311518626-UST-Labor-Law-2013.pdf

FUNDAMENTAL PRINCIPLES AND POLICIES 2. BFOQ BLR CB CBA CE DOLE

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Ee Er LA LC LLO LOA NCMB

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NLRC NSD OFW OT PCE POEA

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LEGEND Bona Fide Occupational Qualification Bureau of Labor Relations Collective Bargaining Collective Bargaining Agreement Certification Election Department of Labor and Employment Employee Employer Labor Arbiter Labor Code Legitimate Labor Organization Leave of Absence National Conciliation and Mediation Board National Labor Relations Commission Night Shift Differential Overseas Filipino Worker Overtime Petition for Certification Election Philippine Overseas Employment Administration Regional Arbitration Branch Regional Director Regular Holiday Regional Tripartite Wages and Productivity Boards Regular Wage Regular Working Days Service Incentive Leave Secretary of Labor and Employment Unfair Labor Practice Undertime Voluntary Arbitrator Voluntary Recognition Wage Distortion Weekly Rest Day

Labor disputes arising from collective bargaining or other concerted activity respecting such terms and conditions.

Q: What matters may properly fall under the term “labor law”? A: The term “labor law” covers the following: 1. Statutes passed by the State to promote the welfare of the workers and Ees and regulate their relations with their Ers. 2. Judicial decisions applying and interpreting the aforesaid statutes. 3. Rules and regulations issued by administrative agencies, within their legal competence, to implement labor statutes. Q: What is the purpose of labor legislation? (2006 Bar Question) A: The purpose of labor legislation is to afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relations between workers and Ers. The State shall assure the rights of workers to self-organization, collective bargaining (CB), security of tenure and just and humane conditions of work. Q: What are the classifications of labor laws? A: 1. Labor Standards – That which sets out the minimum terms, conditions and benefits of employment that Ers must provide or comply with and to which Ees are entitled as a matter of legal right. th

e.g. 13 month pay 2.

LABOR LAW Q: What is labor? A: It is the exertion by human beings of physical or mental efforts, or both, towards the production of goods and services. Q: What is labor Law?

Labor Relations – Defines and regulates the status, rights and duties, and the institutional mechanisms, that govern the individual and collective interactions of Ers, Ees or their representatives. It is concerned with the stabilization of relations of Ers and Ees and seeks to forestall and adjust the differences between them by the encouragement of CB and the settlement of labor disputes through conciliation, mediation and arbitration. e.g. Collective Bargaining Negotiations

A: The law that defines State policies on labor and employment and governs the rights and duties of the employer (Er) and employees (Ee) with respect to: 1. The terms and conditions of employment, and

3.

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Social Legislation – All laws passed by the State to promote public welfare. It includes statutes

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation intended to enhance the welfare of the people even where there is no Er-Ee relationship.

Secretary of Labor and Employment, G.R. No. 85867, (1993)].

e.g. GSIS Law, SSS Law, Philhealth benefits, Agrarian Laws

Q: What are the requisites before past practices would be considered as a source of labor law?

Q: How do the provisions of the law on labor relations interrelate, if at all, with the provisions pertaining to labor standards? (2003 Bar Question)

A: There must be: 1. Voluntarily institution by Er without any legal compulsion 2. A passage of time- should have been done over a long period of time, and must be shown to have been consistent and deliberate [American Wire and Cable Daily Rated Employees Union vs. American Wire and Cable Co., Inc., G.R. No. 155059, (2005)].

A: The law on Labor Relations provides for rights and procedures by which workers may obtain from their Er benefits which are over and above the minimum terms and conditions of employment set by labor standards law. Labor Standards law alone does not guarantee lasting industrial peace. It is assured through Labor Relations law which enables workers to obtain better benefits guaranteed by labor standards laws and by providing for a mechanism to settle disputes between the Er and his Ees.

Note: No passage of time is required for a company policy to become a source of labor law.

Q: What is a contract of labor? A: It is a consensual, nominate, principal, and commutative contract whereby one person, called the Er, compensates another, called the laborer, worker or Ee, for the latter’s service. It is relationship impressed with public interest in keeping with our constitutional policy of social justice.

Q: Is there any distinction between Labor Legislation and Social Legislation? Explain. A: Labor Legislation is sometimes distinguished from social legislation by the former referring to labor statutes, like Labor Relations Law and Labor Standards, and the latter to Social Security Laws. Labor legislation focuses on the rights of the worker in the workplace.

Q: What are the essential characteristics of a contract of labor? A: 1. Er freely enters into a contract with the Ee; 2. Er can select who his Ee will be; 3. Er can dismiss the Ee; the Ee in turn can quit his job; 4. Er must give remuneration; and 5. Er can control and supervise the conduct of the Ee.

Social Legislation are those laws that provide particular kinds of protection or benefits to society or segments thereof in furtherance of social justice. Note: All Labor laws are social legislations, but not all social legislations are labor laws.

Q: What are the sources of labor laws? A: 1. Labor Code (LC) and other related special legislation [including their respective Implementing Rules and Regulations (IRR)] 2. Contracts 3. Collective Bargaining Agreement (CBA) 4. Company practice 5. Company policies Q: How does the CBA operate as a source of law? A: The CBA is the norm of conduct between Er and Ees and compliance therewith is mandated by the express policy of the law [DOLE Philippines, Inc., vs. Pawis ng Makabayang Obrero (PAMAO-NFL), G.R. No. 146650, (2003) in citing E. Razon, Inc. vs.

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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FUNDAMENTAL PRINCIPLES AND POLICIES FUNDAMENTAL PRINCIPLES AND POLICIES

nationalism, and encourage their involvement in public and civic affairs.

CONSTITUTIONAL PROVISIONS 6.

Sec. 14, Art. II - The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men.

7.

Sec. 18, Art. II – The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.

8.

Sec. 20, Art. II – The State recognizes the indispensable role of the private sector, encourages private enterprise and provide incentives to needed investments.

9.

Sec. 1, Art. III - No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.

Q: What are the constitutional mandates on Labor Law? A: 1. Sec. 3, Art. XIII – 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 selforganization, 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 decisionmaking processes affecting their rights and benefits as may be provided by law.

10. Sec. 4, Art. III - No law shall be passed abridging the 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.

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.

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

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. 2.

12. Sec. 10, Art. III – No law impairing the obligation of contracts shall be passed.

Sec. 9, Art. II – The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.

3.

Sec. 10, Art II - The State shall promote social justice in all phases of national development.

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Sec. 11, Art II - The State values the dignity of every human person and guarantees full respect for human rights.

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Sec. 13, Art. II - The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and

13. Sec. 16, Art. III – All persons shall have the right to a speedy disposition of their cases before all judicial, quasi-judicial or administrative bodies. 14. Sec. 18 (2), Art. III – No involuntary servitude in any form shall exist except as a punishment for a crime whereof the party shall have been duly convicted. 15. Sec. 1, Art. XIII - The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.

and convenience of the public. The protection to labor clause in the Constitution is not designed to oppress or destroy capital [Capili vs. NLRC, G.R. No. 117378, (1997)].

16. Sec. 2, Art. XIII - The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance.

The law in protecting the rights of the Ees authorizes neither oppression nor self-destruction of the Er [Pacific Mills Inc. vs. Alonzo, G.R. No. 78090, (1991)]. It should be made clear that when the law tilts the scale of justice in favor of labor, it is but a recognition of the inherent economic inequality between labor and management. The intent is to balance the scale of justice; to put the two parties on relatively equal positions. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an injustice to the employer. Justitia nemini neganda est (Justice is to be denied to none) [Philippine Geothermal, Inc. vs. NLRC and Edilberto M. Alvarez, G.R. No. 106370, (1994)].

17. Sec. 13, Art. XIII – The State shall establish a special agency for disabled persons for their rehabilitation, self-development and self-reliance and their integration into the mainstream of society. 18. Sec. 14, Art. XIII – The State shall protect working women by providing safe and healthful working conditions, taking into account their maternal functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation.

NEW CIVIL CODE AND OTHER LAWS

Q: What is the State policy on labor as found in the Constitution (Sec. 3, Art. XIII)?

Q: What are other related laws to labor? A: 1. New Civil Code (NCC) a. Art. 19 – Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. b. 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. c. Art. 1701 - Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public. d. Art. 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. e. Art. 1703 - No contract which practically amounts to involuntary servitude, under any guise whatsoever, shall be valid. f. Art. 1704 - In collective bargaining, the labor union or members of the board or committee signing the contract shall be liable for non-fulfillment thereof.

A: 1. Afford full protection to labor 2. Promote full employment 3. Ensure equal work opportunities regardless of sex, race, or creed 4. Assure the rights of workers to self-organization, security of tenure, just and humane conditions of work, participate in policy and decision-making processes affecting their right and benefits 5. Regulate the relations between Ers and workers Q: What are the basic rights of workers guaranteed by the Constitution (Sec. 3, Art. XIII)? A: The Right to: 1. Security of tenure 2. Living wage 3. Humane working conditions 4. Share in the fruits of production 5. Self-organization 6. Collective bargaining and negotiation 7. Engage in peaceful concerted activities, including the right to strike 8. Participate in policy and decision making processes Q: What is the principle of non-oppression? A: The principle mandates capital and labor not to act oppressively against each other or impair the interest UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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FUNDAMENTAL PRINCIPLES AND POLICIES g. h.

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Art. 1705 - The laborer's wages shall be paid in legal currency. Art. 1706 - Withholding of the wages, except for a debt due, shall not be made by the employer. Art. 1707 - The laborer's wages shall be a lien on the goods manufactured or the work done. Art. 1708 - The laborer's wages shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance. Art. 1709 - The employer shall neither seize nor retain any tool or other articles belonging to the laborer. Art. 1710 - Dismissal of laborers shall be subject to the supervision of the Government, under special laws.

n. o. p.

Home Development Mutual Fund Law of 2009 The Magna Carta of Women Comprehensive Agrarian Reform Law as amended by R.A. 9700 LABOR CODE

Q: What is the aim of labor law? A: The aim of labor law is social justice. Q: What is social justice? A: Social Justice is “neither communism, nor despotism, nor atomism, nor anarchy,” but the humanization of laws and the equalization of social and economic force by the State so that justice in its rational and objectively secular conception may at least be approximated. Social Justice means the promotion of the welfare of all the people, the adoption by the government of measures calculated to insure economic stability of all the competent elements of society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of the community, constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through the exercise of powers underlying the existence of all governments on the time-honored principle of salus populi est suprema lex [Calalang vs. Williams, G.R. No. 47800, (1940)].

Revised Penal Code (RPC) Art. 289 – Formation, maintenance and prohibition of combination of capital or labor through violence or threats. – Any person who, for the purpose of organizing, maintaining or preventing coalitions or capital or labor, strike of laborers or lock-out of employees, shall employ violence or threats in such a degree as to compel or force the laborers or employers in the free and legal exercise of their industry or work, if the act shall not constitute a more serious offense in accordance with the provisions of the RPC.

Q: What are the limitations in invoking the principle of social justice?

Special Laws a. E.O. 180 - Providing guidelines for the exercise of the Right to Organize of Government Employees, creating a Public Sector Labor-Management Council, and for other purposes b. R.A. 8291 - Government Service Insurance Act of 1997 th c. 13 Month Pay Law d. Retirement Pay Law e. SSS Law f. Paternity Leave Act g. Anti – Child Labor Act h. Anti – Sexual Harassment Act i. Magna Carta for Public Health Workers j. Solo Parents Welfare Act of 2000 k. National Health Insurance Act as amended by R.A. 9241 l. Migrant Workers and Overseas Filipinos Act of 1995 as amended by RA 10022 m. PERA Act of 2008

A: 1. Not to undermine property rights resulting in confiscation [Guido vs.Rural Progress Adm, L2089, (1949)] 2. May only protect the laborers who come to court with clean hands [Phil.Long Distance Telephone Co. vs. NLRC, G.R. 80609, (1988)] 3. Never result to an injustice or oppression of the Er [Phil.Geothermal Inc. vs. NLRC, G.R. No. 106370, (1994)] Q: May social justice as a guiding principle in labor law be so used by the courts in sympathy with the working man if it collides with the Equal protection clause of the Constitution? (2003 Bar Question) A: Yes. The State is bound under the Constitution to afford full protection to Labor and when conflicting interests collide and they are to be weighed on the scales of social justice, the law should accord more

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation sympathy and compassion to the less privileged workingman [Fuentes v. NLRC, 266 SCRA 24, (1997)].

created by special (original) charter from Congress are subject to Civil Service rules.

However it should be borne in mind that social justice ceases to be an effective instrument for the “equalization of the social and economic forces” by the State when it is used to shield wrongdoing [Corazon Jamer v. NLRC, 278 SCRA 632 (1997)].

Art. 3, Declaration of Basic Policy Q: What is the policy of the State on labor as found in the LC? A: It is the policy of the State to: 1. Afford full protection to labor 2. Promote full employment 3. Ensure equal work opportunities regardless of sex, race, or creed 4. Assure the rights of workers to self organization, security of tenure, just and humane conditions of work, participate in policy and decision-making processes affecting their right and benefits 5. Regulate the relations between Ers and workers.

Q: What agency exercises the “rule-making power” granted in the Labor Code? A: The Department of Labor and Employment (DOLE) thru the Secretary of Labor and Employment (SLE) and other Government agencies charged with the administration and enforcement of the LC or any of its parts shall promulgate the necessary IRRs. Note: Such rules and regulations shall become effective 15 days after announcement of their adoption in newspapers of general circulation.

Art. 4, Construction in favor of Labor Q: What is “Compassionate Justice”?

Q: What are the limitations to the “rule-making power” given to the Secretary of Labor and Employment and other Government agencies?

The social justice policy mandates a compassionate attitude toward the working class in its relation to management. In calling for protection to labor, the Constitution does not condone wrong doing by the Ee. However, it urges a moderation of the sanctions that maybe applied to him in the light of the many disadvantages that weigh heavily on him like an albatross on his neck.

A: It must: 1. Be issued under the authority of law 2. Not be contrary to law and the Constitution Q: To whom shall all rights and benefits under the Labor Code apply?

It is disregarding rigid rules and giving due weight to all equities of the case [Gandara Mill Supply and Milagros Sy vs. NLRC and Silvestre Germano, G.R. 126703, (1998)].

A: GR: All rights and benefits granted to workers under the LC shall apply alike to all workers, whether agricultural or non-agricultural. XPNs: 1. Government Ees 2. Ees of government corporations created by special or original charter 3. Foreign governments 4. International agencies 5. Corporate officers/ intra-corporate disputes which fall under P.D. 902-A and now fall under the jurisdiction of the regular courts pursuant to the Securities Regulation Code. 6. Local water district except where NLRC’s jurisdiction is invoked. 7. As may otherwise be provided by the LC.

e.g. An Ee who was validly dismissed may still be given severance pay. Q: What is the concept of liberal approach in interpreting the Labor Code and its IRR? A: The LC and its IRR, being remedial in character must be accorded the broadest scope and most beneficial interpretation. It is only in this way that their purpose, which is to remedy evils of exploitation, manipulation and oppression, may be achieved. Strict adherence to the letter of labor law is not allowed; the spirit thereof prevails and must be given effect. Under Art. 4 of the LC, all doubts in the implementation and interpretation of the provisions thereof, including its IRR, are to be resolved in favor of labor.

Q: What is the test in determining whether a GOCC is subject to the provisions of the LC? A: It is determined by the manner of their creation. Government corporations incorporated under the Corporation Code are covered by the LC while those UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Q: Are all labor disputes resolved in favor of labor?

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FUNDAMENTAL PRINCIPLES AND POLICIES A: No. The law also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play [St. Luke’s Medical Center Ees Ass’n vs. NLRC, G.R. No. 162053, (2007)].

Art. 212, Definitions Q: Who is an employer? A: Any person acting in the interest of an Er, directly or indirectly. The term does not include a labor organization or any of its officers and agents, except when acting as an Er. (Art. 212[e], LC)

Art. 166, Policy Q: What is the policy of the State in relation to Employees’ Compensation and State Insurance Fund?

An Er is defined as any person or entity that employs the services of others; one for whom work is done and who pays their wages of salaries; any person acting in the interest of an Er; refers to the enterprise where the labor organization operates or seeks to operate. (Sec.1[s], Rule I, Book V, IRR)

A: The State shall promote and develop a tax-exempt Ees’ compensation program whereby Ees and their dependents, in the event of work-connected disability or death, may promptly secure adequate income benefits and medical related benefits. [Art. 166, LC] Q: What is the Compensation Act?

purpose

of

a

Note: The term “employer” is not restricted to business owners alone because it includes any person as long as he acts in the interest of the Er.

Workmen’s Q: When is a labor organization deemed an employer?

A: The primary purpose of a Workmen’s Compensation Act is to provide compensation for disability or death resulting from occupational injuries or diseases, or accidental injury to, or death of Ees.

A: When it is acting as such in relation to persons rendering services under hire, particularly in connection with its activities for profit or gain.

Art. 211, Declaration of Policy

Note: The mere fact that respondent is a labor union does not mean that it cannot be considered an Er for persons who work for it. Much less should it be exempted from labor laws [Bautista vs. Inciong, G.R. No. L-52824, (1988)].

Q: What are the policy objectives of our Labor Relations law?

Q: Who is an employee?

A: The state aims to promote: 1. Free CB and negotiations, including voluntary arbitration, mediation and conciliation as modes of settling labor or industrial disputes; 2. Free trade unionism; 3. Free and voluntary organization of a strong and united labor movement; 4. Enlightenment of workers concerning their rights and obligations as union members and as Ees; 5. Adequate administrative machinery for the expeditious settlement of labor or industrial disputes; 6. Stable but dynamic and just industrial peace; 7. Participation of workers in the decision-making processes affecting their rights, duties and welfare; 8. Truly democratic method of regulating the relations between the Ers and Ees by means of agreements freely entered into through CB, no court or administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or other terms and conditions of employment, except as otherwise provided under the LC.

A: The term “employee” covers: 1. Any person in the employ of the Er 2. Any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment 3. One who has been dismissed from work but the legality of dismissal is being contested in a forum of appropriate jurisdiction. (D.O. No. 40-03) Note: The term shall not be limited to the Ees of a particular Er unless the LC explicitly states. Any Ee, whether employed for a definite period or not, shall, beginning on the first day of service, be considered an Ee for purposes of membership in any labor union. (Art. 277[c], LC)

Q: What is a labor dispute? A: A labor dispute includes any controversy or matter concerning: 1. Terms and conditions of employment, or

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation 2.

The association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment Regardless of whether the disputants stand in the proximate relation of Er and Ee. (Art. 212[l], LC)

3.

machinery; non observance of unwarranted use of union security clause; illegal or unreasonable personnel management policies; violation of no-strike/no-lockout agreement e.

Q: What are the tests on whether a controversy is a labor dispute?

Employment tenure disputes – E.g. Nonregularization of Ees; non-absorption of laboronly contracting staff; illegal termination; nonissuance of employment contract

Q: Who are the parties to a labor dispute? A: 1. As to nature – It depends on whether the dispute arises from Er-Ee relationship, although disputants need not be proximately Er or Ee of another. 2. As to subject matter – The test depends on whether it concerns terms or conditions of employment or association or representation of persons in negotiating, fixing, maintaining or changing terms or conditions of employment.

A: 1. Primary parties are the Er, Ees and the union. 2. Secondary parties are the voluntary arbitrator, agencies of DOLE, NLRC, SLE and the Office of the President. Q: What is an inter-union dispute? A: Any conflict between and among legitimate labor unions involving representation questions for the purposes of CB or to any other conflict or dispute between legitimate labor unions.

Q: What are the kinds of labor disputes? A: 1. Labor standard disputes a. Compensation – E.g. Underpayment of minimum wage; stringent output quota; illegal pay deductions b. Benefits – E.g. Non-payment of holiday pay, OT pay or other benefits c. Working Conditions – E.g. Unrectified work hazards 2. a.

Q: What is an intra-union dispute? A: Any conflict between and among union members, 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 from chartering or affiliation of union.

Labor relations disputes Organizational right disputes/ Unfair Labor Practice (ULP) – E.g. Coercion, restraint or interference in unionization efforts; reprisal or discrimination due to union activities; company unionism; ULP, strike or lockout; union members’ complaint against union officers

Q: What are rights disputes? A: They are claims for violations of a specific right arising from a contract, i.e. CBA or company policies. Q: What are interest disputes? A: They involve questions on “what should be included in the CBA.” Strictly speaking, the parties may choose a voluntary arbitrator to decide on the terms and conditions of employment, but this is impracticable because it will be a value judgment of the arbitrators and not of the parties.

b.

Representation disputes – E.g. Uncertainty as to which is the majority union; determination of appropriate CB unit; contests for recognition by different sets of officers in the same union

c.

Bargaining disputes – E.g. Refusal to bargain; bargaining in bad faith; bargaining deadlock; economic strike or lockout

Q: What are “contract–negotiation disputes”?

Contract administration or personnel policy disputes – E.g. Non-compliance with CBA provision (ULP if gross non-compliance with economic provisions); disregard of grievance

Q: What are “contract–interpretation disputes”?

d.

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

A: These are disputes as to the terms of the CBA.

A: These are disputes arising under an existing CBA, involving such matters as the interpretation and

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FUNDAMENTAL PRINCIPLES AND POLICIES application of the contract, or alleged violation of its provisions.

candidness and openness by Management and participation by the union, representing its members. In fact, our Constitution has recognized the principle of shared responsibility between Ers and workers and has likewise recognized the right of workers to participate in policy and decision-making process affecting their rights [PAL vs. NLRC, G.R. No. 85985, (1993)].

Art. 255, Exclusive Bargaining Representation and Worker’s Participation in Policy and DecisionMaking Q: Who shall be the bargaining representative of the employees for purposes of collective bargaining?

Q: What is the principle of codetermination? (2007 Bar Question)

A: The labor organization designated or selected by the majority of the Ees in an appropriate collective bargaining unit shall be the exclusive representative of the Ees in such unit for the purpose of CB. However, an individual Ee or group of Ees shall have the right at any time to present grievances to their Er. (Art. 255, LC, as amended by Sec. 22 of R.A. No. 6715, 1989)

A: It refers to the right of workers to participate in policy and decision-making process affecting their rights and benefits [PAL vs. NLRC, G.R. No. 85985 (1993); Art. XIII, Sec. 3, 1987 Constitution]. Q: May an employer solicit questions, suggestions and complaints from employees who are represented by a union?

Q: What is the extent of the worker’s right to participate in policy and decision-making processes in a company?

A: No, unless: 1. The CB representative executes an agreement waiving the right to be present on any occasion when Ee grievances are being adjusted by the Er; and 2. Er acts strictly within the terms of his waiver agreement.

A: Such right refers not only to formulation of corporate programs and policies but also to participation in grievance procedures and voluntary modes of settling disputes. Q: Explain the extent of the workers’ right to participate in policy and decision-making process as provided under Art. XIII, Sec. 13 of the 1987 Constitution. Does it include membership in the Board of Directors of a corporation? (2008 Bar Question)

Q: The hotel union filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB) due to an unfair labor practice against the Diamond Hotel who refused to bargain with it. The hotel advised the union that since it was not certified by the DOLE as the exclusive bargaining agent, it could not be recognized as such. The union sought to bargain for members only. May the Union bargain collectively?

A: No. The Supreme Court recognized the right of the union to participate in policy formulation and decision-making process on matters affecting the union members’ rights, duties and welfare. However, such participation of the union in committees of the Er is not in the nature of a co-management control of the business. Impliedly, therefore, workers’ participatory right in policy and decision-making processes does not include the right to put a union member in a corporation’s Board of Directors. [Manila Electric Company vs. Quisumbing, G.R. No. 127598, (1999)].

A: No. Art. 255 of the LC declares that only the labor organization designated or selected by the majority of the Ees in an appropriate CB unit is the exclusive representative of the Ees in such unit for the purpose of CB. The union is admittedly not the exclusive representative of the majority of the Ees of the hotel, hence, it could not demand from the hotel the right to bargain collectively in their behalf [Manila Diamond Hotel vs. Manila Diamond Hotel Ees Union, G.R. No. 158075, (2006)].

Q: May the management be compelled to share with the union or its employees its prerogative of formulating a Code of Discipline?

Q: Who is a managerial employee?

A: Yes. The Code of Discipline involves security of tenure and loss of employment — a property right. It is time that management realizes that to attain effectiveness in its conduct rules, there should be

A: The person who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline Ees.

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Q: Who is a supervisory employee?

Q: May the employer be allowed to dismiss an employee and let him explain later? Why?

A: The person who effectively recommends such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgement.

A: No. While the procedure laid down by the law for the dismissal of an Ee need not be observed to the letter of the law, at least it must be done in the natural sequence of notice, hearing and judgment. Dismissing the Ee and let him explain later is not in accord with the requirement of due process [Batangas Laguna Tayabas Bus Co. v. NLRC, et al. G.R. No. 94429, May 29, 1992].

Q: Who are rank-and-file employees? A: Those persons who are neither Managerial nor Supervisory Ees are considered rank-and file. Art. 277, Miscellaneous Provisions

Q: Under what circumstances may the termination of employees be suspended by the SLE?

Q: What is the right to security of tenure? A: The SLE may suspend the effects of the termination in the event of a prima facie finding by the appropriate official of the DOLE before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off. (Art. 277(b), as amended by Sec. 33, R.A 6715)

A: The right to security of tenure connotes that no worker shall be dismissed upon employment without cause and without due process. Q: What is the worker’s right to notice and hearing prior to dismissal?

Q: Who has the burden of proving the existence of a valid or authorized cause of termination?

A: Art. 277 (b) of the LC provides that: 1. The Er shall furnish the Ee whose employment is sought to be terminated a written notice containing a statement of the causes for termination; and 2. Afford the Ee ample opportunity to be heard and to defend himself

A: The Er has the burden of proof in proving that the termination was for a valid or authorized cause. The existence of a just or authorized cause for dismissal cannot be presumed. A contrary rule would contravene the constitutional policy of affording protection to the worker. (Art. 277, LC)

Note: In connection with dismissals for authorized causes, the Er must serve a written notice upon the worker and the DOLE at least 1 month before the intended date of termination. (Art. 283, LC)

Q: Is a labor organization responsible for the preservation of industrial peace?

Q: Why is notice and hearing necessary in cases of employee dismissal?

A: Yes. The Ministry shall help promote and gradually develop, with the agreement of labor organizations and Ers, labor-management cooperation programs at appropriate levels of the enterprise based on the shared responsibility and mutual respect in order to ensure industrial peace and improvement in productivity, working conditions and the quality of working life. [Art. 277(g), LC, incorporated by B.P Blg. 130]

A: The twin requirement of notice and hearing constitutes essential elements of due process in cases of Ee dismissal. The requirement of notice is intended to inform the Ee concerned of the Er’s intent to dismiss and the reason for the proposed dismissal, upon the other hand, the requirement of hearing affords the Ee opportunity to answer his Er’s charges against him and accordingly to defend himself therefrom before dismissal is effected. Neither of these two requirements can be dispensed with without running afoul of the due process requirement of the 1987 Constitution [Century Textile Mills, Inc., et al. v. NLRC, et al. G.R. No. 77859, May 25, 1988].

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Q: How about in establishments where no legitimate labor organization exists? A: Labor management committees may be formed voluntarily by workers and Ers for the purpose of promoting industrial peace. [Art. 277(h), LC, as amended by Sec. 33, R.A. 6715]

10

RECRUITMENT AND PLACEMENT RECRUITMENT AND PLACEMENT

8.

RECRUITMENT OF LOCAL AND MIGRANT WORKERS

9.

Q: Who is a worker? A: Any member of the labor force, whether employed or unemployed. (Art. 13 [a], LC)

Shipping or manning agents or representatives Name hires (Sec. 1(i) of Rule II, Omnibus Rules and Regulations implementing the Migrant Workers and Overseas Filipinos Act of 1995 as amended by R.A. 10022)

Q: Who are name hires?

Q: What is recruitment and placement?

A: They are individual workers who are able to secure contracts for overseas employment opportunities with Ers without the assistance or participation of any agency. [Rule II, Omnibus Rules and Regulations implementing the Migrant Workers and Overseas Filipinos Act of 1995 as amended by R.A. 10022]

A: 1. Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers; and 2. Includes referrals, contact services, promising or advertising for employment, locally or abroad, whether for profit or not. (Art. 13 [b] ,LC)

Q: Is recruitment and placement constituted even if employment is offered only to one person?

Q: What are the essential elements in determining whether one is engaged in recruitment and placement?

A: Yes, the number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a promise or offer of employment to 2 or more prospective workers, the individual or entity dealing with them shall be deemed to be engaged in the act of recruitment and placement. The words "shall be deemed" create that presumption [People vs. Panis, G.R. L-58674-77, (1986)].

A: It must be shown that: 1. The accused gave the complainant the distinct impression that she had the power or ability to send the complainant for work, 2. Such that the latter was convinced to part with his money in order to be so employed [People vs. Goce, G.R. No. 113161, (1995)].

Q: What is a private employment agency? Q: Who is deemed engaged in recruitment and placement?

A: Any person or entity engaged in the recruitment and placement of workers for a fee which is charged, directly or indirectly, from the workers or Ers or both. (Art. 13, LC)

A: Any person or entity which, in any manner, offers or promises for a fee employment to 2 or more persons. (Art. 13[b], LC)

Q: What is a private recruitment agency? Q: Who may engage in recruitment and placement? A: It is any person or association engaged in the recruitment and placement of workers without charging any fee, directly or indirectly, from the workers or Ers.

A: GR: No person or entity other than the public employment offices, shall engage in the Recruitment and Placement of workers. XPNs: 1. Construction contractors if authorized by the DOLE and Construction Industry Authority 2. Other persons or entities as may be authorized by the SLE 3. Members of the diplomatic corps (but hiring must go through POEA) 4. Public employment offices 5. Private recruitment offices 6. Private employment agencies 7. POEA

Q: Who is a seafarer? A: It refers to any person who is employed or engaged in overseas employment in any capacity on board a ship other than a government ship used for military or non-commercial purposes. The definition shall include fishermen, cruise ship personnel and those serving on mobile offshore and drilling units in the high seas. [Sec. 1(ss), Rule II, Omnibus Rules and Regulations Implementing Migrant Workers Act as amended by R.A. 10022 (2010)]

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Q: What is overseas employment?

requested that it be allowed to employ Cone as fullfledged coach. The DOLE Regional Director granted the request. The Basketball Association of the Phils. appealed the issuance of said permit to the Secretary of Labor who cancelled Cone’s employment permit because GMC failed to show that there is no person in the Philippines who is competent and willing to do the services nor that the hiring of Cone would redound to the national interest. Is the act of the Secretary of Labor valid?

A: It is the employment of a worker outside the Philippines. Q: Who is an Overseas Filipino Worker (OFW)? A: 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. [Sec.(jj), Rule II, Omnibus Rules and Regulations Implementing Migrant Workers Act as amended by R.A. 10022 (2010)]

A: Yes. GMC’s claim that hiring of a foreign coach is an Er’s prerogative has no legal basis. Under Art. 40 of the LC, an Er seeking employment of an alien must first obtain an employment permit from the DOLE. GMC’s right to choose who to employ is limited by the statutory requirement of an employment permit. [GMC vs. Torres, G.R. No. 9366, (1991)]

Note: The term “OFW” is to be used interchangeably with “migrant worker” as provided in R.A. 10022.

PROHIBITION AGAINST TRANSFER OF EMPLOYMENT

Q: Who is an Emigrant?

Q: Who are required to obtain employment permit?

A: Any person, worker or otherwise, who emigrates to a foreign country by virtue of an immigrant visa or resident permit or its equivalent in the country of destination. (Art. 13, LC)

A: GR: Only non-resident aliens; XPNs: 1. Diplomatic services and foreign government officials; 2. Officers and staff of international organizations and their legitimate spouses; 3. Members of governing board who has voting rights only; 4. Those exempted by special laws; 5. Owners and representatives of foreign principals who interview Filipino applicants for employment abroad; 6. Aliens whose purpose is to teach, present and/or conduct research studies; 7. Resident aliens. (D.O. 75-06)

EMPLOYMENT OF NON-RESIDENT ALIENS Q: What are the requirements in employment of non-resident aliens? A: Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign Er who desires to engage an alien for employment in the Philippines: 1. Shall obtain an employment permit from the DOLE 2. The permit may be issued to a non-resident alien or to the applicant Er after a determination of the non-availability of a person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired 3. For an enterprise registered in preferred areas of investments, said permit may be issued upon recommendation of the Government agency charged with the supervision of said registered enterprise

Q: May the non-resident alien transfer employment after issuance of the employment permit? A: After the issuance of an employment permit, the alien shall not transfer to another job or change his Er without prior approval of the SLE. Q: What is required for immigrants and resident aliens?

Q: The DOLE issued an alien employment permit for Earl Cone, a U.S. citizen, as sports consultant and assistant coach for GMC. Later, the Board of Special Inquiry of the Commission on Immigration and Deportation approved Cone’s application for a change of admission status from temporary visitor to pre-arranged employee. A month later, GMC UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

A: An Alien Employment Registration Certificate. Q: What is the duration of the employment permit? A: GR: Minimum of 1 year

12

RECRUITMENT AND PLACEMENT XPN: Unless the employment contract, consultancy services, or other modes of engagement provides otherwise, which in no case shall exceed 5 years. [DOLE Department Order 97-09, Revised Rules for the Issuance of Employment Permits to Foreign Nationals (2009)]

b.

3. Q: May aliens be employed in entities engaged in nationalized activities? A: GR: No. 4. 5.

XPNs: 1. Secretary of Justice specifically authorizes the employment of technical personnel; 2. Aliens are elected members of the board of directors or governing body of corporations or associations engaging in partially nationalized activities shall be allowed in proportion to their allowable participation or share in the capital of such entities [Section 2-A of Anti-Dummy Law, as amended by P.D. 715]; or 3. Enterprises registered under the Omnibus Investment Code in case of technical, supervisory or advisory positions, but for a limited period.

Corporation -A minimum paid-up capital of P2 million Provided, that those with existing licenses shall, within 4 yrs. from the affectivity hereof, increase their capitalization or paid up capital, as the case may be, to P2 million at the rate of Php 250,000.00 every year. (Art. 28, LC) Not otherwise disqualified by law or other government regulations to engage in the recruitment and placement of workers for overseas employment. (Rule I, Part II, POEA Rules) Payment of registration fees Posting of surety/cash bonds

Q: How will POEA regulate private sector participation in the recruitment and overseas placement of workers? A: By setting up a licensing and registration system. (Sec. 14, R.A. 10022) Q: Is a corporation, 70% of the authorized and voting capital of which is owned and controlled by Filipino citizens, allowed to engage in the recruitment and placement of workers, locally or overseas? Explain briefly. (2002 Bar Question)

PRIVATE SECTOR PARTICIPATION IN THE RECRUITMENT AND PLACEMENT OF WORKERS

A: No. It is because Art. 27 of the LC requires at least 75%.

Q: What are the entities in the private sectors that can participate in recruitment and placement of workers?

Q: Who are disqualified to engage in the business of recruitment and placement of workers?

A: 1. 2. 3. 4. 5. 6.

A: 1. Travel agencies and sales agencies of airline companies; (Art. 26, LC) 2. Officers or members of the board of any corporation or members in a partnership engaged in the business of a travel agency; 3. 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; 4. Persons, partnerships or corporations which have derogatory records, such as but not limited to those: a. Certified to have derogatory record or information by the NBI or by the Anti-Illegal Recruitment Branch of the POEA; b. Against whom probable cause or prima facie finding of guilt for illegal recruitment or other related cases exists;

Shipping or manning agents or representatives Private recruitment offices Public employment offices Construction contractors if authorized by the DOLE and Construction Industry Authority. Persons that may be authorized by the SLE Private employment agencies. (Sec. 1, Rule VII, Book I, IRR of the LC)

Q: What are the qualifications for participation in recruitment and placement of workers? A: 1. Filipino citizens, or partnerships or corporations with at least 75% of the authorized capital stock is owned and controlled by Filipino citizens; (Art. 27, LC) 2. Capitalization a. Single proprietorship or partnership -A minimum capitalization of P2 million

13

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation c.

5.

6.

Convicted for illegal recruitment or other related cases and/or crimes involving moral turpitude; and d. Agencies whose licenses have been previously revoked or cancelled by the POEA for violation of R.A. 8042, P.D. 442 as amended and their IRRs as well as these rules and regulations. Any official or Ee of the DOLE, POEA, OWWA, DFA and other government agencies directly involved in the implementation of R.A. 8042 th and/or any of his/her relatives within the 4 civil degree of consanguinity or affinity; and Persons or partners, officers and directors of corporations whose licenses have been previously cancelled or revoked for violation of recruitment laws. (Sec. 2, Rule I, 2002 Rules and Regulations on the Recruitment and Employment of Land-Based Workers)

A: Only when: 1. He has obtained work through recruiter’s efforts, and 2. The worker has actually commenced working Note: A land-based agency may charge and collect from its hired workers a placement fee in an amount equivalent to 1 month salary, exclusive of documentation costs. (Sec. 3, Rule V, POEA Rules and Regulations)

Q: What are the only authorized payments that may be collected from a hired worker? A: 1. Placement fee in an amount equivalent to one month’s salary of the worker, and 2. Documentation costs (Sec. 3, Rule V, POEA Rules and Regulations) ILLEGAL RECRUITMENT, ART. 38 (LOCAL), SEC. 6, MIGRANT WORKERS ACT, R.A. 8042

TRAVEL AGENCIES PROHIBITED FROM RECRUITMENT AND PLACEMENT

Q: What are prohibited practices in recruitment or placement?

Q: What is the rule on recruitment of travel agencies and sales agencies of airline companies?

A: 1.

A: They are prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not.

2. 3.

Q: WTTA is a well-known travel agency and an authorized sales agent of the PAL. Since majority of its passengers are overseas workers, WTTA applied for a license for recruitment and placement activities. It stated in its application that its purpose is not for profit but to help Filipinos find employment abroad. Should the application be approved? (2006 Bar Question)

4.

5.

A: The application should be disapproved, as it is prohibited by Art. 26 of the LC, to wit: "Art. 26. Travel agencies and sales agencies of airline companies are prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not." Rule I, Part II POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Workers (2002) disqualifies any entity having common director or owner of travel agencies and sales agencies of airlines, including any business entity from the recruitment and placement of Filipino workers overseas, whether they derive profit or not.

6. 7.

8. 9.

10. 11.

FEES TO BE PAID BY WORKERS Q: When may a worker be charged any fee? UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

14

Furnishing or publishing any falsie notice/information/document related to recruitment/employment Failure to file reports required by SLE Inducing or attempting 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 Recruitment/placement of workers in jobs harmful to public health or morality or to the dignity of the country Engaging directly or indirectly in the management of a travel agency Substituting or altering employment contracts without approval of DOLE Charging or accepting any amount greater than that specified b DOLE or make a worker pay any amount greater than actually received by him Committing any act of misrepresentation to secure a license or authority Influencing or attempting to influence a person/entity not to employ any woker who has not applied employment through his agency Obstructing or attempting to obstruct inspection by SLE or by his representatives Withholding or denying travel documents from applicant workers before departure for monetary considerations other than authorized by law

RECRUITMENT AND PLACEMENT 12.

13.

14.

15.

16.

Granting 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, postdated checks in relation to the said loan Refusing to condone or renegotiate a loan incurred by an OFW after his employment contract has been prematurely terminated through no fault of his or her own For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the processing of pending worker’s applications; and For recruitment/manning agency or a foreign principal/Er to pass on the OFW or deduct from his or her salary the payment of the cause of fees, premium or other insurance related charges, as provided under the compulsory worker’s insurance coverage Imposing a compulsory and exclusive arrangement whereby an OFW is required to: a. Avail a loan only from specifically designated institutions, or entities or persons b. To undergo health examinations only from specifically designated medical, entities or persons, except seafarers whose medical examination cost is shouldered by the ship owne c. To undergo training of any kind only from designated institutions, entities or persons, except for recommendatory trainings mandated by principals/shipowners (Sec. 6, R.A. 8042, Migrant Workers and Overseas Filipino Act, as amended by R.A. 10022)

holders authority.

Illegal recruitment under Art. 38 means any recruitment activity including prohibited acts under Art. 34 committed by nonlicensees or non-

Failure to actually deploy without valid reason; 2. Failure to reimburse expenses incurred by the worker in connection with his/her documentation and processing for purposes of deployment; 3. To allow a non-Filipino citizen to head or manage a licensed recruitment/ manning agency.

A: 1. Unlawful for any official or Ee of the: a. DOLE b. POEA c. Overseas Workers Welfare Administration (OWWA) d. DFA e. Other Government agencies involved in the implementation of this Act 2.

th

Their relatives within the 4 civil degree of consanguinity or affinity, to engage, directly or indirectly in the business of recruiting migrant workers. (Sec. 8, R.A. 8042) LICENSE vs. AUTHORITY

Q: How does the law regulate the business or recruitment and replacement? A: By requiring license and authority. Q: What is a license?

A:

Local recruitment

1.

Q: Who are the persons prohibited from engaging the business of recruiting migrant workers?

Q: What are the differences between the prohibited acts under the Labor Code and R.A. 8042 or the Overseas Filipinos and Overseas Migrant Workers Act, as amended by R.A. 10022?

Labor Code (Art. 38)

of

A: It is issued by DOLE authorizing a person or entity to operate a private employment agency.

R.A. 8042, as amended by RA 10022 Applies to recruitment for overseas employment Illegal recruitment under Sec. 6 means any recruitment activity committed by nonlicensees/ non-holders of authority or prohibited acts (same as Art. 34, LC)

Q: What is an authority? A: It is a document issued by the DOLE authorizing a person or association to engage in recruitment and placement activities as a private recruitment entity. Q: Who may be issued license and authority? A: 1. Natural persons – Filipino (citizenship requirement)

Added to the following in the list of prohibited acts:

15

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation 2. Artificial persons – question of owners of capital and voting stock (75% Filipino). Q: Who is a non-licensee / non-holder of authority?

b.

A: Any person, corporation or entity: 1. Which has not been issued a valid license or authority to engage in recruitment and placement by the SLE, or 2. Whose license or authority has been suspended, revoked or cancelled by the POEA or the SLE

3.

Q: Is the license or authority transferable?

A: Yes. Even if at the time Larry was promising employment no cash was given to him, he is still considered as having been engaged in recruitment activities, since Art. 13(b) of the LC states that the act of recruitment may be for profit or not. It suffices that Larry promised or offered employment for a fee to the complaining witnesses to warrant his conviction for illegal recruitment [People vs. Domingo, G.R. No. 181475, (2009)].

Q: A recruitment and placement agency declared voluntary bankruptcy. Among its assets is its license to engage in business. Is the license of the bankrupt agency an asset which can be sold in public auction by the liquidator? (1998 Bar Question) A: No, because of the non-transferability of the license to engage in recruitment and placement. The LC (Art. 29) provides that no license to engage in recruitment and placement shall be used directly or indirectly by any person other than the one in whose favor it was issued nor may such license be transferred, conveyed or assigned to any other person or entity. It may be noted that the grant of a license is a governmental act by the DOLE based on personal qualifications, and citizenship and capitalization requirements. (Arts.27-28, LC).

Q: How does one prove illegal recruitment? ` A: It must be shown that the accused gave the distinct impression that he had the power or ability to send complainants abroad for work such that the latter were convinced to part with their money in order to be deployed [People vs. Fortuna, 395 SCRA 353 (2003)].

Note: Change of ownership or relationship of a single proprietorship licensed to engage in overseas employment shall cause the automatic revocation of the license.

Q: May a licensee or holder of authority be held liable for illegal recruitment? A: Yes, any person (whether non-licensee, non-holder of authority, licensee or holder of authority) who commits any of the prohibited acts, shall be liable for Illegal recruitment. (R.A. 8042, as amended by R.A. 10022)

ESSENTIAL ELEMENTS OF ILLEGAL RECRUITMENT Q: What are the elements of illegal recruitment? A: 1. Offender is a non-licensee or non-holder of authority to lawfully engage in the recruitment/placement of workers.

Q: What are the kinds of illegal recruitment? A: 1. Simple Illegal Recruitment 2. Complex Illegal Recruitment

Offender undertakes: a. 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 UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

For complex illegal recruitment, an additional element is the offender commits the act against three or more persons, individually, or as a group [People vs. Baytic, (2003)] or there are three or more offenders.

Q: Larry Domingo was accused of the crime of illegal recruitment. He argued that he issued no receipt or document in which he acknowledged as having received any money for the promised jobs. Hence, he should be free him from liability. Was Larry engaged in recruitment activities?

A: No, they are non-transferable (Art. 29, LC). License or authority is granted on the basis of personal qualifications of the grantee. Thus, it is beyond the commerce of man. The law prohibits alienation of license or authority.

2.

not, when undertaken by non-licensee or non-holder of authority [Art. 13(f), as amended by R.A. 10022] ; or Any of prohibited practices under Art. 34 of the LC.

SIMPLE ILLEGAL RECRUITMENT Q: What is simple illegal recruitment?

16

RECRUITMENT AND PLACEMENT A: It is the violation of Arts. 13(b) and 34 of the LC involving less than three recruiters or victims.

A: Illegal recruitment is defined by law as any recruitment activities undertaken by non-licenses or non-holders of authority [People vs. Senoron, G.R. No. 119160, (1997)]. It is large scale illegal recruitment when the offense is committed against 3 or more persons, individually or as a group (Art. 38[b], LC). In view of the above, Maryrose is guilty of large scale illegal recruitment. Her defense of good faith and the Affidavit of Desistance as well as the refund given will not save her because R.A. 8042 is a special law, and illegal recruitment is malum prohibitum [People vs. Saulo, G.R. No. 125903, (2000)].

Q: What is complex illegal recruitment? A: It is the violation of Arts. 13(b) and 34 of the LC involving at least three recruiters or victims. It may either be: 1. committed by a syndicate; 2. in large Scale ILLEGAL RECRUITMENT IN LARGE SCALE (SEC. 6, R.A. 10022)

ILLEGAL RECRUITMENT AS ECONOMIC SABOTAGE Q: When is illegal recruitment committed in large scale?

Q: When is illegal recruitment considered as economic sabotage?

A: When it is committed against three or more persons individually or as a group.

A: When complex illegal recruitment is committed, such that it is syndicated or done in a large scale.

Q: When is illegal recruitment considered to be committed by a syndicate?

ILLEGAL RECRUITMENT vs. ESTAFA

A: It is committed by a syndicate if Illegal Recruitment was carried out by a group of three or more persons conspiring or confederating with one another.

ILLEGAL RECRUITMENT Malum prohibitum, thus: 1. Criminal intent is NOT necessary 2. it is a crime which involves moral turpitude

Note: Illegal Recruitment in Large Scale pertains to the number of victims while Syndicated Illegal Recruitment pertains to the number of recruiters.

It is not required that it be shown that the recruiter wrongfully represented himself as a licensed recruiter

Q: While her application for renewal of her license to recruit workers for overseas employment was still pending Maryrose Ganda recruited Alma and her 3 sisters, Ana, Joan, and Mavic, for employment as housemates in Saudi Arabia. Maryrose represented to the sisters that she had a license to recruit workers for overseas employment and demanded and received P30,000.00 from each of them for her services. However, her application for the renewal of her license was denied, and consequently failed to employ the four sisters in Saudi Arabia. The sisters charged Maryrose with large scale illegal recruitment. Testifying in her defense, she declared that she acted in good faith because she believed that her application for the renewal of her license would be approved. She adduced in evidence the Affidavits of Desistance which the four private complainants had executed after the prosecution rested its case. In the said affidavits, they acknowledge receipt of the refund by Maryrose of the total amount of Php 120,000.00 and indicated that they were no longer interested to pursue the case against her. Resolve the case with reasons. (2005 Bar Question)

Note: It is enough that the victims were deceived as they relied on the misrepresentation and scheme that caused them to entrust their money in exchange of what they later discovered was a vain hope of obtaining employment abroad

ESTAFA Malum in se, thus: 1.criminal intent is necessary 2.Same Accused defrauded another by abuse of confidence, or by means of deceit Note: It is essential that the false statement or fraudulent representation constitutes the very cause or the only motive which induces the complainant to part with the thing of value.

Illegal recruitment and estafa cases may be filed simultaneously or separately. The filing of charges for illegal recruitment does not bar the filing of estafa, and vice versa. Double jeopardy will not set Q: Bugo, by means of false pretenses and fraudulent representation, convinced Dado to give the amount of Php 120,000.00 for processing the latter’s papers so that he can be deployed to Japan. Dado later on found out that Bugo had misappropriated, misapplied and converted the money to her own

17

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation personal use and benefit. Can Dado file the cases of illegal recruitment and estafa simultaneously?

A: CRIMINAL ACTIONS RTC

A: Yes, illegal recruitment and estafa cases may be filed simultaneously or separately. The filing of charges for illegal recruitment does not bar the filing of estafa, and vice versa. Bugo’s acquittal in the illegal recruitment case does not prove that she is not guilty of estafa. Illegal recruitment and estafa are entirely different offenses and neither one necessarily includes or is necessarily included in the other. A person who is convicted of illegal recruitment may, in addition, be convicted of estafa under Art. 315, par. 2(a) of the RPC. In the same manner, a person acquitted of illegal recruitment may be held liable for estafa. Double jeopardy will not set in because illegal recruitment is malum prohibitum, in which there is no necessity to prove criminal intent, whereas estafa is malum in se, in the prosecution of which, proof of criminal intent is necessary [Sy vs. People, G.R. No. 183879, (2010)].

Province or city: 1. Where the offense was committed or 2. Where the offended party actually resides at the same time of the commission of the offense MONEY CLAIMS NLRC Original and exclusive jurisdiction to hear and decide claims arising out of an Er-Ee 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 liability of the principal/ Er and the recruitment/ placement agency for any and all claims shall be joint and several.  The performance bond to be filed by the recruitment/ placement agency shall be answerable for all money claims or damages that may be awarded to the workers.  If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the claims and damages.

LIABILITIES LOCAL RECRUITMENT AGENCY Q. What is the liability of the Local Recruitment Agency? A. A Local Recruitment Angency shall be jointly and solidarily liable with its principal or foreign-based Er for any violation of the recruitment agreement and violation of contracts of employment. [Sec. 10(a)(2) Rule V, Book I, IRR]

ADMINISTRATIVE ACTIONS POEA Original and exclusive jurisdiction to hear and decide: 1. All cases which are administrative in character, involving or arising out of violations of rules and regulations relating to licensing and registration of recruitment and employment agencies or entities and 2. Disciplinary action cases and other special cases which are administrative in character, involving Ers, principals, contracting partners and Filipino migrant workers. a. It may be filed with the POEA Adjudication Office or the DOLE/POEA regional office of the place where the complaint applied or was recruited at the option of the complainant. The office with which the complaint was first filed shall take cognizance of the case. b. DA cases and other special cases, as mentioned in the preceding Section, shall be filed with POEA Adjudication Office.

Q. What is the liability of corporate officers, directors or partners if the recruitment/ placement agency is a juridical being? A. If the recruitment/placement agency is a juridical being, the corporate officers, directors or partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the claims and damages [Becmen Service Exporter and Promotion vs. Cuaresma, G.R. Nos. 182978-79, (2009)]. Q: What are the remedies under the Migrant Workers Act and how may they be enforced?

Q: Is compromise agreement on money claims allowed?

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

18

RECRUITMENT AND PLACEMENT A: Yes. Consistent with the policy encouraging amicable settlement of labor disputes, Sec. 10 of R.A. 8042 allows resolution by compromise of cases filed with the NLRC.

broker, and the employer-foreign principal alleging that she was jailed for three months and that she was underpaid. Should Sunace be held liable for the underpayment for the additional two years that she worked for her Taiwanese employer under the theory of imputed knowledge?

Q: When shall compromise agreements on money claims be paid?

A: No, the theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal Taiwanese Er, not the other way around. The knowledge of the principal-foreign Er cannot, therefore, be imputed to its agent Sunace.

A: Any compromise/amicable settlement or voluntary agreement on money claims inclusive of damages shall be paid within four months from the approval of the settlement by the appropriate authority. Q: Are overtime and leave pay included in the terms which is the basis in the computation of the monetary award?

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, it and its owner cannot be held solidarily liable for and of Montehermozo’s claims arising from the 2-year employment extension [Sunace vs. NLRC, G.R. No. 161757, (2006)].

A: No. The word “salaries” in Sec. 10(5) of the LC does not include OT and leave pay. For seafarers, DO No. 33, series of 1996, provides a Standard Employment Contract of Seafarers, in which salary is understood as the basic wage, exclusive of OT, leave pay and other bonuses; whereas OT pay is compensation for all work “performed” in excess of the regular 8 hours, and holiday pay is compensation for any work “performed” on designated rest days and holidays [Serrano vs. Gallant Maritime Services & Marlow Navigation Co., Inc., G.R. No. 167614, (2009)].

SOLIDARY LIABILITY Q: What is the liability of the private employment agency and the principal or foreign-based employer? A: They are jointly and solidarily liable for any violation of the recruitment agreement and the contracts of employment.

FOREIGN EMPLOYER Note: This joint and solidary liability imposed by law against recruitment agencies and foreign Ers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him [Becmen Service Exporter and Promotion vs. Cuaresma, G.R. Nos. 182978-79, (2009)].

THEORY OF IMPUTED KNOWLEDGE Q: What is the theory of imputed knowledge? A: A rule in insurance law 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 so far as the transaction is concerned, even though in fact the knowledge is not communicated to the principal at all [Leonor vs. Filipinas Compania, 48 OG 243].

Q. May the absence of employment contract, special power of attorney and affidavit of responsibility, as required by the POEA Rules and Regulations, absolve the private employment agency and the principal from liability? A. No. Non-compliance with POEA Rules and Regulations cannot be utilized to relieve the agency and its principal from liabitliy. In fact, such noncompliance is a ground for the cancellation or suspension of their license [Hornales vs. NLRC, et al., G.R. No. 118934 (2001)].

Q: Sunace International Management Services (Sunace), deployed to Taiwan Montehermozo as a domestic helper under a 12-month contract effective Feb. 1, 1997. The deployment was with the assistance of a Taiwanese broker, Edmund Wang, President of Jet Crown International Co., Ltd. After her 12-month contract expired on Feb. 1, 1998, Montehermozo continued working for her Taiwanese employer for two more years, after which she returned to the Philippines on Feb. 4, 2000. Shortly after her return she file before the NLRC against Sunace, one Perez, the Taiwanese

PRETERMINATION OF CONTRACT OF MIGRANT WORKER Q: Serrano, a seafarer, was hired by Gallant Maritime and Marlow Navigation Co. for 12 months as Chief Officer. On the date of his departure, he was constrained to accept a downgraded employment contract for the position of Second

19

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Officer, upon the assurance that he would be made Chief Officer after a month. It was not done; hence, he refused to stay on as Second Officer and was repatriated to the Phils. He had served only 2 months & 7 days of his contract, leaving an unexpired portion of 9 months & 23 days.

employment contract, pursuant to law and jurisprudence prior to the enactment of RA 8042 [Serrano vs. Gallant Maritime Services & Marlow Navigation Co., Inc., G.R. No. 167614, (2009)]. Q: What is the basis in computing an employee’s compensation in case of premature termination of contract?

Serrano filed with the LA a Complaint against Gallant Maritime and Marlow for constructive dismissal and for payment of his money claims. The LA rendered a favorable decision to Serrano awarding him $8,770.00, representing his salary for 3 months of the unexpired portion of his contract of employment applying R.A. 8042, Sec 10, par. 5:

A: A worker dismissed from overseas employment without just, valid or authorized cause as defined by law or contract is entitled to full reimbursement of his placement fee with interest at 12% per annum, plus his salary for the unexpired portion of his employment contract or for three months for every year of the unexpired term, whichever is less. (Sec. 7, R.A. 10020, 2010)

Money Claims. - In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of 12% per annum, plus his salaries for the unexpired portion of his employment contract or for 3 months for every year of the unexpired term, whichever is less.

Q: What is the basis in computing an employee’s compensation in case of premature termination of contract? A: The Migrant Workers Act provides that salaries for the unexpired portion of the employent contract or three months for every year of the unexpired term, whichever is less, shall be awarded to the overseas Filipino worker, in cases of illegal dismissal. However in Serrano v. Gallant Maritime Services (G.R. No. 167614, 2009), the clause “or for three months for every year of the unexpired term, whichever is less” is declared unconstitutional and awarded the entire unexpired portion of the employment contract to the overseas Filipino worker.

Is the subject clause constitutional? A: No. The subject clause contains a suspect classification in that, in the computation of the monetary benefits of fixed-term Ees who are illegally discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on the claims of other OFWs or local workers with fixed-term employment. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage.

Nonetheless, Sec. 7 of R.A. 10022 amended Sec. 10 of the Migrant Workers Act, and once again reiterated the provision of awarding the unexpired portion of the employent contract or three months for every year of the unexpired term, whichever is less [Skippers United Pacific, Inc. vs. Doza, et. al, G.R. No. 175558 (2012)].

The clause is a violation of the right of Serrano and other OFWs to equal protection and right to substantive due process, for it deprives him of property, consisting of monetary benefits, without any existing valid governmental purpose. Furthermore, prior to R.A. 8042, all OFWs, regardless of contract periods or the unexpired portions thereof, were treated alike in terms of the computation of their monetary benefits in case of illegal dismissal. Their claims were subjected to a uniform rule of computation: their basic salaries multiplied by the entire unexpired portion of their employment contracts. The same applies local workers with fixedterm employment.

The declaration in March 2009 of the unconstitutionality of the clause “or for three months for every year of the unexpired term, whichever is less” in RA 8042 shall be given retroactive effect to the termination that occurred in January 1999 because an unconstitutional clause in the law confers no rights, imposes no duties and affords no protection. The unconstitutional provision is inoperative, as if it was not passed into law at all [Yap

Thus, Serrano is entitled to his salaries for the entire unexpired period of nine months and 23 days of his UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

20

RECRUITMENT AND PLACEMENT v. Thenamaris Ship’s Management and Intermare Maritime Agencies, Inc., G.R. No. 179532, (2011)].

If the PI is conducted by a prosecution officer and a prima facie case is established

PENALTIES FOR ILLEGAL RECRUITMENT

Information shall be filed in court within 24 hours from the termination of the investigation

Q: What is the consequence of conviction for illegal recruitment? A: PENALTIES (Under R.A. 10022) Offender / Offense Illegal recruitment as economic sabotage Provided: 1. If person illegally recruited is below 18 years of age or 2. Illegal recruitment is committed by a nonlicensee/non-holder

If the PI is conducted by a judge and a prima facie case is found to exist Prosecution officer within 48 hours from the date of receipt of the records of the case. (Sec. 11)

Prescriptive Period for Illegal Recruitment Cases

Penalty Life imprisonment + fine of P2M-P5M

Simple Illegal Recruitment Within 5 yrs. from the time illegal recruitment has happened

Maximum penalty shall be imposed

Economic Sabotage Within 20 yrs. from the time illegal recruitment has happened. (Sec. 12,R.A. 8042)

DIRECT HIRING Q: What is direct hiring? A: It is when an Er hires a Filipino worker for overseas employment without going through the POEA or entities authorized by the SLE.

12 yrs. and 1 day - 20 yrs. imprisonment; or Fine: P1M-P2M 6 yrs. and 1 day - 12 yrs. Any person found guilty imprisonment; or of the prohibited acts Fine of P500K - P1M Licensee/holder of 2-5 yrs. imprisonment; or authority violates Fine: P10K - P50K; provisions or both Non-licensee/non4-8 yrs. imprisonment; or holder of authority Fine: P20K - P100K violates provisions or both Corporation, Penalty imposed upon partnership, officer/s responsible for association, or entity violation Penalties prescribed under RA 10022, Alien + Deportation without further proceedings Automatic revocation of license or authority and all permits and privileges of In every case the recruitment or manning agency, lending institutions, training school or medical clinic PERIODS Mandatory Period for Resolution of Illegal Recruitment Cases The preliminary investigations of cases under R.A. 10022 shall be terminated within a period of 30 calendar days from the date of their filing. Any person found guilty of illegal recruitment

Q: What is the ban on direct hiring? A: GR: An Er may only hire Filipino worker for overseas employment through POEA or entities authorized by DOLE. XPNs: Direct hiring by: 1. International organizations 2. Name hires 3. Members of the diplomatic organizations 4. Other Ers as may be allowed by DOLE Q: Why is direct hiring prohibited? A: 1. To ensure the best possible terms and conditions of employment for the worker. 2. To assure the foreign Er that he hires only qualified Filipino workers. 3. To ensure full regulation of employment in order to avoid exploitation. REGULATION AND ENFORCEMENT SUSPENSION OR CANCELLATION OF LICENSE OR AUTHORITY Q. Who has the power to suspend or cancel any license or authority to recruit employees for overseas employment?

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation A. The Secretary of Labor and Employment

process including lack of notice and hearing by the DOLE. The DOLE in its answer claimed the existence of an emergency in the Middle East which required prompt measures to protect the life and limb of OFWs from a clear and present danger posed by the ongoing war against terrorism. Should the DOLE orders be upheld or set aside? (2004 Bar Question)

Q: What are the grounds for revocation of License? A: 1. Incurring an accumulated 3 counts of suspension by an agency based on final and executory orders within the period of validity of its license 2. Violations of the conditions of license 3. Engaging in acts of misrepresentation for the purpose of securing a license or renewal 4. Engaging in the recruitment or placement of workers to jobs harmful to the public health or morality or to the dignity of the country. (Sec. 3, Rule I, Book VI, Rules and Regulations Governing Overseas Employment)

A: 1. The DOLE order cancelling the licenses of XYZ is void because a report that an agency is covertly transporting extremists is not a valid ground for cancellation of a Certificate of Registration (Art. 239, LC) and there is failure of due process as no hearing was conducted prior to the cancellation (Art. 238, LC). 2. The DOLE order imposing the travel ban is valid because it is a valid exercise of police power to protect the national interest (Sec. 3, Art. XIII, Constitution on full protection to labor safety of workers) and on the rule making authority of the SLE [Art. 5, LC; Phil. Ass’n. of Service Exporters vs. Drilon, G.R. No. 81958, (1988)].

Q: What are the grounds for suspension or cancellation of license? A: 1. Commission of prohibited acts under Art. 34 2. Publishing job announcements w/o POEA’s approval 3. Charging a fee which may be in excess of the authorized amount before a worker is employed 4. Deploying workers w/o processing through POEA 5. Recruitment in places outside its authorized area. (Sec. 4, Rule II, Book IV, POEA Rules) 6. If the employment agency fails to provide the ticket or PTA within 48 hours from receipt of the notice [R.A. 10022]

REGULATORY AND VISITORIAL POWERS OF THE DOLE SECRETARY Q: What are the regulatory powers of the Secretary of Labor and Employment? A: 1. Restrict and regulate the recruitment and placement activities of all agencies 2. Issue orders and promulgate rules and regulations

Q. What is the degree of proof required for suspension of license or authority? A: Administrative determinations require only substantial proof and not clear and convincing evidence. In proceedings for cancellation or suspension of license or authority, no rule requires that testimonies or complaints be corroborated by documentary evidence, if the charge of unlawful exaction is substantially proven.

Q: What constitute visitorial power? A: 1. Access to Er’s records and premises at any time of the day or night, whenever work is being undertaken 2. To copy from said records 3. Question any Ee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of the LC and of any labor law, wage order, or rules and regulation issued pursuant thereto.

Q: Concerned Filipino contract workers in the Middle East reported to the DFA that XYZ, a private recruitment and placement agency, is covertly transporting extremists to terrorist training camps abroad. Intelligence agencies of the Government allegedly confirmed the report. Upon being alerted by the DFA, the DOLE issued orders cancelling the licenses of XYZ, and imposing an immediate travel ban on its recruits for the Middle East. XYZ appealed to the Office of the President to reverse and set aside the DOLE orders, citing damages from loss of employment of its recruits, and violations of due UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Q: What are the 4 instances where the visitorial power of the Secretary of Labor and Employment may be exercised under the LC? A: Power to:

22

RECRUITMENT AND PLACEMENT 1.

2.

3. 4.

Inspect books of accounts and records of any person or entity engaged in recruitment and placement; require it to submit reports regularly on prescribed forms and act in violations of any provisions of the LC on recruitment and placement. (Art. 37, LC) Have access to Er’s records and premises to determine violations of any provisions of the LC on recruitment and placement. (Art. 128, LC) Conduct industrial safety inspections of establishments. (Art. 165, LC) Inquire into the financial activities of legitimate labor organizations (LLO) and examine their books of accounts upon the filing of the complaint under oath and duly supported by the written consent of at least 20% of the total membership of the labor organization concerned.

A: 1. Workers – Shall be suspended or removed from the list of eligible workers for overseas employment. 2. Employers – Will be excluded from the overseas employment program. Private employment agencies shall face cancellation or revocation of their licenses or authority to recruit. (Sec. 9, E.O. 857) PROHIBITED ACTIVITIES Q: What are the prohibited practices in recruitment/ placement? A: 1. Furnishing or publishing any false notice/information/document related to recruitment/employment 2. Failure to file reports required by SLE 3. Inducing or attempting 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 4. Recruitment/placement of workers in jobs harmful to public health or morality or to the dignity of the country 5. Engaging directly or indirectly in the management of a travel agency 6. Substituting or altering employment contracts without approval of DOLE 7. Charging or accepting any amount greater than that specified by DOLE or make a worker pay any amount greater than actually received by him 8. Committing any act of misrepresentation to secure a license or authority 9. Influencing or attempting to influence any person/entity not to employ any worker who has not applied of employment through his agency 10. Obstructing or attempting to obstruct inspection by SLE or by his representatives 11. Withholding or denying travel documents from applicant workers before departure for monetary considerations other than authorized by law 12. Granting a loan to an OFW which will be used for payment of legal and allowable placement fees 13. Refusing to condone or renegotiate a loan incurred by an OFW after his employment contract has been prematurely terminated through no fault of his or her own 14. For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the processing of pending workers' applications; and

Q: Can the Secretary of Labor and Employment issue search warrants or warrants of arrest? A: No. Under the 1987 Constitution, only a judge may issue search warrants or warrants of arrest. Hence, Art. 38(c) of the LC is unconstitutional inasmuch as it gives the SLE the power to issue search warrants and warrants of arrest. The labor authorities must go through the judicial process [Salazar v. Achacoso, G.R. No. 81510, (1990)]. REMITTANCE OF FOREIGN EXCHANGE EARNINGS Q: What is the rule on remittance of foreign exchange earnings? A: GR: It shall be mandatory for all OFWs to remit a portion of their foreign exchange earnings to their families, dependents, and/or beneficiaries ranging from 50% - 80% depending on the worker’s kind of job. (Rule VIII, Book III, POEA Rules) XPNs: 1. The worker’s immediate family members, beneficiaries and dependents are residing with him abroad 2. Immigrants and Filipino professionals and Ees working with the UN agencies or specialized bodies 3. Filipino servicemen working in U.S. military installations. (Resolution No. 1-83, InterAgency Committee for Implementation of E.O. 857) Q: What is the effect of failure to remit?

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation 15. For a recruitment/manning agency or a foreign principal/ Er to pass on the OFW 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 16. Imposing a compulsory and exclusive arrangement whereby an OFW is required to: a. Avail a loan only from specifically designated institutions, entities or persons b. To undergo health examinations only from specifically designated medical, entities or persons, except seafarers whose medical examination cost is shouldered by the shipowner c. To undergo training of any kind only from designated institutions, entities or persons, except for recommendatory trainings mandated by principals/shipowners. (Sec. 6, R.A. 10022)

2. When public welfare so requires. (Sec. 4 R.A. 10022) Q: What are the minimum conditions/ provisions of overseas employment contracts? A: 1. Guaranteed wages for regular hours and OT, not lower than the minimum wage prescribed in all of the following: a. The host country b. Bilateral agreements or international conventions ratified by the host country and the Philippines c. The Philippines 2. Free transportation to and from the worksite or offsetting benefit 3. Free food and accommodation or offsetting benefit 4. Just/ authorized causes of termination of the contract or services of the worker

PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA)

Note: An agreement that diminishes the Ees pay and benefits as contained in a POEA-approved contract is void, unless such subsequent agreement is approved by the POEA.

Q: What are the principal functions of the POEA? A: 1. 2.

3. 4.

5.

6.

Q: What is the rule on deployment of OFWs?

Protection of the right of Filipino workers to fair and equitable employment practices Regulation of private sector participation in the recruitment and overseas placement of workers by setting up a licensing and registration system Deployment of Filipino workers through Government to Government hiring Formulation, implementation, and monitoring of overseas employment of Filipino workers taking into consideration their welfare and domestic manpower requirements Shall inform migrant workers not only of their rights as workers but also of their rights as human beings, instruct and guide the workers how to assert their rights and provide the available mechanism to redress violation of their rights. (Sec. 14, R.A. 10022) Implementation, in partnership with other lawenforcement agencies, of an intensified program against illegal recruitment activities. (Sec. 14, R.A. 10022)

A: The State shall allow the deployment of OFWs: 1. Only in countries where the rights of Filipino migrant workers are protected. 2. To vessels navigating the foreign seas or to installations located offshore or on high seas whose owners/Ers are compliant with international laws and standards that protect the rights of migrant workers. 3. To companies and contractors with international operations: Provided, That they are compliant with standards, conditions and requirements, as embodied in the employment contracts prescribed by the POEA and in accordance with internationally-accepted standards. (Sec. 3, R.A. 10022 amending R.A. 8042) Q: What are the guarantees of the receiving country for the protection of the rights of OFWs? A: 1. It has existing labor and social laws protecting the rights of workers, including migrant workers; 2. It is a signatory to and/or a ratifier of multilateral conventions, declarations or resolutions relating to the protection of workers, including migrant workers; and 3. It has concluded a bilateral agreement or arrangement with the government on the

Q: May the POEA, at any time terminate or impose a ban on employment of migrant workers? A: Yes, in consultation with the DFA based on the ff. grounds: 1. In pursuit of the national interest; or

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

24

RECRUITMENT AND PLACEMENT protection of the rights of OFWs. (Sec. 3, R.A. 10022 amending R.A. 8042)

Q: What are the regulatory and adjudicatory functions of the POEA?

Provided, that the receiving country is taking positive, concrete measures to protect the rights of migrant workers in furtherance of any of the guarantees.

A: 1. Regulatory – It regulates the private sector participation in the recruitment and overseas placement of workers through its licensing and registration system. 2. Adjudicatory a. Administrative cases involving violations of licensing rules and regulations and registration of recruitment and employment agencies or entities b. Disciplinary action cases and other special cases which are administrative in character involving employers, principals, contracting partners and Filipino migrants.

Note: In the absence of a clear showing that any of the guarantees exists in the country of destination of the migrant workers, no permit for deployment shall be issued by the POEA.

Q: What is the general rule on repatriation of a worker? A: GR: The repatriation of the: 1. Worker and the transport of his personal belongings - shall be the primary responsibility of the agency which recruited or deployed the worker overseas. 2. Remains and transport of the personal belongings of a deceased worker and all costs attendant thereto - shall be borne by the principal and/or the local agency.

Q: What are the grounds for disciplinary action of OFWs? A: Under R.A. 8042, these are: 1. Prostitution 2. Unjust refusal to depart for the worksite 3. Gunrunning or possession of deadly weapons 4. Vandalism or destroying company property 5. Violation of the laws and sacred practices of the host country and unjustified breach of employment contract 6. Embezzlement of funds of the company or fellow worker entrusted for delivery to relatives in the Phils. 7. Creating trouble at the worksite or in the vessel 8. Gambling 9. Initiating or joining a strike or work stoppage where the laws of the host country prohibits strikes or similar actions 10. Commission of felony punishable by Philippine laws or by the host country 11. Theft or robbery 12. Drunkenness 13. Drug addiction or possession or trafficking of prohibited drugs 14. Desertion or abandonment

XPNs: 1. If the termination of employment is due solely to the fault of the worker, the principal/ Er or agency shall not be responsible for the repatriation of the former and/or his belongings. 2. In cases of war, epidemic, disaster or calamities, natural or man-made, and other similar event, and where the principal or recruitment agency cannot be identified, the Overseas Workers Welfare Administration, in coordination with appropriate international agencies, shall take charge of the repatriation. (Sec.15, R.A. 8042) Q: What is the rule on mandatory repatriation of underage migrant workers? A: Upon discovery or being informed of the presence of migrant workers whose ages fall below the minimum age requirement for overseas deployment, the responsible officers in the foreign service shall without delay repatriate said workers and advise the DFA through the fastest means of communication available of such discovery and other relevant information. The license of a recruitment/manning agency which recruited or deployed an underage migrant worker shall be automatically revoked and shall be imposed a fine of not less than P500,000 but not more than P1,000,000. (Sec. 9, R.A. 10022)

Q: What is the distinction between the jurisdiction of the LA and POEA? A: JURISDICTION Labor Arbiter POEA Original and Original and exclusive exclusive jurisdiction over: jurisdiction over all claims arising out of 1. All cases which are Er-Ee relationship administrative in character

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation or by virtue of any law or contract involving OFWs including claims for: 1. Actual 2. Moral 3. Exemplary 4. Other forms of damages. (Sec. 10, R.A. 8042)

relating to licensing and registration of recruitment and employment agencies 2. Disciplinary Action cases and other special cases, which are administrative in character, involving Ees, principals, contracting partners and Filipino migrant workers. (Rule VII, Book VII, POEA Rules)

Q: A seafarer was prevented from leaving the port of Manila and refused deployment without valid reason. His POEA-approved employment contract provides that the employer-employee relationship shall commence only upon the seafarer’s actual departure from the port in the point of hire. Is the seafarer entitled to relief under the Migrant Workers’ Act, in the absence of an employeremployee relationship? A: Yes. Despite the absence of an Er-Ee relationship, the NLRC has jurisdiction over the seafarer’s complaint. The jurisdiction of LAs is not limited to claims arising from Er-Ee relationships. Sec. 10 of the Migrant Workers Act provides that the LAs shall have jurisdiction over claims arising out of an Er-Ee 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. Since the present case involves the employment contract entered into by petitioner for overseas employment, his claims are cognizable by the LAs of the NLRC [Santiago vs. CF Sharp Crew Management,G.R. No. 162419, (2007)]. Q: What matters fall outside the jurisdiction of the POEA? A: 1.

2.

Foreign judgments – such claim must be brought before regular courts. POEA is not a court; it is an administrative agency, exercising adjudicatory or quasi-judicial functions. Torts – falls under the provisions of the Civil Code.

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

26

LABOR STANDARDS LABOR STANDARDS HOURS OF WORK

4.

COVERAGE/ EXCLUSIONS 5. Q: Who are the employees covered by the conditions of employment under the Labor Code?

6.

A: GR: The conditions of employment under the LC apply to Ees in all establishments and undertakings whether for profit or not.

Q: Why are managerial employees not covered by the conditions of employment under the Labor Code?

XPNs: 1. Government Ees 2. Managerial Ees 3. Field personnel 4. The Er’s family members who depend on him for support 5. Domestic helpers and persons in the personal service of another, and 6. Workers who are paid by results as determined under DOLE regulations. [Art. 82. LC]

A: They are employed by reason of their special training, expertise or knowledge and for positions requiring the exercise of discretion and independent judgment. Value of work cannot be measured in terms of hours. Q: Who are field personnel? A: They are: 1. non-agricultural Ees 2. who regularly perform their duties 3. away from the principal place of business or branch office of the Er; and 4. whose actual hours of work in the field cannot be determined with reasonable certainty.

Q: Who are government employees? A: They are Ees of the: 1. National Government 2. Any of its political subdivisions 3. Including those employed in GOCCs with original charters

Q: Who are domestic helpers and persons in the personal service of another?

Q: What law governs government employees? A: The Civil Service Law, rules and regulations.

A: Those who: 1. perform services in the Er’s home which are usually necessary or desirable for the maintenance or enjoyment thereof; or 2. minister to the personal comfort, convenience or safety of the Er as well as the members of his Er’s household.

Q: Who are managerial employees? A: Those whose primary duty consists of the management of the establishment in which they are employed or a department or subdivision thereof, and other officers or members of the managerial staff. [Art. 82(2), LC]

Q: A house personnel was hired by a ranking company official to maintain a staff house provided for the official. The personnel is being paid by the company itself. Is the house personnel a domestic servant of the company official?

They must meet all of the ff. conditions, namely: 1.

2. 3.

as to the promotion or any change of status of other Ees are given particular weight. Execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge Execute under general supervision special assignment and tasks; and Do not devote more than 20% of their hours worked to activities which are not directly and closely related to the performance of the work described.

Primary duty: management of the establishment in which they are employed or of a department or sub-division thereof; Customarily or regularly direct the work of 2 or more Ees Has the authority to hire or fire other Ees of lower rank; or their suggestions and recommendations as to the hiring and firing and

A: No, the personnel is not a domestic helper but a regular Ee of the company [Apex Mining vs. NLRC, G.R. No. 9366, (1991); Remington Industrial Sales Corporation, G.R. Nos. 169295-96, (2006)]. Q: When do the conditions of employment under the Labor Code apply?

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation although compensated on a commission basis, [is] exempt from the observance of normal hours of work for his compensation is measured by the number of sales he makes" [Lazaro vs. SSS, 435 SCRA 472].

A: Only if an Er-Ee relationship exists. Q: Who determines working conditions? A: Generally, they are determined by the Er, as he is usually free to regulate, according to his discretion, all aspects of employment.

Q: What is the rationale behind the law on eighthour labor? A: It is enacted not only to safeguard the health and welfare of the Ee or laborer, but also in a way to minimize unemployment by forcing Ers, in cases where more than 8-hour operation is necessary, to utilize different shifts of laborers or Ees working only for 8 hours each.

Q: What is the limitation on the employer’s power to regulate working conditions? A: It must be done in good faith and not for the purpose of defeating or circumventing the rights of the Ees. Such are not always absolute and must be exercised with due regard to the rights of labor.

Q: What are considered hours worked?

Note: One’s employment, profession, trade or calling is a property right and the wrongful interference therewith is an actionable wrong.

A: 1. All time during which an Ee is required to be: a. On duty, or b. At the Ers premises, or c. At a prescribed workplace 2. All time during which an Ee is suffered or permitted to work. (Sec. 3, Rule I, Book III, IRR)

Q: What are the 3 groups of employees under the LC? A: 1. Managerial Ee - One who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline Ees. 2. Supervisory Ee - those who in the interest of the Er, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. 3. Rank-and-file Ee - all Ees not falling within any of the above definitions. (Art. 212[m], LC)

Q: What are the principles in determining hours worked? A: 1. All hours which the Ee is required to give to his Er regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion. 2. Rest period is excluded from hours worked, even if Ee does not leave his workplace, it being enough that: a. He stops working b. May rest completely c. May leave his workplace, to go elsewhere, whether within or outside the premises of the workplace 3. All time spent for work is considered hours worked if: a. The work performed was necessary b. If it benefited the Er c. Or the Ee could not abandon his work at the end of his normal working hours because he had no replacement d. Provided, the work was with the knowledge of his Er or immediate supervisor 4. The time during which an Ee is inactive by reason of interruptions in his work beyond his control shall be considered working time: a. If the imminence of the resumption of the work requires the Ees presence at the place of work; or

NORMAL HOURS OF WORK Q: What are the normal hours of work of an employee? A: GR: The normal hours of work of any Ee shall not exceed 8 hours a day. (Art. 83, LC) XPNs: 1. Health Personnel 2. Compressed Workweek Note: Normal hours of work may be shortened or compressed. Neither does it follow that a person who does not observe normal hours of work cannot be deemed an employee. In Cosmopolitan Funeral Homes, Inc. vs. Maalat, the employer similarly denied the existence of an Er-Ee relationship, as the claimant according to it, was a "supervisor on commission basis" who did not observe normal hours of work. This Court declared that there was an Er-Ee relationship, noting that "[the] supervisor, UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

28

LABOR STANDARDS b.

If the interval is too brief to be utilized effectively and gainfully in the Ees own interest. (Sec. 4, Rule I, Book III, IRR)

XPNs: i. Emergency call outside his regular working hours where he is required to travel to his regular place of business or some other work site. ii. Done through a conveyance provided by the Er. iii. Done under the supervision and control of the Er. iv. Done under vexing and dangerous circumstance.

Q: What are the hours of work of health personnel? A: GR: 8 hours for 5 days (40-hour workweek), exclusive of time for meals. XPN: Where the exigencies of the service require that such personnel work for 6 days or 48 hours, they shall be entitled to an additional compensation of at least 30% of their regular th wage for work on the 6 day. (Art. 83, LC)

b.

Q: Can hospitals require resident physicians to be on duty beyond the 40-hour workweek limitation?

Travel that is all in a day’s work – time spent in travel as part of the Ees principal activity E.g. travel from job site to job site during the work day, must be counted as working hours.

A: GR: The customary practice of requiring resident physicians beyond the 40 hrs. of work per week is not permissible and violates the limitation under Art. 83.

c.

XPN: If there is a training agreement between the resident physician and the hospital and the training program is duly accredited or approved by appropriate government agency. Q: Who are the health personnel covered by the 40hour workweek? A: 1. Those in cities and municipalities with a population of at least 1 million; or 2. Those in hospitals and clinics with a bed capacity of at least 100

Travel away from home GR: a. Travel that requires an overnight stay on the part of the Ee when it cuts across the Ees workday is clearly working time. b. The time is not only hours worked on regular workdays but also during corresponding working hours on nonworking days. Outside of these regular working hours, travel away from home is not considered working time. XPN: During meal period or when Ee is permitted to sleep in adequate facilities furnished by the Er.

Q: When are hours not counted to be compensable? Note: Art. 83(2) of the LC does not require hospitals to pay the Ees a full weekly salary with paid 2 days off [San Juan de Dios Ees Assoc.-AFW et al. vs. NLRC, G.R. No. 126383, (1997)].

A: 1. Ee ceases to work 2. Ee may rest completely 3. Ee may leave at his will the spot where he actually stays while working to go somewhere else (Luzon Stevedoring vs. Luzon Marine) 4. When work is broken/not continuous (NDC vs. CIR) 5. Assembly time, routinary practice of employees, proceedings not infected with complexities so as to deprive employees time to attend to their personal pursuits (Arica vs. NLRC) 6. Meal time (60 mins.), unless predominantly spent for the Er’s benefit

Q: When are hours worked compensable? A: When: 1. Ee is required to be on duty 2. Ee is suffered or permitted to work 3. Rest periods of short duration during working hours 4. Travel time, when beneficial to the Er (Rada vs. NLRC): a.

Travel from home to work GR: Normal travel from home to work is not working time.

Note: Activities before work and after work are deemed performed during work hours, where such activities are controlled or required by the Er and are pursued necessarily and primarily for the Er’s benefit.

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation COMPRESSED WORKWEEK Q: What is a Compressed Workweek?

5.

A: The normal workweek is reduced to less than 6 days but the total number of work-hours of 48 hours per week shall remain. The normal workday is increased to more than 8 hours but not to exceed 12 hours, without corresponding overtime premium. The concept can be adjusted accordingly depending on the normal workweek of the company. (Department Advisory Order No. 2, Series of 2009)

6.

Q: What are the requisites for adoption of compressed workweek? A: 1. The Er shall notify the DOLE through the Regional Office which has jurisdiction over the workplace, of the adoption of compressed workweek. 2. The notice shall be in Report Form attached to the advisory. 3. The Regional Office shall conduct an ocular visit to validate whether the adoption of the flexible work arrangements is in accordance with this issuance. (Department Advisory Order No. 2, Series of 2009)

Q: When is the implementation of a compressed workweek valid? A: The validity of the reduction of working hours can be upheld when the arrangement is: 1. Temporary 2. It is a more humane solution instead of a retrenchment of personnel 3. There is notice and consultations with the workers and supervisors 4. A consensus is reached on how to deal with deteriorating economic conditions; and 5. It is sufficiently proven that the company was suffering from losses.

MEAL BREAK Q: What is the duration of the meal period? A: Every Er shall give his Ees not less than 60 minutes or 1 hour time-off for regular meals.

Under the Bureau of Working Conditions’ bulletin, a reduction of the number of regular working days (RWD) is valid where the arrangement is resorted to by the Er to prevent serious losses due to causes beyond his control, such as when there is a substantial slump in the demand for his goods or services or when there is a lack of raw materials. There is one main consideration in determining the validity of reduction of working hours – that the company was suffering from losses. A year of financial losses would not justify a reduced workweek [Linton Commercial vs. Hellera, G.R. No. 163147, (2007)].

Q: Is the meal period compensable? A: Being a time-off, it is not compensable. Ee must be completely relieved from duty. Q: When is compensable?

the

meal

period

considered

A: It is compensable where the lunch period or meal time: 1. Is predominantly spent for the Er’s benefit; or 2. Where it is less than 20 mins. Note: Where during a meal period, the laborers are required to stand by for emergency work, or where the meal hour is not one of complete rest, such is considered OT. [Pan Am vs. Pan Am Ees Association, G.R. No. L-16275, (1961)] Rest periods or coffee breaks running from 5 to 20 mins. shall be considered as compensable working time. (Sec. 7, Rule I, Book III, IRR)

Q: Under what conditions may a "compressed workweek" schedule be legally authorized as an exception to the "8-hour a day" requirement under the LC? (2005 Bar Question) A: 1. The Ee voluntarily agrees to it 2. There is no diminution in their weekly or monthly take home pay or fringe benefits 3. The benefits are more than or at least commensurate or equal to what is due to the Ees without the compressed work week 4. OT pay will be due and demandable when they are required to work on those days which should UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

have ceased to be working days because of the compressed work week schedule. No strenuous physical exertion or that they are given adequate rest periods. It must be for a temporary duration as determined by the DOLE.

Q: Are meal periods provided during overtime work compensable? A: Yes, since the 1 hour meal period (noncompensable) is not given during OT work because the latter is usually for a short period and to deduct from the same would reduce to nothing the Ees’ OT

30

LABOR STANDARDS work. Thus, the 1 hour break for meals during OT should be treated as compensable.

A: 1. If waiting is an integral part of his work, or 2. The Ee is required or engaged by the Er to wait (engaged to wait)

Q: What are the instances where meal periods shortened to not less than 20 minutes is compensable or not compensable?

Note: The controlling factor is whether waiting time spent in idleness is so spent predominantly for the Er’s benefit or for the Ee.

A: 1. Compensable – At the instance of Er, when: a. Work is non-manual in nature or does not involve strenuous physical exertion; b. Establishment regularly operates less than 16 hours a day; c. Work is necessary to prevent serious loss of perishable goods. d. Actual or impending emergency or there is urgent work to be performed on machineries and equipment to avoid serious loss which the Er would otherwise suffer. (Sec. 7, Rule I, Book III, IRR) 2.

Q: When is waiting time not considered working time? A: When the Ee is waiting to be engaged: idle time is not working time; it is not compensable. Note: Under the law, the idle time that an Ee may spend for resting and during which he may leave the spot or place of work though not the premises of his Er, is not counted as working time only where the work is broken or is not continuous [National Development Co. vs. CIR, 6 SCRA 763 (1962)].

Not Compensable – Ee requested for the shorter meal time so that he can leave work earlier than the previously established schedule. Requisites: a. Ees voluntarily agree in writing and are willing to waive OT pay for the shortened meal period; b. No diminution in the salary and other fringe benefits of the Ees which are existing before the effectivity of the shortened meal period; c. Work of the Ees does not involve strenuous physical exertion and they are provided with adequate coffee breaks in the morning and afternoon; d. Value of the benefits derived by the Ees from the proposed work arrangements is equal to or commensurate with the compensation due them for the shortened meal period as well as the OT pay for 30 mins. as determined by the Ees concerned; e. OT pay will become due and demandable after the new time schedule f. Arrangement is of temporary duration.

Q: When is idle time considered working time? A: When the Ee is idle or inactive by reason of interruptions beyond his control shall be considered working time. Q: What are the conditions in order for lectures, meetings and training programs to be NOT considered as working time? A: All of the ff. conditions must be present: 1. Attendance is outside of the Er’s regular working hours 2. Attendance is in fact voluntary and 3. The Ee does not perform any productive work during such attendance. OVERTIME WORK, OVERTIME PAY Q: What is overtime work? A: Work performed beyond 8 hours within the worker’s 24-hour workday.

WAITING TIME Note: Express instruction from the Er to the Ee to render OT work is not required for the Ee to be entitled to OT pay; it is sufficient that the Ee is permitted or suffered to work. However, written authority after office hours during rest days and holidays are required for entitlement to compensation.

Q: When is an employee considered working while on call? A: When Ee is required to remain on call in the Er’s premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose.

Q: What is a work day?

Q: When is waiting time considered working time?

A: The 24-hour period which commences from the time the Ee regularly starts to work

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Illustration: If the worker starts to work 8 am today, the workday is from 8 am today up to 8 am tomorrow.

Q: What is the basis of computing the overtime pay and additional remuneration? A: Regular wage which includes the cash wage only, without deduction on account of the facilities provided by the Er. (Art. 90, LC)

Note: Minimum normal working hours fixed by law need not be continuous to constitute the legal working day.

Q: What is the rationale behind the overtime pay?

Q: In lieu of overtime pay, the employee was given permission to go on leave on some other day, is that valid?

A: Ee is made to work longer than what is commensurate with his agreed compensation for the statutory fixed or voluntarily agreed hours of labor he is supposed to do [PNB vs. PEMA and CIR, G.R. No. L30279, (1982)]. It discourages the Er from requiring such work thus protecting the health and well-being of the worker, and also tend to remedy unemployment by encouraging Ers to employ others workers to do what cannot be accomplished during the normal hours of work.

A: No. Permission given to the Ee to go on leave on some other day of the week shall NOT exempt the Er from paying the additional compensation required because it would prejudice the Ee, for he will be deprived of the additional pay for the OT work he has rendered and which is utilized to offset the undertime he may have incurred. Undertime could be charged against the Ees accrued leave.

Q: Distinguish overtime pay from premium pay. A: OVERTIME PAY Additional compensation for work performed beyond 8 hours on ordinary days (within the worker’s 24-hour workday)

Q: Socorro is a clerk-typist in Hospicio de San Jose, a charitable institution dependent for its existence on contributions and donations from well wishers. She renders work 11 hours a day but has not been given OT pay since her place of work is a charitable institution. Is Socorro entitled to overtime pay? Explain briefly. (2002 Bar Question)

PREMIUM PAY Additional compensation for work performed within 8 hours on days when normally he should not be working (on non-working days, such as rest days and special days.) But additional compensation for work rendered in excess of 8 hours during these days is also considered OT pay.

A: Yes. Socorro is entitled to OT compensation. She does not fall under any of the exceptions to the coverage of Art. 82, under the provisions of hours of work. The LC is equally applicable to non-profit institutions. A covered Ee who works beyond 8 hours is entitled to OT compensation.

Q: What are the overtime pay rates?

Q: Flores applied for the position of driver in the motor-pool of Gold Company, a multinational corporation. Danilo was informed that he would frequently be working overtime as he would have to drive for the company's executives even beyond the ordinary 8-hour work day. He was provided with a contract of employment wherein he would be paid a monthly rate equivalent to 35 times his daily wage, regular sick and vacation leaves, 5 day-leave with pay every month and time off with pay when the company's executives using the cars do not need Danilo's service for more than eight hours a day, in lieu of overtime. Are the above provisions of the contract of employment in conformity with, or violative of, the law?

A: PAY RATES OT during a regular working day Additional compensation of 25% of the regular wage OT during a holiday or rest day Rate of the first 8 hours worked on plus at least 30% of the regular wage (RW): If done on a special holiday OR rest day: 30% of 130% of RW If done on a special holiday AND rest day: 30% of 150% of RW

A: Except for the provision that Danilo shall have time off with pay when the company's executives using the cars do not need Danilo's service for more than 8 hours a day, in lieu of OT, the provisions of the contract of employment of Danilo are not violative of

If done on a regular holiday: 30% of 200% of RW

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

32

LABOR STANDARDS any labor law because they instead improve upon the present provisions of pertinent labor laws.

A: Where a worker incurs undertime hours during his regular daily work, said undertime hours should not be offset against the overtime hours on the same day or on any other day. It is both prohibited by the statute and by jurisprudence.

Q: May an employee be compelled to render overtime work? A: GR: No. An Ee may not be compelled to render OT work; it is voluntary.

Q: Can the right to overtime pay be waived? A: GR: The right to OT pay cannot be waived as it is governed by law and not merely by the agreement of the parties.

XPNs: Compulsory OT work in any of the following situations: 1. Urgent work to be performed on machines and installations in order to avoid serious loss or damage to the Er or some other cause of similar nature 2. Work is necessary to prevent loss or damage to perishable goods 3. In case of imminent danger to the public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity 4. Country is at war 5. Completion or continuation of the work started before the 8th hour is necessary to prevent serious obstruction or prejudice to the business operations of the Er 6. Any other national or local emergency has been declared 7. Necessary to prevent loss of life or property.

XPNs: 1. If the waiver is made in exchange for certain valuable benefits and privileges, which may even exceed the OT Pay, waiver may be permitted. 2. Compressed workweek Q: May the overtime rate be subject to stipulation of the employer and employee? A: Generally, the premium for work performed on the Ee’s rest days or on special days or regular holidays are included as part of the regular rate of the Ee in the computation of OT pay for any OT work rendered on said days especially if the Er pays only the minimum OT rates prescribed by law. The Ees and Er, however, may stipulate in their collective agreement the payment of OT rates higher than those provided by law and exclude the premium rates in the computation of OT pay. Such agreement may be considered valid only if the stipulated OT pay rates will yield to the Ees not less than the minimum prescribed by law.

Note: There should be payment of additional compensation. Ees refusal to obey the order of the Er constitutes insubordination for which he may be subjected to disciplinary action.

Q: The employment contract requires work for more than 8 hours a day with a fixed wage inclusive of overtime pay. Is that valid?

Q: Can there be overtime pay in a compressed workweek scheme? A: Any work performed beyond 12 hours a day or 48 hours a week shall be subject to overtime premium. (Department Advisory No. 02, s. of 2004)

A: It depends. 1. When the contract of employment requires work for more than 8 hours at specific wages per day, without providing for a fixed hourly rate or that the daily wages include OT pay, said wages cannot be considered as including OT compensation [Manila Terminal Co. vs. CIR, et al., 91 Phil., 625]. 2. However, the employment contract may provide for a “built-in” OT pay. Because of this, nonpayment of OT pay by the employer is valid [Engineering Equipment vs. Minister of Labor, G.R. No. L-64967, (1985)].

NIGHT WORK (R.A. 10151), NIGHT SHIFT DIFFERENTIAL Q: What is night work? A: Any and all work rendered between 6 pm and 6 am [National Rice & Corn Corp. vs. NARIC, 105 Phil 891]. Q: Who is a night worker?

Q: Can undertime (UT) offset overtime? A: Any employed person whose work requires performance of a substantial number of hours of

33

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation night work which exceeds a specified limit. This limit shall be fixed by the SLE after consulting the workers’ representatives/labor organizations and Ers. (Art. 154, Chapter V, LC, as amended by R.A. 10151)

available to women workers who would otherwise be called upon to perform such work: 1.

Q: Who are covered by the provisions on night work under R.A. 10151?

2.

A: GR: All persons, who shall be employed or permitted or suffered to work at night. XPN: Those employed in agriculture, stock raising, fishing, maritime transport and inland navigation, during a period of not less than 7 consecutive hours, including the interval from midnight to 5 in the morning, to be determined by the SLE after consulting the workers’ representatives/ labor organizations and Ers.

Note: During the periods referred to in this article: 1. A woman worker shall not be dismissed or given notice of dismissal, except for just or authorized causes provided for in the Code that are not connected with pregnancy, childbirth and childcare responsibilities. 2. A woman worker shall not lose the benefits regarding her status, seniority, and access to promotion which may attach to her regular night work position.

Q: What is night shift differential (NSD)? A: It is additional compensation of not less than 10% of an Ee’s regular wage for every hour worked between 10 pm to 6 am, whether or not such period is part of the worker’s regular shift.

Q: May a pregnant women and nursing mothers be allowed to work at night?

Q: Do workers have the right to undergo health assessment to avoid health problems associated with night work?

A: Yes, but only if a competent physician, other than the company physician, shall certify their fitness to render night work, and specify, in the case of pregnant Ees, the period of the pregnancy that they can safely work.

A: At their request, workers shall have the right to undergo health assessment without charge and to receive advice on how to reduce or avoid health problems associated with their work: 1. Before taking up an assignment as a night worker; 2. At regular intervals during such an assignment; and 3. If they experience health problems during such an assignment which are not caused by factors other than the performance of night work.

Q: What are the facilities required from Ers under R.A. 10151? A: 1. Suitable first-aid facilities, including arrangements where such workers, where necessary, can be taken immediately to a place for appropriate treatment. 2. Safe and healthful working conditions and adequate or reasonable facilities, i.e. sleeping or resting quarters in the establishment, and transportation from the work premises to the nearest point of their residence subject to exceptions and guidelines to be provided by the DOLE.

Note: Night workers who are certified as unfit for night work, due to health reasons, shall be transferred, whenever practicable, to a similar job for which they are fit to work. If such transfer to a similar job is not practicable, these workers shall be granted the same benefits as other workers who are unable to work, or to secure employment during such period.

Q: Are women allowed to be employed for night work?

Q: May an Ee waive his right to night shift differential?

A: Yes, under R.A. 10151 which repealed Arts. 130 and 131 of the LC on Night Work prohibition with regard to women workers. However, measures shall be taken to ensure that an alternative to night work is UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Before and after childbirth, for a period of at least 16 weeks, which shall be divided between the time before and after childbirth; For additional periods, in respect of which a medical certificate is produced stating that said additional periods are necessary for the health of the mother or child: a. During pregnancy; b. During a specified time beyond the period, after childbirth is fixed pursuant to paragraph 1, the length of which shall be determined by the DOLE after consulting the labor organizations and Ers.

A: GR: No, such waiver is against public policy [Mercury Drug Co., Inc. vs. Dayao, et al., G.R. No. L-30452, (1982)].

34

LABOR STANDARDS XPN: Higher/better benefits

end to be achieved, the worker is a contractor; if the former controls not only the end but also the manner and means to be used, the latter is an employee.

PART-TIME WORK Q: Is part-time work prohibited under Philippine laws?

Q: What can the contractor furnish? A: The contractor may furnish: 1. Both material and labor, or 2. Only labor

A: No, it is not prohibited. The LC merely provides for the maximum number of hours and not the minimum. Under Art. 124, as amended by R.A. 6727, wage proportionate to part-time work is recognized.

Q: What are the duties of a contractor who furnishes both work and the material?

Note: The wage and benefits of a part-time worker are in proportion to the number of hours worked. For example, if an Ee earns P300.00 for an 8-hour work, he shall then get P150.00 for work done in 4 hours.

A: This is equivalent to sale; therefore, these are the duties: 1. To deliver 2. To transfer ownership 3. To warrant against eviction and hidden defects

CONTRACT FOR A PIECE OF WORK Q: Define contract for a piece of work.

Q: What are the remedies of the Er in case of defects?

A: It is a contract whereby the contractor binds himself to execute a piece of work for the Er, in price or consideration of a certain compensation. The contractor may employ his labor, skill or also furnish the material.

A: 1. Ask the contractor to remove the defect or to execute another work. 2. If the contractor fails or refuses, the Er can ask another at the contractor’s expense. If a building is involved, expenses for correction and completion may be recovered.

Note: All workers paid on piece-work shall be entitled to receive not less than the prescribed daily minimum wage or a proportion thereof for working less than 8 hours.

Q: Distinguish contract for piece of work from lease of services.

Q: What is the rule on agreements waiving or limiting the contractor’s liability?

A: CONTRACT FOR PIECE OF WORK

A: 1. In the absence of fraud, the agreement would ordinarily be valid. 2. In the absence of prohibitory statute, the validity of a limitation is generally upheld, with a view of obtaining compensation commensurate to the risk assumed.

LEASE OF SERVICES

The object is the resultant work or object.

The object is services.

The risk is borne by the worker before delivery.

The risk is generally borne by the Er, not by the worker unless the latter is guilty of fault or negligence.

Q: A asked B to make a radio cabinet. B bound himself to furnish the material. Before the radio cabinet could be delivered, it was destroyed by a fortuitous event. a) Who suffers the loss? b) Is the contract extinguished?

Q: Who is a contractor? A: The worker is also called a contractor. He in turn may obtain the services of others, who will work under him.

A: 1. B suffers the loss of both the materials and the work, unless there was mora accipiendi. If there was mora accipiendi, it is evident that A suffers the loss. 2. No, and therefore B may be required to do the work all over again, unless there had been a prior stipulation to the contrary or unless a re-making is possible. (Art. 1717, NCC)

Q: What is the test to determine if one is an Ee or an independent contractor? A: The “right of control” test is used. If the person for whom services are to be performed controls only the

35

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Note: The law merely refers to the burden of the loss, and not to the extinguishment of the contract.

XPNs: The laborer was able, willing and ready to work but was: 1. Prevented by management; 2. Illegally locked out; 3. Illegally suspended; 4. Illegally dismissed 5. Otherwise illegally prevented from working [Aklan Electric Coop. vs. NLRC, G.R. No. 129246, (2000)].

Q: What is the effect when the employer accepts the work? A: 1. The contractor is generally relieved of liability. 2. If the acceptance is made without objection, the Er may still sue for hidden defects.

Q: To whom does the title on Wages apply?

Q: Where is the place of payment?

A: GR: It applies to all Ees.

A: 1. Where stipulated 2. If no stipulation, then at the time and place of delivery.

XPNs: 1. Farm tenancy or leasehold; 2. Household or domestic helpers, including family drivers and persons working in the personal service of another; 3. Home workers engaged in needlework or in any cottage industry duly registered in accordance with law; 4. Workers in duly registered cooperatives when so recommended by the Bureau of Cooperative Development and upon approval of the SLE. 5. Workers of a barangay micro business enterprise (R.A. 9178)

Q: What is mechanic’s lien? A: One who executed a work on a movable property has a right to retain it by way of pledge until he is paid. WAGES Q: What is a wage? A: It is the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, payable by an Er to an Ee under a written or unwritten contract of employment: 1. 2.

WAGE vs. SALARY Q: Distinguish between wage and salary? A: WAGE SALARY (Gaa vs.CA, G.R. No. 44169, Dec. 3, 1985) Compensation for Paid to “white collared manual labor (skilled or workers” and denotes a unskilled) also known as higher degree of “blue collared workers,” employment or a paid at stated times and superior grade of measured by the day, services and implies a week, month or season. position in the office. Considerable pay for a Out gesture of a larger lower and less and more important responsible character of service employment. GR: Not subject to execution

For work done or to be done, or for services rendered or to be rendered; and includes Fair and reasonable value of board, lodging, or other facilities customarily furnished by the Er to the Ee as determined by SLE.

Q: What is meant by “customary”? A: It is founded on long-established and constant practice connoting regularity. Q: What is meant by “fair and reasonable value”? A: It shall not include any profit to the Er or to any person affiliated with the Er.

XPN: Debts incurred for food, shelter, clothing and medical attendance.

Q: What is the “No Work, No Pay” Principle (fair day’s wage for a fair day’s labor)? A: GR: If there is no work performed by the Ee, without the fault of the Er, there can be no wage or pay. UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

36

Subject to execution.

LABOR STANDARDS MINIMUM WAGE DEFINED, MINIMUM WAGE SETTING

A: In the determination of such regional minimum wages, the Regional Board shall, among other relevant factors consider the following:

Q: What is minimum wage? 1. 2.

The demand for living wages Wage adjustment vis-a-vis the consumer price index 3. The cost of living and changes or increases therein 4. The needs of workers and their families 5. The need to induce industries to invest in the countryside 6. Improvements in standards of living 7. The prevailing wage levels 8. Fair return on the capital invested and capacity to pay by Ers 9. Effects on employment generation and family income 10. The equitable distribution of income and wealth along the imperatives of economic and social development

A: Statutory minimum wage is the lowest wage rate fixed by law that an Er can pay his workers. Q: What is the rationale for fixing a minimum wage? A: The legislature was entitled to adopt measures to reduce the evils of the “sweating system,” the exploiting of workers at wages so low as to be insufficient to meet the bare cost of living, thus making their very helplessness the occasion of a most injurious competition. The legislature had the right to consider that its minimum wage requirements would be an important aid in carrying out its policy of protection. There is also an additional and compelling consideration which recent economic experience has brought into a strong light. The exploitation of a class of workers who are in an unequal position with respect to bargaining power and are thus relatively defenceless against the denial of a living wage is not only detrimental to their health and well-being but casts a direct burden of their support upon the community. What these workers lose in wages the taxpayers are called upon to pay. The bare cost of living must be met [West Coast Hotel v. Parrish, 300 US 79].

Q: What is salary ceiling method? A: A method of minimum wage adjustment whereby the wage adjustment is applied to Ees receiving a certain denominated ceiling. In other words, workers already being paid more than the existing minimum wage are also to be given a wage increase [ECOP vs. NWCP, G.R. No. 96169, (1991)]. Q: What is a floor wage method?

Q: Who are exempted from the coverage of fixing a minimum wage?

A: It involves the fixing of a determinate amount to be added to the prevailing statutory minimum wage rates.

A: 1. Household or domestic helpers, including family drivers and persons in the personal service of another; 2. Homeworkers engaged in needle-work; 3. Workers employed in any establishment duly registered with the National Cottage Industries and Development Authority, provided that such workers perform the work in their respective homes; 4. Workers in a duly registered cooperative when so recommended by the Bureau of Cooperative Development and upon approval of the SLE. (Sec. 2, Rule VII, Book III, IRR of LC)

Q: The Regional Wage Board of Region II issued a Wage Order granting all Ees in the private sector throughout the region an across-the-board increase of P15.00 daily. Is this Wage Order valid? A: The Wage Order is valid insofar as the mandated increase applies to Ees earning the prevailing minimum wage rate at the time of the passage of the Wage Order and void with respect to its application to Ees receiving more than the prevailing minimum wage rate at the time of the passage of the Wage Order. The Regional Wage granted an across-theboard wage increase of P15.00 to all Ees in the region. It did not set a wage level nor a range to which a wage adjustment or increase shall be added. In doing so, the Regional Wage Board exceeded its authority by extending the coverage of the Wage Order to wage earners receiving more than the prevailing minimum wage rate, without a

Q: What are the standards or criteria for minimum wage setting?

37

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation denominated salary ceiling. The Wage Order granted additional benefits not contemplated by R.A. No. 6727. [MBTC vs. NWPC Commission, G.R. No. 144322, (2007)]

a.

b. Q: Since the Wage Order was declared void with respect to its application to employees receiving more than the prevailing minimum wage rate at the time of the passage of the Wage Order, should these Ees refund the wage increase received by them?

If resulting amount is equivalent to or more than the applicable statutory minimum rate in relation to the number of hours worked – worker will receive such amount If the amount is less than the applicable legal rate – Er is required by law to pay the difference between the resulting amount and the applicable legal minimum rate.

APPRENTICES/LEARNERS/PERSONS WITH DISABILITY

A: No. The Es should not refund the wage increase since they received it in good faith, in the honest belief that they are entitled to such wage increase and without any knowledge that there was no legal basis for the same [MBTC vs. NWPC Commission, G.R. NO. 144322, (2007)].

Q: What is the minimum wage rate for apprentices/learners and persons with disability? A: The wage or salary rate shall not be less than 75% of the applicable minimum wage. COMMISSION

MINIMUM WAGE OF WORKERS PAID BY RESULTS Q: What is a commission? Q: Who are workers paid by results? A: A fee paid based on a percentage of the sale made by an Ee or agent, as distinguished from regular payments of wages or salary.

A: They are: 1. paid based on the work completed; and 2. not on the time spent in working 3. Including those who are paid on piecework, “takay”, “pakiaw”, or task basis if their output rates are in accordance with the standards prescribed.

Q: Are commissions included in the computation of the basic salary? A: 1. If the commission is comprised of a predetermined percentage of the selling price of the goods – included in the basic salary 2. If the commission were paid as productivity bonuses or closely resemble profit-sharing, or when it has no clear, direct or necessary relation to the amount of work actually done by each individual employee – excluded from basic salary

WORKERS PAID BY RESULTS Q: What is the application of wage orders to workers paid by results? A: All workers paid by result, including those who are paid on piece work, “takay” or task basis, shall be entitled to receive not less than the prescribed daily minimum wage or a proportion thereof for working less than 8 hours.

DEDUCTIONS FROM WAGES Q: What is the rule on wage deductions?

Q: What is the minimum wage of workers paid by results?

A: GR: Deductions from wages are strictly prohibited

A: 1. Those who are paid piece rates which are prescribed in Piece Rate orders issued by DOLE – wages or earnings are determined by simply multiplying the number of pieces produced by the rate per piece. 2. Those who are paid output rates which are prescribed by the Er and are not yet approved by the DOLE – the number of pieces produced is multiplied by the rate per piece as determined by the Er.

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

XPNs: 1. Deductions under Art. 113 of the LC for insurance premiums 2. Union dues in cases where the right of the worker or his union to check off has been recognized by the Er or authorized in writing by the individual worker concerned (Art. 113, LC). Art. 241(o) of the LC provides that special assessments may be validly checkedoff provided that there is an individual written authorization duly signed by every Ee.

38

LABOR STANDARDS 3.

Deductions for SSS, Medicare and Pag-ibig premiums 4. Taxes withheld pursuant to the Tax Code 5. Deductions under Art. 114 of the LC for loss or damage to tools, materials or equipment 6. Deductions made with the written authorization of the Ee for payment to a third person. (Sec 13, Rule VIII, Book III of the IRR) 7. Deductions as disciplinary measures for habitual tardiness (Opinion dated March 10, 1975 of the Labor Secretary) 8. Agency fees under Art. 248(e)of the LC 9. Deductions for value of meals and facilities freely agreed upon 10. In case where the Ee is indebted to the Er where such indebtedness has become due and demandable. (Art. 1706, NCC) 11. In court awards, wages may be subject of execution or attachment, but only for debts incurred for food, shelter, clothing, and medical attendance. (Art. 1703, NCC) 12. Salary deduction of a member of a legally established cooperative. (R.A. 6938, Art. 59, LC)

and is not due to an error in the construction/ application of a doubtful or difficult question of law. FACILITIES vs. SUPPLEMENTS Q: Distinguish between facilities and supplement A: FACILITIES Items of expenses necessary for the laborer’s and his family’s existence and subsistence Note: Does not include tools of trade or articles / services primarily for the benefit of the Er or necessary to the conduct of the Er’s business.

Forms part of the wage Deductible from wage For the benefit of the worker and his family.

Q: Are deductions for absences allowed?

SUPPLEMENT Extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages [Atok Big Wedge Mining Co. vs. Atok Big Wedge Mutual Benefit Assoc., G.R. No. L-7349, (1955)]. Independent of wage Not wage deductible Granted for the convenience of the Er.

Q: What is the criterion in determining whether an item is a supplement or facility?

A: Yes. Deductions for unpaid absences are allowed. If the Ee is monthly paid, the equivalent daily rate should be determined first before making the deduction.

A: The criterion is not so much with the kind of the benefit or item (food, lodging, bonus or sick leave) given, but its purpose [State Marine vs. Cebu Seamen’s Ass’n., G.R. No. L-12444, (1963)].

NON-DIMINUTION OF BENEFITS

Q: When can the cost of facilities furnished by the employer be charged against an employee?

Q: What is the concept of non-diminution of benefits?

A: In order that the cost be charged against the Ee, the latter’s acceptance of such facilities must be voluntary.

A: GR: Benefits being given to Ees cannot be taken back or reduced unilaterally by the Er because the benefit has become part of the employment contract, whether written or unwritten.

Q: What are the requirements for deducting values for facilities?

XPN: When diminution of benefits is done to correct an error.

A: 1.

Note: If the error is not corrected in a reasonable time, it ripens into a company policy and Ees can demand it as a matter of right.

2. 3.

Q: When is non-diminution of benefits applicable? A: It is applicable if it is shown that the grant of benefit: 1. Is based on an express policy of the law; or 2. Has ripened into practice over a long period of time and the practice is consistent and deliberate

Proof must be shown that such facilities are customarily furnished by the trade The provision of deductible Facilities must be voluntarily accepted in writing The Facilities must be charged at fair and reasonable value [Mabeza vs. NLRC, G.R. No. 118506, (1997)]

Q: Are food and lodging, or the electricity and water consumed by a hotel worker, considered facilities?

39

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation A: No. These are supplements. Considering, therefore, that hotel workers are required to work different shifts and are expected to be available at various odd hours, their ready availability is a necessary matter in the operations of a small hotel. Furthermore, granting that meals and lodging were provided and indeed constituted facilities, such facilities could not be deducted without the Er complying first with certain legal requirements. [Mabeza vs. NLRC, G.R. No. 118506, (1997)]

3.

4. WAGE DISTORTION/RECTIFICATION Q: What is Wage Distortion (WD)? A: A situation where an increase in wage results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among the Ee-groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service or other logical bases of differentiation.

Should a WD exist, there is no legal requirement that, in the rectification of that distortion by a readjustment of the wage rates of the differing classes of Ees, the gap which had previously or historically existed be restored in precisely the same amount. In other words, correction of a WD may be done by re-establishing a substantial or significant gap (as distinguished from the historical gap) between the wage rates of the differing classes of Ees. The re-establishment of a significant difference in wage rates may be the result of the resort to grievance procedures or CB negotiations. [Metro Transit Org., Inc. vs. NLRC, G.R. No. 116008, (1995)]

Q: Distinguish the process for correction of wage distortion of organized establishments and unorganized establishments? A: Organized Establishment (with union) The Er and the union shall negotiate to correct distortion. Any dispute shall be resolved through a grievance procedure under the CBA. If it remains unresolved, it shall be dealt with through voluntary arbitration. The dispute will be resolved within 10 days from the time the dispute was referred to voluntary arbitration.

Q: What are the elements of wage distortion? A: 1. An existing hierarchy of positions with corresponding salary rates. 2. A significant change or increase in the salary rate of a lower pay class without a corresponding increase in the salary rate of a higher one; 3. The elimination of the distinction between the 2 groups or classes; and 4. The WD exists in the same region of the country [Alliance Trade Unions vs. NLRC, G.R. No. 140689, (2004)]. Q: Is the employer legally obliged to correct wage distortion?

Unorganized Establishment (without union) The Er and the workers shall endeavor to correct the distortion. Any dispute shall be settled through the NCMB. If it remains unresolved within 10 days it shall be referred to the NLRC. The NLRC shall conduct continuous hearings and decide the dispute within 20 days from the time the same was referred.

A: The Er and the union shall negotiate to correct the distortions. If there is no union, the Er and the workers shall endeavor to correct such distinctions.

Q: Can the issue of wage distortion be raised in a notice of strike?

Q: What are the basic principles in wage distortion?

A: No. WD is non-strikeable [Ilaw at Buklod ng Manggagawavs. NLRC, G.R. No. 91980, (1991)]. WD is neither a deadlock in collective bargaining nor ULP.

A: 1. The concept of WD assumes an existing group or classification of Ees which establishes distinctions among such Ees on some relevant or legitimate basis. This classification is reflected in a differing wage rate for each of the classes of Ees. 2. Often results from Government decreed increases in minimum wages.

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

DIVISOR TO DETERMINE DAILY RATE Q: How is the estimated equivalent monthly rate (EEMR) of daily-paid employees computed? A: 1.

40

For those who are required to work every day including Sundays or rest days, special days and regular holidays.

LABOR STANDARDS EEMR = (Applicable daily rate x 393.50 days)/12

XPNs: 1. CBA 2. Rules and regulations as the SLE provides 3. Preference of Ee based on religious grounds – Ee shall make known his preference in writing at least 7 DAYS before the desired effectivity of the initial rest day so preferred. [Sec. 4(1), Rule III, Book III, IRR]

Where 393.50: = 298 ordinary working days = 24 for 12 regular holidays x 200% = 67.60 for 52 rest days x 130%; and = 3.90 for 3 special days x 130%

2.

XPNs to XPN no. 3: Er may schedule the WRD of his choice for at least 2 days in a month if the preference of the Ee will inevitably result in: a. serious prejudice to the operations of the undertaking and b. the Er cannot normally be expected to resort to other remedial measures. [Sec. 4(2) , Rule III, Book III, IRR]

For those who do not work and are not considered paid on Sundays or rest days. EEMR = (Applicable daily rate x 313 days)/12 Where 313: = 298 ordinary working days

Q: When should employees be informed of the schedule of their weekly rest days?

= 12 regular holidays; and = 3 special holidays

3.

A: Er shall make known rest period by means of: 1. Written notice 2. Posted conspicuously in the workplace 3. At least 1 week before it becomes effective. (Sec. 5, Rule III, Book III, IRR)

For those who do not work and are not considered paid on Saturdays and Sundays or rest days

EMERGENCY REST DAY WORK

EEMR = (Applicable daily rate x 261 days)/12 Where 261: = 246 ordinary working days

Q: Can an employee be compelled to work on his rest day?

= 12 regular holidays; and

A: GR: No.

= 3 special holidays

XPNs: 1. Urgent work to be performed on the machinery, equipment or installation, to avoid serious loss which the Er would otherwise suffer; 2. Nature of work requires continuous operations for 7 days in a week or more and stoppage of the work may result in irreparable injury or loss to the Er; 3. Abnormal pressure of work due to special circumstances, where the Er cannot be ordinarily expected to resort to other measures; 4. Actual or impending emergencies (serious accident, fire, flood, typhoon, earthquake, etc.) 5. Prevent loss or damage to perishable goods; 6. Analogous or similar circumstances as determined by the SLE; 7. Work is necessary to avail of favorable weather or environmental conditions where

REST PERIODS WEEKLY REST DAY Q: What is the right to weekly rest day (WRD)? A: Every Er shall give his Ees a rest period of not less than 24 consecutive hours after every 6 consecutive normal work days. (Sec. 3, Rule III, Book III, IRR) Q: What is the scope of weekly rest day? A: It shall apply to all Ers whether operating for profit or not, including public utilities operated by private persons. (Sec. 1, Rule III, Book III, IRR) Q: Who determines the weekly rest day? A: GR: Er shall determine and schedule the WRD of his Ee.

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation performance or quality of work is dependent thereon.

same day is the scheduled rest day

Q. What is the rule when an employee volunteers to work on his rest day under other circumstances? A: He shall express it in writing subject to additional compensation. (Sec. 6[2], Rule III, Book III, IRR)

Excess of 8 hrs:+ 30% of hourly rate on said date. (M.C. No. 10, Series of 2004) Ee is only entitled to his basic rate. No PP is required.

Q: What is premium pay? Work performed on a Special Working Holiday

A: It is the additional compensation for work rendered by the Ee on days when normally he should not be working such as special holidays and WRDs. Q: Can the employer and employee agree on the rate of premium pay other than that provided by law?

Note: Holiday work provided under Art. 93 pertains to special holidays or special days.

A: Yes. Nothing shall prevent the Er and his Ee or their representatives from entering into any agreement with terms more favorable to the Ees; Provided, it shall not be used to diminish any benefit granted to the Ees under existing laws, agreements and voluntary Er practices. (Sec. 9, Rule III, Book III, IRR)

Q: Jose applied with Mercure Drug Company for the position of Sales Clerk. Mercure Drug Company maintains a chain of drug stores that are open every day till late at night. Jose was informed that he had to work on Sundays and holidays at night as part of the regular course of employment. He was presented with a contract of employment setting forth his compensation on an annual basis with an express waiver of extra compensation for work on Sundays and holidays, which Jose signed. Is such a waiver binding on Jose? Explain. (1996 Bar Question)

Q: What are the rates of compensation for rest day, Sunday or holiday work? A: INSTANCES Work on a scheduled rest day

Work performed on Sundays and Holidays by an Ee who has no regular workdays and rest days Work on a Sunday (If Ee’s scheduled rest day)

Work performed on any Special Holiday

Work performed on a Special Holiday and

Reason: Work performed is considered work on ordinary working days. (Sec. 7, Rule III, Book III, IRR)

RATES OF ADDITIONAL COMPENSATION

A: No, the waiver is not binding on Jose. Rights may be waived, unless the waiver is contrary to law, public order, public policy, morals and customs. The waiver in this case is void.

+ 30% premium pay of 100% RW (Sec. 7, Rule III, Book III, IRR)

HOLIDAY PAY/PREMIUM PAY + 30% premium pay of 100% RW (Sec. 7, Rule III, Book III, IRR)

Q: What is holiday pay? A: It is a premium given to Ees pursuant to the law even if he has not been suffered to work on a regular holiday. It is limited to the 12 regular holidays, also called legal holidays listed by law. The Ee should not have been absent without pay on the working day preceding the regular holiday.

+ 30% premium pay of 100% RW (Sec. 7, Rule III, Book III, IRR) 1st 8 hrs: + 30% PP of 100% RW

Q: What are the classes of special days?

Excess of 8 hrs: + 30% of hourly rate on said date. (M.C. No. 10, Series of 2004) 1st 8 hrs: + 50% PP of 100% RW

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

A: 1. National Special Public Holiday GR: Non-working days XPN: Otherwise declared by the President

42

LABOR STANDARDS 2.

Local Special Public Holiday – Regular working day

NATIONAL SPECIAL DAYS All Saints Day Last Day of the Year Ninoy Aquino Day Chinese New Year

called legal holidays. The following are considered regular holidays:

DATE November 1 December 31 August 21 According to its respective date in the calendar

REGULAR HOLIDAYS New Year’s Day Maundy Thursday Good Friday

Eid’l Fitr

Other days declared by law 1. Special Non-working November 2 days 2. Special Public Holidays 3. Special National Holiday 4. Special Holiday ( for all schools) a. Edsa Revolution February 25 Anniversary LOCAL SPECIAL DAYS Those declared by: e.g. Manila day (in 1. Law, or Manila only) 2. Ordinance (Proclamation 295, s. of 2011 of President Benigno Aquino III)

Eid’l Adha

Araw ng Kagitingan Labor Day Independence Day National Heroes Day Bonifacio Day Christmas Day Rizal Day

NATIONAL SPECIAL DAYS DATE All Saints Day November 1 Last Day of the Year December 31 Ninoy Aquino Day August 21 Other days declared by law 1. Special Non-working November 2 days December 24 2. Special Public Holidays 3. Special National Holiday 4. Special Holiday ( for all schools) a. Edsa Revolution February 25 Anniversary LOCAL SPECIAL DAYS Those declared by: e.g. Manila day (in 1. Law, or Manila only) 2. Ordinance (R.A. 9849, 2009)

DATE January 1 According to their respective dates in the calendar After the determination of approximate dates of the Islamic holidays in accordance with the Islamic calendar (Hijra) or the lunar calendar, or upon Islamic astronomical calculations April 9 May 1 June 12 Last Monday of August November 30 December 25 December 30

Q: What are Muslim holidays? A: Muslim holidays are those observed in specified Muslim areas. All private corporations, offices, agencies and entities or establishments operating within the designated Muslim provinces and cities are required to observe Muslim holidays. Q: When shall Eid’l Fitr and/or Eid’l Adha be declared a national holiday? A: The proclamation declaring a national holiday for the observance of Eid’l Fitr and/or Eid’l Adha shall be issued: 1. After the approximate date of the Islamic holiday has been determined in accordance with the: a. Islamic Calendar (Hijra) or b. Lunar Calendar or c. Upon astronomical calculations d. Whichever is possible or convenient 2. The Office of Muslim Affairs shall inform the Office of the President on which day the holiday shall fall. (Proclamation 295, s. of 2011 of President Benigno Aquino III)

Q: What are regular holidays (RH)? A: They are compensable whether worked or unworked subject to certain conditions. They are also

43

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Q: Can a Christian employee working within the Muslim area be compelled to work during Muslim holiday?

A: Yes. But Ee shall be compensated twice his regular rate. Q: What are the rates of compensation for regular holidays on employee’s regular workday and rest day?

A: No. All workers, Muslims and Christians, working within the Muslim area are entitled to holiday pay on Muslim holidays [SMC vs. CA, G.R. 146775, (2002)].

A: Q: Can a Muslim Ee working outside the Muslim area be compelled to work during the observance of the MH?

FORMULA TO COMPUTE WAGES ON REGULAR HOLIDAYS (M.C.No.10, Series of 2004) RH on Ee’s regular RH on Ee’s rest day workday If unworked 100% 100%

A: GR: No. Muslim Ees shall be excused from work during Mulsim holidays without diminution of salary or wages. XPN: Those who are permitted or suffered to work on Muslim holidays are entitled to at least 100% basic pay + 100% as premium of their basic pay [SMC vs. CA, G.R. 146775, (2002)].

e.g. Php 300 RW e.g. Php 300 RW If worked (1st 8 hrs) 200% 200% + 30% of 200%

Note: RH falling within temporary or periodic shutdown and temporary cessation of work are compensable. However, if the temporary or periodic shutdown and cessation of work is due to business reverses, the Er may not pay the Regular holidays during such period.

e.g. 300(RW) + 300

e.g 600 (200% of RW) X 0.3

600 = Total Wage (TW)

180

Q: Distinguish regular holiday from special holiday.

600 + 180 = 780 (TW) If worked (OT)(excess of 8 hrs)

A:

230%

REGULAR HOLIDAY SPECIAL HOLIDAY If Unworked Regular pay (subject to certain No Pay conditions for daily paid Ee’s) If worked + 30% premium pay of 2x regular pay (200%) 100% RW

200% + 30% of hourly rate on said date

230% + 30% of hourly rate on said date

Q: What is an important condition that should be met in order to avail/receive the single holiday pay? A: The Ee should not have been absent without pay on the working day preceding the RH.

Q: What are retail establishments? Q: Distinguish between monthly paid and daily paid employees.

A: They are engaged in the sale of goods to end users for personal or household use. (e.g. Grocery)

A: Q: What are service establishments?

Monthly Paid Ees One whose wage or salary is being paid everyday of the month, including rest days, Sundays, regular or special days, although he does not regularly work on these days.

A: They are engaged in the sale of services to individuals for their own or household use. (e.g. TV repair shop) Q: Is an exercise of profession retail or service? A: It is neither retail nor service.

Not excluded from benefit of holiday pay.

Q: May an employer require an employee to work on Regular holidays? UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

44

Daily Paid Ees One whose wage or salary is being paid only on those days he actually worked, except in cases of regular or special days, although he does not regularly work on these days.

LABOR STANDARDS Q: What is the effect if a legal holiday falls on a Sunday?

COVERAGE, EXCLUSIONS Q: Who are entitled to holiday pay?

A: A legal holiday falling on a Sunday creates no legal obligation for the Er to pay extra to the Ee who does not work on that day, aside from the usual holiday pay to its monthly paid Ee [Wellington vs.Trajano, G.R. 114698, (1995)].

A: GR: All Ees are entitled. (Sec.1, Rule IV, Book III, IRR) XPNs: 1. Government Ees and any of its political subdivisions, including GOCCs (with original charter) 2. Retail and service establishments regularly employing less than 10 workers 3. Domestic helpers and persons in the personal service of another 4. Ee engaged on task or contract basis or purely commission basis 5. Members of the Family of the Er who are dependent on him for support 6. Managerial Ee and other members of the managerial staff 7. Field personnel and other Ee whose time and performance are unsupervised by the Er 8. Ee paid fixed amount for performing work irrespective of the time consumed in the performance thereof. (Sec. 1, Rule IV, Book III, IRR)

Q: Discuss the concept of absences. A: ABSENCES LOA with pay on the day LOA without pay on the immediately preceding day immediately RH. preceding a RH. GR: An Ee may not be paid the required HP if he has not worked on such Regular holiday. GR: All covered Ees are entitled to HP.

XPNs: Where the day immediately preceding the holiday is a: 1. Non-working day in the establishment or 2. The scheduled rest day of the Ee.

TEACHERS, PIECE WORKERS, TAKAY, SEAFARERS, SEASONAL WORKERS Q: What are the holiday pays of certain employees? A:

Q: What is the effect in case there is a temporary or periodic shutdown and temporary cessation of work?

EMPLOYEES Private school teachers (Faculty members of colleges and universities)

A: TEMPORARY OR PERIODIC SHUTDOWN and TEMPORARY CESSATION OF WORK (Sec. 7, Rule IV, Book III, IRR) Instances Rule: 1. Yearly inventory, or RH falling within 2. when the repair or the period shall be cleaning of machineries compensated. is undertaken Due to business reverses RH may not be paid (cessation as authorized by by the Er the SLE)

Ee paid by: 1. results or 2. output (Piece work payment)

Seasonal Workers Workers having no regular work days Seafarers

45

RULE 1. RH during semestral vacations - Not entitled to holiday pay 2. RH during Christmas vacation - Entitled to holiday pay Holiday pay shall not be less than his average daily earnings for the last 7 actual work days preceding the Regular holiday. Provided: Holiday pay shall not be less than the statutory minimum wage rate. May not be paid the required Holiday pay during off-season where they are not at work. Shall be entitled to holiday pay Shall be entitled to holiday pay

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Q: Are the school faculty who according to their contracts are paid per lecture hour entitled to unworked holiday pay?

absence Same

A: 1. If during RH – No. Art. 94 of the LC is silent with respect to faculty members paid by the hour who because of their teaching contracts are obliged to work and consent to be paid only for work actually done (except when an emergency or a fortuitous event or a national need calls for the declaration of special holidays). Regular holiday specified as such by law are known to both school and faculty members as "no class days" certainly the latter do not expect payment for said unworked days, and this was clearly in their minds when they entered into the teaching contracts [Jose Rizal College vs. NLRC, G.R. No. 65482, (1987)]. 2.

A: WED Worked LOA w/pay LOA w/o pay LOA w/o pay

LOA w/ pay

worked

Authorized

worked

RH

RH

ENTITLED TO HOLIDAY PAY Yes. Both

RH

RH

Yes. Both

RH

RH

No. Both

RH

Yes. Only to holiday pay on Friday

Worked

st

Q: What if the conditions are not met? st

A: He must work on the 1 regular holiday to be nd entitled to holiday pay on the 2 regular holiday. (Sec. 10, Rule IV, Book III, IRR) LEAVES SERVICE INCENTIVE LEAVE Q: What is Service Incentive Leave (SIL)? A: It is 5-days leave with pay for every Ee who has rendered at least 1 year of service. It is commutable to its money equivalent if not used or exhausted at the end of the year. Q: What is meant by “at least 1 year of service”?

RATE

A: Service for not less than 12 months, whether continuous or broken reckoned from the date the Ee started working, including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy, or

200% 200% 300% (at least) 300%

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

GOOD FRIDAY

A: On the day immediately preceding the 1 RH, he must be: 1. Present (worked), or 2. On LOA with pay. (Sec. 10, Rule IV, Book III, IRR)

A: There are 2 RHs falling on the same day.

Present LOA w/pay

MAUNDY THURS

Q: What are the conditions so that an employee may be entitled to 2 successive holiday pays?

Q: What is the concept of double holiday pay?

MAUNDY THURSDAY & ARAW NG KAGITINGAN unworked unworked

Worked and day is Rest Day

Q: What is the concept of successive Regular holidays?

If during special public holidays – Yes. The law and the IRR governing holiday pay are silent as to payment on Special Public Holidays. It is readily apparent that the declared purpose of the holiday pay which is the prevention of diminution of the monthly income of the Ees on account of work interruptions is defeated when a regular class day is cancelled on account of a special public holiday and class hours are held on another working day to make up for time lost in the school calendar. Otherwise stated, the faculty member, although forced to take a rest, does not earn what he should earn for that day. Be it noted that when a special public holiday is declared, the faculty member paid by the hour is deprived of expected income, and it does not matter that the school calendar is extended in view of the days or hours lost, for their income that could be earned from other sources is lost during the extended days. Similarly, when classes are called off or shortened on account of typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whether or not extensions are ordered [Jose Rizal College vs. NLRC, G.R. No. 65482, (1987)].

WED

(at least) 390% (+30% of each 3 100%)

46

LABOR STANDARDS that provided in the employment contract is less than 12 months, in which case said period shall be considered as one year. (Sec. 3, Rule V, Book III, IRR)

A: Yes. Under P.D. 851 or the SIL Law, the exclusion from its coverage of workers who are paid on a purely commission basis is only with respect to field personnel. Ees engaged on task or contract basis or paid on purely commission basis are not automatically exempted from the grant of SIL, unless, they fall under the classification of field personnel [Serrano vs. Severino Santos, G.R. No. 187698, (2010)].

Q: Who are entitled to Service Incentive Leave? A: GR: Applies to every Ee who has rendered at least 1 year of service. (Art. 95[a]) XPNs: 1. Government Ees and any of its political subdivisions including GOCCs 2. Those already enjoying the benefit 3. Domestic helpers and persons in the personal services of another 4. Those already enjoying vacation leave with pay of at least 5 days 5. Managerial Ees 6. Field personnel and other Ees whose performance is unsupervised by the Er 7. Employed in establishments regularly employing less than 10 workers 8. Exempt establishments 9. Engaged with a task or contract basis, purely commission basis, or those who are paid in a fixed amount of performing work irrespective of the time consumed in the performance thereof. (Art. 95[b], LC)

Note: “Field personnel” shall refer to non-agricultural Ees who regularly perform their 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 (Ibid.)

Q: Do employees with salaries above minimum wage entitled to Service Incentive Leave? A: Yes. The difference between the minimum wage and the actual salary received by the Ees cannot be th deemed as their 13 month pay and SIL pay as such difference is not equivalent to or of the same import as the said benefits contemplated by law [JPL Marketing Promotions vs. CA, G.R. No. 151966, (2005)]. Q: Explain the entitlement of terminated Ees to Service Incentive Leave.

Q: Are teachers of private schools on contract basis entitled to Service Incentive Leave?

A: 1. Illegally dismissed Ees - entitled to SIL until actual reinstatement [Integrated Contractor and Plumbing Works, Inc. vs. NLRC, G.R.No. (2005)] 2. Legally dismissed Ees – The Ee who had not been paid of SIL from the outset of employment is entitled only of such pay after a year from commencement of service until termination of employment or contract [JPL Marketing Promotions vs. CA, G.R. No. 151966, (2005)].

A: Yes. The phrase "those who are engaged on task or contract basis" should, however, be related to "field personnel" applying the rule on ejusdem generis that those general and unlimited terms are restrained and limited by the particular terms that they follow. Clearly, Cebu Institute of Technology teaching personnel cannot be deemed as field personnel which refers "to non-agricultural Ees who regularly perform their duties away from the principal place of business or branch office of the Er and whose actual hours of work in the field cannot be determined with reasonable certainty” (Par. 3, Art. 82, LC); [CIT vs. Ople, G.R. No. 70203, (1987)].

Q: Is Service Incentive Leave commutable to its monetary equivalent if not used or exhausted at the end of the year? A: Yes. It is aimed primarily at encouraging workers to work continuously and with dedication to the company.

Q: Are part-time workers entitled to the full benefit of the yearly 5-day Service Incentive Leave?

Q: What is the basis for cash conversion?

A: Yes. Art. 95 of the LC speaks of the number of months in a year for entitlement to said benefit (Bureau of Working Conditions Advisory Opinion to Phil. Integrated Exporter’s, Inc.).

A: The basis shall be the salary rate at the date of commutation. The availment and commutation of the SIL may be on a pro-rata basis (No. VI(c), DOLE Handbook on Worker’s Statutory Monetary Benefit).

Q: Are piece-rate workers entitled to the full benefit of the yearly 5 day Service Incentive Leave?

47

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Q. What is the exemption to the application of Service Incentive Leave to employees?

the Er shall pay to the SSS damages equivalent to the benefits which said Ee would otherwise have been entitled to, and the SSS shall in turn pay such amount to the Ee concerned.

A. Establishments employing less than 10 Ees are exempted by the LC and the Implementing Rules from paying SIL. The clear policy of the LC is to include all establishments, except a few classes, under the coverage of the provision granting SIL to workers [Murillo vs. Sun Valley Realty, Inc., G.R. No. L67272 (1988)].

Q: What are the requirements in order that maternity benefits may be claimed? A: 1. There is childbirth, abortion or miscarriage 2. She has paid at least three monthly contributions

MATERNITY LEAVE PATERNITY LEAVE Q: What is maternity leave benefit? Q: What is the concept of paternity leave benefits? A: A covered female Ee is entitled to a daily maternity benefit equivalent to 100% of her present basic salary, allowances and other benefits or the cash equivalent of such benefits for 60 days or 78 days in case of caesarian delivery.

A: Every married male Ee in the private and public sectors shall be entitled to a paternity leave of 7 days with full pay for the first 4 deliveries of the legitimate spouse with whom he is cohabiting.

Q: What are the conditions for availment of maternity leave benefit?

Q: What is paternity leave? A: It refers to the benefits granted to a married male Ee allowing him not to report for work for 7 days but continues to earn the compensation therefore, on the condition that his spouse has delivered a child or suffered a 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.

A: 1. The Ee shall have notified her Er of her pregnancy and the probable date of her childbirth which notice shall be transmitted to the SSS; 2.

3.

The payment shall be advanced by the Er in 2 equal installments within 30 days from the filing of the maternity leave application; In case of caesarian delivery, the Ee shall be paid the daily maternity benefit for 78 days;

4.

Payment of daily maternity benefits shall be a bar to the recovery of sickness benefits for the same compensable period of 60 days for the same childbirth, abortion, or miscarriage;

5.

The maternity benefits provided under Sec. 14-A shall be paid only for the first four deliveries;

6.

The SSS shall immediately reimburse the Er of 100% of the amount of maternity benefits advanced to the Ee by the Er upon receipt of satisfactory proof of such payment and legality thereof; and

7.

Q: What are the conditions for entitlement to paternity leave? A: The male Ee is 1. Legally married to, and is cohabiting with the woman who delivers the baby; 2. Ee of private or public sector; 3. Maybe availed of only for the first 4 deliveries of the legitimate spouse with whom he is cohabiting; and 4. Notify his Er of the pregnancy of his legitimate spouse and the expected date of such delivery Note: Delivery shall include childbirth or any miscarriage.

Q: Ron is a bank employee of BPI. He is cohabiting with Michelle for straight five years with whom he has four children. In the fifth year of their cohabitation, Michelle had her miscarriage. Ron is availing himself of his paternity leave. Is he entitled to paternity leave?

If an Ee should give birth or suffer abortion or miscarriage without the required contributions having been remitted for her by her Er to the SSS, or without the latter having been previously notified by the Er of the time of the pregnancy, UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

A: No. Ron is not entitled to paternity leave because the facts of the case only show that he is only cohabiting with Michelle. The law expressly provides

48

LABOR STANDARDS that the male must be legally married to the woman with whom he is cohabiting as a condition for entitlement of paternity leave. Even assuming that Ron is legally married to Michelle, he cannot avail also of the paternity leave because the law limits the deliveries only to four which include childbirth or th miscarriage. Based on the facts, it is already the 5 delivery of the woman.

he/she is entrusted with the custody of the children; e. Nullity or annulment of marriage as decreed by a court or by a church as long as he/she is entrusted with the custody of the children; f. Abandonment of spouse for at least 1 yr;

Q: What is parental leave?

3. Unmarried mother/father who has preferred to keep and rear his or her child/children instead of: a. having others care for them or b. give them up to a welfare institution;

A: Leave benefits granted to a solo parent to enable him/her to perform parental duties and responsibilities - where physical presence is required.

4. Any other person who solely provides: a. parental care and b. support to a child or children;

In addition to leave privileges under existing laws, parental leave of not more than 7 working days every year shall be granted to any solo parent Ee who has rendered service of at least 1 year. (Sec. 8)

5. Any family member who assumes the responsibility of head of family as a result of the: a. death, b. abandonment, c. disappearance or d. prolonged absence of the parents or solo parent.

PARENTAL LEAVE

Q: What are the conditions for entitlement of parental leave?

Note: 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. (Sec.3)

A: 1. He or she must fall among those referred to as a solo parent 2. Must have the actual and physical custody of the child or children 3. Must have at least rendered service of one year to his or her employer 4. He or she must remain a solo parent

LEAVES FOR VICTIMS OF VIOLENCE AGAINST WOMEN CHILDREN (R.A. 9262) Q: What is the leave for victims of violence against women or otherwise known as battered woman leave?

Q: Who are considered a solo parent entitled to parental leave? A:

A: A female Ee who is a victim of violence (physical, sexual, or psychological) is entitled to a paid leave of 10 days in addition to other paid leaves. (R.A. 9262, Anti- VAWC Act)

Any individual who falls under any of the ff. 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;

SPECIAL LEAVE BENEFIT FOR WOMEN Q: What is the special leave benefit for women?

2. Parent left solo or alone with the responsibility of parenthood due to: a. Death of spouse; b. Detention or service of sentence of spouse for a criminal conviction for at least 1 yr; c. Physical and/or mental incapacity of spouse d. Legal separation or de facto separation from spouse for at least 1 year as long as

A: A woman Ee having rendered continuous aggregate employment service of at least 6 months for the last 12 months shall be entitled to a special leave benefit of 2 months with full pay based on her gross monthly compensation following surgery caused by gynaecological disorders. (Sec. 18, R.A. 9710, Magna Carta of Women) SERVICE CHARGES Q: What are service charges?

49

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation th

A: These are charges collected by hotels, restaurants and similar establishments at the rate of 85% for covered Ees equally distributed among them, and 15% for the management to answer for losses and breakages.

Q: Is 13 month pay legally demandable?

Q: Who are covered employees?

Q: Who are covered by P.D. 851?

A: GR: All Ees are covered, regardless of their position, designation, and employment status, irrespective of the method by which their wages are paid.

A: All rank-and-file Ees regardless of the amount of basic salary that they receive in a month, if their Ers th are not otherwise exempted from paying the 13 th month pay. Such Ees are entitled to the 13 month pay regardless of said designation of employment status, and irrespective of the method by which their wages are paid.

A: Yes. It is a statutory obligation, granted to covered Ees, hence, demandable as a matter of right. (Sec 1, P.D. 851)

Note: Applies only to hotels, restaurants and similar establishment collecting service charges.

XPN: Managerial Ees (Sec. 2, Rule VI, Book III, IRR)

Provided, that they have worked for at least 1 month, during a calendar year. (Revised Guidelines on the th Implementation of the 13 Month Pay Law)

Q: When is the share of employee distributed and paid to them?

Q: Who are NOT covered by P.D. 851?

A: Not less than once every 2 weeks or twice a month at intervals not exceeding 16 days.

A: 1. 2. 3. 4.

Q: Distinguish between service charge and tips? A: Service charges are collected by the management from the customers. Tips are voluntary payments made by the customers to the Ees for excellent service.

Government Ees Household helpers Ees paid purely on commission basis th Ees already receiving 13 month pay

Q: What would be your advice to your client, a manufacturing company, who asks for your legal opinion on whether or not the 13th Month Pay Law covers a casual Ee who is paid a daily wage? (1998 Bar Question)

Q: What happens if the service charge is abolished? A: The share of the covered Ees shall be considered integrated in their wages on the basis of the average monthly share of each Ees for the past 12 months immediately preceding the abolition.

A: I will advise the manufacturing company to pay the casual Ee 13th Month Pay if such casual Ee has worked for at least 1 month during a calendar year. The law on the 13th Month Pay provides that Ees are entitled to the benefit of said law regardless of their designation or employment status.

Note: Service charges form part of the award in illegal dismissal cases. th

13 MONTH PAY

The SC ruled in Jackson Building-Condominium Corp. vs. NLRC (G.R. No. 112546, 1996), interpreting th P.D.851, as follows: Ees are entitled to the 13 month pay benefits regardless of their designation and irrespective of the method by which their wages are paid.

th

Q: What is 13 month pay or its equivalent? A: Additional income based on wage required by P.D. th 851 Requiring all Ers to pay their Ees a 13 month pay which is equivalent to 1/12 of the total basic salary earned by an Ee within a calendar year.

th

Note: An Er may give to his Ees ½ of the required 13 Month pay before the opening of the regular school year and the other half on or before Dec. 24.

Note: The absence of an express provision in the CBA th obligating the Er to pay the members of a union 13 month pay is immaterial. Notwithstanding therefore the absence th of any contractual agreement, the payment of a 13 month pay being a statutory grant, compliance with the same is mandatory and is deemed incorporated in the CBA.

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

th

Q: In what form is the 13 month pay given? A: It is given in the form of: 1. Christmas Bonus 2. Midyear Bonus

50

LABOR STANDARDS 3. 4.

Profit Sharing Scheme Other Cash bonuses amounting to not less than 1/12 of its basic salary

b.

Note: It must always be in the form of a legal tender. th

Q: What are not proper substitutes for 13 month pay? A: 1. 2. 3. 4.

Free rice Electricity Cash and stock dividends Cost-of-living Allowance (Sec. 3)

Q: Concepcion Textile Co. included the OT pay, night-shift differential pay, and the like in the th computation of its Ees’ 13 month pay. Subsequently, with the promulgation of the decision of the SC in the case of SMC vs. Inciong (103 SCRA 139) holding that these other monetary claims should not be included in the computation of the th 13 Month Pay, Concepcion Textile Co. sought to recover under the principle of solutio indebiti the th overpayment of the Ees’ 13 month pay, by debiting th against future 13 month payments whatever excess amounts it had previously made.

In the case of non-profit institutions and organizations, where their income, whether from donations, contributions, grants and other earnings from any source, has consistently declined by more than 40% of their normal income for the last 2 years, subject to the provision of Sec. 7 of P.D. 851;

2.

The Government and any of its political subdivisions, including GOCCs, except those corporations operating essentially as private subsidiaries of the Government;

3.

Ers already paying their Ees 13 month pay or more in a calendar year of its equivalent at the time of this issuance:

th

Its equivalent shall include: a. Christmas bonus b. Mid-year bonus c. Profit-sharing payments and d. Other cash bonuses amounting to not less than 1/12th of the basic salary It shall not include: a. cash and stock dividends, b. COLA c. all other allowances regularly enjoyed by the Ee, as well as non-monetary benefits.

(1) Is the Company's action tenable? th (2) With respect to the payment of the 13 month pay after the SMC ruling, what arrangement, if any, must the Company make in order to exclude from th the 13 month pay all earnings and remunerations other than the basic pay? (1994 Bar Question) A: The Company's action is not tenable. The principle of solutio indebiti which is a civil law concept is not applicable in labor law. [Davao Fruits Corp. vs. NLRC, et al., G.R. No. 85073, (1993)]. After the 1981 SMC ruling, the High Court decided the case of Philippine Duplicators Inc. vs. NLRC, GR 110068, (1993). Accordingly, management may undertake to exclude sick leave, vacation leave, maternity leave, premium pay for regular holiday, night differential pay and cost of living allowance. Sales commissions, however, should be included based on the settled rule as earlier enunciated in Songco vs. NLRC (G.R. No. L50999, 1990).

4.

Ers of household helpers and persons in the personal service of another in relation to such workers; and

5.

Ers of those who are paid on a 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 a piece-rate basis in which case the Er shall be covered by this issuance insofar as such workers are concerned. (Sec 3, P.D. 851)

Q: What are the options of covered employers? A: th 1. Pay 1/2 of the 13 month pay required before the opening of the regular school year and the other half on or before the 24th day of December of every year. 2. In any establishment where a union has been recognized or certified as the CB agent of the Ee, the periodicity or frequency of payment of the th 13 month pay may be the subject of agreement.

th

Q: Are all employers required to pay 13 month pay under P.D. 851? A: GR: Yes. It applies to all Ers, XPNs: 1. Distressed Ers: a. Currently incurring substantial losses or

51

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Q: How are claims adjudicated?

Agricultural Commercial and Industrial Workers Union vs. NLRC, G.R. No. 107994, (1995)].

th

A: Non-payment of the 13 month pay provided by P.D. 851 and the rules of NLRC shall be treated as money claims cases. Q: Are the following employees entitled to 13 Month Pay? a. Employees who are paid by results b. Employees with multiple Employers c. Private school teachers d. Resigned or separated Employees

th

Q: Is 14 month pay legally demandable? th

A: No. The granting of 14 month pay is a management prerogative and is not legally demandable. It is basically a bonus and is gratuitous in nature [Kamaya Point Hotel vs. NLRC, G.R. No. 75289, (1989)].

th

Q: What is Commission in relation to 13 Pay?

A: th 1. Ee paid by results – entitled to 13 month pay.

Those with Multiple Ers – Government Ees working part time in a private enterprise, including private educational institutions, as well as Ees working in 2 or more private firms, whether full or part time basis, are entitled to th the required 13 month pay from all their private Ers regardless of their total earnings from each or all their Ers.

3.

Private School Teachers, including faculty members of universities and colleges – entitled regardless of the number of months they teach or are paid within a year, if they have rendered service for at least 1 month within a year.

4.

2.

The so-called commission paid to or received by medical representatives of BoieTakeda Chemicals or by the rank-and-file Ees of Phil. Fuji Xerox were excluded from the term basic salary because these were paid as productivity bonuses. Such bonuses closely resemble profit sharing, payments and have no clear, direct, necessary relation to the amount of work actually done by each individual Ee. SEPARATION PAY

Q: What is the meaning of separation pay? A: Separation pay refers to the amount due to the Ee who has been terminated from service for causes authorized by law such as the installation of laborsaving losses or the closing or cessation of operation of the establishment or undertaking.

Resigned or Separated Ees - If resigned or separated from work before the time of payment th of 13 month pay, entitled to monetary benefits in proportion to the length of time he started working during the calendar year up to the time of resignation or termination of service. (Proth rated 13 month pay)

Q: What is the purpose for providing separation pay? A: Separation pay is intended to provide the Ee with the wherewithal during the period he is looking for another employment [Gabuay v. Oversea Paper Supply, G.R. No. 148837, (2004)].

th

Q: When does pro-ration of 13 month pay apply? A: GR: Pro-ration of this benefit applies only in cases of resignation or separation from work; computation should be based on length of service and not on the actual wage earned by the worker [Honda Phils. vs. Samahan ng Manggagawasa Honda, G.R. No. 145561, (2005)].

Q: When is an employee entitled to separation pay? A: 1.

XPN: Ees who are paid a guaranteed minimum th wage or commissions earned are entitled to 13 Month Pay based on total earnings [Philippine UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Month

A: 1. The salesman’s commissions, comprising a predetermined percent of the selling price of the goods sold by each salesman, were properly included in the term basic salary for purposes of th computing their 13 month pay.

Note: Ees paid a fixed or guaranteed wage plus th commission are also entitled to the mandated 13 month pay, based on their total earnings during the calendar year, i.e. on both their fixed or guaranteed wage and commission

2.

th

2.

52

When the termination of employment is due to causes authorized by law (Art. 284, LC) When the severance of employment is caused by a disease, particularly when the Ee is found to be

LABOR STANDARDS

3.

4.

5.

suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health and of his co-Ees. (Art. 284, LC) When the termination from service has been declared illegal, but his reinstatement to his former position is no longer feasible for some valid reason [Gabuay v. Oversea Paper Supply, G.R. No. 148837, (2004)]. In case of pre-termination of employment contract in job-contracting arrangement [D.O 1802, Rules Implementing Art. 106 – 109, LC] Where separation pay is awarded as a measure of social or compassionate justice [PLDT v. NLRC, G.R. No. L-80609, (1988)].

3.

Q: Can Art. 287 of the LC (on retirement) as amended by R.A. 7641 be applied retroactively? A: Yes, provided: 1. the claimant for retirement benefits was still the Ee of the Er at the time the statute took effect; and 2. the claimant was in compliance with the requirements for eligibility under the statute for such retirement benefits [PSVSIA vs. NLRC, G.R. No. 115019, (1997)].

RETIREMENT PAY Q: What is retirement?

Q: Are the provisions of the retirement plan binding as part of the employment contract?

A: It is the result of a bilateral act of the parties, a voluntary agreement between the Er and the Ee whereby the latter after reaching a certain age agrees and/or consents to sever his employment with the former [Soberano v. Secretary of Labor, G.R. No. L43753-56 and G.R. No. L-50991, (1980); Ariola v. Philex Mining Corp, 446 SCRA 152 (2005)].

A: Yes. The retirement plan forms part of the employment contract since it is made known to the Ees and accepted by them, and such plan has an express provision that the company has the choice to retire an Ee regardless of age, with 20 years of service, said policy is within the bounds contemplated by the LC. Moreover, the manner of computation of retirement benefits depends on the stipulation provided in the company retirement plan [Progressive Dev’t Corporation vs. NLRC, G.R. No. 138826, (2000)].

Q: Who are covered by the LC provisions on retirement? A: All Ees in the private sector: 1. Regardless of their position, designation or status; and 2. Irrespective of the method by which their wages are paid. (Sec.1, Rule II, Book VI, IRR)

Note: Although retirement plan forms part of the employment contract, before a right to retirement benefits or pension vests in an Ee, he must have met the stated conditions of eligibility with respect to the nature of employment, age, and length of service. This is a condition precedent to his acquisition of rights thereunder. SC ruled that the conditions of eligibility for retirement must be met at the time of retirement at which juncture the right to retirement benefits or pension, if the Ee is eligible, vests in him.

Q: Who are NOT covered by the LC provisions on retirement? A: 1. Ees of the National Government and its political subdivisions, including GOCCs (if they are covered by the Civil Service Law) 2. Domestic helpers and persons in the personal service of another 3. Ees of retail, service, and agricultural establishments or operations employing not more than 10 Ees (Sec.2, Rule II, Book VI, IRR)

Again, it has been held that "pension and retirement plans create a contractual obligation in which the promise to pay benefits is made in consideration of the continued faithful service of the Ee for the requisite period [Brion vs. South Phil. Union Mission of the Seventh Day Adventist Church, 307 SCRA 497, (1999)].

Q: ALPAP, the exclusive bargaining representative of all commercial airline pilots of PAL, assailed that PAL's act of unilaterally retiring an airline pilot under a special retirement plan is an act of illegal dismissal or union busting. Is a special retirement plan different from those contemplated under the LC as agreed upon by the parties valid?

Q: What are the kinds of retirement schemes? A: 1. 2.

One that is voluntarily given by the Er, expressly as announced company policy or impliedly as in the failure to contest the Ee’s claim for retirement benefits [Marilyn Odchimar Gertach v. Reuters Limited, Phils., G.R. No. 148542 (2005)].

Compulsory and contributory in nature; One set up by the agreement between the Er and Ees in the CBA or other agreements between them (other applicable employment contract);

53

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation A: Yes. A pilot who retires after 20 years of service or after flying 20,000 hours would still be in the prime of his life and at the peak of his career, compared to one who retires at the age of 60 years old. Based on this peculiar circumstance that PAL pilots are in, the parties provided for a special scheme of retirement different from that contemplated in the LC. Conversely, the provisions of Art. 287 of the LC could not have contemplated the situation of PAL's pilots. Rather, it was intended for those who have no more plans of employment after retirement, and are thus in need of financial assistance and reward for the years that they have rendered service [PAL vs. Airline Pilots Ass’n of the Phils., G.R. No. 143686, (2002)].

governed by such CBA [Pantranco North Express vs. NLRC, G.R. No. 95940, (1996)]. Q: What is the rule for extension of service of retiree upon his reaching the compulsory retirement age? A: Upon the compulsory retirement of an Ee or official in the public or private service, his employment is deemed terminated. The matter of extension of service of such Ee or official is addressed to the sound discretion of the Er [UST Faculty Union vs. NLRC, G.R. No. 89885, (1990)]. AMOUNT Q: In the absence of an applicable agreement or retirement plan, how are retirement benefits computed?

ELIGIBILITY Q: What is retirement age?

A: A retiree is entitled to a retirement pay equivalent to at least ½ month salary for every year of service, a fraction of at least 6 months being considered as 1 whole year. (R.A. 7641)

A: It is the age of retirement that is specified in the: 1. 2. 3. 4.

CBA; Employment contract; Retirement plan [Sec. 3, Rule II, Book VI, IRR]; OR Optional retirement age for underground mining Ees

Q: What comprises “½ month salary” or retirement pay?

Q: In the absence of a retirement plan or other applicable agreement, what is the retirement age?

A: Unless parties provide for broader inclusions, retirement pay is comprised of: 1. 15 days salary based on latest salary rate; 2. Cash equivalent of not more than 5 days of service incentive leaves (22.5/year of service) th 3. 1/12 of the 13 month pay 4. All other benefits as may be agreed upon by the Er and Ee. (Sec.5.2, Rule II, Book VI, IRR)

A: 1. Optional – Upon reaching 60 years old provided that Ee has rendered 5 years of service. Note: The option to retire upon reaching the age of 60 years or more but not beyond 65 is the exclusive prerogative of the Ee if there is no provision on retirement in a CBA or any other agreement or if the Er has no retirement plan [R.A. 7641; Capili vs. NLRC, G.R. No. 117378, (1997)].

2.

Note: Under Sec. 26 of R.A. No. 4670, otherwise known as “Magna Carta for Public School Teachers”, public school teachers having fulfilled the age and service requirements of the applicable retirement laws shall be given one range salary raise upon the retirement, which shall be the basis of the computation of the lump sum of the retirement pay and monthly benefit thereafter.

Compulsory – 65 years old, regardless of years of service (Sec. 4, Rule II, Book VI, IRR)

Q: In 1955, Hilaria was hired as a grade school teacher at the Sta. Catalina College. In 1970, she applied for and was granted a 1 year leave of absence (LOA) without pay due to the illness of her mother. After the expiration in 1971 of her LOA, she had not been heard from by Sta. Catalina. In the meantime, she was employed as a teacher at the San Pedro Parochial School during SY ‘80-‘81 and at the Liceo de San Pedro, during SY 1981-1982. In 1982, she applied anew at Sta. Catalina which hired st her. On Mar 22, 1997, during the 51 Commencement Exercises of Sta. Catalina, Hilaria was awarded a Plaque of Appreciation for 30 yrs. of service and Php 12,000 as gratuity pay. On May 31,

Note: Retirement benefits, where not mandated by law, may be granted by agreement of the Ees and their Er or as a voluntary act on the part of the Er. Retirement benefits are intended to help the Ee enjoy the remaining years of his life, lessening the burden of worrying for his financial support, and are a form of reward for his loyalty and service to the Er [Aquino vs. NLRC, G.R. No. 87653, (1992)].

Q: Is compulsory retirement age below 60 allowed? A: Yes. Art. 287 permits Er and Ee to fix the applicable retirement age at below 60. The same is legal and enforceable so long as the parties agree to be UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

54

LABOR STANDARDS 1997, Hilaria reached the compulsory retirement age of 65. Sta. Catalina pegged her retirement benefits at Php 59,038.35. However, amount of Php 12,000 representing the gratuity pay, which was given to her, was deducted from her retirement benefits.

by foreignbased Ers for employment abroad may be covered by the SSS on a voluntary basis.

Should the gratuity pay be deducted from the retirement benefits?

officials for the qualify for the duration of their retirement or life tenure. insurance benefit administered by Note: Any person, the System shall whether elected be subject to or appointed, in compulsory the service of an coverage.

Er is a covered Ee if he receives 2. Compulsory compensation for upon all self- such service.

A: No. Gratuity pay is separate and distinct from retirement benefits. It is paid purely out of generosity.

employed persons earning Php 1, 800 or more per annum.

Q: What is the difference between gratuity pay and retirement benefits? A: GRATUITY PAY It is paid to the beneficiary for the past services or favor rendered purely out of the generosity of the giver or grantor. It is not intended to pay a worker for actual services rendered or for actual performance. It is a money benefit or bounty given to the worker, the purpose of which is to reward Ee’s who have rendered satisfactory service to the company.

RETIREMENT BENEFITS

RETIREMENT BENEFITS OF WORKERS PAID BY RESULTS/ RETIREMENT BENEFITS OF PART-TIME WORKERS

Are intended to help the Ee enjoy the remaining years of his life, releasing him from the burden of worrying for his financial support, and are a form of reward for his loyalty to the Er [(Sta. Catalina College and Sr. Loreta Oranza, vs. NLRC and Hilaria Tercera, G.R. No. 144483, (2003)].

Q: How shall we determine the amount of retirement benefits of workers paid by results and part-time workers? A: The 15-day salary of workers paid by results and part-time workers shall be determined from their average daily salary which is the average daily salary for the last 12 months reckoned from the date of their retirement, divided by the number of actual working days in that particular period. [Sec. 5.2 and 5.3 of the Rules Implementing the New Retirement Law] TAXABILITY

RETIREMENT PAY UNDER RA 7641 VIS-À-VIS RETIREMENT BENEFITS UNDER SSS AND GSIS LAWS

Q: Are retirement benefits under R.A 7641 taxable?

Q: What is retirement pay under the LC in relation to retirement benefits under SSS and GSIS laws? (1997 Bar Question)

A: No. Retirement benefits under R.A 7641 are tax exempt provided that such benefits provided by the retirement plan be equal or less than the minimum requirement provided by law.

A: Social Security Law Compulsory upon all E e s not over 60 years of age and their Ers.

Revised Government Service Insurance Act

Compulsory for all permanent Ees below 60 years of age upon appointment to 1. Filipinos permanent recruited in status, and for the Philippines all elective

Q: What are the requirements for tax exemption under R.A. 7641? A:

Employees’ Compensation Act

1.

Compulsory upon all Ers and their Ees not over 60 years of age; Provided, that an Ee who is over 60 years of age and paying contributions to

2.

55

That there be no CBA or other applicable employment contract providing for retirement benefits for an Ee; or Even if there is a CBA or other applicable employment contract providing for retirement benefits for an Ee, that the same is below the requirements set forth by law.

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation WOMEN WORKERS

Q: What is the state policy on non-discrimination against women?

PROVISIONS AGAINST DISCRIMINATION A: The State condemns discrimination against women in all its forms and pursues by all appropriate means and without delay the policy of eliminating discrimination against women in keeping with the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) and other international instruments consistent with Philippine law. The State shall accord women the rights, protection, and opportunities available to every member of society. (Sec. 2, R.A. 9710 or the Magna Carta of Women)

Q: What are the discriminatory acts against women Ee? A: 1. Discrimination with respect to the terms and conditions of employment solely on account of sex a. Payment of lesser compensation to a female Ee as against a male Ee for work of equal value b. Favoring a male Ee with respect to promotion, training opportunities, study and scholarship grants on account of gender. (Art. 135, LC) c. Favoring a male applicant with respect to hiring where the particular job can equally be handled by a woman d. Favoring a male Ee over a female Ee with respect to the dismissal of personnel. 2.

The State shall take steps to review and, when necessary, amend and/or repeal existing laws that are discriminatory to women within 3 years from the effectivity of this Act. (Sec. 12, R.A. 9710)

Q: Can an individual, the sole proprietor of a business enterprise, be said to have violated the Anti-Sexual Harassment Act of 1995 if he clearly discriminates against women in the adoption of policy standards for employment and promotions in the enterprise? Explain. (2003 Bar Question) A: When an Er discriminates against women in the adoption of policy standards for employment and promotion in his enterprise, he is not guilty of Sexual Harassment. Instead, the Er is guilty of discrimination against women Ees which is declared to be unlawful by the LC.

Stipulating, whether as a condition for employment or continuation of employment: a. That a woman Ee shall not get married, or b. That upon marriage, such woman Ee shall be deemed resigned or separated. (Art. 136, LC)

Q: May a woman worker be dismissed on the ground of dishonesty for having written ‘’single” on the space for civil status on the application sheet, contrary to the fact that she was married ?

For an Er to commit Sexual Harassment, he – as a person of authority, influence or moral ascendancy – should have demanded, requested or otherwise required a sexual favor from his Ee whether the demand, request or requirement for submission is accepted by the object of said act.

A: Art. 136 of the LC, explicitly prohibits discrimination merely by reason of marriage of a female Ee. The policy of not accepting or disqualifying from work any woman worker who contracts marriage is afoul of the right against discrimination provided to all women workers by our labor laws and by our Constitution [PT&T Co. vs. NLRC, G.R. No. 118978, (1997)]. 1.

2.

STIPULATION AGAINST MARRIAGE (ART. 136, LC) Q: What is the “no-spouse employment” policy? A: Policy banning spouses from working in the same company.

Dismissing, discriminating or otherwise prejudice a woman Ee by reason of her being married. (Art. 136, LC)

Q: Does it violate provisions of the LC? A: GR: It may not facially violate Art. 136 of the LC but it creates a disproportionate effect and the only way it could pass judicial scrutiny is by showing that it is reasonable despite the discriminatory and disproportionate effect.

Art. 137 of the LC Note: Discrimination in any form from preemployment to post employment, including hiring, promotion or assignment, based on the actual, perceived or suspected HIV status of an individual is unlawful. (Philippine AIDS Prevention and Control Act of 1998, [R.A. 8504])

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

XPN: Bona fide occupational qualification rule (BFOQ)

56

LABOR STANDARDS Q: What is the bona fide occupational qualification rule?

PROHIBITED ACTS (ART. 137, Labor Code) Q: What are the prohibited acts under Art. 137 of the LC?

A: There must be a finding of any BFOQ to justify an Er’s no spouse employment rule. There must be a compelling business necessity for which no alternative exists other than the discriminating practice. To justify a BFOQ, the Er must prove two factors: 1.

2.

A: It shall be unlawful for any Er to: 1. Deny any woman Ee benefits provided by law. 2. Discharge any woman for the purpose of preventing her from enjoying any of the benefits provided by law. 3. Discharge such woman on account of her pregnancy, or while on leave or in confinement due to her pregnancy. 4. Discharge or refuse the admission of such woman upon returning to her work for fear that she may again be pregnant.

That the employment qualification is reasonably related to the essential operation of the job involved; and That there is a factual basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job [Star Paper vs.Simbol, G.R. No. 164774, (2006)].

Q: At any given time, approximately 90% of the production workforce of a semiconductor company are females. 75% of the female workers are married and of child-bearing years. It is imperative that the Company must operate with a minimum number of absences to meet strict delivery schedules. In view of the very high number of lost working hours due to absences for family reasons and maternity leaves, the company adopted a policy that it will employ married women as production workers only if they are at least 35 years old. Is the policy in violation of any law? (1998 Bar Question)

Q: What is the importance of the bona fide occupational qualification Rule? A: 1. 2.

To ensure that the Ee can effectively perform his work So that the no-spouse employment rule will not impose any danger to business.

Q: Glaxo, a company which has a policy against employees having relationships with the employees of its competitors, employed Tecson as a medical representative. Tecson married Bettsy, a Branch coordinator in one of Glaxo’s competitors. Tecson was then transferred to another area but he did not accept such transfer.

A: Yes, it violates Art. 140 of the LC which provides that no Er shall discriminate against any person in respect to the terms and conditions of employment on account of his age. Q: Who are covered under this Title?

Is the policy of Glaxo valid and reasonable so as to constitute the act of Tecson as willful disobedience?

A: Any women who is permitted or suffered to work: 1. With or without compensation 2. In any night club, cocktail lounge, massage clinic, bar or similar establishment 3. Under the effective control or supervision of the Er for a substantial period of time 4. Shall be considered as an Ee of such establishment for purposes of labor and social legislation.

A: The prohibition against personal or marital relationships with Ees of competitor companies upon Glaxo’s Ees is reasonable under the circumstances because relationships of that nature might compromise the interest of the company. Glaxo does not impose an absolute prohibition against relationships between its Ees and those of competitor companies. Its Ees are free to cultivate relationships with and marry persons of their own choosing. What the company merely seeks to avoid is a conflict of interest between the Ee and the company that may arise out of such relationships. Furthermore, the prohibition forms part of the employment contract and Tecson was aware of such restrictions when he entered into a relationship with Bettsy [Duncan Assoc. of Detailman-PTGWO vs.GlaxoWellcome Phil. Inc., G.R. No. 162994, (2004)].

ANTI-SEXUAL HARASSMENT ACT (R.A. 7877) Q: What is the policy of the State in enacting the Anti-Sexual Harassment law? A: The State shall: 1. Value the dignity of every individual

57

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation 2. 3. 4.

Enhance the development of its human resources Guarantee full respect for human rights, and Uphold the dignity of workers, Ees, applicants for employment, students or those undergoing training, instruction or education. (Sec. 2, R.A. 7877)

the employee [Domingo vs.Rayala, G.R. No. 155831, (2008)]. Q: When is Sexual Harassment committed? A: Specifically: 1.

In a work-related or employment environment: a. The sexual favor is made as a condition in the hiring or in the employment, reemployment 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 Ee which in a way would discriminate, deprive or diminish employment opportunities or otherwise adversely affect said Ee; b. The above acts would impair the Ees’ rights or privileges under existing labor laws; or c. The above acts would result in an intimidating, hostile, or offensive environment for the Ee.

2.

In an education or training environment sexual harassment is employed: a. Against one who is under the care, custody or supervision of the offender; b. Against one whose education, training, apprenticeship or tutorship is entrusted to the offender; c. When sexual favor is made a condition to the giving of a passing grade, or the granting of honors and scholarships, or the payment of a stipend, allowance or other benefits, privileges, or considerations; or d. When sexual advances result in an intimidating, hostile or offensive environment for the student, trainee or apprentice.

Q: Who may be held liable for Sexual Harassment? A: In a work, education or training-related environment Sexual Harassment may be committed by an: 1. 2. 3. 4. 5. 6. 7.

Er Manager Supervisor Agent of the Er Teacher, instructor, professor Coach, trainer, or Any other person who, having authority, influence or moral ascendancy over another in a work or training or education environment: a. Demands b. Requests or c. Requires -any sexual favor from the other, regardless of whether the demand, request or requirement for submission is accepted by the object of R.A. 7877.(Sec. 3, R.A. 7877)

Q: How is Sexual Harassment committed? A: Generally, Sexual Harrasment is committed when a person demands, requests, or otherwise requires any sexual favor from another, regardless of whether the demand, request or requirement for submission is accepted by the latter. Q: Under the Sexual Harassment Act, does the definition of Sexual Harassment require a categorical demand or request for sexual favor?

Q: What are the duties of the employer or head of office in a work-related, education or training environment?

A: No. While the provision states that there must be a “demand, request or requirement of a sexual favor.” It is not necessary that the demand, request or requirement of a sexual favor be articulated in a categorical manner. It may be discerned, with equal certitude, from the acts of the offender.

A: 1. 2.

Likewise, it is not essential that the demand, request or requirement be made as a condition for continued employment or for promotion to a higher position. It is enough that the respondent’s acts result in creating an intimidating, hostile or offensive environment for

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Prevent or deter the commission of acts of Sexual Harassment, and Provide the procedures for the resolution, settlement or prosecution of acts of Sexual Harassment.

Towards this end, the Er or head of office shall:

58

LABOR STANDARDS 1.

Promulgate appropriate rules and regulations in consultation with the jointly approved by the Ees or students or trainees, through their duly designated representatives, prescribing the procedure for the investigation or Sexual Harassment cases and the administrative sanctions therefore. (Sec. 4, R.A. 7877)

Q: A Personnel Manager, while interviewing an attractive female applicant for employment, stared directly at her for prolonged periods, albeit in a friendly manner. After the interview, the manager accompanied the applicant to the door, shook her hand and patted her on the shoulder. He also asked the applicant if he could invite her for dinner and dancing at some future time. Did the Personnel Manager, by the above acts, commit Sexual Harassment? Reason. (2000 Bar Question)

Note: Administrative sanctions shall not be a bar to prosecution in the proper courts for unlawful acts of Sexual Harassment.

A: Yes, because the Personnel Manager, is in a position to grant or not to grant a favor (a job) to the applicant. Under the circumstances, inviting the applicant for dinner or dancing creates a situation hostile or unfriendly to the applicant's chances for a job if she turns down the invitation. [Sec. 3(a)(3), R.A. No. 7877, Anti-Sexual Harassment Act]

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.

3.

The Er or head of office, education or training institution shall disseminate or post a copy of this R.A. 7877 for the information of all concerned

Q: In the course of an interview, another female applicant inquired from the same Personnel Manager if she had the physical attributes required for the position she applied for. The Personnel Manager replied: "You will be more attractive if you will wear micro-mini dresses without the undergarments that ladies normally wear." Did the Personnel Manager, by the above reply, commit an act of sexual harassment? Reason.

Q: What is the liability of the employer, head of office, educational or training institution? A: Er shall be solidarily liable for damages arising from the acts of Sexual Harassment committed in the employment, education or training environment provided: 1.

2.

A: Yes. The remarks would result in an offensive or hostile environment for the Ee. Moreover, the remarks did not give due regard to the applicant’s feelings and it is a chauvinistic disdain of her honor, justifying the finding of Sexual Harassment [Villaramavs. NLRC, G.R. No. 106341 (1994)].

The Er or head of office, educational or training institution is informed of such acts by the offended party; and No immediate action is taken thereon. (Sec. 5, R.A. 7877)

Q: Pedrito Masculado, a college graduate from the province, tried his luck in the city and landed a job as a utility/maintenance man at the warehouse of a big shopping mall. After working as a casual employee for 6 months, he signed a contract for probationary employment for 6 months. Being wellbuilt and physically attractive, his supervisor, Mr. Hercules Barak, took special interest to befriend him. When his probationary period was about to expire, he was surprised when one afternoon after working hours, Mr. Barak followed him to the men’s comfort room. After seeing that no one else was around, Mr. Barak placed his arm over Pedrito’s shoulder and softly said: “You have great potential to become a regular Ee and I think I can give you a favorable recommendation. Can you come over to my condo unit on Saturday evening so we can have a little drink? I’m alone, and I’m sure you want to stay longer with the company.”

Q: Can an independent action for damages be filed? A: Yes. Nothing under R.A. 7877 shall preclude the victim of work, education or training-related Sexual Harassment from instituting a separate and independent action for damages and other affirmative relief. (Sec. 6) Q: What is the three-fold liability rule in Sexual Harassment cases? A: An act of Sexual Harassment may give rise to civil, criminal and administrative liability on the part of the offender, each proceeding independently of the others. Q: When does the action prescribe? A: Any action shall prescribe in 3 years.

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Is Mr. Barak liable for Sexual Harassment committed in a work-related or employment environment? (2000 Bar Question)

c.

A: Yes, the elements of Sexual Harassment are all present. The act of Mr. Barak was committed in a workplace. Mr. Barak, as supervisor of Pedrito Masculado, has authority, influence and moral ascendancy over Masculado. Given the specific circumstances mentioned in the question like Mr. Barak following Masculado to the comfort room, etc. Mr. Barak was requesting a sexual favor from Masculado for a favorable recommendation regarding the latter's employment. It is not impossible for a male, who is a homosexual, to ask for a sexual favor from another male.

B. C.

The approval of DOLE, the following must be complied with: i. The employment does not involve advertisement or commercials promoting alcoholic beverages, intoxicating drinks, tobacco and its byproducts or exhibiting violence ii. there is a written contract approved by DOLE iii. the conditions provided in the first instance are met. Above 15 but below 18 – may be employed in any non-hazardous work Above 18 – no prohibition

Q: What is the duty of the employer before engaging minor into work?

EMPLOYMENT OF MINOR WORKERS

A: The Er shall first secure a work permit from the DOLE which shall ensure observance of the requirements. (Sec. 12, R.A. 7160)

Q: What are the rules on employment of minor workers?

Q: Is there a rule regarding the issuance of work certificates/ permits to children at least 15 but below 18 years of age?

A: GR: 1. No person under 18 years of age will be allowed to be employed in an undertaking which is hazardous or deleterious in nature. 2. No Er shall discriminate against any person in respect to terms and conditions of employment on account of his age.

A: The issuance of a DOLE Certificate to youth aged 15 to below 18 years of age is not required by law. No employer shall deny opportunity to any such youth applying for employment merely on the basis of lack of work permit or certificate of eligibility for employment. Any young person aged 15 to below 18 years of age may present copy of this DOLE advisory to any employer, job provider, government authority, or his/her representative when seeking employment or anytime during employment. (DOLE Department Advisory No. 01-08)

XPN: A. Below 15 yrs. Old 1. The child works directly under the sole responsibility of his parents or legal guardian and where only members of the family are employed, subject to the following conditions:

Q: What is a non-hazardous work? a.

2.

Employment does not endanger the child’s safety, health and morals b. Employment does not impair the child’s normal development c. Er-parent or legal guardian provides the child with the primary and/or secondary education prescribed by the Department of Education The child’s employment or participation in public entertainment or information through cinema, theater, radio or television is essential provided: a. Employment contract is concluded by the child’s parents or legal guardian, b. With the express agreement of the child concerned, if possible, and

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

A: It is any work or activity in which the Ee is not exposed to any risk which constitutes an imminent danger to his safety and health. Q: What are hazardous workplaces? A: 1. Nature of work exposes the workers to dangerous environmental elements, contaminants or work conditions 2. Workers are engaged in construction work, logging, fire-fighting, mining, quarrying, blasting, stevedoring, dock work, deep-sea fishing, and mechanized farming

60

LABOR STANDARDS 3.

4.

Workers are engaged in the manufacture or handling of explosives and other pyrotechnic products Workers use or are exposed to heavy or powerdriven tools

parents or guardian, the provisions of the alleged DO of DOLE to the contrary notwithstanding. A mere DO cannot prevail over the express prohibitory provisions of the LC. Q: Determine whether the following minors should be prohibited from being hired and from performing their respective duties indicated hereunder: (2006 Bar Question)

Q: You were asked by a paint manufacturing company regarding the possible employment as a mixer of a person aged 17, who shall be directly under the care of the section supervisor. What advice would you give? Explain briefly. (2002 Bar Question)

1. A 17-year old boy working as miner at the Walwadi Mining Corporation.

A: The paint manufacturing company cannot hire a person who is aged 17. Art. 139(c) of the LC provides that a person below 18 years of age shall not be allowed to work in an undertaking which is hazardous or deleterious in nature as determined by the SLE. Paint manufacturing has been classified by the SLE as a hazardous work.

A: Yes, he should be prohibited from being hired and from performing the duties of a miner because such constitutes hazardous work under D.O. No. 04 Series of 1999. Art. 139(c) of LC expressly prohibits the employment of persons below 18 years of age in an undertaking which is hazardous or deleterious in nature as determined by the SLE.

Q: What are the prohibitions on the employment of children in certain advertisements?

2. An 11-year old boy who is an accomplished singer and performer in different parts of the country.

A: Employment of child models in all commercial advertisements promoting the following shall be prohibited: 1. Alcoholic beverage 2. Intoxicating drinks 3. Tobacco and its by products 4. Gambling 5. Violence 6. Pornography

A: No, he should not be prohibited from being hired and from performing as a singer. Under Art. VIII Sec. 12(2) of R.A. 7619 as amended by R.A. 7658, this constitutes an exception to the general prohibition against the employment of children below 15 years of age, provided that the following requirements are strictly complied with:

Q: A spinster school teacher took pity on one of her pupils, a robust and precocious 12-year old boy whose poor family could barely afford the cost of his schooling. She lives alone at her house near the school after her housemaid left. In the afternoon, she lets the boy do various chores as cleaning, fetching water and all kinds of errands after school hours. She gives him rice and Php 30.00 before the boy goes home at 7 every night. The school principal learned about it and charged her with violating the law which prohibits the employment of children below 15 years of age. In her defense, the teacher stated that the work performed by her pupil is not hazardous, and she invoked the exception provided in the Department Order of DOLE for the engagement of persons in domestic and household service. Is her defense tenable? (2004 Bar Question)

2.

1.

3.

The Er shall ensure the protection, health safety and morals of the child The Er shall institute measures to prevent the child’s exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time; and The Er shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skill acquisition of the child. Moreover, the child must be directly under the sole responsibility of his parents or guardian and his employment should not in any way interfere with his schooling.

3. A 15-year old girl working as a library assistant in a girls' high school. A: No, she should not be prohibited from working as a library assistant because the prohibition in the LC against employment of persons below 18 years of age merely pertains to employment in an undertaking which is hazardous or deleterious in nature as

A: No, her defense is not tenable. Under Art. 139 of the LC on “minimum employable age,” no child below 15 years of age shall be employed except when he works directly under the sole responsibility of his

61

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation identified in the guidelines issued by the SLE. Working as a library assistant is not one of undertakings identified to be hazardous under D.O. No 04 Series of 1999.

A: 1. When the parent, guardian, teacher or person having care or custody of the child fails or is unable to protect the child against abuse, exploitation and discrimination; or 2. When such acts are committed against the child by the said parent, guardian, teacher or person having care and custody over the child.

4. A 16-year old girl working as model promoting alcoholic beverages. A: Yes, she should be prohibited from working as a model promoting alcoholic beverages. R.A. 7610 categorically prohibits the employment of child models in all commercials or advertisements promoting alcoholic beverages and intoxicating drinks, among other things.

Q: What is the limitation on the hours of work of a working child? A: If the child is: 1.

Below 15 years of age – not more than 20 hours a week and not more than 4 hours a day - Not allowed to work between 8:00 pm – 6:00 am

2.

At least 15 years of age but below 18 years of age – will not exceed 8 hours a day or 40 hours a week - Not allowed to work between 10:00 pm – 6:00 am

5. A 17-year old boy working as a dealer in a casino. (2006 Bar Question) A: Yes, he should be prohibited from working as a dealer in casino, because Art. 140 of the LC prohibits the employment of persons below 18 years of age in an undertaking which is hazardous or deleterious in nature identified in the guidelines issued by the SLE. Working as a dealer in a casino is classified as hazardous under D.O. No. 04 Series of 1999 as it exposes children to physical, psychological or sexual abuses.

Q: What are the worst forms of labor? 1.

ACT AGAINST CHILD LABOR (R.A. 9231) AND CHILD ABUSE LAW (R.A. 7610) Q: What is child labor? A: Any work or economic activity performed by a child that subjects him or her to any form of exploitation or is harmful to his or her health and safety or physical, mental or psychosocial development.

2. 3.

Q: Who is a working child? 4. A: Any child engaged as follows: 1. 2.

When the child is below 18 years of age in a work or economic activity that is not child labor; or When the child is below 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

5.

Q: Who can file a complaint for unlawful acts committed against children?

Q: When may the State intervene in behalf of the child?

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

All forms of slavery (Anti-Trafficking of Persons Act of 2003) or practices similar to slavery such as sale and trafficking of children, debt bondage and serfdom and forced or compulsory labor, including recruitment of children for use in armed conflict; The use, procuring, offering or exposing of a child pornography or for pornographic performances; The use, procuring, offering or exposing of a child for illegal or illicit activities, including the production and trafficking of dangerous drugs and volatile substances prohibited under existing laws; Employing child models in all commercials or advertisements promoting alcoholic beverages, intoxicating drinks, tobacco and its byproducts and violence; and Work which, by its nature or circumstances in which it is carried out, is hazardous or likely to be harmful to the health, safety or morals of children.

A: 1. 2.

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Offended party Parents or guardians

LABOR STANDARDS 3.

Ascendants or collateral relatives within the rd 3 degree of consanguinity Officer, social worker or representative of a licensed child-caring institution Officer or social worker of DSWD Barangay chairman of the place where the violation occurred, where the child is residing or employed At least 3 concerned, responsible citizens where the violation occurred

given an allowance incidental to education, i.e., “baon,” transportation, school projects, and school activities; provided, that the foster family and foster care arrangements are in compliance with the procedures and requirements as prescribed by R.A. 10165 or Foster Care Act of 2012.

Q: Which courts have jurisdiction over offenses punishable under R.A. 9231?

A: 1. A janitress doing irregular laundry work for a household during rest day; 2. A construction worker doing casual gardening job for a household; or 3. A hospital nurse or a student doing baby-sitting job.

4. 5. 6.

7.

Q: What are the examples of persons performing work occasionally or sporadically and not on an occupational basis?

A: The Family Courts shall have original jurisdiction over all cases involving offenses punishable under this Act. EMPLOYMENT OF HOUSEHELPERS

Q: What is the employable age for a kasambahay? Q: Who are the kasambahay covered by R.A. 10361, otherwise known as the “Domestic Workers Act” or “Batas Kasambahay”?

A: 15 years old and above. Note: The employment of children 15 but below 18 years of age may be made under the following conditions:

A: All kasambahay engaged in domestic work, whether on a live-in or live-out arrangement, such as, but not limited to, the following: 1. 2. 3. 4. 5. 6. 7.

1. 2.

General househelp Nursemaid or Yaya Cook Gardener Laundry person Working children or domestic workers 15 years and above but below 18 years of age; or Any person who regularly performs domestic work in one household on an occupational basis (live-out arrangement). [Sec. 3(d), R.A. 10361]

3. 4.

The consent of the parent/guardian of working children is required in the employment contract.

Q: Who is the employer of a kasambahay? A: An Er is any person who engages and controls the services of a kasambahay and is party to the employment contract.

Q: Who are not covered by the Batas Kasambahay? A: The following are not covered: 1. 2. 3. 4.

Q: Under the law, who are included in the employer’s household to be provided direct service by the kasambahay?

Service providers Family drivers Children under foster family arrangement; and Any other person who performs work occasionally or sporadically and not on an occupational and regular basis.

Q: Who are arrangement?

children

under

foster

They shall not be allowed to work for more than 8 hours a day, and in no case beyond 40 hours a week; They shall not be allowed to work between 10 p.m. to 6 a.m. of the following day; They shall not be allowed to do hazardous work; and They shall not be denied access to education and training.

A: Immediate family members or other occupants of the house who are directly and regularly provided services by the kasambahay. Q: How can an employer hire a kasambahay?

family

A: An Er can hire directly or through private employment agencies registered with the DOLE regional offices. The Er, whether the kasambahay is hired directly or through POEA, shall shoulder the expenses for hiring. The kasambahay shall not be

A: Children under foster family arrangement are those who are living with a family or household of relative/s and are provided access to education and

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation charged of any cost of the recruitment, placement, or finder’s fee.

5.

Hours of work and proportionate additional payment; 6. Rest days and allowable leaves; 7. Board, lodging and medical attention; 8. Agreements on deployment expenses, if any; 9. Loan agreement; 10. Termination of employment; and 11. Any other lawful condition agreed upon by both parties.

Note: The Er shall pay the expenses that are directly used for the transfer of the kasambahay from place of origin to the place of work. An Er can be reimbursed of the deployment expenses when the kasambahay unreasonably leaves the Er within 6 months from the time he/she started work. If a kasambahay is hired thru a Private Employment Agency, the agency is allowed to collect Service Fee from the Er.

Q: Is the employer required to register the kasambahay?

Q: Are there pre-employment requirements? A: Yes. Before entering into an employment contract, the Er has the option to require the following from a kasambahay:

A: Yes. The Er is required to register the kasambahay in the Registry of Domestic Workers in the barangay where the Er resides. For this purpose, the DILG, in coordination with the DOLE, shall formulate a registration system.

1.

Note: The registration of the kasambahay is free of charge.

2. 3. 4.

Medical certificate or health certificate issued by a local government health officer; Barangay and police clearance; NBI clearance; and Duly authenticated birth certificate or, if not available, voter’s identification card, baptismal record, or passport showing the kasambahay’s age.

Q: What are the mandatory benefits of the kasambahay? A: 1. 2. 3. 4. 5. 6. 7. 8.

Note: Requirements are mandatory when the employment of the kasambahay is facilitated through a private employment agency. It is not a requirement for a kasambahay to be trained and certified by TESDA prior to employment. However, the kasambahay is encouraged to undergo competency assessment and be certified by TESDA. Training is not a requirement for competency assessment.

Q: What are the other rights and privileges of the kasambahay? A: 1. Freedom from Er’s interference in wage disposal; 2. Standard of treatment; 3. Board, lodging, and medical attendance; 4. Right to privacy; 5. Access to outside communication; 6. Access to education and training; 7. Right to be provided a copy of the employment contract; 8. Right to Certificate of Employment; 9. Right to form, join, or assist labor organization; 10. Right to terminate employment based on just cause; and 11. Right to exercise religious beliefs and cultural practices.

Q: Is a contract necessary before entering into an employment for domestic work? A: Yes. The Er and the kasambahay shall enter into a contract of employment written in a language or dialect understood by them. Note: The contract need not be notarized. The Punong Barangay or his/her designated officer may attest to the contract and serve as witness to its execution.

Q: What should be the contents of the employment contract? A: 1. 2. 3. 4.

Duties and responsibilities of the kasambahay; Period of employment; Compensation; Authorized deductions;

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Monthly minimum wage; Daily rest period of 8 (total) hours; Weekly rest period of 24 (uninterrupted) hours 5 days annual service incentive leave with pay; 13th month pay; SSS benefit; PhilHealth benefit; and Pag-IBIG benefit

Q: What are the basic necessities of the kasambahay?

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LABOR STANDARDS A: 1. At least 3 adequate meals a day, taking into consideration the kasambahay’s religious beliefs and cultural practices; 2. Humane sleeping condition; and 3. Appropriate rest and basic medical assistance.

rest period. The Er shall respect the preferred weekly rest day of the kasambahay on religious grounds. (Sec. 21, R.A. 10361)

Note: Though not part of the “basic necessities” required to be provided by the Er to the kasambahay, shampoo, soap, toothpaste etc. may be provided gratuitously.

A: After 1 year of service.

Q: When can the kasambahay avail of the five-day annual Service Incentive Leave?

Note: If the kasambahay fails to avail of any of his/her annual SIL, it shall be forfeited and cannot be converted to cash.

Q: How much is the monthly minimum wage of a kasambahay?

Q: What other agreements may the employer and the kasambahay enter into relative to the kasambahay’s weekly rest day and Service Incentive Leave?

A: For those employed in: 1. National Capital Region – Php 2,500.00 2. Cities and 1st class municipalities – Php 2,000.00 3. Other municipalities – Php 1,500.00 (Sec. 24, R.A. 10361)

A: 1. Offsetting a day of absence with a particular rest day; 2. Waiving a particular rest day in return for an equivalent daily rate of pay; 3. Accumulating rest days not exceeding 5 days; 4. Adding the accumulated rest days (maximum of 5 days) to the five-day SIL; and 5. Waiving a particular SIL in return for an equivalent daily rate of pay.

Note: The law provides a mechanism for increasing the minimum wage of the kasambahay. Initially, one year from 4 June 2013, the Regional Tripartite Wages and Productivity Boards (RTWPB) may review, and if proper, determine and adjust the minimum wage (Sec. 24, R.A. 10361). The RTWPB shall coordinate with TESDA on the wage review and adjustment based on the kasambahay’s competency level, in line with the thrust to professionalize the domestic service sector.

Q: In what form and when will the wage of a kasambahay be paid?

Q: When will a kasambahay be entitled to the 13 month pay?

A: In cash, at least once a month.

A: After 1 month of service.

th

th

Q: How is the 13 month pay computed and when is it paid?

Note: The Er shall at all times provide the kasambahay with a copy of the pay slip every pay day containing the amount paid and all deductions made, if any. The copies of the pay slip shall be kept by the Er for a period of 3 years. (Sec. 26, R.A. 10361)

th

A: In computing the 13 month pay, the total basic wage received in a given calendar year shall be divided by 12. The amount derived shall be paid not later than December 24.

Payment of wages by means of promissory note, voucher, coupon, token, ticket, chit, or anything other than the cash wage is prohibited.

Q: When will a kasambahay be covered by SSS, PhilHealth, and Pag-IBIG?

Q: Is the kasambahay entitled to daily rest period?

A: After 1 month of service.

A: Yes. He/she is entitled to a total daily rest period of at least 8 hours.

Q: Is the employer liable under the SSS, PhilHealth, and Pag-IBIG laws in case the kasambahay refuses membership with those agencies?

Q: Can the employer require the kasambahay to work beyond 16 hours at any given workday in return for an equivalent hourly rate?

A: Membership under the SSS, PhilHealth, and PagIBIG is mandatory and non-negotiable.

A: No. The eight-hour rest period must be observed.

Q: Supposing that in exchange for non-membership, the kasambahay agrees with the employer to receive

Note: Kasambahays are also entitled to at least 24 consecutive hours of rest in a week. The Er and the kasambahay may determine the schedule of the weekly

65

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation the premiums and contributions in addition to his/her salary, is this allowed?

6.

A: No. Under the SSS, PhilHealth, and Pag-IBIG laws, the Er has the obligation to register the kasambahay and deduct and remit the required premiums and contributions. The Er shall incur certain liabilities, including criminal prosecution, if he fails or refuses to comply with his/her obligations.

Q: Can the employer also terminate the contract at any time? A: Yes, on the following grounds: 1.

Q: Who will pay the SSS premium, and PhilHealth and Pag-IBIG contributions of the kasambahay?

2.

A: GR: The Er.

3.

XPN: If the wage of the kasambahay is Php 5,000.00 or more, the kasambahay will pay his/her share in the premiums/contributions.

4.

5. Q: Does the law have provisions protecting employers of kasambahay? 6. A: Yes. They include: 1. 2. 3.

4.

5.

Prohibition against privileged information; Er may require certain pre-employment documents prior to engagement; Ers are assured of quality services through DOLETESDA training, assessment, and certification of kasambahay; Forfeiture of 15-day unpaid salary should the kasambahay leave the residence of the Er without any justifiable reason; and Right to terminate the employment on justifiable grounds.

7.

The domestic worker and the Er may mutually agree upon written notice to pre-terminate the contract of employment to end the employment relationship. (Sec. 32, R.A. 10361)

Q: If the duration of the domestic service is not determined in the contract, can a kasambahay or the employer terminate the contract anytime?

A: Yes, on the following grounds:

2.

3.

4.

5.

A: Yes. Either the Er or the kasambahay may give notice to end the working relationship 5 days before the intended date of the termination of service.

Verbal or emotional abuse of the kasambahay by the Er or any member of the household; Inhuman treatment including physical abuse of the kasambahay by the Er or any member of the household; Commission of a crime or offense against the kasambahay by the Er or any member of the household; Violation by the Er of the terms and conditions of the employment contract and other standards set forth under the law; Any disease prejudicial to the health of the kasambahay, the Er, or member/s of the household; and

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Misconduct or willful disobedience by the kasambahay of the lawful order of the Er in connection with the former’s work; Gross or habitual neglect or inefficiency by the kasambahay in the performance of duties; Fraud or willful breach of the trust reposed by the Er on the kasambahay; Commission of a crime or offense by the kasambahay against the person of the Er or any immediate member of the Er’s family; Violation by the kasambahay of the terms and conditions of the employment contract and other standards set forth under the law; Any disease prejudicial to the health of the kasambahay, the Er, or member/s of the household; and Other causes analogous to the foregoing. (Sec. 34, R.A. 10361)

Note: Neither the domestic worker nor the Er may terminate the contract before the expiration of the term except for grounds provided for in Secs. 33 and 34 of the Batas Kasambahay.

Q: Can the kasambahay terminate the contract at any time?

1.

Other causes analogous to the foregoing. (Sec. 33, R.A. 10361)

Q: What are the entitlements of a kasambahay unjustly dismissed by the employer? A: 1. Outright payment of earned wage; and 2. Indemnity benefit in the form of wage equivalent to 15 days work. Q: What are the liabilities of a kasambahay who leaves his/her employer without justifiable reason?

66

LABOR STANDARDS A: 1. Forfeiture of wage equivalent to 15 days work; and 2. Reimbursement of the deployment expenses, if the employment contract is terminated within 6 months from employment.

A: 1. Ensure that the kasambahay is qualified as required by the Er; 2. Secure the best terms and conditions of employment for the kasambahay; 3. Ensure that the employment agreement between the kasambahay and the employer stipulates the terms and conditions of employment and all the benefits in accordance with the IRR; 4. Provide a pre-employment orientation briefing to the kasambahay and the Er about their rights and responsibilities in accordance with this IRR; 5. Ensure that the kasambahay is not changed or required to pay any recruitment or placement fees; 6. Keep copies of employment contracts and agreements pertaining to recruited kasambahay which shall be made availabe during inspections or whenever required by the DOLE or local government officials; 7. Assist the kasambahay in filing his/her complaints or grievances against the Ers; 8. Cooperate with government agencies in rescue operations involving abused or exploited kasambahay; and 9. Assume joint and solidary liability with the Er for payment of wages, wage-related and other benefits, including monthly contribution for SSS, PhilHealth, and Pag-IBIG membership.

Q: Can the employer inspect the belongings of the kasambahay before he/she leaves the household in case of termination of employment? A: No. However, the Er and the kasambahay can agree in their employment contract that an inspection can be made before he/she leaves the household. Q: If there is non-payment or underpayment of wage and other labor-related concerns, where can the kasambahay seek assistance? A: The kasambahay can go to a Kasambahay Desk Officer situated in their respective barangays or the nearest DOLE field/provincial/regional office. Q: Can the employer demand from a private employment agency the replacement of a kasambahay? A: Yes, within 1 month from the day the kasambahay reported for work, the Er may demand a replacement based on the following cases: 1.

2.

3.

Q: What are the specific acts declared “unlawful” under the law?

The kasambahay is found to be suffering from an incurable or contagious disease, or mental illness as certified by a competent or government physician; The kasambahay abandons the job without justifiable cause, voluntarily resigns, commits theft or any other analogous acts prejudicial to the Er or his/her family; or The kasambahay is physically or mentally incapable of discharging the minimum requirements of the job, as specified in the employment contract.

A: 1. Employment of children below 15 years of age; 2. Withholding of the kasambahay’s wages; 3. Interference in the disposal of the kasambahay’s wages; 4. Requiring kasambahay to make deposits for loss or damage; 5. Placing the kasambahay under debt bondage; and 6. Charging another household for temporarily performed tasks.

Q: What will happen in case the private employment agency fails to provide a qualified replacement after one month from receipt of the employer’s request?

Note: Unlawful acts are punishable with an administrative fine ranging from Php 10,000 to Php 40,000 to be imposed by the DOLE Regional Offices.

A: The Er shall be entitled to a refund of 75% of the fees paid to the private employment agency.

Q: What other remedies for unlawful acts are available under the law?

Q: What are the declared responsibilities of the private employment agency under the law?

A: The aggrieved party may file the appropriate civil or criminal action before the regular courts.

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Q: Does the law afford remedy for abused or exploited kasambahay?

domestic Ees of the rest house and not of NBC? (2000 Bar Question)

A: The law mandates the conduct of immediate rescue of abused or exploited kasambahay by the municipal or city social welfare officer or a social welfare officer from DSWD, in coordination with the concerned barangay officials. The law sets out that crimes or offenses committed under the Penal Code and other criminal laws shall be filed with the regular courts.

A: No, they are not domestic Ees. They are the Ees of NBC because the rest house and recreational facility are business facilities which are for use of NBC’s top executives and clients [Traders Royal Bank vs. NLRC, G.R. No. 127864, (1999)]. EMPLOYMENT OF HOMEWORKERS Q: Who are homeworkers?

Q: Erlinda worked as a cook, preparing the lunch and merienda of the Ees of Remington Industrial Sales Corp. She worked at the premises of the company. When Erlinda filed an illegal dismissal case, Mr. Tan, the managing director of Remington Corp., claimed that Erlinda was a domestic helper and not a regular Ee of the corporation. Mr. Tan argued that it is only when the househelper or domestic servant is assigned to certain aspects of the business of the Er that such househelper or domestic servant may be considered as such an Ee. Is Erlinda a domestic or househelper?

A: They are those who perform in or about his own home any processing or fabrication of goods or materials, in whole or in part, which have been furnished directly or indirectly, by an Er and sold thereafter to the latter. Q: Who is the employer of a homeworker? A: Includes any person, natural or artificial who, for his account or benefit, or on behalf of any person residing outside the country, directly or indirectly, or through an Ee, agent contractor, subcontractor or any other person:

A: No, Erlinda is clearly not a househelper. A “househelper” or “domestic servant” under the IRR of the LC is one who is employed in the Er’s home to minister exclusively to the personal comfort and enjoyment of the Er’s family. A househelper, domestic servant or laundrywoman in a home or in a company staffhouse is different in the sense that in a corporation or a single proprietorship engaged in business or industry or any agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises of the business of the Er. In such instance, they are Ees of the company or Er in the business concerned, entitled to the privileges of a regular Ee. The mere fact that the househelper or domestic servant is working within the premises of the business of the employer and in relation to or in connection with its business, as in its staffhouses for its guest or even for its officers and Ees, warrants the conclusion that such househelper or domestic servant is and should be considered a regular Ee and not a househelper. (Remington Industrial vs. Castaneda, G.R. Nos. 169295-96, Nov.20, 2006)

1.

2.

Q: What is the duty of the employer in case he contracts with another the performance of his work? A: It shall be the duty of the Er to provide in such contract that the Ees or homeworkers of the contractor and the latter’s subcontractor shall be paid in accordance with the LC. Q: What is the liability of the employer if the contractor or subcontractor fails to pay the wages or earnings of his Ees?

Q: NBC has a rest house and recreational facility in the highlands of Tagaytay City for the use of its top executives and corporate clients. The rest house staff includes a caretaker, two cooks and a laundrywoman. All of them are reported to the SSS as domestic or household Ees of the resthouse and recreational facility and not of NBC. Can NBC legally consider the caretaker, cooks and laundrywoman as UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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 directions. Sells any goods, articles or materials to be processed or fabricated in or abut a home and then rebuys them after such processing or fabrication, either by himself or through some other person.

A: Er shall be jointly and severally liable with the contractor or sub-contractor to the workers of the latter to the extent that such work is performed under such contract, in the same manner as if the Ees or homeworkers were directly engaged by the Er.

68

LABOR STANDARDS Q: Can homeworkers form labor organizations?

services, the bank allows her to work in her residence during her leave. For this purpose, the bank installed a fax machine in her residence, and gave her a cellphone and a beeper. Is Josie a homeworker under the law? Explain. (2000 Bar Question)

A: Yes. DO No. 5, replacing Rule XIV of the IRR Book 3 of the LC, authorizes the formation and registration of labor organization of industrial homeworkers. It also makes explicit the Ers duty to pay and remit SSS, Philhealth and ECC premiums.

A: No, she is actually an office worker. She is not an industrial homeworker who accepts work to be fabricated or processed at home for a contractor, which work, when finished, will be returned to or repurchased by said contractor. (Art. 155, LC)

Q: What are the prohibitions against homework? A: No homework shall be performed on: 1. Explosives, fireworks and similar articles; 2. Drugs and poisons; and 3. Other articles, the processing of which requires exposure to toxic substances. (Sec. 13, Rule XIV, Book III, IRR)

APPRENTICES AND LEARNERS Q: Who is an apprentice?

Q: Can the Er make deductions on homeworker’s earnings?

A: Any worker who is covered by a written apprenticeship agreement with an individual Er or any of the entities recognized under the LC.

A: GR: No Er, contractor or subcontractor shall make any deduction from the homeworker’s earnings for the value of materials which have been lost, destroyed, soiled or otherwise damage.

Q: What is apprenticeship? A: It is practical training on the job supplemented by related theoretical instruction involving a contract between an apprentice and an Er on an approved apprenticeable occupation.

XPNs: Unless the ff. conditions are met: 1. The homeworker is clearly shown to be responsible for the loss or damage; 2. The Ee is given reasonable opportunity to show cause why deductions should not be made; 3. The amount of such deduction is fair and reasonable and shall not exceed the actual loss or damages; and 4. The deduction is made at such rate that the amount deducted does not exceed 20% of the homeworker’s earnings in a week.

Q: What is an apprenticeable occupation? A: A highly technical occupation which requires more than 3 months of practical training with theoretical instruction officially endorsed by a tripartite body and approved for apprenticeship by the Authority. Q: What is on the job training (OJT)? A: It is practical work experience through actual participation in productive activities given to or acquired by an apprentice.

Q: Distinguish househelpers from homeworkers. A: HOUSEHELPERS

Minister to the personal needs and comfort of his Er in the latter’s home

Q: What are highly technical industries?

HOMEWORKERS Performs in or about his own home any processing or fabrication of goods or materials, in whole or in part, which have been furnished directly or indirectly, by an Er and sold thereafter to the latter.

A: Those which are engaged in the application of advanced technology. Q: What are related theoretical instructions? A: Technical information based on apprenticeship standards approved by the Bureau. Note: Prior approval by TESDA (formerly DOLE) of the proposed apprenticeship program is a condition sine qua non. Otherwise, an apprentice becomes a regular Ee. [Nitto Enterprises vs. NLRC, G.R. No. 114337, (1995)].

Q: Josie is the confidential secretary of the Chairman of the Board of the bank. She is presently on maternity leave. In an arrangement where the Chairman of the Board can still have access to her

69

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Q: What are the qualifications of an apprentice? A: 1. At least 15 years of age

2. Prior approval by the DOLE of the proposed apprenticeship program is a condition sine qua non before an apprenticeship agreement can be validly entered into. [Nitto Enterprises vs. NLRC 248 SCRA 654 (1995)]

Note: Those below 18 years of age shall not work in hazardous occupations

2. 3. 4.

5.

Note: One of the objectives of Title II (Training and Employment of Special Workers) of the Labor Code is to establish apprenticeship standards for the protection of apprentices. An apprenticeship program should first be approved by the Department of Labor and Employment (DOLE) before an apprentice may be hired, otherwise a person hired will be considered a regular employee. [Century Canning Corp. vs. CA, 530 SCRA 501 (2007)]

Physically fit for the occupation Possess vocational aptitude and capacity Possess: a. The ability to comprehend, and b. Follow oral and written instructions The company must have an apprenticeship program duly approved by the DOLE.

Q: What is the period of apprenticeship?

Note: Trade and industry associations may recommend to the SLE appropriate educational requirements for different occupations.

A: Must not exceed 6 months:

Q: When is an occupation deemed hazardous?

1.

A: 1. Nature of work exposes worker to dangerous environmental elemental contaminants or work conditions 2. Workers are engaged in construction work, logging, fire fighting, mining, quarrying, blasting, stevedoring, deep-sea fishing, and mechanized farming 3. Workers are engaged in the manufacture or handling of explosives and other pyrotechnic products 4. Workers use, or are exposed to heavy or powerdriven machinery or equipment.

2.

Q: What is the status of an apprentice hired after such term? A: He is deemed a regular Ee. He cannot be hired as a probationary Ee since the apprenticeship is deemed the probationary period. Q: How much is the compensation of an apprentice? A: GR: It starts at not less than 75% of the statutory st minimum wage for the 1 6 months (except OJT); thereafter, shall be paid in full minimum wage, including the full COLA.

Q: Who may employ apprentices? A: 1. Only Ers in highly technical industries and 2. Only in apprenticeable occupations approved by SLE

XPN: Art. 72 of the LC provides that the SLE may authorize the hiring of apprentices without compensation whose training on the job is required: 1. by the school or; 2. by a training program curriculum or; 3. as requisite for graduation or 4. as requisite for board examination.

Q: What is the employment status of apprentices? A: They are contractual workers whose length of service depends on the term provided for in the apprenticeship agreement. Thus, the employer is not obliged to employ the apprentice after the completion of his training.

Note: GR: Apprenticeship programs shall be primarily voluntary

Q: What are the conditions for employment of an apprentice?

XPNs: Compulsory Apprenticeship: 1. National security or economic development so demand, the President may require compulsory training 2. Services of foreign technicians are utilized by private companies in apprenticeable trades.

A: 1. Should be an apprenticeable trade as determined by TESDA

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

2 months/400 hours: Trades or occupations which normally require 1 year or more for proficiency 1 month/200 hours: Occupations and jobs which require more than 3 months but less than 1 year for proficiency. (Sec. 19, Rule VI, Book II, IRR)

70

LABOR STANDARDS Q: What are the rules regarding apprenticeship agreements?

liable by Victor Monteverde as Padilla’s employer? (1997 Bar Question)

A: Apprenticeship agreements, including the wage rates of apprentices, shall: 1. Conform to the rules issued by SLE. 2. The period of Apprenticeship shall not exceed 6 months. 3. Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no case shall start below 75% of the applicable minimum wage, may be entered into only in accordance with Apprenticeship programs duly approved by the SLE. 4. The DOLE shall develop standard model programs of Apprenticeship. (Sec. 18, Rule VI, Book II, IRR)

A: Gomburza College is not liable for the acts of Padilla because there is no Er-Ee relationship between them. As provided in the IRR of the LC, "there is no Er-Ee relationship between students on one hand, and schools, colleges, or universities on the other, where students work with the latter in exchange for the privilege to study free of charge, provided the students are given real opportunity, including such facilities as may be reasonable and necessary to finish their chosen courses under such arrangement."

Q: Who signs the apprenticeship agreement?

A: 1. Either party may terminate an agreement after the probationary period but only for a valid cause. 2. It may be initiated by either party upon filing a complaint or upon DOLE’s own initiative.

Q: Who may agreement?

A: Every apprenticeship agreement shall be signed by: 1. The Er or his agent, or 2. An authorized representative of any of the recognized organizations, associations or groups, and 3. The apprentice.

terminate

an

Apprenticeship

Q: Who may appeal the decision of the authorized agency of the DOLE? What is the period of appeal?

Q: Who will sign if the apprentice is a minor?

A: It may be appealed by any aggrieved person to the SLE within 5 days from receipt of the decision.

A: An apprenticeship agreement with a minor shall be signed in his behalf by: 1. His parent or guardian, or if the latter is not available, 2. An authorized representative of the DOLE.

Note: The decision of the SLE shall be final and executory.

Q: What is Exhaustion of Administrative Remedies (EAR)? A: It is a condition precedent to the institution of action. (Sec. 32b, Rule VI, Book II, IRR)

Q: What are the rules on working scholars? A: There is no Er-Ee relationship between students on one hand, and schools, where there is written agreement between them under which the former agree to work for the latter in exchange for the privilege to study free of charge. The student is not considered an Ee. (Sec. 14, Rule IX, Book III, IRR)

Q: How is the principle of Exhaustion of Administrative Remedies applied in case of breach of apprenticeship agreement? A: Exhaustion of Administrative Remedies is a condition precedent to the institution of an action for enforcing application of agreement.

Q: Padilla entered into a written agreement with Gomburza College to work for the latter in exchange for the privilege of studying in said institution. His work was confined to keeping clean the lavatory facilities of the school. One school day, he got into a fist fight with a classmate, Monteverde, as a result of which the latter sustained a fractured arm. Victor filed a civil case for damages against him, impleading Gomburza College due to the latter's alleged liability as his employer. Under the circumstances, could Gomburza College be held

Q: Who shall settle differences arising out of apprenticeship agreement? A: The plant apprenticeship committee shall have the initial responsibility for settling differences arising out of Apprenticeship agreement. (Sec. 32b, Rule VI, Book II, IRR)

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Q: What is the procedure for the termination of apprenticeship?

Q: Who may employ learners? A: Only Ers in semi-skilled and other industrial occupations which are non-apprenticeable.

A: The party terminating shall: 1. Serve a written notice on the other at least 5 days before actual termination, 2. Stating the reason for such decision; and 3. A copy of said notice shall be furnished the Apprenticeship Division concerned.

Q: What is the status of learners who have been allowed or suffered work during the first 2 months, if training is terminated by the Er before the end of the stipulated period through no fault of the Learner?

Q: Who are learners? A: They are deemed regular Ees. (Sec. 4, Rule VII, Book II, IRR)

A: 1. They are persons hired as trainees in semi-skilled and other industrial occupations 2. Which are non-apprenticeable and 3. Which may be learned through practical training on the job in a relatively short period of time 4. Which shall not exceed 3 months 5. Whether or not such practical training is supplemented by theoretical instructions. (Sec. 1a, Rule VII, Book II, IRR)

DISTINCTIONS BETWEEN LEARNERSHIP AND APPRENTICESHIP Q: Distinguish learnership from apprenticeship. A: Learnership Apprenticeship Nature Training on the job in semi-skilled and other Training in trades which industrial occupation or are apprenticeable, that trades which are nonis, practical training on apprenticeable and which the job supplemented may be learned thru by related theoretical practical training on the instruction for more job in a relatively short than 3 months. period of time. Duration of training Min: 3 months Max: 3 months Max: 6 months Commitment to employ With commitment to employ the learner as a regular Ee if he desires No commitment to hire upon completion of learnership In case of pretermination of contract Considered a regular Ee if pre-termination occurs after 2 months of training Worker not considered and the dismissal is as regular Ee. without fault of the Learner. Coverage Highly technical Semi-skilled/Indus-trial industries and only in occupations industrial occupation There is a list of learnable No list trades by TESDA Written agreement Requires learnership Requires apprenticeship agreement agreement

Q: When may learners be employed? A: 1. When no experienced worker is available 2. It is necessary to prevent curtailment of employment opportunities; and 3. Employment does not create unfair competition in terms of labor costs or impair or lower working standards. Q: What are the contents of a learnership agreement? A: Any Er desiring to employ learners shall enter into a learnership agreement with them, which agreement shall include: 1. The names and addresses of the learners; 2. The duration of the learnership period, which shall not exceed 3 months; 3. The wages or salary rates of the learners which shall begin at not less than 75% of the applicable minimum wage; and 4. A commitment to employ the learners if they so desire, as regular Ees upon completion of the Learnership. Q: What is the qualification of a learner? A: Must be at least 15 years of age. Note: Those below 18 years of age shall not work in hazardous occupations.

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

72

LABOR STANDARDS Q: Does the mere fact that a worker has a disability, make him a disabled worker?

PERSONS WITH DISABILITY (R.A. 7277 as amended by R.A. 9442)

A: No, because his disability may not impair his efficiency or the quality of his work. If despite his disability he can still efficiently perform his work, he would be considered a qualified disabled worker entitled to the same treatment as qualified able-bodied workers. [Bernardo v. NLRC, G.R. No. 122917, (1999)].

DEFINITION Q: Who are persons with disability? A: Those whose earning capacity is impaired by: 1. Physical deficiency 2. Age 3. Injury 4. Disease 5. Mental deficiency 6. Illness

RIGHTS OF PERSONS WITH DISABILITY Q: What are the rights and privileges of disabled workers? A: Disabled workers shall have the following rights: 1. Equal opportunity for employment 2. Sheltered employment (the Government shall endeavour to provide them work if suitable employment for disabled persons cannot be found through open employment) 3. Apprenticeship 4. Vocational rehabilitation (means to develop the skills and potentials of disabled workers and enable them to compete in the labor market) 5. Vocational guidance and counselling

Q: What is the duration of the employment period of persons with disability? A: There is no minimum or maximum duration. It depends on the agreement but it is necessary that there is a specific duration stated. Q: May persons with disability be hired as apprentices or learners? A: Yes, if their disability is not such as to effectively impede the performance of job operations in the particular occupations for which they are hired. (Art. 81, LC)

PROHIBITIONS ON DISCRIMINATION AGAINST PERSONS WITH DISABILITY Q: What is the prohibition on discrimination against disabled workers?

Q: Can persons with disability acquire the status of a regular Ee?

A: No disabled person shall be denied access to opportunities for suitable employment. A qualified disabled employee 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.

A: Yes, if work is usually or necessarily desirable to the business. [Bernardo vs. NLRC, G.R No. 122917, (1999)] Q: Who may employ persons with disability? A: Ers in all industries: Provided, the disability is not such as to effectively impede the performance of job operations in the particular occupations for which they are hired.

Note: 5% of all casual emergency and contractual positions in the Departments of Social Welfare and Development; Health; Education, Culture and Sports; and other government agencies, offices or corporations engaged in social development shall be reserved for disabled persons. (R.A. 7277)

Q: When can persons with disability be employed? A: 1. When their employment is necessary to prevent curtailment of employment opportunities; and 2. When it will not create unfair competition in labor costs or lower working standards. (Art. 79, LC)

INCENTIVES FOR EMPLOYERS Q: What are the incentives provided to employers who are employing disabled workers? A: 1. Entitled to an additional deduction, from their gross income, equivalent to 25% of the total amount paid as salaries and wages to disabled persons:

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Labor Law and Social Legislation Provided, however, That such entities present proof as certified by the DOLE that disabled persons are under their employ: Provided further, That the disabled Ee is accredited with the DOLE and the Department of Health as to his disability, skills and qualifications. 2. Private entities that improve or modify their physical facilities in order to provide reasonable accommodation for disabled persons shall also be entitled to an additional deduction from their net taxable income, equivalent to 50% of the direct costs of the improvements or modifications. (Sec. 8, R.A. 7277) Q: Distinguish persons with disability from differently abled? A: Persons with disability

Earning capacity is impaired by age, or physical or mental deficiency or injury.

Covers only workers.

Differently Abled Refers to all suffering from restriction of different abilities as a result of mental, physical or sensory impairment to perform an activity in the manner or within range considered normal for a human being. Covers all activities or endeavors.

Basis: loss/impairment of earning capacity.

Basis: range of activity which is normal for a human being.

Loss due to injury or physical or mental defect or age.

Restriction due to impairment of mental/physical/ sensory defect.

If hired, entitled to 75% of minimum wage. Subject to definite periods of employment. Employable only when necessary to prevent curtailment of employment opportunity.

If qualified, entitled to all terms and conditions as qualified able-bodied person.

No restrictions on employment. Must get equal opportunity and no unfair competition.

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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TERMINATION OF EMPLOYMENT TERMINATION OF EMPLOYMENT

security guards to safeguard the persons and belongings of hotel guests, among others. The security guards filled up Baron application form and submitted the executed forms directly to the Security Department of Baron. The pay slips of the security guards bore Baron's logo and showed that Baron deducted the amounts for SSS premiums, medicare contributions and withholding taxes from the wages of the secutiry guards. The assignments of security guards, who should be on duty or on call, promotions, suspensions, dismissals and award citations for meritorious services were all done upon approval by Baron's chief security officer. After the expiration of the contract with ASIA, Baron did not renew the same and instead executed another contract for security services with another agency. ASIA placed the affected security guards on "floating status" on "no work no pay" basis. Having been displaced from work, the ASIA security guards filed a case against the Baron for illegal dismissal, OT pay, minimum wage differentials, vacation leave and sick th leave benefits, and 13 month pay. Baron denied liability alleging that ASIA is the employer of the security guards and therefore, their complaint for illegal dismissal and payment of money claims should be directed against ASIA. Nevertheless, Baron filed a Third Party Complaint against ASIA.

EMPLOYER-EMPLOYEE RELATIONSHIP Q: What determines the employment relationship?

existence

of

an

A: It is determined by law and not by contract [Insular Life Assurance Co. Ltd. vs. NLRC, G.R. No. 119930, (1998)]. Note: Taxi or jeepney drivers under the “boundary” system are Ee’s of the taxi or jeepney owners/operators; so also the passenger bus drivers and conductors [Jardin vs. NLRC and Goodman Taxi, G.R. No. 119268, (2000)].

Q: The employment contract stipulates that there is no employer-employee relationship between the parties. Is that valid? A: No.The existence of an Er-Ee relation is a question of law and being such, it cannot be made the subject of agreement [Tabas vs. California Manufacturing Co., G.R. No. L-80680, (1989)]. Q: Banco de Manila and the Ang Husay Janitorial and Pest Control Agency entered into an Independent Contractor Agreement with the usual stipulations specifically, the absence of employeremployee relationship, and the relief from liability clauses. Can the bank, as a client, and the agency, as an independent contractor, stipulate that no employer-employee relationship exists between the bank and the employees of the Agency who may be assigned to work in the Bank? Reason.

Is there an employer-employee relationship between the Baron, on one hand, and the ASIA security guards, on the other hand? Explain briefly. (1999 Bar Question) A: As a general rule, the security guards of a private security guard agency are the Ees of the latter and not of the establishment that has entered into a contract with the private security guard agency for security services. But under the facts in the question, Baron Hotel appear to have hired the security guards, to have paid their wages, to have the power to promote, suspend or dismiss the security guards and the power of control over them, namely, the security guards were under orders of Baron Hotel as regard their employment. Because of the above-mentioned circumstances, Baron Hotel is the Er of the security guards.

A: Yes, they can stipulate provided that the relationship is job contracting. However the stipulation cannot prevail over the facts and the laws. The existence of Er-Ee relationship is determined by facts and law and not by stipulation of the parties. It is axiomatic that the existence of an Er-Ee relationship cannot be negated by expressly repudiating it in the management contract and providing therein that the Ee is an independent contractor when the terms of the agreement clearly show otherwise. For, the employment status of a person is defined and prescribed by law and not by what the parties say it should be. In determining the status of the management contract, the "four-fold test" on employment has to be applied [Insular Life Assurance Co.. Ltd. vs. NLRC, G.R. No. 119930, (1998)].

Q: Assuming that ASIA is the employer, is the act of ASIA in placing the security guards on "floating status" lawful? Why? A: It is lawful for a private security guard agency to place its security guard on a "floating status" if it has no assignment to give to said security guards. But if the security guards are placed on a "floating status"

Q: ASIA executed a 1-year contract with the Baron Hotel for the former to provide the latter with 20

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Labor Law and Social Legislation for more than 6 months, the security guards may consider themselves as having been dismissed.

FOUR- FOLD TEST Q: What factors determine the existence of an employer-employee relationship?

Q: Lacson was one of more than 100 employees who were terminated from employment due to the closure of LBM Construction Corporation. LBM was a sister company of Lastimoso Construction, Inc. and RL Realty & Dev’t Corp. All three entities formed what came to be known as the Lastimoso Group of Companies. The three corporations were owned and controlled by members of the Lastimoso family; their incorporators and directors all belonged to the Lastimoso family. The three corporations were engaged in the same line of business, under one management, and used the same equipment including manpower services. Lacson and his co-Ees filed a complaint with the Labor Arbiter against LBM, RL Realty and Lastimoso Construction to hold them jointly and severally liable for back wages and separation pay. Lastimoso Construction, Inc. RL Realty & Development Corporation interposed a Motion to Dismiss contending that they are juridical entitles with distinct and separate personalities from LBM Construction Corporation and therefore, they cannot be held jointly and severally liable for the money claims of workers who are not their employees. Rule on the motion to dismiss. Should it be granted or denied? Why? (1999 Bar Question)

A: The “four–fold test”: 1. Selection and engagement of the employee; 2. Payment of wages; 3. Power of dismissal; and 4. Power of control (Azucena, Vol. I, p.158) Q: What is control test? A: Under the control test, there is an Er-Ee relationship when the person for whom the services are performed reserves the right to control not only the end achieved but also the manner and means used to achieve that end [Television and Production Exponents Inc. vs.Servana (542 SCRA 578)]. Q: What kind of control should be exercised by the employer? A: Not all forms of control are indicative of Er-Ee relationship. Where the degree of control is both the result and the means, there is an employer-employee relationship. Where the control is merely to results, there is only an independent contractor relationship. If there is a degree of control for compliance with a government regulation – that is not the control referred to. (Insular life vs. NLRC)

A: It is very clear that even if LBM Construction company, Lastimoso Construction Company, Inc. and RL Realty & Dev’t Corp. all belong to the Lastimoso family and are engaged in the same line of business under one management and used the same equipment including manpower services, these corporations were separate juridical entities. Thus, only the LBM Construction Corporation is the Er of Teofilo Lacson. The other corporation do not have any Er-Ee relations with Lacson. The case in question does not include any fact that would justify piercing the veil of corporate fiction of the other corporations in order to protect the rights of workers. In a case [Concept Builders, Inc. vs. NLRC, G.R. No. 108734, (1996)] the SC ruled that it is a fundamental principle of corporation law that a corporation is an entity separate and distinct from its stockholders and from other corporations to which it may be connected. But this separate and distinct personality of a corporation is merely a fiction created by law for convenience and to promote justice. So, when the notion of separate juridical personality is used to defeat public convenience, justify wrong, protect fraud or defend crime, or is used as a device to defeat the labor laws, this separate personality of the corporation maybe disregarded or the veil of corporate fiction pierced.

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Note: However, in certain cases the control test is not sufficient to give a complete picture of the relationship between the parties, owing to the complexity of such a relationship where several positions have been held by the worker. The better approach is to adopt the two-tiered test [Francisco vs. NLRC, G.R. No. 170087, (2006)]. This two-tiered test would provide us with a framework of analysis, which would take into consideration the totality of circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate in this case where there is no written agreement or terms of reference to base the relationship on and due to the complexity of the relationship based on the various positions and responsibilities given to the worker over the period of the latter’s employment [Francisco vs. NLRC, G.R. No. 170087, (2006)].

Q: Genesis entered into a Career’s Agent Agreement with EmoLife Insurance Company, a domestic corporation engaged in insurance business. In the Agreement, it provides that the agent is an independent contractor and nothing therein shall be construed or interpreted as creating an employeremployee relationship. It further provides that the agent must comply with three requirements: (1)

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TERMINATION OF EMPLOYMENT compliance with the regulations and requirements of the company; (2) maintenance of a level of knowledge of the company's products that is satisfactory to the company; and (3) compliance with a quota of new businesses. However, EmoLife insurance company terminated Genesis’ services. Genesis filed an illegal dismissal complaint alleging therein that an employer-employee relationship exists and that he was illegally dismissed. Is he an employee of the Insurance Company?

Q: What is the proper standard for economic dependence? A: The proper standard is whether the worker is dependent on the alleged Er for his continued employment in that line of business. The determination of the relationship between Er and Ee depends upon the circumstances of the whole economic activity, such as: 1. The extent to which the services performed are an integral part of the Er’s business 2. The extent of the worker’s investment in equipment and facilities; 3. The nature and degree of control exercised by the Er; 4. The worker’s opportunity for profit and loss; 5. The amount of initiative, skill, judgment, or foresight required for the success of the claimed independent enterprise; 6. The permanency and duration of the relationship between the worker and Er; and 7. The degree of dependency of the worker upon the Er for his continued employment in that line of business. [Francisco vs. NLRC, G.R. No. 170087, (2006)]

A: Genesis is not an Ee of EmoLife Insurance Company. Generally, the determinative element is the control exercised over the one rendering the service. The concept of “control” in LC has to be compared and distinguished with “control” that must necessarily exist in a principal-agent relationship. The Er controls the Ee both in the results and in the means and manner of achieving this result. The principal in an agency relationship, e.g. insurance agent, on the other hand, also has the prerogative to exercise control over the agent in undertaking the assigned task based on the parameters outlined in the pertinent laws. In the present case, the Agreement fully serves as grant of authority to Genesis as EmoLife’s insurance agent. This agreement is supplemented by the company’s agency practices and usages, duly accepted by the agent in carrying out the agency. Foremost among these are the directives that the principal may impose on the agent to achieve the assigned tasks, to the extent that they do not involve the means and manner of undertaking these tasks. The law likewise obligates the agent to render an account; in this sense, the principal may impose on the agent specific instructions on how an account shall be made, particularly on the matter of expenses and reimbursements. To these extents, control can be imposed through rules and regulations without intruding into the labor law concept of control for purposes of employment [Gregorio Tongko vs. ManuLife Insurance Company, G.R. No. 167622, (2010)].

Q: When should the four-fold test and the twotiered test be properly applied? A: Present Phililippine law recognizes a two-tiered test. The first tier of the test is the four-fold test. The second tier is the economics of the relationship test. But the latter test is used if and only if there is going to be harshness in the results because of the strict application of the four-fold test [Francisco vs. NLRC, G.R. No. 170087, (2006)]. KINDS OF EMPLOYMENT PROBATIONARY EMPLOYMENT Q: What is probationary employment?

Q: What is the two-tiered test? A: Employment where the Ee, upon his engagement: 1. Is made to undergo a trial period 2. During which the Er determines his fitness to qualify for regular employment, 3. Based on reasonable standards made known to the Ee at the time of engagement. (Sec 6, Rule I, Book VI, IRR)

A: 1. The putative Er’s power to control the Ee with respect to the means and methods by which the work is to be accomplished; and 2. The underlying economic realities of the activity or relationship.

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Labor Law and Social Legislation Q: What are the characteristics of probationary employment?

IRR) probationary Ees may be dismissed for cause before end of the probationary period.

A: 1. It is an employment for a trial period; 2. It is a temporary employment status prior to regular employment; 3. It arises through a contract with the following elements: a. The Ee must learn and work at a particular type of work b. Such work calls for certain qualifications c. The probation is fixed d. The Er reserves the power to terminate during or at the end of the trial period e. And if the Ee has learned the job to the satisfaction of the Er, he becomes a regular Ee.

After the lapse of the probationary period (6 months), Ee becomes regular.

Q: May the employer and employee validly agree to extend the probationary period beyond six months? A: Yes. Such an extension may be lawfully agreed upon, despite the restrictive language of Art. 281. A voluntary agreement extending the original probationary period to give the Ee a second chance to pass the probation standards constitutes a lawful exception to the statutory limit [Mariwasa Manufacturing, Inc. vs. Leogardo, Jr., G.R. No. 74246, (1989)]. Note: By voluntarily agreeing to such an extension, the Ee waived any benefit attaching to the completion of the period if he still failed to make the grade during the period of extension [Mariwasa Mfg. Inc. vs. Hon. Leogardo, G.R. No. 74246, (1989)].

Q: What are the rules on probationary employment? A: 1. Er shall make known to the Ee at the time he is hired, the standards by which he will qualify as a regular Ee; 2. An Ee allowed to continue work after the probationary period shall be considered a regular Ee; 3. During the probationary period, the Ee enjoys security of tenure; his services can only be terminated for just or authorized causes.

Q: When is the extension of probationary period allowed? A: Extension is allowed only when: 1. Nature of the job requires a longer period, or 2. If it is a company policy that the period of probationary employment should be an extended period Note: The extension of period should always be reasonable; Such that, the nature of the work so requires and that it is the amount of time required for an ordinary worker to learn the job.

Q: What is the period of probationary employment? A: GR: It shall not exceed 6 months. XPNs: 1. Covered by an Apprenticeship or Learnership agreement stipulating a different period 2. Voluntary agreement of parties (especially when the nature of work requires a longer period) 3. The Er gives the Ee a second chance to pass the standards set. [Mariwasa Manufacturing, Inc. vs. Leogardo, Jr., G.R. No. 74246, (1989)]. 4. When the same is required by the nature of the work, e.g. the probationary period set for professors, instructors and teachers is 3 consecutive years of satisfactory service pursuant to DOLE Manual of Regulations for Private Schools. 5. When the same is established by company policy.

Q: Is double or successive probation allowed? A: No. The evil sought to be prevented is to discourage scheming Ers from using the system of double or successive probation to circumvent the mandate of the law on regularization and make it easier for them to dismiss their Ees [Holiday Inn Manila vs. NLRC, G.R. No. 109114, (2003)]. Q: Michelle Miclat was employed on a probationary basis as marketing assistant by Clarion Printing House but during her employment she was not informed of the standards that would qualify her as a regular employee. 30 days after, Clarion informed Miclat that her employment contract had been terminated without any reason. Miclat was informed that her termination was part of Clarion’s cost-cutting measures. Is Miclat considered as a regular employee and hence entitled to its benefits?

Note: Period of probation shall be reckoned from the date the Ee actually started working. (Sec.6 [b], Rule I, Book VI, UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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TERMINATION OF EMPLOYMENT A: Yes. In all cases of probationary employment, the Er shall make known to the Ee the standards under which he will qualify as a regular Ee at the time of his engagement. Where no standards are made known to the Ee at that time, he shall be deemed a regular Ee. In the case at bar, she was deemed to have been hired from day one as a regular Ee [Clarion Printing House Inc., vs. NLRC, G.R. No. 148372, (2005)].

How to resolve the conflict between the Alcira and Mitsubishi Motors case: 1. Statutory Construction – The latter case prevails (Mitsubishi Motors); or 2. Rule more favorable to the Ee – use the computation which would amount to granting the subject Ee regular employment status (based on Constitutional and statutory provisions for the liberal interpretation of labor laws)

Q: What is the obligation of the employer to his probationary employees?

Q: What is the purpose of the probation period? A: There is obligation on the part of Er to inform standards for regularization at the time of engagement. The failure to inform has the effect that upon the expiry of the probationary employment, with or without the period provided for in the contract, the worker is deemed to be regular.

A: To afford the Er an opportunity to observe the fitness of a probationary Ee at work. Q: In what instances is a probationary employee deemed a regular employee?

Q: Middleby Phils. Corp. hired Alcira as engineering support services supervisor on a probationary basis for six months. Apparently unhappy with Alcira’s performance, Middleby terminated his services. Alcira contends that he was already a regular employee when he was terminated. According to Alcira’s computation, since Art. 13 of the NCC provides that 1 month is composed of 30 days, 6 th months totaling 180 days, then his 180 day would fall on Nov. 16, 1996 making him a regular Ee before his termination. Is the contention of the petitioner in the computation of six months correct?

A: 1. If he is allowed to work after a probationary period. (Art. 281, LC) 2. If no standards, under which he will qualify as a regular Ee, are made known to him at the time of his engagement. (Sec. 6 [d], Rule I, Book VI, IRR) Q: What are the grounds probationary employment?

for

terminating

A: 1. Just/authorized causes 2. When he fails to qualify as a regular Ee in accordance with reasonable standards made known by the Er to the Ee at the time of his engagement [ICMC vs. NLRC, G.R. No. 72222, (1989)] (see Art. 281, LC)

A: No, the computation of the 6-month probationary period is reckoned from the date of appointment up th to the same calendar date of the 6 month following. In short, since the number of days in each particular month was irrelevant, Alcira was still a probationary Ee when Middleby opted not to “regularize” him on Nov. 20, 1996 [Alcira vs. NLRC, G.R. No. 149859, (2004)].

Note: If Pre-termination of probationary contract is due to the valid causes, the employer is not liable to pay the monetary value of the unexpired portion of the employment.

Note: In Mitsubishi Motors vs. Chrysler Phils. Labor Union, G.R. No. 148738, June 29, 2004, the SC ruled in this wise:

While probationary Ees do not enjoy permanent status, they are afforded the security of tenure protection of the Constitution. Consequently, they cannot be removed from their positions unless for cause. Such constitutional protection, however, ends upon the expiration of the period stated in their probationary contract of employment. Thereafter, the parties are free to renew the contract or not [CSA vs. NLRC, G.R. No. 87333, (1991)].

“Applying Art. 13 of the NCC, the probationary period of 6-months consists of 180 days. This is in conformity with Art. 13(1) of the NCC. The number of months in the probationary period, 6, should then be multiplied by the number of days within a month, 30; hence, the period of 180 days. As clearly provided for the in last par. of Art. 13, in computing a period, the first day shall be excluded and the last day included. Thus, the 180 days commenced on May 27, 1996, and ended on Nov. 23, 1996. The termination letter dated Nov. 25, 1996 was served on Paras only on Nov. 26, 1996. He was, by then already a regular Ee of the company under Art. 281 of the LC.”

Q: What are the limitations on the employer’s power to terminate a probationary employment contract? A: 1. The power must be exercised in accordance with the specific requirements of the contract;

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Labor Law and Social Legislation 2.

3.

4.

therefore can not avail of the status and privileges of a probationary employment. A part-time Ee can not acquire a regular permanent status, and hence, may be terminanted when a qualified etacher becomes available. (Manual of Regulations for Provate Higher Education)

If a particular time is prescribed, the termination must be within such time and if formal notice is required, then that form must be used; The Er’s dissatisfaction must be real and in good faith, not feigned so as to circumvent the contract or the law; and There must be no unlawful discrimination in the dismissal.

Q: Colegio de San Agustin (CSA) hired the Gela Jose as a grade school classroom teacher on a probationary basis for SY ‘84 – ‘85. Her contract was renewed for SY’s ‘85-‘86 and ‘86-‘87. On Mar. 24, ‘87, the CSA wrote the Gela that "it would be in the best interest of the students and their families that she seek employment in another school or business concern for next school year." Notwithstanding the said notice, the CSA still paid Gela her salary for April 15 to May 15, 1987. On April 6, ‘87, Gela wrote the CSA and sought reconsideration but she received no reply. Thereafter, she filed a complaint for illegal dismissal. Was Gela illegally dismissed?

Note: The probationary Ee is entitled to procedural due process prior to dismissal from service.

Q: Ron Cruz was employed as gardener by Manila Hotel on “probation status” effective Sept. 22, 1976. The appointment signed by Cruz provided for a 6 month probationary period. On Mar. 20, 1977, or a day before the expiration of the probationary period, Cruz was promoted to lead gardener position. On the same day, Cruz’ position was “abolished” by Manila Hotel allegedly due to economic reverses or business recession, and to salvage the enterprise from imminent danger of collapse. Was Cruz illegally dismissed?

A: No. The Faculty Manual of CSA underscores the completion of three years of continuous service at CSA before a probationary teacher acquires tenure. Hence, the Gela cannot claim any vested right to a permanent appointment since she had not yet achieved the prerequisite 3-year period under the Manual of Regulation for Private Schools and the Faculty Manual of CSA.

A: Yes, there is no dispute that as a probationary Ee, Cruz had but limited tenure. Although on probationary basis, however, Cruz still enjoys the constitutional protection on security of tenure. During his tenure of employment, therefore, or before his contract expires, Cruz cannot be removed except for cause as provided for by law.

In the instant case where the CSA did not wish to renew the contract of employment for the next school year, Gela has no ground to protest. She was not illegally dismissed. Her contract merely expired [CSA vs. NLRC, G.R No. 87333, (1991)].

What makes Cruz’ dismissal highly suspicious is that it took place at a time when he needs only but a day to be eligible as a regular Ee. That he is competent finds support in his being promoted to a lead gardener in so short span of less than 6 months. By terminating his employment or abolishing his position with but only one day remaining in his probationary appointment, the hotel deprived Cruz of qualifying as a regular Ee with its concomitant rights and privileges. [Manila Hotel Corp. vs. NLRC, G.R. No. L53453, (1986)]

Q: During their probationary employment, eight employees were berated and insulted by their supervisor. In protest, they walked out. The supervisor shouted at them to go home and never to report back to work. Later, the personnel manager required them to explain why they should not be dismissed from employment for abandonment and failure to qualify for the positions applied for. They filed a complaint for illegal dismissal against their employer. As the Labor Arbiter, how will you resolve the case? (2006 Bar Question)

Q: What are the requirements for probationary employment of private school teachers? A: The probationary employement of academic teching personnel shall not be more than a period of 6 consecutive semesters or 9 consecutive trimesters of satisfactory service, as the case may be. (Sec. 117 of

A: As the LA, I will resolve the case in favor of the 8 probationary Ees due to the following: 1. Probationary Ees also enjoy security of tenure [ Bibosovs.VictoriaMilling,G.R.No.L44360, (1977)]. 2. In all cases involving Ees on probationary status, the Er shall make known to the Ee at the time he is hired, the standards by which he will qualify for the positions applied for.

the Manual of Regulations for Provate Higher Education) Note: An academic teaching personnel, who does not possess the minimum academic qualifications under Secs. 35 and 36 of the Manual of Regulations for Provate Higher Education shall be considered as a part-time Ee, and UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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TERMINATION OF EMPLOYMENT 3.

4.

5.

The filing of the complaint for illegal dismissal effectively negates the Er’s theory of abandonment [Rizada vs. NLRC, G.R. No. 96982, (1999)]. The order to go home and not to return to work constitutes dismissal from employment. The 8 probationary Ees were terminated without just cause and without due process.

Ee to the usual trade or business of the Er. The test is whether the former is usually necessary or desirable in the usual business or trade of the Er. [(De Leon vs. NLRC, G.R. No. 70705, ( 1989)] Note: The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. [Highway Copra Traders vs. NLRC, G.R. No. 108889, (1998)]

In view of the foregoing, I will order reinstatement to their former positions without loss of seniority rights with full back wages, plus damages and attorney’s fees.

2.

REGULAR EMPLOYMENT Q: What is regular employment? A: 1. An employment shall be deemed to be regular where the Ee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the Er, theprovisions of written agreements to the contrary notwithstanding and regardless of the oral agreements of the parties. (Sec. 5 [a], Rule I, Book VI, IRR) 2. Any Ee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular Ee with respect to the activity in which he is employed and his employment shall continue while such activity exists. (Sec. 5 [b], Rule I, Book VI, IRR)

Also, the performance of a job for at least a year is sufficient evidence of the job’s necessity if not indispensability to the business. This is the rule even if its performance is not continuous and merely intermittent. The employment is considered regular, but only with respect to such activity and while such activity exists [Universal Robina Corp. vs. Catapang, G.R. No. 164736, (2005)].

Note: The status of regular employment attaches to the casual Ee on the day immediately after the end of his first year of service. The law does not provide the qualification that the Ee must first be issued a regular appointment or must first be formally declared as such before he can acquire a regular status [Aurora Land Projects Corp. vs. NLRC, G.R. No. 114733,(1997)].

Q: Is the mode of compensation determinative of regular employment? A: No, while the Ees mode of compensation was on a “per piece basis” the status and nature of their employment was that of regular Ees [Labor Congress of the Phils vs. NLRC, G.R. No. 123938, (1998)].

Note: Regularization is not a management prerogative; rather, it is the nature of employment that determines it. It is a mandate of the law. [PAL vs. Pascua,G.R. No. 143258, (2003)]

Q: When does Art. 280 not apply? A: It does not apply in case of OFWs.

Regular employment does not mean permanent employment. A probationary Ee becomes a regular Ee after 6 months. A regular Ee may only be terminated for just/authorized causes.

Note: Seafarers cannot be considered as regular Ees. Their employment is governed by the contracts they sign every time they are hired and their employment terminated when the contract expires. Their employment is fixed for a certain period of time [Ravago vs. Esso Eastern Maritime Ltd., G.R. No. 158324, (2005)].

The practice of entering into employment contracts which would prevent the workers from becoming regular should be struck down as contrary to public policy and morals. [Universal Robina Corp. vs. Catapang, G.R. No. 164736, (2005)]

Q: Moises was employed by La Tondeña at the maintenance section of its Engineering Department paid on a daily basis through petty cash vouchers. His work consisted mainly of painting company building and equipment and other odd jobs relating to maintenance. After a service of more than 1 year, Moises requested that he be included in the payroll of regular workers, instead of being paid through petty cash vouchers. Instead, La Tondeña dismissed Moises and claimed that Moises was contracted on

Q: What is the test to determine Regular Employment? A: 1. The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the

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Labor Law and Social Legislation a casual basis specifically to paint certain company buildings and that its completion terminated Moises’ employment. Can Moises be considered as a regular employee?

counters through a uniformly worded agreement called “Employment Contract for Handicapped Workers.” The company disclaimed that these employes were regular employees and maintained among others that they are a special class of workers, who were hired temporarily under a special employment arrangement which was a result of overtures made by some civic and political personalities to the Bank. Should the deaf-mute employees be considered as regular employees?

A: Yes, the law demands that the nature and entirety of the activities performed by the Ee be considered. Here, the painting and maintenance work given to Moises manifests a treatment consistent with a maintenance man and not just a painter, for if his job was only to paint a building there would be no basis for giving him other work assignments in-between painting activities.

A: Yes. The renewal of the contracts of the handicapped workers and the hiring of others leads to the conclusion that their tasks were beneficial and necessary to the bank. It also shows that they were qualified to perform the responsibilities of their positions; their disability did not render them unqualified or unfit for the tasks assigned to them.

It is not tenable to argue that the painting and maintenance work of Moises are not necessary in La Tondeña’s business of manufacturing liquors; otherwise, there would be no need for the regular maintenance section of the company’s engineering department [De Leon vs. NLRC, G.R. No. 70705, (1989)].

The Magna Carta for Disabled Persons mandates that a qualified disabled Ee should be given the same terms and conditions of employment as a qualified able-bodied person. The fact that the Ees were qualified disabled persons necessarily removes the employment contracts from the ambit of Art. 80. Since the Magna Carta accords them the rights of qualified able-bodied persons, they are thus covered by Art. 280 of the LC [Bernardo vs. NLRC, G.R. No. 122917, (1999)].

Q: Honorio Dagui was hired by Doña Aurora Suntay Tanjangco in 1953 to take charge of the maintenance and repair of the Tanjangco apartments and residential bldgs. He was to perform carpentry, plumbing, electrical and masonry work. Upon the death of Doña Aurora Tanjangco in 1982, her daughter, Teresita Tanjangco Quazon, took over the administration of all the Tanjangco properties, and dismissed Dagui. Is Honorio Dagui a regular employee?

Q: Coca-Cola Bottlers Phils, Inc., (CCBPI) engaged the services of the workers as “sales route helpers” for a period of 5 months. After 5 months, the workers were employed by the company on a day-to-day basis. According to the company, the workers were hired to substitute for regular route helpers whenever the latter would be unavailable or when there would be an unexpected shortage of manpower in any of its work places or an unusually high volume of work. The practice was for the workers to wait every morning outside the gates of the sales office of the company, if thus hired, the workers would then be paid their wages at the end of the day. Should the workers be considered as regular Ees of CCBPI?

A: Yes. The jobs assigned to Dagui as maintenance man, carpenter, plumber, electrician and mason were directly related to the business of the Tanjangco’s as lessors of residential and apartment bldgs. Moreover, such a continuing need for his services by the Tanjangcos is sufficient evidence of the necessity and indispensability of his services to their business or trade. Dagui should likewise be considered a regular Ee by the mere fact that he rendered service for the Tanjangcos for more than one year, that is, beginning 1953 until 1982, under Doña Aurora; and then from 1982 up to June 8, 1991 under the daughter, for a total of 29 and 9 years respectively. Owing to Dagui's length of service, he became a regular Ee, by operation of law, one year after he was employed in 1953 and subsequently in 1982 [Aurora Land Projects Corp. vs. NLRC, G.R. No. 114733, (1997)].

A: Yes, the repeated rehiring of the workers and the continuing need for their services clearly attest to the necessity or desirability of their services in the regular conduct of the business or trade of the company. The fact that the workers have agreed to be employed on such basis and to forego the protection given to them on their security of tenure, demonstrate nothing more than the serious problem of impoverishment of so many of our people and the resulting unevenness

Q: A total of 43 employees who are deaf-mutes were hired and re-hired on various periods by Far East Bank and Trust Co. as money sorters and UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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TERMINATION OF EMPLOYMENT Repeated hiring on a project-to-project basis is considered necessary and desirable to the business of the Er. The Ee is regular [Maraguinot vs. NLRC, G.R. No. 120969, (1998)].

between labor and capital [Magsalin & Coca-Cola vs. N.O.W.M., G.R. No. 148492, (2003)]. Q: Metromedia Times Corp. entered, for the fifth time, into an agreement with Efren Paguio, appointing him to be an account executive of the firm. He was to solicit advertisements for “The Manila Times.” The written contract between the parties provided that, “You are not an employee of the Metromedia Times Corp. nor does the company have neither any obligations towards anyone you may employ, nor any responsibility for your operating expenses or for any liability you may incur. The only rights and obligations between us are those set forth in this agreement. This agreement cannot be amended or modified in any way except with the duly authorized consent in writing of both parties.” Is Efren Paguio a regular employee of Metromedia Times Corporation?

Q: What are the indicators of project employment? A: Either one or more of the following circumstances, among others, may be considered as indicators that an Ee is a project Ee. [Hanjin vs. Ibañez, G.R. No. 170181, (2008)] a.

b.

The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable; Such duration, as well as the specific work/service to be performed, is defined in an employment agreement and is made clear to the Ee at the time of hiring; Note: Absent any other proof that the project Ees were informed of their status as such, it will be presumed that they are regular Ees.

A: Yes, he performed activities which were necessary and desirable to the business of the Er, and that the same went on for more than a year. He was an account executive in soliciting advertisements, clearly necessary and desirable, for the survival and continued operation of the business of the corp.

c.

d.

The corporation cannot seek refuge under the terms of the agreement it has entered into with Efren Paguio. The law, in defining their contractual relationship, does so, not necessarily or exclusively upon the terms of their written or oral contract, but also on the basis of the nature of the work of Efren has been called upon to perform. A stipulation in an agreement can be ignored as and when it is utilized to deprive the Ee of his security of tenure [Paguio vs. NLRC, G.R. No. 147816, (2003)].

e.

f.

PROJECT EMPLOYMENT

The work/service performed by the Ee is in connection with the particular project/ undertaking for which he is engaged; The Ee, while not employed and awaiting engagement, is free to offer his services to any other Er; The termination of his employment in the particular project/undertaking is reported to the DOLE Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed form on Ee’s termination, dismissal or suspensions; An undertaking in the employment contract by the Er to pay completion bonus to the project Ee as practiced by most construction companies

Q: What are the requisites in determining whether an employee is a project employee?

Q: What is project employment? A: Employment that has been fixed for a specific project or undertaking the completion for which has been determined at the time of engagement of the Ee (Sec. 5[a], Rule I, Book VI, IRR). The period is not the determining factor, so that even if the period is more than 1 year, the Ee does not necessarily become regular.

A: 1. The project Ee was assigned to carry out a specific project or undertaking, and 2. The duration and scope of which were specified at the time the Ee was engaged for that project. [Imbuido vs. NLRC, G.R. No. 114734, (2000)] 3. The Ee must have been dismissed every after completion of his project or phase 4. Report to the DOLE of Ee’s dismissal on account of completion of contract [Policy Inst. No. 20; D.O. 19 (1997)]

Note: Where the employment of a project Ee is extended long after the supposed project has been finished, the Ees are removed from the scope of project Ees and considered as regular Ees.

Q: The employer hires the employees whereby their employment would automatically expire upon the

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation workers insofar as the effect of temporary cessation of work is concerned. This is beneficial to both the Er and Ee for it prevents the unjust situation of “coddling labor at the expense of capital” and at the same time enables the workers to attain the status of regular Ees [Maraguinot vs. NLRC, G.R. No. 120969, (1998)].

completion of a project. When the employer proceeded to serve notices of termination of employment when the project was about to be completed, the employees filed a notice of strike for mass termination. Is the action of the employees correct?

Q: What is the “day certain” rule?

A: No. The litmus test to determine whether an individual is a project Ee lies in setting a fixed period of employment involving a specific undertaking which completion or termination has been determined at the time of the particular Ee’s engagement. In this case, as previously adverted to, the officers and the members of the Union were specifically hired as project Ees for Leyte Geothermal Power Project. Consequently, upon the completion of the project or substantial phase thereof, the officers and the members of the Union could be validly terminated. [Leyte Geothermal Power Progressive Employees Union v. Philippine National Oil Company, G.R. No. 170351, (2011)].

A: It states that a project employment that ends on a certain date does not end on an exact date but upon the completion of the project. Q: Are project Ees entitled to separation pay? A: GR: Project Ees are not entitled to separation pay if they are terminated as a result of the completion project. XPN: If the projects they are working on have not yet been completed when their services are terminated; project Ees also enjoy security of tenure during the limited time of their employment [De Ocampo vs. NLRC, G.R. No. 81077, (1990)].

Q: What is a project? A: A "project" has reference to a particular job or undertaking that may or may not be within the regular or usual business of the Er. In either case, the project must be distinct, separate and identifiable from the main business of the Er, and its duration must be determined or determinable [PAL vs. NLRC, G.R. No. 125792, (1998)].

Q: Roger Puente was hired by Filsystems, Inc., initially as an installer and eventually promoted to mobile crane operator, and was stationed at the company’s premises. Puente claimed in his complaint for illegal dismissal, that his work was continuous and without interruption for 10 years, and that he was dismissed from his employment without any cause. Filsystems on its part averred that Puente was a project employee in the company’s various projects, and that after the completion of each project, his employment was terminated, and such was reported to the DOLE. Is Roger Puente a regular employee?

Q: Can a project employee or a member of a work pool acquire the status of a regular employee? A: Yes, when the following concur: 1. 2.

There is a continuous rehiring of project Ee’s even after cessation of a project; and The tasks performed by the alleged “project Ee” are vital, necessary and indispensable to the usual business or trade of the Er [D.M. Consunji, Inc. v. JAMIN, G.R. No. 192514, (2012)].

A: No, Puente is a project Ee. The contracts of employment of Puente attest to the fact that he was hired for specific projects. His employment was coterminous with the completion of the projects for which he had been hired. Those contracts expressly provided that his tenure of employment depended on the duration of any phase of the project or on the completion of the construction projects. Furthermore, the company regularly submitted to the labor dep’t reports of the termination of services of project workers. Such compliance with the reportorial requirement confirms that Puente was a project Ee.

Note: The length of time during which the Ee was continuously re-hired is not controlling, but merely serves as a badge of regular employment. Enero and Maraguinot have been employed for a period of not less than 2 years and have been involved in at least 18 projects. These facts are the basis in considering them as regular Ees of the company. A work pool may exist although the workers in the pool do not receive salaries and are free to seek other employment during temporary breaks in the business, provided that the worker shall be available when called to report for a project. Although primarily applicable to regular seasonal workers, this set-up can likewise be applied to project UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

The mere rehiring of Puente on a project-to-project basis did not confer upon him regular employment status. “The practice was dictated by the practical

84

TERMINATION OF EMPLOYMENT consideration that experienced construction workers are more preferred.” It did not change his status as a project Ee. [Filipinas Pre-Fabricated Building Systems (FILSYSTEMS), Inc. vs. Puente, G.R. No. 153832, (2005)]

separated from service in that period, but merely considered on leave until re-employed. If the Ee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but only with respect to such activity and while such activity exists [Benares vs. Pancho, G.R. No. 151827, (2005)].

SEASONAL EMPLOYMENT Q: What is seasonal employment? A: Employment where the job, work or service to be performed is seasonal in nature and the employment is for the duration of the season. (Sec.5 [a], Rule I, Book VI, IRR)

But one year duration on the job is pertinent in deciding whether a casual Ee has become regular or not, but it is not pertinent to a Seasonal or Project Ee. Passage of time does not make a seasonal worker regular or permanent [Mercado vs. NLRC, G.R. No. 78969, (1991)].

An employment arrangement where an Ee is engaged to work during a particular season on an activity that is usually necessary or desirable in the usual business or trade of the Er. Note: For Seasonal Ees, their employment legally ends upon completion of the project or the season. The termination of their employment cannot and should not constitute an illegal dismissal [Mercado vs. NLRC, G.R. No. 79869, (1991)].

Q: Carlito Codilan and Maximo Docena had been working for the rice mill for 25 years, while Eugenio Go, Teofilo Trangria and Reynaldo Tulin have been working for 22, 15, and 6 years respectively. The operations of the rice mill continue to operate and do business throughout the year even if there are only two or three harvest seasons within the year. This seasonal harvesting is the reason why the company considers the workers as seasonal employees. Is the company correct in considering the employees as seasonal employees?

One year duration on the job is pertinent in deciding whether a casual Ee has become regular or not, but it is not pertinent to a Seasonal or Project Ee. Passage of time does not make a seasonal worker regular or permanent [Mercado vs. NLRC, G.R. No. 78969, (1991)]. During off-season, the relationship of Er-Ee is not severed; the Seasonal Ee is merely considered on LOA without pay. Seasonal workers who are repeatedly engaged from season to season performing the same tasks are deemed to have acquired regular employment [Hacienda Fatima vs. National Federation of Sugarcane Workers-Food and General Trade, G.R. No. 149440, (2003)].

A: No, the fact is that big rice mills such as the one owned by the company continue to operate and do business throughout the year even if there are only two or three harvest seasons within the year. It is a common practice among farmers and rice dealers to store their palay and to have the same milled as the need arises. Thus, the milling operations are not seasonal. Finally, considering the number of years that they have worked, the lowest being 6 years, the workers have long attained the status of regular Ees as defined under Art. 280 [Tacloban Sagkahan Rice Mill vs. NLRC, G.R. No. 73806, (1990)].

Q: Are seasonal employees entitled to separation pay? A: When the business establishment is sold which effectively terminates the employment of the Seasonal Ees, the latter would be entitled to separation pay.

CASUAL EMPLOYMENT Q: Can seasonal employees be considered as regular employees?

Q: What is casual employment?

A: Yes. The fact that Seasonal Ees do not work continuously for one whole year but only for the duration of the season does not detract from considering them in regular employment. Seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not

A: 1. It is an employment where the Ee is engaged in an activity which is not usually necessary or desirable in the usual business or trade of the Er, provided: such employment is neither Project nor Seasonal (Art. 281, LC).

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Labor Law and Social Legislation But despite the distinction between regular and casual employment, every Ee shall be entitled to the same rights and privileges, and shall be subject to the same duties as may be granted by law to regular Ees during the period of their actual employment.

answers. A: PROJECT EMPLOYEE Employed for a specific project or undertaking the completion or termination of which is determined at the time of his engagement.

2. An Ee is engaged to perform a job, work or service which is merely incidental to the business of the Er, and such job, work or service is for a definite period made known to the Ee at the time of engagement (Sec. 5 [b], Rule I, Book VI, IRR) Q: Can casual employee employee?

become

a regular

His work need not be incidental to the business of the Er and his employment may exceed one year without necessarily making him a regular Ee. Job is coterminous with a specific project or phase thereof. It is required that a termination report be submitted at the nearest employment office upon completion of the project or phase.

A: If he has rendered at least 1 year of service, whether such service is continuous or broken, he is considered as regular Ee with respect to the activity in which he is employed and his employment shall continue while such activity exists. A casual Ee is only casual for 1 year, and it is the passage of time that gives him a regular status. [KASAMMA-CCO vs. CA, G.R. No. 159828, (2006)] The purpose is to give meaning to the constitutional guarantee of security of tenure and right to selforganization [Mercado vs. NLRC, G.R. No. 79868, (1991)].

No termination report required.

FIXED TERM EMPLOYMENT

Q: Yakult Phils. is engaged in the manufacture of cultured milk. The workers were hired to cut cogon grass and weeds at the back of the factory building used by Yakult. They were not required to work on fixed schedule and they worked on any day of the week on their own discretion and convenience. The services of the workers were terminated by Yakult on less than 1-year after. May casual or temporary Ees be dismissed by the employer before the expiration of the 1-year period of employment?

Q: What is the nature of term employment? A: A contract of employment for a definite period terminates by its own terms at the end of such period [Brent School vs. Zamora, G.R. No. L-48494, (1990)]. Q: What is the decisive determinant in term employment? A: It is the day certain agreed upon by the parties for the commencement and the termination of their employment relation.

A: Yes, the usual business or trade of Yakult Phils. is the manufacture of cultured milk. The cutting of the cogon grasses in the premises of its factory is hardly necessary or desirable in the usual business of the Yakult.

Q: What is a fixed term employment? A: It is an employment where a fixed period of employment was agreed upon:

The workers are casual Ees. Nevertheless, they may be considered regular Ees if they have rendered services for at least 1 year. When, as in this case, they were dismissed from their employment before the expiration of the 1-year period they cannot lawfully claim that their dismissal was illegal [Capule, et al. vs. NLRC, G.R. No. 90653, (1990)].

1. 2.

3.

Q: How is the project worker different from a casual or contractual worker? Briefly explain your UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

CASUAL EMPLOYEE Engaged to perform a job, work or service which is incidental to the business of the Er and the definite period of his employment is made known to him at the time of his engagement. His continued employment after the lapse one year makes him a regular Ee.

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Knowingly and voluntarily by the parties, Without any force, duress or improper pressure being brought to bear upon the Ee and Absent any other circumstances vitiating his consent, or

TERMINATION OF EMPLOYMENT 4.

Where it satisfactorily appears that the Er and Ee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter [Brent School, Inc. vs. Zamora, G.R. No. 48494, (1990)].

the work is usually necessary and desirable to the business of the Er. Q: Does the “Reasonable Connection Rule” applies in fixed term employment for a fixed- term employee be eventually classified as regular employee?

Note: A fixed-period Ee does not become a regular Ee because his employment is coterminous with a specific period of time.

A: No. It should be apparent that this settled and familiar notion of a period, in the context of a contract of employment, takes no account at all of the nature of the duties of the Ee; it has absolutely no relevance to the character of his duties as being usually necessary and desirable to the usual business of the Er, or not.

Ee hired on a fixed-term is regular if job is necessary and desirable to the business of Er [Philips Semiconductor vs. Fadriquela, G.R. No. 141717, (2004)].

Q: Is “term employment” a circumvention of the law on security of tenure?

Q: Dean Jose and other employees are holding administrative positions as dean, dep’t heads and institute secretaries. In the implementation of the Reorganization, Retrenchment and Restructuring program effective Jan. 1, 1984, Dean Jose and other employees were retired but subsequently rehired. Their appointment to their administrative positions as dean, dep’t heads and institute secretaries had been extended by the company from time to time until the expiration of their last appointment on May 31, 1988. Were Dean Jose and other employees illegally dismissed?

A: No, it is not a circumvention of the law if it follows the requisites laid down by the Brent ruling [Romares vs. NLRC, G.R. No. 122327, (1998)]. Q: Darrell was hired as an athletic director in Amorita School for a period of five years. As such, he oversees the work of coaches and related staff involved in intercollegiate or interscholastic athletic programs. However, he was not rehired upon the expiration of said period. Darrell questions his termination alleging that he was a regular employee and could not be dismissed without valid cause. Is he a regular employee?

A: No. Petitioners were dismissed by reason of the expiration of their contracts of employment. Petitioners' appointments as dean, dep’t heads and institute secretaries were for fixed terms of definite periods as shown by their respective contracts of employment, which all expired on the same date, May 31, 1988. The validity of employment for a fixed period has been acknowledged and affirmed by the SC [Blancaflor vs. NLRC, G.R. No. 101013, (1993)].

A: No. Darrell was not a regular Ee but an Ee under a fixed- term contract. While it can be said that the services he rendered were usually necessary and desirable to the business of the school, it cannot also be denied that his employment was for a fixed term of five years. The decisive determinant in fixed- term employment should not be the activities that the employee is called upon to perform, but the day certain agreed upon by the parties for the commencement and termination of their employment relation [Brent School Inc. vs. Zamora, G.R. No. 48494, (1990)].

JOB CONTRACTING ARTS. 106 – 109, LABOR CODE Q: What is “job contracting” contracting/ subcontracting)?

Q: In the abovementioned facts, will Rene automatically become a regular employee if he is rehired by the school for another definite period of employment?

(independent

A: "Contracting" or "subcontracting" is an arrangement whereby a principal agrees to put out or farm out with a contractor the performance or completion of a specific job, work or service 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. (DO 18-A)

A: No. The decisive determinant in term employment is the day certain agreed upon by the parties for the commencement and termination of their employment relationship, a day certain being understood to be that which must necessarily come, although it may not be known when and not whether

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Note: Individuals with special skills, expertise or talent enjoy the freedom to offer their services as independent contractors. An individual like an artist or talent has a right to render his services without any one controlling the means and methods by which he performs his art or craft [Sonza vs. ABS-CBN, G.R. No. 138051, (2004)].

Q: What are the conditions that must be met in order to be considered as legitimate job contracting or subcontracting? A: The following conditions must be met: 1.

2. 3.

The contractor must be registered in accordance with these Rules and 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; The contractor has substantial capital and/or investment; and The Service Agreement ensures compliance with all the rights and benefits under Labor Laws. (Sec. 4, DO 18-A)

Q: SMC and Sunflower Cooperative entered into a 1yr Contract of Services, to be renewed on a month to month basis until terminated by either party. Pursuant to the contract, Sunflower engaged private respondents to render services at SMC’s Bacolod Shrimp Processing Plant. The contract was deemed renewed by the parties every month after its expiration on Jan. 1, ‘94 and respondents continued to perform their tasks until Sep. 11, ‘95. In July ‘95, private respondents filed a complaint before the NLRC, praying to be declared as regular employees of SMC, with claims for recovery of all benefits and privileges enjoyed by SMC rank and file employees. Respondents subsequently filed an Amended Complaint to include illegal dismissal as additional cause of action following SMC’s closure of its Bacolod Shrimp Processing Plant on which resulted in the termination of their services. SMC filed a Motion for Leave to File Attached Third Party rd Complaint to implead Sunflower as 3 -Party Defendant. Are private respondents employees of the independent cooperative contractor (Sunflower) or of the SMC?

Q: When is there “labor-only contracting”? A: There is labor-only contracting when: 1.

2.

The contractor does not have substantial capital or investments in the form of tools, equipment, machineries, work premises, among others, and the Ees 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 The contractor does not exercise the right to control over the performance of the work of the Ee. (Sec. 6, DO 18-A)

A: The contention of SMC holds no basis. Using the “substantial capital” doctrine and the “right of control test,” the Court found that the Sunflower had no substantial capital in the form of tools, equipment, machineries, work premises and other materials to qualify itself as an independent contractor. The lot, building, machineries and all other working tools utilized by private respondents in carrying out their tasks were owned and provided by SMC. In addition, the shrimp processing company was found to have control of the manner and method on how the work was done. Thus, the complainants were deemed Ees not of the cooperative but of the shrimp processing company. Since respondents who were engaged in shrimp processing performed tasks usually necessary or desirable in the aquaculture business of SMC, they should be deemed regular Ees of the latter and as such are entitled to all the benefits and rights appurtenant to regular employment [SMC vs. Prospero Aballa, et al., G.R. No. 149011, (2005)].

Q: What are the factors to consider in determining whether contractor is carrying on an independent business? A: 1. 2. 3. 4. 5. 6. 7. 8. 9.

Nature and extent of work Skill required Term and duration of the relationship Right to assign the performance of specified pieces of work Control and supervision of worker Power of Er to hire, fire and pay wages Control of the premises Duty to supply premises, tools, appliances, materials and labor Mode, manner and terms of payment [Vinoya vs. NLRC, G.R. No. 126286, (2000)]. UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Q: What are the conditions of permissible job contracting?

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TERMINATION OF EMPLOYMENT A: 1. The labor contractor must be duly licensed by the appropriate Regional Office of the DOLE 2. There should be a written contract between the labor contractor and his client-Er that will assure the Ees at least the minimum labor standards and benefits provided by existing laws.

A: 1. If caused by the pre-termination of the Service Agreement not due to authorized causes under Art. 283 of LC – The right of Ee to unpaid wages and other unpaid benefits including unremitted legal mandatory contributions shall be borne by the party at fault, without prejudice to the solidary liability of the parties to the Service Agreement.

Note: The Ees of the contractor or subcontractor shall be paid in accordance with the provisions of the LC. (Art. 106, LC)

2.

Q: Who are the parties in contracting and subcontracting? A: 1. Contractor/subcontractor –any person or entity, including a cooperative, engaged in a legitimate contracting or subcontracting arrangement.

If the termination results from the expiration of the service agreement or completion of the phase of the job – The Ee may opt for payment of separation benefits as may be provided by law or the Service Agreement, without prejudice to his/her entitlement to the completion bonuses or other emoluments, including retirement benefits whenever applicable.

Q: When is the principal deemed the employer of the contractual employee?

2. Contractual Ee– One who is employed by a contractor or subcontractor to perform or complete a job, work, or service pursuant to a service agreement with a principal. (D.O. 18-A)

A: When: 1. There is labor-only contracting 2. The contracting arrangement falls within the prohibited acts

3. Principal– Any Er who puts out or farms out a job, service, or work to a contractor or subcontractor.

Q: May the employer or indirect employer require the contractor or subcontractor to furnish a bond equal to the cost of labor under contract to answer for the wages due to employees in case the contractor or subcontractor fails to pay the same?

Q: Describe the relationship arising from contractual arrangements. A: There is a trilateral relationship between the principal, contractor and Ee. There exists a contractual relationship between the principal and the contractor or subcontractor to its Ees.

A: Yes. The Er or indirect Er may require the contractor or subcontractor to furnish a bond that will answer for the wages due to the Ees.

DEPARTMENT ORDER NO. 18-A

Q: What is the liability of the principal?

Q: What are the rights of a contractual employee?

A: The principal shall be solidarily liable with the contractor in the event of any violation of any provision of the LC, including the failure to pay wages. This will not prevent the principal from claiming reimbursement from the contractor.

A: They shall be entitled to all the rights and privileges as provided for in the LC, as amended, to include the following: 1. Safe and healthful working conditions; 2. Service Incentive Leave, rest days, OT pay, th holiday pay, 13 month pay and separation pay; 3. Retirement benefits under SSS or retirement plans of the contractor; 4. Social security and welfare benefits; 5. Self-organization, CBA and peaceful concerted actions; and 6. Security of tenure (Sec. 8, DO 18-A)

Q: Why is labor-only contracting prohibited? A: It gives rise to confusion as to who is the real Er of the workers and who is liable to their claims. It also deprives workers of the opportunity to become regular Ees. Q: What are the bases of the State in prohibiting labor-only contracting?

Q: What are the effects of termination of contractual employee to separation pay and other benefits?

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation A: 1. The Constitution, which provides that the State shall protect labor and promote its welfare, and shall guarantee basic labor rights including just and humane terms and conditions of employment and the right to self-organization. 2. Art. 106 of the LC, which allows the SLE to distinguish between labor-only contracting and job contracting to prevent any violation or circumvention of the LC.

2.

Q: Distinguish between job contracting and laboronly contracting.

another, Arnold was not free from the control and direction of SMPC because all work activities and schedules were fixed by the company. Therefore, Arnold is not a job contractor. He is engaged in labor-only contracting. SMPC is liable for the claims of the workers hired by Arnold. A finding that Arnold is a labor-only contractor is equivalent to declaring that there exist an Er-Ee relationship between SMPC and workers hired by Arnold. This is so because Arnold is considered a mere agent of SMPC [Lim vs. NLRC, G.R. No. 124630,(1999)].

Q: What are the grounds for cancellation of registration of contractors or subcontractors?

A: JOB CONTRACTING

Er is treated as direct Er of the person recruited in all instances

Liability is limited (shall be solidarily liable with Er only when the Er fails to comply with requirements as to unpaid wages and other labor standards violations) Permissible, subject only to certain conditions The contractor has substantial capital or investment

LABOR-ONLY CONTRACTING No Er-Ee relationship exist between the Er and the contractor's Ees except when the contractor or subcontractor fails to pay the wages of the Ees

A: 1. Misrepresentation of facts in the application; 2. Submission of a falsified or tampered application or supporting documents to the application for registration; 3. Non-submission of Service Agreement between the principal and the contractor when required to do so; 4. Non-submission of the required semi-annual report; 5. Findings through arbitration that the contractor has engaged in labor-only contracting and/or the prohibited activities; 6. Non-compliance with labor standards and working conditions; 7. Findings of violation of Sec. 8 (Rights of Contractor's Employees) or Sec. 9 (Required Contracts); 8. Non-compliance with SSS, the HDMF, Pag-ibig, Philhealth, and ECC laws; and 9. Collecting any fees not authorized by law and other applicable rules and regulations (Sec. 23, DO 18-A).

Liability extends to all those provided under the Labor Standards law

Prohibited by Law Has no substantial capital or investment

Q: SMPC entered into a contract with Arnold for the milling of lumber as well as the hauling of waste wood products. The company provided the equipment and tools because Arnold had neither tools and equipment nor capital for the job. Arnold, on the other hand, hired his friends, relatives and neighbors for the job. Their wages were paid by SMPC to Arnold, based on their production or the number of workers and the time used in certain areas of work. All work activities and schedules were fixed by the company.

DEPARTMENT CIRCULAR NO. 01-12 Q: Are the rules provided under D.O. No. 18-A applicable to companies or firms in: 1. Business Process Outsourcing (BPO) or Knowledge Process Outsourcing (KPO); and 2. Construction Industries A: 1. No. D.O. 18-A contemplates generic or focused singular activity in one contract between the principal and the contractor and does not contemplate information-technology enabled services involving entire business processes. These companies engaged in business processes may hire Ees in accordance with the applicable

1. Is Arnold a job contractor? Explain briefly. 2. Who is liable for the claims of the workers hired by Arnold? Explain briefly. (2002 Bar Question) A: 1. No. In the problem given, Arnold did not have sufficient capital or investment for one. For UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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TERMINATION OF EMPLOYMENT

2.

laws and maintain these employees based on businesses requirements, which may or may not be for different clients of the BPO’s at different periods of the Ee’s employment. [3.2, Department Circular No. 01-12] No. Licensing and the exercise of the regulatory powers over the construction industry is lodged with the Philippine Contractors Accreditation Board (PCAB) under the Construction Industry Authority of the Philippines (CIAP) pursuant to P.D. 1746 and not with the DOLE or any of its regional offices. [4.1, Department Circular No. 01-12]

Independent Contractor

Labor-only contractor

Nature of business

The business of an independent contractor is entirely separate and distinct from the business of the principal

No separate business independent and distinct from the principal. May be a “cabo” or an in-house agency prohibited under DO 18-02

Substantial capital OR investment

Has substantial capital or investment. No substantial capital or investment.

The only investment is bringing individuals to work

Control

Control as to only RESULTS but not the means

Control as to BOTH results and means

EFFECT:

VALID in Philippine law

VOID in Philippine law

FACTOR TEST

EFFECTS OF LABOR-ONLY CONTRACTING Q: What are the effects of finding that there is laboronly contracting? A: A finding that a contractor is a “labor-only” contractor is equivalent to declaring that there is an Er-Ee relationship between the principal and the Ees of the “labor-only” contractor [Assoc. Anglo-American Tobacco Corp. vs. Clave, G.R. No. 50915, (1990)]. Note: The principal is considered the “direct” Er of the contractual Ees for purposes of enforcing the provisions of the LC and other social legislations. The contractor/subcontractor is deemed only to be the agent of the principal. The principal is solidarily liable with the contractor/ subcontractor in the event of any violation of any provision of the LC, including failure to pay wages.

Note: DO 18-A prohibits job contracting of functions performed by regular Ees.

TRILATERAL RELATIONSHIP IN JOB CONTRACTING Q: What is trilateral relationship?

Q: What does substantial capital or investment mean?

A: In legitimate contracting or subcontracting arrangement there exists: 1. Er-Ee relationship between the contractor and the Ees it engaged to perform the specific job, work or service being contracted; and 2. Contractual relationship between the principal and the contractor. (Sec. 5, DO 18-A)

A: It refers to paid-up capital stocks/shares of at least Three Million Pesos (Php 3,000,000.00) in the case of corporations, partnerships and cooperatives; in the case of single proprietorship, a net worth of at least Three Million Pesos (Php 3,000,000.00). (D.O. 18-A) Note: The law does not require both substantial capital and investment in the form of tools, equipment, machineries, etc. This is clear from the use of conjunction “or”. If the contention was to require the contractor to prove that he has both capital and requisite investment, then the conjunction “and” should have been used [Virginia Neri vs. NLRC, G.R. No. 97008, (1993)].

Q: How do you determine the relationship of the parties if it is independent contracting or labor-only contracting? A: Thru the use of the Factor Test. This considers the nature of the business, substantial capital and the control exercised.

Q: What does the right to control mean?

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Labor Law and Social Legislation A: It refers to the right reserved to the person for whom the services of the contractual workers are performed, to determine not only the end to be achieved, but also the manner and means to be used in reaching that end. (D.O. 18-A)

A: 1. It must be serious or of such a grave and aggravated character; 2. Must relate to the performance of the Ees’ duties; 3. Ee has become unfit to continue working for the Er [Philippine Aeolus Automotive United Corp. vs. NLRC, G.R. No. 124617, (2000)].

DISMISSAL FROM EMPLOYMENT Q: What is substantive due process (Security of Tenure)?

Q: Give some examples of serious misconduct.

A: In cases of regular employment, the Er shall not terminate the services of an Ee except for a just cause or when authorized by the LC on Termination of Employment. (Art. 279, LC)

A: 1. Sexual Harassment 2. Fighting within the company premises 3. Uttering obscene, insulting or offensive words against a superior 4. Falsification of time records 5. Gross immorality

No worker shall be dismissed except for a just or authorized cause provided by law and after due process.

Q: Escando, upset at his transfer to the washer section, repeatedly uttered “gago ka” and threatened bodily harm to his superior Mr. Andres. Is the utterance of the obscene words and threats of bodily harm gross and willful misconduct?

JUST CAUSES Q: What are the Just causes for termination (Art. 282, LC)? A: 1. Serious misconduct or willful disobedience by the Ee of the lawful orders of his Er or representative in connection with his work; 2. Gross and habitual neglect by the Ee of his duties; 3. Fraud or willful breach by the Ee of the trust reposed in him by his Er or duly organized representative; 4. Commission of a crime or offense by the Ee against the person of his Er or any immediate member of his family or his duly authorized representative; 5. Other causes analogous to the foregoing.

A: Yes. The repeated utterances by Escando of obscene, insulting or offensive words against a superior were not only destructive of the morals of his co-Ees and a violation of the company rules and regulations, but also constitute gross misconduct which is one of the grounds provided by law to terminate the services of an Ee [Autobus Workers Union vs. NLRC, G.R. No. 11753, (1998)]. Q: Samson made insulting and obscene utterances towards the General Manager saying “Si EDT bullshit yan, sabihin mo kay EDT yan” among others during the Christmas party. Are the utterances towards the General Manager gross misconduct?

Note: The burden of proving that the termination was for a valid or authorized cause shall rest on the Er. (Art. 277[b], LC)

A: The alleged misconduct of Samson when viewed in its context is not of such serious and grave character as to warrant his dismissal. Samson made the utterances and obscene gestures at an informal Christmas gathering and it is to be expected during this kind of gatherings, where tongues are more often than not loosened by liquor of other alcoholic beverages, that Ees freely express their grievances and gripes against their Ers. Ees should be allowed wider latitude to freely express their grievances and gripes against their Er. Ees should be allowed wider latitude to freely express their sentiments during these kinds of occasions which are beyond the disciplinary authority of the Er [Samson vs. NLRC, G.R. No. 121035, (2000)].

Q: What is Serious Misconduct? A: It is an improper or wrong conduct; the 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 in 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 [Villamor Golf Club vs. Pehid, G.R. No. 166152, (2005)]. Q: What are the elements of serious misconduct?

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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TERMINATION OF EMPLOYMENT Q: When is willful disobedience of the employer’s lawful orders a just cause for termination?

were asked to report for reassignment in Metro Manila by PISI. Upon failure to report or respond to such directives they were ordered dismissed from employment by PISI for willful disobedience. Did the failure to report to Manila amount to willful disobedience?

A: Two requisites must concur: 1. The Ees assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude. 2. The disobeyed orders, regulations or instructions of the Er must be: a. Reasonable and lawful b. Sufficiently known to the Ee c. In connection with the duties which the Ee has been engaged to discharge [Cosep vs. NLRC, G.R. No. 124966, (1998)].

A: The reasonableness of the rule pertains to the kind of character of directives and commands and to the manner in which they are made. In this case, the order to report to the Manila office fails to meet this standard. The order to report to Manila was inconvenient, unreasonable, and prejudicial to Escobin’s group since they are heads of families residing in Basilan and they were not given transportation money or assurance of availability of work in Manila [Escobin vs. NLRC, G.R. No. 118159. (1998)].

Q. Is refusal to a promotion by an employee an act of insubordination or willful disobedience?

Q: When is negligence a just cause for termination? A. There is no law that compels an Ee to accept a promotion for the reason that a promotion is in the nature of a gift or reward, which a person has the right to refuse. The exercise of the Ee of the right to refuse a promotion cannot be considered in law as insubordination or willful disobedience [PT&T Corp. vs. CA, G.R. No. 152057, (2003)].

A: When it is gross and habitual. Q: When is there Gross Negligence? A: Gross negligence implies a want or absence of or failure to exercise slight care of diligence of the entire absence of care it evinces thoughtless disregard of consequences without exerting any effort to avoid them. However, such neglect must not only be gross but habitual in character [Judy Phils. vs. NLRC, G.R. No. 111934, (1998)].

Q: A company vehicle was brought twice out of the company premises without authorization. In the first instance the company opted not to implement any action against Homer and instead issued a memorandum reminding Homer as well as the security guards of the proper procedure. However, in the second instance the vehicle met an accident. Is Homer guilty of willful disobedience even though he was not the one who personally brought the company vehicle out of the company premises and was merely a passenger in the second incident?

Q: When is there habitual neglect of duties? A: Habitual Neglect implies repeated failure to perform one’s duties over a period of time, depending upon the circumstance [JGB and Associates vs. NLRC, GR No. 10939, (1996)].

A: Yes. A rule prohibiting Ees from using company vehicles for private purpose without authority from management is a reasonable one. When Homer rode the company vehicle, he was undoubtedly aware of the possible consequences of his act and taking into consideration his moral ascendancy over the security guards it was incumbent upon him not only to admonish them but also to refrain from using the company car himself. Homer is responsible for the unauthorized release of the vehicle of the company which is a violation of the rules and regulations of the company. Homer was already reminded of the proper procedure of the company. [Family Planning Org. of the Phil. vs. NLRC, G.R. No. 75907, (1992)]

Q: Antiola, as assorter of baby infant dress for Judy Phils., erroneously assorted and packaged 2,680 dozens of infant wear. Antiola was dismissed from employment for this infraction. Does the single act of misassortment constitute gross negligence? A: No. Such neglect must not only be gross but also habitual in character. Hence, the penalty of dismissal is quite severe considering that Antiola committed the infraction for the first time [Judy Phils. vs. NLRC, G.R. No. 111934, (1998)]. Q: Does the failure in performance evaluations amount to gross and habitual neglect of duties?

Q: Escobin’s group were security guards based in Basilan. They were placed in floating status and

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Labor Law and Social Legislation A: As a general concept “poor performance” is equivalent to inefficiency and incompetence in the performance of official duties. The fact that an employee’s performance is found to be poor or unsatisfactory does not necessarily mean that the Ee is grossly and habitually negligent of his duties. Gross negligence implies a want or absence of or failure to exercise slight care of diligence or the entire absence or care. He evinces a thoughtless disregard of consequences without exerting any effort to avoid them. [Eastern Overseas Employment Center Inc. vs. Bea, G.R. 143023, (2005)]

A: 1. It applies only to cases involving: a. Ees occupying positions of trust and confidence (confidential and managerial Ee’s) – to this class belong managerial Ees, i.e., those vested with the powers or prerogatives to lay down management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline Ees or effectively recommend such managerial actions b. Ees routinely charged with the care and custody of the employer’s money or property – to this class belong cashiers, auditors, property custodians, etc., or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property [Mabeza vs. NLRC, G.R. No. 118506, (1997)].

Q: Is inefficiency a Just cause for dismissal? A: Yes, 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. [Buiser vs. Leogardo, G.R. No. L-63316, (1984)] This ground is considered analogous to those enumerated under Art. 282. [Skippers United Pacific vs. Magud, G.R. No. 166363, (2006)]

2.

Note: A breach is willful if it is done intentionally, knowingly, and purposely without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly, or inadvertently [De la Cruz vs. NLRC, G.R. No. 119536, (1997)].

Q: Gamido was a quality control inspector of VH Manufacturing. Gamido was allegedly caught by the company Pres. Dy Juanco of sleeping and was dismissed from employment. Did Gamido’s act of sleeping on the job constitute a valid cause of dismissal? A: Sleeping on the job as a valid ground for dismissal only applies to security guards whose duty necessitates that they be awake and watchful at all times. Gamido’s single act of sleeping further shows that the alleged negligence or neglect of duty was neither gross nor habitual [VH Manufacturing vs. NLRC, G.R. No. 130957,(2000)]. Q: Give some forms of neglect of duty. A: 1. Habitual tardiness and absenteeism 2. Abandonment: a. Failure to report for work or absence without justifiable reason b. Clear intention to sever Er-Ee relationship manifested by some overt acts [Labor et. al vs. NLRC, GR No. 110388, (1995)].

3.

The act constituting the breach must be “workrelated” such as would show the Ee concerned to be unfit to continue working for the Er [Gonzales vs. NLRC, G.R. No. 131653, (2001)].

4.

It must be substantial and founded on clearly established facts sufficient to warrant the Ee’s separation from employment [Sulpicio Lines Inc. vs. Gulde, G.R. No. 149930, (2002)].

5.

Fraud must be committed against the Er or his representatives, e.g.: a. Falsification of time cards b. Theft of company property c. Unauthorized use of company vehicle

Note: The treatment of rank and file personnel and managerial Ees in so far as the application of the doctrine of loss of trust and confidence is concerned is different. As regards managerial Ees, such as Caoile, mere existence of a basis for believing that such Ee has breached the trust of his Er would suffice for his dismissal [Caoile vs. NLRC, G.R. No. 115491, (1998)].

Q: What are the guidelines for the doctrine of loss of confidence to apply?

Q: When is loss of trust and confidence a Just cause for termination?

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

The loss of trust and confidence must be based on willful breach.

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TERMINATION OF EMPLOYMENT A: 1. Loss of confidence should not be simulated (reasonable basis for loss of trust and confidence); 2. Not used for subterfuge for causes which are improper and/or illegal and unjustified; 3. Not arbitrarily asserted in the face of overwhelming evidence to the contrary; 4. Must be genuine, not a mere afterthought to justify earlier action taken in bad faith; and 5. The Ee involved holds a position of trust and confidence.

mine site at Benguet. His co-worker Lupega, executed an affidavit known as the “Subsidence Area Anomaly.” The incidents in Lupega’s affidavit supposedly took place when Abel was still a Contract Claims Asst. at the company’s legal dep’t. An investigation was promptly launched by the company’s officers. Abel attended the meetings but claimed that he was neither asked if he needed the assistance of counsel nor allowed to properly present his side. By memo, the company found Abel guilty of (1) fraud resulting in loss of trust and confidence and (2) gross neglect of duty, and was meted out the penalty of dismissal from employment. Was Abel validly dismissed for any of the causes provided for in Art. 282 of the LC?

Note: The breach of trust must rest on substantial grounds and not on the Er’s arbitrariness, whims, caprices, or suspicion; otherwise, the Ee would eternally remain at the mercy of the Er. It should be genuine and not simulated, nor should it appear as a mere afterthought to justify earlier action taken in bad faith of a subterfuge for causes which are improper, illegal, or unjustified. It has never been intended to afford and occasion for abuse because of its subjective nature. There must, therefore, be an actual breach of dully committed by the employee which must be established by substantial evidence [Dela Cruz vs. NLRC, G.R. No. 119536, (1997)].

A: No. The 1st requisite for dismissal on the ground of loss of trust and confidence is that the Ee concerned must be holding a position of trust and confidence. Abel was a contract claims assistant at the time he allegedly committed the acts which led to its loss of trust and confidence. It is not the job title but the actual work that the Ee performs. It was part of Abel’s responsibilities to monitor the performance of the company’s contractors in relation to the scope of work contracted out to them.

Q: Mabeza, a chambermaid at Hotel Supreme was terminated from employment because of her refusal to sign an affidavit attesting to their employer’s (Er’s) compliance with minimum wage and other labor standards. Mabeza filed a complaint for illegal dismissal against Hotel Supreme. As a defense, Hotel Supreme claimed that she abandoned her work and belatedly claimed loss of confidence as the ground for the dismissal of Mabeza because she stole some of the properties of her Er. Is loss of confidence a valid ground for dismissal of a hotel chambermaid?

nd

The 2 requisite is that there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary. The company’s evidence against Abel fails to meet this standard. Its lone witness, Lupega, did not support his affidavit and testimony during the company investigation with any piece of evidence at all. It could hardly be considered substantial evidence [Abel vs. Philex Mining Corp., G.R. No. 178976, (2009)].

A: No. Loss of confidence as a just cause for dismissal was never intended to provide Ers with a blank check for terminating their Ees. Evidently, an ordinary chambermaid who has to sign out for linen and other hotel property from the property custodian each day and who has to account for each and every towel or bed sheet utilized by the hotel's guests at the end of her shift would not fall under any of these two classes of Ees for which loss of confidence, if ably supported by evidence, would normally apply [Mabeza vs. NLRC, G.R. No. 118506, (1997)].

Q: Is failure to reach the monthly sales quota a valid ground for dismissal based on loss of trust and confidence? A: No. It is stated in Art. 282 of the LC that loss of trust and confidence is a ground for termination of an employee. However, it requires that such breach of trust be willful – whether it be done intentionally, knowingly, and purposely, without justifiable excuse. The court finds that failure to reach the monthly sales quota is not valid ground for loss of trust and confidence as this is not what has been contemplated in Art. 282(c) of the LC.

Q: Abelardo Abel was first hired by Philex Mining Corp. in January 1988. He was later assigned to the company’s Legal Department as a Contract Claims Asst., and held the position for 5 yrs. prior to his transfer to the Mine Engineering and Draw Control Department wherein he was appointed Unit Head. In 2002, he was implicated in an irregularity occurring in the subsidence area of the company’s

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Labor Law and Social Legislation Several factors can be attributed to the low sales performance, which may not be compelled by the respondent. It being involuntary on his part the factors cannot be taken as a valid ground as they are not to be considered willful breach of trust, for they were not done intentionally, knowingly and purposely, without justifiable excuse [Norkis Distributors, Inc and Alex D. Buat v. Delfin S. Descallar, G.R. No. 185255, (2012)].

there was a concurrence of the intention to abandon and some overt acts from which it may be inferred that the Ee concerned has no more interest in working [Jo vs. NLRC, G.R. No. 121605, (2000)].

Q: What are the requirements for a valid finding of abandonment?

Q: The employees averred that they were underpaid and filed a complaint for money claims against the employer before the LA. As a result of their complaint, they were relieved from their posts and were not given new assignments despite the lapse of six months. On the other hand, the Er maintains that the employees were not dismissed but were merely transferred to a new post and voluntarily abandoned their jobs when they failed to report for duty in the new location. Upon termination, the employee moved to file a joint complaint for illegal dismissal. Is there a valid indication of abandonment from work?

A: For a valid finding of abandonment, two (2) factors must be present: 1. The failure to report for work, or absence without valid or justifiable reason; and 2. A clear intention to sever Er-Ee relationship, with the 2nd element as the more determinative factor, being manifested by some overt acts [Sta. Catalina College s. NLRC, G.R. No. 144483, (2003)].

A. No. For abandonment of work to fall under Art. 282 of the LC, as amended, as gross and habitual neglect of duties there must be the occurrence of two elements: first, there should be a failure of the employee to report for works without a valid or justifiable reason and second, there should be a showing that the Ee intended to sever the Er-Ee relationship, the second element being the more determinative factor as manifested by overt acts.

Q: How is abandonment proven?

The Er cannot simply conclude knowledge that an employee is ipso facto notified of a transfer when there is no evidence to indicate that the Ee had knowledge of the transfer order. Hence, the failure of an employee to report for work at the new location cannot be taken against him as an element of abandonment.

Q: What is abandonment as a just cause for termination? A: It means the deliberate, unjustified refusal of an employee to resume his employment.

A: To prove abandonment, the Er must show that the Ee deliberately and unjustifiably refused to resume his employment without any intention of returning. There must be a concurrence of the intention to abandon and some overt acts from which an Ee may be deduced as having no more intention to work. The law, however, does not enumerate what specific overt acts can be considered as strong evidence of the intention to sever the Ee-Er relationship [Sta. Catalina College s. NLRC, G.R. No. 144483, (2003)].

In addition to these tests for valid transfer, there should be proper and effective notice to the Ee concerned. It is the Er’s burden to show that the Ee was duly notified of the transfer. Verily, an Er cannot reasonably expect an Ee to report for work in a new location without first informing said Ee of the transfer. Alert security’s insistence on the sufficiency of mere issuance of the transfer order is indicative of bad faith on their part [Alert Security and Investigation Agency, Inc. et al v. Saidali Pasawilan, et al., G.R. No. 182397, (2011)].

Q: Mejila, a barber at Windfield Barber Shop, had an altercation with a fellow barber which resulted in his subsequent turning over the duplicate keys of the shop to the cashier and took away all his belongings there from and worked at different barbershop. Mejila then filed an illegal dismissal case but did not seek reinstatement as a relief. Did Mejila commit abandonment?

Q: What are the guidelines to determine the validity of termination?

A: Mejila’s acts such as surrendering the shop’s keys, not reporting to the shop anymore without any justifiable reason, his employment in another barber shop, and the filing of a complaint for illegal dismissal without praying for reinstatement clearly show that UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

A: Validity of termination per se is determined by compliance with two-notice rule, hearing, just or authorized cause. This is more or propriety of

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TERMINATION OF EMPLOYMENT dismissal as penalty as oppose to reprimand, suspension, etc.

A: Where the Ee has done something that is contrary or incompatible with the faithful performance of his duties, his Er has a just cause for terminating his employment [Manila Chauffeur’s League vs. Bachrach Motor Co., G.R. No. L-47071, (1940)].

Q: When is "commission of a crime or offense" a just cause for termination of an employee? A: It refers to an offense by the Ee against the person of his employer or any immediate member of his family or his duly authorized representative and thus, conviction of a crime involving moral turpitude is not analogous thereto as the element of relation to his work or to his Er is lacking.

AUTHORIZED CAUSES Q: What are the authorized causes of termination by the employer? A: 1. Installation of labor-saving (automation/robotics)

Note: A criminal case need not be actually filed. Commission of acts constituting a crime itself is sufficient.

2.

Q: What is required for an act to be included in analogous cases of just causes of termination? A: Must be due to the voluntary and/or willful act or omission of the Ee [Nadura vs. Benguet Consolidated, G.R. No. L-17780, (1962)], e.g.: 1. Violation of company rules and regulations 2. Drunkenness 3. Gross inefficiency 4. Illegally diverting employer’s products 5. Failure to heed an order not to join an illegal picket 6. Violation of safety rules and code of discipline

devices

Redundancy (superfluity in the performance of a particular work) – exists where the services of an Ee are in excess of what is reasonably demanded by the actual requirements of the enterprise [Wiltshire File Co., Inc. vs. NLRC, G.R. No. 82249, (1991)]. Note: The redundancy should not have been created by the Er.

3.

Reorganization Note: An Er is not precluded from adopting a new policy conducive to a more economical and effective management, and the law does not require that the Er should be suffering financial losses before he can terminate the services of the employee on the ground of redundancy [DOLE Phil., Inc. vs. NLRC, G.R. No. L55413, (1983)].

Note: To fall within the ambit of “analogous cases” the act or omission must have an element similar to those found in the specific Just cause enumerated under Art. 282. [International Rice Research Institute vs. NLRC, G.R. No. 97239, (1993)]

4.

Past offenses Stellar Industrial Service Inc. vs. NLRC: Previous offenses may be so used as a valid justification for dismissal from work ONLY if the infractions are related to the subsequent offense upon which the basis the termination of employment is decreed.

Retrenchment–cutting of expenses and includes the reduction of personnel; It is a management prerogative, a means to protect and preserve the Er’s viability and ensure his survival. To be an authorized cause it must be effected in good faith and for the retrenchment, which is after all a drastic recourse with serious consequences for the livelihood of the Ee’s or otherwise laid-off. Note: The phrase “to prevent losses” means that retrenchment or termination from the service of some Ees is authorized to be undertaken by the Er sometime before the anticipated losses are actually sustained or realized. Evidently, actual losses need not set in prior to retrenchment [Cajucom VII vs. TP Phils Cement Corp., et al, G.R. No. 149090, (2005)].

Chua-Qua vs. Clave: The school failed to show that Chua took advantage of her position to court her student Qua. If the two eventually fell in love, despite the disparity in their ages and academic levels, this only lends substance to the truism that the heart has reasons of its own which reason does not know. But, yielding to this gentle and universal emotion is not to be so casually equated with immorality. The deviation of the circumstances of their marriage from the usual social pattern cannot be considered as a defiance of contemporary social mores.

5.

Closing or cessation of operation of the establishment or undertaking – must be done in good faith and not for the purpose of circumventing pertinent labor laws.

Q: What is the doctrine of incompatibility?

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Labor Law and Social Legislation 6.

Disease –must be incurable within 6 months and the continued employment is prohibited by law or prejudicial to his health as well as to the health of his co-Ees with a certification from the public health officer that the disease is incurable within 6 months despite due to medication and treatment

2.

3. 4.

Q: What are other authorized causes? A: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Q: Ong, a Sales Manager of Wiltshire File Co., Inc., was informed of the termination of his employment due to redundancy upon returning from a trip abroad. Ong maintains that there can be no redundancy since he was the only person occupying his position in the company.

Total and permanent disability of Ee Valid application of union security clause Expiration of period in term of employment Completion of project in project employment Failure in probation Relocation of business to a distant place Defiance of return-to work-order Commission of Illegal acts in strike Violation of contractual agreement Retirement

Is there redundancy even though Ong was the only one occupying his position? A: Redundancy in an Er’s personnel does not necessarily or even ordinarily refer to duplication of work. The characterization of Ong’s services as no longer necessary or sustainable and therefore properly terminable, was an exercise of business judgment on the part of Wiltshire. Furthermore, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as over hiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. The Er has no legal obligation to keep in its payroll more employees that are necessary for the operation of its business [Wiltshire File Co., Inc. vs. NLRC, G.R. No. 82249, (1991)].

Q: What are the procedural steps required in termination of an employee for authorized causes? A: 1. Written Notice to DOLE 30 days prior to the intended day of termination. Purpose: To enable it to ascertain the verity of the cause of termination. 2.

Written notice to Ee concerned 30 days prior the intended date of termination.

3.

Payment of separation pay - Serious business losses do not excuse the Er from complying with the clearance or report required in Art. 283 of the LC and its IRR before terminating the employment of its workers. In the absence of justifying circumstances, the failure of the Er to observe the procedural requirements under Art. 284 of the LC taints their actuations with bad faith if the lay-off was temporary but then serious business losses prevented the reinstatement of respondents, the Er’s should have complied with the requirements of written notice.

Note: The losses which the company may suffer or is suffering may be proved by financial statements audited by independent auditors [Asian Alcohol Corporation vs. NLRC, G.R. No. 131108, (1999)]. Retrenchment is a means of last resort because in the normal course of business losses are expected. Employer must have taken all measures necessary to prevent losses and it is the last measure when you touch the work force.

Q: What are the requisites of a valid retrenchment?

Q: What are the requisites of a valid Redundancy?

A: 1. Written notice served on both the Ee and the DOLE at least 1 month prior to the intended date of retrenchment 2. Payment of separation pay equivalent to at least one month pay or at least 1/2 month pay for every year of service, whichever is higher 3. Good faith

A: 1. Written notice served on both the Ees and the DOLE at least 1 month prior to separation from work

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Payment of separation pay equivalent to at least 1 month pay or at least 1 month pay for every year of service, whichever is higher Good faith in abolishing redundant position Fair and reasonable criteria in ascertaining what positions are to be declared redundant: a. Less preferred status, e.g. temporary Ee b. Efficiency and c. Seniority

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TERMINATION OF EMPLOYMENT 4. 5.

Proof of expected or actual losses The employer used fair and reasonable criteria in ascertaining who would be retained among the Ees, such as status, efficiency, seniority, physical fitness, age, and financial hardship of certain workers [FASAP v. PAL, G.R. No. 178083, (2009)].

the retrenchment done by the Society not valid for its failure to follow the criteria laid down by law? A: No. The Society terminated the employment of several workers who have worked with the Society for great number of years without consideration for the number of years of service and their seniority indicates that they had been retained for such a long time because of loyal and efficient service. The burden of proving the contrary rests on the Society [Phil. Tuberculosis Society, Inc. vs. National Labor Union, G.R. No. 115414, (1998)].

Q: What are the criteria in selecting employees to be retrenched? A: There must be fair and reasonable criteria to be used in selecting Ees to be dismissed such as: 1. Less preferred status; 2. Efficiency rating; 3. Seniority. [Phil. Tuberculosis Society, Inc. vs. National Labor Union, G.R. No. 115414, (1998)]

Q: Due to mounting losses the former owners of Asian Alcohol Corporation sold its stake in the company to Prior Holdings. Upon taking control of the company and to prevent losses, Prior Holdings implemented a reorganization plan and other costsaving measures including the retrenchment of 117 employees some of which are members of the union and the majority held by non-union members. Some retrenched workers filed a complaint for illegal dismissal alleging that the retrenchment was a subterfuge for union busting activities.

Q: What is the “last in first out” (LIFO) rule? A: It applies inthe termination of employment in the line of work. What is contemplated in the LIFO rule is that when there are two or more Ees occupying the same position in the company affected by the retrenchment program, the last one employed will necessarily be the first one to go [Maya Farms Ees’ Organization vs. NLRC, G.R. No. 106256, (1994)].

Was the retrenchment made by Asian Alcohol valid and justified?

Q: Is the seniority rule or "last in first out" policy to be strictly followed in effecting a retrenchment or redundancy program? (2001 Bar Question)

A: Yes. Even though the bulk of the losses were suffered under the old management and continued only under the new management, ultimately the new management of Prior Holdings will absorb such losses. The law gives the new management every right to undertake measures to save the company from bankruptcy [Asian Alcohol Corp. vs. NLRC, G.R. No. 131108, (1999)].

A: In Asian Alcohol Corp., the SC stated that with regard the policy of "first in,last out" in choosing which positions to declare as redundantor whom to retrench to prevent further business losses, there is no law that mandates such a policy. The reason is simple enough. A host of relevant factors come into play in determining cost efficient measures and in choosing the Ees who will be retained or separated to save the company from closing shop. In determining these issues, management plays a preeminent role. The characterization of positions as redundant is an exercise of business judgment on the part of the Er. It will be upheld as long as it passes the test of arbitrariness.

Q: Differentiate redundancy from retrenchment A: Redundancy does not involve losses or the closing or cessation of operations of the establishment. On the other hand, retrenchment involves losses, closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses.

Q: Philippine Tuberculosis Society, Inc. retrenched 116 employees after incurring deficits amounting to 9.1 million pesos. Aside from retrenching its employees, the company also implemented cost cutting measures to prevent such losses for increasing and minimizing it. The NLRC ruled that the retrenchment was not valid on the ground that the Society did not take the seniority rule into account in the selection of the retrenchment. Was

Q: What are the requisites of a valid closure? A: 1. Written notice served on both the Ees and the DOLE at least 1 month prior to the intended date of closure 2. Payment of separation pay equivalent to at least one month pay or at least 1/2 month pay for

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3. 4. 5.

every year of service, whichever is higher, except when closure is due to serious business losses Good faith No circumvention of the law No other option available to the Er

Are Galaxie employees entitled to separation pay? A: No. Galaxie had been experiencing serious financial losses at the time it closed business operations. Art. 283 of the LC governs the grant of separation benefits "in case of closures or cessation of operation" of business establishments "not due to serious business losses or financial reverses." Where, the closure then is due to serious business losses, the LC does not impose any obligation upon the employer to pay separation benefits [Galaxie Steel Workers Union vs. NLRC, G.R. No. 165757, (2006)].

Q: What is the test for the validity of closure or cessation of establishment or undertaking? A: The ultimate test of the validity of closure or cessation of establishment or undertaking is that it must be bona fide in character. And the burden of proving such falls upon the Er [Capitol Medical Center, Inc. vs. Dr. Meris, G.R. No. 155098, (2005)].

Q: Rank-and-file workers of SIMEX filed a petition for direct certification and affiliated with Union of Filipino Workers (UFW). Subsequently, 36 workers of the company’s “lumpia” department and 16 other workers from other departments were effectively locked out when their working areas were cleaned out. The workers through UFW filed a complaint for unfair labor practices against the company. SIMEX then filed a notice of permanent shutdown/total closure of all units of operation in the establishment with the DOLE allegedly due to business reverses brought about by the enormous rejection of their products for export to the United States.

Q: When is separation pay required in case of closure? A: Only where closure is neither due to serious business losses nor due to an act of Government [North Davao Mining Corp vs. NLRC, G.R. No. 112546, Mar. 13, 1996; NFL vs. NLRC, G.R. No. 127718, (2000)]. Note: Closure contemplated is a unilateral and voluntary act on the part of the Er to close the business establishment.  When the closure of the business is due to serious business loss- there is no obligation to pay separation pay.  Where closure of business is by compulsion of law (e.g.: the land where the building is situated was declared covered by the Comprehensive Agrarian Reform Law) - closure of business is NOT attributed to Er’s will thus, no obligation to pay.

Was the closure warranted by the alleged business reverses? A: The closure of a business establishment is a ground for the termination of the services of any Ee unless the closing is for the purpose of circumventing the provisions of the law. But, while business reverses can be a just cause for terminating Ees, they must be sufficiently proved. In this case, the audited financial statement of SIMEX clearly indicates that they actually derived earnings. Although the rejections may have reduced their earnings they were not suffering losses. There is no question that an employer may reduce its work force to prevent losses but it must be serious, actual and real otherwise this ground for termination would be susceptible to abuse by scheming Ers who might be merely feigning business losses or reverses in their business ventures to ease out Ees [Union of Filipino Workers vs. NLRC, G.R. No. 90519, (1992)].

Q: Galaxie Steel Corp. decided to close down because of serious business loses. It filed a written notice with the DOLE informing its intended closure and the termination of its employees. It posted the notice of closure on the corporate bulletin board. Does the written notice posted by Galaxie on the bulletin board sufficiently comply with the notice requirement under Art. 283 of the LC? A: No. In order to meet the purpose, service of the written notice must be made individually upon each and every Ee of the company. However, the Court held that where the dismissal is for an authorized cause, non-compliance with statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. Still, the employer should indemnify the Ee, in the form of nominal damages, for the violation of his right to statutory due process [Galaxie Steel Workers Union vs. NLRC, G.R. No. 165757, (2006)].

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Q: Carmelcraft Corporation closed its business operations allegedly due to losses of Php 1, 603.88 after the Carmelcraft Employees Union filed a petition for certification election. Carmelcraft Union filed a complaint for illegal lockout and ULP with damages and claim for employment benefits. Were the losses incurred by the company enough to justify closure of its operations?

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TERMINATION OF EMPLOYMENT A: The determination to cease operations is a prerogative of management that is usually not interfered with by the State as no business can be required to continue operating at a loss simply to maintain the workers in employment. That would be a taking of property without due process of law which the Er has a right to resist. But where it is manifest that the closure is motivated not by a desire to avoid further losses but to discourage the workers from organizing themselves into a union for more effective negotiations with management, the State is bound to intervene. The losses of less than Php 2,000 for a corporation capitalized at Php 3 million cannot be considered serious enough to call for the closure of the company [Carmelcraft Corp. vs. NLRC, G.R. No. 90634-35, (1990)].

the filling up of vacancies in the facilities of the buyer [MDII Supervisors & Confidential Ees Ass’n (FFW) vs. residential Assistant on Legal Affairs, G.R. Nos. L45421-23, (1977)]. Q: What is the difference between closure and retrenchment? A: CLOSURE It is the reversal of fortune of the Er whereby there is a complete cessation of business operations to prevent further financial drain upon an Er who cannot pay anymore his Ees since business has already stopped.

Q: Is the transferee of the closed corporation required to absorb the employees of the old corporation? A: GR: There is no law requiring a bona fide purchaser of assets of an on-going concern to absorb in its employ the Ee’s of the latter except when the transaction between the parties is colored or clothed with bad faith. [Sundowner Dev’t Corp. vs. Drilon, G.R. No. 82341, (1989)]

One of the prerogatives of management is the decision to close the entire establishment or to close or abolish a department or section thereof for economic reasons, such as to minimize expenses and reduce capitalization.

XPNs: 1. Where the transferee was found to be merely an alter ego of the different merging firms [Filipinas Port Services, Inc. vs. NLRC, G.R. No. 97237, (1991)]. 2. Where the transferee voluntarily agrees to do so [Marina Port Services, Inc. vs. Iniego, G.R. No. 77853, (1990)]. Q: Marikina Dairy Industries, Inc. decided to sell its assets and close operations on the ground of heavy losses. The unions alleged that the financial losses were imaginary and the dissolution was a scheme maliciously designed to evade its legal and social obligations to its employees. The unions want the buyers of the corporations assets restrained to operate unless the members of the unions are hired to operate the plant under the terms and conditions specified in the collective bargaining agreements.

Does not obligate the Er for the payment of separation package if there is closure of business due to serious losses.

Is the buyer of a company’s assets required to absorb the employees of the seller?

RETRENCHMENT Is the reduction of personnel for the purpose of cutting down on costs of operations in terms of salaries and wages resorted to by an Er because of losses in operation of a business occasioned by lack of work and considerable reduction in the volume of business. In the case of retrenchment, however, for the closure of a business or a department due to serious business losses to be regarded as an authorized cause for terminating Ees, it must be proven that the losses incurred are substantial and actual or reasonably imminent; that the same increased through a period of time; and that the condition of the company is not likely to improve in the near future. LC provides for the payment of separation package in case of retrenchment to prevent losses.

Q: When is disease a ground for dismissal?

A: There is no law requiring that the purchaser of a company’s assets should absorb its Ees and the most that can be done for reasons of public policy and social justice was to direct that buyers of such assets to give preference to the qualified separated Ees in

A: Where the Ee suffers from a disease, and: 1. His continued employment is prohibited by law or prejudicial to his health or to the health of his co-Ees. (Sec.8, Rule I, Book VI, IRR)

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With a certification by competent public health authority that the disease is incurable within 6 months despite due medication and treatment [Solis vs. NLRC, GR No. 116175, (1996)].

the latter could be validly terminated from his job [Tan vs. NLRC, G. R. No. 116807, (1997)]. Note: Termination from work on the sole basis of actual perceived or suspected HIV status is deemed unlawful. (Sec. 35, R.A. 8504 HIV/AIDS Law)

Note: The requirement for a medical certification cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the Er of the gravity or extent of the Ee’s illness and thus defeat the public policy on the protection of labor [Manly Express vs.Payong, G.R. No. 167462, (2005)].

Q: Anna Ferrer has been working as a book keeper at Great Foods, Inc., which operates a chain of highend restaurants throughout the country, since 1970 when it was still a small eatery at Binondo. In the early part of the year 2003, Anna, who was already 50 years old, reported for work after a week-long vacation in her province. It was the height of the SARS scare, and management learned that the first confirmed SARS death case in the Phils, a “balikbayan” nurse from Canada, is a townmate of Anna. Immediately, a memorandum was issued by management terminating the services of Anna on the ground that she is a probable carrier of SARS virus and that her continued employment is prejudicial to the health of her co-Ees. Is the action taken by the employer justified? (2004 Bar Question)

Termination of services for health reasons must be effected only upon compliance with the above requisites. The requirement for a medical certificate under Art. 284 of the LC cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the Er of the gravity or extent of the Ee’s illness and thus defeat the public policy on the protection of labor [Sy et. al vs. CA, G.R. No. 142293, (2003)].

Q: What is the procedure in terminating an employee on the ground of disease? A: 1. The Er shall not terminate his employment unless: a. There is a certification by a competent public health authority b. That the disease is of such nature or at such a stage that it cannot be cured within a period of 6 months even with proper medical treatment. 2.

A: The Er’s act of terminating the employment of Anna is not justified. There is no showing that said Ee is sick with SARS, or that she associated or had contact with the deceased nurse. They are merely town mates. Furthermore, there is no certification by a competent public health authority that the disease is of such a nature or such a stage that it cannot be cured within a period of 6 months even with proper medical treatment. (Implementing Rules, Book VI, Rule 1, Sec. 8, LC)

If the disease or ailment can be cured within the period, the Er shall not terminate the Ee but shall ask the Ee to take a leave. The Er shall reinstate such Ee to his former position immediately upon the restoration of his normal health. (Sec. 8, Rule I, Book VI, IRR)

Q: Discuss the rules on separation pay with regard to each cause of termination. A: CAUSE OF TERMINATION

Q: Is an employee suffering from a disease entitled to reinstatement? A: Yes, provided he presents a certification by a competent public health authority that he is fit to return to work [Cebu Royal Plant vs. Deputy Minister, G.R. No. L-58639, (1987)].

Automation

Redundancy Q: Is the requirements of a medical certificate mandatory? Retrenchment

A: Yes, it is only where there is a prior certification from a competent public authority that the disease afflicting the Ee sought to be dismissed is of such nature or at such stage that it cannot be cured within 6 months even with proper medical treatment that UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Closures or cessation of operation not due

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SEPARATION PAY Equivalent to at least 1 month pay or at least 1 month pay for every year of service, whichever is higher Equivalent to at least 1 month pay or at least 1 month pay for every year of service, whichever is higher Equivalent to 1 month pay or at least ½ month pay for every year or service Equivalent to at least 1 month pay or at least 1 month pay for every year of

TERMINATION OF EMPLOYMENT to serious business losses/financial reverses Disease

effectivity, to give them sufficient time to make necessary arrangements. In this case, notwithstanding the Ees knowledge of the cancellation of the distributorship agreement, they remained uncertain about the status of their employment when DAP failed to formally inform them about the redundancy [DAP Corp. vs. CA, G.R. No. 165811, (2005)].

service (if due to severe financial losses, no separation pay Equivalent to at least 1 month pay or at least ½ month pay for every year of service, whichever is higher

Note: A fraction of at least 6 months shall be considered 1 whole year.

DUE PROCESS TWIN NOTICE REQUIREMENT

There is no separation pay when the closure is due to an act of the Government.

Q: What are the two-fold requirements of a valid dismissal for a just cause?

Q: What is the purpose of the two notices served to the Ee and the DOLE 1 month prior to termination?

A: 1. Substantive – it must be for a just cause 2. Procedural – there must be notice and hearing

A: 1. To give the Ees some time to prepare for the eventual loss of their jobs and their corresponding income, look for other employment and ease the impact of the loss of their jobs. 2. To give the DOLE the opportunity to ascertain the verity of the alleged cause of termination [Phil. Telegraph & Telephone Corp. vs. NLRC, G.R. No. 147002, (2005)].

Q: What are the twin requirements of procedural due process [Art. 277(b), LC]? A: 1. Notice – “Twin-notice rule” a. First notice – Necessity of first notice to inform the worker of the violation and preparation for the defense b. Last notice – to give the worker a notice of the Er’s final decision

Note: Notice to both the Ees concerned and the DOLE are mandatory and must be written and given at least 1 month before the intended date of retrenchment – and the fact that the Ees were already on temporary lay-off at the time notice should have been given to them is not an excuse to forego the 1-month written notice [Sebuguero vs. NLRC, G.R. No.115394, (1995)].

2. Hearing – two fundamental rules: a. Hearing means ample opportunity to be heard b. What the law prohibits is TOTAL ABSENCE of opportunity to be heard  If ample opportunity to be heard is given, there is NO violation.  Position paper – a position paper is a valid alternative because not all cases are of litigation concerns. It should suffice in matters that only involve a question of law.

Q: DAP Corp. ceased its operation due to the termination of its distribution agreement with Int’l Distributors Corp. which resulted in its need to cease its business operations and to terminate the employment of its employees. Marcial et al. filed a complaint for illegal dismissal and for failure to give the employees written notices regarding the termination of their employment. On the other hand, DAP claims that their employees actually knew of the termination therefore the written notices were no longer required. Are written notices dispensed with when the employees have actual knowledge of the redundancy?

Q: What is the purpose of notice and hearing? A: 1.

2.

A: The Ees’ actual knowledge of the termination of a company’s distributorship agreement with another company is not sufficient to replace the formal and written notice required by law. In the written notice, the Ees are informed of the specific date of the termination, at least a month prior to the date of

The requirement of notice is intended to inform the Ee concerned of the Er’s intent to dismiss him and the reason for the proposed dismissal. On the other hand the requirement of Hearing affords the Ee the opportunity to answer his Er’s charges against him and accordingly to defend himself there from before dismissal is effected [Salaw vs. NLRC, G.R. No. 90786, (1991)]. Note: Failure to comply with the requirement of the 2 notices makes the dismissal illegal. The procedure is mandatory [Loadstar Shipping Co. Inc. vs. Mesano, G.R. No. 138956, (2003)]. And for non-compliance with the

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affected and the DOLE at least one month before the intended date of termination. Q: Romeo has been an employee of AAA company from 1993 to 1999 but was unable to report to work due to some illness. Romeo claimed that he was offered by AAA of Php 15,000 separation pay, on the contrary AAA claimed Romeo was never terminated and even told the latter that Romeo could go back to work anytime but Romeo clearly manifested that he was no longer interested in returning to work and instead asked for separation pay. Is Romeo terminated or considered resigned? Is Romeo entitled to separation pay?

Q: Should there exist a valid and just cause, may the employer depart from giving the employee the right to be heard? A: No. Art. 277(b) of the LC mandates that an Er who seeks to dismiss an Ee must “afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires.” Expounding on this provision, the SC held that “ample opportunity” connotes every kind of assistance that management must accord the Ee to enable him to prepare adequately for his defense including legal representation [U-BIX Corp. vs. Bravo, G.R. No. 177647, (2008)].

A: Romeo is considered resigned. Romeo’s various pleadings support his intention of not returning to work on the ground that his health is failing. Moreover, Romeo did not ask for reinstatement and rejected AAA Company’s offer for him to return to work. This is tantamount to resignation. Resignation is defined as the voluntary act of an Ee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has no other choice but to disassociate himself from his employment.

Q: What is the procedure to be observed by the employer for the termination of employment based on any of the just causes for termination? A: 1. A written notice should be served to the Ee specifying the ground/s for termination and giving the said Ee reasonable opportunity to explain.

Romeo is not entitled to separation pay. There is no provision in the LC which grants separation pay to voluntarily resigning Ees. In fact, the rule is that an Ee who voluntarily resigns from employment is not entitled to separation pay, except when it is stipulated in the employment contract or CBA, or it is sanctioned by established Er practice or policy. Hence, Romeo is not entitled to separation pay in the absence of a Labor provision and a stipulation in his employment contract or CBA [Romeo Villaruel vs. Yeo Han Guan, G.R. No. 169191, (2011)].

Note: This first written notice must apprise the Ee that his termination is being considered due to the acts stated in the notice [Phil. Pizza Inc. vs. Bungabong, G.R. No. 154315, (2005)].

2. A Hearing or conference should be held during which the Ee concerned, with the assistance of counsel, if the Ee so desires, is given the opportunity to respond to the charge, provide for his evidence and present the evidence offered against him.

Q: Caong, Tresquio and Daluyon were employed by Regualos under a boundary agreement, as drivers of his jeepneys. Later on, the three were barred by Regualos from driving the vehicles due to deficiencies in their boundary payments. Is the policy of suspending jeepney drivers pending payment of arrears in their boundary obligations reasonable?

3. A written notice of termination – If termination is the decision of the Er, it should be served on the Ee indicating that upon due consideration of all the circumstance, grounds have been established to justify his termination. Note: Single notice of termination does not comply with the requirements of the law [Aldeguer & Co., Inc. vs. Honeyline Tomboc, G.R. No. 147633, (2008)].

A: Yes. The policy of suspending drivers who fail to remit the full amount of the boundary was fair and reasonable under the circumstances. Notice was given to the drivers who were getting lax in remitting their boundary payments. In fact, Regualos incurred a considerable amount of arrears. He had to put a stop to it as he also relied on these boundary payments to raise the full amount of his monthly amortizations on the jeepneys.

Q: To whom should notice be given? A: When termination is based on just cause, notice should be given to the Ee applying the “twin notice rule.” If the termination is based on all of the authorized causes, notices should be given to all Ees

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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TERMINATION OF EMPLOYMENT Caong, Tresquio and Daluyon were not denied due process. Due process is not a matter of strict, rigid or formulaic process. The essence of due process is simply the opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one’s side or an opportunity to seek a reconsideration of the action or ruling complained of. A formal or trial-type hearing is not at all times and in all instances essential, as the due process requirements are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand [Caong vs. Regualos, G.R. No. 179428, (2011)].

Q: The illegal dismissal case was referred to the Labor Arbiter. Is a formal hearing or trial required to satisfy the requirement of due process? A: No. Trial-type hearings are not required in labor cases and these may be decided on verified position papers, with supporting documents and their affidavits. The holding of a formal hearing or trial is discretionary with the labor arbiter and is something that the parties cannot demand as a matter of right. It is entirely within his authority to decide a labor case before him, based on the position papers and supporting documents of the parties, without a trial or formal hearing. The requirements of due process are satisfied when the parties are given the opportunity to submit position papers wherein they are supposed to attach all the documents that would prove their claim in case it be decided that no hearing should be conducted or was necessary [Shoppes Manila vs. NLRC, 419 SCRA 354, (2004)].

HEARING; MEANING OF OPPORTUNITY TO BE HEARD Q: What is included in the opportunity to be heard? A: The first written notice to be served on the Ees should contain the specific causes or grounds for termination against them, and a directive that the Ees are given the opportunity to submit their written explanation within a reasonable period. Under the Omnibus Rules, reasonable opportunity means every kind of assistance that management must accord to the Ees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the Ees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. To enable the Ees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the Ees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the Ees.

Note: It is not necessary for the affiants to appear and testify and be cross-examined by the counsel for the adverse party. It is sufficient that the documents submitted by the parties have a bearing on the issue at hand and support the positions taken by them [C.F. Sharp & Co. vs. Zialcita, 495 SCRA 387, (2006)]. The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one’s side or an opportunity to seek a reconsideration of the action or ruling complained of [PLDT vs. Bolso, 530 SCRA 550, (2007)].

Q: Who has the burden of proof in termination cases? A: The burden of proof rests upon the Er to show that the dismissal of the Ee is for a just cause, and failure to do so would necessarily mean that the dismissal is not justified, consonant with the constitutional guarantee of security of tenure.

After serving the first notice, the Ers should schedule and conduct a hearing or conference wherein the Ees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the Ees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement [King of Kings vs. Mamac, G.R. No. 166208, (2007)].

Note: Due process refers to the process to be followed; burden of proof refers to the amount of proof to be adduced. In money claims, the burden of proof as to the amount to be paid the Ees rests upon the Er since he is in custody of documents that would be able to prove the amount due, such as the payroll.

Q: What is the degree of proof required? A: In administrative or quasi-judicial proceedings, substantial evidence is considered sufficient in determining the legality of an Er’s dismissal of an Ee

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dismissal commensurate committed?

Q: Perez and Doria were employed by PT&T. After investigation, Perez and Doria were placed on preventive suspension for 30 days for their alleged involvement in anomalous transactions in the shipping section. PT&T dismissed Perez and Doria from service for falsifying documents. They filed a complaint for illegal suspension and illegal dismissal. The LA found that the suspension and the subsequent dismissal were both illegal. The NLRC reversed the LA’s decision, it ruled that Perez and Doria were dismissed for just cause, that they were accorded due process and that they were illegally suspended for only 15 days (without stating the reason for the reduction of the period of petitioners’ illegal suspension). On appeal, CA held that they were dismissed without due process. Were petitioners illegally dismissed?

A: There is no question that the Er has the inherent right to discipline its Ees which includes the right to dismiss. However this right is subject to the police power of the State. As such, the Court finds that the penalty imposed upon Felizardo was not commensurate with the offense committed considering the value of the articles he pilfered and the fact that he had no previous derogatory record during his 2 years of employment in the company. Moreover, Felizardo was not a managerial or confidential Ee in whom greater trust is reposed by management and from whom greater fidelity to duty is correspondingly expected [ALU-TUCP vs. NLRC, G.R. No. 120450, (1999)].

offense

A: No. Art. 277(b) of the LC provides that, in cases of termination for a just cause, an Ee must be given “ample opportunity to be heard and to defend himself.” Thus, the opportunity to be heard afforded by law to the Ee is qualified by the word “ample” which ordinarily means “considerably more than adequate or sufficient.” In this regard, the phrase “ample opportunity to be heard” can be reasonably interpreted as extensive enough to cover actual hearing or conference. To this extent, Sec. 2(d), Rule I of the IRR of Book VI of the LC requiring a hearing and conference during which the Ee concerned is given the opportunity to respond to the charge is in conformity with Art. 277(b). Significantly, Sec. 2(d), Rule I of the IRR of Book VI of the LC itself provides that the so-called standards of due process outlined therein shall be observed “substantially,” not strictly. This is a recognition that while a formal hearing or conference is ideal, it is not an absolute, mandatory or exclusive avenue of due process [Perez vs. PT&T, G.R. No. 152048, (2009)].

Q: What are the guidelines in determining whether the penalty imposed on employee is proper?

Gravity of the offense Position occupied by the Ee Degree of damage to the Er Previous infractions of the same offense Length of service [ALU-TUCP vs. NLRC, G.R. No. 120450, (1999); PAL vs. PALEA, G.R. No.L-24626, (1974)]

Q: If the dismissal is for just or authorized cause but the requirement of due process of notice and hearing were not complied with, should the dismissal be held illegal? A: No, in Agabon vs. NLRC (G.R. No. 158693, 2004), it was held that when dismissal is for just or authorized cause but due process was not observed, the dismissal should be upheld.

Q: Felizardo was dismissed from Republic Flour Mills-Selecta ice cream Corporation for dishonesty and theft of company property for bringing out a pair of boots, 1 piece aluminum container and 15 pieces of hamburger patties. Is the penalty of

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

the

Q: Is hearing an indispensible part of due process?

A: Yes. The Er must establish that the dismissal is for cause in view of the security of tenure that Ees enjoy under the Constitution and the LC. PT&T failed to discharge this burden. PT&T’s illegal act of dismissing Perez and Doria was aggravated by their failure to observe due process. To meet the requirements of due process in the dismissal of an Ee, an Er must furnish the worker with 2 written notices: (1) a written notice specifying the grounds for termination and giving to said Ee a reasonable opportunity to explain his side and (2) another written notice indicating that, upon due consideration of all circumstances, grounds have been established to justify the Er's decision to dismiss the Ee [Perez. vs. Phil. Telegraph and Telephone Company, G.R. No. 152048, (2009)].

A: 1. 2. 3. 4. 5.

with

The Er, however, should be held liable for noncompliance with the procedural requirements of due process in the form of damages.

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TERMINATION OF EMPLOYMENT Procedural Due Process under Art. 282-284 of the LC as applied in the Agabon Case Art. 282 Art. 283 Art. 284 The Er must give The Er must Er may the Ee a notice give the Ee and terminate the specifying the the DOLE services of his grounds for written notices Ee. which dismissal 30 days prior to is sought a the effectivity hearing or an of his opportunity to separation. be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss. The Worker is an There is no requirement inactive party hearing under Art. 277 in the cause for requirement in (b) of notice termination. diseases but AND hearing ONLY notice there is notice applies only in with DOLE AND requirement to Art. 282 notice to worker, but NO because the Er worker is notice to DOLE is accusing the required. No worker that the need for a latter hearing committed an because due act or omission process is constituting a found in LC cause for (Art. 283) not in termination of Constitution his according to employment. Agabon.

Process a.) Without Just or Authorized Cause b.) With Due Process a.) Without Just or Authorized Cause b.) Without Due Process

a.) With Just or Authorized Cause b.) Without Due Process

a.) With Just or Authorized Cause b.) With Due

Effect

1.

2.

Termination VALID

Reinstatement + Full Backwages Note: If Reinstatement not possible— Separation Pay

Liable for noncompliance With procedural requirements Note: Separation Pay if for Authorized Cause

If based on just cause (Art. 282, LC) but the Er failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act imputable to the Ee; and If based on authorized causes (Art. 283, LC) but the Er failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by Er’s exercise of his management prerogative.

RELIEFS FOR ILLEGAL DISMISSAL Q: What is the “Twin Remedies Rule”? A: In case where the worker is illegally terminated, his remedies are: 1. 2.

Reinstatement without loss of seniority rights Full backwages Note: Full backwages means no deduction

3. 4.

Liability of ER NO Liability

Termination VALID

Termination INVALID

Note: If Reinstatement not possible— Separation Pay

Note: The Agabon ruling was modified by JAKA Food Processing vs. Pacot [G.R. No. 515378, (2005)] where it was held that:

Note: in Art. 277 (b) in relation to Art. 283, if the closure of business will result in a mass layoff and serious labor dispute, the SLE can enjoin the Er as regards mass termination

Possible Situations

Termination INVALID

Reinstatement + Full Backwages

Separation pay in lieu of reinstatement Damages, including Attorney’s fees

Q: Does the offer to reinstate the illegally dismissed employee affect the liability of the erring employer?

Note: Separation Pay if for Authorized Cause

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Labor Law and Social Legislation A: No. At any rate, sincere or not, the offer of reinstatement could not correct the earlier illegal dismissal of the Ee. The Er incurred liability under the LC from the moment an Ee was illegally dismissed, and the liability did not abate as a result of the Er's repentance [Ranara vs.NLRC, 212 SCRA 631 (1992)].

A: 1. Doctrine of Strained Relations (applies to confidential and managerial Ees only) 2. In case of position has been abolished (applies to both managerial and rank and file Ees) Note: Moral and exemplary damages may also be awarded.

Q: PAL dismissed strike leader Capt. Gaston as a result of which the Union resolved to undertake the grounding of all PAL planes and the filing of applications for “protest retirement” of members who had completed 5 years of continuous service, and “protest resignation” for those who had rendered less than 5 years of service in the company. PAL acknowledged receipt of said letters and among the pilots whose “protest resignation or retirement” was accepted by PAL were Enriquez and Ecarma.

Q: What is the prescriptive period for filing an action for illegal dismissal? A: An action for reinstatement by reason of illegal dismissal is one based on an injury which may be brought within 4 years from the time of dismissal pursuant to Art. 1146 of the NCC [Azcor Manufacturing vs. NLRC, 303 SCRA 26 (1999)]. REINSTATEMENT PENDING APPEAL (ART. 223, LC)

Before their readmission, PAL required Enriquez and Ecarma to accept 2 conditions, namely: that they sign conformity to PAL’s letter of acceptance of their retirement and or resignation and that they submit an application for employment as new employees without protest or reservation. As a result of this their seniority rights were lost.

Q: What is reinstatement? A: It is the restoration of the Ee to the state from which he has been unjustly removed or separated without loss of seniority rights and other privileges. Q: What are the forms of reinstatement?

Are the pilots entitled to the restoration of their seniority rights?

A: 1. Actual or physical – the Ee is admitted back to work 2. Payroll – the Ee is merely reinstated in the payroll

A: No, an Ee has no inherent right to seniority. He has only such rights as may be based on a contract, statute, or an administrative regulation relative thereto. Seniority rights which are acquired by an Ee through long-time employment are contractual and not constitutional. The discharge of an Ee thereby terminating such rights would not violate the Constitution. When the pilots tendered their respective retirement or resignation and PAL immediately accepted them, both parties mutually terminated the contractual employment relationship between them thereby curtailing whatever seniority rights and privileges the pilots had earned through the years.

Note: An order of reinstatement by the LA is not the same as actual reinstatement of a dismissed or separated Ee, however it is immediately executory even pending appeal. Thus, until the Er continuously fails to actually implement the reinstatement aspect of the decision of the LA, their obligation to the illegally dismissed Ee, insofar as accrued backwages and other benefits are concerned, continues to accumulate. It is only when the illegally dismissed Ee receives the separation pay (in case of strained relations) that it could be claimed with certainty that the Er-Ee relationship has formally ceased thereby precluding the possibility of reinstatement [Triad Security & Allied Services, Inc. et al vs. Ortega, G.R. No. 160871, (2006)].

Q: What does the term “full backwages” mean?

Q: Is an illegally dismissed employee entitled to reinstatement as a matter of right?

A: The LC as amended by R.A. 6715 points to "full backwages" as meaning exactly that, i.e., without deducting from backwages the earnings derived elsewhere by the concerned Ee during the period of his illegal dismissal [Buenviaje vs. CA, G.R. 147806, (2002)].

A: GR: Yes. XPNs: Proceeds from an illegal dismissal wherein reinstatement is ordered but cannot be carried out as in the following cases:

Q: When can “separation in lieu of reinstatement” be awarded?

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TERMINATION OF EMPLOYMENT 1. Reinstatement cannot be effected in view of the long passage of time or because of the realities of the situation. 2. It would be inimical to the Ers’ interest. 3. When reinstatement is no longer feasible. 4. When it will not serve the best interest of the parties involved. 5. Company will be prejudiced by reinstatement. 6. When it will not serve a prudent purpose. 7. When there is resultant strained relation (applies to both confidential and managerial Ees only). 8. When the position has been abolished (applies to managerial, supervisory and rank-and-file Ees).

Q: What is the rule on wages during reinstatement pendency of appeal?

Note: In such cases, it would be more prudent to order payment of separation pay instead of reinstatement [Quijano vs. Mercury Drug Corporation, G.R. No. 126561, (1998)].

The test is two-fold: (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 Er’s unjustified act or omission. If the delay is due to the Er’s unjustified refusal, the Er may still be required to pay the salaries notwithstanding the reversal of the LA’s decision [Garcia vs. PAL, G.R. No. 164856, (2009)].

A: Dismissed Ee whose case was favorably decided by the LA is entitled to receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a restraining order, it is ministerial upon the LA to implement the order of reinstatement and it is mandatory on the Er to comply therewith. After the LA’s decision is reversed by a higher tribunal, the Ee 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 Er.

Q: What is an order of reinstatement? A: Reinstatement means restoration to a state or condition from which one had been removed or separated. The person reinstated assumes the position he had occupied prior to his dismissal. Reinstatement presupposes that the previous position from which one had been removed still exists, or that there is an unfilled position which is substantially equivalent or of similar nature as the one previously occupied by the Ee.

Q: PAL dismissed Garcia, for violating PAL’s Code of Discipline for allegedly sniffing shabu in PAL’s Technical Center Tool Room Section. Garcia then filed for illegal dismissal and damages where the LA ordered PAL to immediately reinstate Garcia. On appeal, the NLRC reversed the decision and dismissed Garcia’s complaint for lack of merit. Garcia’s motion for reconsideration was denied by the NLRC. It affirmed the validity of the writ and the notice issued by the LA but suspended and referred the action to the Rehabilitation Receiver for appropriate action. May Garcia collect wages during the period between the LA’s order of reinstatement pending appeal and the NLRC decision overturning that of the LA?

An order for reinstatement entitles an employee to receive his accrued backwages 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 [Pfizer vs. Velasco, G.R. 177467, (2011)]. Q: Distinguish Arts. 223 from 279 of the LC.

A: Art. 223(3) of the LC provides that the decision of the LA reinstating a dismissed or separated Ee, insofar as the reinstatement aspect is concerned, shall immediately be executory, pending appeal.

A: Art. 223 May be availed of as soon as the LA renders a judgment declaring that the dismissal of the Ee is illegal and ordering said reinstatement. It may be availed of even pending appeal

Art. 279 Presupposes that the judgment has already become final and executory. Consequently, there is nothing left to be done except the execution thereof.

Even if the order of reinstatement of the LA is reversed on appeal, it is obligatory on the part of the Er to reinstate and pay the wages of the dismissed Ee during the period of appeal until reversal by the higher court. On the other hand, if the Ee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the Ee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period.

Note: An award or order for reinstatement is selfexecutory. It does not require the issuance of a writ of execution [Pioneer Texturizing Corp. vs. NLRC, G.R. No. 118651, (1997)].

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Labor Law and Social Legislation Q: May the Court order the reinstatement of a dismissed employee even if the prayer of the complaint did not include such relief?

payroll reinstatement of the Ee [Bago v. NLRC, G.R. No. 170001, (2007)]. Q: Can the employer demand that the employee reimburse the amount that had been paid under the period of payroll reinstatement?

A: Yes. So long as there is a finding that the Ee was illegally dismissed, the court can order the reinstatement of an Ee even if the complaint does not include a prayer for reinstatement, unless, of course the Ee has waived his right to reinstatement. By law, an Ee who is unjustly dismissed is entitled to reinstatement among others. The mere fact that the complaint did not pray for reinstatement will not prejudice the Ee, because technicalities of law and procedure are frowned upon in labor proceedings [Pheschem Industrial Corp. vs. Moldez, G.R. No. 1161158, (2005)].

A: No. Even if the order of reinstatement of the LA is reversed on appeal, it is obligatory on the part of the Er to reinstate and pay the wages of the dismissed Ee during the period of appeal until reversal by the higher court. If the Ee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the Ee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period [Garcia v. PAL, G.R. No. 164856, (2009)].

In any case, Sec. 2(c), Rule 7 of the Rules of Court provides that a pleading shall specify the relief sought, but may add a general prayer for such further or other reliefs as may be deemed just and equitable. Under this rule, a court can grant the relief warranted by the allegation and the proof even if it is not specifically sought by the injured party; the inclusion of a general prayer may justify the grant of a remedy different from or together with the specific remedy sought, if the facts alleged in the complaint and the evidence introduced so warrant. The prayer in the complaint for other reliefs equitable and just in the premises justifies the grant of a relief not otherwise specifically prayed for [Prince Transport, Inc. vs. Garcia et. al, G.R. No. 167291, (2011)].

Q: What happens if there is an Order of Reinstatement but the position is no longer available? A: The Ee should be given a substantially equivalent position. If no substantially equivalent position is available, reinstatement should not be ordered because that would in effect compel the Er to do the impossible. In such a situation, the Ee should merely be given a separation pay consisting of 1-month salary for every year of service [Grolier Int’l Inc. vs. ELA, G.R. No. 83523, (1989)].

Q: A complaining employee obtained a favourable decision in an illegal dismissal case. The Labor Arbiter ordered her immediate reinstatement. The employer opted payroll reinstatement pending appeal. The NLRC reversed the decision of the LA ruled that the dismissal was valid. The employer stopped the payroll reinstatement. The employee elevated the case to the CA, and eventually to the SC. The SC upheld the dismissal. Is the employee entitled to continued payroll reinstatement after the NLRC decision?

Q: What is the “strained relations” rule? A: When the Er can no longer trust the Ee and vice versa or there were imputations of bad faith to each other, reinstatement could not effectively serve as a remedy. This rule applies only to positions which require trust and confidence [Globe Mackay vs. NLRC, G.R. No. 82511, (1992)]. Note: Under the circumstances where the employment relationship has become so strained to preclude a harmonious working relationship and that all hopes at reconciliation are naught after reinstatement, it would be more beneficial to accord the Ee backwages and separation pay.

A: No. The Ee is not entitled to continued payroll reinstatement. The decision of the NLRC on appeals from decisions of the LA shall become final and executory after 10 calendar days from receipt thereof by the parties. That the CA may take cognizance of and resolve a petition for certiorari for the nullification of the decisions of the NLRC on jurisdictional and due process considerations does not affect the statutory finality of the NLRC decision. Since the NLRC decision which upheld the dismissal became final, the Er was correct in stopping the UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Q: What must be proven before the strained relations rule can be applied to a particular case? A: 1. 2.

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The Ee concerned occupies a position where he enjoys the trust and confidence of his Er; and That it is likely if the Ee is reinstated, an atmosphere of antipathy and antagonism may

TERMINATION OF EMPLOYMENT be generated as to adversely affect the efficiency and productivity of the Ee concerned [Globe Mackay Cable & Wire Corp. vs. NLRC G.R. No. 82511, (1992)].

A: No. When the drivers voluntarily chose not to return to work anymore, they must be considered as having resigned from their employment. The common denominator of those instances where payment of separation pay is warranted is that the employee was dismissed by the Er [Capili vs. NLRC, G.R. 117378, (1997)].

Q: Does the strained relations rule always bar reinstatement in all cases? A: No. The rule should be applied on a case to case basis, based on each case’s peculiar conditions and not universally. Otherwise, reinstatement can never be possible simply because some hostility is invariably engendered between the parties as a result of litigation. That is human nature [Anscor Transport vs. NLRC, G.R. No. 85894, (1990)].

Q: Two groups of seasonal workers claimed separation benefits after the closure of Phil. Tobacco processing plant in Balintawak and the transfer of its tobacco operations to Candon, Ilocos Sur. Phil. Tobacco refused to grant separation pay to the workers belonging to the first batch, because they had not been given work during the preceding year and, hence, were no longer in its employ at the time it closed its Balintawak plant. Likewise, it claims exemption from awarding separation pay to the second batch, because the closure of its plant was due to "serious business losses," as defined in Art. 283 of the LC. Both labor agencies held that the two groups were entitled to separation pay equivalent to 1/2 month salary for every year of service, provided that the employee worked at least 1 month in a given year. Is the separation pay granted to an illegally dismissed employee the same as that provided under Art. 283 of the LC in case of retrenchment to prevent losses?

Besides, no strained relations should arise from a valid and legal act of asserting one's right; otherwise an Ee who shall assert his right could be easily separated from the service, by merely paying his separation pay on the pretext that his relationship with his Er had already become strained [Globe Mackay Cable & Wire Corp. vs. NLRC, G.R. No. 82511, (1992)]. SEPARATION PAY IN LIEU OF REINSTATEMENT Q: How can separation pay be viewed? A: Under present laws and jurisprudence, separation pay may be viewed in 4 ways: 1. In lieu of reinstatement in illegal dismissal cases, where Ee is ordered reinstated but reinstatement is not feasible. 2. As Er’s statutory obligation in cases of legal termination due to authorized causes under Arts. 283 and 284 of the LC. 3. As financial assistance, as an act of social justice and even in case of legal dismissal under Art. 282 of the LC. 4. As employment benefit granted in CBA or company policy. (Poquiz, 2005)

A: No. The separation pay awarded to Ees due to illegal dismissal is different from the amount of separation pay provided for in Art. 283 of the LC. Prescinding from the above, Phil. Tobacco is liable for illegal dismissal and should be responsible for the reinstatement of the first group and the payment of their backwages. However, since reinstatement is no longer possible as Phil. Tobacco have already closed its Balintawak plant, members of the said group should instead be awarded normal separation pay (in lieu of reinstatement) equivalent to at least one month pay, or one month pay for every year of service, whichever is higher. It must be stressed that the separation pay being awarded to the first group is due to illegal dismissal; hence, it is different from the amount of separation pay provided for in Art. 283 in case of retrenchment to prevent losses or in case of closure or cessation of the Er’s business, in either of which the separation pay is equivalent to at least one (1) month or one-half (1/2) month pay for every year of service, whichever is higher [Phil. Tobacco FlueCuring & Redrying Corp. vs. NLRC, G.R. No. 127395, (1998)].

Q: Respondents are licensed drivers of public utility jeepneys owned by Moises Capili. When Capili assumed ownership and operation of the jeepneys, the drivers were required to sign individual contracts of lease of the jeepneys. The drivers gathered the impression that signing the contract was a condition precedent before they could continue driving. The drivers stopped plying their assigned routes and a week later filed with the Labor Arbiter a complaint for illegal dismissal praying not for reinstatement but for separation pay. Are the respondents entitled to separation pay?

Q: Does separation pay apply in cases of legal dismissal?

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Labor Law and Social Legislation A: No. Art. 223 of the LC concerns itself with an interim relief, granted to a dismissed or separated Ee while the case for illegal dismissal is pending appeal. It does not apply where there is no finding of illegal dismissal. On the other hand, an Ee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement [Lansangan vs. Amkor Technology Philippines, Inc., G.R. No. 177026, (2009)].

1. 2.

Actual reinstatement, or if reinstatement is no longer feasible Finality of judgment awarding backwages [Buhain vs. CA, G.R. 143709, (2002)]

Note: The backwages to be awarded should not be diminished or reduced by earnings elsewhere during the period of his illegal dismissal. The reason is that the Ee while litigating the illegality of his dismissal must earn a living to support himself and his family [Bustamante vs. NLRC, G.R. No. 111651, Mar. 15, 1996; Buenviaje vs. CA, G.R. No. 147806, (2002)].

COMPUTATION

BACKWAGES

Q: What is included in the computation of backwages?

Q: What are backwages? A: It is the relief given to an Ee to compensate him for the lost earnings during the period of his dismissal. It presupposes illegal termination.

A: They cover the following: 1. Transportation and emergency allowances 2. Vacation or SIL and sick leave th 3. 13 month pay

Note: Entitlement to backwages of the illegally dismissed Ee flows from law. Even if he does not ask for it, it may be given. The failure to claim backwages in the complaint for illegal dismissal is a mere procedural lapse which cannot defeat a right granted under substantive law [St. Michael’s Institute vs. Santos, G.R. No. 145280, (2001)].

Note: Facilities such as uniforms, shoes, helmets and ponchos should not be included in the computation of backwages because said items are given for free, to be use only during official tour of duty not for private or personal use. The award of backwages is computed on the basis of 30-day month [JAM Trans Co. vs. Flores, G.R. No. L-63555, (1993)].

Q: What is the basis of awarding backwages to an illegally dismissed employee?

Q: How are the backwages of a probationary employee who fails to qualify as a regular employee computed?

A: The payment of backwages is generally granted on the ground of equity. It is a form of relief that restores the income that was lost by reason of the unlawful dismissal; the grant thereof is intended to restore the earnings that would have accrued to the dismissed Ee during the period of dismissal until it is determined that the termination of employment is for a just cause. It is not private compensation or damages but is awarded in furtherance and effectuation of the public objective of the LC. Nor is it a redress of a private right but rather in the nature of a command to the Er to make public reparation for dismissing an Ee either due to the former’s unlawful act or bad faith [Tomas Claudio Memorial College Inc., vs. CA, G.R. No. 152568, (2004)].

A: The backwages that should be awarded to respondent shall be reckoned from the time of her constructive dismissal until the date of the termination of her employment. The computation should not cover the entire period from the time her compensation was withheld up to the time of her actual reinstatement. This is because as a probationary Ee, the lapse of probationary employment without appointment as a regular Ee of effectively severed the Er-Ee relationship between the parties [Robinsons Galleria vs. Ranchez, G.R. No. 177937, (2011)].

Q: What is the period covered by the payment of backwages?

Q: Is an employee entitled to backwages even after the closure of the business?

A: The backwages shall, from the time that wages are unlawfully withheld until the time of actual reinstatement or, if reinstatement is no longer feasible, until the finality of judgment awarding backwages, cover the period from the date of dismissal of the employee up to the date of: UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

A: No. The closure of the business rendered the reinstatement of complainant to an Ees previous position impossible but she is still entitled to the payment of backwages up to the date of dissolution or closure. An Er found guilty of ULP in dismissing his Ee may not be ordered to pay backwages beyond the

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TERMINATION OF EMPLOYMENT date of closure of business where such closure was due to legitimate business reasons and not merely an attempt to defeat the order of reinstatement [Pizza Inn vs. NLRC, G.R. No. 74531, (1988)].

shall depend on the attending circumstances of the case. [Victory Liner, Inc. v. Race, G.R. No. 164820 (2008)]. Note: The rule providing for the entitlement of an illegally dismissed Ee to only three years backwages “without deduction or qualification” to obviate the need for further proceedings in the course of execution, otherwise known as the “Mercury Drug Rule,” has long been abandoned since March 21, 1989 [BPI Employees Union & Uy v. BPI, et al., G.R. No. 137863, (2005)].

Q: What are the circumstances that prevent award of backwages? A: 1. Dismissal for cause 2. Death, physical or mental incapacity of the employee 3. Business reverses 4. Detention in prison

PREVENTIVE SUSPENSION Q: What is preventive suspension?

LIMITED BACKWAGES

A: During the pendency of the investigation, the Er may place the Ee under preventive suspension leading to termination when there is an imminent threat or a reasonable possibility of a threat to the lives and properties of the Er, his family and representatives as well as the offender’s co-workers by the continued service of the Ee.

Q: What is the rule on backwages for dismissed employees? A: GR: In the case of Osmalik Bustamante, et al. v. NLRC and Evergreen Farms, Inc., the SC held that the passing of R.A. 6715, particularly Sec. 34, which took effect on March 21, 1989, amended Art. 279 of the LC, which now states in part:

Q: What is the duration of preventive suspension? A: It should not last for more than 30 days. The Ee should be made to resume his work after 30 days. It can be extended provided the Ee’s wages are paid after the 30-day period.

ART. 279. Security of Tenure. - An Ee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

This period is intended only for the purpose of investigating the offense to determine whether he is to be dismissed or not. It is not a penalty. Note: The Er may continue the period of preventive suspension provided that he pays the salary of the Ee. If more than 1 month, the Ee must actually be reinstated or reinstated in the payroll. Officers are liable only for the offense committed if done with malice.

Verily, the evident legislative intent as expressed in R.A. 6715, is that the backwages to be awarded to an illegally dismissed Ee, should not, as a general rule, be diminished or reduced by the earnings derived by him elsewhere during the period of his illegal dismissal. The underlying reason for this ruling is that the Ee, while litigating the legality (illegality) of his dismissal, must still earn a living to support himself and his family. Corollary thereto, full backwages have to be paid by the Er as part of the price or penalty he has to pay for illegally dismissing his Ee. Thus, the provision calling for “full backwages” to illegally dismissed employees is clear, plain and free from ambiguity and, therefore, must be applied without attempted or strained interpretation.

Q: Cantor and Pepito were preventively suspended pending application for their dismissal by Manila Doctor’s Hospital after being implicated by one Macatubal when they refused to help him when he was caught stealing x-ray films from the hospital. Was the preventive suspension of Cantor and Pepito proper? A: No. Where the continued employment of an Ee poses a serious and imminent threat to the life and property of the Er or on his co-Ees, the Ees’ preventive suspension is proper. In this case, no such threat to the life and property of the Er or of their coEe’s is present and they were merely implicated by the Macatubal [Manila Doctors Hospital vs. NLRC, G.R. No 64897, (1985)].

XPN: Award of backwages to a separated Ee may be limited for a certain number of years considering good faith on the part of the Er in terminating the employee, which period

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation CONSTRUCTIVE DISMISSAL

Q: Flores, a conductor of JAM Transportation Co., Inc., had an accident where he had to be hospitalized for a number of days. Upon reporting back to the company he was told to wait. For several days this continued and he was promised a route assignment which did not materialize. Upon speaking to Personnel Manager Medrano, he was told that he will be accepted back to work but as a new employee. Flores rejected the offer because it would mean forfeiture of his 18 years of service to the company. Is the offer for reinstatement as a new employee a constructive dismissal?

Q: What is constructive dismissal? A: Constructive dismissal occurs when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or diminution in pay or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee leaving the latter with no other option but to quit [The University of Immaculate Conception vs. NLRC, G.R. No. 181146, (2011)].

A: Yes. Flores’ re-employment as a new Ee would be very prejudicial to him as it would mean a demotion in rank and privileges and the retirement benefits for his previous 18 years of service with the company would simply be considered as non-existent. It amounts to constructive dismissal. [JAM Transportation Co., Inc. vs. Flores, G.R. No. 82829, (1993)]

Q: What are the reliefs entitled to illegally or constructively dismissed employees? A: An an illegally or constructively dismissed Ee is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no longer viable; and (2) backwages. These two reliefs are separate and distinct from each other and are awarded conjunctively [Robinsons Galleria vs. Ranchez, G.R. No. 177937, (2011)].

Q: Quinanola was transferred from the position of Executive Secretary to the Executive Vice President and General Manager to the Production Dep’t as Production Secretary. Quinanola rejected the assignment and filed a complaint for illegal dismissal due to constructive dismissal. Did the transfer of Quinanola amount to constructive dismissal?

Q: Reynaldo was hired by Geminilou Trucking Service (GTS) as a truck driver to haul and deliver products of San Miguel Pure Foods Company, Inc. He was paid Php 400 per trip and made 4 trips a day. He claimed that he was requested by GTS to sign a contract entitled “Kasunduan Sa Pag-upa ng Serbisyo” which he refused as he found it to alter his status as a regular employee to merely contractual. He averred that on account of his refusal to sign the Kasunduan, his services were terminated prompting him to file a complaint before the NLRC for constructive dismissal against the GTS. Would Reynaldo’s refusal to sign the Kasunduan adequately support his allegation of constructive dismissal?

A: No. Quinanola’s transfer was not unreasonable since it did not involve a demotion in rank or a change in her place of work nor a diminution in pay, benefits and privileges. It did not constitute constructive dismissal. Furthermore, an employee’s security of tenure does not give him a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. [Philippine Japan Active Carbon Corp. vs. NLRC, G.R. No. 83239, (1989)]

A: No. The test of constructive dismissal is whether a reasonable person in the Ee’s position would have felt compelled to give up his job under the circumstances. In the present case, the records show that the lone piece of evidence submitted by Reynaldo to substantiate his claim of constructive dismissal is an unsigned copy of the Kasunduan. This falls way short of the required quantum of proof which is substantial evidence, or such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Reynaldo was not dismissed, but that he simply failed to report for work after an altercation with a fellow driver [Madrigalejos vs. Geminilou Trucking Service, G.R. No. 179174, (2008)].

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Q: Sangil was a utility man/assistant steward of the passenger cruise vessel Crown odyssey under a oneyear contract. Sangil suffered head injuries after an altercation with a Greek member of the crew. He informed the captain that he no longer intends to return aboard the vessel for fear that further trouble may erupt between him and the other Greek crewmembers of the ship. Was Sangil constructively dismissed? A: Yes. There is constructive dismissal where the act of a seaman in leaving ship was not voluntary but was impelled by a legitimate desire for self-preservation or because of fear for his life Constructive dismissal does not always involve diminution in pay or rank but

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TERMINATION OF EMPLOYMENT may be inferred from an act of clear discrimination, insensibility or disdain by an Er may become unbearable on the part of the Ee that it could foreclose any choice by him except to forego his continued employment. [Sunga Ship Management Phil., Inc. vs. NLRC, G.R. No. 119080, (1998)]

from his relief from the military or civic duty. Only when such a "floating status" lasts for more than 6 months that the Ee may be considered to have been constructively dismissed [Nippon Housing Phil. Inc., vs. Leynes, G.R. No. 177816, (2011)

Q: Does the validity of suspending operation excuse the employer from paying separation pay? A: No. The validity of its act of suspending its operations does not excuse it from paying separation pay. Art. 283 of the LC is emphatic that an Ee, who was dismissed due to cessation of business operation, is entitled to the separation pay equivalent to one month pay or at least 1/2 month pay for every year of service, whichever is higher. And it is jurisprudential that separation pay should also be paid to Ees even if the closure or cessation of operations is not due to losses [Manila Minings Corp. Employees Assn. vs. Manila Mining Corp., G.R. Nos. 178222-23, (2010)]. Q: Under what circumstances is the award of financial assistance proper? A: The general rule is that financial assistance is allowed only in instances where the Ee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Nonetheless, financial assistance may be allowed as a measure of social justice and exceptional circumstances, and as an equitable concession for balancing the interests of the Er with those of the worker. Where there is neither a dismissal nor abandonment, it has been previously held that separation pay may be awarded under appropriate circumstances. Also, in cases where there is no dismissal, the status quo between the Ee and Er should be maintained; and in lieu of reinstatement the grant of separation pay to Ee is proper. [Luna vs. Allado Construction Co., Inc., G.R. No. 175251, (2011)] Q: What is a floating status? When is an employee in a floating status considered to be constructively dismissed? A: Pursuant to Art. 286 of the LC, the bona fide suspension of the operation of a business undertaking for a period not exceeding 6 months, or the fulfillment by the Ee of a civic duty shall not terminate employment. In all such cases the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one month from the resumption of operations of his Er or

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation MANAGEMENT PREROGATIVE

bound by law or contract to grant it, it just the same granted the benefit.

Q: What is Management Prerogative? Q: Is the exercise of management prerogative unlimited?

A: GR: It is the right of an Er to regulate, according to his own discretion and judgment, all aspects of employment, including: 1. Hiring 2. Work assignments 3. Working methods 4. Time, place and manner of work 5. Tools to be used 6. Processes to be followed 7. Supervision of workers 8. Working regulations 9. Transfer of Ees 10. Work supervision 11. Lay-off of workers 12. Discipline 13. Dismissal 14. Recall of workers

A: No. It is circumscribed by limitations found in: 1. Law, 2. CBA, or 3. General principles of fair play and justice Furthermore, a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of Ees. In treating the latter, management should see to it that its Ees are at least properly informed of its decisions and modes of actions. Such management prerogative may be availed of without fear of any liability so long as it is exercised in good faith for the advancement of the Er’s interest and not for the purpose of defeating or circumventing the rights of employees under special laws or valid agreement and are not exercised in a malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite [PAL vs. NLRC, G.R. No. 85985, (1993); San Miguel Brewery Sales vs. Ople, G.R. No. 53515, (1989); Punzal vs.ETSI Technologies Inc (518 SCRA 66)].

XPNs: Otherwise limited by law, contract, and principles of fair play and justice. Note: So long as a company’s prerogatives are exercised in good faith for the advancement of the Er’s interest and not for the purpose of defeating or circumventing the rights of the Ees under special laws or under valid agreements, the Supreme Court will uphold them.

Note: It must be established that the prerogative being invoked is clearly a managerial one.

Q: Little Hands Garment Company, an unorganized manufacturer of children's apparel with around 1,000 workers, suffered losses for the 1st first time in history when its US and European customers shifted their huge orders to China and Bangladesh. The management informed its employees that it could no longer afford to provide transportation shuttle services. Consequently, it announced that a normal fare would be charged depending on the distance traveled by the workers availing of the service.

Q: Is withholding an employee’s salary a valid exercise of management prerogative?

Was the Little Hands Garments Company within its rights to withdraw this benefit which it had unilaterally been providing its employees? (2005 Bar Question)

Q: May a MERALCO employee invoke the remedy of writ of habeas data available where his employer decides to transfer her workplace on the basis of copies of an anonymous letter posted therein, imputing to her disloyalty to the company and calling for her to leave, which imputation it investigated but fails to inform her of the details thereof?

A: No. Any withholding of an Ee’s wages by an Er may only be allowed in the form of wage deductions under the circumstances provided in Art. 113 of the LC: 1) the worker is insured; 2) for union dues; 3) in cases authorized by law or regulation issued by the SLE. In the absence of the following circumstances, withholding thereof is thus unlawful [SHS Perforated Materials, Inc. vs. Diaz, G.R. 185814, (2010)].

A: Yes, because this is a management prerogative which is not due any legal or contractual obligation. – The facts of the case do not state the circumstances through which the shuttle service may be considered as a benefit that ripened into a demandable right. There is no showing that the benefit has been deliberately and consistently granted, i.e. with the Er’s full consciousness that despite its not being

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

A: No. The writs of amparo and habeas data will not issue to protect purely property or commercial concerns nor when the grounds invoked in support of the petitions therefor are vague or doubtful. Employment constitutes a property right under the

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MANAGEMENT PREROGATIVE context of the due process clause of the Constitution. The writ of habeas data directs the issuance of the writ only against public officials or employees, or private individuals or entities engaged in the gathering, collecting or storing of data or information regarding an aggrieved party’s person, family or home; and that MERALCO (or its officers) is clearly not engaged in such activities [MERALCO vs. Lim, G.R. No. 184769, (2010)].

is not motivated by discrimination, bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is inherent in the right of Ers to control and manage their enterprises effectively. Note: The right of Ees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them [Endico vs. Quantum Foods Distribution Center, G.R. No. 161615, (2009)].

DISCIPLINE

Q: May the employer exercise his right to transfer an employee and compel the latter to accept the same if said transfer is coupled with or is in the nature of promotion?

Q: Discuss briefly the employer's right to discipline his employees. A: The Er has the prerogative to instill discipline in his Ees and to impose reasonable penalties, including dismissal, on erring Ees pursuant to company rules and regulations [San Miguel Corporation vs. NLRC, G.R. No. 87277, (1989)].

A: No. There is no law that compels an Ee to accept promotion. Promotion is in the nature of a gift or a reward which a person has a right to refuse. When an Ee refused to accept his promotion, he was exercising his right and cannot be punished for it. While it may be true that the right to transfer or reassign an Ee is an Er’s exclusive right and the prerogative of management, such right is not absolute [Dosch vs. NLRC and Northwest Airlines, G.R. No. 51182, (1983)].

An Er has the prerogative to prescribe reasonable rules and regulations necessary for the proper conduct of its business, to provide certain disciplinary measures in order to implement said rules and to assure that the same would be complied with. An employer enjoys a wide latitude of discretion in the promulgation of policies, rules and regulations on work-related activities of the Ees. This is inherent in its right to control and manage its business effectively [San Miguel Corp. vs.NLRC, 551 SCRA 410].

Q: Who has the burden of proving that the transfer was reasonable? A: The Er must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the Ee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the Er fail to overcome this burden of proof, the Ee’s transfer shall be tantamount to constructive dismissal. [Blue Dairy Corporation vs. NLRC, 314 SCRA 401 (1999)]

Q: Is the power of the employer to discipline his employees absolute? A: No. While management has the prerogative to discipline its Ees and to impose appropriate penalties on erring workers, pursuant to company rules and regulations, however, such management prerogative must be exercised in good faith for the advancement of the Er’s interest and not for the purpose of defeating or circumventing the rights of the Ees under special laws and valid agreements. [PLDT vs. Teves, G.R. No. 143511, (2010)].

Q: What are the limitations on management prerogatives? A: 1. Such that the Er must be motivated by good faith 2. The contracting out should not be resorted to circumvent the law or must not have been the result of malicious or arbitrary actions [MERALCO v. Quisumbing, G.R. no. 127598. (2000)].

TRANSFER OF EMPLOYEES Q: Discuss briefly the employer’s right to transfer and reassign Ees.

PRODUCTIVITY STANDARD

A: In the pursuit of its legitimate business interests, especially during adverse business conditions, management has the prerogative to transfer or assign Ees from one office or area of operation to another provided there is no demotion in rank or diminution of salary, benefits and other privileges and the action

Q: May an employer impose productivity standards for its workers? A: Yes. An Er is entitled to impose productivity standards for its workers. In fact, non-compliance may be visited with a penalty even more severe than

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation demotion. The practice of a company in laying off workers because they failed to make the work quota has been recognized in this jurisdiction. Failure to meet the sales quota assigned to each of them constitute a just cause of their dismissal, regardless of the permanent or probationary status of their employment. Likewise, 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. This management prerogative of requiring standards may be availed of so long as they are exercised in good faith for the advancement of the Er’s interest [Leonardo vs. NLRC, G.R. No. 125303, (2000)].

ordinarily received by or strictly due the recipient. An Er cannot be forced to distribute bonuses when it can no longer afford to pay. To hold otherwise would be to penalize the Er for his past generosity [Producers Bank of the Phil. vs.NLRC, G.R. No. 100701, (2001)]. CHANGE OF WORKING HOURS Q: Discuss briefly the employer’s right to change working hours. A: Well-settled is the rule that management retains the prerogative, whenever exigencies of the service so require, to change the working hours of its Ees. Q: May the normal hours fixed in Art. 83 of the LC be reduced by the employer? Explain. A: Art. 83 provides that the normal hours of work of an Ee shall not exceed 8 hours a day. This implies that the Er, in the exercise of its management prerogatives, may schedule a work shift consisting of less than 8 hours. And following the principle of “a fair day’s wage for a fair day’s labor,” the Er is not obliged to pay an Ee, working for less than 8 hours a day, the wages due for 8 hours. Nonetheless, if by voluntary practice or policy, the Ee for a considerable period of time has been paying his Ees’ wages due for 8 hours work although the work shift less than 8 hours (e.g. seven) it cannot later on increase the working hours without an increase in the pay of the employees affected. An Er is not allowed to withdraw a benefit which he has voluntarily given.

GRANT OF BONUS Q: What is a bonus? A: It is an amount granted and paid to an Ee for his industry and loyalty which contributed to the success of the Er’s business and made possible the realization of profits. Q: Can bonus be demanded? A: GR: Bonus is not demandable as a matter of right. It is a management prerogative given in addition to what is ordinarily received by or strictly due to recipient [Producers Bank of the Phil. vs. NLRC, G.R. No. 100701, (2001)].

RULE ON MARRIAGE BETWEEN EMPLOYEES OF COMPETITOR-EMPLOYEES

XPNs: Given for a long period of time, provided that: 1. Consistent and deliberate – Er continued giving benefit without any condition imposed for its payment; 2. Er knew he was not required to give benefit; 3. Nature of benefit is not dependent on profit; 4. Made part of the wage or compensation agreed and stated in the employment contract.

Q: Is the stipulation in the employment contract prohibiting an employee from marrying another employee of a competitor company a valid exercise of management prerogative? A: Yes. The policy is not aimed at restricting a personal prerogative that belongs only to the individual. However, an employee’s personal decision does not detract the employer from exercising management prerogatives to ensure maximum profit and business success. It does not impose an absolute prohibition against relationships between its employees and those of competitor companies. Its employees are free to cultivate relationships with and marry persons of their own choosing. What the company merely seeks to avoid is a conflict of interest between the employee and the company that may arise out of such relationships.

Q: The projected bonus for the employees of Suerte Co. was 50% of their monthly compensation. Unfortunately, due to the slump in the business, the president reduced the bonus to 5% of their compensation. Can the company unilaterally reduce the amount of bonus? (2002 Bar Question) A: Yes. The granting of a bonus is a management prerogative, something given in addition to what is UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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MANAGEMENT PREROGATIVE It is alos not violative of the equal protection clause because it is a settled principle that the commands of the equal protection clause are addressed only to the State or those acting under color of its authority. Corollarily, it has been held in a long array of U.S. Supreme Court decisions that the equal protection clause erects no shield against merely private conduct, however, discriminatory or wrongful. The only exception occurs when the State in any of its manifestations or actions has been found to have become entwined or involved in the wrongful private conduct. (Duncan Association of Detailman-PTGWO and Pedro A. Tecson v. Glaxo Wellcome Philippines, Inc., G.R. No. 162994, September 17, 2004) POST-EMPLOYMENT BAN Q: Genesis Fulgencio had been working for Solidbank Corporation since 1977. He later on applied for retirement. Solidbank required Genesis to sign an undated Undertaking where he promised that "[he] will not seek employment with a competitor bank or financial institution within one (1) year from February 28, 1995, and that any breach of the Undertaking or the provisions of the Release, Waiver and Quitclaim would entitle Solidbank to a cause of action against him before the appropriate courts of law.” Equitable Banking Corporation (Equitable) employed Genesis. Is the postretirement employment ban incorporated in the Undertaking which Genesis executed upon his retirement is unreasonable, oppressive, hence, contrary to public policy? A: No. There is a distinction between restrictive covenants barring an Ee to accept a post-employment competitive employment or restraint on trade in employment contracts and restraints on postretirement competitive employment in pension and retirement plans either incorporated in employment contracts or in CBAs between the Er and the union of Ees, or separate from said contracts or CBAs which provide that an Ee who accepts post retirement competitive employment will forfeit retirement and other benefits or will be obliged to restitute the same to the Er. The strong weight of authority is that forfeitures for engaging in subsequent competitive employment included in pension and retirement plans are valid even though unrestricted in time or geography. A post-retirement competitive employment restriction is designed to protect the Er against competition by former Ee who may retire and obtain retirement or pension benefits and, at the same time, engage in competitive employment [Rivera vs. Solidbank, G.R. No. 163269, April 19, 2006)].

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation SOCIAL AND WELFARE LEGISLATION (P.D. 629)

his orders as regards the employment, except the Government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government: Provided, That a self-employed person shall be both Ee and Er at the same time. (Sec 8[c], R.A. 8282)

Q: What is Social Legislation? A: It consists of statutes, regulations and jurisprudence that afford protection to labor, especially to working women and minors, and is in full accord with the constitutional provisions on the promotion of social justice to insure the well-being and economic security of all the people.

Q: Who is an employee? A: Any person who performs services for an Er in which either or both mental and physical efforts are used and who receives compensation for such services, where there is an Er-Ee relationship: Provided, That a self-employed person shall be both Ee and Er at the same time. (Sec. 8[d], R.A. 8282)

SOCIAL SECURITY SYSTEM LAW (R.A. 8282) Q: What is the policy objective in the enactment of the Social Security System Law? A: To establish, develop, promote and perfect a sound and viable tax-exempt social security service suitable to the needs of the people throughout the Philippines, which shall promote social justice and provide meaningful protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden. (Sec. 2, R.A. 8282)

Q: What is employment? A: GR: Any service performed by an Ee for his Er. XPNs: 1. Employment purely casual and not for the purpose of occupation or business of the Er; 2. Service performed on or in connection with an alien vessel by an Ee if he is employed when such vessel is outside the Phils; 3. Service performed in the employ of the Phil. Government or instrumentality or agency thereof; 4. Service performed in the employ of a foreign government or international organization, or their wholly-owned instrumentality: 5. Such other services performed by temporary and other Ees which may be excluded by regulation of the SSC. Ees of bona fide independent contractors shall not be deemed Ees of the Er engaging the services of said contractors. (Sec. 8[j], R.A. 8282)

Note: The enactment of SSS law is a legitimate exercise of the police power. It affords protection to labor and is in full accord with the constitutional mandate on the promotion of social justice [Roman Catholic Archbishop of Manila vs. SSS, G.R. No. 15045, (1961)].

Q: Are the SSS premiums considered as taxes? A: No. The funds contributed to the System belong to the members who will receive benefits, as a matter of right, whenever the hazards provided by the law occur [CMS Estate, Inc., vs. SSS, G.R. No. 26298, (1984)].

Q: What is a contingency?

Q: Are benefits received under SSS Law part of the estate of a member?

A: The retirement, death, disability, injury or sickness and maternity of the member.

A: No. Benefits receivable under the SSS Law are in the nature of a special privilege or an arrangement secured by the law pursuant to the policy of the State to provide social security to the workingman. The benefits are specifically declared not transferable and exempt from tax, legal processes and liens [SSS vs. Davac, et. al., G.R. No.21642, (1966)].

COVERAGE Q: Who are covered by SSS? A: 1. Compulsory Coverage a. All Ees not over 60 years of age and their Ers; b. Domestic helpers whose income is not less than P 1000/month and not over 60 years of age and their Ers;

Q: Who is an employer? A: Any person, natural or juridical, domestic or foreign, who carries into the Phils. any trade, business, industry, undertaking or activity of any kind and uses the services of another person who is under UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Limitations:

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SOCIAL AND WELFARE LEGISLATION

c. d. e. f.

g. h.

2.

3.

i. Any benefit earned by the Ees under private benefit plans existing at the time of the approval of the Act shall not be discontinued, reduced or otherwise impaired; ii. Existing private plans shall be integrated with the SSS but if the Er under such plan is contributing more than what is required by this Act, he shall pay to the SSS the amount required to him, and he shall continue with his contributions less the amount paid to SSS; iii. Any changes, adjustments, modifications, eliminations or improvements in the benefits of the remaining private plan after the integration shall be subject to agreements between the Ers and the Ees concerned; and iv. The private benefit plan which the Er shall continue for his Ees shall remain under the Ers management and control unless there is an existing agreement to the contrary All self-employed – considered both an Er and Ee Professionals; Partners and single proprietors of business; Actors and actresses, directors, scriptwriters and news correspondents who do not fall within the definition of the term “Ee”; Professional athletes, coaches, trainers and jockeys; AND Individual farmers and fisherman. (Sec. 9, R.A. 8282)

Any foreign government, international organization, or their wholly-owned instrumentality employing workers in the Philippines, may enter into an agreement with the Philippine government for the inclusion of such Ees in the SSS except those already covered by their respective civil service retirement systems. Q: Are seafarers covered by the SSS Law? A: Yes. The result of the Memorandum of Agreement entered by SSS and DOLE approved by the Social Security Commission per the Commission's Resolution No. 437, dated July 14, 1988 was that the Standard Contract of Employment to be entered into between foreign shipowners and Filipino seafarers is the instrument by which the former express their assent to the inclusion of the latter in the coverage of the Social Security Act. In other words, the extension of the coverage of the SSS to Filipino seafarers arises by virtue of the assent given in the contract of employment signed by Er and seafarer [Ben Sta. Rita v. Court of Appeals, G.R. No. 119891, (1995)]. Note: By extending the benefits of the Social Security Act to Filipino seafarers on board foreign vessels, the individual employment agreements entered into with the stipulation for such coverage contemplated in the DOLE-SSS Memorandum of Agreement, merely gives effect to the constitutional mandate to the State to afford protection to labor whether "local or overseas." (Ibid.)

Q: When is the compulsory coverage deemed effective? A: 1. Employer – on the first day of operation 2. Employee – on the day of his employment 3. Compulsory coverage of self-employed – his registration with the SSS

Voluntary a. Spouses who devote full time to managing the household and family affairs, unless they are also engaged in other vocation or employment which is subject to mandatory coverage ; (Sec. 9[b], R.A. 8282) b. Filipinos recruited by foreign-based Ers for employment abroad may be covered by the SSS on a voluntary basis; (Sec. 9[c], R.A. 8282) c. Ee separated from employment to maintain his right to full benefits d. Self-employed who realizes no income for a certain month

upon

Q: What is the effect of separation of an employee from his employment under compulsory coverage? A: 1. His Er’s obligation to contribute arising from that employment shall cease at the end of the month of separation, 2. But said Ee shall be credited with all contributions paid on his behalf and entitled to benefits according to the provisions of R.A. 9282. 3. He may, however, continue to pay the total contributions to maintain his right to full benefit. (Sec. 11, R.A. 8282)

By agreement

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Note: The above provision recognizes the “once a member, always a member” rule.

A: The contribution shall be determined in accordance with Sec. 18 of the SSS Law, provided that:

Q: What is the effect of interruption of business or professional income?

1. The monthly earnings declared as the time of registration shall be considered as his monthly compensation and he shall pay for both Er and Ee contributions 2. The monthly earnings declared at the time of registration shall remain the basis of his monthly salary credit, unless another declaration of his monthly earnings was made, the latter becomes the new basis of his monthly salary credits. [Sec. 19-A, R.A. No. 8282]

A: If the self-employed member realizes no income in any given month: 1. He shall not be required to pay contributions for that month. 2. He may, however, be allowed to continue paying contributions under the same rules and regulations applicable to a separated Ee member: 3. Provided, that no retroactive payment of contributions shall be allowed other than as prescribed under Sec.22-A. (Sec. 11-A, R.A. 8282)

Q: How much is the monthly pension? A: 1. The monthly pension shall be the highest of the following amounts: a. The sum of the following: i. Php 300.00; plus ii. 20% of the average monthly salary credit; plus iii. 2% of the average monthly salary credit for each credited year of service in excess of 10 years; or b. 40% of the average monthly salary credit; or c. Php 1,000.00, provided that the Monthly Pension shall in no case be paid for an aggregate amount of less than sixty (60) months (Sec. 12 [a], R.A. 8282) 2. Minimum Pension a. Php 1,200.00 - members with at least 10 credited years of service b. Php 2, 400.00 for those with 20 credited years of service. (Sec. [b], R.A. 8282)

Q: What is a self-employed individual? A: A self-employed person is one whose income is not derived from employment as well as those mentioned in Sec. 9-A of the law, including: 1. All self-employed professionals; 2. Partners and single proprietors of business; 3. Actors and actresses, directors, scriptwriters and news correspondents who do not fall within the definition of the term Ee in Sec. 8 of this Act; 4. Professional athletes, coaches, trainers and jockeys; and 5. Individual farmers and fishermen. [Sec. 8(s), RA 8282] Q: On her way home from work, Mikaela, a machine operator in a sash factory, decided to watch a movie in a movie house. However, she is stabbed by an unknown assailant. When she filed a claim for benefits under the SSS Law, it was denied on the ground that her injury is not work-connected. Is the denial legal? Why?

Q: What is an average monthly credit? A: An average monthly credit is the result obtained by: 1. Dividing the sum of the last 60 monthly salary credits immediately preceding the semester of contingency by 60; or 2. Dividing the sum of all the monthly salary credits paid prior to the semester of contingency by the number of monthly contributions paid in the same period, whichever is greater.

A: No. It is not necessary, for the enjoyment of benefits under the SSS Law that the injury is workconnected. What is important is membership in the SSS and not the causal connection of the work of the Ee to his injury or sickness. Note: Claims based on work-connected injuries or occupational diseases are covered by the State Insurance Fund.

Provided, that the injury or sickness which caused the disability shall be deemed as the permanent disability for the purpose of computing the average monthly salary credit.

Q: How are contributions of the self-employed to the SSS determined?

Q: What is an average daily salary credit? UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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SOCIAL AND WELFARE LEGISLATION A: An average salary credit is the result obtained by dividing the sum of the 6 highest monthly salary credits in the 12-month period immediately preceding the semester of contingency by 180.

5.

Such other services performed by temporary and other Ees which may be excluded by regulation of the Commission. Ees of bona fide independent contractors shall not be deemed Ees of the Er engaging the service of said contractors.

Q: May the monthly pension be suspended? Q: A textile company hires 10 carpenters to repair the roof of its factory which was destroyed by typhoon “Bening.” Are the carpenters subject to compulsory coverage under the SSS Law? Why?

A: Yes. The monthly pension and dependents’ pension shall be suspended: 1. 2. 3.

Upon the reemployment or resumption of selfemployment; Recovery of the disabled member from his permanent total disability Failure to present himself for examination at least once a year upon notice by the SSS. [Sec. 13-A (b), RA 8282]

A: No. the employment is purely casual and not for the purpose of the occupation or business of the Er. Their engagement is occasioned by the passage of the typhoon; they are not hired on a regular basis. BENEFITS

EXCLUSIONS FROM COVERAGE

Q: What are the Benefits under the SSS Act?

Q: Enumerate the kinds of employment which are excluded from compulsory coverage under the SSS Law.

A: 1. 2. 3. 4. 5.

A: Under Section 8(j) of R.A. 1161, as amended, the following services or employments are excluded from coverage: 1. 2.

3.

4.

Sickness Benefits Permanent Disability Benefits Maternity Leave Benefit Retirement Benefit Death and funeral Benefits

Q: Are the Benefits provided for in the SSS Law transferable?

Employment purely casual and not for the purpose of occupation or business of the Er; Service performed on or in connection with an alien vessel by an employee if he is employed when such vessel is outside the Philippines; Service performed in the employ of the Philippine Government or instrumentality or agency thereof; Service performed in the employ of a foreign government or international organization, or their wholly-owned instrumentality:

A: Benefits provided for in the SSS Law are not transferable and no power of attorney or other document executed by those entitled thereto in favor of any agent, attorney or any other person for the collection thereof on their behalf shall be recognized, except when they are physically unable to collect personally such benefits. (Sec.15, R.A. 1161, as amended) Q: What are the reportorial requirements of the employer and self-employed?

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 an agreement with the Philippine Government for the inclusion of such Ees 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 this Act on coverage and amount of payment of contributions and benefits: Provided, finally, That the provisions of this Act shall be supplementary to any such agreement; and

A: 1. Er - Report immediately to SSS the names, ages, civil status, occupations, salaries and dependents of all his covered Ees 2. Self-employed - Report to SSS within 30 days from the first day of his operation, his name, age, civil status, occupation, average monthly net income and his dependents SICKNESS BENEFITS Q: What is sickness benefit?

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Labor Law and Social Legislation A: It is a daily allowance paid to a covered Ee who becomes sick and is confined in a hospital for more than 3 days or elsewhere with the Commission’s approval.

b. c.

Q: What are the requirements to be entitled for sickness benefit? A: Under Sec. 14 of the Social Security Law, the following are the requisites for the enjoyment by a covered individual of the sickness benefits: 1.

2.

3.

4.

Not paid for more than 240 days on account of the same confinement; and Ee member shall notify his Er of the fact of his sickness or injury within 5 calendar days after the start of his confinement unless such confinement: i. is in a hospital ii. the Ee became sick or was injured while working or within the premises of the Er (notification to the Er not necessary); Note: If the member is unemployed or self-employed, he shall directly notify the SSS of his confinement within 5 calendar days after the start thereof unless such confinement is in a hospital in which case notification is also not necessary;

Payment of at least 3 monthly contributions in the 12-month period immediately preceding the semester of sickness; Sickness or injury and confinement for more than 3 days in a hospital or elsewhere with the Commission’s approval; Notice of the fact of sickness by the Ee to the Er (or to the SSS in case the member is unemployed) within 5 calendar days after the start of his confinement; and Exhaustion of sick leaves of absence with full pay to the credit of the Ee.

Where notification is necessary, confinement shall be deemed to have started not earlier than the 5th day immediately preceding the date of notification. (Sec.14 [b], R.A. 8282) Note: The law does not require that sickness must be related to the duties of the beneficiaries.

Q: When will compensable confinement commence?

Q: May the requirement of notification be dispensed with?

A: 1. Begins on the 1st day of sickness 2. Payment of such allowances shall be promptly made by the Er: th a. every regular payday or on the 15 and last day of each month, b. in case of direct payment by the SSS - as long as such allowances are due and payable. (Sec. 14[b], R.A. 8282)

A: Yes. Notification is not necessary when: 1. Confinement is in a hospital; or 2. The employee became sick or was injured while working or within the premises of the employer. Q: Who will pay the sickness benefits and how much is the benefit?

Q: What are the requirements in order that Er may claim reimbursement of the sickness benefit?

A: 1. The Er shall pay the Ee for each compensable confinement or fraction thereof

The following requisites must be complied with in order to avail of sickness benefits:

A: 1. 100% of daily benefits shall be reimbursed by SSS if the following requirements are satisfied: a. Receipt of SSS of satisfactory proof of such payment and legality thereof; b. The Er has notified the SSS of the confinement within 5 calendar days after receipt of the notification from the Ee member.

a.

2.

2. The SSS shall pay the member who is unemployed, self-employed or voluntary members with a daily sickness benefit equivalent to 90% of his average daily salary credit.

In no case shall the daily sickness benefit be paid longer than 120 days in 1 calendar year, nor shall any unused portion of the 120 days of sickness benefit granted be carried forward and added to the total number of compensable days allowable in the subsequent year;

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Er shall be reimbursed only for each day of th confinement starting from the 10 calendar day immediately preceding the date of notification to the SSS if the notification to the SSS is made beyond 5 calendar days after receipt of the notification from the Ee member. (Sec. 14 [c], R.A. 8282)

SOCIAL AND WELFARE LEGISLATION Q: When will reimbursement be made by SSS?

b.

A: GR: SSS shall reimburse the Er or pay the unemployed member only for confinement within 1 year immediately preceding the date the claim for benefit or reimbursement is received by the SSS. XPN: Confinement in a hospital in which case the claim for benefit or reimbursement must be filed within 1 year from the last day of confinement. (Sec. 14[c], R.A. 8282)

3.

Not gainfully employed and has not reached the age of 21 years of age; or c. If over 21 years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of selfsupport, physically or mentally; and The parent who is receiving regular support from the member. [Sec. 8 (e), RA 8282]

Q: Compare death benefits with permanent total disability benefits

Q: When is the employer or the unemployed member not entitled to reimbursement?

A: A: 1. Where the Er failed to notify the SSS of the confinement; 2. In the case of the unemployed; where he failed to send the notice directly to the SSS except when the confinement is in a hospital; and 3. Where the claim for reimbursement is made after 1 year from the date of confinement.

Death Benefits

PTD Benefits

Requisite at least 36 monthly contributions Benefits payable to whom Primary Beneficiaries Member Failure to make 36 monthly payments Benefits shall be in lump sum equivalent to the monthly pension times the number of monthly contributions paid to SSS or 12 times the monthly pension, whichever is higher.

PERMANENT DISABILITY BENEFITS Q: What is a permanent disability benefit?

Q: What is the effect of the death of the PTD pensioner?

A: It is a cash benefit paid to a member who becomes permanently disabled, either partially or totally.

A: 1. Primary beneficiaries are entitled to receive monthly pension as of the date of disability. 2. No primary beneficiaries and he dies within 60 months from the start of his monthly pension secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the 5year guaranteed period excluding the dependents’ pension. (Sec. 13-A [c], R.A. 8282)

Q: What disabilities are deemed permanent total disability? A: Under Sec. 13-A (d) of the SSS Law, the following disabilities are deemed permanent total: 1. Complete loss of sight of both eyes; 2. Loss of two limbs at or above the ankle or wrists; 3. Permanent complete paralysis of two limbs; 4. Brain injury resulting to incurable imbecility or insanity; and 5. Such cases as determined and approved by the SSS.

Q: What is the effect of retirement or death to partial disability pension? A: Disability pension shall cease upon his retirement or death. (Sec 13-A [j], R.A. 8282)

Q: Among the persons entitled to permanent disability benefits are the dependents of the covered employee. Who are these dependent?

Q: What is the difference of compensability under the Labor Law and the Social Security Law? A: The claims are different as to their nature and purpose [Ortega vs. Social Security Commission, G.R. No. 176150, (2008)].

A: The dependents shall be the following: 1. The legal spouse entitled by law to receive support from the member; 2. The legitimate, legitimated or legally adopted and illegitimate child who is: a. Unmarried

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Labor Law and Social Legislation RETIREMENT BENEFIT

LABOR LAW

SOCIAL SECURITY LAW Purpose Governs compensability Benefits are intended to of : provide insurance or 1. work-related protection against the disabilities hazards or risks of 2. when there is loss disability, sickness, old of income due to age or death, inter alia, work-connected irrespective of whether or work- they arose from or in the aggravated injury course of the or illness. employment. Nature A disability is total and Disability may be permanent if as a result permanent total or of the injury or sickness permanent partial. the Ee is unable to perform any gainful occupation for a continuous period exceeding 120 days regardless of whether he loses the use of any of his body parts.

Q: What is a retirement benefit? A: It is a cash benefit paid to a member who can no longer work due to old age. Q: What are the types of retirement benefits? A: 1. Monthly Pension - Lifetime cash benefit paid to a retiree who has paid at least 120 monthly contributions to the SSS prior to the semester of retirement. 2. Lump Sum Amount - Granted to a retiree who has not paid the required 120 monthly contributions. Q: Who are entitled to retirement benefits? A: 1. A member who a. is at least 60 years old b. has paid at least 120 monthly contributions prior to the semester of retirement; and c. already separated from employment or has ceased to be self-employed,

MATERNITY LEAVE BENEFIT Q: What is the maternity benefit? A: The maternity benefit is a daily cash allowance granted to a female member who was unable to work due to childbirth or miscarriage. Q: What are the qualifications for entitlement to the maternity benefit? A: 1. She has paid at least three monthly contributions within the 12-month period immediately preceding the semester of her childbirth or miscarriage. 2. She has given the required notification of her pregnancy through her Er if employed, or to the SSS if separated, voluntary or self-employed member.

2.

A member who is at least 65 years old, shall be entitled for as long as he lives to the monthly pension; (Sec 12-B [a], R.A. 8282)

3.

A member a. At least 60 years old at retirement; and b. Does not qualify for pension benefits under paragraph (a) above - entitled to a lump sum benefit equal to the total contributions paid by him and on his behalf; c. Must be separated from employment and is not continuing payment of contributions to the SSS on his own. (Sec. 12-B [b], R.A. 8282)

Q: What happens when the retirement pensioner is re-employed or resumes self-employment? A: The monthly pension of a retirement pensioner who resumes employment and is less than 65 years old will be suspended. He and his Er will again be subject to compulsory coverage. (Sec. 12-B [c], R.A. 8282)

Q: Is the voluntary or self-employed member also entitled to the maternity benefit? A: Yes, A voluntary or a self-employed member is entitled to the maternity benefit provided that she meets the qualifying conditions as mentioned in the preceding question.

Q: Are the children of a retiree member entitled to the dependent's pension? A: Yes (Sec. 12[A], R.A. 8282). However, only 5 minor children, beginning from the youngest, are entitled to

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SOCIAL AND WELFARE LEGISLATION the dependent’s pension. No substitution is allowed. Where there are more than 5 legitimate and illegitimate children, the legitimate ones will be preferred.

A: 1. Dependent parents 2. In the absence of the foregoing, any other person designated by the covered employee as secondary beneficiary. [Sec. 8(k), R.A. 8282]

Q: For how long will the dependent child receive the pension?

Q: Who are considered dependents?

A: Until the child reaches 21 years of age, gets married, gets employed and earns Php 300 a month or more, or dies.

A: 1. The legal spouse entitled by law to receive support from the member; 2. The legitimate, legitimated, or legally adopted, and illegitimate child who: a. Is unmarried, b. Not gainfully employed, and c. Has not reached 21 years of age, or if over 21 years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally. 3. The parent who is receiving regular support from the member.

However, the dependent's pension is granted for life to children who are over 21 years old, provided they are incapacitated and incapable of self-support due to physical or mental defect which is congenital or acquired during minority. DEATH AND FUNERAL BENEFITS Q: When is a beneficiary entitled to death benefits? A: 1. Upon death of a member, if he has paid at least 36 monthly contributions prior to the semester of death: a. primary beneficiaries shall be entitled to the monthly pension; or b. If there are no primary beneficiaries, secondary beneficiaries shall be entitled to a lump sum benefit equivalent to 36 times the monthly pension. 2. Upon death of a member If he has not paid the required 36 monthly contributions prior to the semester of death: a. Primary or secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the monthly pension multiplied by the number of monthly contributions paid to the SSS: or b. 12 times the monthly pension, whichever is higher. (Sec. 13, R.A. 8282)

Q: How long shall the primary beneficiaries be entitled to the death benefits consisting of monthly pension and dependent’s pension? A: 1. Dependent spouse – entitled until he/she remarries 2. Dependent children – entitled until: a) They get married; b) Find gainful employment; c) Reach the age of 21 years; or d) Recover from mental or physical incapacity and can now support themselves. Q: What is the funeral benefit? A: A funeral grant equivalent to Php 12, 000.00 shall be paid, in cash or in kind, to help defray the cost of expenses upon the death of a member or retiree. (Sec. 13-B, R.A. 8282)

Q: Who are primary beneficiaries? BENEFICIARIES A: 1. The dependent spouse until he or she remarries 2. The dependent legitimate, legitimated or legally adopted, and illegitimate children: Provided, that the dependent illegitimate children shall be entitled to 50% of the share of the legitimate, legitimated or legally adopted children.

Q: What is meant by “dependent for support”? A: The entitlement to benefits as a primary beneficiary requires not only legitimacy but also dependence upon the member Ee [Gil v. SSC CA- GR SP. 37150, (1996)].

Q: Who are secondary beneficiaries?

If a wife who is already separated de facto from her husband cannot be said to be "dependent for support" upon the husband, absent any showing to

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Labor Law and Social Legislation the contrary. Conversely, if it is proved that the husband and wife were still living together at the time of his death, it would be safe to presume that she was dependent on the husband for support, unless it is shown that she is capable of providing for herself [SSS vs. Aguas, G.R. No. 165546, (2006)].

renovate its building. The work to be performed by these 50 people is not in connection with the purpose of the business of the factory. Hence, the employment of these 50 persons is purely casual. They are, therefore, excepted from the compulsory coverage of the SSS law.

Q: A, an SSS member was survived by his legal wife, who is not dependent upon him. He was also survived by two common-law wives with whom he had illegitimate minor children. Who among them is entitled to the benefits?

Q: How are disputes settled? A:

A: The illegitimate minor children shall be entitled to the death benefits as primary beneficiaries because the legal wife is not dependent upon the member. The SSS Law is clear that for a minor child to qualify as a “dependent” the only requirements are that he/she must be below 21 yrs. of age, not married nor gainfully employed [Signey vs. SSS, G.R. No. 173582, (2008)].

Social Security Commission (SSC)

Q: What is compensation?

Note: Disputes within the mandatory period of 20 days after the submission of evidence. (Sec. 5a, R.A. 8282) Decision, in the absence of appeal, shall be final and executory 15 days after date of notification. (Sec. 5b, R.A. 8282)

A: All actual remuneration for employment, including the mandated cost of living allowance, as well as the cash value of any remuneration paid in any medium other than cash except that part of the remuneration received during the month in excess of the maximum salary.

CA / SC

Q: The owners of FALCON Factory, a company engaged in the assembling of automotive components, decided to have their building renovated. (50) persons, composed of engineers, architects and other construction workers, were hired by the company for this purpose. The work was estimated to be completed in 3 years. The workers contended that since the work would be completed after more than 1 year, they should be subject to compulsory coverage under the Social Security Law. Do you agree with their contention? Explain your answer fully. (2000 Bar Question)

Execution of decision

Decisions of SSC shall be appealable to: 1. CA – questions of law and fact (Sec. 5c, R.A. 8282) 2. SC – questions of law. (Sec. 5c, R.A. 8282) SSC may, motu proprio or on motion of any interested party, issue a writ of execution to enforce any of its decisions or awards, after it has become final and executory. (Sec. 5d¸ R.A. 8282)

Q: Can the SSC validly re-evaluate the findings of the RTC, and on its own, declare the latter’s decision to be bereft of any basis? A: No. It cannot review, much less reverse, decisions rendered by courts of law as it did in the case at bar when it declared that the CFI Order was obtained through fraud and subsequently disregarded the same, making its own findings with respect to the validity of Bailon and Alice’s marriage on the one hand and the invalidity of Bailon and Teresita’s marriage on the other. In interfering with and passing upon the CFI Order, the SSC virtually acted as an appellate court. The law does not give the SSC unfettered discretion to trifle with orders of regular courts in the exercise of its authority to determine the beneficiaries of the SSS [SSS vs. Teresita Jarque Vda. De Bailon, G.R. No. 165545, (2006)].

A: No. Under Sec. 8 (j) of R.A. 1161, as amended, employment of purely casual and not for the purpose of the occupation or business of the Er is excepted from compulsory coverage. An employment is purely casual if it is not for the purpose of occupation or business of the Er. In the problem given, Falcon Factory is a company engaged in the assembly of automotive components. The 50 persons (engineers, architects and construction workers) were hired by Falcon Factory to UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

DISPUTE SETTLEMENT Disputes involving: 1. Coverage 2. Benefits 3. Contributions 4. Penalties 5. Any other matter related thereto.

128

SOCIAL AND WELFARE LEGISLATION Q: Due to the delinquency incurred by ABC Co. incurred on its premium and loan amortizations, SSS suggested settling its obligation either through instalment or through dacion en pago. ABC chose dacion en pago and offered its property situated in Baguio City. It was approved by the SSS. However, SSS refused to accept the payment unless the interest and charges will be paid. ABC then filed suit in court. SSS moved for dismissal contending that the SSC, and not regular courts, has the jurisdiction to entertain a controversy arising from the nonimplementation of a dacion en pago agreed upon by the parties as a means of settlement of ABC’s liabilities. Resolve.

2.

A: The law clearly vests upon the Commission jurisdiction over “disputes arising under this Act with respect to coverage, benefits, contributions and penalties thereon or any matter related thereto...” Dispute is defined as “a conflict or controversy.”From the allegations of the complaint, it readily appears that there is no longer any dispute with respect to ABC’s accountability to the SSS. It had, in fact, admitted their delinquency and offered to settle them by way of dacion en pago subsequently approved by the SSS in Resolution No. 270-s. 2001. The controversy, instead, lies in the nonimplementation of the approved and agreed dacion en pago on the part of the SSS. As such, ABC filed a suit to obtain its enforcement which is, doubtless, a suit for specific performance and one incapable of pecuniary estimation beyond the competence of the Commission [SSS vs. Atlantic Gulf and Pacific Company of Manila, Inc. and Semirara Coal Corp., G.R. No. 175952, (2008)].

Q: What is compensation?

3. 4.

Q: Who is an employee or member? A: Any person, receiving compensation while in the service of an Er, whether by election or appointment, irrespective of status of appointment, including barangay and sanggunian officials. (Sec. 2[d], R.A. 8291)

A: The basic pay or salary received by an Ee, pursuant to his or her election or appointment, excluding per diems, bonuses, OT pay, honoraria, allowances and any other emoluments received in addition to the basic pay which are not integrated into the basic pay under existing laws. (Sec. 2[i], R.A. 8291) Q: Baradero is a member of the Sangguniang Bayan of the Municipality of La Castellana, Negros Occ. and is paid on a per diem basis. On the other hand, Belo a Vice-Governor of Capiz is in a hold over capacity and is paid on a per diem basis. Are the services rendered by Baradero and Belo on a per diem basis creditable in computing the length of service for retirement purposes? A: Yes. The traditional meaning of per diem is a reimbursement for extra expenses incurred by the public official in the performance of his duties. Under this definition the per diem is intended to cover the cost of lodging and subsistence of officers and employees when the latter are on a duty outside of their permanent station. On the other hand, a per diem could rightfully be considered a compensation or remuneration attached to an office.

GSIS LAW (R.A. 8291) Q: What are the purposes behind the enactment of the GSIS Law? A: To provide and administer the following social security benefits for government Ees: 1. 2. 3. 4.

Its political subdivisions, branches, agencies, instrumentalities GOCCs, and financial institutions with original charters Constitutional Commissions and the Judiciary (Sec. 2[c], R.A. 8291)

Compulsory life insurance Optional life insurance Retirement benefits Disability benefits to work-related contingencies; and Death benefits

The per diems paid to Baradero and Belo were in the nature of compensation or remuneration for their services as Sangguniang Bayan and Vice-Governor, respectively, rather than a reimbursement for incidental expenses incurred while away from their home base.

Q: Who are considered employers under the GSIS Act?

If the remuneration received by a public official in the performance of his duties does not constitute a mere “allowance for expenses” but appears to be his actual base pay, then no amount of categorizing the salary as a “per diem” would take the allowances received

5.

A: 1. National Government

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Labor Law and Social Legislation from the term service with compensation for the purpose of computing the number of years of service in government [GSIS v. CSC, G. R. Nos. 98395 and 102449, (1995)].

EXCLUSIONS FROM COVERAGE Q: Who are excluded from the coverage of the GSIS Law?

Q: What is the penalty in case of delayed remittance or non-remittance of contributions?

A: 1. Ees who have separate retirement schemes (members of the Judiciary, Constitutional Commissions and others similarly situated) 2. Contractual Ees who have no Er-Ee with the agencies they serve 3. Uniformed members of the AFP, BJMP, whose coverage by the GSIS has ceased effective June 24, 1997 4. Uniformed members of the PNP whose coverage by the GSIS has ceased effective February 1, 1996. (Sec. 2.4, Rule II, IRR, R.A. 8291)

A: The unremitted contributions shall be charged interests as prescribed by the GSIS Board of Trustees but shall not be less than 2% simple interest per month from due date to the date of payment by the employers concerned (Sec. 7, R.A. 8291). COVERAGE Q: State briefly the compulsory coverage of the GSIS. (2009 Bar Question)

Q: For the purpose of benefit entitlement, how are the members classified?

A: The following are compulsorily covered by the GSIS pursuant to Sec. 3 of RA 8291: 1. All Ees receiving compensation who have not reached the compulsory retirement age, irrespective of employment status. 2. Members of the judiciary and constitutional commissions for life insurance policy.

A: 1. Active members a. Still in the service and are paying integrated premiums. b. Covered for the entire package benefits and privileges being extended by GSIS.

Q: Who are the government Ees subject to coverage under the GSIS?

2.

A: GR: All Ees receiving compensation who have not reached the compulsory retirement age, irrespective of employment status. XPNs: 1. Uniformed members of the: a. AFP; and b. PNP. 2. Contractuals who have no Er and Ee relationship with the agencies they serve.

Policyholders a. Covered for life insurance only b. Can avail of policy loan privilege only c. May also apply for housing loans d. Judiciary and Constitutional Commissions 3. a.

b.

Q: Who are covered by life insurance, retirement and other social security protection?

Retired Members Former active members who have retired from the service and are already enjoying the corresponding retirement benefits applied for Not entitled to any loan privilege, except stock purchase loan (Sec. 2.2, Rules II, IRR, R.A. 8291) BENEFITS

A: GR: All members of the GSIS shall have life insurance, retirement, and all other social security protections such as disability, survivorship, separation, and unemployment benefits. (Sec. 3, R.A. 8291)

Q: What are the Benefits provided under the GSIS Act? A: 1. 2. 3. 4. 5. 6. 7.

XPNs: Members of: 1. The judiciary; and 2. Constitutional commissions Note: They shall have life insurance only.

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Separation Unemployment or involuntary separation Retirement Permanent disability Temporary disability Survivorship Funeral

SOCIAL AND WELFARE LEGISLATION 8. 9.

In the case of forfeiture, the separated employee shall be entitled to receive only ½ of the cash surrender value of his insurance.

Life Insurance Such other benefits and protection as may be extended to them by the GSIS such as loans.

UNEMPLOYMENT BENEFITS

Q: Who shall be compulsorily covered with life insurance?

Q: What are the conditions for entitlement to unemployment benefits?

A: G.R.: All Ees

A: 1. The recipient must be a permanent Ee at the time of separation; 2. His separation was involuntary due to the abolition of his office or position resulting from reorganization; and 3. He has been paying the contribution for at least 1 year prior to separation.

XPN: All members of the Armed Forces of the Philippines and the Philippine National Police (PNP) Q: What are the reportorial requirements of the Er? A: Er must report to GSIS the names, employment status, positions, salaries of the employee and such other matter as determined by the GSIS.

Q: What will consist of an unemployment benefit?

SEPARATION BENEFITS

A: It will consists of cash payment equivalent to 50% of the average monthly compensation

Q: When will a member be entitled to separation benefits?

Note: A member who has rendered at least 15 years of service will be entitled to separation benefits instead of unemployment benefits.

A: A member who has rendered a minimum of 3 years creditable service shall be entitled to separation benefit upon resignation or separation under the following terms: 1.

2.

RETIREMENT BENEFITS Q: What are the conditions in order to be entitled to Retirement Benefits?

A member with at least 3 years but less than 15 years: Cash payment equivalent to 100% of the AMC for every year of service the member has paid contributions: a. not less than Php 12,000.00 b. Payable upon reaching 60 years of age or upon separation, whichever comes later.

A: 1. A member has rendered at least 15 years of service; 2. He is at least 60 years of age at the time of retirement; and 3. He is not receiving a monthly pension benefit from permanent total disability. (Sec. 13-A, R.A. 8291)

A member with less than 15 years of service and less than 60 years of age at the time of resignation or separation: a. Cash payment equivalent to 18 times the basic monthly pension (BMP), payable at the time of resignation or separation b. An old-age pension benefit equal to the basic monthly pension, payable monthly for life upon reaching the age of 60.

Q: What is the rule in case of extension of service in order to be entitled for Retirement Benefit? A: Rabor v. CSC (G.R. No. 111812, May 1995), held that the head of the government agency concerned is vested with discretionary authority to allow or disallow extension of the service of an official or Ee who has reached 65 years old without completing the 15 years of government service. However, this discretion is to be exercise conformably with the provisions of Civil Service Memorandum Circular No. 27, series of 1990 which provides that the extension shall not exceed 1 year.

Q: What are the effects of separation from service with regard to membership? A: A member separated from the service shall continue to be a member and shall be entitled to whatever benefits he has qualified to. Note: A member separated for a valid cause shall automatically forfeit his benefits, unless the terms of resignation or separation provide otherwise.

Q: What is the reason for compulsory retirement?

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Labor Law and Social Legislation A: The compulsory retirement of government officials and Ees upon their reaching the age of 65 years is founded on public policy which aims by it to maintain efficiency in the government service and at the same time give to the retiring public servants the opportunity to enjoy during the remainder of their lives the recompense, for their long service and devotion to the government , in the form of a comparatively easier life, freed from the rigors of civil service discipline and the exacting demands that the nature of their work and their relations with their superiors as well as the public would impose upon them [Beronilla vs. GSIS, G.R. No. 21723, (1970)].

Q: What are the two types of permanent disability? A: 1. Permanent Total Disability (PTD) - accrues or arises when recovery from any loss or impairment of the normal functions of the physical and/or mental faculty of a member which reduces or eliminates his capacity to continue with his current gainful occupation or engage in any other gainful occupation is medically remote. [Section 2 (q) and (s) R.A. 8291] 2. Permanent Partial Disability (PPD) - accrues or arises upon the irrevocable loss or impairment of certain portion/s of the physical faculties, despite which the member is able to pursue a gainful occupation. (Sec. 2[u], R.A. 8291)

Q: What are the options of the retiree with regard to his or her retirement benefits? A: The retiree may get either of the following:

Q: What are the benefits which an employee is entitled to in case of a PTD?

1. Lump sum equivalent to 6 months of the basic monthly pension (BMP) payable at the time of retirement and an old-age pension benefit equal to BMP payable for life, starting upon the expiration of the 5 years covered by the lump sum; or 2. Cash payment equivalent to 18 times his BMP and monthly pension for life payable immediately. (Sec. 13[a], R.A. 8291)

A: 1. A member is entitled to the monthly income benefit for life equivalent to the BMP when: a. He is in the service at the time of the disability or b. If separated from service c. He has paid at least 36 monthly contributions within 5 years immediately preceding his disability d. He has paid a total of at least 180 monthly contribution prior his disability e. He is not receiving old-age retirement pension benefits

PERMANENT DISABILITY BENEFITS Q: What is disability? A: Any loss or impairment of the normal functions of the physical and/or mental faculty of a member, which reduces or eliminates his/her capacity to continue with his/her current gainful occupation or engage in any other gainful occupation.

2. If the member does not satisfy the conditions above but has rendered at least 3- years-service, he shall be advanced the cash payment equivalent to 100% of his average monthly compensation for each year of service he has pad contributions but not less than Php 12,000.00 which should have been his separation benefit (he shall no longer receive separation benefits)

Q: What is total disability? A: Complete incapacity to continue with present employment or engage in any gainful occupation due to the loss or impairment of the normal functions of the physical and/or mental faculties of the member.

Q: What are the benefits which an employee is entitled to in case of a PPD?

Q: What are the conditions in order to be entitled for permanent disability benefits?

A: A member is entitled to cash payment in accordance with the schedule of disabilities to be prescribed by GSIS, if he satisfies the given conditions of either (1) or (2) of Sec. 16(a).

A: The permanent disability was not due to any of the following: 1. 2. 3. 4.

Grave misconduct Notorious negligence Habitual intoxication Willful intention to kill himself or another UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Q: When will the payment of these benefits be suspended?

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SOCIAL AND WELFARE LEGISLATION A: 1. In case a member is re-employed; or 2. Member recovers from disability as determined by the GSIS; or 3. Fails to present himself for medical examination when required by the GSIS. (Sec. 16 [c], R.A. 8291)

Q: Under what conditions are the primary beneficiaries entitled to the basic monthly pension? A: Upon the death of a member, the primary beneficiaries shall be entitled to: 1.

Survivorship pension: Provided, That the deceased: a. was in the service at the time of his death; or b. if separated from the service, has rendered at least 3 years of service at the time of his death and has paid 36 monthly contributions within the five-year period immediately preceding his death; or has paid a total of at least 180 monthly contributions prior to his death; or

2.

The survivorship pension plus a cash payment equivalent to 100% of his average monthly compensation for every year of service: Provided, that the deceased was in the service at the time of his death with at least 3 years of service; or

TEMPORARY DISABILITY BENEFITS Q: When does temporary total disability arise? A: It accrues or arises when the impaired physical and/or mental faculties can be rehabilitated and/or restored to their normal functions. (Sec 2[t], R.A. 8291) Q: What benefits are given for temporary disability? A: 1. Member is entitled to 75% of his current daily compensation for each day or fraction thereof of th total disability benefit, to start at the 4 day but not exceeding 120 days in one calendar year when: a. He has exhausted all sick leaves b. CBA sick leave benefits Provided, that: i. He was in the service at time of disability; or ii. If separated, he has rendered at least 3 years of service and has paid at least 6 monthly contributions in the year preceding his disability 2. The temporary total disability benefits shall in no case be less than P70 a day.

3. A cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than Php 12,000.00: Provided, that the deceased has rendered at least 3 years of service prior to his death but does not qualify for the benefits under item (1) or (2) of this paragraph. [Sec. 21 (a), R.A. 8291] Q: After the end of the guaranteed 30 months, are the beneficiaries still entitled to any survivorship benefits? A: Yes. The survivorship pension shall be paid as follows:

Note: A member cannot enjoy the temporary total disability benefit and sick leave pay simultaneously.

1.

An application for disability must be filed with the GSIS within 4 years from the date of the occurrence of the contingency.

2.

SURVIVORSHIP BENEFITS Q: Who are entitled to survivorship benefits? A: Upon the death of a member or pensioner, his beneficiaries shall be entitled to survivorship benefits. Such benefit shall consist of: 1. 2.

3.

The basic survivorship pension which is 50% of the basic monthly pension; and The dependent children’s pension not exceeding 50% of the basic monthly pension

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When the dependent spouse is the only survivor, he/she shall receive the basic survivorship pension for life or until he or she remarries; When only dependent children are the survivors, they shall be entitled to the basic survivorship pension for as long as they are qualified, plus the dependent children’s pension equivalent to 10% of the basic monthly pension for every dependent child not exceeding 5, counted from the youngest and without substitution; When the survivors are the dependent spouse and the dependent children, the dependent spouse shall receive the basic survivorship pension for life or until he/she remarries, and the dependent children shall receive the dependent children’s pension. (Sec. 21[b], R.A. 8291)

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Note: The dependent children shall be entitled to the survivorship pension as long as there are dependent children and, thereafter, the surviving spouse shall receive the basic survivorship pension for life or until he or she remarries.

claim for death benefits with the GSIS? Why? (1991 Bar Question) A: The beneficiaries of a member of the GSIS are entitled to the benefits arising from the death of said member. Death benefits are called survivorship benefits under the GSIS Law. Not being a beneficiary, Bella is not entitled to receive survivorship benefits. She is not a beneficiary because she is a commonlaw wife and not a legal dependent spouse.

Q: When are secondary beneficiaries entitled to survivorship benefits? A: In the absence of primary beneficiaries, the secondary beneficiaries shall be entitled to: 1.

2.

Q: Is the cause of death of Gary (cardiac arrest due to accidental electrocution in his house) compensable? Why?

The cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than Php 12,000.00: Provided, That the member is in the service at the time of his death and has at least 3 years of service; or In the absence of secondary beneficiaries, the benefits under this paragraph shall be paid to his legal heirs. (Sec. 21[c], R.A. 8291)

A: Yes. To be compensable under the GSIS Law, the death need not be work connected. Q: Abraham, a policeman, was on leave for a month. While resting in their house, he heard two of his neighbors fighting with each other. Abraham rushed to the scene intending to pacify the protagonists. However, he was shot to death by one of the protagonists. Eva Joy, a housemaid, was Abraham's surviving spouse whom he had abandoned for another woman years back. When she learned of Abraham's death, Eva Joy filed a claim with the GSIS for death benefits. However, her claim was denied because: (a) when Abraham was killed, he was on leave; and (b) she was not the dependent spouse of Abraham when he died. Resolve with reasons whether GSIS is correct in denying the claim. (2005 Bar Question)

Q: What are the benefits that the beneficiaries are entitled to upon the death of the pensioner? A: 1. Upon the death of an old-age pensioner or a member receiving the monthly income benefit for permanent disability, the qualified beneficiaries shall be entitled to the survivorship pension. 2. When the pensioner dies within the period covered by the lump sum, the survivorship pension shall be paid only after the expiration of such period.

A: Yes, because under the law, a dependent is one who is a legitimate spouse living with the Ee. (Art. 167 [i], LC) In the problem given, Eva Joy had been abandoned by Abraham who was then living already with another woman at the time of his death.

Q: Gary Leseng was employed as a public school teacher at the Marinduque High. On April 27, 1997, a memorandum was issued by the school principal designating Gary to prepare the model dam project, which will be the official entry of the school in the search for Outstanding Improvised Secondary Science Equipment for Teachers. Gary complied with his superior's instruction and took home the project to enable him to finish before the deadline. While working on the model dam project, he came to contact with a live wire and was electrocuted. The death certificate showed that he died of cardiac arrest due to accidental electrocution.

Moreover, Abraham was on leave when he was killed. The 24-hour duty rule does not apply when the policeman is on vacation leave [ECC v. CA, G.R. No. 121545, (1996)]. Taking together jurisprudence and the pertinent guidelines of the ECC with respect to claims for death benefits, namely: 1. 2.

Bella (Gary’s common-law wife) and Jobo (his only son) filed a claim for death benefits with the GSIS which was denied on the ground that Gary’s death did not arise out of and in the course of employment and therefore not compensable because the accident occurred in his house and not in the school premises. Is Bella entitled to file a UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

3.

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That the Ee must be at the place where his work requires him to be; That the Ee must have been performing his official functions; and That if the injury is sustained elsewhere, the Ee must have been executing an order for the Er, it is not difficult to understand then why Eva Joy's claim was denied by the GSIS [Tancinco v. GSIS, G.R. No. 132916, (2001)].

SOCIAL AND WELFARE LEGISLATION Q: When does compulsory life insurance coverage take effect?

In the present case, Abraham was resting at his house when the incident happened; thus, he was not at the place where his work required him to be. Although at the time of his death Abraham was performing a police function, it cannot be said that his death occurred elsewhere other than the place where he was supposed to be because he was executing an order for his Er.

A: All Ees including the members of the Judiciary and the Constitutional Commissioners except for Members of the AFP, the PNP, BFP and BJMP, shall, under such terms and conditions as may be promulgated by the GSIS, be compulsorily covered with life insurance, which shall automatically take effect as follows:

FUNERAL BENEFITS 1. Q: What comprises the Funeral Benefit? A: The funeral benefit, in the amount Php 20,000, which is intended to defray the expenses incident to the burial and funeral of the deceased member, pensioner, or retiree under R.A. 660, R.A. 1616, P.D. 1146, and R.A. 8291. It is payable to the members of the family of the deceased, in the order which they appear: 1. Legitimate spouse 2. Legitimate child who spent for the funeral services, or 3. any other person who can show unquestionable proof of his having borne the funeral expenses of the deceased.

2.

3.

Q: When may a member obtain optional Life Insurance coverage? A: 1. A member may at any time apply for himself and/or his dependents an insurance and/or preneed coverage embracing: a. Life b. Memorial plans c. Health d. Education e. Hospitalization f. Other plans as maybe designed by GSIS

Q: When will it be paid? A: Upon the death of: 1. 2.

3. 4.

Those employed after the effectivity of this Act, their insurance shall take effect on the date of their employment; For those whose insurance will mature after the effectivity of this Act, their insurance shall be deemed renewed on the day following the maturity or expiry date of their insurance; For those without any life insurance as of the effectivity of this Act, their insurance shall take effect following said effectivity.

An active member A member who has been separated from the service but is entitled to future separation or retirement benefits A member who is a pensioner (excluding survivorship pensioners) A retiree who is at the time of his retirement was of pensionable age, at least 60 years old, who opted to retire under RA 1616 (An act further amending Sec.12, C.A. 186, as amended, by prescribing two other modes of retirement and for other purposes).

2.

Any Er may apply for group insurance coverage for its Ees.

Q: What is the prescriptive period to claim the benefits? A: GR: 4 years from the date of contingency XPNs: Life insurance and retirement (Sec. 28, R.A. 8291)

LIFE INSURANCE Q: What are the classes of life insurance coverage under the GSIS Law?

Q: May a member enjoy the benefits provided for in the Revised GSIS Act simultaneous with similar benefits provided under other laws for the same contingency?

A: 1. Compulsory Life Insurance 2. Optional Life Insurance

A: Whenever other laws provide similar benefits for the same contingencies covered by this Act, the member who qualifies to the benefits shall have the option to choose which benefits will be paid to him.

Note: The plans may be endowment or ordinary life.

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Labor Law and Social Legislation However, if the benefits provided by the law chosen are less than the benefits provided under this Act, the GSIS shall pay only the difference. (Sec. 55, R.A. 8291)

This is advantageous to the SSS and GSIS members for purposes of death, disability or retirement benefits. In the event the Ees transfer from the private sector to the public sector, or vice-versa, their creditable employment services and contributions are carried over and transferred as well.

BENEFICIARIES Q: Who are the considered beneficiaries?

EMPLOYEES’ COMPENSATION A: 1. Primary beneficiaries a. The legal dependent spouse until he/she remarries, and b. The dependent children (Sec. 2[g] , R.A. 8291) 2.

Q: Discuss briefly the Employees’ Compensation Program. A: It is the program provided for in Arts. 166 to 208 of the LC whereby a fund known as the State Insurance Fund is established through premium payments exacted from Ers and from which the Ees and their dependents in the event of work-connected disability or death, may promptly secure adequate income benefit, and medical or related benefits.

Secondary beneficiaries a. The dependent parents, and b. Subject to the restrictions on dependent children, the legitimate descendants (Sec. 2[h] , R.A. 8291)

COVERAGE Q: Who are considered dependents? Q: Who are subject to coverage under the Employees’ Compensation Program?

A: 1. Legitimate spouse dependent for support upon the member or pensioner; 2. Legitimate, legitimated, legally adopted child, including the illegitimate child, a. who is unmarried, b. not gainfully employed, c. not over the age of majority, or if over the age of majority, incapacitated and incapable of self-support due to a mental or physical defect acquired prior to age of majority; and 3. Parents dependent upon the member for support. (Sec. 2[f])

A: Ers and their Ees not over 60 years of age are subject to compulsory coverage under this program. The Er may belong to either the: 1. Public sector covered by the GSIS, comprising the National Government, including GOCCs, Philippine Tuberculosis Society, the Philippine National Red Cross, and the Philippine Veterans Bank; and 2. Private sector covered by the SSS, comprising all Ers other than those defined in the immediately preceding paragraph.

LIMITED PORTABILITY LAW (R.A. 7699) The Ee may belong to either the: 1. Public sector comprising the employed workers who are covered by the GSIS, including the members of the AFP, elective officials who are receiving regular salary and any person employed as casual emergency, temporary, substitute or contractual; 2. Private sector comprising the employed workers who are covered by the SSS.

Q: What is the Limited Portability Rule? A: A covered worker who transfers employment from one sector to another or is employed on both sectors, shall have creditable services or contributions on both Systems credited to his service or contribution record in each of the Systems and shall be totalized for purposes of old-age, disability, survivorship, and other benefits in either or both Systems. (Sec. 3, R.A. 7699)

Q: When does compulsory coverage take effect?

All contributions paid by such member personally, and those that were paid by his employers to both Systems shall be considered in the processing of benefits which he can claim from either or both Systems. (Sec. 4, R.A. 7699)

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

A: 1. Employer – on the first day of operation 2. Employee – on the day of his employment Q: What is an occupational disease?

136

SOCIAL AND WELFARE LEGISLATION A: One which results from the nature of the employment, and by nature is meant conditions which all Ees of a class are subject and which produce the disease as a natural incident of a particular occupation, and attach to that occupation a hazard which distinguishes it from the usual run of occupations and is in excess of the hazard attending the employment in general

2.

3. 4.

To be occupational, the disease must be one wholly due to causes and conditions which are normal and constantly present and characteristic of the particular occupation.

Note: Notorious negligence is equivalent to gross negligence; it is something more than mere carelessness or lack of foresight.

Q: Abraham Dino works as a delivery man in a construction supply establishment owned by Abraham Julius. One day, while Dino was making reports on his delivery, he had an altercation with Julius; irked by the disrespectful attitude of Dino, Julius pulled out his gun and shot Dino, hitting him in the spinal column and paralyzing him completely. Julius was prosecuted for the act.

Q: What is compensable sickness? A: It means any illness definitely accepted as an occupational disease listed by the Commission or any illness caused by employment, subject to proof that the risk of contracting the same is increased by working conditions. (Art. 167(l), LC) Q: Discuss briefly the theory of Increased Risk.

1.

A: The term “sickness” as defined in Art. 167(l) of the LC is a recognition of the theory of increased risk. To establish compensability under the same, the claimant must show substantial proof of workconnection, but what is required is merely a reasonable work-connection and not a direct causal relation. Proof of actual cause of the ailment is not necessary. The test of evidence of relation of the disease with the employment is probability and not certainty [Jimenez v. Employees’ Compensation Commission, G.R. No. L-58176, (1984); Panotes vs. ECC, G.R. No. L-64802, (1984)].

2.

Is the disability suffered by Abraham Dino compensable? If Abraham Dino recovers compensation from the SIF, can he still recover from Abraham Julius damages in the criminal case? Why?

A: 1. Yes. The injury was sustained by Abraham Dino in his place of work and while in the performance of his official functions. 2.

Q: May an illness not listed by the Employees’ Compensation Commission as an occupational disease be compensable? A: Where the illness is not listed by the Employees’ Compensation Commission as an occupational disease, it must be established that the risk of contracting the same is increased by working conditions.

No. Under Art. 173 of the LC, as amended by P.D. 1921, the liability of the State Insurance Fund under the Employees’ Compensation Program shall be exclusive and in place of all other liabilities of the Er to the Ee or his dependents or anyone otherwise entitled to recover damages on behalf of the Ee or his dependents.

Q: Wilfredo, a truck driver employed by a local construction company, was injured in an accident while on assignment in one of his employer’s project in Iraq. Considering that his injury was sustained in a foreign country, is Wilfredo entitled to benefits under the Employees’ Compensation Program?

Q: What defenses may be interposed by the State Insurance Fund against a claim for compensation made by a covered Ee or his dependents?

A: Yes. Filipinos working abroad in the service of an Er, domestic or foreign, who carries on in the Philippines any trade, business, industry, undertaking or activity of any kind, are covered by the ECP. (Rule 1, Section 5, ECC Rules; Art.169, LC)

A: The following defenses may be set up: 1.

Disability or death was occasioned by the Ee’s intoxication, wilful intention to injure or kill himself or another, or his notorious negligence (Art. 172, LC) No notice of sickness, injury or death was given to the Er (Art. 206, LC) Claim was filed beyond 3 years from the time the cause of action accrued (Art. 201, LC, as amended by P.D. 1921)

Injury is not work-connected or the sickness is not occupational

Q: What is the “Going and Coming Rule”? Is this rule absolute?

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation A: GR: In the absence of special circumstances, an Ee injured while going to or coming from his place of work is excluded from the benefits of Workmen’s Compensation Act.

eligible for monthly income benefit. (Art. 167, LC, as amended by Sec. I, P.D. 1921) Q: What are the benefits which may be enjoyed under the State Insurance Fund?

XPNs: 1. Where the Ee is proceeding to or from his work on the premises of the Er; 2. Proximity Rule—where the Ee is about to enter or about to leave the premises of his Er by way of exclusive or customary means of ingress and egress; 3. Ee is charged, while on his way to or from his place of employment or at his home, or during this employment with some duty or special errand connected with his employment; and 4. Where the Er as an incident of the employment provides the means of transportation to and from the place of employment.

A: 1. 2. 3. 4.

Medical Benefits Disability Benefits Death Benefits Funeral Benefits MEDICAL BENEFIT (MEDICAL SERVICES)

Q: What are the conditions of entitlement to medical services? A: For an Ee to be entitled to medical services, the following conditions must be satisfied: 1. He has been duly reported to the System (SSS or GSIS); 2. He sustains a permanent disability as a result of an injury or sickness; and 3. The System has been notified of the injury or sickness which caused his disability.

Q: Who are entitled to benefits under the Employees’ Compensation Program? A: The covered Ee, his dependents, and in case of his death, his beneficiaries.

DISABILITY BENEFIT

Q: Who are the dependents of the employee?

Q: What are disability benefits?

A: 1. Legitimate, legitimated, legally adopted or acknowledged natural child who is unmarried, not gainfully employed, and not over 21 years of age or over 21 years of age provided he is incapacitated and incapable of self-support due to a physical or mental defect which is congenital or acquired during minority; 2. Legitimate spouse living with the Ee 3. Parents of said Ee wholly dependent upon him for regular support. (Art.167(i), LC, as amended by P.D. 1921)

A: They are income benefits in case of temporary total disability, permanent total disability and permanent partial disability Q: What are the disabilities that are considered total and permanent? A: The following disabilities shall be deemed total and permanent: 1. Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided for in the Rules; 2. Complete loss of sight of both eyes; 3. Loss of two limbs at or above the ankle or wrist; 4. Permanent complete paralysis of two limbs; 5. Brain injury resulting in incurable imbecility or insanity; and 6. Such cases as determined by the Medical Director of the System and approved by the Commission. (Art.192(c), LC)

Q: Who are included in the term beneficiaries? A: "Beneficiaries" means the dependent spouse until he remarries and dependent children, who are the primary beneficiaries. In their absence, the dependent parents and subject to the restrictions imposed on dependent children, the illegitimate children and legitimate descendants who are the secondary beneficiaries: Provided, that the dependent acknowledged natural child shall be considered as a primary beneficiary when there are no other dependent children who are qualified and

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Q: May a permanent partial disability be converted to permanent total disability after the employee’s retirement? Why?

138

SOCIAL AND WELFARE LEGISLATION A: Yes. This is in line with the social justice provision in the Constitution. A person’s disability may not manifest itself fully at one precise moment in time but rather over a period of time. And disability should not be understood more on its medical significance but on the loss of earning capacity.

2.

3.

4. Q: May permanent total disability arise although the employees does not lose the use of any part of his body?

5.

A: Yes. Where the Ee is unable, by reason of the injury or sickness, to perform his customary job for more than 120 days, permanent total disability arises. [Ijares vs. CA, G.R. No. 105854, (1999)]

If the cause was due to the Ee’s own notorious negligence, or voluntary act or drunkenness, the Er shall not be liable. If the cause was partly due to the Ee’s lack of sue care, the compensation shall be inequitably reduced. If the cause was due to the negligence of a fellow Ee, the Er and the guilty Ee shall be liable solidarily. If the cause was due to the intentional or malicious act of fellow Ee, the fellow Ee and Er are liable unless the Er exercised due diligence in selecting and supervising his Ees. FUNERAL BENEFIT

DEATH BENEFIT

Q: What is the funeral benefit?

Q: What are the conditions for entitlement to death benefits?

A: A funeral benefit of Php 10, 000.00 shall be paid upon the death of a covered Ee or permanently totally disabled pensioner.

A: The beneficiaries of a deceased Ee shall be entitled to an income benefit if all of the following conditions are satisfied: 1. The Ee has been duly reported to the System; 2. He died as a result of an injury or sickness; and 3. The System has been duly notified of his death, as well as the injury or sickness which caused his death.

Q: Who are required to make contributions to the State Insurance Fund? A: Contributions under this Title shall be paid in their entirety by the Er and any contract or device for the deduction of any portion thereof from the wages or salaries of the Ees shall be null and void. (Art.183(c), LC)

Q: For how long are the primary beneficiaries entitled to the death benefits?

Q: When does the right to compensation or benefit for loss or impairment of an employee’s earning capacity due to work-related illness or injury arise?

A: 1. Dependent Spouse—until he or she remarries. 2. Dependent Children—until they get married, or find gainful employment, or reach 21 years of age. 3. Dependent Child suffering from physical or mental defect—until such defect disappears.

A: It arises or accrues upon, and not before, the happening of the contingency. Hence, an Ee acquires no vested right to a program of compensation benefits simply because it was operative at the time he became employed [San Miguel Corporation vs. NLRC, G.R. No. 57473, (1988)].

Q: If an employee suffers disability or dies before he is duly reported for coverage to the System (SSS or GSIS), who will be liable for the benefits?

Q: Does recovery from the State Insurance Fund bar a claim for benefits under the SSS Law? Why?

A: The Er shall be liable (Sec.1, Rule X; Sec.1, Rule XI; Sec. 1, Rule XII; Sec. 1, Rule XIII; ECC Rules)

A: No, as expressly provided for in Art. 173 of the LC, payment of compensation under the State Insurance Fund shall not bar the recovery of benefits under the SSS Law, Republic Act No. 1161, as amended. Benefits under the State Insurance Fund accrue to the Ees concerned due to hazards involved and are made a burden on the employment itself. On the other hand, social security benefits are paid to SSS members by reason of their membership therein for which they contribute their money to a general fund [Ma-ao Sugar Central Co., Inc. vs. CA, G.R. No. 83491, (1990)].

Q: What are the rules regarding employer’s liability in case of death or injury? A: 1. If the cause of the death or personal injury arose out of and in the course of employment, the Er is liable.

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation LABOR RELATIONS LAW

WHO MAY UNIONIZE FOR PURPOSES OF COLLECTIVE BARGAINING

RIGHT TO SELF-ORGANIZATION Q: Who are the workers with a right to selforganization for purposes of collective bargaining?

Q: What is the right to self-organization? A: It is the right of workers and Ees to form, join or assist unions, organizations or associations for purposes of CB and negotiation and for mutual aid and protection. It also refers to the right to engage in peaceful concerted activities or to participate in policy and decision-making processes affecting their rights and benefits.

A: 1. All persons employed in commercial, industrial and agricultural enterprises 2. Workers in religious, charitable, medical, or educational institutions, whether operating for profit or not 3. Supervisors 4. Security Guards 5. Workers of Cooperatives

Note: Art. 243 of the LC incorporated the policy laid down in the International Labor Organization Convention No. 87: Freedom of Association and Protection of the Right to Organization which provides that workers and Ers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organization concerned, to join organizations of their own choosing without previous authorization.

Q: What is the right of supervisory employees in self-organization?

Also, under the International Covenant on Civil and Political Rights, Art. 22- Everyone shall have the right to freedom of association with others, including the right to form and join trade unions for the protection of his interests.

A: Supervisory Ees shall not be eligible for membership in a labor organization of the rank-andfile Ees but may join, assist or form separate labor organizations of their own. The rank and file union and the supervisors’ union operating within the same establishment may join the same federation or national union.

Q: What are the constitutional provisions that protect the right to self-organization?

Q: Who are the employees eligible to join a labor organization for mutual aid and protection?

A: 1. Sec. 18, Art. II—the State affirms labor as a primary social economic force. It shall protect the rights of the workers and promote their welfare. 2. Sec. 3, Art. XIII—the State is required to guarantee the rights of all workers to selforganization, CB and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. 3. Sec. 8, Art. III—the right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law, shall not be abridged.

A: The following enjoy the right to self-organization for mutual aid and protection: 1. Ambulant workers 2. Intermittent workers 3. Itinerant workers 4. Self-employed people 5. Rural workers 6. Those without definite Ers [Art. 243]

Q: What is the extent of the right to selforganization?

A: Any Ee, whether employed for a definite period or not, shall, beginning on his first day of service, be considered as an employee for purposes of membership in any labor union. [Art. 277 (c), LC as amended by Sec. 33, R.A. No. 6715]

Note: The reason for this rule is that the abovementioned workers have no Ers to collectively bargain with.

Q: When is an employee considered eligible to join a labor organization?

A: It includes the right: 1.

2.

To form, join and assist labor organizations for the purpose of CB through representatives of their own choosing; and To engage in lawful and concerted activities for the purpose of CB or for their mutual aid and protection. (Art. 246, LC)

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Note: Organizations of workers and Ers shall have the right to establish and join federations and confederations, and any such organization, federation or confederation shall have the right to affiliate with international organizations of workers and Ers [ILO Convention No. 87, Art. 5]

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LABOR RELATIONS LAW WHO CANNOT FORM, JOIN, AND ASSIST LABOR ORGANIZATIONS

responsibilities relating to labor relations [Tunay na Pagkakaisa ng Manggawa sa Asia Brewery vs. Asia Brewer, Inc., G.R. No. 162025, (2010)].

Q: Who are the persons/employees not allowed to form unions?

Note: An important element of the “confidential Ee rule” is the Ee’s access to confidential labor relations information. An Ee may not be excluded from the appropriate bargaining unit merely because he has access to confidential information concerning the Er’s internal business which is not related to the field of labor relations and has no relevance to negotiations and settlement of grievances wherein the interests of a union and the management are invariably adversarial [San Miguel Corp. Supervisors v. Laguesma, G.R. 110399, (1997)].

A: 1. Managerial Ees 2. High level or Managerial Government Ees (Sec. 3, E.O. 180) 2. Ees of International organizations with immunities Managerial Ees (Art. 212, LC) - 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 Ees.

Q: What is the rationale behind the exclusion of confidential employees from the rank-and-file bargaining unit?

Note: However, the mere fact that an Ee is designated as “manager” does not ipso facto make him one. Job description determines the nature of his employment

3.

4. 5. 6. 7.

A: The rationale for their separate category and disqualification to join any labor organization is similar to the inhibition for managerial Ees, because if allowed to be affiliated with a union, the latter might not be assured of their loyalty in view of evident conflict of interests and the union can also become company-denominated with the presence of managerial Ees in the union membership. Having access to confidential information, confidential Ees may also become the source of undue advantage. Said Ees may act as a spy or spies of either party to a CBA. [San Miguel Foods Inc., vs. San Miguel Corporation Supervisors and Exempt Union, G.R. No. 146206, (2011)]

Members of the AFP including the police officers, policemen, firemen, and jail guards. (Sec. 4, E.O. 180) Confidential Ees Ees of cooperatives who are its members. However they may form workers’ association. Non-Ees Government Ees, including GOCC’s with original charters Note: Government Ees are governed by the Civil Service Commission.

8.

Q: Are Human Resource Assistant and Personnel Assistant considered confidential employees?

Aliens without a valid working permit or aliens with working permits but are nationals of a country which do not allow Filipinos to exercise their right of self-organization and to join or assist labor organizations. [Art. 269 of LC; D.O. No. 9 (1997), Rule II, Sec. 2]

A: Yes. As Human Resource Assistant, the scope of one’s work necessarily involves labor relations, recruitment and selection of employees, access to Ees' personal files and compensation package, and human resource management. As regards a Personnel Assistant, one's work includes the recording of minutes for management during CB negotiations, assistance to management during grievance meetings and administrative investigations, and securing legal advice for labor issues from the petitioner’s team of lawyers, and implementation of company programs. Therefore, in the discharge of their functions, both gain access to vital labor relations information which outrightly disqualifies them from union membership [San Miguel Foods Inc. v. San Miguel Corporation Supervisors and Exempt Union, G.R. No. 146206, (2011)].

Q: Who are classified as confidential employees expressly excluded from the CBA of rank-and-file bargaining unit? A: Confidential Ees are defined as those who 1. assist or act in a confidential capacity, 2. to persons who formulate, determine, and effectuate management policies in the field of labor relations. The two (2) criteria are cumulative, and both must be met if an employee is to be considered a confidential employee – that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed

Q: May aliens exercise the right to self-organization?

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Labor Law and Social Legislation A: GR: All aliens, natural or juridical, as well as foreign organizations are strictly prohibited from engaging directly or indirectly in all forms of trade union activities without prejudice to normal contacts between Philippine labor unions and recognized international labor centers.

Q: What is the Globe Doctrine? A: In defining the appropriate bargaining unit, the determining factor is the desire of the workers themselves. Q: What is the Substantial Mutual Interest Doctrine?

XPN: Alien Ees with valid working permits issued by the DOLE may exercise the right to self-organization and join or assist labor organizations for purposes of CB, if they are nationals of a country which grants the same or similar rights to Filipino workers, as certified by the DFA. (Art. 269, LC)

A: The Ees sought to be represented by the CB agent must have substantial mutual interest in terms of employment and working condition as evinced by the type of work they perform [San Miguel Corp. Employees Union-PTGWO v. Confesor, 262 SCRA 81, (1996)].

Q: A, an employee of XYZ Cooperative, owns 500 shares in the cooperative. He has been asked to join the XYZ Cooperative Employees Association. He seeks your advice on whether he can join the association. What advice will you give him? (2010 Bar Question)

Q: What is the Collective Bargaining History Doctrine? A: In determining the appropriate bargaining unit, prior CB history and affinity of the Ees may be resorted to.

A: A cannot join XYZ Cooperative Employees Association because owning shares makes him a coowner thereof. An Ee-member of a cooperative cannot join a union and bargain collectively with his cooperative for an owner cannot bargain with himself and his co-owners [Cooperative Rural Bank of Davao City, Inc. v. Calleja, 165 SCRA 725, (1988)].

Q: What is the Employment Status Doctrine? A: The determination of the appropriate bargaining unit is based on the employment status of the Ees. Q: What are the factors considered in determining the Substantial Mutual Interest Doctrine?

BARGAINING UNIT A: 1. Similarity in the scale and manner of determining earnings 2. Similarity in employment benefits, hours of work, and other terms and conditions of employment 3. Similarity in the kinds of work performed 4. Similarity in the qualifications, skills and training of Ees 5. Frequency of contract or interchange among the Ees 6. Geographical proximity 7. Continuity and integration of production processes 8. Common supervision and determination of laborrelations policy 9. History of CB 10. Desires of the affected Ees or 11. Extent of union organization

Q: What is a bargaining unit? A: It is a group of Ees of a given Er, comprised of all or less than all of the entire body of the Ees which the collective interest of all the Ees consistent with equity to the Er, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law. TEST TO DETERMINE THE CONSTITUENCY OF AN APPROPRIATE BARGAINING UNIT Q: What are the factors considered in determining the appropriateness of a bargaining unit? A: 1. Will of the Ees (Globe Doctrine) 2. Affinity and unity of the Ees’ interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions (Substantial Mutual Interest Doctrine / Community of Interest Rule) 3. Prior CB history (CB History Doctrine) 4. Similarity of employment status (Employment Status Doctrine) UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Q: A registered labor union in UP, ONAPUP, filed a petition for certification election among the nonacademic employees. The university did not oppose, however, another labor union, the All UP Workers Union assents that it represents both academic and non-academic personnel and seeks to unite all workers in one union. Do employees performing

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LABOR RELATIONS LAW academic functions need to comprise a bargaining unit distinct from that of the non-academic employees?

Subsidiaries or corporations formed out of former divisions of a mother company following a re-organization may constitute a separate bargaining unit.

A: Yes. The mutuality of interest test should be taken into consideration. There are two classes of rank and file Ees in the university, those who perform academic functions such as the professors and instructors, and those whose function are nonacademic who are the janitors, messengers, clerks etc. Thus, not much reflection is needed to perceive that the mutuality of interest which justifies the formation of a single bargaining unit is lacking between the two classes of Ees [U.P. v. Ferrer-Calleja, G.R. No.96189, (1992)].

Q: Union filed a petition for certification election among the rank and file employees of three security agencies including the Veterans Security. The latter opposed alleging that the three security agencies have separate and distinct corporate personalities. May a single petition for certification election be filed by a labor union in the three corporations instead of filing three separate petitions? A: Yes. The following are indications that the three agencies do not exist and operate separately and distinctly from each other with different corporate direction and goals: 1) Veterans Security failed to rebut the fact that they are managed through the Utilities Management Corporation with all their employees drawing their salaries and wages from the said entity; 2) that the agencies have common and interlocking incorporators and officers; 3) that they have a single mutual benefit system and followed a single system of compulsory retirement. 4) they could easily transfer security guards of one agency to another and back again by simply filling-up a common pro-forma slip; 5) they always hold joint yearly ceremonies such as the PGA Annual Awards Ceremony; and 6) they continue to be represented by one counsel.

Q: Is the bargaining history a decisive factor in the determination of appropriateness of bargaining unit? A: No. While the existence of a bargaining history is a factor that may be reckoned with in determining the appropriate bargaining unit, the same is not decisive or conclusive. Other factors must be considered. The test of grouping is community or mutuality of interests. This is so because the basic test of an asserted bargaining unit’s acceptability is whether or not it is fundamentally the combination which will best assure to all Ees the exercise of their CB rights [Democratic Labor Association v. Cebu Stevedoring Company, Inc., G.R. No. L-10321, (1958)].

Hence, the veil of corporate fiction of the three agencies should be lifted for the purpose of allowing the Ees of the three agencies to form single union. As a single bargaining unit, the Ees need not file three separate PCE [Philippine Scout Veterans Security and Investigation Agency v. SLE, G.R. No. 92357, (1993)].

Q: What is “one-union, one-company” policy? A: GR: All the rank-and-file Ees with substantially the same interests and who invoke the right to selforganization are part of a single unit so that they can deal with their Er with just one and potent voice. The Ees’ bargaining power is strengthened thereby [General Rubber and Footwear Corporation v. Bureau of Labor Relations, et al., G.R. L-74262, (1987)].

Q: Company XYZ has two recognized labor unions, one for its rank-and-file employees and the other for its supervisory employees. Of late, the company instituted a restructuring program by virtue of which A, a rank-and-file employee and officer of rank-andfile employees’ labor union, was promoted to a supervisory position along with four other colleagues, also active union members and/or officers. Labor Union KMJ, a rival labor union seeking recognition as the rank-and-file bargaining agent, filed a petition for the cancellation of the registration of rank-and-file employees labor union on the ground that A and her colleagues have remained to be members of rank-and-file employees labor union. Is the petition meritorious? Explain. (2010 Bar Question)

XPNs: 1. Supervisory Ees who are allowed to form their own unions apart from the rank-andfile Ees and 2. Craft Unit 3. Plant Unit Note: The policy should yield to the right of Ees to form union for purposes not contrary to law, selforganization and to enter into CB negotiations. Note: Two companies cannot be treated into a single bargaining unit even if their businesses are related.

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Labor Law and Social Legislation within 10 days from receipt of the notice, record the fact of VR in its roster of legitimate labor unions and notify the labor union concerned.

A: No. The inclusion as union members of Ees outside the bargaining unit shall not be a ground for the cancellation of the registration of the union. Said Ees are automatically deemed removed from the list of membership of said union. (Art. 245-A, LC as amended by R.A. 9481)

Q: What are the three conditions to voluntary recognition? A: VR requires three concurrent conditions:

VOLUNTARY RECOGNITION

1.

Q: What are the three methods of determining the bargaining representative?

2.

A: 1. Voluntary recognition (VR) 2. Certification election with or without run-off election 3. Consent election

3.

Q: What is voluntary recognition? A: The process by which a legitimate labor union is recognized by the Er as the exclusive bargaining representative or agent in a bargaining unit, reported with the Regional Office. [Sec. 1 (bbb), Rule I, Book V, IRR]

VR is possible only in an unorganized establishment. Only one union must ask for recognition. If there are two or more unions asking to be recognized, the Er cannot recognize any of them; the rivalry must be resolved through an election. The union voluntarily recognized should be the majority union as indicated by the fact that members of the bargaining unit did not object to the projected recognition. If no objection is raised, the recognition will proceed and the DOLE shall be informed. If objection is raised, the recognition is barred and a CE or consent election will have to take place.

Note: In an organized establishment, VR is not possible. A petition to hold a CE has to be filed within the freedom th period which means the last 60 days of the 5 year of the expiring CBA. The petition may be filed by any LLO, but the petition must have written support of at least 25% of the Ees in the bargaining unit.

Q: When is voluntary recognition proper? A: VR is proper only in cases where there is only one legitimate labor organization existing and operating in a bargaining unit.

Q: Where and when to file the petition for Voluntary Recognition?

REQUIREMENTS A: Within 30 days from such recognition, Er shall submit a notice of VR with the Regional Office which issued the recognized labor union’s certificate of registration or certificate of creation of a chartered local.

Q: What are the requirements for voluntary recognition? A: The notice of VR shall be accompanied by the original copy and two duplicate copies of the following requirements: 1. Joint statement under oath of the VR 2. Certificate of posting of joint statement for 15 consecutive days in at least two conspicuous places in the establishment of the bargaining unit 3. Certificate of posting 4. Approximate number of Ees in the bargaining unit and the names of those who supported the recognition 5. Statement that the labor union is the only legitimate labor organization operating within the bargaining unit

Q: What are the effects of recording of fact of voluntary recognition? A: 1. The recognized labor union shall enjoy the rights, privileges and obligations of an existing bargaining agent of all the Ees in the bargaining unit. 2. It shall also bar the filing of a PCE by any labor organization for a period of one year from the date of entry of VR.

Note: Where the notice of VR is sufficient in form, number and substance and where there is no registered labor union operating within the bargaining unit concerned, the Regional Office, through the Labor Relations Division shall, UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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LABOR RELATIONS LAW shall attach to the petition the charter certificate it issued to its local/chapter. [Sec. 1, Rule VIII, Book V, IRR as amended by D.O. 40-F-03]

CERTIFICATION ELECTION Q: What is certification election?

Q: In registration of federation or national union, should the 20% membership requirement be complied with?

A: It is the process of determining through secret ballot the sole and exclusive representative of the Ees in an appropriate bargaining unit, for purposes of CB or negotiation. [Sec. 1 (h), Rule I, Book V, IRR]

A: No. The registration requirement of submitting the names of all its members comprising at least 20% of all the Ees in the bargaining unit where it seeks to operate is applicable only to registration of independent union. Art. 237, LC merely requires for proof of affiliation of at least 10 local chapters and the names and addresses of the companies where they operate. No 20% membership requirement is required for registration of a federation or national union.

Note: The process is called CE because it serves as the official, reliable and democratic basis for the BLR to determine and certify the union that shall be the exclusive bargaining representative of the Ees for the purpose of bargaining with the Er.

Q: What is the nature of certification election? A: A CE is not a litigation but merely an investigation of a non-adversarial fact-finding character in which BLR plays a part of a disinterested investigator seeking merely to ascertain the desire of the Ees as to the matter of their representation [Airline Pilots Association of the Philippines v. CIR, G.R. No. L-33705, (1977)].

Note: Under the LC and the rules, the power granted to labor organizations to directly create a chapter or local through chartering is given to a federation or national union only, not to a trade union center [SMCEU v. San Miguel Packaging Products Employees Union, G.R. No. 171153, (2007)].

Q: What is the purpose of a certification election?

Q: Can an employer file a petition for certification election?

A: It is a means of determining the worker’s choice of: 1. Whether they want a union to represent them for CB or if they want no union to represent them at all. 2. And if they choose to have a union to represent them, they will choose which among the contending unions will be the sole and exclusive bargaining representative of the Ees in the appropriate bargaining unit.

A: Yes, when requested to bargain collectively (Art. 258). But thereafter it should not be allowed to have an active role in the CE; it shall merely act as a bystander. CE proceeding is not a litigation, but a mere summary and non-litigious proceeding. The only purpose is to ascertain the will of the parties in determining who will be the bargaining agent.

Q: Who may file a petition for certification election (PCE)?

Winning Union = majority of the valid votes cast, assuming that there is a valid election

A: 1. Any LLO 2. A national union or federation which has already issued a charter certificate to its local chapter participating in the CE 3. A local chapter which has been issued a charter certificate 4. An Er only when requested to bargain collectively in a bargaining unit where no registered CBA exists. [Sec. 1, Rule VIII, Book V, IRR as amended by D.O. 40-F-03]

Valid election - majority of eligible voters cast their votes Consequences of selection of a bargaining agent - Er’s duty to bargain collectively Q: What is the “Employer as bystander” doctrine? A: In all cases, whether the PCE is filed by an Er or a LLO, the Er shall not be considered a party thereto with a concomitant right to oppose a PCE. The Er’s participation in such proceedings shall be limited to: (1) being notified or informed of petitions of such nature; and (2) submitting the list of Ees during the

Note: A national union or federation filing a petition in behalf of its local/chapter shall not be required to disclose the names of the local/chapter’s officers and members, but

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Labor Law and Social Legislation pre-election conference should the Mediator-Arbiter act favorably on the petition.

known as 12-month bar. After that period, a PCE may be filed again.

Except when it is requested to bargain collectively, an Er is a mere bystander to any PCE; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine which organization will represent the Ees in their CB with the Er. The choice of their representative is the exclusive concern of the Ees; the Er cannot have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it; not even a mere allegation that some Ees participating in a PCE are actually managerial Ees will lend an Er legal personality to block the CE. The Er’s only right in the proceeding is to be notified or informed thereof [Republic v. Kawashima Textile, G.R. No. 160352, (2008)].

Q: Can the five-year representation status of a bargaining agent be extended? A: No. While the parties may agree to extend the CBA’s original five-year term together with all other CBA provisions, any such amendment or term in excess of five years will not carry with it a change in the union’s exclusive CB status. Under Art. 253-A, LC, the exclusive bargaining status cannot go beyond five years and the representation status is a legal matter not for the workplace parties to agree upon. In other words, despite an agreement for a CBA with a life of more than five years, either as an original provision or by amendment, the bargaining union’s exclusive bargaining status is effective only for five years and can be challenged within 60 days prior to the expiration of the CBA’s first five years [FVC Labor Union-Philippine Transport and General Workers Organization v. Sama-samang Nagkakaisang Manggagawa sa FVC-Solidarity of Independent and General Labor Organizations, G.R. No. 176249 (2009).

Q: May an organization which carries a mixture of rank-and-file and supervisory employees possess any of the rights of a legitimate labor organization, including the right to file a petition for certification election for the purpose of collective bargaining?

IN AN UNORGANIZED ESTABLISHMENT

A: No. A labor organization composed of both rankand-file and supervisory Ees is not a labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory Ees cannot possess any of the rights of a legitimate labor organization, including the right to file a petition for CE for the purpose of CB. It becomes necessary, therefore, anterior to the granting of an order allowing a CE, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Art. 245 of the LC [Republic vs. Kawashima Textile, G.R. No. 160352, (2008)].

Q: What is an unorganized establishment? A: An unorganized establishment is a bargaining unit with no recognized or certified bargaining agent. It does not necessarily refer to an entire company. Note: It may happen that the rank-and-file unit has a bargaining agent while the supervisory unit still does not have such agent; thus, the former is already an “organized establishment” while the latter remains, in the same company, an unorganized establishment.

Q: What are the requirements for certification election in unorganized establishments?

Q: What are the issues involved in a certification proceeding?

A: The certification election shall be automatically conducted upon the filing of a PCE by a LLO.

A: Certification proceedings directly involve two issues: 1. Proper composition and constituency of the bargaining unit; and 2. The veracity of majority membership claims of the competing unions so as to identity the one union that will serve as the bargaining representative of the entire bargaining unit.

IN AN ORGANIZED ESTABLISHMENT Q: What are the requisites for certification election in an Organized Establishment? A: The Mediator-Arbiter is required to automatically order the conduct of a CE by secret ballot in an organized establishment as soon as the following requisites are met: 1. A petition questioning the majority status of the incumbent bargaining agent is filed before the DOLE within the 60-day freedom period;

Note: Some of the Ees may not want to have a union; hence, “no union” is one of the choices named in the ballot. If “no union” wins, the company or the bargaining unit remains un-unionized for at least 12 months, the period is

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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LABOR RELATIONS LAW 2. 3.

Such petition is verified; The petition is supported by the written consent of at least 25% of all the Ees in the bargaining unit [Art. 256, (LC), [TUPAS-WFTU v. Laguesma, G.R. No. 102350, (1994)].

the Court held that the mere filing of a PCE within the freedom period is sufficient basis for the issuance of an order for the holding of a CE, subject to the submission of the consent signatures within a reasonable period from such filing [Port Workers Union of the Phils. v. Laguesma, G.R. Nos. 94929-30, (1992)].

Q: Can an employer voluntarily recognize a union in case there are other legitimate labor organizations in a bargaining unit?

Q: What is the effect of employee’s withdrawal of his signature in the petition for certification election?

A: No. An Er cannot ignore the existence of an LLO at the time of its VR of another union. The Er and the voluntarily recognized union cannot, by themselves, decide whether the other union represented an appropriate bargaining unit [Sta. Lucia East Commercial Corporation v. Hon. Secretary of Labor, G.R. 162355,(2009)].

A: If the withdrawal was made before the filing of the petition, then the withdrawal is presumed to be voluntary unless there is convincing proof to the contrary. If the withdrawal was made after the filing of the petition, the withdrawals are deemed involuntary. Thus, withdrawals made after the filing of the petition will not affect the PCE.

Q: In the petition for certification election, when should the 25% consent signature be filed?

Q: Distinguish the requisites for a petition for certification election between organized and unorganized establishments.

A: Ideally, the signature should be filed together with the petition. However, it may be filed after the petition within a reasonable period of time.

A: Q: What is the effect if the petition for certification election was not accompanied by the requisite 25% consent signatures?

Art. 256. ORGANIZED Art. 257. UNORGANIZED Bargaining agent Present None Petition filed Has to be a verified No need to be verified petition Freedom Period No PCE except within 60 Not applicable. No days before the freedom period. Petition expiration of the CBA. can be filed anytime. (See Art. 253 & 253-A) Substantial support rule Must be duly supported by 25% of all the No substantial support members of the rule. appropriate bargaining unit. Why? Intention of law is to bring in the union, to Percentage base: all implement policy behind members of an Art. 211(a). appropriate bargaining unit.

A: Under the Implementing Rules, absence or failure to submit the written consent of at least 25% of all the Ees in the bargaining unit to support the petition is a ground for denying the said petition. The Supreme Court said that the Mediator-Arbiter may still have the discretion to grant or deny the petition. Even if there is no 25% consent signature submitted together with the petition, it is within the discretion of the Med-Arbiter whether to grant or deny the petition [Port Workers Union v. Bienvenido Laguesma, G.R. Nos. 94929-30, (1992)]. If the petition, however, is accompanied by the 25% consent signatures, then the holding of the CE becomes mandatory [California Manufacturing Corp. v. Laguesma, G.R. No. 97020, (1992)]. Q: Should the consent signatures of at least 25% of the employees in the bargaining unit be submitted simultaneously with the filing of the petition for certification election?

Note: The approval of the PCE in an unorganized bargaining unit is NEVER appealable, the reason being that the law favors unionized than not unionized.

A: No, the administrative rule requiring the simultaneous submission of the 25% consent signatures upon the filing of PCE should not be strictly applied to frustrate the determination of the legitimate representative of the workers. Accordingly,

Q: May an employee intervene in the petition for certification election?

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Labor Law and Social Legislation A: Yes, for the purpose of protecting his individual right. [Sec. 1, Rule VIII, Book V, IRR as amended by D.O. 40-F-03, s. 2008]

A: Yes. Because the objective in a CE is to ascertain the majority representation of the bargaining representative, if the Ees desire to be represented at all by anyone. Hence, no union is one of the choices in a CE.

Q: Where is a petition for certification election filed? A: It shall be filed with the Regional Office. [Implementing Rules, as amended by D.O. 40-F-03, s. 2008]

Alternative Answer: No. A “no union” cannot win in a CE. The purpose of a CE is to select an exclusive bargaining agent and a no union vote would precisely mean that the voter is not choosing any of the contending unions. If the no-union votes constitute a majority of the valid votes cast, this fact will all the more mean that no union won in CE. A one-year bar will consequently stop the holding of another CE to allow the Er to enjoy industrial peace for at least one year.

Q: Who shall hear and resolve the petition for certification election? A: The Mediator-Arbiter. Q: When shall a petition for certification election be filed? A: The proper time to file the PCE depends on whether the certified bargaining unit has a CBA or not:

Q: In what instance may a petition for certification election be filed outside the freedom period of a current collective bargaining agreement? (1997 Bar Question)

1. If it has no CBA, the petition may be filed anytime outside the 12-month bar (certification year). 2. If it has CBA, it can be filed only within the last 60 th days of the 5 year of the CBA.

A: As a general rule, in an establishment where there is a CBA in force and effect, a PCE may be filed only during the freedom period of such CBA. But to have that effect, the CBA should have been filed and registered with the DOLE. [Art. 231, 253-A and 256, LC]

Note: At the expiration of the freedom period, the Er shall continue to recognize the majority status of the incumbent bargaining agent where no PCE is filed.

Q: Distinguish Union Election from Certification Election.

Thus, a CBA that has not been filed and registered with the DOLE cannot be a bar to a CE and such election can be held outside the freedom period of such CBA.

A: UNION ELECTION

CERTIFICATION ELECTION

Held pursuant to the union’s constitution and by-laws

The process is ordered and supervised by DOLE

Right to vote is enjoyed only by union members

Winners of union election become officers and representatives of the union only

Alternative Answer: A PCE may be filed outside the freedom period of a current CBA if such CBA is a new CBA that has been prematurely entered into, meaning, it was entered into before the expiry date of the old CBA. The filing of the PCE shall be within the freedom period of the old CBA which is outside the freedom period of the new CBA that had been prematurely entered into.

All Ees whether union or non-union members who belong to the appropriate bargaining unit can vote The winner in a CE is an entity, a union, which becomes the representative of the whole bargaining unit that includes even the members of the defeated unions.

Q: Are probationary employees entitled to vote in a certification election? Why? (1999 Bar Question) A: Yes, in a CE, all rank-and-file Ees in the appropriate bargaining unit are entitled to vote. This principle is clearly stated in Art. 255, LC which states that the "labor organization designated or selected by the majority of the Ees in such unit shall be the exclusive representative of the Ees in such unit for the purpose of CB." [Airtime Specialists, Inc. v. Ferrer-Calleja, G.R. No. 80612-16, (1989)].

Note: Both in CE and union election, the prescribed procedures should be followed.

Q: Can a "no-union" win in a certification election? (2006 Bar Question) UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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LABOR RELATIONS LAW Any Ee, whether employed for a definite period or not, shall beginning on the first day of his service, be eligible for membership in any labor organization. In a CE for the bargaining unit of rank and file Ees, all rank and file Ees, whether probationary or permanent are entitled to vote. As long as probationary Ees belong to the defined bargaining unit, they are eligible to support the PCE [NUWHRAIN-Manila Pavilion Hotel Chapter v. Secretary, G.R. No. 181531, (2009)].

repeat, if the dismissal is under question, as in the case now at bar whereby a case of illegal dismissal and/or ULP was filed, the Ees concerned could still qualify to vote in the elections [Phiippine Fruits & Vegetables Industries v. Torres, G.R. No. 92391, (1992)].

Q: What is direct certification?

A: Yes, provided that there is a pending illegal dismissal case filed by them. While the case is still pending, the Er-Ee relationship is not yet severed.

Q: Can employees whose services were terminated still entitled to vote during the certification election?

A: It is the process whereby the Mediator-Arbiter directly certifies a labor organization of an appropriate bargaining unit of a company after a showing that such petition is supported by at least a majority of the Ees in the bargaining unit.

Q: How should protest be made during certification elections? A: Protest must be raised and contained in the minutes of the proceedings otherwise it is deemed waived [National Association of Trade Free Unions v. Mainit Lumber Development Co. Workers Union, G.R. No. 79526, (1990)]. Protests should be formalized before the Med-Arbiter within 5 days from the close of the proceedings otherwise it is deemed abandoned [Timbungco v. Castro, G.R. No. 76111, (1990)].

Q: Is direct certification still allowed? A: No. Even in a case where a union has filed a PCE, the mere fact that there was no opposition does not warrant a direct certification. More so in a case when the required proof is not presented in an appropriate proceeding and the basis of the direct certification is the union’s self-serving assertion that it enjoys the support of the majority of the Ees, without subjecting such assertion to the test of competing claims [Samahang Manggagawa sa Permex v. Secretary, G.R. No. 107792, (1998)].

RUN-OFF ELECTION Q: What is a run-off election? A: An election conducted when: 1. A CE which provides for three or more choices results in none of the contending unions receiving a majority of the valid votes cast, and 2. There are no objections or challenges which if sustained can materially alter the results, provided 3. The total number of votes for all the contending unions is at least 50% of the number of votes cast. [Sec. 1, Rule X, Book V, IRR] 4. None of the choices obtained the majority of the valid votes cast (50% + 1 second majority); 5. The two choices which garnered the highest votes will be voted and the one which garners the highest number of votes will be declared the winner provided they get the majority votes of the total votes cast.

Q: Does the failure of an independent union to prove its affiliation with a federation affect its right to file a petition for certification election as an independent union? A: No, as a LLO, it has the right to file a PCE on its own beyond question. Its failure to prove its affiliation with a federation cannot affect its right to file said PCE as an independent union. At the most, its failure will result in an ineffective affiliation with the federation. Despite affiliation, the local union remains the basic unit free to serve the common interest of all its members and pursue its own interests independently of the federation [Samahan ng mga Manggagawa sa Filsystems v. SLE, G.R. No. 128067, (1998)].

REQUIREMENTS Q: May illegally dismissed employees of the company participate in the certification election?

Q: What are the requirements for a run-off election?

A: Yes, it is now well-settled that Ees who have been improperly laid off but who have at present an unabandoned right to or expectation of reemployment, are eligible to vote in CEs. Thus, and to

A: 1. An election was conducted with three or more choices

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation 2. None of the contending union obtained the required majority vote of 50% + 1 of the valid votes cast 3. There are no objections or challenges that can alter the results materially 4. The number of votes received by all contending unions when added together amounts to at least 50% of the total votes cast

Election

the sole and exclusive bargaining agent of all the Ees in an appropriate bargaining unit for the purpose of CB.

Q: Who are the choices in a run-off election? nd

A: The unions receiving the highest and 2 highest number of the votes cast. [Sec.2, Rule X, Book V, IRR]

Note: MedArbiter may determine if there is an Er-Ee relationship and if the voters are eligible.

Note: “No Union” shall not be a choice in the Run-off Election.

Q: When should the notice for run-off election be posted? A: The notice should be posted by the Election Officer at least five days before the actual date. [Sec. 1, Rule X, Book V, IRR] RE-RUN ELECTION Q: What is a Re-run Election? A: An election that takes place when: 1. One choice receives a plurality of the vote and the remaining choices results in a tie; or 2. All choices received the same number of votes.

Consent Election

Note: In both instances, the “no union” is also a choice.

CONSENT ELECTION Q: What is a consent election? A: An election voluntarily agreed upon by the parties, with or without the intervention by the DOLE. [Sec.1 (h), Rule I, Book V, IRR] Note: To afford an individual Ee-voter an informed choice where a local/chapter is the petitioning union, the local/chapter shall secure its certificate of creation at least five working days before the date of the consent election. [Sec.1, Rule VIII, Book V, IRR as amended by DO 40-F-03]

Run-Off Election

Q: Distinguish certification election, consent election, run-off election, and re-run election. A: Purpose Certification

To determine

Participation of MediatorArbiter Requires PCE

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

filed by a union or Er. A MedArbiter grants the petition and an election officer is designated by regional director to supervise the election.

150

To determine the issue of majority representation of all the workers in the appropriate CB unit mainly for the purpose of determining the administrator of the CBA when the contracting union suffered massive disaffiliation and not for the purpose of determining the bargaining agent for purpose of CB. Takes place between the unions who received the two highest number of votes in a CE with three or more choices, where not one of the unions obtained the majority of the valid votes cast, provided the

Held by agreement of the unions with or without the participation of the MedArbiter.

LABOR RELATIONS LAW

Re-run Election

total union votes is at least 50% of the votes cast. Takes place in two instances: 1. If one choice receives a plurality of the vote and the remaining choices results in a tie; or 2. If all choices received the same number of votes. In both instances, the no union is also a choice.

1.

The chapter shall acquire legal personality only for purposes of filing a PCE from the date it was issued a charter certificate

2.

The chapter shall be entitled to all other rights and privileges of a LLO only upon the submission of the following documents in addition to its charter certificate: a. Names of the chapter’s officers, their addresses, and the principal office of the chapter b. Chapter’s constitution and by-laws c. Where the chapter’s constitution and bylaws are the same as that of the federation or the national union, this fact shall be indicated accordingly

3.

The genuineness and due execution of the supporting requirements shall be: a. Certified under oath by the secretary or treasurer of the local/chapter, and b. Attested to by its president [Sec.2(e), Rule III, Book V, IRR, as amended by D.O. 40-F-03]

Q: What are the reportorial requirements in affiliation?

Note: Petition for cancellation of registration is not a bar to a PCE. No prejudicial question shall be entertained in a PCE. (D.O. 40-03)

A: The report of affiliation of independently registered labor unions with a federation or national union shall be accompanied by the following documents: 1. Resolution of the labor union's board of directors approving the affiliation; 2. Minutes of the general membership meeting approving the affiliation; 3. The total number of members comprising the labor union and the names of members who approved the affiliation; 4. The certificate of affiliation issued by the federation in favor of the independently registered labor union; and 5. Written notice to the Er concerned if the affiliating union is the incumbent bargaining agent. [D.O. 40-03, Rule, III, Sec. 7, (2003)]

AFFILIATION AND DISAFFILIATION OF THE LOCAL UNION FROM THE MOTHER UNION Q: What is an Affiliate? A: “Affiliate” refers to: 1. An independent union affiliated with a federation, national union; or 2. A local chapter which was subsequently granted independent registration but did not disaffiliate from its federation. Q: What is the purpose of affiliation? A: The purpose of affiliation is to foster the free and voluntary organization of a string and united labor movement. (Art. 211 [c], LC)

Q: What is the effect of affiliation?

Q: How is a local chapter created?

A: The labor union that affiliates with a federation is subject to the laws of the parent body under whose authority the local union functions. The Constitution, by-laws and rules of the mother federation, together with the charter it issues to the local union, constitutes an enforceable contract between them and between the members of the subordinate union inter se. Thus, pursuant to the Constitution and by-

A: A duly registered federation or national union may directly create a local/chapter by issuing a charter certificate indicating the establishment of a local/chapter.

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Labor Law and Social Legislation laws, the federation has the right to investigate and expel members of the local union [Villar v. Inciong, G.R. No. L-50283-84, (1983)].

A: Yes. The pendency of an election protest does not bar the valid disaffiliation of the local union which was supported by the majority of its members.

Q: May a local union disaffiliate from the federation?

The right of a local union to disaffiliate with the federation in the absence of any stipulation in the Constitution and by-laws of the federation prohibiting disaffiliation is well settled. Local unions remain as the basic unit of association, free to serve their own interest subject to the restraints imposed by the Constitution and by-laws of national federation and are free to renounce such affiliation upon the terms and conditions laid down in the agreement which brought such affiliation to existence. In the case at bar, no prohibition existed under the Constitution and by-laws of the federation. Hence, the union may freely disaffiliate with the federation [Philippine Skylanders v. NLRC, G.R. No. 127374, (2002)].

A: GR: A labor union may disaffiliate from the mother union to form an independent union only during the 60-day freedom period immediately preceding the expiration of the CBA. XPN: Even before the onset of the freedom period, disaffiliation may still be carried out, but such disaffiliation must be effected by the majority of the union members in the bargaining unit. Note: This happens when there is a substantial shift in allegiance on the part of the majority of the members of the union. In such a case, however, the CBA continues to bind the members of the new or disaffiliated and independent union to determine the union which shall administer the CBA may be conducted [ANGLO-KMU v. Samahan ng Manggagawang Nagkakaisa sa Manila Bay Spinning Mills at J.P. Coats, G.R. No.118562, (1996)]

Q: Distinguish between an independently registered and unregistered chartered local union. A: CHARTERED LOCAL UNION Independently Unregistered Registered How to affiliate? By application with the federation for the By signing contract of issuance of a charter affiliation certificate to be submitted to the Bureau Labor Relations Effect of Disaffiliation to the union (local) Would cease to be an Would not affect its LLO and would no longer being an LLO and have the legal therefore it would personality and the continue to have legal rights and privileges personality and to granted by law to LLO, possess all rights and unless the local chapter privileges of LLO. is covered by its duly registered CBA. Effect of Disaffiliation to the CBA An existing CBA would continue to be valid as The CBA would continue the labor organization to be valid up to its can continue expiration date. administering the CBA. Entitlement to union dues after Disaffiliation Labor organization Union dues may no entitled to the union longer be collected as dues and not the there would no longer federation from which be any labor union that the labor organization is allowed to collect such disaffiliated. union dues from the Ees.

Q: What is the limitation to disaffiliation? A: Disaffiliation should be in accordance with the rules and procedures stated in the Constitution and by-laws of the federation. A local union may disaffiliate with its mother federation provided that there is no enforceable provision in the federation’s constitution preventing disaffiliation of a local union [Tropical Hut Employees Union v. Tropical Hut, G.R. Nos. L-43495-99, (1990)]. Note: A prohibition to disaffiliate in the Federation’s constitution and by-laws is valid because it is intended for its own protection. Locals or chapters who retained status as LLO shall be allowed to register as independent unions. If they fail to register, they shall lose their legitimate status upon the expiration of the CBA.

Q: PSEA is a local union in Skylander company which is affiliated with PAFLU. PSEA won the certification election among the rank and file employees of the Skylander company but its rival union PSEA-WATU protested the results. Pending the resolution of such controversy, PSEA disaffiliated with PAFLU and hence affiliated with NCW which was supported by its members. May a local union disaffiliate with its mother federation pending the settlement of the status as the sole and exclusive bargaining agent?

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

152

LABOR RELATIONS LAW SUBSTITUTIONARY DOCTRINE

A: Union dues are the lifeblood of the union. All unions are authorized to collect reasonable membership fees, union dues, assessments, fines and other contributions for labor education and research, mutual death and hospitalization benefits, welfare fund, strike fund and credit and cooperative undertakings. [Art. 277(a), LC]

Q: What is the Substitutionary Doctrine? A: Under this doctrine, where there occurs a shift in the Ees union allegiance after the execution of a CB contract with the Er, the Ees can change their agent (labor union) but the CB contract which is still subsisting continues to bind the Ees up to its expiration date. They may however, bargain for the shortening of said expiration date.

Q: What are special assessments or extraordinary fees? A: These are assessments for any purpose or object other than those expressly provided by the labor organization’s Constitution and by-laws.

Note: The Ee cannot revoke the validly executed CB contract with their Er by the simple expedient of changing their bargaining agent. The new agent must respect the contract [Benguet Consolidated Inc. v. BCI Employees and Worker’s Union-PAFLU, G.R. No. L-24711, (1968)].

REQUIREMENTS FOR VALIDITY Q: What are the requisites of a valid check-off?

It cannot be invoked to support the contention that a newly certified CB agent automatically assumes all the personal undertakings of the former agent-like the “no strike clause” in the CBA executed by the latter.

A: GR: No special assessments, attorney’s fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an Ee without individual written authorization duly signed by the Ee.

UNION DUES AND SPECIAL ASSESSMENTS Q: What are the dues and assessments which the union may collect?

The authorization should specify: 1. Amount 2. Purpose & 3. Beneficiary of the deduction.

A: Legitimate labor organizations are authorized to collect reasonable amount of the following: 1. Membership fees 2. Union dues 3. Assessments 4. Fines 5. Contribution for labor education and research, mutual death and hospitalization benefits, welfare fun, strike fund and credit and cooperative undertakings [Art. 277 (a), LC] 6. Agency fees [Art. 248 (e), LC]

XPNs: 1. For mandatory activities under the LC 2. For Agency Fees 3. When non-members of the union avail of the benefits of the CBA: a. Non-members may be assessed union dues equivalent to that paid by union members; b. Only by board resolution approved by majority of the members in general meeting called for the purpose.

Q: What are union dues? A: These are regular monthly contributions paid by the members to the union in exchange for the benefits given to them by the CBA and to finance the activities of the union in representing the union.

Q: What are the requisites for a valid levy of special assessment or extraordinary fees? A: 1. Authorization by a written resolution of the majority of all members at the general membership meeting duly called for that purpose;

Q: What is check-off? A: It is a method of deducting from an Ee’s pay at a prescribed period, the amounts due the union for fees, fines and assessments.

2. Note: Deductions for union service fees are authorized by law and do not require individual check-off authorizations.

Q: What is the nature and purpose of check-off?

153

Secretary’s record of the minutes of the meeting, which must include the: a. List of members present b. Votes cast UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation c. d.

Purpose of the special assessments Recipient of such assessments;

AGENCY FEES Q: What is an agency fee?

3.

Individual written authorization to check-off duly signed by the Ee concerned – to levy such assessments.

A: It is an amount equivalent to union dues, which a non-union member pays to the union because he benefits from the CBA negotiated by the union.

Q: What is the effect of failure to strictly comply with the requirements set by law?

Note: Payment by non-union members of agency fees does not amount to unjust enrichment because the purpose of such dues is to avoid discrimination between union and non-union members.

A: It shall invalidate the questioned special assessments. Substantial compliance with the requirements is not enough in view of the fact that the special assessment will diminish the compensation of union members [Palacol v. FerrerCalleja, G.R. No. 85333, (1990)].

Q: A is employed by XYZ Company where XYZ Employees Union (XYZ-EU) is the recognized exclusive bargaining agent. Although A is a member of rival union XYR-MU, he receives the benefits under the CBA that XYZ-EU had negotiated with the company. XYZ-EU assessed A, a fee equivalent to the dues and other fees paid by its members but A insists that he has no obligation to pay said dues and fees because he is not a member of XYZ–EU and he has not issued an authorization to allow the collection. Explain whether his claim is meritorious. (2010 Bar Question)

Q: Who has jurisdiction over check-off disputes? A: Being an intra-union dispute, the RD of the DOLE has jurisdiction over check off disputes. Q: Distinguish check-off from special assessments. A: Check-off

Special Assessment How approved (Union Dues) By obtaining the individual By written resolution written authorization duly approved by majority of signed by the Ee which all the members at the must specify: meeting called for that 1. Amount purpose. 2. Purpose 3. Beneficiary Exception to such requirement (Agency fees) Not necessary when: 1. For mandatory activities under the LC 2. For Agency Fees 3. When non-members of the union avail of the benefits of the CBA: a. Said non-members No exception; written may be assessed resolution is mandatory union dues equivalent in all instances. to that paid by union members; b. Only by Board resolution approved by majority of the members in general meeting called for the purpose

A: No. the fee exacted from A takes the form of an agency fee which is sanctioned by Art. 248 (e), LC. The collection of agency fees in an amount equivalent to union dues and fees from Ees who are not union members is recognized under the LC. The union may collect such fees even without any written authorization from the non-union member Ees, if said Ees accept the benefits resulting from the CBA. The legal basis of agency fees is quasi-contractual [Del Pilar Academy v. Del Pilar Academy Employees Union, G.R. No. 170112, (2008)]. REQUISITES FOR ASSESSMENT Q: What are the requisites for assessment of agency fees [Art. 248 (e), LC]? A: 1. 2. 3.

The Ee is part of the bargaining unit He is not a member of the union He partook of the benefits of the CBA

Note: Under Art. 241 (o), LC, other than for mandatory activities under the Code, no special assessments, attorney’s fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an Ee without his authorization. The individual authorization required under this article shall not apply to non-members of the recognized CB agent with regard to assessment of agency fees.

Q: Distinguish union dues from agency fees. UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

154

LABOR RELATIONS LAW A: Union Dues Is deducted from members for the payment of union dues May not be deducted from the salaries of the union members without the written consent of the workers affected.

A: The mechanics of CB, which is defined as negotiations towards a collective agreement, is set in motion only when the following jurisdictional preconditions are present, namely:

Agency Fee Is deducted from nonmembers of the bargaining agent (union) for the enjoyment of the benefits under the CBA.

1.

May be deducted from the salary of the Ees without their written consent.

2. 3.

Possession of the status of majority representation of Ees representative in accordance with any of the means of selection or designation provided for by the LC; Proof of majority representation; A demand to bargain under Art. 250 (a), LC [Kiok Loy v. NLRC, G.R. No. L-54334, (1986)].

Q: When should bargaining commence?

RIGHT TO COLLECTIVE BARGAINING

A: Bargaining commences within 12 months after the determination and certification of the Ees exclusive bargaining representative (certification year).

Q: What is collective bargaining? A: 1. It is the process of negotiation by an organization or group of workmen, in behalf of its members, with the Er, concerning wages, hours of work, and other terms and conditions of employment, and 2. the settlement of disputes by negotiation between an Er and the representative of his Ees.

Q: What is the procedure in collective bargaining? A: When a party desires to negotiate an agreement: 1. 2.

Note: GR: No court or administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work, or other terms and conditions of employment

3.

4.

XPNs: As otherwise provided under the LC: 1. National Wages and Productivity Commission and RTWPB as to wage fixing. [Art. 99 and 122, LC] 2. NCMB and NLRC as to wage distortion. [Art. 124, LC] 3. SLE and President of the Philippines as to certification and assumption of powers over labor disputes. [Art. 236(g), LC]

5.

It shall serve a written notice upon the other party with a statement of proposals Reply by the other party shall be made within 10 days with counter proposals In case of differences, either party may request for a conference which must be held within 10 calendar days from receipt of request If not settled, NCMB may intervene and encourage the parties to submit the dispute to a VA If not resolved, the parties may resort to any other lawful means (either to settle the dispute or submit it to a VA).

Note: During the conciliation proceeding in the NCMB, the parties are prohibited from doing any act which may disrupt or impede the early settlement of disputes. (Art. 250 [d], LC)

Q: What is the purpose behind this rule?

Q: What are the stages in collective bargaining?

A: It is to encourage a truly democratic method of regulating the relations between the Ers and Ees by means of agreements freely entered into through CB.

A: 1. Preliminary process: Sending a written notice for negotiation which must be clear and unequivocal 2. Negotiation process. 3. Execution process: The signing of the agreement 4. Publication for at least 5 days before ratification 5. Ratification by the majority of all the workers in the bargaining unit represented in the negotiation (not necessary in case of arbitral award) 6. Registration process.

Q: Who are the parties to a collective bargaining? A: 1. Er 2. Ees, represented by the exclusive bargaining agent Q: What are the jurisdictional preconditions in Collective Bargaining? (Kiok Loy Doctrine)

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation 7.

8.

Administration process: The CBA shall be jointly administered by the management and the bargaining agent for a period of 5 years. Interpretation and Application process.

Q: May either party bargain to an impasse? A: It depends: 1.

DUTY TO BARGAIN COLLECTIVELY Q: What is the meaning of the duty to bargain collectively?

2.

A: The duty to bargain collectively means the performance 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 and conditions of employment including proposals 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 or to make any concession. (Art. 252, LC)

Q: When does the duty of the employer to bargain collectively arise? A: Only after the union requests the Er to bargain. If there is no demand, the Er cannot be in default. Note: Where a majority representative has been designated, it is a ULP for the Er, as a refusal to collectively bargain, to deal and negotiate with the minority representative to the exclusion of the majority representative.

When there is a CBA, the duty to bargain collectively shall also 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 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. [Art. 253, LC]

Where there is a legitimate representation issue, there is no duty to bargain collectively on the part of the Er [Lakas ng mga Manggagawang Makabayan v. Marcelo Enterprises, G.R. No. L-38258, (1982)].

Q: What is the test of bargaining in good faith? A: There is no perfect test of good faith in bargaining. The good faith or bad faith is an inference to be drawn from the facts and is largely a matter for the NLRC’s expertise. The charge of bad faith should be raised while the bargaining is in progress.

Q: What are the restrictions to the duty to bargain collectively?

Note: With the execution of the CBA, bad faith 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. This is not a case where private respondent exhibited an indifferent attitude towards CB because the negotiations were not the unilateral activity of petitioner union. The CBA is good enough that private respondent exerted “reasonable effort of good faith bargaining” [Samahang Manggagawa sa Top Form Manufacturing-United Workers of the Phiippinels v. NLRC, G.R. No. 113856, (1998)].

A: 1. Such duty does not compel any party to agree to a proposal or to make any concession. 2. Parties cannot stipulate terms and conditions of employment which are below the minimum requirements prescribed by law. Q: Does a petition for cancellation of a union’s certificate of registration involve a prejudicial question that should first be settled before parties could be required to collectively bargain?

Q: Does an employer’s steadfast insistence to exclude a particular substantive provision in the negotiations for a CBA constitute refusal to bargain or bargaining in bad faith?

A: No. A pending cancellation proceeding is not a bar to set mechanics for CB. If a certification election may still be held even if a petition for cancellation of a union’s registration is pending, more so that the CB process may proceed. The majority status of the union is not affected by the cancellation proceedings [Capitol Medical Center v. Trajano, G.R. No. 155690, (2005)]. UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Where the subject of a dispute is a mandatory bargaining subject, either party may bargain to an impasse as long as he bargains in good faith. Where the subject is non-mandatory, a party may not insist in bargaining to the point of impasse. His instance may be construed as evasion of duty to bargain.

A: No. This is no different from a bargaining representative’s perseverance to include one that they deem of absolute necessity. Indeed, an adamant insistence on a bargaining position to the point where the negotiations reach an impasse does not establish

156

LABOR RELATIONS LAW bad faith. Obviously, the purpose of CB is the reaching of an agreement resulting in a contract binding on the parties; but the failure to reach an agreement after negotiations have continued for a reasonable period does not establish a lack of good faith. The statutes invite and contemplate a CB contract, but they do not compel one. The duty to bargain does not include the obligation to reach an agreement. While the law makes it an obligation for the Er and the Ees 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 [Union of Filipro Employees v. Nestle Philippines, G.R. Nos. 158930-31, (2008)].

WHEN THERE IS ABSENCE OF A CBA Q: What is the duty to bargain collectively when there is no collective bargaining agreement? A: In the absence of an agreement or other voluntary arrangement providing for a more expeditious manner of CB, it shall be the duty of Er and the representatives of the Ees to bargain collectively in accordance with the provisions of the LC. [Art. 251, LC] WHEN THERE IS A CBA Q: What is the duty to bargain collectively when there is a collective bargaining agreement? A: When there is a CBA, the duty to bargain collectively, in addition to Art. 252, shall mean that:

Q: What is a deadlock? 1. A: Deadlock is synonymous with impasse or a standstill which presupposes reasonable effort at good faith bargaining but despite noble intentions does not conclude an agreement between the parties.

2.

3.

Q: In case of deadlock in the renegotiation of the collective bargaining agreement, what are the actions that may be taken by the parties?

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 60 th days prior the expiration of its 5 year. 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. (Art. 253, LC)

A: The parties may: Note: CBA is a contract of indefinite period under Art. 253.

1.

2. 3.

Call upon the NCMB to intervene for the purpose of conducting conciliation or preventive mediation; Refer the matter for VA or compulsory arbitration; Declare a strike or lockout upon compliance with the legal requirements (This remedy is a remedy of last resort.)

A CBA is entered into in order to foster stability and mutual cooperation between labor and capital. An Er should not be allowed to rescind unilaterally its CBA with the duly certified bargaining agent it had previously contracted with, and decide to bargain anew with a different group if there is no legitimate reason for doing so and without first following the proper procedure. If such behavior would be tolerated, bargaining and negotiations between the Er and the union will never be truthful and meaningful, and no CBA forged after arduous negotiations will ever be honored or be relied upon [Employees Union of Bayer Phils., FFW v. Bayer Philippines, Inc., 636 SCRA 472, (2010)].

Q: May economic exigencies justify refusal to bargain? A: No. An Er is not guilty of refusal to bargain by persistently rejecting the union’s economic demands where he is operating at a loss, on a low profit margin, or in a depressed industry, as long as he continues to negotiate. But financial hardship constitutes no excuse for refusing to bargain collectively.

Q: What is a single enterprise bargaining? A: It involves negotiation between one certified labor union and one Er. Any voluntarily recognized or certified labor union may demand negotiations with its Er for terms and conditions of work covering Ees in the bargaining unit concerned. (Sec. 3, Rule XVI, Book V, Rules to Implement the LC, as amended by Department Order No. 40-03, Series of 2003)

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Labor Law and Social Legislation Q: What is a multi-employer bargaining scheme?

Incorporated v. P.I. Manufacturing Supervisors and Foremen Association, 543 SCRA 614 (2008)].

A: It involves negotiation between and among several certified labor unions and Ers.

Q: When should a collective bargaining agreement be filed for registration?

Any legitimate labor union and Er may agree in writing to come together for the purpose of CB provided that: 1.

2.

3.

A: Within 30 days from execution of CBA, the parties thereto shall submit the agreement to the Regional Office which issued the certificate of registration/ certificate of creation of chartered local of the labor union-party to the agreement.

Only legitimate labor unions which are incumbent exclusive bargaining agents may participate and negotiate; Only Ers with counterpart legitimate labor unions which are incumbent bargaining agents may participate and negotiate; and Only those legitimate labor unions which pertain to employer units which consent to multi-Er bargaining may participate. (Sec. 5, Rule XVI, Book V, Rules to Implement the LC, as amended by Department Order No. 40-03, Series of 2003)

Q: What are the requirements for registration? A: The application for CBA registration shall be accompanied by the original and two duplicate copies of the following requirements: 1. CBA 2. A statement that the CBA was posted in at least two conspicuous places in the establishment concerned for at least five days before its ratification 3. Statement that the CBA was ratified by the majority of the Ees in the bargaining unit.

COLLECTIVE BARGAINING AGREEMENT Q: What is a collective bargaining agreement?

Note: The following documents must be certified under oath by the representative of the Er and the labor union. No other document shall be required in the registration of the CBA.

A: It is a contract executed upon request of either the Er or the exclusive bargaining representative of the Ees incorporating the agreement reached after negotiations with respect to wages, hours of work, terms and conditions of employment, including proposals for adjusting any grievance or questions under the agreement.

Q: What is a zipper clause? A: It is a stipulation in a CBA indicating that issues that could have been negotiated upon but not contained in the CBA cannot be raised for negotiation when the CBA is already in effect.

Note: The certification of the CBA by the BLR is not required to make such contract valid. Once it is duly entered into and signed by the parties, a CBA becomes effective as between the parties whether or not it has been certified by the BLR [Liberty Flour Mills Employees Association v. Liberty Flour Mills, G.R. Nos. 58768-70, (1989)].

A CBA is not an ordinary contract but one impressed with public interest, only provisions embodied in the CBA should be so interpreted and complied with. Where a proposal raised by a contracting party does not find print in the CBA, it is not a part thereof and the proponent has no claim whatsoever to its implementation (SMTFM-UWP v. NLRC, G.R. No. 113856, (1998).

Q: What is the nature of a collective bargaining agreement? A: The CBA is the law between the contracting parties—the CB representative and the Er-company. Compliance with a CBA is mandated by the expressed policy to give protection to labor [Vicente Almario v. Philippine Airlines, Inc., 532 SCRA 614, (2007)].

Q: What may be done during the 60-day freedom period? A: 1. A labor union may disaffiliate from the mother union to form a local or independent union only during the 60-day freedom period immediately preceding the expiration of the CBA. 2. Either party can serve a written notice to terminate or modify agreement at least 60 days prior to its expiration period.

Q: What is the purpose of a collective bargaining agreement? A: The goal of CB is the making of agreements that will stabilize business conditions and fix fair standards of working conditions [P.I. Manufacturing, UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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LABOR RELATIONS LAW 3.

A PCE may be filed.

Q: When should established?

grievance

machinery

be

MANDATORY PROVISIONS OF THE CBA A: 1. Agreement by the parties 2. A grievance committee – composed of at least two representatives each from the members of the bargaining unit and the Er, unless otherwise agreed upon by the parties – shall be created within 10 days from the signing of CBA

Q: What are the mandatory provisions of the collective bargaining agreement? A: 1. 2. 3. 4. 5. 6. 7. 8. 9.

Grievance machinery Voluntary Arbitration Wages Hours of work Family planning Rates of pay Mutual observance clause No Strike-No Lockout Clause Labor-Management Council

Note: Although Art. 260, LC mentions “parties to a CBA”, it does not mean that a grievance machinery cannot be set up in a CBA-less enterprise. In any workplace where grievance can arise, a grievance machinery can be established.

Q: What is a grievance procedure? A: It refers to the internal rules of procedure established by the parties in their CBA which usually consists of successive steps starting at the level of the complainant and his immediate supervisor and ending, when necessary, at the level of the top union and company officials and with VA as the terminal step.

Note: In addition, the BLR requires that the CBA should include a clear statement of the term of the CBA. Er’s duty to bargain is limited to mandatory bargaining subjects; as to other matters, he is free to bargain or not.

GRIEVANCE PROCEDURE Q: What is grievance?

Q: What will happen to grievances submitted to the grievance machinery which are not settled within seven calendar days from the date of their submission?

A: There is grievance when a dispute or controversy arises over the interpretation or implementation of any provision of the CBA or interpretation or enforcement of company personnel policies. [Sec.1 (u), Rule I, Book V, IRR]

A: They shall automatically be referred to VA prescribed in the CBA. [Art. 260 (2), LC]

Q: What provisions must the parties include in a collective bargaining agreement?

Either party may serve notice upon the other of its decision to submit the issue to VA. If the party upon whom such notice is served fails/refuses to respond within seven days from receipt, VA/panel designated in the CBA shall commence arbitration proceedings. If the CBA does not designate or if the parties failed to name the VA/panel, the regional branch of NCMB appoints VA/panel.

A: 1. Provisions that will ensure the mutual observance of its terms and conditions. 2. A machinery for adjustment and resolution of grievances arising from the: a. Interpretation/implementation of the CBA and b. Interpretation/ enforcement of company personnel policies. [Art. 260(1), LC]

Q: How are cases arising from the Interpretation or implementation of collective bargaining agreements handled and disposed? (1995 Bar Question)

Q: What is grievance machinery? A: It refers to the mechanism for the adjustment and resolution of grievances arising from the interpretation or enforcement of company personnel policies. It is part of the continuing process of CB.

A: They are disposed through the grievance machinery and if not resolved by the grievance machinery, through VA.

Note: It is a mandatory provision in any CBA. No collective agreement can be registered in the absence of such procedure.

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Labor Law and Social Legislation VOLUNTARY ARBITRATION

A: 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. [Sec. 3, Art. XIII, 1987 Constitution]

Q: What is voluntary arbitration? A: It refers to the mode of settling labor management disputes by which the parties select a competent, trained and impartial third person who shall decide on the merits of the case and whose decision is final and executory. [Sec.1 (d), Rule II, NCMB Revised Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings, (2004)]

Q: How is the decision of a voluntary arbitrator enforced? A: Upon motion of any interested party, the voluntary arbitrator or panel of voluntary arbitrators or the LA in the region where the movant resides, in case of the absence or incapacity of the voluntary arbitrator or panel of voluntary arbitrators, for any reason, may issue a writ of execution requiring either the sheriff of the NLRC or regular courts or any public official whom the parties may designate in the submission agreement to execute the final decision, order or award. [Art. 262-A, LC]

Q: Who is a voluntary arbitrator? A: Any person who has been accredited by the NCMB as such, or any person named or designated in the CBA by the parties as their voluntary arbitrator, or one chosen by the parties with or without the assistance of the NCMB, pursuant to a selection procedure agreed upon in the CBA or one appointed by the NCMB in case either of the parties to the CBA refuses to submit to VA.

NO STRIKE-NO LOCKOUT CLAUSE

Note: A voluntary arbitrator is not an Ee, functionary or part of the government or of the DOLE, but he is authorized to render arbitration services provided under labor laws [(Ludo & Luym Corporation v. Saornido, G.R. No. 140960, (2003)].

Q: What is a no strike-no Lockout clause? A: It is a clause in the CBA which is an expression of the firm commitment of the parties 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 Er, that it will not stage a lockout during the lifetime thereof.

Q: What is the difference between compulsory and voluntary arbitration?

Q: When does the no strike-no Lockout clause in the collective bargaining agreement apply?

A: Compulsory arbitration is a system whereby the parties to a dispute are compelled by the government to forego their right to strike and are compelled to accept the resolution of their dispute through rd arbitration by a 3 party. The essence of arbitration remains since a dispute is resolved by a disinterested rd 3 party whose decision is final and binding on the rd parties. The 3 party is normally appointed by the government.

A: The “no strike-no lockout” clause in the CBA applies only to economic strikes. It does not apply to ULP strikes. Hence, if the strike is founded on a ULP of the Er, a strike declared by the union cannot be considered a violation of the no strike clause [Master Iron Labor Union v. NLRC, G.R. No. 92009, (1993)]. Q: Will acts of violence committed in the course of strike render the strike illegal?

Under VA, referral of a dispute by the parties is made, pursuant to a VA clause in their CBA, to an impartial rd 3 person for a final and binding resolution. Ideally, arbitration awards are to be complied with by both parties without delay, such that once an award has been rendered by an arbitrator, nothing is left to be done by both parties but to comply with the same [Luzon Development Bank v. Association of Luzon Development Bank Employees, G.R. No. 120319, (1995)].

A: It depends upon the acts of violence committed. 1. If pervasive, widespread and regularly committed, it is illegal, union is responsible. 2. If isolated, sporadic or remote, it is still legal but the person who committed is responsible.

Q: What is the basis for voluntary arbitration and its rationale?

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160

LABOR RELATIONS LAW LABOR MANAGEMENT COUNCIL

DURATION

Q: When may a Labor Management Council be formed?

Q: What is the duration of a collective bargaining agreement?

A: Labor-Management Councils or Committees may be formed voluntarily by workers and Ers in the event no legitimate labor organization exists for the purpose of promoting industrial peace. (Art. 277, LC)

A: 1. Representation aspect (refers to the identity and majority status of the union that negotiated the CBA as the exclusive bargaining representative) five years. 2. All other provisions (refers to the rest of the CBA, economic as well as non-economic provisions except representation) - three years after the execution of the CBA

Note: One thing it cannot and must not do is to replace a union. It can deal with the Er on matters affecting the employee's rights, benefits and welfare. [Azucena, 2010, p. 418]

Q: What is the role of the DOLE in the creation of Labor Management Councils?

Note: Neither party shall terminate nor modify the CBA during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least 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. [Art. 253, LC]

A: The DOLE shall promote the formation of labormanagement councils in organized and unorganized establishments to enable the workers to participate in policy and decision-making processes in the establishment, insofar as said processes will directly affect their rights, benefits and welfare, except those which are covered by CB agreements or are traditional areas of bargaining.

No petition questioning the majority status of the incumbent bargaining agent shall be entertained by the DOLE and no CE shall be conducted outside of the 60-day freedom period.

The DOLE shall promote other labor-management cooperation schemes and, upon its own initiative or upon the request of both parties, may assist in the formulation and development of programs and projects on productivity, occupational safety and health, improvement of quality of work life, product quality improvement, and other similar schemes. (Sec. 1, Rule XXI, Book V, IRR]

Q: What is the automatic renewal clause of collective bargaining agreements? (2008 Bar Question) A: Although a CBA has expired, it continues to have legal effects as between the parties until a new CBA has been entered into [Pier & Arrastre Stevedoring Services, Inc. v. Confessor, G.R. No. 110854, (1995)]. The law makes it a duty of the parties to keep the status quo and to continue in full effect the terms and conditions of the existing agreement until a new agreement is reached by the parties. [Art. 253, LC].

Q: How is the representative in the Management Council selected? A: In organized establishments, the workers’ representative to the council shall be nominated by the exclusive bargaining representative. In establishments where no LLO exists, the workers’ representative shall be elected directly by the Ees at large. (Sec. 2, Rule XXI, Book V, IRR) GRIEVANCE MACHINERY

LABOR MANAGEMENT COUNCIL

Resolves disputes in the interpretation and implementation of the meaning of the provisions of the CBA and of the company personnel policies.

Resolves disputes not within the provisions of the CBA [PHIMCO Industries v. PHIMCO Industries Labor Association (2010)].

Q: What is the hold-over principle? A: 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. Despite the lapse of the formal effectivity of the CBA the law still considers the same as continuing in force and effect until a new CBA shall have been validly executed. Q: Does the hold-over principle apply to imposed CBA / arbitral award?

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Labor Law and Social Legislation A: YES. The hold-over principle, i.e., the duty of the parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing CBA until a new agreement is reached by the parties apply to an imposed CBA. The law does not provide for any exception nor qualification on which economic provisions of the existing agreement are to retain its force and efe. Likewise, the law does not distinquish between a CBA duly ageed upon by the parties and an imposed CBA [General Milling Corporation – ILU v. General Milling Corp., (2011)].

Q: May the economic provisions of an existing CBA be extended beyond the 3 year period as prescribed by law in the absence of a new agreement? A: Yes. Under the principle of hold over, until a new CBA has been executed by and between the parties, they are duty bound to keep the status quo and must continue in full force and effect the terms and conditions of the existing agreement. The law does not provide for any exception or qualification as to which of the economic provisions of the existing agreement are to retain force and effect. Therefore, it must be encompassing all the terms and condition in the said agreement [New Pacific Timber v. NLRC, G.R. No. 124224, (2000)].

FOR ECONOMIC PROVISIONS Q: What are the economic provisions of a collective bargaining agreement?

Q: Mindanao Terminal Company and respondent union has an existing CBA which was about to expire. Negotiations were held regarding certain provisions of the CBA which resulted in a deadlock. The union thereafter filed a notice of strike. During the conference called by the NCMB, the company and the union were able to agree on all of the provisions of the CBA except for one. The unresolved provision was subsequently settled, however no CBA was signed. Thus, in the records of the Mediation Arbiter, all issues were settled before the lapse of the six month period after the expiration of the old CBA. Does the signing of the CBA by the parties determine the date it was entered into?

A: Provisions granting economic benefits to the Ees such as increases, vacation and sick leaves, hospitalization and retirement. FOR NON-ECONOMIC PROVISIONS Q: What are the non-economic provisions of a collective bargaining agreement? A: 1. Coverage of the bargaining unit 2. Union security clauses 3. Management prerogatives and/or responsibilities of Ees 4. Grievance machinery and VA 5. No strike – no lock out provision

rights/

A: No. The signing of the CBA does not determine the date it was entered into. In the present case, there was already a meeting of the minds between the company and the union prior to the end of the six month period after the expiration of the old CBA. Hence, such meeting of the minds is sufficient to conclude that an agreement has been reached within the six month period as provided under Art. 253-A, LC [Mindanao Terminal and Brokerage Services Inc., v. Confessor, G.R. No. 111809, (1997)].

Q: What is the effectivity and retroactivity date of economic and non-economic provisions of the collective bargaining agreement? A: 1. If the CBA is the very first for the bargaining unit, the parties have to decide the CBA effectivity date. 2. Those made within six months after date of expiry of the CBA are subject to automatic retroaction to the day immediately following the date of expiry. 3. Those not made within six months, the parties may agree to the date of retroaction.

Q: When is the effectivity of an arbitral award concluded beyond six months from the expiration of the old CBA? A: The CBA arbitral award granted six months from the expiration of the last CBA shall retroact to such time agreed upon by both the Er and the union. Absent such agreement as to retroactivity, the award st shall retroact to the 1 day after the six month period following the expiration of the last day of the CBA should there be one. In the absence of a CBA, the SLE’s determination of the date of retroactivity as part of his discretionary powers over arbitral award

Note: This rule applies only if there is an existing agreement. If there is no existing agreement, there is no retroactive effect because the date agreed upon shall be the start of the period of agreement. Art. 253-A on retroactivity does not apply if the provisions were imposed by the SLE by virtue of arbitration. It applies only if the agreement was voluntarily made by the parties.

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LABOR RELATIONS LAW shall control [Manila Electric Company v. Quisumbing, G.R. No. 127598, Feb. 22 and (2000)].

A: While the parties may agree to extend the CBA’s original five-year term together with all other CBA provisions, any such amendment or term in excess of five years will not carry with it a change in the union’s exclusive bargaining status. By express provision of Art. 253-A of the LC, the exclusive bargaining status cannot go beyond the five years and the representation status is a legal matter not for the workplace parties to agree upon. Despite an agreement for a CBA with a life of more than five years, either as an original provision or by amendment, the bargaining union’s exclusive bargaining status is effective only for five years and can be challenged within 60 days prior to the expiration of the CBA’s first five years [FVC Labor Union-Philippine Transport and General Workers Organization v. Sama-samang Nagkakaisang Manggagawa sa FVC-Solidarity of Independent and General Labor Organizations, G.R. 176249, (2009)].

Q: PAL was suffering from a worsened financial condition resulting to a retrenchment which downsized its labor force by more than 1/3 thereby affecting numerous union members. Hence, the union went on strike. The PAL offered that shares of stock be transferred to its Ees but the union refused. Thus, PAL claimed it has no alternative left but to close. PALEA then proposed that the CBA be suspended for 10 years provided they remain the certified bargaining agent. PAL agreed and resumed operations. Is the agreement to suspend the CBA for 10 years abdicated the worker’s right to bargain? A: No. The primary purpose of a CBA is to stabilize labor-management relations in order to create a climate of a sound and stable industrial peace. The assailed agreement was the result of the voluntary CB negotiations undertaken in the light of severe financial situation faced by PAL [Rivera v. Espiritu, G.R. No. 135547, (2002)].

Q: ABC company and U labor union have been negotiating for a new collective bargaining agreement but failed to agree on certain economic provisions of the existing agreement. In the meantime, the existing collective bargaining agreement expired. The company thereafter refused to pay the employees their midyear bonus, saying that the collective bargaining agreement which provided for the grant of midyear bonus to all company employees had already expired. Are the employees entitled to be paid their midyear bonus? Explain your answer. (2010 Bar Question)

Q: Is the agreement in conflict with Art. 253-A, LC? A: No. There is no conflict between the agreement and Art. 253-A, LC for the latter has a two-fold purpose namely: a) to promote industrial stability and predictability and b) to assign specific time tables wherein negotiations become a matter of right and requirement. In so far as the first purpose, the agreement satisfies the first purpose. As regard the second purpose, nothing in Art. 253-A prohibits the parties from waiving or suspending the mandatory timetables and agreeing on the remedies to enforce the same [Rivera v. Espiritu, G.R. No. 135547, (2002)].

A: Yes, the parties are duty-bound to maintain the status quo and to continue in full force and effect the terms and conditions of the existing CBA until a new agreement is reached by the parties (Art. 253, LC). Furthermore, Art. 253-A provides for an automatic renewal clause of a CBA. Although a CBA has expired, it continues to have legal effects as between the parties until a new CBA has been entered into.

Q: Does the agreement violate the five year representation limit as provided under Art. 253-A, LC? A: No. Under the said article, the representation limit of the exclusive bargaining agent applies only when there is an existing CBA in full force and effect. In this case, the parties agreed to suspend the CBA and put in abeyance the limit on representation [Rivera v. Espiritu, G.R. No. 135547, (2002)].

UNION SECURITY UNION SECURITY CLAUSES; CLOSED SHOP, UNION SHOP, MAINTENANCE OF MEMBERSHIP SHOP, ETC. Q: Define union security.

Q: What is the effect of an amended or extended term of the collective bargaining agreement on the exclusive representation status of the collective bargaining agent and the right of another union to ask for certification as exclusive bargaining agent?

A: “Union security” is a generic term, which is applied to and comprehends “closed shop,” “union shop,” “maintenance of membership,” or any other form of agreement which imposes upon Ees the obligation to acquire or retain union membership as a condition affecting employment.

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Labor Law and Social Legislation Q: What is “union security clause”?

3.

A: A stipulation in CBA whereby the management recognizes that the memberships of Ees in the union which negotiated said agreement should be maintained and continued as a condition for employment or retention of employment. The obvious purpose is to safeguard and ensure the continued existence of the union.

there is sufficient evidence to support the decision of the union to expel the Ee from the union.

These requisites constitute just cause for terminating an Ee based on the union security provision of the CBA [Gen. Milling Corporation v. Casio, G.R. No. 149552 (2010)]. CHECK-OFF; UNION DUES, AGENCY FEES

Q: Define closed shop. Q: What is the difference between union dues and agency fees?

A: A closed shop may be defined as an enterprise in which, by agreement between the Er and his Ees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the Ees in interest are a part.

A: Union dues are collected from union members while agency fees are collected by the union from non-members belonging to the same bargaining unit who receive the benefits under the CBA. Q: What are the rules in case of check-off?

Q: Define union shop.

A:

A: There is union shop when all new regular Ees are required to join the union within a certain period as a condition for their continued employment.

UNION DUES There must be an individual written authorization by individual members.

CLOSE SHOP Er cannot hire any Ee unless they are members of the union.

UNION SHOP Er can hire even those who are not members of the union but it requires that after a certain period they must become members of the union.

ULP IN COLLECTIVE BARGAINING Q: What are the forms of unfair labor practice in bargaining? A: 1. Failure to meet and convene 2. Evading the mandatory subjects of bargaining 3. Bad faith in bargaining, including failure to execute the CBA if requested 4. Gross violation of the CBA 5. Surface Bargaining 6. Blue sky bargaining

Q: Define maintenance of membership. A: There is maintenance of membership shop when Ees, 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.

Note: Violations of CBA, except those which are gross in character, shall no longer be treated as ULP but a grievance under CBA. [Art. 261, LC]; [Silva v. NLRC, G.R. No. 110226, (1997)].

Q: What are the requisites for termination on account of enforcement of a union security clause in a collective bargaining agreement?

BARGAINING IN BAD FAITH Q: What is boulwarism?

A: In terminating the employment of an Ee by enforcing the union security clause, the Er needs only to determine and prove that: 1. the union security clause is applicable; 2. the union is requesting for the enforcement of the union security provision in the CBA; and UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

AGENCY FEES Can be assessed even without the written authorization of the employee concerned.

A: Boulwarism is known as bad faith in bargaining. It includes the failure to execute the CBA. Q: When does boulwarism occur?

164

LABOR RELATIONS LAW requires exaggerated or unreasonable economic demands, then it is guilty of ULP [Standard Chartered Bank v. Confessor, G.R. No. 114974, (2004)].

A: It occurs when Er directly bargains with the Ee disregarding the union; the aim was to deal with the labor union through Ees rather than with the Ees thru the union. Er submits its proposals and adopts a takeit-or-leave-it stand.

SURFACE BARGAINING Q: What is Surface bargaining?

REFUSAL TO BARGAIN

A: It is the act of “going through the motions of negotiating” without any legal intent to reach an agreement [Standard Chartered Bank Employees Union v. Confesor, (2004)].

Q: When is there Refusal to bargain? A: This occurs when the Er refuses or fails to meet and convene with the majority of his Ees. To bargain in good faith, an Er must not only meet and confer with the union which represents his Ees, but must also recognize the union for the purpose of CB. (Azucena, 2010, p. 360)

Note: Surface bargaining is a question of intent of the party concerned and usually such intent can only be inferred from the totality of the challenged party’s conduct both at and away from the bargaining table.

Q: What is the effect of refusal of management to give counter-proposals to the union’s demands?

Q: What is featherbedding/make work activities?

A: The failure of the Er to submit its counterproposals to the demands of the bargaining union does not, by itself, constitute refusal to bargain [Philippine Marine Radio Officers Association v. CIR, 102 Phil 373, (1957)]. However, when the Er refuses to submit an answer or reply to the written bargaining proposals of the certified bargaining union, ULP is committed.

A: It refers to the practice of the union or its agents in causing or attempting to cause an Er to pay or deliver or agree to pay or deliver money or other things of value, in the nature of an exaction, for services which are not performed or not to be performed, as when a union demands that the Er maintain personnel in excess of the latter’s requirements, including the demand for fee for union negotiations. [Art. 249 (d), LC]

Note: While the law does not compel the parties to reach an agreement, it contemplates that both parties will approach the negotiation with an open mind and make a reasonable effort to reach a common ground of agreement [Kiok Loy v. NLRC, G.R. No. 54334, (1986)].

Note: It is not featherbedding if the work is performed no matter how unnecessary or useless it may be.

Q: What is the sweetheart doctrine? A: It is when a labor organization asks for or accepts negotiations or attorney’s fees from Ers as part of the settlement of any issue in CB or any other dispute.

INDIVIDUAL BARGAINING Q: When is individual bargaining considered as unfair labor practice?

Note: The resulting CBA is considered as a “sweetheart contract” – a CBA that does not substantially improve the employees’ wages and benefits and whose benefits are far below than those provided by law.

A: When the Er attempts to negotiate with individual workers rather than with the certified bargaining agent is considered as ULP [Insular Life Assurance Co., Ltd., Employees Assoc.-NATU v. Insular Life Assurance Co., Ltd., G.R. No. L-25291, (1971)].

UNFAIR LABOR PRACTICE (ULP) NATURE OF ULP

BLUE SKY BARGAINING

ILO Convention No. 95: Right to Organize and Collective Bargaining Convention, Article 2-Workers' and Employers' organizations shall enjoy adequate protection against any acts of interference by each other or each other's agents or members in their establishment, functioning or administration.

Q: What is blue-sky bargaining? A: It is defined as unreasonable proposals.

making

exaggerated

or

Note: Whether or not the union is engaged in blue-sky bargaining is determined by the evidence presented by the union as to its economic demands. Thus, if the union

Q: When are acts considered as Unfair Labor Practice?

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Labor Law and Social Legislation A: The act complained of must have a proximate and causal connection with: 1. Exercise of the Right to Self-organization 2. Exercise of the Right to CB

3.

Note: Not all illegal acts are ULP. Only those enumerated in the LC are ULP.

Note: An expression which might be permissibly uttered by one employer, might, in the mouth of a more hostile employer, be deemed improper and consequently actionable as a ULP.

ULP OF EMPLOYERS

Q: Phil. Marine Officers Guild (PMOG) is a union representing some of Philsteam’s officers and Cebu Seamen’s Association (CSA) is another union representing some of Philsteam’s officers. PMOG sent a letter to Philsteam requesting for CB but the company asked the former to first prove that it represents the majority. Simultaneously, Philsteam interrogated its captains, deck officers and engineers while CSA likewise sent its demands to Philsteam. The company recognized CSA as representing the majority and entered into a CBA. Hence PMOG declared a strike. PMOG was subjected to vilification and Philsteam’s pier superintendent participated in the solicitation of membership for CSA. Is the company guilty of ULP?

Q: What are the unfair labor practice that may be committed by employers? A: 1. 2. 3. 4. 5. 6. 7. 8. 9.

Interference Yellow dog condition Contracting out Company unionism Discrimination for or against union membership Discrimination because of testimony Violation of duty to bargain Paid negotiation Gross violation of CBA

Q: What is interference?

A: Yes. Although the company is free to make interrogations as to its Ees’ union, the same should be for a legitimate purpose and must not interfere with the exercise of self-organization otherwise it is considered as ULP. Moreover, Philsteam’s supervisory Ees’ statement that PMOG is a “money-making” union, which is made to appear to be said in behalf of the union and the participation of the company’s pier superintendent in soliciting membership for the competing union, is ULP for interfering with the exercise of the right to self-organization. [Philsteam and Navigation v. Philippine Marine Officers Guild, G.R. Nos. L-20667 and L-20669, (1965)]

A: The act of Er to interfere with, restrain or coerce Ees in the exercise of their right to self-organization. Q: What is the test of interference? A: Whether the Er has engaged in conduct which, it may reasonably be said, tends to interfere with the free exercise of the Ees right to self-organization. Note: Direct evidence that an Ee was in fact intended or coerced by the statements of threats of the Er is not necessary if there is a reasonable interference that the antiunion conduct of the Er does have an adverse effect on selforganization and CB [The Insular Life Assurance-NATU v. The Insular Life Co. Ltd, G.R. No.L-25291, (1971)].

Q: What are other examples of acts of interference?

Q: What is the totality of conduct doctrine?

A: 1. Outright and unconcealed intimidation 2. Intimidating expressions of opinion by Er 3. An Er who interfered with the right to selforganization before a union is registered can be held guilty of ULP. [Samahan ng mga Manggagawa sa Bandolino-LMLC v. NLRC, G.R. No. 125195, (1997)]

A: It states that the culpability of Er’s remarks is to be evaluated not only on the basis of their implications, but against the background of and in conjunction with collateral circumstances. Under this doctrine, expressions of opinion by an Er, though innocent in themselves, frequently were held to be ULP because of: 1. 2.

Note: It is the prerogative of the company to promote, transfer or even demote its Ees to other positions when the interests of the company reasonably demand it. Unless there are circumstances which directly point to interference by the company with the Ees right to self-organization, the transfer of an Ee should be considered as within the bounds

The circumstances under which they were uttered The history of the particular Er’s labor relations or anti-union bias UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Their connection with an established collateral plan of coercion or interference [The Insular Life Assurance-NATU v. The Insular Life Co. Ltd, G.R. No.L-25291, (1971)].

166

LABOR RELATIONS LAW allowed by law. [Rubberworld Phils. v. NLRC, G.R. No. 75704, (1989)]

A: GR: Contracting out services is not ULP per se. XPNs: The following are prohibited for being contrary to law or public policy:

In order that interrogation would not be deemed coercive: a. The Er must communicate to the Ee the purpose of questioning b. Assure him that no reprisal would take place c. Obtain Ee participation voluntarily d. Must be free from Er hostility to union organization e. Must not be coercive in nature

A. 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.

Q: What is a yellow dog condition? A: It is to require as a condition of employment that a person or an Ee shall not join a labor organization or shall withdraw from one to which he belongs.

(2) Contracting out of work with a “Cabo”. Q: What is a yellow dog contract? (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:

A: It is a promise exacted from workers as condition of employment that they are not to belong to or attempts to foster a union during their period of employment. Q: Is yellow dog contract valid?

(i) Requiring them to perform functions which are currently being performed by the regular employees of the principal; and

A: No. It is null and void because: 1. It is contrary to public policy for it is tantamount to involuntary servitude. 2. It is entered into without consideration for Ees in waiving their right to self-organization. 3. Ees are coerced to sign contracts disadvantageous to their family.

(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.

Note: This is one of the cases of ULP that may be committed in the absence of an Er-Ee relationship.

Q: What are the 3 usual provisions under a yellow dog contract?

(4) Contracting out of a job, work or service through an in-house agency.

A: 1. A representation by the Ee that he is not a member of a labor union. 2. A promise by the Ee not to join a labor union. 3. A promise by the Ee that upon joining a labor union, he will quit his employment.

(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 LC, as amended.

Q: What is “contracting out” as a form of ULP? A: It is to contract out services or functions being performed by union members when such will interfere with, restrain or coerce Ees in the exercise of their rights to self-organization.

(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

Q: Does it mean that an Employer cannot contract out work?

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Labor Law and Social Legislation the Labor Code provisions on Security of Tenure.

Q: What is a run-away shop?

(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.

A: It is an industrial plant moved by its owners from one location to another to escape labor regulations or State laws or to discriminate against Ees at the old plant because of their union activities. It may also be the place where the Er transferred his business in case of strike.

(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).

A: Yes. Where a plant removal is for business reasons but the relocation is hastened by anti-union motivation, the early removal is ULP. It is immaterial that the relocation is accompanied by a transfer of title to a new Er who is an alter ego of the original Er.

Q: Is resorting to run-away shop ULP?

Q: What is a company union? (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).

A: Any labor organization whose formation, function or administration has been assisted by any act defined as ULP [Art. 212(i), LC]. Q: What are the forms of company unionism?

B. Contracting out of jobs, works or services analogous to the above when not done in good faith and not justified by the exigencies of the business [Sec. 7, D.O. 18-A].

A: 1.

Note: Consistent with the authority of the Secretary of Labor and Employment to restrict or prohibit the contracting out of labor to protect the rights of workers, it shall be mandatory for all persons or entities, including cooperatives, acting as contractors, to register with the Regional Office of the Department of Labor and Employment (DOLE) where it principally operates. Failure to register shall give rise to the presumption that the contractor is engaged in labor-only contracting [Sec. 14, D.O. 18-A].

2.

Financial support to the union by: a. Er defrays union expenses b. Pays attorney's fees to the attorney who drafted the Constitution or by-laws of the union.

3.

Er encouragement assistance - Immediately granting of exclusive recognition as bargaining agent without determining whether the union represents the majority of the employees

4.

Supervisory assistance- Soliciting membership, permitting union activities during work time or coercing Ees to join the union by threats of dismissal or demotion

Q: Company "A" contracts out its clerical and janitorial services. In the negotiations of its CBA, the union insisted that the company may no longer engage in contracting out these types of services, which services the union claims to be necessary in the company's business, without prior consultation. Is the union's stand valid or not? For what reasons? (2001 Bar Question) A: The union's stand is not valid. It is part of management prerogative to contract out any work, task, job or project except that it is an ULP to contract out services or functions performed by union members when such will interfere with, restrain or coerce Ees in the exercise of their rights to self-organization. (Art. 248[c] of the LC).

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Initiation of the company union idea by: a. Outright formation by Er or his representatives b. Ee formation on outright demand or influence by Er and c. Managerially motivated formation by Ees

Q: What is meant by the act of company-domination of union? A: This is to initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization including giving of financial or other support to it or its organizers or supporters.

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LABOR RELATIONS LAW Q: Why is company unionism/captive unionism a form of ULP?

A: Yes. The Er is not guilty of ULP if it merely complies in good faith with the request of the certified union for the dismissal of Ees expelled from the union pursuant to the union security clause in the CBA. [Soriano v. Atienza, G.R. No. L-68619, (1989)]

A: It is considered ULP because the officers will be beholden to the Ers and they will not look after the interest of whom they represent.

Q: A profit sharing scheme was introduced by the company for its managers and supervisors, who are not members of the union, hence do not enjoy the benefits of the CBA. The respondent union wanted to participate with the scheme but was denied by the company due to the CBA. Subsequently the company distributed the profit sharing to the manager, supervisors and other non-union member employees. As a result the union filed a notice of strike alleging ULP. Is the non-extension of the profit sharing scheme to union members discriminatory and an ULP?

Q: What is meant by discrimination as a form of ULP? A: It 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. Q: When is a discriminatory?

discharge

of

an

employee

A: The underlying reason for the discharge must be established in order to determine whether such an act is discriminatory or not.

A: No. There can be no discrimination when the Ees are not similarly situated. The situation of union members is different and distinct from non-union members because only union members enjoy the benefit under the CBA. The profit sharing scheme was extended to those who do not enjoy the benefits of the CBA. Hence, there is no discrimination and ULP is not committed [Wise and Co., Inc. v. NLRC, G.R. No. L87672, (1989)].

The fact that a lawful cause for discharge is available is not a defense where the Ee is actually discharged because of his union activities. If the discharge is actually motivated by lawful reason, the fact that the Ee is engaged in union activities at the time will lie against the Er and prevent him from the exercise of business judgment to discharge an Ee for cause [Phil. Metal Foundries Inc. v. CIR, G.R. Nos. L-34948-49, (1979)].

Q: Is dismissal of an employee pursuant to a union security clause a form of ULP?

Q: Jobo has 3 hotels, the Taal Vista Lodge, Manila Hotel and the Pines Hotel. Among the 3, Pines Hotel had more employees and the only one with a labor organization. When the bonus was distributed among the 3 hotels, Pines Hotel employees received the least amount compared to the employees of Manila Hotel and Taal Vista Lodge. Did the company commit ULP?

A: No. Union security clauses in the CBA, if freely and voluntarily entered into, are valid and binding. Thus, the dismissal of an Ee by the company pursuant to a labor union’s demand in accordance with a union security agreement does not constitute ULP [Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos, G.R. No. 113907, (2000)]. A union member who is employed under an agreement between the union and his Er is bound by the provisions thereof since it is a joint and several contract of the members of the union entered into by the union as their agent [Manalang v. Artex Dev’t, G.R. No. L-20432, (1967)].

A: Yes. In this case, Pines Hotel Ees who were the most numerous "would receive, a lesser bonus than the employees of the Manila Hotel and Taal Vista Lodge where neither is there any existing labor organization nor the complainant union has any member." The fact that management granted Christmas bonus to its Ees, the same should have been distributed pro rata among all its Ees regardless of their place of work [Manila Hotel Co. v. Pines Hotel Employees’ Association, G.R. No.L-30139, (1972)].

Q: Is notice and hearing required in case an employee is dismissed pursuant to a union security clause? A: Yes. Although a union security clause in a CBA may be validly enforced and dismissal pursuant thereto may likewise be valid, this does not erode the fundamental requirement of due process. The reason

Q: Can an employer discriminate against an employee without committing ULP?

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Labor Law and Social Legislation behind the enforcement of union security clauses which is the sanctity and inviolability of contracts cannot erode one’s right to due process.

5.

Q: Balmar Farms Employees Association (BFEA) is affiliated with Associated Labor Union (ALU). ALU won in the certification election held in the company. Thus, ALU sent its proposal for a CBA, but the company refused to act on it alleging that BFEA is the sole and exclusive bargaining representative and that BFEA through its president had sent a letter informing the company of its disaffiliation with ALU. Is the company guilty of ULP for refusing to bargain collectively?

Notwithstanding the fact that the dismissal was at the instance of the federation and that it undertook to hold the company free from any liability resulting from such dismissal, the company may still be held liable if it was remiss in its duty to accord the wouldbe dismissed Ees their right to be heard on the matter. Q: Mabeza and her co-employees were asked by the company to sign an affidavit attesting to the latter’s compliance with pertinent labor laws. Mabeza signed the affidavit but refused to swear to its veracity before the City prosecutor. Mabeza then filed a LOA which was denied by management. After sometime, she attempted to return to work but the company informed her not to report for work and continue with her unofficial leave. Did the company commit ULP?

A: Yes. ALU is the certified exclusive bargaining representative after winning the certification election. The company merely relied on the letter of disaffiliation by BFEA’s president without proof and consequently refusing to bargain collectively constitutes ULP. Such refusal by the company to bargain collectively with the certified exclusive bargaining representative is a violation of its duty to collectively bargain which constitutes ULP [Balmar Farms v. NLRC, G.R. No.73504, (1991)].

A: Yes. The act of compelling an Ee to sign an instrument indicating the Er’s compliance with Labor laws which the company might have violated together with the act of terminating or coercing those Ees to cooperate is an act of ULP. This is analogous with Art. 248(f) of the LC which provides: “to dismiss, discharge or otherwise prejudice or discriminate against an Ee for having given or being about to give testimony under this Code”. For in not giving a positive testimony in favor of the Er, Mabeza reserved not only her right to dispute the claim but also to work for better terms and condition [Mabeza v. NLRC, G.R No. 118506, (1997)].

Q: The Kilusang Kabisig, a newly-formed labor union claiming to represent a majority of the workers in the Microchip Corp., proceeded to present a list of demands to the management for purposes of Collective Bargaining. The Microchips Corp., a multinational corp. engaged in the production of computer chips for export, declined to talk with the union leaders, alleging that they had not as yet presented any proof of majority status. The Kilusang Kabisig then charged Microchip Corp. with ULP, and declared a "wildcat" strike wherein means of ingress and egress were blocked and remote and isolated acts of destruction and violence were committed. Was the company guilty of an ULP when it refused to negotiate with the Kilusang Kabisig? (1997 Bar Question)

Q: When can ULP be committed in bargaining? A: When the act constitutes violation of the duty to bargain collectively as prescribed in the LC.

A: No. It is not ULP not to bargain with a union which has not presented any proof of its majority status. Only the labor organization designated or selected by the majority of the employees in an appropriate CB unit is the exclusive representative of the Ees in such unit for the purpose of collective bargaining. It is not a ULP for an Er to ask a union requesting to bargain collectively that such union first show proof of its being a majority union [Philippine Diamond Hotel and Resort, Inc. (Manila Diamond Hotel) v. Manila Diamond Hotel Employees Union, G.R. No. 158075, June 30, 2006)].

Note: A company’s refusal to make counter-proposal, if considered in relation to the entire bargaining process, may indicate bad faith and this is especially true where the union’s request for a counter proposal is left unanswered [Kiok Loy v. NLRC, G.R. No. L-54334, (1986)].

Q: What are the examples of ULP in bargaining? A: 1. Delaying negotiations by discussing unrelated matters 2. Refusal to accept request to bargain 3. Rejecting a union’s offer to prove its majority claim 4. Shutdown to avoid bargaining UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Engaging in surface bargaining

Q: What is meant by paid negotiation as a form of ULP?

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LABOR RELATIONS LAW A: It is the act of the Er to pay negotiation or attorney’s fees to the union or its officers or agents as part of the settlement of any issue in CB or any other dispute.

6. 7.

Note: ULP cases are not subject to compromise in view of the public interest involve. The relation between capital and labor is not merely contractual. They are impressed with public interest that labor contracts must yield to common good.

Q: When is the violation of CBA considered as ULP? A: Only when the violation is gross – There must be a flagrant and/or malicious refusal to comply with the economic provision of the CBA.

Q: Is the commission of an ULP by an employer subject to criminal prosecution? (2005 Bar Question)

Note: All the ULP acts must have a relation to the Ees exercise of their right to self-organization. Anti-union or anti-organization motive must be proved because it is a definitional element of ULP.

A: Yes, because ULPs are not only violations of the civil rights of both labor and management but are also criminal offenses against the State which shall be subject to prosecution and punishment. (Art. 247 LC; See also B.P. Blg. 386 as amended by R.A. 6715). However, the criminal aspect can only be filed when the decision of the labor tribunals, finding the existence of ULP, shall have become final and executory.

If violation is not gross, it is not ULP but a grievance under CBA. The “grossly violate” phrase is an amendment by R.A. 6715.

Q: A complaint for ULP was filed by a prosecutor of the CIR against Alhambra company, upon the charges of the union that 15 of its members employed as drivers and helpers are discriminated for being deprived of the benefits under the CBA with no justifiable reason other than union membership. Is the company guilty of ULP?

Q: When is an employer required to furnish financial report? A: Upon written request of an LLO, the Er should furnish the Ee its annual audited financial statements, including the balance sheet and the profit and loss statement, within 30 calendar days from the date of receipt of the request, after the union has been duly recognized by the Er or certified as the sole and exclusive bargaining representative of the Ees in the bargaining unit, or within 60 calendar days before the expiration of the existing CBA, or during the CB negotiation (Sec. 242(c), LC).

A: Yes. The refusal to extend the benefits and privileges under the CBA to Ees constitutes ULP. Failure on the part of the company to live up in good faith to the terms of the CBA is a serious violation of the duty to collectively bargain which again amounts to ULP. The 15 drivers and helpers are found to be Ees of the company, hence, the benefit and privileges under the CBA should be extended to them [Alhambra Industries v. CIR, G.R. No. L-25984, (1970)].

Q: When is employer’s refusal to furnish financial information NOT an unfair labor practice?

Q: What are the reliefs available in ULP cases? A: The following reliefs may be availed of: 1.

A: While the refusal to furnish the requested information is in itself an unfair labor practice and also supports the interference of surface bargaining, however, if the union failed to put its request in writing in Art. 242(c) of the LC, management cannot be held liable for ULP [Standard Chartered Bank Employees Union v. Confesor, (June 2004)].

Civil liability Note: Recovery of civil liability in the administrative proceedings shall bar recovery under the Civil Code (Art. 247, LC)

2.

Criminal liability

Q: When is the violation of the CBA constitutive of ULP?

Note: No criminal prosecution under this Title may be instituted without a final judgment finding that a ULP was committed. (Art. 247, LC)

3. 4. 5.

CBA may be imposed Strike by union members

A: Only when there is gross violation. Gross violation shall be understood as the flagrant and malicious refusal to comply with economic provisions of the CBA.

Cease and desist order Affirmative order Court may order the Er to bargain

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Labor Law and Social Legislation ULP OF LABOR ORGANIZATIONS

A: No. A union violates the law when, to restrain or coerce non-strikers from working during the strike, it:

Q: What are the ULP of labor organizations? 1. 2. 3. 4.

A: It shall be ULP for a labor organizations, its officers, agents or representatives: 1.

2.

3.

4.

5.

6.

To restrain or coerce Ees in the exercise of their rights to self-organization. However, a labor organization shall have the right to prescribe its own rules with respect to the acquisition or retention of membership To cause or attempt to cause an Er to discriminate against an Ee, including discrimination against an Ee with respect to whom membership in such organization has been denied or to terminate an Ee on any ground other than the usual terms and conditions under which membership or continuation of membership is made available to other members To violate the duty, or refuse to bargain collectively with the Er, provided it is the representative of the Ees To cause or attempt to cause an Er 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 To ask for or accept negotiations or attorney's fees from Ers as part of the settlement of any issue in Collective Bargaining or any other dispute or To violate a CBA (Art. 248, LC).

5. 6.

7.

8. 9.

Assaults or threatens to assault them Threatens them with the loss of their jobs Blocks their ingress to or egress from the plant Damages non-strikers’ automobiles or forces them off the highway Physically preventing them from working Sabotages the Er’s property in their presence, thereby creating an atmosphere of fear or violence Demonstrates loudly in front of a non-striker’s residence with signs and shouts accusing the non-striker of “scabbing” Holding the non-striker up to ridicule Seeking public condemnation of the non-striker

Q: What is a case of union-induced discrimination? A: This pertains to the arbitrary use of union security clause. A union member may not be expelled from the union, and consequently from his job, for personal and impetuous reasons or for causes foreign to the closed shop agreement [Manila Mandarin Employees Union v. NLRC, G.R. No. 76989, (1987)]. Labor unions are not entitled to arbitrarily exclude qualified applicants for membership and a closedshop applicant’s provision will not justify the employer in discharging, or a union in insisting upon the discharge of an Ee whom the union thus refuses to admit to membership without any reasonable ground thereof [Salunga v. CIR, G.R. No. L-22456, (1967)].

Q: Is interference by a labor organization an ULP? Q: What are the aspects of ULP? A: No, because interference by a labor organization in the exercise of the right to organize is itself a function of self-organizing.

A: Under Art. 247, ULP has two aspects: 1. Civil aspect 2. Criminal aspect.

Q: What are examples of interference which does not amount to ULP?

Note: Civil aspect- LA together with claim for damages arising from termination (ex: reinstatement)

A: 1. Union campaigns for membership even among members of another union 2. Filing by a union of a petition to dislodge an incumbent bargaining union 3. A bargaining union, through a union security clause, requires an incoming employee to join the union.

Criminal aspect- Regular courts. Commenced only upon final decision by LA that party commits ULP. No simultaneous filing is allowed. There must be a final decision first by the Labor Arbiter.

Q: Who may be criminally liable for ULP? A: 1. On the part of the employer, only the officers and agents of corporations, associations or partnerships who have actually participated in,

Q: May a union coerce employees to join a strike?

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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LABOR RELATIONS LAW

2.

authorized or ratified unfair labor practices shall be held criminally liable. On the part of the union, only officers, members of governing boards, representatives or agents or members of labor associations or organizations who have actually participated in, authorized or ratified the unfair labor practices shall be held criminally liable.

FORMS OF CONCERTED ACTIVITIES Q: What are the forms of concerted activities? A: 1. 2. 3. 4. 5.

Q: Who has the burden of proof in ULP cases? A: In ULP cases, it is the union which has the burden of proof to present substantial evidence to support its allegations of ULP committed by the employer. It is not enough that the union believed that the employer committed acts of unfair labor practice when the circumstances clearly negate even a prima facie showing to warrant such a belief.

Strike Lockout Picketing Boycott Other Concerted Activities a. Collective Letter b. Publicity c. Placards and Banners d. Speeches Music and Broadcasts

Q: What is a strike? A: It means any temporary stoppage of work by the concerted action of Ees as a result of an industrial or labor dispute. (Sec.1 [uu], Rule I, Book V, IRR)

RIGHT TO PEACEFUL CONCERTED ACTIVITIES

The term strike shall comprise not only concerted work stoppages, but also slowdowns, mass leaves, sitdowns, attempts to damage, destroy or sabotage plant equipment and facilities and similar activities. Thus, the fact that the conventional term “strike” was not used by the striking employees to describe their common course of action is inconsequential, since the substance of the situation and not its appearance, will be deemed to be controlling.

Q: What is the constitutional basis of strikes, lockouts and other concerted activities? A: The State 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 (Sec. 3, Art. XIII, 1987 Constitution). Note: The law does not look with favor upon strikes and lockouts because of their disturbing and pernicious effects upon the social order and the public interests; to prevent or avert them and to implement Sec. 6, Art. XIV of the Constitution, the law has created several agencies, namely: the BLR, the DOLE, the Labor Management Advisory Board, and the CIR. [Luzon Marine Dev’t Union v. Roldan, G.R. No. L-2660, (1950)]

The right to strike, while constitutionally recognized, is not without legal constrictions. Art. 264(a) of the LC, as amended, provides that no strike or lockout shall be declared after assumption of jurisdiction by the President or the Secretary or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout. The court has consistently ruled that once the Secretary of Labor assumes jurisdiction over a labor dispute, such jurisdiction should not be interfered with by the application of the coercive processes of a strike or lockout. A strike that is undertaken despite the issuance by the Secretary of Labor of an assumption order and/or certification is a prohibited activity and thus illegal [Solidbank Corporation v. Ernesto U. Gamier/ Solid Bank Union, G.R. No. 159460, (Nov. 2010)].

Q: What is a concerted action? A: It is an activity undertaken by two or more employees or by one on behalf of others. Q: Are all concerted actions strikes? A: Not all concerted activities are strikes. They may only be protest actions – they do not necessarily cause work stoppage by the protesters. A strike in contrast is always a group action accompanied by work stoppage.

Note: The fact that the conventional term “strike” was not used by the striking employees to describe their common course of action is inconsequential, since the substance of the situation and not its appearance will be deemed controllin [Toyota Motor Phils. Corp. Workers Association v. NLRC, 537 SCRA 174 (2007)]. It shall comprise not only

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation concerted work stoppages, but also slowdowns, mass leaves, sit downs, attempt to damage, destroy or sabotage plant equipment and facilities, and similar activities [Samahang Manggagawa sa Sulpicion Lines v. Sulpicio Lines, Inc., G.R. No. 140992, (2004)].

Q: Distinguish between an economic strike and a ULP strike. A: ECONOMIC STRIKE

Q: What is the purpose of a strike?

Voluntary strike because the employee will declare a strike to compel management to grant its demands

A: A strike is a coercive measure resorted to by laborers to enforce their demands. The idea behind a strike is that a company engaged in a profitable business cannot afford to have its production or activities interrupted, much less, paralyzed [Phil. Can Co. v. CIR, G.R. No. L-3021, (1950)]. Q: What are the elements of a strike?

Q: What are the different forms of strike? A:

2.

3.

4.

5.

6.

7.

Legal Strike-one called for a valid purpose and conducted through means allowed by law. Illegal Strike-one staged for a purpose not recognized by law, or if for a valid purpose, conducted through means not sanctioned by law. Economic Strike- one staged by workers to force wage or other economic concessions from the employer which he is not required by law to grant [Consolidated Labor Association of the Phil. vs. Marsman, G.R. No. L-17038, (1964)] ULP Strike-one called to protest against the employer’s acts of unfair practice enumerated in Art. 248 of the LC, as amended, including gross violation of the CBA and union busting. Slow Down Strike-one staged without the workers quitting their work but by merely slackening or by reducing their normal work output. Wild-Cat Strike-one declared and staged without filing the required notice of strike and without the majority approval of the recognized bargaining agent. Sit Down Strike-one where the workers stop working but do not leave their place of work.

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

As to nature Involuntary strike; the LO is forced to go on strike because of the ULP committed against them by the Er. It is an act of self-defense since the Ees are being pushed to the wall and their only remedy is to stage a strike. Who will initiate

The CB agent of the appropriate Either the CB agent or the LLO bargaining unit in behalf of its members can declare an economic strike As to the cooling-off period 30 days from notice of strike before the 15 days from the filing of the intended date of notice of strike actual strike subject to the 7day strike ban As to the exception to the cooling-off period The cooling-off period may be dispensed with, and the union may take immediate action in No exception – case of dismissal from mandatory employment of their officers duly elected in accordance Note: notice of with the union’s constitution strike and strike and by-laws, which may vote may be constitute union busting dispensed with; where the existence of the they may strike union is threatened. It must immediately still observe the mandatory 7day strike ban period before it can stage a valid strike

A: 1. Existence of an Er-Ee relationship 2. Existence of a labor dispute 3. Employment relation is deemed to continue although in a state of belligerent suspension 4. Temporary work stoppage 5. Work stoppage is done through concerted action 6. The striking group is a legitimate labor organization; in case of a bargaining deadlock, it must be the Ees’ sole bargaining representative

1.

ULP STRIKE

Q: What is a lockout? A: It means any temporary refusal of an Er to furnish work as a result of an industrial or labor dispute. (Art. 212 [p]) Q: When does lockout amount to ULP? A: A lockout, actual or threatened, as a means of dissuading the Ees from exercising their rights is clearly an ULP. However, to hold an Er guilty, the

174

LABOR RELATIONS LAW evidence must establish that the purpose was to interfere with the Ees exercise of their rights.

The right to peaceful picketing shall be exercised by the workers with due respect for the rights of others. No person engaged in picketing shall commit any act of violence, coercion or intimidation. Stationary picket, the use of means like placing of objects to constitute permanent blockade or to effectively close points of entry or exit in company premises are prohibited by law.

Q: Is there any express statutory recognition of the workers’ right to strike and the employer’s right to lockout? A: Yes. Art. 263(b) of the LC provides that workers shall have the right to engage in concerted activities for purposes of CB for their mutual benefit and protection. The right of LLOs to strike and picket and of Ers to lockout, consistent with the national interest, shall continue to be recognized and respected. However, no labor union may strike and no Er may declare a lockout on grounds involving inter-union and intra-union disputes.

Q: Distinctions between strike and picketing. STRIKE To withhold or to stop work by concerted action of Ees as a result of an industrial or labor dispute. The work stoppage may be accompanied by picketing by the striking employees outside of the company compound. Focuses on stoppage of work

Q: Is the right to strike or lockout absolute? Explain. A: No, the exercise of these rights is subject to reasonable restrictions pursuant to the police power of the State. It has been held that the right to strike, because of the more serious impact upon the public interest, is more vulnerable to regulation that the right to organize and select representatives for purposes of CB [National Federation of Sugar Workers (NFSW) v. Ovejera, et al. G.R. No. L-59743, (1982)]. Q: What is picketing?

PICKETING To march to and from 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 a strike activity separate and different from actual stoppage of work. Focuses on publicizing the labor dispute and its incidents to inform the public of what Is happening in the company struck against.

Note: A strike conducted by a union which acquired its legal personality AFTER the filing of its notice of strike and the conduct of the strike vote is ILLEGAL.

A: It is the act of marching to and fro the Ers premises which is usually accompanied by the display of placard and other signs, making known the facts involved in a labor dispute.

Q: Who is a strike-breaker? A: Any person who obstructs, impedes, or interferes with by force, violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours or conditions of work or in the exercise of the right of self-organization or CB. (Art. 212 [r], LC)

The right to picket as a means of communicating the facts of a labor dispute is a phase of the freedom of speech guaranteed by the Constitution. If peacefully carried out, it cannot be curtailed even in the absence of Er-Ee relationship [PAFLU v. Cloribel, G.R. No. L25878, (1969)].

Q: What is a strike area? A: It means the establishment, warehouses, depots, plants or offices, including the sites or premises used as runaway shops, of the Er struck against, as well as the immediate vicinity actually used by picketing strikers in moving to and fro before all points of entrance to and exit from said establishment. (Sec. 1 [vv], Rule I, Book V, IRR)

Q: Is the right to picket an absolute right? A: No, while peaceful picketing is entitled to protection as an exercise of free speech, the courts are not without power to confine or localize the sphere of communication or the demonstration to the parties to the labor dispute, including those with related interests, and to insulate establishments or persons with no industrial connection or having interest totally foreign to the context of the dispute [Liwayway Pub., Inc. v. Permanent Concrete Workers Union, G.R. No. L-25003, (1981)].

Q: What is a boycott? A: It is an attempt, by arousing a fear of loss, to coerce others, against their will to withhold from one

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Labor Law and Social Legislation denominated “unfriendly to labor” their beneficial business intercourse.

Q: The employees wrote and published a letter to the bank president, demanding his resignation on the grounds of immorality, nepotism, favoritism and discrimination in the appointment and promotion of bank employees. The bank dismissed the employees for the alleged libelous letter. Were the employees engaged in a concerted activity?

A “boycott” may be said to include any activity on the part of a labor organization whereby it is sought through concerted action, other than by reason of lawful competition, to obtain withdrawal of public patronage from one in business [Burke v. Adams Dairy, Inc., 352 U.S. 969].

A: Yes, assuming that they acted in their individual capacities when they wrote the letter, they were nonetheless protected, for they were engaged in a concerted activity, in their right of self-organization that includes concerted activity for mutual aid and protection. Any interference made by the company will constitute as ULP.

Q: Is a boycott lawful? A: Ees may lawfully exert economic pressure on their Er by means of a boycott, provided they act peaceably and honestly. They have a right to persuade the public by any lawful means to refuse to patronize the Er. Union members are entitled to advise the public of the existence of their controversy with the Er and may request their friends and the public generally to assist them by not patronizing the Er. In so doing, there is no element of threat or coercion or unlawful interference with another’s business. [51A, C.J.S. Sec. 286, pp. 64-85]

The joining in protests or demands, even by a small group of Ees, if in furtherance of their interests as such is a concerted activity protected by the Industrial Peace Act. It is not necessary that union activity be involved or that Collective Bargaining be contemplated [Republic Savings Bank v. CIR, G.R. No. L-20303, (1967)].

Q: What is a slowdown?

Q: May the grievances of the employees be published in newspapers and on placards and banners?

A: It is a method by which one’s Ees, without seeking a complete stoppage of work, retard production and distribution in an effort to compel compliance by the Er with the labor demands made upon him.

A: Members of a labor union may, without authorization by statute, make known the facts of a labor dispute, for freedom of speech is guaranteed by the Constitution. Striking Ees, too, have a right to acquaint the public with the fact of the existence of the strike setting forth their claims in a controversy over terms and conditions of employment by sign, handbill or newspaper, advertisement as a legitimate means of economic coercion. (31 Am. Jur., Sec. 274, p. 968)

Q: Does an “overtime boycott” or “work slowdown” by the employees constitute a strike and hence a violation of the CBA’s “No strike, no lockout” clause? A: Yes, the concept of a slowdown is a "strike on the installment plan." It is a willful reduction in the rate of work by concerted action of workers for the purpose of restricting the output of the Er, in relation to a labor dispute; as an activity by which workers, without a complete stoppage of work, retard production or their performance of duties and functions to compel management to grant their demands.

It is generally conceded that a striker having the right to apprise the public of the fact of the strike and solicit its support may inscribe his grievances upon placards and banners to be seen at a distance and to be read by many at the same time and that he may carry such placards or banners upon a public street, provided the inscription is not libellous or otherwise unlawful. (31 Am. Jur., Sec. 278, p. 971)

Such a slowdown is generally condemned as inherently illicit and unjustifiable, because while the Ees "continue to work and remain at their positions and accept the wages paid to them," they at the same time "select what part of their allotted tasks they care to perform of their own volition or refuse openly or secretly, to the Er's damage, to do other work;" in other words, they "work on their own terms" [Interphil Laboratories Employees Union-FFW v. Interphil Laboratories, Inc., G.R. No. 142824, (2001)]. UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Q: Does a strike staged by resigned employees fall under the ambit of concerted actions protected by law? A: No, resigned employees’ mass action is not a strike because Ees who go on strike do not quit their employment. Ordinarily, the relationship of Er and Ee continues until one of the parties acts to sever the

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LABOR RELATIONS LAW relationship or they mutually act to accomplish that purpose. As they did not assume the status of strikers, their “protest retirement/resignation” was not a concerted activity which was protected by law [Enrique v. Zamora, G.R. No. L-51382, (1986)].

Rebuilders, Inc. v. Progresibong Unyon ng mga Manggagawa ng AER G.R. No. 160138, (2011)]. WHO MAY DECLARE A STRIKE OR LOCKOUT? Q: Who may declare a strike or lockout?

Q: PHIMCO argues that the strike staged by its employees was illegal as they committed the prohibited acts under Art. 264(e) of the LC such as blocking the ingress and egress of the company premises. The employees, on the other hand, submit that the picket was peaceful and no human barricade blocked the company premises. May a peaceful picketing of employees be held illegal?

A: 1. Any certified or duly recognized bargaining representative may declare a strike in cases of bargaining deadlocks and ULP. The Er may declare a lockout in the same cases. 2. In the absence of a certified or duly recognized bargaining representative, any LLO in the establishment may declare a strike but only on grounds of ULP. [Sec. 6, Rule XXII, Book V, Implementing Rules, as amended by D.O. 40-03]

A: Yes. Despite the validity of the purpose of a strike and compliance with the procedural requirements, a strike may still be held illegal where the means employed are illegal. The means become illegal when they come within the prohibitions under Art. 264(e) of the LC. Protected picketing does not extend to blocking ingress to and egress from the company premises, and, the fact 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 [PHIMCO Industries, Inc. v. PHIMCO Industries Labor Association, G.R. No. 170830, (2010)].

Note: 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.

Q: On what grounds may a strike or lockout be declared? A: 1. Collective Bargaining Deadlock – economic 2. ULP – political Note: It is possible to change an economic strike into a ULP strike [Consolidated Labor Ass’n of the Phils. v. Marsman and Co., G.R. No. L-17038, (1964)].

Note: Even if the purpose of a strike is valid, the strike may still be held illegal where the means employed are illegal. Thus, the employment of violence, intimidation, restraint or coercion in carrying out concerted activities which are injurious to the right to property renders a strike illegal. And so is picketing or the obstruction to the free use of property or the comfortable enjoyment of life or property, when accompanied by intimidation, threats, violence, and coercion as to constitute nuisance. [Soriano Aviation v. Employees Association of A. Soriano Aviation, G.R. No. 166879, (2009)].

Q: Because of financial problems, the company decided to temporarily shutdown its operations at the dyeing and finishing division. It notified the DOLE of the shutdown. Raymund Tomaroy with 16 members of the union staged a picket in front of the company’s compound, carrying placards. He th demanded a resumption of work and 13 month pay. The company filed a petition to declare the strike illegal. The union argues that they did not stage a strike, for considering that the dyeing and finishing division of the company was shut down, it could not have caused a work stoppage. Was the action of the union a strike?

Q: Is the penalty of outright dismissal against the striking employees severe for a one-day absence from work? A: Yes. The penalty of dismissal against the striking Ees, who only staged a one day walkout, is too severe. It is not in accordance with settled and authoritative doctrine and legal principles that a mere finding of the illegality of a strike does not automatically warrant a wholesale dismissal of the strikers from their employment and that a premature or improvident strike should not be visited with a consequence so severe as dismissal where a penalty less punitive would suffice [Automotive Engine

A: Yes, the concerted efforts of the members of the union and its supporters caused a temporary work stoppage. The allegation that there can be no work stoppage because the operation in the division had been shut down is of no consequence. It bears stressing that the other divisions were fully operational [Bukluran ng Manggagawa sa Clothman Knitting Corp. v. CA, G.R. No. 158158, (2005)].

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Labor Law and Social Legislation Q: What is conversion doctrine?

negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employers and employees. [Gold City Integrated Port Services, Inc. v. NLRC, G.R. No. 103560, (1995)]

A: It is when a strike starts as economic and later, as it progresses, it becomes a ULP, or vice versa. Q: Can a strike be converted into a lockout? A: No, a strike cannot be converted into a pure and simple lockout by the mere expedient of filing before the trial court a notice of offer to return to work during the pendency of the labor dispute between the union and the Er [Rizal Cement Workers Union v. CIR, G.R. No. L-18442, (1962)].

Q: When is a person or entity considered as participating or interested in a labor dispute? A: 1. If relief is sought against him or it, and 2. He or it is engaged in the same industry, trade, craft, or occupation in which such dispute occurs, or 3. Has a direct or indirect interest therein, or 4. Is a member, officer, or agent of any association composed in whole or in part of Ees or Ers engaged in such industry, trade, craft, or occupation.

Q: What are the instances where a strike or lockout cannot be declared? A: 1. Violations of CBAs, except flagrant and/or malicious refusal to comply with economic provisions. 2. Inter-union disputes 3. Intra-union disputes 4. Failure to file a notice of strike or lockout or without necessary strike or lockout vote obtained and reported to the Board. 5. After assumption of jurisdiction by the Secretary has been declared 6. After certification or submission of the dispute to compulsory or voluntary arbitration 7. There is already a pending case involving the same grounds for the strike or lockout. 8. Labor standards cases such as wage orders. [Sec. 5, Rule XXII, Book V, Implementing Rules, as amended by D.O. 40-03]

Q: Liwayway Publication Inc. is a second sub lessee of a part of the premises of the Permanent Concrete Products, Inc. It has a bodega for its newsprint in the sublet property which it uses for its printing and publishing business. The daily supply of newsprint needed to feed its printing plant is taken from its warehouse. The employees of the Permanent Concrete Products Inc. declared a strike against their company. The union members picketed, stopped and prohibited Liwayway’s trucks from entering the compound to load newsprint from its bodega. Does the lower court have jurisdiction to issue a writ of preliminary injunction considering that there was a labor dispute between Permanent Concrete Products, Inc. and the union?

Q: When does a deadlock in collective bargaining arise?

A: Yes, Liwayway Publication Inc. is not in any way related to the striking union except for the fact that it is the sub- lessee of a bodega in the company’s compound.

A: A deadlock arises when there is an impasse which presupposes reasonable effort at good faith in bargaining which, despite noble intentions, does not conclude in agreement between the parties.

The business of Liwayway is exclusively the publication of magazines which has absolutely no relation or connection whatsoever with the cause of the strike of the union against their company, much less with the terms, conditions or demands of the rd strikers. Liwayway is merely a 3 person or an innocent by-stander [Liwayway Pub., Inc. v. Permanent Concrete Workers Union, G.R. No. L25003, (1981)].

Q: What is an internal union dispute? A: It includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by-laws of a union, including any violation of the rights and conditions of union membership provided for in this LC. (Art. 212 [q], LC) Q: What is a labor dispute? A: Any controversy or matter concerning terms or conditions or representation of persons in UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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LABOR RELATIONS LAW REQUISITES FOR A VALID STRIKE REQUISITES FOR A VALID LOCKOUT

period [NSFW vs. Ovejera, G.R. No. 59743, (1982)].

Q: What are the requisites of a lawful strike / lockout?

In case of dismissal from employment of union officers which may constitute union busting, the time requirement for the filing of the Notice of Strike shall be dispensed with but the strike vote requirement, being mandatory in character, shall “in every case” be complied with.

A: The requirements for a valid strike or lockout are as follows: 1.

It must be based on a valid and factual ground;

2.

A strike or lockout notice shall be filed with the NCMB at least 15 days before the intended date of the strike or lockout if the issues raised are unfair labor practices, or at least 30 days before the intended date thereof if the issue involves bargaining deadlock.

Note: The purpose of the 7 day strike ban is to give DOLE an opportunity to verify whether the projected strike really carries the imprimatur of the majority of the union members in addition to the cooling-off period before the actual strike [Lapanday Workers’ Union, et.al. v. NLRC, G.R. Nos. 95494-97, (1995)].

8.

Note: The failure of the union to serve the company a copy of the notice of strike is a clear violation of Section 3, Rule XXII, Book V of the Rules Implementing the LC. The Constitutional precepts of due process mandate that the other party be notified of the adverse action of the opposing party [Filipino Pipe and Foundry Corp. v. NLRC, G.R. No. 115180, (1999)].

The dispute must not be the subject of an assumption of jurisdiction by the President or the SLE, a certification for compulsory arbitration, or submission to compulsory or voluntary arbitration nor a subject of a pending case involving the same grounds for the strike or lockout.

Q: What is a cooling-off period? 3.

In cases of dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws, which may constitute union busting where the existence of the union is threatened, the 15-day cooling-off period shall not apply and the union may take action immediately after the strike vote is conducted and the result thereof submitted to the DOLE.

4.

Notice of conduct of strike vote 24 hours before the intended strike is filed with the DOLE.

5.

A strike must be approved by a majority vote of the members of the union and a lockout must be approved by a majority vote 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 that purpose.

6.

A strike or lockout vote shall be reported to the NCMB-DOLE Regional Branch at least 7 days before the intended strike or lockout subject to the cooling-off period.

7.

In the event the result of the strike/lockout ballot is filed within the cooling-off period, the 7day requirement shall be counted from the day following the expiration of the cooling-off

A: It is the period of time given by the NCMB to mediate and conciliate the parties. It is the span of time allotted by law for parties to settle their disputes in a peaceful manner before staging a strike or lockout. Note: Cooling-off and waiting period may be done simultaneously.

Q: Johnny is the duly elected President and principal union organizer of the Nagkakaisang Manggagawa ng Manila Restaurant (NMMR), a legitimate labor organization. He was unceremoniously dismissed by management for spending virtually 95% of his working hours in union activities. On the same day Johnny received the notice of termination, the labor union went on strike. Management filed an action to declare the strike illegal, contending that: 1. The Union did not observe the “cooling-off period” mandated by the LC; and 2. The Union went on strike without complying with the strike-vote requirement under the LC. Rule on the foregoing contentions with reasons. (2009 Bar Question)

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation A: 1. Yes. The conduct of a strike action without observing the cooling-off period is a violation of one of the requirements of law which must be observed. The cooling-off periods required by Art. 263 (c) and (f) of the LC are to enable the DOLE to exert efforts to amicably settle the controversy and for the parties to review and reconsider their respective positions during the cooling-off periods. But the LC also provides that if the dismissal constitutes union busting, the union may strike immediately. 2. 3. Yes. The conduct of the strike action without a strike vote violates Art. 263 (f) – “In every case, the union or the Er shall furnish the DOLE the results of the voting at least 7 days before the intended strike” to enable the DOLE and the parties to exert the last effort to settle the dispute without strike action.

Q: What is the purpose of giving notice of the conduct of a strike vote to the NCMB at least 24 hours before the meeting for the said purpose? A: 1. Inform the NCMB of the intent of the union to conduct a strike vote; 2. Give the NCMB ample time to decide on whether or not there is a need to supervise the conduct of the strike vote to prevent any acts of violence and or irregularities; 3. Ample time to prepare for the deployment of the requisite personnel [Capitol Medical Center v. NLRC, G.R. No. 147080, (2005)]. Q: Is a no strike/lockout clause legal? A: Yes, but it is applicable only to economic strikes, not ULP strikes. As a provision in the CBA, it is a valid stipulation although the clause may be invoked by an Er only when the strike is economic in nature or one which is conducted to force wage or other concessions from the Er that are not mandated to be granted by the law itself. It would be inapplicable to prevent a strike which is grounded on ULP [Panay Electric Co. v. NLRC, G.R. No. 102672, (1995); Malayang Samahan ng mga Manggagawa sa Greenfield v. Ramos, G.R. No. 113907, (2000)].

Q: NFSW, the bargaining agent of Central Azucarera de la Carlota (CAC) rank and file employees, filed a th notice of strike based on non-payment of the 13 month pay and 6 days thereafter they held the strike. A day after the commencement of the strike, a report of the strike-vote was filed by NFSW with DOLE. CAC filed a petition to declare the strike illegal due to non-compliance with the 15-day cooling off period and the strike was held before the lapse of 7 days from the submission to the DOLE of the result of the strike vote. Was the strike held by NFSW legal?

Q: What is a preventive mediation case? A: It involves labor disputes which are the subject of a formal or informal request for conciliation and mediation assistance sought by either or both parties or upon the initiative of the NCMB. (Sec. 1 [mm], Rule I, Book V, IRR)

A: No. The cooling-off period in Art. 264(c), LC and the 7-day strike ban after the strike-vote report prescribed in Art. 264(f) of the LC were meant to be mandatory. The law provides that “the labor union may strike” should the dispute “remain unsettled until the lapse of the requisite number of days from the filing of the notice”, this clearly implies that the union may not strike before the lapse of the coolingoff period. The cooling-off period is for the MOLE to exert all efforts at mediation and conciliation to effect a voluntary settlement.

Note: The regional branch may treat the notice as preventive mediation case upon agreement of the parties.

Q: Give the legal basis for the conversion of a notice of strike to preventive mediation. A: It is in pursuance of the NCMB’s duty under the Rules Implementing the Labor Code to exert “all efforts at mediation and conciliation to enable the parties to settle the dispute amicably” and in line with the state policy of favoring voluntary modes of settling labor disputes. And a strike mounted by the union after the NCMB dropped the notice of strike from its docket of notice of strikes and during the pendency of preventive mediation proceedings would be illegal [San Miguel Corporation v. NLRC et al., G.R. No. 119293, (2003)].

The mandatory character of the 7-day strike ban is manifest in the provision that “in every case” the union shall furnish the DOLE with the results of the voting “at least 7 days before the intended strike.” This period is to give time to verify that a strike vote was actually held [NFSW v. Ovejera, G.R. No. L-59743, (1982)].

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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LABOR RELATIONS LAW Q: Who has the duty to declare that the notice of strike or lockout has been converted into preventive mediation case?

conciliation meetings called by the regional branch of the NCMB. 4.

A: Upon the recommendation of the conciliator or mediator handling the labor dispute, the Director of the Regional Branch of the NCMB which has jurisdiction over the labor dispute has the duty to declare and inform the parties that the issues raised or the actual issues involved are not proper subjects of a Notice of Strike or Lockout has been converted into a Preventive Mediation Case without prejudice to further conciliation or upon the request of either or both parties.

Q: Was the strike held by the union legal based on the fact that the notice of strike only contained general allegations of ULP? A: No. In cases of ULP, the notice of strike shall as far as practicable, state the acts complained of and the efforts to resolve the dispute amicably [Tiu v. NLRC, G.R. No. 123276, (1997)].

Q: What are the contents of the notice of strike or lockout? A: 1. 2. 3. 4. 5. 6. 7.

8.

Q: Fil Transit Employees Union filed a notice of strike with the Bureau of Labor Relations because of alleged ULP of the company. Because of failure to reach an agreement the union went on strike. Several employees were dismissed because of the strike. The union filed another notice of strike alleging ULP, massive dismissal of officers and members, coercion of employees and violation of workers’ rights to self-organization. The DOLE after assuming jurisdiction over the dispute, ordered all striking employees including those who were dismissed to return to work. The company however countered that no strike vote had been obtained before the strike was called and the result of the strike vote was not reported to DOLE. Was the strike held by the union illegal for failure to hold a strike vote?

Name and addresses of Er Union involved Nature of the industry to which the Er belongs Number of union members Workers in the bargaining unit Other relevant date In case of bargaining deadlocks: unresolved issues, written proposals of the union, counterproposals of the Er and proof of request for conference to settle differences In case of ULP: The acts complained of, and the efforts taken to resolve the dispute

Note: NCMB shall inform the concerned party in case notice does not conform with the requirements.

A: Yes, there is no evidence to show that a strike vote had in fact been taken before a strike was called. Even if there was a strike vote held, the strike called by the union was illegal because of non-observance by the union of the mandatory 7-day strike ban counted from the date the strike vote should have been reported to the DOLE [First City Interlink Transportation Co., Inc. v. Confessor, G.R. No. 106316, (1997)].

Q: What action will the NCMB take on the notice of strike of strike or lockout? A: 1. Upon receipt of notice, the regional branch of the NCMB shall exert all efforts at mediation and conciliation to enable the parties to settle the dispute amicably. It shall also encourage the parties to submit the dispute to voluntary arbitration. 2.

3.

A notice, upon agreement of the parties, may be referred to alternative modes of dispute resolution, including voluntary arbitration.

Q: What is the effect of non-compliance with the requisites of a strike?

The regional branch of the NCMB may, upon agreement of the parties, treat a notice as a preventive mediation case.

A: The strike may be declared illegal. Q: What are the tests in determining the legality of strike?

During the proceedings, the parties shall not do any act which may disrupt or impede the early settlement of the dispute. They are obliged, as part of their duty to bargain collectively in good faith and to participate fully and promptly in

A: The following must concur: 1. Purpose test – the strike must be due to either bargaining deadlock and/or the ULP

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Labor Law and Social Legislation 2.

Compliance with the procedural and substantive requirements of the law. (See requisites of a valid strike)

that the latter will in turn bring pressure upon the Er of another company with whom another union has a labor dispute

3.

Means employed test – It states that a strike may be legal at its inception but eventually be declared illegal if the strike is accompanied by violence which is widespread, pervasive and adopted as a matter of policy and not mere violence which is sporadic which normally occur in a strike area.

Illegal – There is no labor dispute involved. Note: A strike can validly take place only in the presence of and in relation to a labor dispute between Er and Ee.

6.

Q: Give examples of strike and explain their legality.

Illegal – It is a political rally

A: 1. Sit-down strike – Characterized by a temporary work stoppage of workers who seize or occupy property of the Er or refuse to vacate the premises of the Er.

7.

Wildcat strike – A work stoppage that violates the labor contract and is not authorized by the union.

Slowdown – Strike on an installment plan; an activity by which workers, without complete stoppage of work, retard production or their performance of duties and functions to compel management to grant their demands Illegal – Ees work on their own terms; while the Ees continue to work and remain in their positions and accept wages paid to them, they at the same time select what part on their allotted tasks they care to perform on their own volition or refuse openly or secretly

4.

Sympathetic strike – Work stoppages of workers of one company to make common cause with other strikers or other companies without demands or grievances of their own against the Er

2.

Secondary strike – Work stoppages of workers of one company to exert pressure on their Er so UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

comply

unannounced

with

notice

A: 1. No. First, the union failed to satisfy the required majority vote of the union membership approving the conduct of a strike/ (Art. 263 [f], LC; Sec. 11, Rule XXII, Department Order No. 4003). Second, the strike was illegal due to the nonobservance of the 30-day cooling off period by the union. (Art. 263 [c], LC)

Illegal – There is no labor dispute between the workers who are joining the strikers and the latter’s Er 5.

and

Q: A is a member of the labor union duly recognized as the sole bargaining representative of his company. Due to a bargaining deadlock, 245 members of the 500-strong union voted on March 13, 2010 to stage a strike. A notice of strike was submitted to the NCMB on March 16, 2010. Seven days later the workers staged a strike. In the course of which, A had to leave to attend to his wife who just gave birth. The union members later intimidated and barred other employees from entering the work premises, thus paralyzing the business operations of the company. A was dismissed from employment as a consequence of the strike. 1. Was the strike legal? Explain. 2. Was A’s dismissal valid? Why or why not? (2010 Bar Question)

Illegal –Because it fails to comply with certain requirements of the law, to wit: notice of strike, vote and report on strike vote 3.

Quickie strikes- brief temporary work stoppage Illegal- failure to requirements and etc.

Illegal – Amounts to a criminal act because of the Ees trespass on the premises of the Er 2.

Welga ng bayan (Cause Oriented Strikes) – A political strike and therefore there is neither a bargaining deadlock nor any ULP

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No. A, as an ordinary striking worker, may not be declared to have lost his employment status by mere participation in an illegal strike, unless there is proof that he knowingly participated in the commission of illegal acts during the strike. (Art. 264, LC; Arellano University Employees and Workers Union v. Court of Appeals, 502 SCRA 219)

LABOR RELATIONS LAW Q: Two unions, joined a welga ng bayan. The unions, led by their officers, staged a work stoppage which lasted for several days, prompting FILFLEX and BIFLEX Corporations to file a petition to declare the work stoppage illegal for failure to comply with procedural requirements. Did the the employees committed an illegal work stoppage?

A: If peacefully carried out, picketing cannot be prohibited even in the absence of Ee-Er relationship [PAFLU v. CFl, G.R.L-49580,(1983)]. ASSUMPTION OF JURISDICTION BY THE SECRETARY OF LABOR OR CERTIFICATION OF THE LABOR DISPUTE TO THE NLRC FOR COMPULSORY ARBITRATION

A: Yes. Ees, who have no labor dispute with their Er but who, on a day they are scheduled to work, refuse to work and instead join a welga ng bayan commit an illegal work stoppage. There being no showing that the two unions notified the corporations of their intention, or that they were allowed by the corporations, to join the welga ng bayan, their work stoppage is beyond legal protection [BIFLEX Phils. Inc. Labor Union (NAFLU) vs. FILFLEX Industrial and Manufacturing Corp., G.R. No. 155679, (2006)].

Q: What is the power of the SLE to assume jurisdiction over a labor dispute or certify it to the NLRC for compulsory arbitration?

Q: May a strike be enjoined?

A: The SLE may assume jurisdiction over a labor dispute, or certify it to the NLRC for compulsory arbitration, if, in his opinion, it may cause or likely to cause a strike or lockout in an industry indispensable to the national interest. The President may also exercise the power to assume jurisdiction over a labor dispute.

A: GR: No strikes arising from a labor dispute may be enjoined.

Q: What is the effect of such assumption or certification of labor dispute to the NLRC?

XPNs: 1. Art. 263(g)- Assumption order by SLE 2. Art. 218(e)-Enjoining or restraining any actual or threatened commission of any unlawful act in any labor dispute

Q: What constitional provisions protect the right to picket?

A: The following are the effects: (a) on intended or impending strike or lockout– automatically enjoined even if a Motion for Reconsideration is filed; (b) on actual strike or lockout– strikers or locked out Ees should immediately return to work and Er should readmit them back; and (c) on cases filed or may be filed – all shall be subsumed/absorbed by the assumed or certified case except when the order specified otherwise. The parties to the case should inform the SLE of pendency thereof.

A: The right to picket is guaranteed under the freedom of speech and of expression and to peacably assemble to air grievances under Sec. 4, Art. III.

Q: What is the extent of the power of the President or the Secretary of Labor and Employment to issue assumption and certification orders?

Q: What are the requisites for lawful picketing?

A: The power to issue assumption and certification orders is an extraordinary authority strictly limited to national interest cases and granted to the President or to the SLE, “which can justifiably rest on his own consideration of the exigency of the situation in relation to the national interest”.

REQUISITES FOR LAWFUL PICKETING

A: The following are the requisites: 1. 2. 3.

4.

It should be peacefully carried out; There should be no act of violence, coercion or intimidation; The ingress to (entrance) or egress from (exit) the company premises should not be obstructed; Public thoroughfares should not be impeded.

Pursuant to Art. 263(g) of the LC, as amended, the SLE is vested with the discretionary power to decide not only the question of whether to assume jurisdiction over a given labor dispute or certify the same to the NLRC, but also the determination of the industry indispensable to national interest.

Q: What is the effect of the absence of EmployeeEmployerr relationship on picketing?

The President shall not be precluded from intervening at any time and assuming jurisdiction over any labor

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Labor Law and Social Legislation dispute involving industries indispensable to national interest in order to settle or terminate the same.

5. 6.

Under Art. 277(b) of the LC, as amended, the SLE may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the DOLE before whom such dispute is pending that the termination may cause a serious labor dispute or is in the implementation of a mass lay-off.

Q: What does the phrase “under the same terms and conditions” contemplates?

Q: When a dispute is assumed by the President or SLE, or certified to the NLRC for compulsory arbitration, may a strike or lockout be validly declared on account of the same dispute?

XPN: Payroll reinstatement in lieu of actual reinstatement but there must be showing of special circumstances rendering actual reinstatement impracticable, or otherwise not conducive to attaining the purpose of the law in providing for assumption of jurisdiction by the SLE in a labor dispute that affects the national interest [Manila Diamond Hotel Ees Union v. SLE, G.R. No. 140518, (2004)].

A: GR: It contemplates only actual reinstatement. This is in keeping with the rationale that any work stoppage or slowdown in that particular industry can be inimical to the national economy.

A: No. The assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout. Q: What order?

is

the

nature

of

a

Hospitals; and Export oriented industries

return-to-work Q: What are issues that the Secretary of Labor and Employment may resolve when he assumes jurisdiction over a labor dispute?

A: A return-to-work order is a valid statutory part and parcel of the assumption of jurisdiction and certification orders given the predictable prejudice the strike could cause not only to the parties but more especially to the national interest. Stated otherwise, the assumption of jurisdiction and the certification to the NLRC has the effect of automatically enjoining the strike or lockout, whether actual or intended, even if the same has not been categorically stated or does not appear in the assumption or certification order. It is not a matter of option or voluntariness but of obligation. It must be discharged as a duty even against the worker’s will. The worker must return to his job together with his co-workers so that the operation of the company can be resumed and it can continue serving the public and promoting its interest. It is executory in character and shall be strictly complied with by the parties even during the pendency of any petition questioning their validity precisely to maintain the status quo while the determination is being made [Union of Filipro Employees vs. Nestle Philippines, Inc., GR No. 8871013, December 19, 1990].

A: 1. Issues submitted to the SLE for resolution and such issues involved in the labor dispute itself [St. Scholastica’s College v. Torres, G.R. No. 100158, (1992)]. 2. SLE may subsume pending labor cases before LAs which are involved in the dispute and decide even issues falling under the exclusive and original jurisdiction of LAs such as the declaration of legality or illegality of strike [Int’l. Pharmaceuticals v. SLE, G.R. Nos. 92981-83, (1992)]. Note: Power of SLE is plenary and discretionary [St. Luke’s Medical Center v. Torres, G.R. No. 99395, (1993)].

Q: Is it necessary for the Secretary of Labor and Emplyment to issue a return-to-work order in an assumption order? A: No, the mere issuance of an assumption order automatically carries with it a return-to-work order although not expressly stated therein [TSEU-FFW v. CA, G.R. Nos. 143013-14, (2000)].

Q: What are the industries which are considered as indispensable to the national interest?

Q: What is the extent of the powers of the President during strikes/lockouts?

A: 1. Public utilities 2. Companies engaged in the generation or distribution of energy 3. Banks 4. Schools UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

A: 1. May determine the industries, which are in his opinion indispensable to national interest

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LABOR RELATIONS LAW 2.

May intervene at any time and assume jurisdiction over any such labor dispute in order to settle or terminate the same. (Art. 263[g], LC)

exercise of such right national interest will be affected. The LC vests upon the SLE the discretion to determine what industries are indispensable to national interest.

Note: The decision of the President or SLE is final and executory after receipt thereof by the parties.

Note: The underlying principle embodied in Art. 264 (g), LC on the settlement of labor disputes is that assumption and certification orders are executory in character and are strictly complied with by the parties even during the pendency of any petition questioning their validity. This extraordinary authority given to the Secretary of Labor is aimed at arriving at a peaceful and speedy solution to labor disputes, without jeopardizing national interests.

Q: May a return to work order be validly issued pending determination of the legality of the strike? A: Yes. Where the return to work order is issued pending the determination of the legality of the strike, it is not correct to say that it may be enforced only if the strike is legal and may be disregarded if illegal. Precisely, the purpose of the return to work order is to maintain the status quo while the determination is being made [Sarmiento v. Tuico, G.R. Nos. 75271-73, (1988)].

Q: A notice of strike was filed by the PSBA Employees Union-FFW, alleging union busting, coercion of Employees and harassment on the part of PSBA. The conciliation being ineffective, the strike pushed through. A complaint for ULP and for a declaration of illegality of the strike with a prayer for preliminary injunction was filed by PSBA against the union.

Q: Does a return-to-work order violate the constitutional provision against involuntary servitude?

While the cases were pending, a complaint was filed in the RTC of Manila by some PSBA students against PSBA and the union, seeking to enjoin the union and its members from picketing and from barricading themselves in front of the school’s main gate. A TRO was then issued by the RTC, which the union opposed on the ground that the case involves a labor dispute over which the RTC had no jurisdiction. The Acting SLE later on assumed jurisdiction over the labor dispute and ordered the striking Employees to return to work. Was the SLE correct in ordering the striking Employees to return to work?

A: A return-to-work order is not offensive to the constitutional provision against involuntary servitude. It must be discharged as a duty even against the worker’s will. The worker must return to his job together with his co-workers so that the operation of the company can be resumed and it can continue serving the public and promoting its interest. It is executory in character and 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. NATURE OF ASSUMPTION ORDER OR CERTIFICATION ORDER

A: Yes. In the opinion of the Acting SLE, the labor dispute adversely affected the national interest, affecting as it did 9,000 students. He is authorized by law to assume jurisdiction over the labor dispute, after finding that it adversely affected the national interest. This power is expressly granted by Art. 263 (g) of the LC, as amended by B.P. Blg. 227.

Q: What is the nature of the power of the Secretary of Labor and Employment under Art. 263(g) of the LC? A: The assumption of jurisdiction 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 be inimical to the national economy. The SLE acts to maintain industrial peace. Thus, his certification for compulsory arbitration is not intended to impede the worker’s right to strike but to obtain a speedy settlement of the dispute [Philtread Workers Union v. Confesor, G.R. No. 117169, (1997)].

Q: Does the RTC have jurisdiction to decide on the case filed by the PSBA students? A: No. The RTC was without jurisdiction over the subject matter of the case filed by some PSBA students. It is a labor dispute which the labor agencies have exclusive jurisdiction. The regular courts have no jurisdiction over labor disputes and to issue injunctions against strikes is well-settled [PSBA v. Noriel, G.R. No. 80648, (1988)].

Art. 263(g), LC does not interfere with the workers right to strike but merely regulates it, when in the

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Labor Law and Social Legislation Note: The SLE may cite the defiant party in contempt pursuant to the power vested in him under the provisions of the LC.

Q: Members of the union learned that a redundancy program would be implemented by PLDT. They thus filed a notice of strike on the ground of ULP. However, the Secretary of Labor, recognizing that PLDT’s operations is impressed with public and national interest as communication plays a vital role in furtherance of trade, commerce, and industry specially at this time of globalized economy where information is vital to economic survival, enjoined the strike and issued a “qualified” return to work order where all striking employees except those who were terminated due to redundancy were ordered to return to work. Was the “qualified” return to work order valid?

Q: What are the justifications for the dismissal of a defiant Employee? A: 1. A strike that is undertaken after the issuance by the SLE of an assumption or certification order becomes a prohibited activity and thus illegal. The striking union officers and members, as a result, are deemed to have lost their employment status for having knowingly participated in an illegal strike.

A: No. When the SLE exercises the powers granted by Art. 263(g) of the LC, he is, indeed, granted great breadth of discretion. However, the application of this power is not without limitation, lest the SLE would be above the law. As Art. 263(g) is clear and unequivocal in stating that all striking or locked out Ees shall immediately return to work and the Er shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout, then the unmistakable mandate must be followed by the SLE [PLDT v. Manggagawa ng Komunikasyon sa Pilipinas, G.R. No. 162783, (2005)].

From the moment an Ee defies a return-to-work order, he is deemed to have abandoned his job.

3.

By staging a strike after the assumption or certification for compulsory arbitration, the Ee forfeit their right to be readmitted to work, having, in effect, abandoned their employment [Steel Corporation of the Philippnes v. SCP Employees Union, G.R. Nos. 169829-30, (2008)].

Note: Once the SLE assumes jurisdiction over a labor dispute or certifies it to the NLRC for compulsory arbitration, such jurisdiction should not be intered with by the application of the coercive process of a strike or lockout.

EFFECT OF DEFIANCE OF ASSUMPTION OR CERTIFICATION ORDER

The workers defying a return-to-work order issued in connection with the asusmption or certification by the SLE may, in fact, be subjected not only to immediate disciplinary action such as dismissal or loss of employment status but to criminal prosecution as well. Defiant strikers could be validly replaced.

Q: What is the effect of defiance to the return to work order? A: It shall be considered an illegal act committed in the course of the strike or lockout and shall authorize the SLE or the NLRC, as the case may be, to enforce the same under pain or loss of employment status or entitlement to full employment benefits from the locking-out Er or backwages, damages and/or other positive and/or affirmative reliefs, even to criminal prosecution against the liable parties [(Sec. 6, Rule IX, of the New Rules of Procedure of the NLRC; St. Scholastica’s College v. Torres, G.R. No. 100158, (2002)].

Q: Several employees and members of Union A were terminated by Western Phone Co. on the ground of redundancy. After complying with the necessary requirements, the Union staged a strike and picketed the premises of the company. The management then filed a petition for the Secretary of Labor and Employment to assume jurisdiction over the dispute. Without the benefit of a hearing, the Secretary issued an Order to assume jurisdiction and for the parties to revert to the status quo ante litem.

Q: What is the effect of a defiance of assumption or certification orders of the Secretary of Labor and Employment?

1.

A: The defiance by the union, its officers and members of the SLE’s assumption of jurisdiction or certification order constitutes a valid ground for dismissal [Art. 263(g), LC].

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

2.

2.

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Was the order to assume jurisdiction legal? Explain. Under the same set of facts the Secretary instead issued an Order directing all striking workers to return to work within 24 hours, except those who were terminated due to redundancy. Was the Order legal? Explain.

LABOR RELATIONS LAW A: 1. Yes, the SLE has plenary power to assume jurisdiction under Art. 263[g],LC: “When in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the SLE may assume jurisdiction over the dispute and decide it or certify it to the NLRC for compulsory arbitration.” This extraordinary authority given to the SLE is aimed at arriving at a peaceful and speedy solution to labor disputes without jeopardizing national interests [Steel Corportaion v. SCP Employees Union, G.R. Nos. 169829-30, (2008)]. Such assumption shall have the effect of automatically enjoining an impending strike or lockout or an order directing immediate return to work and resume operations, if a strike already took place, and for the employer to re-admit all employees under the same terms and conditions prevailing before the strike or lockout. [Art. 263(g), LC; Sec. 15, Rule XXII, Department Order No. 40-G-03] 2.

A: A strike may be considered legal where the union believed that the company committed ULP and the circumstances warranted such belief in good faith, although subsequently such allegations of ULP are found out as not true [Bacus v. Ople, GR No. L-56856, (1984), People’s Industrial and Commercial Ees and Organization (FFW) v. People’s Industrial and Commercial Corp., G.R. No.37687, (1982)]. Q: What is the effect of the good faith of strikers on the legality of strike? A: GR: A strike grounded on ULP is illegal if no such acts actually exist. XPN: Even if no ULP acts are committed by the Er, if the Ees believe in GF that ULP acts exist so as to constitute a valid ground to strike, then the strike held pursuant to such belief may be legal. Where the union believed that the Er committed ULP and the circumstances warranted such belief in good faith, the resulting strike may be considered legal although, subsequently, such allegations of ULP were found to be groundless [NUWHRAIN-Interim Junta v. NLRC, G.R. No. 125561, (1998)].

No. The order will be inconsistent with the established State policy of enjoining the parties from performing acts that undermines the underlying principles emodied in Art. 263[g], LC. In this case, exempting the employees terminated due to redundancy from those who are required to return-to-work, the SLE comes short of his duty under Art. 263(g), LC to maintain status quo or the terms and conditions prevailing before the strike.

Q: May a strike be declared illegal on the ground of non-compliance with the strict and mandatory requirements for a valid conduct of a strike? A: Yes. The requirements of law and its implementing rules are mandatory and failure of a union to comply renders the strike illegal [Magdala Multipurpose & Livelihood Cooperative v. Kilusang Manggagawa ng LGS, G.R. Nos. 191138-39, (2011)].

ILLEGAL STRIKE Q: When is a strike illegal?

Q: Are employees who staged an illegal strike entitled to backwages?

A: A strike is illegal where: 1.

2. 3.

4.

5. 6.

A: No. Contemplating two causes for the dismissal of an Ee—(a) unlawful lockout, and (b) participation in an illegal strike—the third paragraph of Art. 264(a) authorizes the award of full backwages only when the termination of employment is a consequence of an unlawful lockout. As a general rule, backwages are granted to indemnify a dismissed Ee for his loss of earnings during the whole period that he is out of his job. Considering that an illegally dismissed Ee is not deemed to have left his employment, he is entitled to all the rights and privileges that accrue to him from the employment. That backwages are not granted to Ees participating in an illegal strike simply accords with the reality that they do not render work for the Er during the period of the illegal strike under the

It is contrary to specific prohibition of law, such as strike by Ees performing governmental functions; Violates a specific requirement of law; Declared for an unlawful purpose, such as inducing the Er to commit ULP against non-union Ees; Employs unlawful means in the pursuit of its objective, such as widespread terrorism of nonstrikers; Declared in violation of an existing injunction; Contrary to an existing agreement, such as a no strike clause or conclusive arbitration clause

Q: What is “good faith strike” doctrine?

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Labor Law and Social Legislation principle of a fair day’s wage for a fair day’s labor [Danilo Escario v. NLRC, G.R. No. 160302, (2010)].

ceased from their labor; the declaration of a strike is not a renunciation of employment relation.

Q: X was dismissed for joining an illegal strike but was reinstated because he is only a member of the union who did not commit any illegal act. Is X entitled for backwages for the period of strike?

Q: Who are not entitled to reinstatement? A: 1. Union officers who knowingly participate in the illegal strike 2. Any striker or union who knowingly participates in the commission of illegal acts during the strike

A: No. Conformably with the long honored principle of “a fair day’s wage for a fair day’s labor”, Ee’s dismissed for joining illegal strike are not entitled to backwages for the period of the strike even if they are reinstated by virtue of their being merely members of the striking union who did not commit any illegal act during the strike [Escario v. NLRC, G.R. 160302, (2010)].

Note: Those union members who have joined an illegal strike but have not committed any illegal act shall be reinstated but without backwages. The responsibility for the illegal acts committed during the strike must be on an individual and not on a collective basis [First City Interlink Transportation Co., Inc. v. Confesor, G.R. No. 106316, (1997)].

LIABILITY OF UNION OFFICERS; LIABILITY OF ORDINARY WORKERS

Q: What is the rule in strikes in hospitals?

Q: What are the effects of an illegal strike?

A: 1. It shall be the duty of the striking Ees or lockingout Er to provide and maintain an effective skeletal workforce of medical and health personnel for the duration of the strike or lockout. 2. SLE may immediately assume jurisdiction within 24 hours from knowledge of the occurrence of such strike or lockout certify it to the NLRC for compulsory arbitration.

A: Union Officer May be declared to have lost his employment status Knowingly participating in an illegal strike

Knowingly participating in the commission of illegal acts during strike

May be terminated

Ordinary worker Cannot be terminated Note: The LC protects ordinary, rank-and-file union members who participated in such a strike from losing their jobs provided that they did not commit illegal acts during the strike.

May terminated

Q: More or less 1400 employees of the company staged a mass walk-out, allegedly without anybody leading them as it was a simultaneous, immediate and unanimous group action and decision, to protest the non-payment of their salaries and wages. The Secretary of Labor and Employment who found the strike to be illegal granted the clearance to terminate the employment of those who were instigators in the illegal strike. Was the decision of the Secretary in granting the clearance correct?

be

A: No, a mere finding of the illegality of a strike should not be automatically followed by wholesale dismissal of the strikers from their employment. While it is true that administrative agencies exercising quasi-judicial functions are free from the rigidities of procedure, it is equally well-settled that avoidance of technicalities of law or procedure in ascertaining objectively the facts in each case should not, however, cause denial of due process [Bacus v. Ople, G.R. No. L-56856, (1984)].

[Art. 264, LC; Samahang Manggagawa Sa Sulpicio Lines, Inc.–Naflu et al. v. Sulpicio Lines, Inc., G.R. No. 140992, (2004)] Q: What is the rule on reinstatement of striking workers? A: Striking Ees are entitled to reinstatement, regardless of whether or not the strike was the consequence of the Er’s ULP because while out on strike, the strikers are not considered to have abandoned their employment, but rather have only UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

188

LABOR RELATIONS LAW Q: Two days after the union struck, the Secretary of LE ordered the striking workers to return to work within 24 hours. But the striking union failed to return to work and instead they continued their pickets. As a result, violence erupted in the picket lines. The service bus ferrying non-striking workers was stoned causing injuries to its passengers. Threats, defamation, illegal detention, and physical injuries also occurred. The company was directed to accept back all striking workers, except the union officers, shop stewards, and those with pending criminal charges. Was the SLE correct in not including the union officers, shop stewards and those with pending criminal charges in the returnto-work order?

A: GR: No, even if such strike was legal. XPN: 1. Where the strikers voluntarily and unconditionally offered to return to work, but the Er refused to accept the offer – Ers are entitled to backwages from the date their offer was made 2. When there is a return-to-work order and the Ees are discriminated against other Ees, workers are entitled to back wages from the date of discrimination 3. In case of a ULP strike, in the discretion of the authority deciding the case 4. When the Ees were illegally locked out and thus compel them to stage a strike.

A: No, to exclude union officers, shop stewards and those with pending criminal charges in the directive to the company to accept back the striking workers without first determining whether they knowingly committed illegal acts would be tantamount to dismissal without due process of law [Telefunken Semiconductors Ees Union-FFW v. SLE, G.R. No. 122743 & 127215, (1997)].

Q: By reason of a deadlock in collective bargaining, the union, after the lapse of the cooling-off period, declares a strike. The strike is peaceful but fruitless; the management is adamant. So after 60 days, the strikers abandon their strike and offer to return to work. Is the company bound to readmit them? Why?

Q: Can employees who abandoned a legal strike but were refused reinstatement be awarded backwages?

A: Yes. By going on strike, the Ees are not deemed to have abandoned their work; they are merely utilizing a weapon given to them by law to seek better terms and conditions of employment and to protect their rights. An Er who refuses to readmit the strikers, excepting those who have forfeited their employment status because of illegal acts committed in the course of the strike would be discriminating against them for have exercised their right to engage in a concerted action; it commits a ULP [Cromwell Commercial Employees and Laborers Union v. CIR, et al., G.R. No. L-19778, ( 1964)].

A: Yes, provided the following requisites are present: 1. 2.

3.

The strike was legal There was an unconditional offer to return to work as when the strikers manifested their willingness to abide by the CIR back-to-work order and even sought the aid of competent authorities to effect their return The strikers were refused reinstatement such as when they have not been re-admitted to their former position [Philippine Marine Officers' Guild v. Compañia Maritima et al., G.R. Nos. L-20662 and L-20662 (1971)].

Q: If by reason of the prolonged strike, the company was compelled to hire replacements, would this constitute as sufficient reason for it not to readmit the strikers? Why?

Note: No backwages will be awarded to union members as a penalty for their participation in the illegal strike. As for the union officers, for knowingly participating in an illegal strike, the law mandates that a union officer may be terminated from employment and they are not entitled to any relief [Gold City Integrated Port Services, Inc. v. NLRC, G.R. No. 86000, (1990)].

A: No. Under Art. 264 of the LC, mere participation of an Ee in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the Er during such lawful strike. A contrary rule would enable the Er to dismiss an Ee by the simple expedient of hiring a replacement.

LIABILITY OF EMPLOYER

Q: If an employer knowingly readmits to work a striker who committed illegal acts during a strike, can it later on seek the dismissal of the employee by reason of such acts? Why?

Q: Are strikers entitled to their backwages or strike duration pay?

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation A: The Er can no longer seek the dismissal of the Ee on the ground that he committed illegal acts during the strike. By readmitting him to work, the Er is deemed to have condoned the illegal acts.

CBA with Union X, and eventually to Voluntary Arbitration. Is the company correct? Explain. (2010 Bar Question) A: No. The RTC has jurisdiction to hear and decide the prohibitory injunction case filed by Union X against Company C to enjoin the latter from implementing the memorandum-policy against the use of cell phones in the factory. The issue in this case is the validity and constitutionality of the cell phone ban being implemented by Company C. The issue, therefore, does not involve the interpretation of the memorandum-policy, but its intrinsic validity [Haliguefla v. PAL 602 SCRA 297].

WAIVER OF ILLEGALITY OF STRIKE Q: When is there a waiver of the illegality of a strike by the employer? A: When an Er accedes to the peaceful settlement brokered by the NLRC by agreeing to accept all Ees who had not yet returned to work, it waives the issue of the illegality of the strike [Reformist Union v. NLRC, G.R. No. 120482, (1997)].

REQUISITES FOR LABOR INJUNCTIONS Q: Does the compliance with the return-to-work order operate as a waiver of the strike’s illegality?

Q: Is injunction in labor disputes prohibited?

A: GR: A return-to-work order does not have the effect of rendering the issue of the legality of the strike as moot and academic. [Insurefco Paper Pulp and Project Workers Union v. Insular Sugar Refining Corp., 95 Phil. 761]

A: GR: No temporary or permanent injunction or restraining order in any case involving or growing out of labor disputes shall be issued by any court. (Art. 254, LC) XPNs: 1. Injunction power of the NLRC (Art. 218, LC) 2. Prohibited activities during a strike or lockout (Art. 264, LC) 3. Assumption or certification power of the SLE in national interest cases [Art. 263(g), LC]

XPN: Er may be considered to have waived its right to proceed against the striking Es for alleged commission of illegal acts during the strike when, during a conference before the Chairman of the NLRC, it agreed to reinstate them and comply with the return-to-work order issued by the SLE [TASLI-ALU v. Court of Appeals, G.R. No. 145428, (2004)].

Q: What are the requisites in issuing an injunction in a labor case?

INJUNCTIONS

A: 1. There is an actual or threatened commission of any or all prohibited or unlawful acts in any labor dispute 2. There is a need to enjoin or restrain such acts or to require the performance of a particular act 3. If not restrained or performed forthwith, may cause grave or irreparable damage to any party or render ineffectual any decision in favor of such party [Sec. 218, LC]

Q: What is an injunction? A: It is an order or a writ that commands a person to do or not to do a particular act. It may be a positive (mandatory) or a negative (prohibitory) command. Q: Company C, a toy manufacturer, decided to ban the use of cell phones in the factory premises. In the pertinent Memorandum, management explained that too much texting and phone-calling by employees disrupted company operations. Two employee-members of Union X were terminated from employment due to violation of the memorandum-policy. The union countered with a prohibitory injunction case (with prayer for the issuance of a temporary restraining order) filed with the RTC challenging the validity and constitutionality of the cell phone ban. The company filed a motion to dismiss, arguing that the case should be referred to the grievance machinery pursuant to an existing UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Note: "Labor dispute" includes any controversy or matters concerning terms or conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of Er and Ee [Sec. 212, LC].

Q: Is injunction available in picketing? A: GR: No, because picketing is part of the freedom of speech duly protected by the Constitution.

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LABOR RELATIONS LAW XPNs: 1. Where picketing is carried out through the use of illegal means 2. Where picketing involves the use of violence and other illegal acts 3. Where picketing affects the rights of third parties and injunction become necessary to protect such rights.

incidents arising from, in connection with or relating to labor disputes, as the controversy under consideration, to the exclusion of the regular courts. The RTC, being a co-equal body of the NLRC, has no jurisdiction to issue any restraining order or injunction to enjoin the execution of any decision of the latter [Deltaventures v. Cabato, G.R. No. 118216, (2000)].

INNOCENT BYSTANDER RULE

Q: The employer filed with the RTC a complaint for damages with preliminary mandatory injunction against the union, the main purpose of which is to dispense the picketing of the members of the union. The union filed a motion to dismiss on the ground of lack of jurisdiction. The RTC denied the motion to dismiss and enjoined the picketing, it said that mere allegations of Employer-Employeee relationship does not automatically deprive the court of its jurisdiction and even the subsequent filing of charges of ULP, as an afterthought, does not deprive it of its jurisdiction. Was the issuance by the RTC of the injunction proper?

Q: Who are innocent bystanders? A: They are the third party in a picketing who has no existing connection or interest with and the picketing union [MSF Tire & Rubber v. CA, G.R. No. 128632, (1999)]. Note: While peaceful picketing is entitled to protection as an exercise of free speech, the courts are not without power to confine or localize the sphere of communication or the demonstration to the parties to the labor dispute, including those with related interest, and to insulate establishments or persons with no industrial connection or having interest totally foreign to the context of the dispute. (Ibid.)

A: No, the concerted action taken by the members of the union in picketing the premises of the department store, no matter how illegal, cannot be regarded as acts not arising from a labor dispute over which the RTCs may exercise jurisdiction [Samahang Manggagawa ng Liberty Commercial v. Pimentel, G.R. No. L-78621, (1987)].

Q: What must be established by an innocent bystander before a court enjoins a labor strike? A: The innocent by stander must show: 1. 2.

Compliance with the grounds specified in Rule 58 of the Rules of Court, and That it is entirely different from, without any connection whatsoever to, either party to the dispute and, therefore, its interests are totally foreign to the context thereof [MSF Tire & Rubber v. CA, G.R.No. 128632, (1999)].

Q: May the RTC take cognizance of the complaint which is incidental to a labor dispute? A: No. The RTC has no jurisdiction to act on labor cases or various incidents arising therefrom, including the execution of decisions, awards or orders where rd the subject matter of the 3 party claim is only incidental to a labor case. rd

A party, by filing its 3 party claim with the deputy sheriff, it submitted itself to the jurisdiction of the NLRC acting through the LA. The broad powers granted to the LA and to the NLRC by Arts. 217, 218 and 224 of the LC can only be interpreted as vesting in them jurisdiction over

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Labor Law and Social Legislation PROCEDURE AND JURISDICTION

8.

LABOR ARBITER 9.

Enforcement of compromise agreements when there is non-compliance by any of the parties pursuant to Art. 227 of the LC, as amended; and Other cases as may be provided by law

JURISDICTION Note: Although the provision speaks of exclusive and original jurisdiction of LAs, the cases enumerated may instead be submitted to a voluntary arbitrator by agreement of the parties under Art. 262 of the LC. The law prefers voluntary over compulsory arbitration.

Q: What is the distinction between the jurisdiction of the labor arbiter and the National Labor Relations Commission? A: 1. The NLRC has exclusive appellate jurisdiction on all cases decided by the LA. 2. The NLRC does not have original jurisdiction on the cases over which the LA have original and exclusive jurisdiction. 3. The NLRC cannot have appellate jurisdiction if a claim does not fall within the exclusive original jurisdiction of the LA.

Q: What is the nature of the cases which the labor arbiter may resolve? A: The cases that an LA can hear and decide are employment related. Where no Er-Ee relationship exists between the parties and no issue is involved which may be resolved by reference to the LC, other labor statutes, or any CBA, it is the RTC that has jurisdiction [Lapanday Agricultural Dev’t. Corp v. CA, G.R. No. 112139, (2000)].

Q: What is the nature of jurisdiction of labor arbiters?

The LA has jurisdiction over controversies involving Ers and Ees only if there is a “reasonable causal connection” between the claim asserted and the ErEe relations. Absent such link, the complaint is cognizable by the regular court. [Eviota v. CA, G.R. No. 152121, (2003)]

A: It is original and exclusive. LAs have no appellate jurisdiction. Q: What are the cases falling under the jurisdiction of labor arbiters?

Q: Do labor arbiters exercise concurrent jurisdiction with the NLRC?

A: Exclusive and original jurisdiction to hear and decide the following cases involving all workers: 1. 2. 3.

4. 5.

6.

7.

A: Yes, with respect to contempt cases.

ULP cases Termination disputes If accompanied with a claim for reinstatement, those that workers file involving wages, rates of pay, hours of work and other terms and conditions of employment Claims for actual, moral, exemplary and other forms of damages arising from Er-Ee relations Cases arising from any violation of Art. 264, LC including questions involving the legality of strikes and lockouts except claims for Employment Compensation, Social Security, Philhealth and maternity benefits, all other claims arising from Er-Ee relations, including those of persons in domestic or household service, involving an amount exceeding P5000 regardless of whether accompanied with a claim for reinstatement Monetary claims of overseas contract workers arising from Er-Ee relations under the Migrant Worker’s Act of 1995 as amended by RA 10022

Q: What is the extent of the jurisdiction of the labor arbiter if there are unresolved matters arising from the interpretation of the CBA? A: GR: LAs have no jurisdiction over unresolved or unsettled grievances arising from the interpretation or implementation of the CBA and those arising from the interpretation or enforcement of company personnel policies. XPN: Actual termination disputes Note: Where the dispute is just in the interpretation, implementation or enforcement stage of the termination, it may be referred to the grievance machinery set up by the CBA or by voluntary arbitration. Where there was already actual termination, i.e., violation of rights, it is already cognizable by the LA [Maneja v. NLRC, G.R. No. 124013, (1998)].

Q: Does the use of the word “may” in the provisions of the Grievance Procedure allow the alternative submission of the case before the labor arbiter?

Wage distortion disputes in unorganized establishments not voluntarily settled by the parties pursuant to RA 6727 UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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PROCEDURE AND JURISDICTION A: Yes. The use of the word “may” shows the intention of the parties to reserve the right to submit the illegal termination dispute to the jurisdiction of the LA, rather than to a voluntary arbitrator. Petitioner validly exercised his option to submit his case to a LA when he filed his complaint before the proper government agency. In other words, the CA is correct in holding that voluntary arbitration is mandatory in character if there is a specific agreement between the parties to that effect. It must be stressed however that, in the case at bar, the use of the word “may” shows the intention of the parties to reserve the right of recourse to LAs [Vivero v. CA, G.R. No. 138938, (2000)].

the claims enumerated in Art.217, LC [Ocheda v. CA, G.R. No. 85517, (1992)]. 10. Complaint arising from violation of training agreement [Singapore Airlines v. Pano, G.R. No. L-47739, (1983)] LABOR ARBITER vs. REGIONAL DIRECTOR Q: What are the differences between the powers of the Secretary of Labor and Employment, Regional Director and Labor Arbiter? A: Art. 128 Visitation and Enforcement Power of Secretary of Labor and Employment

Q: Who has the exclusive appellate jurisdiction over all cases decided by Labor Arbiters? A: The NLRC.

Art. 129 Regional Director

LA exercises original and exclusive jurisdiction on cases involving :

Q: What are the cases which do not fall under the jurisdiction of the labor arbiters? A: LAs have no jurisdiction over the following: 1. 2. 3.

4.

5.

6.

7.

8.

9.

Art. 217(a)(6) Labor Arbiter

Foreign governments [JUSMAG-Phils. v. NLRC, G.R. No. 108813, (1994)] International agencies [Lasco v. NLRC, G.R. Nos. 109095-109107, (1995)] Intra-corporate disputes which fall under P.D. 902-A and now falls under the jurisdiction of the regular courts pursuant to the new Securities Regulation Code [Nacpil v. IBC, G.R. No. 144767, (2002)] Executing money claims against government [Dept. of Agriculture v. NLRC, G.R. No. 104269, (1993)] Cases involving GOCCs with original charters which are governed by civil service law, rules or regulations (Art. IX-B, Sec.2, No.1, 1987 Constitution) Local water district [Tanjay Water District v. Gabaton, (1989)] except where NLRC jurisdiction is invoked [Zamboanga City Water District v. Buat, G.R. No. 104389, (1994)] The aggregate money claim does not exceed P5000 and without claim for reinstatement [Rajah Humabon Hotel, Inc. v. Trajano, G.R. Nos. 100222-23, (1993)] Claim of Ee for cash prize under the Innovation Program of the company, although arising from Er-Ee relationship, is one requiring application of general civil law on contracts which is within the jurisdiction of the regular courts [SMC v. NLRC, G.R. No. 80774, (1988)] Cause of action based on quasi-delict or tort which has no reasonable connection with any of

a) Inspection of establishments; and b)issuance of orders to compel compliance with labor standards, wage orders and other labor laws

Enforcement of labor legislation in general

193

Adjudication of Ee’s claims for wages and benefits

Limited to monetary claims

a. ULP ; b. termination disputes ; c. wages ; d. rates of pay; e. hours of work ; f. other terms of employment, claims for damages arising from Er-Ee relationship, legality of strikes and lockouts, and g. all other claims arising from Er-Ee relationship involving an amount exceeding Php 5,000.00 All other claims arising from ErEe relations

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation

Proceeding is an offshoot of routine inspections

Initiated by sworn complaints filed by any interested party

LA decides case within 30 calendar days after submission of the case by the parties for decision

A: Yes. The subject of litigation is incapable of pecuniary estimation, exclusively cognizable by the RTC, pursuant to Sec. 19(1) of BP Blg. 129, as amended. Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals. Not every controversy or money claim by an Ee against the Er or vice-versa is within the exclusive jurisdiction of the LA. Actions between Ees and Er where the Er-Ee relationship is merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular court. Here, the Er-Ee 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 [Halaguena vs. PAL Incorporated, G.R. No. 172013, (2009)].

Jurisdictional requirements: 1) Complaint arises from Er-Ee relationship

No jurisdictional requirements

2) Claimant is an Ee or person employed in domestic or household service or a HH 3) Complaint does NOT include a claim for reinstatement 4) Aggregate money claim of EACH claimant does not exceed P5,000

Appealable to SLE (In case compliance order is issued by Regional Office)

Appealable to NLRC

1) All other claims arising from Er-Ee relations 2) Including those of persons in domestic or household service

REINSTATEMENT PENDING APPEAL Q: What is the effect of perfection of an appeal on execution?

3) Involving an amount exceeding P5,000

A: The perfection of an appeal shall stay the execution of the decision of the LA on appeal, except execution for reinstatement pending appeal.

4) Whether or not accompanied with a claim for reinstatement

Note: The provision of Art. 223 of LC is clear that an award by the LA for reinstatement shall be immediately executory even pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement [Pioneer Texturizing Corp. v. NLRC, G.R. No. 118651, (1997)].

Q: May dismissed employees collect their wages during the period between the Labor Arbiter’s order of reinstatement pending appeal and the NLRC decision overturning that of the LA?

Appealable to NLRC

A: Yes. Art. 223(3) of the LC provides that the decision of the LA reinstating a dismissed or separated Ee, insofar as the reinstatement aspect is concerned, shall immediately be executory, pending appeal.

Q: FASAP, the sole and exclusive bargaining representative of the flight attendants, flight stewards and pursers of PAL, and respondent PAL entered into a CBA incorporating the terms and conditions of their agreement for the years ‘01-‘05. Sec. 144, Part A of the CBA provides that compulsory retirement shall be 55 for females and 60 for males. They filed an action with the RTC claiming that the CBA provision is discriminatory and hence unconstitutional. The RTC issued a TRO. The appellate court ruled that the RTC has no jurisdiction over the case at bar. Does the RTC have jurisdiction over the petitioners' action challenging the legality of the provisions on the compulsory retirement age contained in the CBA? UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Even if the order of reinstatement of the LA is reversed on appeal, it is obligatory on the part of the Er to reinstate and pay the wages of the dismissed Ee during the period of appeal until reversal by the higher court. On the other hand, if the Ee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the Ee is not required to reimburse whatever salary he received for he is entitled to such, more so if he

194

PROCEDURE AND JURISDICTION actually rendered services during the period [Pfizer v. Velasco, G.R. No. 177467, (2011)].

Q: Is the posting of an appeal bond required for the perfection of an appeal from a Labor Arbiter’s decision involving monetary award?

Unless there is a restraining order, it is ministerial upon the LA to implement the order of reinstatement and it is mandatory on the Er to comply therewith [Garcia v. PAL, G.R. No. 164856, (2009)].

A: Yes. In case the decision of the LA or the RD involves a monetary award, an appeal by the Er may be perfected only upon the posting of a bond. (Sec.6, Rule VI, NLRC 2011 Rules of Procedure)

REQUIREMENTS TO PERFECT APPEAL TO NLRC

Q: What are the forms of the appeal bond?

Q: How is an appeal from Labor Arbiter to National Labor Relations Commission perfected?

A: It shall either be in the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages and attorney's fees. (Sec. 6, Rule VI, NLRC 2011 Rules of Procedure)

A: 1. The appeal is perfected: a. Filed within the reglementary period of 10 calendar days from receipt if it involves a decision, award, or order of the LA, or 5 calendar days from receipt if it involves a decision or resolution of the RD b. Verified by the appellant himself in accordance with Sec. 4, Rule 7 of the Rules of Court, as amended c. In the form of a memorandum of appeal which shall state the grounds relied upon and the arguments in support thereof, the relief prayed for, and with a statement of the date the appellant received the appealed decision, resolution or order d. In 3 legibly typewritten or printed copies e. Accompanied by (i) proof of payment of the required appeal fee; (ii) posting of a cash or surety bond as provided in Sec. 6 of this Rule; (iii) a certificate of non-forum shopping; and (iv) proof of service upon the other parties (Sec. 4, Rule VI, NLRC 2011 Rules of Procedure)

Q: Who may issue a surety bond? A: It shall be issued by a reputable bonding company duly accredited by the Commission or the SC, and shall be accompanied by original or certified true copies of: 1.

A joint declaration under oath by the Er, his counsel, and the bonding company, attesting that the bond posted is genuine, and shall be in effect until final disposition of the case.

2.

An indemnity agreement between the Erappellant and bonding company;

3.

Proof of security deposit or collateral securing the bond: provided, that a check shall not be considered as an acceptable security;

4.

A certificate of authority from the Insurance Commission;

5.

Certificate of registration from the SEC;

6.

Certificate of authority to transact surety business from the Office of the President;

A: The appeal may be entertained only on any of the following grounds:

7.

Certificate of accreditation and authority from the SC; and

1.

8.

A notarized board resolution or secretary's certificate from the bonding company showing its authorized signatories and their specimen signatures. [Sec. 6, Rule VI, NLRC 2011 Rules of Procedure]

Note: Mere notice of appeal without complying with the aforementioned requisites shall not stop the running of the period for perfecting an appeal.

Q: What are the grounds for filing an appeal?

2.

3. 4.

If there is prima facie evidence of abuse of discretion on the part of the LA or RD; If the decision, award or order was secured through fraud or coercion, including graft and corruption; If made purely on questions of law; and/or If serious errors in the findings of facts are raised which, if not corrected, would cause grave or irreparable damage or injury to the appellant. (Sec.2, Rule VI, NLRC 2011 Rules of Procedure)

Note: The appellant shall furnish the appellee with a certified true copy of the said surety bond with all the above-mentioned supporting documents.

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation Q: What is the period within which a cash or surety bond shall be valid and effective?

A: Yes. A motion for reconsideration is required to enable NLRC to correct its mistakes. If no MR is filed, NLRC’s decision becomes final and executory.

A: From the date of deposit or posting, until the case is finally decided, resolved or terminated, or the award satisfied. This condition shall be deemed incorporated in the terms and conditions of the surety bond, and shall be binding on the appellants and the bonding company. [Sec. 6, Rule VI, NLRC 2011 Rules of Procedure]

Q: What is the remedy in case of denial of the MR? A: If the motion is denied, the aggrieved party may file a petition for certiorari not later than 60 days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the 60 day period shall be counted from notice of the denial of said motion. No extension of time to file the petition shall be granted except for compelling reason and in no case exceeding 15 days. (Sec. 4, Rule 65, Rules of Court)

Q: What is the effect if the bond is verified by the NLRC to be irregular or not genuine? A: The Commission shall cause the immediate dismissal of the appeal, and censure or cite in contempt the responsible parties and their counsels, or subject them to reasonable fine or penalty. (Sec.6, Rule VI, NLRC 2011 Rules of Procedure)

Q: What is the effect if no service of summons was made?

Note: The appellee shall verify the regularity and genuineness of the bond and immediately report any irregularity to the NLRC.

A: In the absence of service of summons or a valid waiver thereof, the hearings and judgment rendered by the LA is null and void.

Q: May the bond be reduced?

Q: What is compulsory arbitration? A: The process of settlement of labor disputes by a government agency which has the authority to investigate and make an award binding on all the parties.

A: GR: No. XPN: On meritorious grounds, and only upon the posting of a bond in a reasonable amount in relation to the monetary award.

Q: Can the Labor Arbiter conduct compulsory arbitration?

Note: The mere filing of a motion to reduce bond without complying with the requisites in the preceding paragraphs shall not stop the running of the period to perfect an appeal. (Sec. 6, Rule VI, NLRC 2011 Rules of Procedure)

A: Yes. Under the LC, it is the LA who is clothed with the authority to conduct compulsory arbitration on cases involving termination disputes [Art.217, P.D. 442, as amended]. [PAL v. NLRC, G.R. No. 55159, (1989)]

Q: Company A, within the reglementary period, appealed the decision of a Labor Arbiter directing the reinstatement of an Employee and awarding backwages. However, A's cash bond was filed beyond the ten day period. Should the NLRC entertain the appeal? Why? (2001 Bar Question)

Q: What are the rules on venue of filing cases? A: 1. All cases which the LAs have authority to decide may be filed in the Regional Arbitration Branch (RAB) having jurisdiction over the workplace of the complainant /petitioner.

A: No, the NLRC should not entertain the appeal, as the same was not perfected for failure to file a bond. In ABA vs. NLRC,( G.R. No.122627, 1999), the SC ruled: "An appeal bond is necessary...the appeal may be perfected only upon the posting of cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from."

Note: Workplace is understood to be the place or locality where the Ee is regularly assigned when the cause of action arose. It shall include the place where the Ee is supposed to report back after a temporary detail, assignment or travel. In case of field Ees, as well as ambulant or itinerant workers, their workplace is where they are” a. Regularly assigned b. Supposed to regularly receive their salaries and wages

Q: Is a motion for reconsideration (MR) of the NLRC decision required before certiorari may be availed of?

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

196

PROCEDURE AND JURISDICTION c. Receive their work instructions from d. Reporting the results of their assignment to their Er

2.

Q: Does an individual adjudicatory power?

Where 2 or more RABs have jurisdiction over the workplace, the first to acquire jurisdiction shall exclude others.

3.

Improper venue when not objected to before filing of position papers shall be deemed waived.

4.

Venue may be changed by written agreement of the parties or when the NLRC or the LA so orders, upon motion by the proper party in meritorious cases.

5.

cases within their respective territorial jurisdiction. have

A: No. The law lodges the adjudicatory power on each of the eight divisions, neither on the individual commissioners nor on the whole commission. The “division” is a legal entity, not the person who sits in it. Hence, an individual commissioner has no adjudicatory power, although of course, he can concur or dissent in deciding a case. JURISDICTION

For Overseas Contract Workers where the complainant resides or where the principal office of the respondent Er is located, at the option of the complainant.

Q: What are the two kinds of jurisdiction of the NLRC? A: 1. Exclusive Original Jurisdiction a. Certified labor disputes causing or likely to cause a strike or lockout in an industry indispensable to national interest, certified to it by the SLE or the President for compulsory arbitration b. 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 c. Injunction in strikes or lockouts under Art. 264 of the LC d. Contempt cases

Note: The Rules of Procedure on Venue is merely permissive, allowing a different venue when the interest of substantial justice demands a different one. [Dayag v. Canizares, GR. No. 124193, (1998)]

NATIONAL LABOR RELATIONS COMMISSION Q: What is the NLRC? A: It is an administrative body with quasi-judicial functions and the principal government agency that hears and decides labor-management disputes; it is attached to the DOLE solely for program and policy coordination only. Q: How are the powers and functions of the NLRC allocated? A: 1. En Banc a. Promulgating rules and regulations and governing the hearings and disposition of cases before any of its divisions and regional branches. b. Formulating policies affecting its administration and operations. c. On temporary or emergency basis, to allow cases within the jurisdiction of any division to be heard and decided by any other division whose docket allows the additional workload and such transfer will not expose litigants to unnecessary additional expense. 2.

Commissioner

2.

Exclusive Appellate Jurisdiction a. All cases decided by the LA under Art. 217(b) of the LC and Sec. 10 of R.A.8042 (Migrant Worker’s Act); and b. Cases decided by the Regional Offices of DOLE in the exercise of its adjudicatory function under Art.129 of the LC over monetary claims of workers amounting to not more than P5000 and not accompanied by claim for reinstatement.

Q: What is the composition of the NLRC? A: 1. Chairman 2. 23 Members a. 8 members each shall be chosen only from among the nominees of the workers and Er

Division (8 Divisions with 3 members) a. Adjudicatory; b. All other powers, functions and duties; c. Exclusive appellate jurisdiction over

197

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation b.

c.

organization respectively. The Chairman and the 7 remaining members shall come from the public sector, with the latter to be chosen preferably from among the incumbent LAs. Upon assumption into office, the members nominated by the workers and Ers organization shall divest themselves of any affiliation with or interest in the federation or association to which they belong.

A: 1. Member of the Philippine Bar 2. Engaged in the practice of law in the Philippines for at least 10 years 3. At least 5 years of experience or exposure in handling labor management relations Q: What is the term of office of the Chairman, Commissioners and Labor Arbiters? A: They shall hold office during good behavior until they reach the age of 65 unless removed for causes as provided by law or become incapacitated to discharge the function of his office.

Note: There is no need for the Commission on Appointments to confirm the positions in the NLRC. Such requirement has no constitutional basis. [Calderon v. Carale, GR. No. 91636, (1992)]

Provided, however, that the President of the Philippines may extend the services of the Commissioners and LAs up to the maximum age of 70 years upon the recommendation of the Commission en banc.

Q: How does the NLRC adjudicate cases? A: 1. The NLRC adjudicates cases by division. A concurrence of 2 votes is needed for a valid judgment.

Q: Some disgruntled members of Bantay Labor Union filed with the Regional Office of the DOLE a written complaint against their union officers for mismanagement of union funds. The RD did not rule in the complainants' favor. Not satisfied, the complainants elevated the RD’s decision to the NLRC. The union officers moved to dismiss on the ground of lack of jurisdiction. Are the union officers correct? Why? (2001 Bar Question)

Note: Whenever the required membership in a division is not complete and the concurrence of the Commissioners to arrive at judgment or resolution cannot be obtained, the Chairman shall designate such number of additional Commissioners from the other divisions as may be necessary.

2.

It shall be mandatory for the division to meet for purposes of consultation.

A: Yes, the union officers are correct in claiming that the NLRC has no jurisdiction over the appealed ruling of the RD. In Barles v. Bitonio (G.R. No. 120220, 1999), the SC ruled:

Note: The conclusion of a division on any case submitted to it for decision should be reached in consultation before the case is assigned to a member for the writing of the opinion.

3.

“Appellate authority over decisions of the RD involving examination of union accounts is expressly conferred on the BLR under the Rule of Procedure on Mediation- Arbitration.”

A certification that a consultation has been conducted, signed by the presiding commissioner of the division, shall be issued (copy attached to the record of case and served upon the parties).

Sec. 4. Jurisdiction of the BLR — (b) The BLR shall exercise appellate jurisdiction over all cases originating from the RD involving complaints for examination of union books of accounts.

Q: What are the qualifications of the Chairman and the Commissioners? A: 1. Member of the Philippine Bar 2. Engaged in the practice of law in the Philippines for at least 15 years 3. At least 5 years of experience or exposure in handling labor management relations 4. Preferably a resident of the region where he is to hold office

The language of the law is categorical. Any additional explanation on the matter is superfluous." Q: Company "A" and Union "B" could not resolve their negotiations for a new CBA. After conciliation proceedings b efor e th e NCM B p r oved f u t i l e , B went on strike. Violence during the strike prompted A to file charges against striker-members of B for their illegal acts. The SLE assumed jurisdiction, referred the strike to the

Q: What are the qualifications of an Executive Labor Arbiter?

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

198

PROCEDURE AND JURISDICTION NLRC and issued a return-to-work order. The NLRC directed the parties to submit their respective position papers and documentary evidence. At the initial hearing before the NLRC, the parties agreed to submit the case for resolution after the submission of the position papers and evidence. Subsequently, the NLRC issued an arbitral award resolving the disputed provisions of the CBA and ordered the dismissal of certain strikers for having knowingly committed illegal acts during the strike. The dismissed employees elevated their dismissal to the CA claiming that they were deprived of their right to due process and that the affidavits submitted by A were self-serving and of no probative value. Should the appeal prosper? State the reason(s) for your answer clearly. (2001 Bar Question)

Power to investigate matters and hear disputes within its jurisdiction (adjudicatory power – original and appellate jurisdiction over cases)

4.

Contempt power

5.

Ocular Inspection

6.

Power to issue injunctions and restraining orders EFFECT OF NLRC REVERSAL OF LABOR ARBITER’S ORDER OF REINSTATEMENT

Q: May dismissed employees collect their wages during the period between the Labor Arbiter’s order of reinstatement pending appeal and the NLRC decision overturning that of the LA? A: Yes. Art. 223 (3) of the LC provides that the decision of the LA reinstating a dismissed or separated Ee, insofar as the reinstatement aspect is concerned, shall immediately be executory, pending appeal.

A: The appeal should not prosper. The SC, in many cases, has ruled that decisions made by the NLRC may be based on position papers. In the question, it is stated that the parties agreed to submit the case for resolution after the submission of position papers and evidence. Given this fact, the striker-members of B cannot now complain that they were denied due process. They are in estoppel. After voluntarily submitting a case and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the court. A party cannot adopt a posture of double dealing [Marquez vs. Secretary of Labor, G.R. No. 80685, (1989)].

Even if the order of reinstatement of the LA is reversed on appeal, it is obligatory on the part of the Er to reinstate and pay the wages of the dismissed Ee during the period of appeal until reversal by the higher court. On the other hand, if the Ee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the Ee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period [Pfizer v. Velasco, G.R. No. 177467, (2011)].

Q: Is barangay conciliation available in labor cases?

REMEDIES

A: No. Labor cases are not subject to barangay conciliation since ordinary rules of procedure are merely suppletory in character vis-à-vis labor disputes which are primarily governed by labor laws [Montoya v. Escayo, G.R. No. 82211-12, (1989)].

Q: Is judicial review of the NLRC’s decision available? A: Yes, through petitions for certiorari (Rule 65) which should be initially filed with the CA in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief desired. The CA is procedurally equipped to resolve unclear or ambiguous factual finding, aside from the increased number of its component divisions [St. Martin Funeral Home v. NLRC, G.R. No. 130866, (1998)].

Q: What are the powers of the NLRC? A: 1. Rulemaking power – promulgation of rules and regulations: a. Governing disposition of cases before any of its division/regional offices. b. Pertaining to its internal functions c. As may be necessary to carry out the purposes of the LC. 2.

3.

Q: What is an injunction or a temporary restraining order (TRO)? A: Orders which may require, forbid, or stop the doing of an act. The power of the NLRC to enjoin or restrain the Commission from any or all prohibited or unlawful acts under Art. 218 of Labor Code can only be exercised in labor disputes.

Power to issue compulsory processes (administer oaths, summon parties, issue subpoenas)

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Labor Law and Social Legislation Note: A restraining order is generally regarded as an order to maintain the subject of controversy in status quo until the hearing of an application for a temporary injunction. [BF Homes v. Reyes, G.R. No. L-30690 (1982)]

Note: Irreparable Injury -an injury which cannot be adequately compensated in damages due to the nature of the injury itself or the nature of the right or property injured or when there exist no pecuniary standard for the measurement of damages.

Q: Who may issue a TRO? A: 1. President (Art.263[g], LC) 2. Secretary of Labor (Art. 263[g], LC) 3. NLRC (Art.218, LC) Note: Art. 218 of the LC limits the grant of injunctive power to the NLRC. The LA is excluded statutorily. Hence, no NLRC Rules can grant him that power.

c.

That as to each item of relief to be granted, greater injury will be inflicted upon the complainant by the denial of the relief than will be inflicted upon the defendants by the granting of the relief.

d.

That complainant has no adequate remedy at law

Q: What is the procedure for the issuance of restraining order/injunction?

Note: Adequate remedy – one that affords relief with reference to the matter in controversy and which is appropriate to the particular circumstances of the case if the remedy is specifically provided by law. [PAL v. NLRC, GR. No. 120567, (1998)]

A: 1. Filing of a verified petition 2.

3.

4.

Hearing after due and personal notice has been served in such manner as the Commission shall direct to: a. All known persons against whom relief is sought b. Also the President or other public officials of the province or city within which the unlawful acts have been threatened or commercial charged with the duty to protect the complainant’s property.

e.

5.

Q: What are “certified cases”? A: These are cases certified or referred to the Commission for compulsory arbitration under Art. 263 (g) of the LC dealing about national interest cases. A national interest dispute may be certified to the NLRC even before a strike is declared since Art. 263 (g) of the LC does not require the existence of a strike, but only of an industrial dispute [Government Service Insurance System Employees Association (GSISEA), et al. v. Court of Industrial Relations, G.R. No. L-18734, (1961)].

Finding of fact of the Commission to the effect that: a. Prohibited or unlawful acts have been threatened and will be committed, or have been and will be continued unless restrained, but no injunction or TRO shall be issued on account of any threat, prohibited or unlawful act, except against the persons, association or organization making the threat or committing the prohibited or unlawful act or actually authorizing or ratifying the same after actual knowledge thereof.

Q: What is the function of the NLRC in certified cases? A: When sitting in a compulsory arbitration certified to by the SLE, the NLRC is not sitting as a judicial court but as an administrative body charged with the duty to implement the order of the SLE. As an implementing body, its authority did not include the power to amend the Secretary’s order [UST v. NLRC and UST Faculty Union, G. R. No. 89920, (1990)].

The substantial and irreparable injury to the complainant’s property.

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Posting of a bond. CERTIFIED CASES

Reception at the hearing of the testimonies of the witnesses with opportunity for crossexamination, in support of the allegations of the complaint made under oath as well as testimony in opposition thereto.

b.

That public officers charged with the duty to protect complainant’s property are unable or unwilling to furnish adequate protection.

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PROCEDURE AND JURISDICTION Q: What is the effect of defiance from the certification order?

3.

Labor education.

A: Non-compliance with the certification order of the SLE shall be considered as an illegal act committed in the course of the strike or lockout and shall authorize the Commission to enforce the same under pain of immediate disclipinary action, including dismissal or loss of employment status or payment by the lockingout Er of backwages, damages and/or other affirmative relief, even criminal prosecution against the liable parties. (Sec. 4, Rule VIII, NLRC 2011 Rules)

Note: Jurisdiction over labor management problems or disputes is also exercised by other offices: 1. DOLE Regional Offices 2. Office of the Secretary of Labor 3. NLRC 4. POEA 5. OWWA 6. SSS-ECC 7. RTWPB 8. NWPC 9. Regular courts over intra-corporate disputes.

Q: What is the procedure in deciding certified cases?

Q: Who is a mediator-arbiter?

A: 1. Unless there is a necessity to conduct a clarificatory hearing, the Commission shall resolve all certified cases within 30 calendar days from receipt by the assigned Commissioner of the complete records, which shall include the position papers of the parties and the order of the SLE denying the motion for reconsideration of the certification order, if such motion has been filed.

A: An officer in the Regional Office or Bureau authorized to hear, conciliate and decide representation cases or assist in the disposition of intra or inter-union disputes.

2.

Q: What kinds of cases fall within BLR’s jurisdiction? A: The BLR has original and exclusive jurisdiction over: 1. Inter-union disputes 2. Intra-union disputes 3. Other related labor relations disputes

Where a clarificatory hearing is needed, the Commission shall, within five days from receipt of the records, issue a notice to be served on the parties through the fastest means available, requiring them to appear and submit additional evidence, if any.

3.

Notwithstanding the necessity for a clarificatory hearing, all certified cases shall be resolved by the Commission within 60 calendar days from receipt of the complete records.

4.

No motion for postponement or extension shall be entertained. [Sec. 5, Rule VIII, NLRC 2005 Rules]

Q: What is the coverage of inter/intra-union disputes? A: They shall include: 1.

Conduct or nullification of election of union and workers’ association officers 2. Audit/accounts examination of union or workers’ association funds 3. Deregistration of CBAs 4. Validity/invalidity of union affiliation or disaffiliation 5. Validity/invalidity of acceptance/ non-acceptance for union membership 6. Validity/invalidity of voluntary recognition 7. Opposition to application for union or CBA registration 8. Violations of or disagreements over any provision of the constitution and by-laws of union or workers’ association 9. Disagreements over chartering or registration of labor organizations or the registration of CBAs; 10. Violations of the rights and conditions of membership in a union or workers’ association; 11. Violations of the rights of LLO, except interpretation of CBAs; 12. Validity/invalidity of impeachment/ expulsion/suspension or any disciplinary action meted against any officer and member, including

BUREAU OF LABOR RELATIONS MEDIATOR-ARBITERS JURISDICTION (ORIGINAL AND APPELLATE) Q: What is covered by the BLR’s jurisdiction and functions? A: The BLR no longer handles all labor management disputes; rather its functions and jurisdiction are largely confined to: 1. 2.

Union matters Collective bargaining registry and

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Labor Law and Social Legislation 6. 7.

those arising from non-compliance with the reportorial requirements under Rule V; 13. Such other disputes or conflicts involving the rights to self-organization, union membership and CB – a. Between and among LLO and b. Between and among members of a union or workers’ association. [Sec.1, Rule XI, Book V, IRR as amended by D.O. 40-F-03]

8.

Q: May a decision in an inter/intra-union dispute be appealed from? A: Yes.

Q: What is covered by the phrase “other related labor relations disputes”?

Q: Within what period may an appeal to a decision of the Mediator-Arbiter or Regional Director in an inter/intra-union dispute be filed?

A: 1. Any conflict between: a. A labor union and the Er; or b. A labor union and a group that is not a LO; or c. A labor union and an individual who is not a member of such union 2.

3.

A: The decision may be appealed by any of the parties within 10 days from receipt thereof. (Sec. 16, Rule XI, D.O. 40-03) Q: To whom is the decision appealable?

Cancellation of registration of unions and worker’s associations filed by individual/s other than its members, or group that is not a LO.

A: The decision is appealable to the: 1. BLR: if the case originated from the Med-Arbiter or RD;

A petition for Interpleader involving labor relations. [Sec. 2, Rule XI, Book V, IRR as amended by D.O. 40-F-03]

2.

A: 1. It may hold a referendum election among the members of a union for the purpose of determining whether or not they desire to be affiliated with a federation.

A: A legitimate labor organization or its members. [Sec. 5, Rule XI, D.O. 40-03] the

issue

involves

the

entire

2.

A: The complaint must be signed by at least 30% of the entire membership of the union. Q: What if the issue involves a member only? A: Only the affected member may file the complaint. [Sec. 5, Rule XI, D.O. 40-03]

But the BLR has no authority to: a. Order a referendum among union members to decide whether to expel or suspend union officers. b. Forward a case to the Trade Union Congress of the Philippines for arbitration and decision.

Q: What are the administrative functions of the Bureau Labor Relations?

Note: GR: Redress must first be sought within the union itself in accordance with its constitution and by-laws

A: 1. 2. 3. 4.

XPNs: 1. Futility of intra-union remedies; 2. Improper expulsion procedure; 3. Undue delay in appeal as to constitute substantial injustice; 4. The action is for damages; 5. Lack of jurisdiction of the investigating body; action for the administrative agency is patently illegal, arbitrary and oppressive; UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

SLE: if the case originated from the BLR.

Q: What is the extent of the Bureau of Labor Relations authority?

Q: Who may file a complaint or petition involving intra/inter-union disputes?

Q: What if membership?

Issue is purely a question of law; Where the administrative agency had already prejudged the case; and Where the administrative agency was practically given the opportunity to act on the case but it did not.

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Regulation of the labor unions Keeping the registry of labor unions Maintenance of a file of the CBA Maintenance of a file of all settlements or final decisions of the SC, CA, NLRC and other agencies on labor disputes

PROCEDURE AND JURISDICTION Q: What are the effects of filing or pendency of inter/intra-union dispute and other labor relations disputes?

NATIONAL CONCILIATION AND MEDIATION BOARD (NCMB) NATURE OF PROCEEDINGS

A: 1. The rights relationships and obligations of the party-litigants against each other and other parties-in-interest prior to the institution of the petition shall continue to remain during the pendency of the petition and until the date of the decision rendered therein. Thereafter, the rights, relationships and obligations of the partylitigants against each other and other parties-ininterest shall be governed by the decision ordered.

Q: What are the alternative modes of settlement of labor dispute under Art. 211 of the LC? A: 1. Voluntary Arbitration 2. Conciliation 3. Mediation Q: What is the nature of the proceedings? A: The proceedings are non-litigious.

2.

The filing or pendency of any inter/intra union disputes is not a prejudicial question to any petition for certification election, hence it shall not be a ground for the dismissal of a petition for certification of election or suspension of the proceedings for the certification of election. (Sec. 3, Rule XI, DO 40-03)

Q: Are all labor disputes required to be submitted to mandatory conciliation-mediation? A: GR: All issues arising from labor and employment shall be subject to mandatory conciliation-mediation. The LA or the appropriate DOLE agency or office that has jurisdiction over the dispute shall entertain only endorsed or referred cases by the duly authorized officer [Art. 228 (a), as amended by R.A. 10396]

Q: State the rules on appeal in intra/inter-union disputes. A: 1. Formal Requirements a. Under oath b. Consist of a memorandum of appeal. c. Based on either of the following grounds: i. Grave abuse of discretion ii. Gross violation of the rules iii. With supporting arguments and evidence 2.

Period - within 10 days from receipt of decision.

3.

To whom appealable a. BLR – if the case originated from the MedArbiter/Regional Director. b. SLE – if the case originated from the BLR.

4.

XPNs: 1. Grievance machinery and Voluntary Arbitration, in which case, their agreement will govern 2. When excepted by the SLE (Ibid.) Note: Any or both parties involved in the dispute may preterminate the conciliation-mediation proceedings and request referral or endorsement to the appropriate DOLE agency or office which has jurisdiction over the dispute, or if both parties so agree, refer the unresolved issues to voluntary arbitration." (Art. 228 (b), as amended by R.A. 10396)

Q: What is arbitration? A: It is the submission of a dispute to an impartial person for determination on the basis of evidence and arguments of the parties. The arbiter’s decision or award is enforceable upon the disputants. It may be voluntary (by agreement) or compulsory (required by statutory provision) [Luzon Dev’t Bank v. Ass’n of Luzon Dev’t Bank Employees, G.R. No. 120319, (1995)].

Where Filed - Regional Office or to the BLR, where the complaint originated (records are transmitted to the BLR or Sec. within 24 hours from the receipt of the memorandum of appeal). [Rule XI, D.O. 40-03]

Q: Can the court fix resort to voluntary arbitration? A: Resort to VA dispute, should not be fixed by the court but by the parties relying on their strengths and resources.

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Labor Law and Social Legislation Q: Who are the parties to labor relations cases?

situation It is the process where a disinterested 3rd party meets with management and labor, at their request or otherwise, during a labor dispute or in CB conferences, and by cooling tempers, aids in reaching an agreement

A: 1. Employee’s organization 2. Management 3. The public Note: Er and Ees are active parties while the public and the State are passive parties. [Poquiz, 2006, p.3]

Q: What is the concept of tripartism? A: It is the representation of 3 sectors. These are: 1. The public or the government 2. The employers 3. The workers – in policy-making bodies of the gov’t.

It is when a 3rd party studies each side of the dispute then makes proposals for the disputants to consider. The mediator cannot make an award nor render a decision

Q: What is the legal basis of conciliation and mediation?

Q: Can workers insist that they be represented in the policy making in the company?

A: Sec. 3, Art. 13 of the Constitution provides: “The State shall promote xxx the preferential use of voluntary modes of setting disputes including conciliation and shall ensure mutual compliance by the parties thereof in order to foster industrial peace.”

A: No. Such kind of representation in the policymaking bodies of private enterprises is not ordained, not even by the Constitution. What is provided for is workers participation in policy and decision-making process directly affecting their rights, benefits, and welfare.

Note: A similar provision is echoed in the Declaration of Policy under Art. 211 (a) of the LC, as amended.

CONCILIATION vs. MEDIATION

Q: Who can avail of conciliation and mediation services of the NCMB?

Q: What is conciliation and mediation? A: Any party to a labor dispute, either the union or management, may seek the assistance of NCMB or any of its Regional Branches by means of formal request for conciliation and preventive mediation. Depending on the nature of the problem, a request may be filed in the form of consultation, notice of preventive mediation or notice of strike/lockout.

A: CONCILIATION Is conceived of as a mild form of intervention by a neutral third party The conciliatorMediator, relying on his persuasive expertise, who takes an active role in assisting parties by trying to keep disputants talking, facilitating other procedural niceties, carrying messages back and forth between the parties, and generally being a good fellow who tries to keep things calm and forwardlooking in a tense

MEDIATION Is a mild intervention by a neutral third party The conciliatormediator, whereby he starts advising the parties or offering solutions or alternatives to the problems with the end in view of assisting them towards voluntarily reaching their own mutually acceptable settlement of the dispute

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Q: Where can a request for conciliation and mediation be filed? A: An informal or formal request for conciliation and mediation service can be filed at the NCMB Central Office or any of its Regional Branches. There are at present 14 regional offices of the NCMB which are strategically located all over the country for the convenient use of prospective clients. PREVENTIVE MEDIATION Q: What is a preventive mediation case? A: Refers to the potential labor dispute which is the subject of a formal or informal request for conciliation and mediation assistance sought by

204

PROCEDURE AND JURISDICTION either or both parties or upon the initiative of the NCMB to avoid the occurrence of an actual labor dispute.

A: Conciliation and mediation is non-litigious/nonadversarial, less expensive, and expeditious. Under this informal set-up, the parties find it more expedient to fully ventilate their respective positions without running around with legal technicalities and, in the course thereof, afford them a wider latitude of possible approaches to the problem.

Q: Who may file a notice for preventive mediation? A: Any certified or duly recognized bargaining representative may file a notice or declare a strike or request for preventive mediation in cases of bargaining deadlocks and ULPs. The Er may file a notice or declare a lockout or request for preventive mediation in the same cases. In the absence of a certified or duly recognized bargaining representative, any LLO in the establishment may file a notice, request preventive mediation or declare a strike, but only on grounds of ULP. (Sec. 3, Rule IV of the NCMB Manual of Procedure)

Q: Are the parties bound by the agreement entered into by them? A: Yes, the parties are bound to honor any agreement entered into by them. It must be pointed out that such an agreement came into existence as a result of painstaking efforts among the union, management, and the ConciliatorMediator. Therefore, it is only logical to assume that the Conciliator assigned to the case has to follow up and monitor the implementation of the agreement.

Note: Only a certified or duly recognized bargaining agent may file a notice or request for preventive mediation. If the notice was filed not by the Union but by its individual members, the NCMB had no jurisdiction to entertain it.

Q: Is conciliation and mediation service still possible during actual strike or lockout?

Moreover, the notice or request for preventive mediation cannot be filed by the Federation on behalf of its local/chapter. A local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its members. Mere affiliation does not divest the local union of its own personality, neither does it give the mother federation the license to act independently of the local union. It only gives rise to a contract of agency, where the former acts in representation of the latter. Hence, local unions are considered principals while the federation is deemed to be merely their agent [Insular Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao, G.R. Nos. 174040-41, (2010)].

A: Yes, it is possible to subject an actual strike or actual lockout to continuing conciliation and mediation services. In fact, it is at this critical stage that such conciliation and mediation services by fully given a chance to work out possible solution to the labor dispute. With the ability of the Conciliator-Mediator to put the parties at ease and place them at a cooperative mood, the final solutions of all the issues involved may yet be effected and settled. Q: When the dispute has already been assumed or certified to the NLRC, is it also possible to remand the same to conciliation and mediation services?

Q: What are the valid issues for a notice of strike / lockout or preventive mediation? A: A notice of strike or lockout maybe filed on ground of ULP acts, gross violation of the CBA, or deadlock in CBAs. A complaint on any of the above ground must be specified in the NCMB Form or the proper form used in the filing of complaint.

A: Yes, the parties are not precluded from availing the services of an NCMB Conciliator-Mediator as the duty to bargain collectively subsists until the final resolution of all issues involved in the dispute. Conciliation is so pervasive in application that, prior to a compulsory arbitration award, the parties are encouraged to continue to exhaust all possible avenues of mutually resolving their dispute, especially through conciliation and mediation services.

In case of preventive mediation, any issue may be brought before the NCMB Central Office or its regional offices for conciliation and possible settlement through a letter. This method is more preferable than a notice of strike/lockout because of the non-adversarial atmosphere that pervades during the conciliation conferences.

Q: What benefit can the parties have in appearing during conciliation conferences?

Q: What advantage can be derived from conciliation and mediation services?

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation A: Generally speaking, any party appearing during scheduled conciliation conferences has the advantage of presenting its position on the labor controversy. The issue raised in the complaint can be better ventilated with the presence of the concerned parties. Moreover, the parties can observe a norm of conduct usually followed in like forum. DOLE REGIONAL DIRECTORS JURISDICTION

A: 1. Access to Er’s records and premises at any time of the day or night, whenever work is being undertaken 2. To copy from said records 3. Question any Ee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of the LC and of any LC, wage order, or rules and regulation issued pursuant thereto.

Q: What are the money claims falling under the jurisdiction of the DOLE Regional Directors?

Q: Give four instances where the Visitorial power of the SLE may be exercised under the LC.

A: Under Art. 129 of the LC, the RDs or any of the duly authorized hearing officers of DOLE have jurisdiction over claims for recovery of wages, simple money claims and other benefits, provided that: 1. The claim must arise from Er-Ee relationship; 2. The claimant does not seek reinstatement; and 3. The aggregate money claim of each employee does not exceed Php 5,000.00.

A: Power to: 1.

2.

Note: In the absence of any of the ff. requisites, it is the LA who shall have the jurisdiction over the claims arising from Er-Ee relations, except claims for Ees compensation, SSS, Philhealth, and maternity benefits, pursuant to Art. 217 of the LC.

3. 4.

The proceedings before the Regional Office shall be summary and non-litigious in nature.

Q: What is the adjudicatory power of the Regional Director?

Q: What is Enforcement power? A: It is the power of the SLE to:

A: The RD or any of his duly authorized hearing officer is empowered through summary proceeding and after due notice, to hear and decide cases involving recovery of wages and other monetary claims and benefits, including legal interests.

1. 2.

DOLE SECRETARY VISITORIAL AND ENFORCEMENT POWERS

3.

Q: What are the three kinds of powers of the SLE? A: 1. Visitorial powers 2. Enforcement powers 3. Appellate or power to review

4.

Q: What constitutes Visitorial power?

5.

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Inspect books of accounts and records of any person or entity engaged in recruitment and placement, require it to submit reports regularly on prescribed forms and act in violations of any provisions of the LC on recruitment and placement. (Art. 37) Have access to Er’s records and premises to determine violations of any provisions of the LC on recruitment and placement. (Art. 128) Conduct industrial safety inspections of establishments. (Art. 165) Inquire into the financial activities of LLO and examine their books of accounts upon the filing of the complaint under oath and duly supported by the written consent of at least 20% of the total membership of the LO concerned.

206

Issue compliance orders Issue writs of execution for the enforcement of their orders, except in cases where the Er contests the findings of the labor officer and raise issues supported by documentary proof which were not considered in the course of inspection Order stoppage of work or suspension of operation when non-compliance with the law or implementing rules and regulations poses grave and imminent danger to health and safety of workers in the workplace Require Ers to keep and maintain such employment records as may be necessary in aid to the visitorial and enforcement powers Conduct hearings within 24 hours to determine whether:

PROCEDURE AND JURISDICTION a.

An order for stoppage of work or suspension of operations shall be lifted or not; and Er shall pay the concerned Ees their salaries in case the violation is attributable to his fault. (As amended by RA 7730);[ Guico v. Secretary, G.R. No. 131750, (1998)]

[People’s Broadcasting v. The Secretary of the Department of Labor and Employment, G.R. No. 179652, (2009)].

Q: What are the violations under Art. 128 of the LC?

A: Yes, under Art. 277(b) of the LC, the SLE may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the DOLE before whom such dispute is pending that the termination may cause serious labor dispute or is in implementation of a mass layoff.

b.

POWER TO SUSPEND EFFECTS OF TERMINATION Q: Does the SLE have the power to suspend the effects of termination?

A: 1. Obstruct, impede, delay or otherwise render ineffective the orders of the SLE or his authorized representatives 2. Any government employee found guilty of, or abuse of authority, shall be subject to administrative investigation and summary dismissal from service.

Note: Art. 277 (b) of LC, is applicable on suspension of the effects of termination if there is a showing that the termination may cause serious labor dispute within the company while Art. 263 (g) of LC on assumption of jurisdiction is applicable in cases of strike in establishments affecting national interest, not just the company.

Q: What are the limitations to other courts? A: In relation to enforcement orders issued under Art. 128 of the LC, no inferior court or entity shall: 1. 2.

ASSUMPTION OF JURISDICITION

Issue temporary or permanent injunction or restraining order; or Assume jurisdiction over any case

Q: When can the SLE assume jurisdiction over a labor dispute? A: When there is a labor dispute causing or likely to cause a strike affecting national interest, the SLE, on his own initiative or upon petition by any of the parties, may either assume jurisdiction or certify the dispute to the NLRC for compulsory arbitration.

Q: What are the instances when Enforcement power may not be used? A: 1. Case does not arise from the exercise of visitorial power 2. When Er-Ee relationship ceased to exist at the time of the inspection 3. If Er contests the finding of the Labor Regulation Officer and such contestable issue is not verifiable in the normal course of inspection

Note: Art. 263(g) of the LC is both an extraordinary and a preemptive power to address an extraordinary situation (a strike or lockout in an industry indispensable to the national interest). As the term “assume jurisdiction” connotes, the intent of the law is to give the SLE full authority to resolve all matters within the dispute that gave rise to or which arose out of the strike or lockout—it includes and extends to all questions and controversies arising from or related to the dispute, including cases over which the Labor Arbiter has exclusive jurisdiction [Bagong Pagkakaisa ng Manggagawa ng Triumph International v. Secretary of the Department of Labor and Employment, G.R. No. 167401, (2010)].

Q: Does the SLE have the power to determine the existence of an employer-employee relationship in the exercise of its visitorial and enforcement powers under Art. 128 of the LC? A: No. The visitorial and enforcement powers of the SLE comes into play only “in cases when the relationship of Er-Ee still exists.” The SLE’s power does not apply in two instances, namely: (a) where the Er-Ee relationship has ceased; and (b) where no such relationship has ever existed. The question of ErEe relationship becomes a battle of evidence, the determination of which should be comprehensive and intensive and therefore best left to the specialized quasi-judicial body that is the NLRC

Q: What is the effect of the assumption or certification? A: It automatically enjoins the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of the assumption or certification, all striking or locked out Ees shall immediately return to work and the Er shall immediately resume operations and

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Labor Law and Social Legislation readmits all workers under the same terms and conditions prevailing before the strike or lockout.

the BLR which exercises appellate jurisdiction in such case [Barles v. Bitonio, G.R. No. 120270, (1999)].

Q: May assumption of jurisdiction be exercised without the necessity of prior notice or hearing given to any of the party disputants?

VOLUNTARY ARBITRATION POWERS Q: What powers may the SLE exercise with regard to voluntary arbitration?

A: Yes. The rationale for the SLE’s assumption of jurisdiction can justifiably rest on his own consideration of the exigency of the situation in relation to the national interests [Capitol Medical Center v. Trajano, G.R. No. 155690, June 30, 2005]. APPELLATE JURISDICTION

A: The SLE may authorize any official to act as Voluntary Arbitrator upon the written request and agreement of the parties to a labor dispute [Art. 212 (n), LC]. He shall also approve, upon recommendation of the NCMB the guidelines in administering the Voluntary Arbitration Fund [Art. 276 (f), LC].

Q: What are the cases within the appellate jurisdiction of the SLE?

GRIEVANCE MACHINERY AND VOLUNTARY ARBITRATION

A: 1. Appeal from and adverse decision of the POEA [Sec. 1, Part VII, Rule V, 2003 POEA Rules and Regulations; Eastern Mediterranean Maritime Ltd. And Agemar Manning Agency Inc., v. Surio et. al., G.R. No. 154213, (2012)] 2. Appeal the order or results of a certification election on the ground that the Rules and Regulations or parts thereof established by the SLE for the conduct of election have been violated. (Art. 259, LC) 3. A review of cancellation proceedings decided by the BLR in the exercise of its exclusive and original jurisdiction [Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees Union, G.R. No.131374, ( 2000)].

Q: What is a grievance?

Note: The SLE has no jurisdiction over decisions of the BLR rendered in the exercise of its appellate power to review the decision of the RD in a petition to cancel the union's certificate of registration, said decisions being final and inappealable. (Ibid.)

Q: What is grievance procedure?

A: Any question by either the Er or the union regarding the interpretation or application of the CBA or company personnel policies or any claim by either party that the other party is violating any provision of the CBA or company personnel policies. Q: What is grievance machinery? A: It 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. It is part of the continuing process of CB.

A: It is the internal rules of procedure established by the parties in their CBA with voluntary arbitration as the terminal step, which are intended to resolve all issues arising from the implementation and interpretation of their CBA.

Secs. 7 to 9 of Rule II, Book V of the IRR of the LC provides for two situations: a.

b.

It refers to the system of grievance settlement at the plant level as provided in the CBA. It usually consists of successive steps starting as the level of the complainant and his immediate supervisor and ending, when necessary, at the level of the top union and company officials.

The first situation involves a petition for cancellation of union registration which is filed with a Regional Office. A decision of a Regional Office cancelling a union's certificate of registration may be appealed to the BLR whose decision on the matter shall be final and inappealable. The second situation involves a petition for cancellation of certificate of union registration which is filed directly with the BLR. A decision of the BLR cancelling a union's certificate of registration may be appealed to the SLE whose decision on the matter shall be final and inappealable (Ibid.)

SUBJECT MATTER OF GRIEVANCE Q: What are the cases falling under the jurisdiction of the Grievance Machinery? A: Any grievance arising from:

SLE has no appellate jurisdiction over decisions of RD involving petitions for examinations of union accounts. It is UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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PROCEDURE AND JURISDICTION 1. 2.

The interpretation or implementation of the CBA; and The interpretation or enforcement of company personnel policies

4.

Note: Gross violation of CBA provisions shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement.

Note: Art. 217(c) of the LC requires LAs to refer cases involving the implementation of CBAs to the grievance machinery provided therein and to voluntary arbitration. Likewise, Art. 260 of the LC clarifies that such disputes must be referred first to the grievance machinery and, if unresolved within seven days, they shall automatically be referred to voluntary arbitration [Miguela Santuyo v. Remerco Garments Manufacturing, Inc., G.R. No. 174420, (2010)].

5.

A: No. They must immediately dispose and refer the same to the grievance machinery or voluntary arbitration provided in the CBA

JURISDICTION Q: What falls under the jurisdiction of Voluntary Arbitrators?

The parties may choose to submit the dispute to voluntary arbitration proceedings before or at the stage of compulsory arbitration proceedings.

A: Generally, the arbitrator is expected to decide only those questions expressly delineated by the submission agreement. Nevertheless, the arbitrator can assume that he has the necessary power to make a final settlement since arbitration is the final resort for the adjudication of the disputes [Ludo and Luym Corp. v. Saornido, G.R. No. 140960, (2003)].

Q: Who has jurisdiction over actual termination disputes and complaints for illegal dismissal filed by workers pursuant to the union security clause? A: The LA and not the grievance machinery.

Q: What cases are within the jurisdiction of VA?

PROCEDURE

A: Original and exclusive jurisdiction over:

Q: How is arbitration initiated?

All unresolved grievances arising from the: a. Implementation or interpretation of the CBA b. Interpretation or enforcement of company personnel policies

A: 1. Submission Agreement – Where the parties define the disputes to be resolved 2. Demand notice – Invoking collective agreement arbitration clause

Note: Under Art. 217, it is clear that a LA has original and exclusive jurisdiction over termination disputes. However, under Art. 261, a VA 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 an LA, except when the parties unmistakably express that they agree to submit the same to voluntary arbitration [Negros Metal Corporation v. Armelo Lamayo, G.R. No. 186557, (2010)].

2.

Wage distortion issues arising from the application of any wage orders in organized establishments

3.

Those arising from interpretation and implementation of productivity incentive programs under R.A. 6971

Any other labor disputes upon agreement by the parties including ULP and bargaining deadlock. (Art. 262, LC)

Q: May the NLRC and DOLE entertain disputes/grievances/matters under the exclusive and original jurisdiction of the voluntary arbitrator?

VOLUNTARY ARBITRATOR

1.

Violations of CBA provisions which are not gross in character are no longer treated as ULP and shall be resolved as grievances under the CBA

Q: Who is a voluntary arbitrator (VA)? A: 1. Any person accredited by the NCMB as such 2. Any person named or designated in the CBA by the parties to act as their VA 3. One chosen with or without the assistance of the NCMB, pursuant to a selection procedure agreed upon in the CBA 4. Any official that may be authorized by the SLE to act as VA upon the written request and agreement of the parties to a labor dispute. [Art. 212 [n], LC] Q: What are the powers of a voluntary arbitrator?

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UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Labor Law and Social Legislation A: 1. Hold hearings 2. Receive evidence 3. Take whatever action necessary to resolve the dispute including efforts to effect a voluntary settlement between parties. [Art. 262-A, LC]

Q: What is the nature of the power of a voluntary arbitrator? A: Arbitrators by the nature of their functions, act in a quasi-judicial capacity (BP 129, as amended by R.A. 9702); where a question of law is involved or there is abuse of discretion, courts will not hesitate to pass upon review of their acts.

Q: How is a voluntary arbitrator /panel chosen? A: 1. The parties in a CBA shall designate in advance a VA/panel, preferably from the listing of qualified VAs duly accredited by the NCMB, or 2. Include in the agreement a procedure for the selection of such VA or panel of VAs, preferably from the listing of qualified VAs duly accredited by the NCMB. [Art.260(3), LC]

REMEDIES Q: Are decisions appealable?

voluntary

arbitrators

A: GR: Decisions of VA are final and executory after 10 calendar days from receipt of the copy of the award or decision by the parties. (Art. 262-A, LC) Note: Art. 262-A deleted the word “unappealable” from Art. 263. It makes the voluntary arbitration award final and executory after 10 calendar days from receipt of the copy of the award or decision by the parties. Presumably, the decision may still be reconsidered by the VA on the basis of a motion for reconsideration duly filed during that period [Albert Teng v. Alfredo Pahagac, G.R. No. 169704, (2010)].

Q: Who will designate the voluntary arbitrator /panel in case the parties fail to select one? A: It is the NCMB that shall designate the VA panel based on the selection procedure provided by the CBA. [Manila Central Line Free Workers Union v. Manila Central Line Corp., G.R. No. 109383, (1998)]

XPN: Appeal to the CA via Rule 43 of the Rules of Court within 15 days from the date of receipt of VA’s decision [Luzon Dev’t Bank v. Ass’n of Luzon Dev’t Bank Ee’s, G.R. No. 120319, (1995)].

Q: May Labor Arbiters be designated as voluntary arbitrators? A: Yes. There is nothing in the law that prohibits LAs from also acting as voluntary arbitrators as long as the parties agree to have him hear and decide their dispute [Manila Central Line Free Workers Union v. Manila Central Line Corp., G.R. No. 109383, (1998)].

Note: A VA by the nature of his functions acts in quasijudicial capacity. There is no reason why the VA’s decisions involving interpretation of law should be beyond the SC’s review. Administrative officials are presumed to act in accordance with law, yet the SC will not hesitate to pass upon their work where a question of law is involved or where a showing of abuse of authority or discretion in their official acts is properly raised in petitions for certiorari [Continental Marble Corporation v. NLRC, G.R. No. L-43825, (1988)].

Q: What is the effect of the award of voluntary arbitrator? A: The decision or award of the voluntary arbitrator acting within the scope of its authority shall determine the rights of the parties and their decisions shall have the same legal effects as judgment of the courts. Such matters on fact and law are conclusive.

Q: PSSLU had an existing CBA with Sanyo Phils., Inc. which contains a union security clause which provides that: “all members of the union covered by this agreement must retain their membership in good standing in the union as condition of his / her continued employment with the company.” On account of anti-union activities, disloyalty and for joining another union, PSSLU expelled 12 employees from the union. As a result, PSSLU recommended the dismissal of said Ees pursuant to the union security clause. Sanyo approved the recommendation and considered the said Ees dismissed. Thereafter, the dismissed Ees filed with the Arbitration Branch of the NLRC a complaint for illegal dismissal.

Q: Are both the employer and the bargaining representative of the employees required to go through the grievance machinery in case a grievance arises? A: Yes, because it is but logical, just and equitable that whoever is aggrieved should initiate settlement of grievance through the grievance machinery. To impose compulsory procedure on Ers alone would be oppressive of capital.

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of

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PROCEDURE AND JURISDICTION Does the voluntary arbitrator have jurisdiction over the case?

that they were "submitting the issue of performance bonus to voluntary arbitration."

A: No, the VA has no jurisdiction over the case. Although the dismissal of the Ees concerned was made pursuant to the union security clause provided in the CBA, there was no dispute whatsoever between PSSLU and Sanyo as regards the interpretation or implementation of the said union security clause. Both PSSLU and Sanyo are united and have come to an agreement regarding the dismissal of the Ees concerned. Thus there is no grievance between the union and management which could be brought to the grievance machinery. The dispute is between PSSLU and Sanyo. The dispute therefore, does not involve the interpretation or implementation of a CBA [Sanyo Philippines Workers Union-PSSLU v. Canizares, G.R. No. 101619, (1992)].

Does the voluntary arbitrator have the power to pass upon the question of whether to grant the performance bonus and to determine the amount thereof? A: Yes, in their agreement to arbitrate, the parties submitted to the VA “the issue of performance bonus.” The language of the agreement to arbitrate may be seen to be quite cryptic. There is no indication at all that the parties to the arbitration agreement regarded “the issue of performance bonus” as a two-tiered issue, only one tier of which was being submitted to arbitration. Possibly, Sime Darby’s counsel considered that issue as having dual aspects and intended in his own mind to submit only one of those aspects to the VA, if he did, however, he failed to reflect his thinking and intent in the arbitration agreement [Sime Darby Phils. v. Magsalin, G.R. No. 90426, (1989)].

Q: X was employed as telephone operator of Manila Midtown Hotel. She was dismissed from her employment for committing the following violations of offenses subject to disciplinary actions, namely: falsifying official documents and culpable carelessness-negligence or failure to follow specific instructions or established procedures. X then filed a complaint for illegal dismissal with the Arbitration branch of the NLRC. The Hotel challenged the jurisdiction of the Labor Arbitrator on the ground that the case falls within the jurisdictional ambit of the grievance procedure and voluntary arbitration under the CBA.

Q: Apalisok, production chief for RPN Station, was dismissed due to her alleged hostile, arrogant, disrespectful, and defiant behavior towards the Station Manager. She informed RPN that she is waiving her right to resolve her case through the grievance machinery provided in the CBA. The voluntary arbitrator resolved the case in the employee’s favor. On appeal, the CA ruled in favor of RPN because it considered Apalisok’s waiver to file her complaint before the grievance machinery as a relinquishment of her right to avail herself of the aid of the voluntary arbitrator. The CA said that the waiver had the effect of resolving an otherwise unresolved grievance, thus the decision of the VA should be set aside for lack of jurisdiction. Is the ruling of the CA correct?

Does the LA have jurisdiction over the case? A: Yes, the LA has jurisdiction. The dismissal of X does not call for the interpretation or enforcement of company personnel policies but is a termination dispute which comes under the jurisdiction of the LA. The dismissal of X is not an unresolved grievance. Neither does it pertain to interpretation of company personnel policy [Maneja v. NLRC, G.R. No. 124013, (1998)].

A: No. Art. 262 of the LC provides that upon agreement of the parties, the VA can hear and decide all other labor disputes.

Q: Sime Darby Salaried Employees Association-ALU (SDSEA-ALU) wrote petitioner Sime Darby Pilipinas (SDP) demanding the implementation of a performance bonus provision identical to the one contained in their own CBA with SDP. Subsequently, SDP called both respondents SDEA and SDEA-ALU to a meeting wherein SDEA explained that it was unable to grant the performance bonus. In a conciliation meeting, both parties agreed to submit their dispute to voluntary arbitration. Their agreement to arbitrate stated, among other things,

The Ees waiver of her option to submit her case to grievance machinery did not amount to relinquishing her right to avail herself of voluntary arbitration. Contrary to the finding of the CA, voluntary arbitration as a mode of settling the dispute was not forced upon RPN. Both parties indeed agreed to submit the issue of validity of the dismissal of petitioner to the jurisdiction of the VA by the Submission Agreement duly signed by their

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Labor Law and Social Legislation respective counsels. The VA had jurisdiction over the parties’ controversy [Apalisok v. RPN, G.R. No. 138094, (2003)].

decision of the NLRC may be filed should be computed from the date counsel of record of the party receives a copy of the decision or resolution, and not from the date the party himself receives a copy thereof [Ginete v. Sunrise Manning Agency, G.R. No. 142023, (2001)].

COURT OF APPEALS RULE 65, RULES OF COURT

Q: Company A was sold to Company B with the undertaking that Company B will absorb the former’s employees. However, they were not hired by Company B or given separation pay by Company A. They thus filed an action for illegal dismissal but was denied. When the case reached the CA via a petition for certiorari, the same was dismissed outright considering that the verification and certification against forum shopping was signed only by 3 out of the 228 petitioners. Was the CA correct?

Q: What is the remedy of a party aggrieved by a decision of the NLRC? A: File a petition for certiorari (Rule 65) which should be initially filed with the CA in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief desired. The CA is procedurally equipped to resolve unclear or ambiguous factual finding, aside from the increased number of its component divisions [St. Martin Funeral Home v. NLRC, G.R. No. 130866, (1998)].

A: Yes. While litigation is not a game of technicalities, and that the rules of procedure should not be enforced strictly at the cost of substantial justice, still it does not follow that the Rules of Court may be ignored at will and at random to the prejudice of the orderly presentation, assessment and just resolution of the issues. The Rules of Court provide that a petition for certiorari must be verified and accompanied by a sworn certification of non-forum shopping. Failure to comply with these mandatory requirements shall be sufficient ground for the dismissal of the petition. Considering that only 3 of the 228 named petitioners signed the requirement, the CA dismissed the case against them, as they did not execute a Verification and Certification against forum shopping. It does not involve a failure to attach the Annexes. Rather, the procedural infirmity consists of omission – the failure to sign a Verification and Certification against forum shopping (Ramirez et. al. v. Mar Fishing Co., Inc. et. al., G.R. No. 168208, June 13, 2012).

Note: Rule 65, Section 1, Rules of Court: Petition for Certiorari - When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require. The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46.

Q: Within what period should the petition for certiorari be filed with the Court of Appeals?

XPN: The Court may recognize the merits of a case by considering the special circumstances or compelling reasons that justifies the relaxation of the rule requiring verification and certification of non-forum shopping in the interes of substantial justice. (Ibid.)

A: Under Sec. 4, Rule 65 (as amended by A.M. No. 00-2-03-SC) of the Rules of Civil Procedure, the petition must be filed within 60 days from notice of the judgment or from notice of the resolution denying the petitioner’s motion for reconsideration. This amendment is effective September 1, 2000, but being curative may be given retroactive application. [Narzoles v. NLRC, G.R. No. 141959, (2000)]

SUPREME COURT RULE 45, RULES OF COURT

Art. 224 of the LC, which requires that copies of final decisions, orders or awards be furnished not only the party’s counsel of record but also the party himself applies to the execution thereof and not to the filing of an appeal or petition for certiorari. The period within which a petition for certiorari against a UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

Q: How does a party appeal from a judgment, or final order or resolution, of the Court of Appeals? A: A party desiring to appeal may file with the Supreme Court a verified petition for review on

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PROCEDURE AND JURISDICTION certiorari under Rule 45 within fifteen (15) days from notice of the judgment, final order or resolution appealed from [Sea Power Shipping Enterprises, Inc. v. CA, G.R. No. 138270, (2001)].

Compensation claims accruing prior to the effectivity of the LC and between Nov. 1, 1974-Dec. 31, 1974

Note: Rule 45, Sec. 1, Rules of Court: Filing of petition with Supreme Court.—A party desiring to appeal by certiorari from a judgment, final order or resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court or other courts, whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition may include an application for a writ of preliminary injunction or other provisional remedies and shall raise only questions of law, which must be distinctly set forth. The petitioner may seek the same provisional remedies by verified motion filed in the same action or proceeding at any time during its pendency.

Union funds

Illegal Dismissal Cases

Q: Give the policy of the Supreme Court regarding appeals in labor cases. A: The Supreme Court is very strict regarding appeals filed outside the reglementary period for filing the same. To extend the period of the appeal is to delay the case, a circumstance which could give the employer the chance to wear out the efforts and meager resources of the worker that the latter is constrained to give up for less than what is due him [Firestone Tire and Rubber Co. of the Philippines v. FirestoneTire and Rubber Co. Employees Union, G.R. No. 75363, (1992)].

A: It may arise from the making of a promise, even though without consideration, if it was intended that the promise should be relied upon. If in fact it was relied on, a refusal to enforce it would virtually sanction the perpetration of fraud or would result in other injustice. It presupposes the existence of a promise on the part of one against whom estoppel is claimed. The promise must be plain and unambiguous and sufficiently specific so that the court can understand the obligation assumed and enforce the promise according to its terms.

Q: Give the rules as regards the prescriptive period provided for in the LC.

Note: In order to make out a claim of promissory estoppel, a party bears the burden of establishing the following elements: (1) a promise was reasonably expected to induce action or forbearance; (2) such promise did, in fact, induce such action or forbearance; and (3) the party suffered detriment as a result.

A:

ULP

Money Claims

PRESCRIPTIVE PERIOD 1 year from accrual of such ULP; otherwise forever barred (Art. 290, LC) GR: 3 years from the time the cause of action accrued; otherwise forever barred (Art. 291, LC)

Q: What are the acts considered as criminal violations of the LC? A: Except as otherwise provided in the LC, or unless the acts complained of hinge on a question of interpretation or implementation of ambiguous provisions of an existing CBA, any violation of the provisions of the LC declared to be unlawful or penal in nature shall be punished with a fine of not less than Php 1,000.00 nor more than Php 10,000.00 or imprisonment of not less than three months nor more than three years, or both such fine and imprisonment at the discretion of the court. (Art. 288, LC)

XPN: Promissory Estoppel

All money claims accruing prior to the effectivity of the LC Workmen’s

After 3 years from the date of submission of the annual financial report to the DOLE or from the date the same should have been submitted as required by law, whichever comes earlier. (Sec. 5, Rule II, Book VII, Omnibus Rules Implementing the LC) 4 years. It commences to run from the date of formal dismissal [Mendoza v. NLRC, G.R. No. 122481, (1998)].

Q: When does promissory estoppel arise?

PRESCRIPTION OF ACTIONS

SUBJECT

not later than Mar. 31, 1975 before the appropriate regional offices of the DOLE. (Art. 291, LC)

Within one year from the date of effectivity, in accordance with IRR; otherwise, they shall forever be barred Dec. 31, 1974 shall be filed

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Labor Law and Social Legislation 1. Prohibition against transfer of employment - After the issuance of an employment permit, the alien shall not transfer to another job or change his employer without prior approval of the SLE. (Art. 41, LC)

orders issued in accordance with this Article. [Art. 128 (4), LC] 10. It shall be unlawful for any employer to discriminate against any woman Ee with respect to terms and conditions of employment solely on account of her sex. (Art. 135, LC)

2. Violation of the provisions on learnership (Art. 77, LC) 3. In cases of unlawful withholding of wages, the culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered (Art. 111, LC).

11. It shall be unlawful for an Er to require as a condition of employment 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 Ee merely by reason of her marriage. (Art. 136, LC)

4. It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorney’s fees which exceed ten percent of the amount of wages recovered (Art. 111, LC).

12. It shall be unlawful for any Er: (a) to deny any woman Ee the benefits provided for in this Chapter or to discharge any woman employed by him for the purpose of preventing her from enjoying any of the benefits provided under this Code; (b) to discharge such woman on account of her pregnancy, or while on leave or in confinement due to her pregnancy; or (c) to discharge or refuse the admission of such woman upon returning to her work for fear that she may again be pregnant.

5. It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the worker’s consent. (Art. 116, LC) 6. It shall be unlawful to make any deduction from the wages of any employee for the benefit of the Er or his representative or intermediary as consideration of a promise of employment or retention in employment. (Art. 117, LC)

13. Violations of rights and conditions of membership in a labor organization (Art. 241, LC)

7. It shall be unlawful for an Er to refuse to pay or reduce the wages and benefits, discharge or in any manner discriminate against any Ee who has filed any complaint or instituted any proceeding under this Title or has testified or is about to testify in such proceedings. (Art. 118, LC)

14. Unfair labor practice of Ers (Art. 248, LC) 15. Unfair labor practice of labor organizations (Art. 249 in relation to Art. 247, LC) 16. Violation of the provision on retirement benefits (Art. 287, LC)

8. It shall be unlawful for any person to make any statement, report, or record filed or kept pursuant to the provisions of this Code knowing such statement, report or record to be false in any material respect. (Art. 119, LC)

Note: In addition to the penalty prescribed under Art. 288, any alien found guilty shall be summarily deported upon completion of service of sentence. (Art. 288, LC). If the offense is committed by a corporation, trust, firm, partnership, association or any other entity, the penalty shall be imposed upon the guilty officer or officers of such corporation, trust, firm, partnership, association or entity. (Art. 289, LC)

9. It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective the orders of the SLE or his duly authorized representatives issued pursuant to the authority granted under this Article, and no inferior court or entity shall issue temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the enforcement

UNIVERSITY OF SANTO TOMAS 2013 GOLDEN NOTES

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