Ateneo Labor Law Reviewer

ATENEO CENTRAL BAR OPERATIONS 2007 Labor Law & Social Legislation SUMMER REVIEWER LABOR STANDARDS I. GENERAL PRINCIPLES Labor Code – principal labor law of the country. But even now, there are Labor Laws that are not found in the Labor Code. Social Legislation – the promotion of the welfare of all the people, the adoption by the government of measures calculated to insure economic stability of all the component elements of society thru the maintenance of proper economic and social equilibrium in the interrelations of the members of the community, constitutionally, thru the adoption of measures legally justifiable, or extra-constitutionally, thru the exercise of powers underlying the existence of all governments, on the time honored principle of salus populi esta suprema lex (Calalang v. Williams, 02 December 1940) Social Justice – humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objective secular conception may at least be approximated Labor Standards – sets out the minimum terms, conditions, and benefits of employment that employers must provide or comply with and to which employees are entitled as a matter of legal right Labor Relations – defines the status, rights and duties, as well as the institutional mechanisms that govern the individual and collective interactions between employers, employees and their representatives Art. 3. Declaration of basic policy Afford protection to labor Promote full employment Ensure equal work opportunities regardless of sex, race, or creed Regulate the relations between workers and uicnco kT mpr im es e™s ed) employers TI FF Q( U arrights e and needed to s ee t a Assure worker’s to self-organization, dec om pr ess or his pi ctsecurity ur e. of tenure, and just collective bargaining, and humane conditions of work Seven basic rights of workers guaranteed by the Constitution: 1. right to organize 2. to conduct collective bargaining or negotiation with management

3. to engage in peaceful concerted activities, including strike in accordance with law 4. to enjoy security of tenure 5. to work under humane conditions 6. to receive a living wage 7. to participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. Art. 4. Construction in favor of labor When the interest of labor and capital collide, the heavier influence of capital should be counterbalanced with the sympathy and compassion of law for the less privileged workers. But protection to labor does not mean oppression or destruction of capital. The employer’s act will be sustained when it is in the right. [Eastern Shipping Lines v. POEA, 166 SCRA 523 (1998)] Court decisions adopt a liberal approach that favors the exercise of labor rights. The mandate is simply to resolve doubt in favor of labor. If there is no doubt in implementing and interpreting the law, labor will enjoy no built-in advantage and the law will have to be applied as it is. When the subject matter is covered by the Labor Code, doubts which involve implementation and interpretation of labor laws should be resolved in favor of labor, even if the question involves Rules of Evidence. Management Rights / Prerogative – except as limited by special laws, an employer is free to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers Capitol Medical Center, Inc. v. Meris (16 September 2005) As long as the company’s exercise of the same is exercised in good faith for the advancement of the employer’s interest, and not for the purpose of defeating or circumventing the rights of the employees under special laws or valid agreements, the courts will uphold them.

—Adviser: Atty. Marlon J. Manuel; Head: Ryan Quan; Understudy: Kate Sabado; Labor Standards: Kukay Malabanan; Labor Relations: Peewee Estrella; Social Legislation: Binkki Hipolito—

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Philippine Blooming Mills Employees Association v. Philippine Blooming Mills, GR No. L-31195, 05 June 1973 The primacy of human rights – freedom of expression, of peaceful assembly and of petition for redress of grievances over property rights has been sustained. PAL v. NLRC, GR No. 85985 (1993) The exercise of management prerogatives is not unlimited. A line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of employees. In treating the latter, management should see to it that its employees are at least properly informed of its decisions and modes of action.

Art. 5. Rules and regulations Department of Labor and Employment (DOLE) Lead agency in enforcing labor laws and it possesses rule-making power in the enforcement of the Code But a rule or regulation that exceeds the Department’s rule-making authority is void. Art. 6. Applicability of Labor Code Applies alike to all workers, except as otherwise provided by law, whether agricultural or nonagricultural. Applies to a government corporation incorporated under the Corporation Code II. EMPLOYER –EMPLOYEE RELATIONSHIP (EER) A. ELEMENTS OF RELATIONSHIP Jurisprudential Tests to Determine Existence of EER: A. The employer has the ability (need not be actual) to exercise control over the following: 1. Payment of Wages payment of compensation by way of uicnco kT mpr im es e™s ed) TIdoes FF Qnot ( U commission militate ar e and needed toagainst s eethe t a pr ess or Art. 97 of the conclusiondec EERom exists. Under his pi ct ur e. Labor Code, "wage" shall mean "however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, price or commission basis…" (Insular Life Assurance Co., Ltd. V. NLRC, GR No.119930, 12 March 1998)

Wages are defined as 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, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered, and included the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee. [Ruga v. NLRC, 181 SCRA 266 (1990)] 2. Hiring – employment relation arises from contract of hire, express or implied [Ruga v. NLRC, 181 SCRA 266 (1990)] Selection and engagement of the workers rests with the employers Not a conclusive test since it can be avoided by the use of subcontracting agreements or other contracts other than employment contracts 3. Firing – disciplinary power exercised by employer over the worker and the corresponding sanction imposed in case of violation of any of its rules and regulations 4. Control, not only over the end product / RESULT of the work, but more importantly, control over the MEANS through which the work is accomplished. (most essential element; without it, there is no EER) B. Economic Relations Test – a subordinate / alternative test. Existing economic conditions between the parties are used to determine whether EER exists. 1. payment of PAG-IBIG Fund contributions 2. payment / remittance of contributions to the State Insurance Fund 3. deduction of withholding tax 4. deduction / remittance of SSS contributions Insular Life Assurance Co., Ltd. v. NLRC, GR No. 119930, 12 March 1998 The employment status of a person is defined and prescribed by law and not by what the parties say it should be. Algon Engineering Construction Corp. v. NLRC, GR No. 83402, 06 October 1997 No particular evidence is required to prove the existence of an EER. All that is necessary is to show that the employer is capable of exercising control over the employee. In labor disputes, it suffices that Page 2 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 there be a causal connection between the claim asserted and the EER. Control of the employee's conduct is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Aurora Land Projects Corp. v. NLRC, GR No. 114733, 02 January 1997 Whenever the existence of EER is in dispute, four elements constitute the reliable yardstick (fourfold test); (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee's conduct. It is the so-called "control test," and that is whether the employer controls or has reserved the right to control the employee not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished, which constitute the most important index of the existence of the employer-employee relationship Stated otherwise, an EER exists where the person for whom the services are performed reserves the right to control no only the end to be achieved but also the means to be used in reaching such end. Filipinas Broadcasting Network, Inc. v. NLRC, GR No. 118892, 11 March 1998 There could be no EER where "the element of control is absent; where a person who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work ; and in turn is compensated according to the result of his efforts and not the amount thereof, we should not find that the relationship of employeremployee exists." Dy Keh Beng v. International Labor, GR No. L32245, 25 May 1979 It should be borne in mind that the control test calls merely for the existence of the right to control the manner of doing the work, not the actual exercise of the right. AFP Mutual Benefit Association v. NLRC, GR No. 102199, 28 January 1997 However, not all that glitters is control. The uicnco kT mpr im es e™ fact that private respondent required to ssolicit TI FF Q( was U ed) ar epetitioner needed to hardly s ee tbe and a business exclusively for could dec om pr ess or hisin labor pi ct ur e. considered as control jurisprudence. Under Memo Circulars No. 2-81 and 2-85 issued by the Insurance Commissioner, insurance agents are barred from serving more than one insurance company, in order to protect the public and to enable insurance companies to exercise exclusive supervision over their agents in their solicitation work.

Thus, the exclusivity restriction clearly springs from a regulation issued by the Insurance Commission, and not from an intention by petitioner to establish control over the method and manner by which private respondent shall accomplish his work. This feature is not meant to change the nature of the relationship between the parties, nor does it necessarily imbue such relationship with the quality of control envisioned by the law. So too, the fact that private respondent was bound by company policies, memo/circulars, rules and regulations issued from time to time is also not indicative of control. With regard to the territorial assignments given to sales agents, this too cannot be held as indicative of the exercise of control over an employee. Further, not every form of control that a party reserves to himself over the conduct of the other party in relation to the services being rendered may be accorded the effect of establishing an employer-employee relationship. Ruga v. NLRC, 181 SCRA 266 (1990) The employer-employee relationship between the crew members and the owners of the fishing vessels engaged in deep-sea fishing is merely suspended during the time the vessels are drydocked or undergoing repairs or being loaded with the necessary provisions for the next fishing trip. The said ruling is premised on the principle that all these activities i.e., drydock, repairs, loading of necessary provisions, form part of the regular operation of the company fishing business. B. INDEPENDENT CONTRACTORS AND LABOR-ONLY CONTRACTORS Independent Contractors has sufficient substantial capital OR investment in machinery, tools or equipment directly or intended to be related to the job contracted carries an independent business different from the employer’s undertakes to perform the job under its own account and responsibility, FREE from the principal’s control NO EER except when the contractor or subcontractor fails to pay the employees’ wages.

Labor – Only Contractors has NO substantial capital OR investment in the form of machinery, tools or equipment has no independent business performs activities directly related to the main business of the principal Principal treated as direct employer of the person recruited in all instances (contractor is deemed Page 3 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 agent of the principal) Principal’s liability extends to all rights, duties and liabilities under labor standard laws including the right to self-organization

LIMITED liability (principal solidarily liable with contractor or subcontractor only when latter fails to comply with requirements as to unpaid wages and other labor standards violations. PERMISSIBLE PROHIBITED

Contracting or subcontracting – an arrangement whereby a principal agrees to put out or farm out with a contractor or subcontractor 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 Contractor or subcontractor – any person or entity engaged in a legitimate contracting or subcontracting arrangement Contractual employee – one employed by a contractor or subcontractor to perform or complete a job, work or service pursuant to an arrangement between the latter and a principal Principal – any employer who puts out or farms out a job, service or work to a contractor or subcontractor Permissible Job Contracting; Conditions a. The contractor carries on an independent business; b. Undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and c. The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business. uicnco kT mpr im es e™s ed) TI FF Q( U ar e and needed to s ee t a dec om–pran ess or Labor-only Contracting arrangement where his pi ct ur e. the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, and any of the following elements are present: 1. The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed

2. The employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; or 3. The contractor does not exercise the right to control over the performance of the work of the contractual employee. Substantial capital or investment – capital stocks and subscribed capitalization in the case of corporations, tools, equipment, implements, machineries and work premises, actually and directly used by the contractor or subcontractor in the performance or completion of the job, work or service contracted out. Right to Control – 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. The test to determine whether one is a job or labor-only contractor is to look into the elements of a job contractor. If ALL elements of a job contractor are present, then he is a job contractor. Otherwise, he is a labor-only contractor. Absent one of the elements for being a job contractor, the person is a labor-only contractor. On the other hand, not all requisites of a laboronly contractor need to be present. As long as any one of the elements is present, then the person is a labor-only contractor. Posting of Bond – an employer or indirect employer may require the contractor or subcontractor to furnish a bond equal to the cost of labor under contract, on condition that the bond will answer for the wages due the employees should the contractor or subcontractor, as the case may be, fail to pay the same Civil liability of employer and contractors – Every employer or indirect employer shall be jointly and severally liable with his contractor or sub-contractor for the unpaid wages of the employees of the latter. Such employer or indirect employer may require the contractor or sub-contractor to furnish a bond equal to the cost of labor under contract on condition that the bond will answer for the wages due the employees should the contractor or subcontractor, as the case may be, fail to pay the same Liability of the principal to the employee in cases of illegal dismissal Page 4 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 1. Joint and several with the employer, but with the right to reimbursement from the employercontractor 2. Wage differentials only to the extent where the employee performed the work under the principal. 3. Separation pay and backwages, only when the principal has some relation to the termination (such as when he conspired to terminate) (Rosewood Processing Inc. v. NLRC, GR Nos. 116476-84, 21 May 1998) NOTE: this ruling is an obiter and made an unjustified interpretation of Art. 109 of the Labor Code. Art. 109 makes the principal liable in illegal dismissal WON there was fault on his part. Prohibited Acts (DO 18-02): a. Contracting out of a job, work or service when not done in good faith and not justified by the exigencies of the business and the same results in the termination of regular employees and reduction of work hours or reduction or splitting of the bargaining unit b. Contracting out of work with a "cabo" as defined in Section 1 (ii), Rule I, Book V of these Rules. "Cabo" refers to a person or group of persons or to a labor group which, in the guise of a labor organization, supplies workers to an employer, with or without any monetary or other consideration whether in the capacity of an agent of the employer or as an ostensible independent contractor c. Taking undue advantage of the economic situation or lack of bargaining strength of the contractual employee, or undermining his security of tenure or basic rights, or circumventing the provisions of regular employment, in any of the following instances: i. In addition to his assigned functions, requiring the contractual employee to perform functions which are currently being performed by the regular employees of the principal or of the contractor or subcontractor; ii. Requiring him to sign, as a precondition to uicnco kT mpr im es e™s ed)an employment orQcontinued employment, TI FF ( U ar e needed to s ee t and a antedated resignation dec om pr essletter; or a blank his pi of ct labor ur e. standards payroll; a waiver including minimum wages and social or welfare benefits; or a quitclaim releasing the principal, contractor or subcontractor from any liability as to payment of future claims; and

iii. Requiring him to sign a contract fixing the period of employment to a term shorter than the term of the contract between the principal and the contractor or subcontractor, unless the latter 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 d. Contracting out of a job, work or service through an in-house agency which refers to a contractor or subcontractor engaged in the supply of labor which is owned, managed or controlled by the principal and which operates solely for the principal e. Contracting out of a job, work or service directly related to the business or operation of the principal by reason of a strike or lockout whether actual or imminent f. Contracting out of a job, work or service being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to self organization as provided in Art. 248 (c) of the Labor Code, as amended Existence of EER – The contractor or subcontractor shall be considered the employer of the contractual employee for purposes of enforcing the provisions of the Labor Code and other social legislation. The principal, however, shall be solidarily liable with the contractor in the event of any violation of any provision of the Labor Code, including the failure to pay wages. The principal shall be deemed the employer of the contractual employee in any of the following cases as declared by a competent authority: a. where there is labor-only contracting; or b. where the contracting arrangement falls within the prohibited acts Registration of Contractors and Subcontractors The registration of contractors and subcontractors shall be necessary for purposes of establishing an effective labor market information and monitoring. Failure to register shall give rise to the presumption that the contractor is engaged in labor-only contracting. Neri v. NLRC, GR Nos. 97008-09, 23 July 1993 Page 5 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 The law does not require both substantial capital and investment in the form of tools, equipment and machineries. This is clear from the use of the conjunction “or.” If the intention was to require the contractor to prove that he has both capital and the requisite investment, then the conjunction “and” should have been used. While these services (janitorial, security and even technical or other specific services) may be considered directly related to the principal business of the employer, nevertheless, they are not necessary in the conduct of the principal business of the employer. Lapanday Agricultural Dev’t Corp. v. CA, GR No. 112139, 31 January 2000 It will be seen from the above provisions that the principal (petitioner) and the contractor (respondent) are jointly and severally liable to the employees for their wages. The joint and several liability of the contractor and the principal is mandated by the Labor Code to assure compliance with the provisions therein including the minimum wage. The contractor is made liable by virtue of his status as direct employer. The principal, on the other hand, is made the indirect employer of the contractor's employees to secure payment of their wages should the contractor be unable to pay them. Even in the absence of an EER, the law itself establishes one between the principal and the employees of the agency for a limited purpose i.e. in order to ensure that the employees are paid the wages due them. Several factors to consider to Determine Whether Contractor is carrying on an independent business: 1. nature and extent of work 2. skill required 3. term and duration of the relationship 4. right to assign the performance of specified pieces of work 5. control and supervision of worker 6. power of employer with hiring, firing, and payment of wages 7. control of the premises 8. duty to supply premises, tools, appliances, materials and labor Q uic kT im e™ FF of( payment U nco mpr es sv.ed) 9. mode, manner, TI terms (Vinoya ar e and needed to s ee t a dec om pr ess or NLRC, GR No. 126286, 2000) his pi ct02 urFebruary e. C. SPECIAL CASES 1. Working scholars – no EER between students on one hand, and schools, colleges or universities on the other, where:

a. 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 b. provided, the students are given real opportunities, including such facilities as may be reasonable and necessary to finish their chosen courses under such agreement 2. Resident physicians in training – There is EER between resident physicians and the training hospital unless: a. There is a training agreement between them b. The training program is duly accredited or approved by the appropriate government agency. III. PRE-EMPLOYMENT A. PRINCIPLES AND DEFINITIONS JMM Promotion & Management Inc. v. CA, GR No. 120095, 05 August 1996 The POEA Rules are clear. A reading thereof readily shows that in addition to the cash and surety bonds and the escrow money, an appeal bond in an amount equivalent to the monetary award is required to perfect an appeal from a decision of the POEA. Obviously, the appeal bond is intended to further insure the payment of the monetary award in favor of the employee if it is eventually affirmed on appeal to the NLRC. Overseas recruiters are subject to more stringent requirements because of the special risks to which our workers abroad are subjected by their foreign employers, against whom there is usually no direct or effective recourse. The overseas recruiter is solidarily liable with the foreign employer. The bonds and the escrow money are intended to insure more care on the part of the local agent in its choice of the foreign principal to whom our overseas workers are to be sent. Every intendment of the law must be interpreted in favor of the working class, conformably to the mandate of the Constitution. By sustaining rather than annulling the appeal bond as a further protection to the claimant employee, this Court affirms once again its commitment to the interests of labor. PNB v. Cabansag, GR No. 157010, 21 June 2005 Noteworthy is the fact that respondent likewise applied for and secured an Overseas Employment Certificate from the POEA through the Philippine Embassy in Singapore. The Certificate, issued on March 8, 1999, declared her a bona fide contract worker for Singapore. Under Philippine law, this Page 6 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 document authorized her working status in a foreign country and entitled her to all benefits and processes under our statutes. Thus, even assuming that she was considered at the start of her employment as a “direct hire” governed by and subject to the laws, common practices and customs prevailing in Singapore she subsequently became a contract worker or an OFW who was covered by Philippine labor laws and policies upon certification by the POEA. At the time her employment was illegally terminated, she already possessed the POEA employment Certificate. Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with the basic public policy of the State 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 employers. B. RECRUITMENT AND PLACEMENT 1. Definition: Illegal Recruitment; Prohibited Acts Recruitment and Placement – any act of (CETCHUP) canvassing, enlisting, transporting, contracting, hiring, utilizing or procuring workers and includes (CRAP) includes contract services, referrals, advertising for employment, promising for employment locally or abroad, whether for profit or not: Provided, That any person or entity which, in any manner, offers or promises for a fee, employment to two or more persons shall be deemed engaged in recruitment and placement Prohibited Practices 1. To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than that actually received by him as a loan or advance 2. To furnish or publish any false notice or information or document in relation to recruitment or employment uicnco kT mpr im es e™s ed) TI notice, FF Q( testimony, U 3. To give any false ar e and needed toinformation s ee t a om prany ess or or document ordec commit his pi ct ur act e. of misrepresentation for the purpose of securing a license or authority under this Code 4. To induce or attempt to induce a worker already employed to quit his employment in order to offer him to another unless the transfer is designed to

liberate the worker from oppressive terms and conditions of employment 5. To influence or to attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency 6. To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines 7. To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives 8. To fail to file reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor 9. To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of the Secretary of Labor 10. To become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel agency 11. To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under this Code and its implementing rules and regulations 12. Failure to actually deploy without valid reason as determined by DOLE 13. Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker’s fault Art. 38. Illegal recruitment Any recruitment activities, including the prohibited practices enumerated under Article 34 of this Code, to be undertaken by non-licensees or nonholders of authority, shall be deemed illegal and punishable under Article 39 of this Code. The Department of Labor and Employment or any law enforcement officer may initiate complaints . People v. Panis, 142 SCRA 664 (1986) The number of persons dealt with is not the basis in determining WON an act constitutes recruitment and placement. Any of the acts mentioned in Article 13 (b) will constitute recruitment and placement even if only one prospective worker is involved. In that case, a license or authority from POEA is needed. Page 7 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 The proviso about “two or more persons” merely lays down a rule of evidence: where fee is collected because of a promise or offer of employment to two 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.

Labor Code local recruitment and employment Illegal Recruitment (Art. 38): Any recruitment activity including Prohibited Acts under Art. 34 committed by nonlicensees or nonholders of authority. Elements: 1. That the offender has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers; and, 2. That the offender undertakes either any activity within the meaning of recruitment and placement defined under Article 13(b), or any prohibited practices enumerated under Article 34.

RA 8042 – Overseas Filipinos and Overseas Migrant Workers Act applies to recruitment for overseas employment Illegal Recruitment (Sec. 6): Any recruitment activity committed by nonlicensees / non-holders of authority; OR Prohibited Acts (same as Art. 34 of LC) committed by any person, whether a nonlicensee, non-holder, licensee or holder of authority. Added the following in the list of Prohibited Acts: 1. fail to actually deploy without valid reason; 2. fail to reimburse expenses incurred by the worker in connection with his/her documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the work ers fault.

To prove illegal recruitment, it must be shown that the accused gave the distinct impression that he had the power or ability tokT send uicnco imcomplainants e™s ed) TIsuch FF Qthat ( U mpr es abroad for work the latter ar e and needed to were s ee t a decwith om pr ess or in order to be convinced to part his pitheir ct urmoney e. deployed. A person is guilty of illegal recruitment when he gives the impression that he has the power to send workers abroad. Illegal recruitment involving economic sabotage

1. By a syndicate – carried out by a group of 3 or more persons confederating with one another 2. In large scale – committed against 3 or more persons individually or as a group People v. Fernandez, et. al., 07 March 2002 These categories are separate or independent categories. If there is only one complainant in several complaints, there is no illegal recruitment in large. But where there are three conspiring recruiters, there is illegal recruitment by a syndicate. Non-licensee / Non-Holder of authority – any person, corporation or entity which has not been issued a valid license or authority to engage in recruitment and placement by the Secretary of Labor, or whose license or authority has been suspended, revoked or cancelled by the POEA or the Secretary Who are liable: Principals, accomplices, and accessories For juridical persons, the officers having control, management or direction of their business shall be liable. Where illegal recruitment is proved but the elements of “large scale” or “syndicate” are absent, the accused can be convicted only of “simple illegal recruitment”. (People v. Sagun, GR No. 110554, 19 February 1999) Illegal recruitment (IR) involving Economic Sabotage (Art. 38 (b) Labor Code & Sec. 10 RA 8042): 1. IR committed by syndicate – carried out by a group of 3 or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or scheme falling under illegal recruitment 2. IR committed in large scale - committed against 3 or more persons individually or as a group Estafa – a person convicted for illegal recruitment under Labor Code can be convicted for violation of the Revised Penal Code provisions on estafa provided the elements of the crime are present. Art. 39 (c) of Labor Code unconstitutional Only a Judge may issue warrants of search and arrest. The labor authorities must go through the judicial process. Venue – filed with the RTC of the province or city, Where offense committed; OR Where offended party actually resides at the time of the commission of the offense Page 8 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Prescriptive Periods: Simple IR – within 5 years from time IR happened Economic Sabotage – within 20 years from time IR happened People v. Diaz, 259 SCRA 441 (1996) The acts of the appellant, which were clearly described in the lucid testimonies of the three victims, such as collecting from each of the complainants payment for passport, medical tests, placement fee, plane tickets and other sundry expenses, promising them employment abroad, contracting and advertising for employment, unquestionably constitute acts of large scale illegal recruitment. Aquino v. CA, 204 SCRA 240 (1991) Receipt of payments, after the expiration of the license, for services rendered before said expiration does not constitute illegal recruitment. Recruitment refers to the offering of inducements to qualified personnel to enter a particular job or employment. The advertising, the promise of future employment and other come-ons took place while Ms. Aquino was still licensed. True, the payments for services rendered are necessary consequences of the applications for overseas employment. However, it is asking too much to expect a licensed agency to absolutely at the stroke of midnight stop all transactions on the day its license expires and refuse to accept carry-over payments after the agency is closed. In any business, there has to be a winding-up after it ceases operations. The collection of unpaid accounts should not be the basis of a criminal prosecution. The prosecution is based on the date of the prohibited activity, not on the payments being illegal exactions even if effected during the correct period. The payments are necessary in order to defray the expenses entailed in any overseas contract of employment. They are intended for administrative and business expenses and for the travelling expenses of the applicants once cleared for overseas travel. People v. Senoron, 267 SCRA 278 (1997) According to the Labor Code, it is not the Q( U uicnco im e™s ed)fees issuance or signingTIofFF receipts forkT the placement mpr es ar e needed to s eerather t and a that makes a case dec for illegal but om prrecruitment, ess or his pi ct uractivities e. the undertaking of recruitment without the necessary license or authority. Absent any other participation in the IR activities, mere receiving of placement fees or signing of receipt do not constitute IR.

By themselves, procuring a passport, airline tickets and foreign visa for another individual, without more, can hardly qualify as recruitment activities. IR must be proved beyond reasonable doubt. 2. Regulation of Recruitment and Placement Activities Entities authorized to engage in recruitment and placement a. public employment offices b. Philippine Overseas Employment Administration (POEA) c. private recruitment entities d. private employment agencies e. shipping or manning agents or representatives f. such other persons or entities as may be authorized by the DOLE Secretary g. construction contractors Is direct-hiring of OFWs allowed? Why? No. Employers cannot directly hire workers for overseas employment except through authorized entities see (enumeration above). The reason for the ban is to ensure full regulation of employment in order to avoid exploitation. Fees to be Paid by Workers: No worker shall be charged with any fee until employee: (1) obtained work through recruiter’s efforts; and (2) worker has actually commenced working. Placement fee in an amount equivalent to one month’s salary of the worker and documentation costs are the ONLY AUTHORIZED PAYMENTS that may be collected from a hired worker. Eastern Assurance and Surety Corp. v. Secretary of Labor, 181 SCRA 110 (1990) POEA has the power to order refund of illegally collected fees. Implicit in its power to regulate the recruitment and placement activities of all agencies is the award of appropriate relief to the victims of the offenses committed by the respondent agency or contractor. Such relief includes the refund or reimbursement of such fees as may have been fraudulently or otherwise illegally collected, or such money, goods or services imposed and accepted in excess of what is licitly prescribed. Nature of the liability of local recruitment agency and foreign principal 1. Local Agency is solidarily liable with foreign principal.

Darvin v. CA, 292 SCRA 534 (1998) Page 9 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 2. Severance of relations between local agent and foreign principal does not affect liability of local recruiter.

protection from unscrupulous employers, the recruitment or placement agency in the Philippines be made to share in the employer's responsibility.

Joint and solidary liability of recruiter with Foreign Principal A recruitment agency is solidarily liable for the unpaid salaries of a worker it recruited for employment overseas. Even if the recruiter and the principal had already severed their agency agreement at the time employee was injured, the recruiter may still be sued for a violation of the employment contract because no notice of the agency agreement's termination was given to the employee.

Stronghold Insurance Co. v. CA, 205 SCRA 605 (1992) The surety bond required of recruitment agencies is intended for the protection of our citizens who are engaged for overseas employment by foreign companies. The purpose is to insure that if the rights of these overseas workers are violated by their employers, recourse would still be available to them against the local companies that recruited them for the foreign principal. The foreign principal is outside the jurisdiction of our courts and would probably have no properties in this country against which an adverse judgment can be enforced. This difficulty is corrected by the bond, which can be proceeded against to satisfy that judgment.

Catan v. NLRC, 160 SCRA 691 (1988) This must be so, because the obligations covenanted in the recruitment agreement entered into by and between the local agent and its foreign principal are not coterminous with the term of such agreement so that if either or both of the parties decide to end the agreement, the responsibilities of such parties towards the contracted employees under the agreement do not at all end, but the same extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. Otherwise, this will render nugatory the very purpose for which the law governing the employment of workers for foreign jobs abroad was enacted. Posting of cash bond by recruiter Capricorn Travel & Tours v. CA, 184 SCRA 123 (1990) The requirement for the posting of a cash bond is also an indispensable adjunct to the requirement that the agency undertakes to assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the contract of overseas employment and to guarantee compliance with existing labor and social legislation of the Philippines and the country of employment. The undertaking to assume joint and solidaryQliability andim to guarantee uicnco kT e™s ed) TI FF ( U mpr es compliance with labor laws, and the consequent ar e and needed to s ee t a dec om pr ess or posting of cash and surety his pi bonds, ct ur e.may be traced all the way back to the constitutional mandate for the State to "afford full protection to labor, local and overseas." The peculiar nature of overseas employment makes it very difficult for the Filipino overseas worker to effectively go after his foreign employer for employment-related claims and, hence, public policy dictates that, to afford overseas workers

Liability of surety In a surety bond, the surety unequivocally bound itself to answer for all liabilities which the POEA may adjudge or impose against the principal in connection with the recruitment of Filipino seamen Stronghold Insurance Co. v. CA, 205 SCRA 605 (1992) The surety agreed to answer for whatever decision might be rendered against the principal, whether or not the surety was impleaded in the complaint and had the opportunity to defend itself. There is nothing in the stipulation calling for a direct judgment against the surety as a co-defendant in an action against the principal. Power to suspend or cancel any license or authority to recruit employees for overseas employment is concurrently vested with the POEA and the Secretary of Labor. The penalties of suspension and cancellation of license or authority are prescribed for violations of the above quoted provisions, among others. And the Secretary of Labor has the power under Section 35 of the law to apply these sanctions, as well as the authority, conferred by Section 36, not only to 'restrict and regulate the recruitment and placement activities of all agencies,' but also to 'promulgate rules and regulations to carry out the objectives and implement the provisions' governing said activities. Pursuant to this rulemaking power thus granted, the Secretary of Labor gave the POEA on its own initiative or upon filing of a complaint or report or upon request for investigation by any aggrieved Page 10 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 person, (authority to) conduct the necessary proceedings for the suspension or cancellation of the license or authority of any agency or entity' for certain enumerated offenses including 1. the imposition or acceptance, directly or indirectly, of any amount of money, goods or services, or any fee or bond in excess of what is prescribed by the Administration 2. any other violation of pertinent provisions of the Labor Code and other relevant laws, rules and regulations. The Administrator was also given the power to 'order the dismissal of the case or the suspension of the license or authority of the respondent agency or contractor or recommend to the Minister (now Secretary) the cancellation thereof. 3. Contracts Freedom to Stipulate Vir-Jen Shipping v. NLRC, 115 SCRA 347 (1992); 125 SCRA 577 (1983) The form contracts approved by the National Seamen Board [now POEA] are designed to protect Filipino seamen not foreign shipowners who can take care of themselves. The standard forms embody the basic minimums which must be incorporated as parts of the employment contract. They are not collective bargaining agreements or illimitable contracts which the parties cannot improve upon or modify in the course of the agreed period of time. Terms and conditions and other benefits not provided by the minimum requirements are valid if the whole employment package is more beneficial to the worker than the minimum. But the stipulations should not contradict law, public policy and morals. Minimum Provisions for Contract 1. Guaranteed wages, for regular working hours and overtime pay for services rendered beyond regular work hours in accordance with the standards established by the Administration 2. Free transportation from point of hire to site of uicnco kT mpr im es e™s ed) TI return FF Q( U employment and ar e and needed to s ee t a dec om prand essdental or 3. Free emergency medical treatment his pi ct ur e. and facilities 4. Just causes for the termination of the contract or of the services of the workers 5. Workmen’s compensation benefits and war hazard protection 6. Repatriation of workers remains and properties in case of death to the point of hire, or if this is not

possible under the circumstances, the proper disposition thereof, upon prior arrangement with the worker’s next-of-kin and the nearest Embassy or Consulate through the Office of the Labor Attache 7. Assistance in the remittance of worker’s salaries, allowances or allotments to his beneficiaries 8. Free and adequate lodging facilities or compensatory food allowance at prevailing cost of living standards at the jobsite 4. Dispute Settlement Regulatory power – DOLE Secretary shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage of this Title and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this Title. Jurisdiction of the POEA Original and exclusive jurisdiction to hear and decide: a. 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 b. disciplinary action cases and other special cases, which are administrative in character, involving employers, principals, contracting partners and Filipino migrant workers Money Claims of OFWs A worker dismissed from overseas employment without just, valid or authorized cause as defined by law or contract, is entitled to: a. full reimbursement of the placement fee with interest at 12% per annum PLUS b. his salary for unexpired portion of his employment contract OR salary for 3 months for every year of the unexpired term, WHICHEVER IS LESSER 3-months option available ONLY IF the employment contract is for at least one year. If the contract is shorter than that, the salary paid should be that for the unexpired portion. Jurisdiction over Money Claims Labor Arbiters have jurisdiction over all monetary claims of Overseas Filipino Workers arising from employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment, including claims for actual, moral, exemplary and other forms of damages. Page 11 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007

C. EMPLOYMENT OF ALIENS Requisites for Employment of Non-Resident Aliens 1. working permit from DOLE 2. certification that there is no available Filipino willing and competent to do the job for the employer 3. alien must train at least two Filipino understudies for such undertaking 4. FOR ENTERPRISES REGISTERED IN PREFERRED AREAS OF INVESTMENT – employment permit issued upon recommendation of government agency charged with the supervision of said registered enterprise Exemption from Permit 1. All members of Diplomatic Services and foreign government officials accredited with the Phil. Government 2. Members of international organizations with which the Phil. Government is a cooperating member (i.e. ADB, IRRI) 3. Missionaries actually engaged in missionary work 4. All aliens granted exemption by special laws and all those whose employment in the Phil. Have been determined by the Sec. of Labor to be beneficial to national interest. Duration of Permit Valid for 1 year from date of issuance, unless sooner revoked by the Secretary of Labor Renewable upon showing of good cause Non-transferable Other Prohibitions Aliens shall not transfer to another job or change his employer without prior approval of the secretary of labor Non-resident alien shall not take up employment in violation of the provisions of the Code. D. HUMAN RESOURCES & MANPOWER DEVELOPMENT 1. Government Machinery uicnco kT mpr im es e™s ed) TI FF Q( U ar e needed to s ee t and a Policy dec om pr ess or pi ct ur It is the policy ofhis the State toe. provide relevant, accessible, high quality and efficient technical education and skills development in support of the development of high-quality Filipino middle-level manpower responsive to and in accordance with Philippine development goals and priorities.

Power and Functions of TESDA Responsible for formulating, continuing, coordinating, and fully integrating technical education and skills development policies, plans and programs 2. Apprenticeship and Learnership Learners Apprentices What Persons hired as Practical trainees in semitraining on the skilled and other job industrial Supplemented occupations by related Nontheoretical apprenticeable instruction May be learned Covered by a through practical written training on the apprenticeship job in a relatively agreement with short period of an individual time employer or Shall not exceed entity 3 months Needs DOLE approval Shall not exceed 6 months When No experienced Only in highlyworkers technical may be hired available industries Prevent Only in curtailment of apprenticeable employment occupations opportunities Not to create unfair competition in labor costs and lower working standards List of learnable At least 14 trades provided years old by TESDA Possesses vocational aptitude and c apacity for tests Ability to comprehend Ability to follow oral and written instructions Any form of employment requiring beyond 3 mos. practical Page 12 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 training on the job supplemented by related theoretical instruction No list Requisites for a Valid Apprenticeship 1. qualifications of apprentice are met 2. the apprentice earns not less than 75% of the prescribed minimum salary 3. apprenticeship agreement duly executed and signed 4. apprenticeship program approved by the Sec. of Labor; otherwise, the apprentice shall be deemed as a regular employee 5. period of apprenticeship not exceed 6 months At the termination of the apprenticeship, the employer is not required to continue the employment. Employer may not pay wage if the apprenticeship is • a requirement for graduation • required by the School • required by the Training Program Curriculum • requisite for Board examination Venue of Apprenticeship Programs The plant, shop, premises of the employer or firm concerned if the apprenticeship program is organized by an individual employer or firm. The premises of one or several firms designated for the purpose by the organizer of the program if such organizer is an association of employers, civic groups and the like. DOLE training center or other public training institutions with which the Bureau has made appropriate arrangements. Contents of Learnership Agreement 1. names and addresses of employer and learner 2. occupation to be learned and the duration of the training period which shall not exceed 3 months 3. wage of the learner which shall be at least 75% of the applicable minimum wage uicnco kT mpr im es e™s ed) FF Q(the U 4. commitment to TI employ learner, so t ar e and needed toif he s ee a dec omemployee pr ess orupon completion desires, as a regular his pi ct ur e. of training A learner who has worked during the first two months shall be deemed a regular employee if training is terminated by the employer before the end of the stipulated period thorough no fault of the learner.

V. WORKING CONDITIONS Coverage Book III of the Labor Code provides the conditions or standards of employment. These standards apply only if there exists EER. Excluded Employees 1. Government employees whether employed by the National Government or any of its political subdivisions, including those employed in GOCCs 2. Management employees. If they meet ALL of the following conditions: i. Their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof ii. They customarily and regularly direct the work of two or more employees therein iii. They have authority to hire or fire other employees of lower rank; or there suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight 3. Officers or members of managerial staff if they perform the following duties and responsibilities i. Primary duty consists of performance of work directly related to management policies of employer ii. Customarily and regularly exercise discretion and independent judgment iii. (a) Regularly and directly assist a proprietor or a managerial employee; (b) Execute under general supervision work along specialized or technical lines requiring special training, experience or knowledge; (c) execute under general supervision special assignments and tasks; and iv. who do not devote more than 20% of their hours worked in a workweek to activities which are not directly and closely related to the performance of work in i-iii above. 4. domestic servants and persons in the personal service of another if i. they perform such services in the employer’s home which are usually necessary or desirable for the maintenance and enjoyment thereof, or ii. minister to the personal comfort, convenience, or safety of the employer as well as members of the employer’s household Page 13 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 5. workers paid by results, including those who are paid on piece-work, takaw, pakyaw or task basis 6. non-agricultural field personnel if they regularly perform their duties away from the principal or branch office of place of business and whose actual hours of work in the field cannot be determined with reasonable certainty. Managerial Employees – refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff Field Personnel – non-agricultural employees 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 Mercidar Fishing Corp. v. NLRC, 297 SCRA 440 (1998) Fishermen are not field personnel since throughout the duration of their work, they are under the effective control and supervision of the employer. Autobus Transport Systems Inc. v. Bautista, GR No. 156367, 16 May 2005) It is of judicial notice that along the routes that are plied by bus companies, there are its inspectors assigned in strategic places, mandatory once-a-week car barn or shop day, drivers/conductors must be at a specific place at a specific time, as they generally observe prompt departure and arrival from their point of origin to their point of destination. They are under the constant supervision while in the performance of this work. Thus, drivers/conductors are not field personnel. B. HOURS OF WORK Work hours shall not exceed 8. Thus, part-time work, or a day’s work of less than 8 hours, not prohibited. Work Day – 24-hr period commencing from the time an employee regularly starts to work regardless of uicnco kT mpr im es e™s ed) FF Q( or U whether the work isTIbroken continuous ar e and needed to s ee t a dec om pr ess or his pi ct ur e. Calendar Day – 24-hr. period commencing at 12 midnight and ending at 11:59 p.m. Compressed Work Week (CWW) Resorted to by the employer to prevent serious losses due to causes beyond his control, such as when there is substantial slump in demand for his

goods and services or when there is lack of raw materials. Instead of working 6 days a week, the employees will be regularly working for less than 6 days but each workday exceeds 8 hrs. For the hours exceeding 8 in a workday, the employees waive their OT pay because, in return, they will no longer incur transport and other expenses. Allowed on condition that it is freely agreed upon between the employer and majority of the employees. Further, the arrangement should not diminish the employees’ monthly or daily pay or their established employment benefits. Extended workday in CWW should not exceed 12 hrs. Work exceeding 12 hrs. in a day or 48 hrs. in a week should be considered OT. Should the work shift revert to 8 hrs., the reversion shall not constitute a diminution of benefits. Hours of Work of Hospital and Clinic Personnel; Coverage 1. all hospitals and clinics situated in cities or municipalities with a population of 1 million or more 2. all hospitals and clinics with a bed capacity of at least 100 Hospitals and Clinics – place devoted primarily to maintenance and operation of facilities for the diagnosis, treatment, and care of individuals suffering from illness, disease, injury or deformity or in need of obstetrical or other medical and nursing care Regular Working Hours and Days of Hospital and Clinic Personnel Not more than 8 hrs. in any one day and not more than 40 hrs. in any one week Not more than 5 days in a work week. The workweek may begin at any hour and on any day Overtime Work of Hospital and Clinic Personnel May be scheduled to work for more than 5 days or 40 hrs. a week, provided employee is paid for overtime work Overtime: additional compensation of regular wage + at least 30% thereof Considered as Compensable Hours Worked 1. All time during which an employee required to be on duty or to be at the employer’s premises or to be at a prescribed work place; and 2. All time during which an employee suffered or permitted to work. 3. Rest periods of short duration during working hours. Page 14 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007

Principles in Determining Hours Worked 1. All hours are hours worked which the employee is required to give to his employer, regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion 2. An employee need not leave the premises of the workplace in order that his rest period shall not be counted, it being enough that he stops working, may rest completely and may leave his workplace 3. If the work performed was necessary or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent or such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor. 4. The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working time either if a. the imminence of the resumption of work requires the employee's presence at the place of work; or b. if the interval is too brief to be utilized effectively and gainfully in the employee's own interes t. Waiting Time Waiting time spent by an employee shall be considered as working time if 1. waiting is an integral part of his work or 2. the employee is required or engaged by the employer to wait. Working while on call - an employee who is required to remain on call in the employer's premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose. Travel Time Travel that is Travel Away All in Days from Home Work Normal travel from Time spent by Travel that home to work an employee keeps an Q( U uic kT mpr im e™s ed) which is not work TI in as employee FFtravel nco es ar e needed to s ee t and a time decpart omofprhis ess or away from his pi ct ur e. principal home activity, like overnight travel from jobsite to jobsite during the workday GR: not Compensable Work time Travel From Home to Work

compensable because it is a normal incident of employment Exceptions: 1. where employee made to work on an emergency call and travel is necessary in proceeding to the workplace 2. travel is done through a conveyance provided by the employer 3. travel is done under the supervision and control of the employer 4. travel is done under vexing and dangerous circumstances

and counted as hours worked

when it cuts across an employee’s workday because it substitutes for the hours the employee should have been in the office

Univ. of Pangasinan Faculty Union v. Univ. of Pangasinan, 127 SCRA 691 (1984) Semestral break of teachers is compensable hours worked for it is a form of interruption beyond their control. Applies only for regular full-time teachers. Rada v. NLRC, 205 SCRA 69 (1992) The fact that he picks up employees at certain specified points in EDSA in going to the project site and drops them off at the same time on his way back from the field office going home to Marikina is not merely incidental to petitioner’s job as a driver. Said transportation arrangement had been adopted not so much for the convenience of the employees, but primarily for the benefit of the employer. Since the assigned task of fetching and delivering employees is indispensable and consequently mandatory, then the time required of and used by petitioner in going from his residence to the field office and back should be paid as overtime work. Lectures, Meeting, Trainings, Programs Page 15 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 NOT considered working time if ALL the following conditions are met: 1. Attendance is outside of the employee's regular working hours 2. Attendance is in fact voluntary 3. The employee does not perform any productive work during such attendance. Meal and Rest Periods GR: not less than 1 hour time-off for regular meals – non-compensable Except: meal period of not less than 20 mins. in the following cases – compensable hours worked: 1. Where the work is non-manual work in nature or does not involve strenuous physical exertion 2. Where the establishment regularly operates not less than 16 hours a day 3. In case of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer 4. Where the work is necessary to prevent serious loss of perishable goods Rest periods or coffee breaks – running from 5 to 20 mins. considered as compensable working time. To shorten meal time to less than 20 mins, is not allowed. If the so-called “meal time” is less than 20 mins., it becomes only a rest period. Sime Darby Pilipinas v. NLRC, 289 SCRA 86 (1998) The employer may change the meal break from 30 mins. fully paid to 60 mins. without pay. For a full one hour undisturbed lunch break, the employees can freely and effectively use this hour not only for eating but also for their rest and comfort. Since the employees are no longer required to work during this 1-hour lunch break, there is no more need for them to be compensated for this period. Overtime Pay (OT) – work exceeding eight hours within the worker’s 24-hour workday. Work within the uicnco kT mpr im es e™s ed) E’ee’s shift is not overtime. TI FF Q( U ar e and needed to s ee t a dec om pr ess or his pi ct ur e. OT on a Regular Day: regular wage + at least 25% thereof OT on a Holiday/E’ee’s Rest Day: rate of 1st 8 hrs. on holiday/rest day + at least 30% thereof. Since the OT work is considered hourly, the pay rate is computed also on per hour basis. The

daily wage is divided by 8 to get the hourly base rate. If employee is paid on a monthly salary basis, the daily rate is obtained by the following formula: Daily Rate = monthly salary x 12_____ Total no of days considered paid in a year Permissible for the employer to stipulate that the employee’s monthly salary constitutes payment for all the days of the month, including rest days and holidays, where the employee’s monthly salary, when converted by the increased divisor into its daily equivalent, would still meet minimum wage. Regular Wage – includes the cash wage only, without deduction on account of facilities provided by the employer Conditions to be entitled to OT pay 1. Actual rendition of OT work 2. Submission of sufficient proof that said work was actually performed 3. OT work is with the knowledge and consent of the employer Compulsory OT Work (provided employee paid the additional compensation required) 1. Country at war/National or Local Emergency 2. Completion of work started before the 8t h hour and is necessary to prevent serious obstruction or prejudice to the business 3. Urgent work to be performed on Machines to avoid serious loss or damage to employer 4. Necessary to Prevent loss of life/property or Imminent danger to public safety 5. Necessary to prevent loss or damage to perishable goods 6. Necessary to avail of favorable weather or environmental condition Undertime NOT Offset by OT – an employee’s regular pay rate is lower than the OT rate. Offsetting the undertime hours against the OT hours would result in undue deprivation of the employee’s extra pay for OT work. Right to OT pay cannot be waived. But when the alleged waiver of OT pay is in consideration of benefits and privileges which may even exceed the OT pay, the waiver may be permitted.

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Night Shift Differential (NSD) – every employee shall be paid a night shift differential of not less than 10% of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning. NSD = (10% x regular wage/hr.) x no. of hrs. of work between 10 pm – 6 am If work done between 10 pm and 6 am is OT work, the NSD should be based on the OT rate. Employees NOT Covered by NSD 1. Those of the government and any of its political subdivisions, including government-owned and/or controlled corporations 2. Those of retail and service establishments regularly employing not more than 5 workers 3. Domestic helpers and persons in the personal service of another 4. Managerial employees 5. Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof C. REST PERIODS AND HOLIDAYS Weekly Rest Periods – applies to all employers whether operating for profit or not, including public utilities operated by private persons Business on Sundays/Holidays – All establishments and enterprises may operate or open for business on Sundays and holidays provided that the employees are given the weekly rest day and the benefits as provided. Weekly Rest Day – Every employer shall give his employees a rest period of not less than 24 consecutive hrs. after every 6 consecutive normal work days. uicnco kT mpr im es e™s ed) TI FF Q( U ar e and to s eeoft the Preference of employee –needed The preference a dec om pr ess or employee as to his weekly his pi day ct urofe.rest shall be respected by the employer if the same is based on religious grounds. The employee shall make known his preference to the employer in writing at least 7 days before

the desired effectivity of the initial rest day so preferred. Where, however, the choice of the employee as to his rest day based on religious grounds will inevitably result in serious prejudice or obstruction to the operations of the undertaking and the employer cannot normally be expected to resort to other remedial measures, the employer may so schedule the weekly rest day of his choice for at least 2 days in a month. Schedule of Rest Day a. Where the weekly rest is given to all employees simultaneously – the employer shall make known such rest period by means of a written notice posted conspicuously in the work place at least one week before it becomes effective b. Where the rest period is not granted to all employees simultaneously and collectively – the employer shall make known to the employees their respective schedules of weekly rest through written notices posted conspicuously in the work place at least one week before they become effective Work on Rest Day Authorized (UAAP NAF) 1. In case of urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer 2. In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity, to prevent loss of life or property, or in cases of force majeure or imminent danger to public safety 3. In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures 4. To prevent serious loss of perishable goods 5. Where the nature of the work is such that the employees have to work continuously for 7 days in a week or more, as in the case of the crew members of a vessel to complete a voyage and in other similar cases 6. Under other analogous or similar circumstances 7. When the work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. Other than the above circumstances, no employee shall be required against his will to work on his scheduled rest day. Page 17 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 When an employee volunteers to work on his rest day under other circumstances, he shall express such desire in writing, subject to payment of additional compensation. An employee shall be entitled additional compensation for work performed on a Sunday only when it is his established rest day. Holidays with Pay; Applies to ALL employees. EXCEPT: 1. Those of the government and any of the political subdivision, including government-owned and controlled corporation 2. Those of retail and service establishments regularly employing less than ten 10 workers 3. Domestic helpers and persons in the personal service of another 4. Managerial employees 5. Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. Absences Employee on Leave of absence with pay – entitled to the benefit provided herein Employee on leave of absence without pay on the day immediately preceding a regular holiday – may not be paid the required holiday pay if he has not worked on such regular holiday Where the day immediately preceding the holiday is a non-working day in the establishment or the scheduled rest day of the employee, he shall not be deemed to be on leave of absence on that day, in which case he shall be entitled to the holiday pay if he worked on the day immediately preceding the non-working day or rest day

vacations. Paid for the regular holidays during Christmas vacation 2. Employee paid by results (payment on piecework) – holiday pay shall not be less than his average daily earnings for the last 7 actual working days preceding the regular holiday; Provided, However, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate 3. Seasonal workers – may not be paid the required holiday pay during off-season when they are not at work 4. Workers without regular working days – entitled to the benefits Double Holiday – an employee who is entitled to holiday pay should receive at least 200% of his basic wage even if he did not work on that day, provided, he was present or on leave wit pay on the preceding work day. If he worked, he is entitled to 300% of his basic wage. Holiday-Sunday – a legal holiday falling on a Sunday creates no legal obligation for the employer to pay extra, aside from the usual holiday pay, to its monthly-paid employees Successive Regular Holidays – Where there are 2 successive regular holidays, like Holy Thursday and Good Friday, an employee may not be paid for both holidays if he absents himself from work on the day immediately preceding the first holiday, unless he works on the first holiday, in which case he is entitled to his holiday pay on the second holiday. To be entitled to 2 successive holidays, employee must: (1) be present on the day immediately preceding the 1st holiday; or (2) be on leave wit pay.

Temporary or Periodic Shutdown and Temporary uicnco kT mpr im es e™s ed) TI FF Q( U Cessation of Work ar Due e and toneeded Business toReverses s ee t – a om regular pr ess or employer may not dec pay histhe pi ct ur e.holidays during this period

Holidays 1. New Year’s Day - Jan. 1 2. Maundy Thursday - Movable Date 3. Good Friday - Movable Date 4. Araw ng Kagitingan - April 9 5. Labor Day - May 1 6. Independence Day - June 12 7. Nat’l Heroes Day Last Sun. of Aug. 8. Bonifacio Day - Nov. 30 9. Eidul Fit’r - Movable Date 10. Christmas Day - Dec. 25 11. Rizal Day - Dec. 30

Holiday Pay of Certain Employees 1. Private School teachers including faculty members of college and universities – may not be paid for the regular holidays during semestral

Special Days 1. Special Non-Working Days 2. Special Public Holidays 3. Special National Holiday

Temporary or Periodic Shutdown and Temporary Cessation of Work (i.e. yearly inventory, repair or cleaning of machineries or equipment, etc) – regular holidays falling within this period compensable

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 4. All Saints’ Day - Nov. 1 5. Last Day of the Yr - Dec. 31 6. Ninoy Aquino Day - August 21 Muslim Holidays – while the regular holidays are observed in the whole country, the Muslim holidays, except Eidul Fitr, are observed only in specified areas. Muslim employees working outside of the specified areas shall be excused from reporting for work during the observance of the Muslim holidays as recognized by law, without diminution of salary or wages during the period. Rules on Payment of Holiday Pay: 1. REGULAR HOLIDAYS a. If it is employee’s regular work day: - Unworked: - 100% - Worked: 1st 8 hrs - 200% excess of 8 hrs. - + 30% of hourly rate on said day b. If it is employeee’s rest day: - Unworked: - 100% - Worked: 1s t 8 hrs. - + 30% of 200% excess of 8 hrs. - + 30% of hourly rate on said day 2. SPECIAL DAYS a. Unworked – no pay unless there is a favorable company policy, practice or CBA granting payment of wages on special days even if unworked b. Worked

1st 8 hrs. - + 30% of the daily rate of 100% excess of 8 hrs. - + 30% of hourly rate on said day

c. Falling on employee’s rest day and if worked 1st 8 hrs. - + 50% of the uicnco kT mpr im es e™s ed) TI FF Q( U daily rate of 100%ar e and needed to s ee t a dec om pr ess- or excess his ofpi8cthrs. ur e. + 30% of hourly rate on said day 3. SPECIAL WORKING HOLIDAYS – only basic rate.

D. SERVICE CHARGE & SERVICE INCENTIVE LEAVE Service Incentive Leave (SIL) – every employee who has rendered at least 1 year of service shall be entitled to a yearly service incentive leave of 5 days with pay Commutable to its money equivalent if not used or exhausted at the end of the year. At least 1 year service – service for not less than 12 months, whether continuous or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contract is less than 12 months, in which case said period shall be considered as one year Employees NOT Covered 1. Those of the government and any of its political subdivisions, including government-owned and controlled corporations 2. Domestic helpers and persons in the personal service of another 3. Managerial employees 4. Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof 5. Those who are already enjoying the benefit herein provided 6. Those enjoying vacation leave with pay of at least five days 7. Those employed in establishments regularly employing less than ten employees Service Charges – apply only to establishments collecting service charges such as hotels, restaurants, lodging houses, night clubs, cocktail lounge, massage clinics, bars, casinos and gambling houses, and similar enterprises, including those entities operating primarily as private subsidiaries of the Government Employees Covered – all employees of covered employers, regardless of their positions, designations or employment status, and irrespective of the method by which their wages are paid EXCEPT to managerial employees Page 19 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Distribution 85% distributed equally among the covered employees 15% for the disposition by management to answer for losses and breakages and distribution to managerial employees at the discretion of the management in the latter case distributed and paid to the employees not less than once every 2 weeks or twice a month at intervals not exceeding 16 days Supervisors share in the 15%. LC speaks of “management,” and not “managerial employees.” E. OTHERS Vacation Leave (VL) / Sick Leave (SL) – not required by law and depends on voluntary employer policy or collective bargaining. Solo Parent Leave (RA 8972: Solo Parents’ Welfare Act of 2000) – a parental leave of not more than 7 working days every years shall be granted to any solo parent employee who has rendered service of at least 1 year Solo Parent – woman who gives birth as a result of rape or crimes against chastity, a widow or widower, a spouse separated legally or de facto for at least one year, and so forth. The claimant parent has to show that he/she is left alone with the responsibility of parenthood. Leave under RA 9262 (Anti-Violence Against Women and their Children Act of 2004) – allows the victim of violence, which may be physical, sexual, or psychological, to apply for the issuance of a protection order. If such victim is an employee, she is entitled to a paid leave of up to 10 days in addition to other paid leaves under the Labor Code, other laws and company policies. The employee has to submit a certification from the Punong Barangay or Kagawad or prosecutor or Clerk of Court that an action under RA 9262 has been filed and is pending. uicnco kT mpr im es e™s ed) TI FF Q( U ar e and needed to s ee t a dec om pr ess or VI. his WAGES pi ct ur e. A. CONCEPT AND DEFINITION Agriculture – includes farming in all its branches and, among other things, includes cultivation and tillage of soil, dairying, the production, cultivation,

growing and harvesting of any agricultural and horticultural commodities, the raising of livestock or poultry, and any practices performed by a farmer on a farm as an incident to or in conjunction with such farming operations, but does not include the manufacturing or processing of sugar, coconuts, abaca, tobacco, pineapples or other farm products Wage – paid to any employee shall mean the: 1. 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, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered; and includes 2. the fair and reasonable value, as determined by the DOLE Secretary, of board, lodging, or other facilities customarily furnished by the employer to the employee. "Fair and reasonable value" shall not include any profit to the employer, or to any person affiliated with the employer. Fair Wage for Fair Work; No Work – No Pay Principle – if there is no work performed by the employee, there can be no wage or pay unless the laborer was able, willing, and ready to work but was prevented by management or was illegally locked out, suspended or dismissed. But where the failure of employees to work was not due to the employer’s fault, the burden of economic loss suffered by the employees. Should not be shifted to the employer. Each party must bear his own loss. Equal Pay for Equal Work – persons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries. Facilities – articles or services for the benefit of the employee or his family but shall not include tools of the trade or articles or service primarily for the benefit of the employer or necessary to the conduct of the employers business. May be deducted from the employees’ wages. Acceptance of Facilities – in order that the cost of facilities furnished by the employer may be charged against an employee, the employee’s acceptance of such facilities MUST BE VOLUNTARY. Mabeza v. NLRC, 271 SCRA 670 (1997) Requirements for deducting value of facilities: Page 20 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 1. Proof must be shown that such facilities are customarily furnished by the trade 2. The provision of deductible facilities must be voluntarily accepted in writing by the employee 3. The facilities must be charged at fair and reasonable value

therein, with a salary of not less than the statutory or established minimum wage, shall be presumed to be paid for all the days in the month whether worked or not. The monthly min. wage shall not be less than the statutory minimum wage multiplied by 365 days divided by 12.

Facilities Supplements items of expense extra remuneration or necessary for the special privileges or laborer’s and his family’s benefits given to or existence and received by the subsistence employees over and above their ordinary earnings or wages. part of the wage independent of the wage deductible from the wage not wage deductible

Agricultural Rate – farm work from land preparation to harvesting

Employees NOT Covered by Provisions on Wages 1. farm tenancy / leasehold 2. domestic service 3. persons working in their respective homes in needle work or in any cottage industry duly registered in accordance with law 4. Barangay micro business enterprise (BMBE) under RA 9178, the BMBE Law. BMBE – any business entity or enterprise engaged in the production, processing, or manufacturing of products or commodities, including agroprocessing, trading and services, whose total assets including those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, shall not be more than P3M B. WAGE-FIXING Regional Minimum Wages – the minimum wage rates for agricultural and non-agricultural employees and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards Minimum Wage – lowest wage rate fixed by law that an employer can pay his Q employee; payment uicnco kT mpr im es e™s ofed) FF ( U minimum wages isTI not dependent on the employer’s ar e and needed to s ee t dec om pr a ess or ability to pay his pi ct ur e. Daily-Paid Employee – paid only for days he actually worked Monthly-Paid Employee – employees paid by the month, irrespective of the number of working days

Industrial Rate – manufacturing or processing of farm products Non-Diminution Rule GR: Nothing in the Labor Code shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of the Labor Code. Benefits being given to employees shall not be taken back or reduced unilaterally by the employer because the benefit has become part of the employment contract, written or unwritten. Exception: To correct an error, otherwise, if the error is left uncorrected for a reasonable period of time, it ripens into a company policy and employees can demand for it as a matter of right. When Non-Diminution Rule Applicable – The rule is applicable if it is shown that the grant of the benefit is 1. based on an express policy 2. has ripened into practice over a long period of time; and the practice is consistent and deliberate, and is not due to an error in the construction/application of a doubtful or difficult question of law Bonus – a benefit which is contingent or conditional; its demandability depends on certain pre-conditions. It is an amount granted voluntarily to an employee for his/her industry and loyalty which contributed to the success and realization of profits of the employer’s business. It is not a demandable and enforceable obligation unless it was promised to be given without any conditions imposed for its payment in which case it is deemed part of the wage. Payment by Results – regulated by DOLE Secretary to ensure the payment of fair and reasonable wage rates, preferably through time and motion studies or in consultation with representatives of workers’ and Page 21 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 employers’ organizations. Includes pakyaw, piece work and other noontime work. Two Categories of Piece-Rate Employees 1. Employees paid piece rates which are prescribed in Piece Rate orders issued by DOLE – wages are determined by multiplying the number of pieces produced by the pay rate per piece. 2. Employees paid output rates which are prescribed by the employer and are not yet approved by the DOLE – to determine wage, the number of pieces produces is multiplied by the rate per piece as determined by the employer. If the result is equal to or greater than the applicable legal daily rate in proportion to the number of hours worked, the worker receives such increased amount. If the amount is lower, the employer must make up the difference. Benefits Payable to Piece-Rate Workers (HANS MOTO) 1. Holiday Pay 2. Applicable Statutory Minimum Daily Rate 3. Night Differential Pay 4. Service Incentive Leave 5. Meal and Rest Periods 6. Overtime and Premium Pay 7. Thirteenth Month Pay 8. Other Benefits Basic Wage – means all remuneration or earnings paid by an employer to a worker for services rendered on normal working days and hours but does not include cost-of-living allowances, profit sharing payments, premium payments, 13th month pay or other monetary benefits which are not considered as part of or integrated into the regular salary of the workers Minimum Wage – lowest wage rate fixed by law than an employer can pay his employees Who Sets Minimum Wage 1. Regional Tripartite Wages and Productivity Board 2. Congress National Wages and Productivity Commission Q( U uicnco kT mpr im es e™s ed) FFguidelines 1. Prescribes rulesTI and for ar e and needed tothes ee t a dec om pr essminimum or determination of appropriate wage and his pi ct ur e. productivity measures at the regional, provincial, or industry levels 2. Reviews regional wage levels set by the Regional Tripartite Wages and Productivity Boards to determine if these are in accordance with prescribed guidelines and national development plans

Regional Tripartite Wages and Productivity Boards 1. Determine and fix minimum wage rates applicable in their regions, provinces or industries therein and to issue the corresponding wage orders, subject to guidelines issued by the National Wages and Productivity Commission. 2. Develop plans, programs and projects relative to wages, incomes and productivity improvement for their respective regions 3. Receive, process and act on applications for exemption from prescribed wage rates as may be provided by law or any Wage Order 4. Other functions Composition of Each Regional Board 1. Regional Director of DOLE 2. Regional Director of NEDA 3. Regional Director of DTI 4. 2 members from Employer sector 5. 2 members from Employee sector Wage Order – an order issued by the Regional Board whenever the conditions in the region so warrant after studying and investigating and studying all pertinent facts and based on the standards and criteria prescribed by the Labor Code. A wage order adjusts the minimum level but not the levels above the minimum. It does not mandate across the board salary increase. Employees NOT Covered 1. Household or domestic helpers, including family drivers and workers in the personal service of another 2. Workers and employees in retail/service establishments regularly employing not more than 10 workers, when exempted from compliance, for a period fixed by the Commission/Boards 3. Workers and employees in new business enterprises outside the National Capital Region and export processing zones for a period of not more than two or three years, as the case may be, from the start of operations when exempted Effectivity of Wage Orders – takes effect after 15 days from its complete publication in at least one newspaper of general circulation in the region Public Hearings and Consultations Mandatory – notice must be given to employees’ and employers’ Page 22 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 groups, provincial, city and municipal officials and other interested parties. A wage order issued without the required public consultation and newspaper publication is null and void. Frequency – a wage order issued by the Board may not be disturbed for a period of 12 months from its effectivity and no petition for wage increase shall be entertained during said period EXCEPT when Congress itself issues a law increasing wages. Standards/Criteria for Minimum Wage Fixing – must be economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the employees within the framework of the national economic and social development program. Factors to Consider: 1. The demand for living wages 2. Wage adjustment vis-à-vis the consumer price index 3. The cost of living and changes or increases 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 of the capital invested and capacity to pay of employers 9. Effects on employment generation and family income 10. The equitable distribution of income and wealth along the imperatives of economic and social development Wage Distortion – a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service or other logical basis of differentiation. Simply, if the uicnco kT im es e™ pay advantage of aTIposition over another is removed FF Q( U mpr s ed) ar e needed to s eerequired t and a or significantly reduced by a dec om prpay essadjustment or hispay pi advantage ct ur e. by a wage order, such should be restored. Correction of Wage Distortion A. ORGANIZED ESTABLISHMENT 1. Employer and union shall negotiate to correct the distortion

2. Any dispute arising should be resolved through grievance procedure under CBA 3. If dispute remains unresolved, through voluntary arbitration B. UNORGANIZED ESTABLISHMENT 1. The employer and employees shall endeavor to correct the distortion 2. Any dispute shall be settled through National Conciliation and Mediation Board (NCMB) 3. If remains unresolved after 10 days of conciliation, it shall be referred to the NLRC Amount of Distortion Adjustment – the restoration of the previous pay advantage is the aim but not necessarily to the last peso. Restoration of appreciable differential, a significant pay gap, should suffice as correction. Suggested Formula to Correct a Salary Distortion Minimum Wage = % x Prescribed Increase Ac tual Salary Prubankers Association v. Prudential Bank and Trust Co., 302 SCRA 74 (1999) Wage distortion involves comparison of jobs located in the same region. Examination of alleged salary distortion is limited to jobs or positions in the same employer in the same region; thus, the comparison of salaries has to be intra-region, not inter-region. Bankard Employees Union – WATU v. NLRC, GR No. 140689, 17 February 2004 The distortion that should be rectified refers to distortion arising from compliance with a government wage order. It does not refer to distortion caused by salary revisions voluntarily initiated by the employer unless such a duty exists because of a CBA stipulation or company practice. C. PAYMENT OF WAGES Manner of wage payment – wages shall be paid in legal tender and the use of tokens, promissory notes, vouchers, coupons, or any other form alleged to represent legal tender is absolutely prohibited even when expressly requested by the employee. Payment by check – Payment of wages by bank checks, postal checks or money orders is allowed where

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 1. such manner of wage payment is customary on the date of the effectivity of the Labor Code, 2. where it is so stipulated in a collective agreement, or 3. where all of the following conditions are met: a. There is a bank or other facility for encashment within a radius of 1 kilometer from the workplace b. The employer or any of his agents or representatives does not receive any pecuniary benefit directly or indirectly from the arrangement c. The employees are given reasonable time during banking hours to withdraw their wages from the bank which time shall be considered as compensable hours worked if done during working hours d. The payment by check is with the written consent of the employees concerned if there is no collective agreement authorizing the payment of wages by bank checks Time of payment GR: 1. not less than once every 2 weeks; or 2. twice a month at intervals not exceeding 16 days Except: 1. In case payment cannot be made with such regularity due to force majeure or circumstances beyond the employer's control – the employer shall pay the wages immediately after such force majeure or circumstances have ceased. 2. In case of payment of wages by results involving work which cannot be finished in 2 weeks, payment shall be made at intervals not exceeding sixteen days in proportion to the amount of work completed. Final settlement shall be made immediately upon completion of the work. Place of payment – the place of payment shall be at or near the place of undertaking. Payment in a place other than the work place shall be permissible only under the following circumstances: 1. When payment cannot be effected at or near the place of work by reason of the deterioration of peace and order conditions, or by reason of Q( U uicnco kT mpr im e™s by actual or impending caused TI FFemergencies es ed)fire, ar e needed to s ee t and a flood, epidemicdec or other om prcalamity ess or rendering pi ct ur e. payment thereathis impossible 2. When the employer provides free transportation to the employees back and forth 3. Under any other analogous circumstances; Provided, That the time spent by the employees in collecting their wages shall be considered as compensable hours worked

Prohibited Place of Payment – bar, night or day club, drinking establishment, massage clinic, dance hall, or other similar places or in places where games are played with stakes of money or things representing money except in the case of persons employed in said places Payment through Banks; Requisites 1. There must be a written permission of the majority of the employees concerned in an establishment 2. The establishment must have 25 or more employees 3. The establishment must be located within 1 km. radius to the bank. Payment through ATM allowed Direct Payment of Wages GR: paid directly to workers to whom they are due Exceptions: 1. Payment Through Another Person a. In case of force majeure rendering such payment impossible provided such person is under written authority given by the worker for the purpose b. When authorized under existing law including: i. payments for the insurance premiums of the employee ii. union dues where the right to check-off has been recognized by the employer in accordance with a collective agreement iii. authorized in writing by the individual employees concerned 2. Payment Through Heirs of Worker – in case the worker has died, employer may pay wages of the deceased to the heirs of the latter without necessity of intestate proceedings Procedure: 1. When the heirs are of age, they shall execute an affidavit attesting to their relationship to the deceased and the fact that they are his heirs to the exclusion of all other persons. 2. In case any of the heirs is a minor, such affidavit shall be executed in his behalf by his natural guardian or next of kin. 3. Affidavit shall be presented to the employer who shall make payment through the DOLE Sec. or his representative 4. Payment of wage shall absolve the employer of any other liability with respect to the amount paid. 3. Payment through Member of Worker’s Family – where the employer is authorized in writing by the Page 24 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 employee to pay his wages to a member of his family Non-interference in Disposal of Wages – No employer shall limit or otherwise interfere with the freedom of any employee to dispose of his wages and no employer shall in any manner oblige any of his employees to patronize any store or avail of the services offered by any person. Wage Deductions GR: NOT allowed Except: 1. In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance 2. For union dues, in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned 3. In cases where the employer is authorized by law or regulations issued by the DOLE Secretary Other Allowable Deductions 1. In cases where employee indebted to employer, where such indebtedness has become due and demandable 2. In court awards, wages may be the subject of execution or attachment, but only for debts incurred for food, shelter, clothing, and medical attendance 3. Withholding Tax 4. Salary deductions of a legally established cooperative 5. Deductions for payment to 3rd persons, upon written authorization of the employee 6. Union dues 7. Agency fee 8. Deductions for value of meals and other facilities 9. Deductions for loss or damage 10. SSS, Medicare, Pag-IBIG premiums Deductions for Loss or Damage GR: No employer shall require his worker to make deposits for the reimbursement of loss of or damage to material, equipment, orQtools supplied by uicnco kT mpr im es e™the TI FF ( U s ed) employer. ar e and needed to s ee t dec om pr a ess or his pi ct ur e. Except: When the trade, occupation or business of the employer recognizes or considers the practice of making deductions or requiring deposits necessary or desirable. Requisites for Valid Deduction for Loss/Damage

1. The employee concerned is clearly shown to be responsible for the loss or damage 2. The employee is given reasonable opportunity to show cause why deduction should not be made 3. The amount of such deduction is fair and reasonable and shall not exceed the actual loss or damage 4. The deduction from the wages of the employee does not exceed 20% of the employee's wages in a week Prohibited / Unlawful Acts 1. 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. 2. Deduction from the wages of any employee for the benefit of the employer or his representative or intermediary as consideration of a promise of employment or retention in employment. 3. Refuse to pay or reduce the wages and benefits, discharge or in any manner discriminate against any employee who has filed any complaint or instituted any proceeding under this Title or has testified or is about to testify in such proceedings. 4. 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. D. LIABILITY FOR WAGES Worker Preference in Case of Employer’s Bankruptcy – workers shall enjoy first preference as regards their wages and other monetary claims, any provisions of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full before claims of the government and other creditors may be paid. A declaration of bankruptcy or a judicial liquidation must take place before the worker’s preference may be enforced. Establishes a preference of credit and NOT a lien. Attorney’s Fees 1. In case of unlawful withholding of wages, the culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered. 2. It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorney’s

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 fees which exceed ten percent of the amount of wages recovered.

VII. WORKING CONDITIONS FOR SPECIAL GROUPS OF EMPLOYEES A. WOMEN Night Work Prohibition – no woman regardless of age shall be employed or permitted or suffered to work, with or without compensation in any: 1. In any industrial undertaking or branch thereof between 10 pm – 6 am of the following day; or 2. In any commercial or non-industrial undertaking or branch thereof, other than agricultural - between 12 mn – 6 am of the following day; or 3. In any agricultural undertaking at nighttime unless she is given a period of rest of not less than nine (9) consecutive hours. Exceptions: Prohibitions DO NOT APPLY 1. In cases of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disasters or calamity, to prevent loss of life or property, or in cases of force majeure or imminent danger to public safety; 2. In case of urgent work to be performed on machineries, equipment or installation, to avoid serious loss which the employer would otherwise suffer; 3. Where the work is necessary to prevent serious loss of perishable goods; 4. Where the woman employee holds a responsible position of managerial or technical nature, or where the woman employee has been engaged to provide health and welfare services; 5. Where the nature of the work requires the manual skill and dexterity of women workers and the same cannot be performed with equal efficiency by male workers; 6. Where the women employees are immediate members of the family operating the uicnco kT im es e™s ed) establishment TI or undertaking; and FF Q( U mpr ar e needed to s ee and a 7. Under other analogous cases by tthe dec om pr ess exempted or hisand pi ct ur e. Secretary of Labor Employment in appropriate regulations. Facilities for Women The DOLE Secretary may require employers to: 1. Provide seats proper for women and permit them to use such seats when they are free from work

and during working hours, provided they can perform their duties in this position without detriment to efficiency 2. To establish separate toilet rooms and lavatories for men and women and provide at least a dressing room for women 3. To establish a nursery in a workplace for the benefit of the women employees therein 4. To determine appropriate minimum age and other standards for retirement or termination in special occupations such as those of flight attendants and the like Maternity Leave (under RA 1161 SSS Law) A female member, who need not be legally married, who has paid for at least 3 monthly contributions in the 12-month period immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity benefit equivalent to 100% of her average daily salary credit for o 60 days – normal delivery o 78 days – caesarian delivery Benefits shall be paid only for the FIRST 4 deliveries or miscarriages Maternity benefits, like other benefits granted by the SSS, are granted in lieu of wages and therefore, may not be included in computing the employee’s 13th month pay for the calendar year The employer shall advance the payment subject to reimbursement by the SSS. It is not necessary that the woman be impregnated by her legitimate husband. It is immaterial who the father is. Every pregnant woman in the private sector, whether married or unmarried, is entitled to the maternity leave benefits. Paternity Leave (under RA 8187 Paternity Leave Act of 1996) Grants 7 working days of paternity leave with full pay to married male employees in the private and public sectors. (Sec. 1(a), RA 8187 IRR) Conditions to entitlement: a. The claimant, a married male employee, is employed at the time of delivery of his child b. He is cohabiting with his spouse at the time she gives birth or suffers a miscarriage c. He has applied for paternity leave d. His wife has given birth or suffered a miscarriage Wife – lawful wife; woman legally married to male employee concerned Family Planning Services; Incentives for Family Planning – employers who habitually employ more Page 26 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 than 200 workers in any locality shall provide free family-planning services to their employees and their spouses which shall include but not limited to, the application or use of contraceptives Discrimination Prohibited – unlawful for any employer to discriminate against any woman employee with respect to terms and conditions of employment solely on account of her sex Acts of Discrimination 1. Payment of a lesser compensation, including wage, salary or other form of remuneration and fringe benefits, to a female employees as against a male employee, for work of equal value 2. Favoring a male employee over a female employee with respect to promotion, training opportunities, study and scholarship grants solely on account of their sexes Person guilty of committing these acts are criminally liable under Arts. 288-289 of the Labor Code That the institution of any criminal action under this provision shall not bar the aggrieved employee from filing an entirely separate and distinct action for money claims, which may include claims for damages and other affirmative reliefs. The actions hereby authorized shall proceed independently of each other. Stipulation Against Marriage It shall be unlawful for the employer to: 1. require as a condition of employment or continuation of employment that a woman employee shall not get married 2. to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated 3. to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage PT&T Co. v. NLRC, 272 SCRA 596 (1997) A woman worker may not be dismissed on the ground of dishonesty for having written “single” on the space for civil status on the application sheet, uicnco kT mpr im es e™ TI FF Q( U s ed) contrary to the fact that she was married. ar e and needed to s ee t dec om pr a ess or his pi ct ur e. Prohibited Acts It is unlawful for any employer: 1. To discharge any woman employed by him for the purpose of preventing such woman from enjoying the maternity leave, facilities and other benefits provided under the Code

2. To discharge such woman employee on account of her pregnancy, or while on leave or in confinement due to her pregnancy 3. To discharge or refuse the admission of such woman upon returning to her work for fear that she may be pregnant 4. To discharge any woman or child or any other employee for having filed a complaint or having testified or being about to testify under the Code 5. To require as a condition for a continuation of employment that a woman employee shall not get married or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage Classification of Certain Women Workers – Any woman who is permitted or suffered to work, with or without compensation, in any night club, cocktail lounge, massage clinic, bar or similar establishments under the effective control or supervision of the employer for a substantial period of time as determined by the Secretary of Labor and Employment, shall be considered as an employee of such establishment for purposes of labor and social legislation. B. MINORS Below 15 Not employed EXCEPT: 1. when the child works directly under the sole responsibility of his/her parents/legal guardian who employs only members of his/her family under the ff conditions a. employment does not endanger the child’s life, safety, health and morals b. employment does not impair the child’s normal development; and c. the parent/legal guardian provides the child with primary/secondary education 2. when the child’s employment or participation in public entertainment or information through cinema, theater, radio or television is essential, provided that: Page 27 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 a. employment does not involve advertisements or commercials promoting alcoholic beverages, intoxicating drinks, tobacco and its by-products or exhibiting violence b. there is a written contract approved by the DOLE, if possible c. the conditions prescribed for the employment of minors in No. 1 are met d. the following requirements are complied with: i. employer shall ensure protection, health, morals, and normal development of the child ii. employer shall institute measures to prevent child’s exploitation / discrimination taking into account the system and level of remuneration, duration, and arrangement of working time iii. employer shall formulate and implement a continuing program for training and skills acquisition of the child, subject to approval and supervision of competent authorities (as amended by RA 9231) 15 – Below 18 ALLOWED ONLY in: nonhazardous or non-deleterious undertakings 18 years and No prohibition above Hazardous Workplaces a. Nature of the work exposes the workers to uic kT mpr im es e™s ed) dangerous environmental TI FF Q( U elements, nco ar e needed to s ee t and a contaminants or work dec omconditions pr ess or his pi ct ur e. b. Workers are engaged in construction work, logging, fire-fighting, mining, quarrying, blasting, stevedoring, dock-work, deep sea fishing, and mechanized farming c. Workers are engaged in the manufacture or handling of explosives and other pyrotechnic products

d. Exposed to or use of heavy power-driven machinery or equipment e. Workers use or are exposed to power-driven tools C. HOUSEHELPERS Domestic or Household Service – services in the employer’s home which is which is usually necessary or desirable for the maintenance and enjoyment thereof and includes ministering to the personal comfort and convenience of the members of the employer’s household, including services of family drivers. Rights of Househelpers 1. Not to be assigned to non-household work 2. Reasonable compensation (minimum cash wage) 3. Lodging, food and medical attendance 4. If under 18 years, an opportunity for elementary education – cost of which shall be part of househelper’s compensation 5. Contract for household service shall NOT EXCEED 2 years – renewable from year to year 6. Just and humane treatment 7. Right not to be required to work for more than 10 hrs. a day – if the househelper agrees to work overtime and there is additional compensation, the same is permissible 8. Right to 4 days vacation each month with pay – if the helper does not ask for the vacation, the number of vacation days cannot be accumulated, he is only entitled only to its monetary equivalent. 9. Funeral expenses must be paid by the employer if the househelper has no relatives with sufficient means in the place where the head of the family lives 10. Termination only for just cause 11. Indemnity for unjust termination of service 12. Employment certification as to nature and duration of service and efficiency and conduct of the househelper Indemnity for Unjust Termination of Service 1. If the period for household service is fixed, neither the employer nor the househelper may terminate the contract before the expiration of the term except for a just cause. 2. If the househelper is unjustly dismissed, he or she shall be paid the compensation already earned + that for 15 days by way of indemnity 3. If the househelper leaves without justifiable reason, he or she shall forfeit any unpaid salary due him/her not exceeding 15 days.

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Employment for Certification – upon the severance of the household service relationship, the househelper may demand from the employer a written statement of the nature and duration of the service and his/her efficiency and conduct as househelper Apex Mining Co. Inc. v. NLRC, 196 SCRA 251 (1991) The criteria are the personal comfort and enjoyment of the family of the employer in the home of said employer. While it may be true that the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in their circumstances is that in the former instance they are actually serving the family while in the latter case, whether it is a corporation or a single proprietorship engaged in business or industry or any other agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises of the business of the employer. In such instance, they are employees of the company or employer in the business concerned entitled to the privileges of a regular employee. D. HOMEWORKERS Homeworker – applies to any person who performs industrial homework for an employer, contractor or sub-contractor Industrial Homeworker – system of production under which work for an employer or contractor is carried out by a homeworker at his/her home. Materials may or may not be furnished by the employer or contractor Employer of Homeworker – 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 employee, agent contractor, sub-contractor or any other person: a. Delivers, or causes to be delivered, any goods, articles or materials to processed or Q(be uic kT mpr im es e™fabricated TI FFand U nco s ed) in or about a home thereafter to be returned ar e and needed to s ee t a dec om pr ess or or to be disposedhis of or in accordance pi distributed ct ur e. with his directions b. Sells any goods, articles or materials to be processed or fabricated in or about a home and then rebuys them after such processing or fabrication, either by himself or through some other person

Deductions – No employee, 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 damaged unless the following conditions are met: 1. The homeworker concerned is clearly shown to be responsible for the loss or damage; 2. The employee 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. Liability of employer and contractor – Whenever an employer shall contract with another for the performance of the employer's work, it shall be the duty of such employer to provide in such contract that the employees or homeworkers of the contractor and the latter's sub-contractor shall be paid in accordance with the provisions of this Rule. In the event that such contractor or sub-contractor fails to pay the wages or earnings of his employees or homeworkers as specified in this Rule, such employer shall be jointly and severally liable with the contractor or subcontractor to the workers of the latter, to the extent that such work is performed under such contract, in the same manner as if the employees or homeworkers were directly engaged by the employer. Prohibitions for Homework 1. explosives, fireworks and articles of like character 2. drugs and poisons 3. other articles, the processing of which requires exposure to toxic substance E. HANDICAPPED / DISABLED Handicapped Workers – those whose earning capacity is impaired by age or physical or mental deficiency or injury, disease or illness There must be a link between the deficiency and the work which entitles the employer to lessen the worker’s wage. If the disability of the person is not in any way related to the work for which he was hired, he should not be so considered as a handicapped worker. Handicapped Worker (Art. 78 LC)

Handicapped Person (RA 7277 Magna Carta Page 29 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007

Those whose earning capacity is impaired by age or physical or mental deficiency or injury

for Disabled Persons) Those suffering from restriction or different abilities as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being.

When Employable 1. their employment is necessary to prevent curtailment of employment opportunities 2. does not create unfair competition in labor costs 3. does not impair or lower working standards Handicapped Workers May Become Regular Employees – if their handicap is not such as to effectively impede the performance of job operations in the particular occupations for which they were hired. Equal Opportunity for Employment – no disabled person shall be denied access to opportunities for suitable employment. Qualified disabled employees shall be subject to same terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able-bodied person Employment Agreement; Contents 1. Names and addresses of the employer and the handicapped worker 2. Rate of pay of the handicapped worker which shall not be less than 75% of the legal minimum wage 3. Nature of work to be performed by the handicapped worker 4. Duration of the employment

VIII. ADMINISTRATION AND EMPLOYMENT Art. 128. Visitorial and enforcement power. Power of the Sec. of Labor or his duly authorized uicregulation kT mpr im es e™ representative, including TI FF Q labor ( U nco officers s ed)to: ar e and needed to s ee t a om pr ess or and premises 1. have access to dec employer’s records ur e.whenever work is at any time of thehis daypiorctnight being undertaken therein 2. right to copy records 3. to question any employee 4. investigate any fact, condition, or matter which may be necessary to determine violations or

which may be necessary to aid in enforcement of the Labor Code or any labor law or order 5. issue compliance orders to give effect to labor legislation based on the findings of employment and enforcement officers or industrial safety engineers made in the course of inspection Compliance Order – must observe due process in administrative proceedings: a. alleged violator must first be heard and given adequate opportunity to present evidence on his behalf b. evidence presented duly considered before any decision reached c. decision is based on substantial evidence d. decision based on evidence presented in the hearing, or at least contained in the record and disclosed to the parties e. decision is that of the decision-making authority and not mere views of subordinates f. decision should explain the issues involved and the reasons for the decisions rendered 6. Issue writs of execution to the appropriate authority for the enforcement of their orders, EXCEPT in cases where the employer contests the findings of the labor employment and enforcement officer and raises isues supported by documentary proofs which were not considered in the course of inspection – in the latter case, the case will have to be forwarded to a Labor Arbiter Appeal If order issued by duly authorized representative of DOLE Sec. – appeal to the latter If order involves monetary award – an appeal by the employer may be perfected upon only upon posting of CASH or SURETY bond in the amount equivalent to the monetary award in the order appealed from Power of DOLE Secretary May order stoppage of work OR suspension of any unit or department where non-compliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace. Within 24 hrs – a hearing shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall be lifted If violation is attributable to FAULT OF THE EMPLOYER, he shall pay the employees concerned their salaries or wages during the period of such stoppage of work or suspension of operations. Page 30 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007

Unlawful For any person or entity to obstruct, impede, delay or otherwise render ineffective the orders of the Sec. or his authorized representatives issued pursuant to the authority under Art. 128 No inferior court shall issue temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the enforcement orders. Enforcement Power cannot be Used Case does not arise from exercise of visitorial power When EER ceased to exist at the time of inspection If employer contests finding of the labor officer and such contestable issue is not verifiable in the normal course of inspection Recovery of Wages, Simple Money Claims and Other Benefits (Art. 129) Jurisdiction: DOLE Regional Director (summary proceeding and non-litigious) Claimant: Employee or person in domestic or household service, provided: 1. no claim for reinstatement 2. aggregate claims of each employee or househelper DOES NOT EXCEED P5,000. Guico v. Sec. of Labor, 298 SCRA 666 (1998) If the claim later exceeds P5,000, the Regional Director still retains jurisdiction based on inspection’s findings in the nature of enforcement action 3. claims arise from EER NOTE: Notice and hearing Resolution of complaint within 30 days from filing (Appeal within 5 calendar days to NLRC) NLRC to resolve appeal within 10 calendar days from submission Q( pleading uicnco kT mpr im es e™s ed) TI of FFlast U ar e and needed to s ee t a dec om pr ess or hisforpiEmployees’ ct ur e. Not Included: claims Compensation, Social Security benefits, Medicare benefits and Maternity Benefits Art. 128 Art. 129 WHO DOLE Sec. OR EXERCISES his duly

Regional Director or any

POWER authorized representative who may or may not be a Regional Director NATURE OF Visitorial and POWER enforcement power exercised through routine inspections of establishment EXISTENCE Requires OF EER existence of EER

duly authorized hearing officer of DOLE

Adjudicatory power on matter involving recovery of wage

EER not necessary since it should not include a claim for reinstatement HOW Enforcement Sworn INITIATED power is an complaint filed offshoot of by interested visitorial power party LIMITS AS No limit Aggregate claim TO AMOUNT of each OF CLAIM complainant does not exceed P5,000 APPEAL Appeal to Sec. Appeal to NLRC of Labor within within 5 10 calendar calendar days days IX. MEDICAL, DENTAL AND OCCUPATIONAL SAFETY First Aid Treatment – adequate, immediate and necessary medical and dental attention or remedy given in case of injury or illness suffered by a worker during employment, irrespective of whether or not such injury or illness is work-connected, before a more extensive medical and/or dental treatment can be secured. First-Aider – any person trained and duly certified as qualified to administer first aid by the PNRC or by any other organization accredited by the former X. EMPLOYEES’ COMPENSATION Workmen’s Compensation – a general and comprehensive term applied to those laws providing for compensation for loss resulting from the injury,

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 disablement or death of a workman through industrial accident, casualty or disease Compensation – money relief offered according to the scale established under the statute as differentiated from compensatory damages recoverable in an action at law for breach of contract or for tort WORKMEN’S COMPENSATION ACT (WCA) Presumption of compensability Presumption of aggravation There is a need for the employer to controvert the claim within 14 days otherwise he is deemed to have waived the right Payment of compensation is made by the employer

EMPLOYEES COMPENSATION LAW (ECL) No presumption of compensability No presumption of aggravation No need for the employer to controvert the claim Payment of compensation is made by the SSS/GSIS through the State Insurance Fund. The employer’s obligation is to pay his counter contribution to the SSS

Injury – any harmful change in the human organism from any accident arising out of and in the course of employment Conditions for Injury to be Compensable 1. The employee must have been injured at the place where the work required him to be 2. The employee must have been performing his official functions 3. If the injury is sustained elsewhere, the employee must have been executing an order of the employer 4. The injury was not due to the employee’s intoxication, willful intention to injure or kill himself or another, or notorious negligence Injuries incurred by a health worker while Q( U uic kT im e™s ed) doing overtime TI FFwork shall nco bempr considered es ar e needed to s ee t and a work-connected dec om pr ess or his pi ct ur e. Sickness – any illness accepted as an occupational disease listed by the Commission or any illness caused by the employment subject to proof that the risk of contracting the same is increased by the working conditions

Conditions for Occupational Disease and Resulting Disability or Death to be Compensable 1. Employee’s work must involve the risk described therein 2. the disease was contracted as a result of the employee’s exposure to the described risks 3. the disease was contracted within the period of exposure and other such factors necessary to contract it 4. there was no notorious negligence on the part of the employee Death – loss of life resulting from injury or sickness Disability – loss or impairment of a physical or mental function resulting from injury or sickness Direct Premises Rule GR: The accident should have occurred at the place of work to be compensable. Exceptions: 1. INGRESS-EGRESS / PROXIMITY RULE – when the injury is sustained when the employee is proceeding to or from his work on the premises of the employer, the injury is compensable. 2. GOING TO OR COMING FROM WORK – when the injury is sustained when the employee is proceeding to or from his work on the premises of the employer, the injury is compensable. a. The act of the employee of going to, or coming from, the work place, must have been a continuing act, that is, he had not been diverted therefrom by any other activity and he had not departed from his usual route to, or from, his workplace; and b. An employee on a special errand must have been official and in connection with his work. c. EXTRA PREMISES RULE – the company which provides the means of transportation in going to, or coming from the place of work, is liable to the injury sustained by the employees while on board said means of transportation d. SPECIAL ERRAND RULE – injury sustained outside the company premises is compensable if his being out is covered by an office order or a locator slip or a pass for official business e. DUAL PURPOSE DOCTRINE – allows compensation where a special trip would have to be made for the employer if the employee had not combined the service for the employer with his going or coming trip Page 32 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 f. SPECIAL ENGAGEMENT RULE – covers field trips, outings, intramurals, and picnics when initiated and sanctioned by the employer g. POSITIONAL AND LOCAL RISKS DOCTRINE – if an employee by reason of his duties is exposed to a special or peculiar danger from the elements, that is, one greater than that to which other persons in the community are exposed and an unexpected injury occurs, the injury is compensable Compulsory Coverage – ECL applies to all employers, and to all employees, public or private including casual, emergency, temporary, or substitute employees An employee over 60 yrs of age and paying contributions to qualify for the retirement or life insurance benefit administered by the system shall be subject to compulsory coverage. Effective Date of Coverage – the employer is covered from the first day of operation and the employee from first day of employment Limits of Liability No compensation if the injury, death or disability is the result of the employee’s: 1. intoxication 2. willful intention to injure or kill himself or another 3. notorious negligence – deliberate act of the employee in disregard to his own personal safety 4. otherwise provided by the Labor Code Death through Suicide GR: not compensable Exceptions: 1. by agreement of the parties 2. if the suicide/death is caused by work-related or compensable illness or disease Rules on Simultaneous Recovery 1. Simultaneous recovery under the Labor Code Q( U uicbe kT im The e™saction and the Civil Code cannot made. TI FF nco mpr es ed) is aremployee e and needed to s ee t a selective and the may either choose to dec om pr ess or his either. pi ct ur e. once the election file the claim under But is made, the claimant cannot opt for the other remedy. 2. Simultaneous recovery under the Labor Code and the SSS can be made.

State Insurance Fund – all covered employers are required to remit to a common fund a monthly contribution equivalent to 1% of the monthly salary credit of every covered employee. The employee pays no contribution to the fund. Any agreement to contrary is prohibited Disability Categories 1. TEMPORARY TOTAL – if as a result of the injury or sickness, the employee is unable to perform any gainful occupation for a continuous period not exceeding 120 days 2. PERMANENT TOTAL – if as a result of the injury or sickness, the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days 3. PERMANENT PARTIAL - if as a result of the injury or sickness, the employee suffers a permanent partial loss of the use of any part of his body Death Benefits – The System shall pay to the primary beneficiaries upon the death of the covered employee an amount equal to his monthly income benefit, plus 10% thereof for each dependent child, but not exceeding 5, beginning with the youngest, and without substitution. The income benefit shall be guaranteed for 5 years. Dependent 1. Legitimate, legitimated, and 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 incapable of self-support due to a physical or mental defect which is congenital or acquired during minority 2. legitimate spouse living with the employee 3. parents of said employee wholly dependent upon him for regular support Benefits 1. for life to the primary beneficiaries, guaranteed for 5 years 2. for not more than 60 mos. to the secondary beneficiaries in case there are no primary beneficiaries 3. in no case shall the total benefit be less than P15,000. Beneficiaries A. PRIMARY 1. Dependent spouse until he/she remarries 2. Dependent children (legitimate, legitimated, natural born or legally adopted)

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 B. SECONDARY 1. Illegitimate children and legitimate descendants 2. Parents, grandparents, grandchildren

uicnco kT mpr im es e™s ed) TI FF Q( U ar e and needed to s ee t a dec om pr ess or his pi ct ur e.

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 LABOR RELATIONS I. RIGHT TO SELF ORGANIZATION A. CONCEPT & SCOPE Art. 243. Coverage and employees’ right to selforganization. Art. 246. Non-abridgment of right to selforganization. Employer – includes any person acting in the interest of an employer, directly or indirectly; the term shall not include any labor organization or any of its officers or agents except when acting as employer Employee – includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless the Code so explicitly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment. Any employee, 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 par.c) Right to Self-Organization The right includes: 1. Forming, joining, or assisting labor organizations for the purpose of collective bargaining through representatives of their own choosing. 2. To engage in lawful concerted activities for the purpose of collective bargaining or for their mutual aid and protection. Who Enjoys the Right to Self Organization General Rule: 1. ALL persons in: Commercial, industrial, agricultural, religious, charitable, medical and educational institutions, whether or not operated for profit. uicnco kT mpr im es e™s ed) TI FF Q( U ar e and needed to s ee t a dec bargaining, om pr ess or PURPOSE: Collective engaging in lawful hiscollective pi ct ur e. concerted activities for bargaining, and mutual aid and protection. 2. Ambulant, intermittent and itinerant and rural workers, the self-employed and those with no definite employers may form labor organizations.

PURPOSE: Mutual aid and protection. It shall be unlawful for any person to restrain, coerce, discriminate against, or unduly interfere with employees and workers in their exercise of the right to self organization. B. LABOR ORGANIZATIONS 1. Definition and Types Labor Organization – means any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of` dealing with employers concerning terms and conditions of employment Legitimate Labor Organization – means any labor organization duly registered with the DOLE, and includes any branch or local thereof Affiliate – refers to an independent union affiliated with a federation or national union or a chartered local which was subsequently granted independent registration but did not disaffiliate from its federation, reported to the Regional Office and the Bureau in accordance with Rule III, Sections 6 and 7 of these Rules. Chartered Local – refers to a labor organization that acquired legal personality through the issuance of a charter certificate by a duly registered federation or national union, and reported to the Regional Office in accordance with Rule III, Section 2-E of the Rules. Consolidation – refers to the creation or formation of a new union arising from the unification of two or more unions Independent Union – refers to a labor organization operating at the enterprise level that acquired legal personality through independent registration Legitimate Workers’ Association – refers to an association of workers organized for mutual aid and protection of its members or for any legitimate purpose other than collective bargaining registered with the Department Merger – refers to a process where a labor organization absorbs another National Union or Federation – refers to a group of legitimate labor unions in a private establishment organized for collective bargaining or for dealing with employers concerning terms and conditions of Page 35 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 employment for their member unions or for participating in the formulation of social and employment policies and standards and programs, registered with the Bureau Union – refers to any labor organization in the private sector organized for collective bargaining and for other legitimate purposes Workers’ Association – refers to an association of workers organized for the mutual aid and protection of its members for any legitimate purpose other than collective bargaining. 2. Registration of labor organizations Art. 231. Registry of unions and file of collective bargaining agreements. Art. 234. Requirements of registration. Art. 235. Action on application. Art. 236. Denial of registration; appeal. Art. 237. Additional requirements for federations or national unions. Art. 238. Cancellation of registration; appeal. Art. 239. Grounds for cancellation of union registration. Art. 240. Equity of the incumbent. Requirements for Registration (ANNEX A) Requirements in Case Of Merger/Consolidation (ANNEX B) Procedure for Registration of Labor Organization (ANNEX C) 3. Cancellation of registration Grounds for Cancellation of Union Registration 1. Misrepresentation, False Statement or Fraud in connection with: a. adoption/ratification of the CBL or amendments thereto, minutes of ratification and the list of members who took part in the ratification b. election of officers, minutes thereof, list of uicnco kT mpr im es e™s ed) officers/voters TI FF Q( U ar e and needed to reports s ee t a c. in the preparation of the financial dec om pr ess or his pi ct ur e. 2. Failure to Submit: a. CBL, minutes of its adoption/ratification, list of members who took part within 30 days from adoption of ratification or amendments thereto

b. Minutes of the elections of officers, list of officers/voters within 30 days from election c. Annual financial report to the BLR within 30 days after the closing of every fiscal year d. List of individual members to the BLR once a year or whenever required by the BLR 3. Acting as labor contractor or engaging in the 'Cabo System' or otherwise engaging in any activity prohibited by law 4. Entering into CBAs with terms and conditions of employment below minimum standards established by law 5. Asking for or accepting attorney's fees or negotiation fees from employer 6. Checking off special assessments or any other fees without duly signed individual written authorizations of the members (other than for mandatory activities under the Labor Code) Procedure for Cancellation of Registration (ANNEX D) Procedure for Cancellation of Registration Due to Non-Compliance with Reportorial Requirements (ANNEX E) 4. Rights of Labor Organization Art. 242. Rights of legitimate labor organizations. Art. 277. Miscellaneous provisions. (a) All unions are authorized to collect reasonable membership fees, union dues, assessments and fines and other contributions for labor education and research, mutual death and hospitalization benefits, welfare fund, strike fund and credit and cooperative undertakings. Rights of Labor Organizations 1. To act as the representative of its members for the purpose of collective bargaining; 2. To be certified as the exclusive representative for purposes of collective bargaining; 3. To be furnished by the employer, with its annual audited financial statements, including the balance sheet and the profit and loss statement. 4. To own property, real or personal, for the use and benefit of the labor organization and its members; 5. To sue and be sued in its registered name; 6. To undertake all other activities designed to benefit the organization and its members, including cooperative, housing, welfare and other projects not contrary to law. The income and properties received by legitimate labor organization which are actually, directly and Page 36 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 exclusively used for their lawful purposes shall be free from taxes, duties and other assessments. Right to Represent its Members When a union files a case “for and in behalf of its members,” a member of that union will not be permitted to file in the same case a complaint-inintervention. Intervention will be allowed only if there is suggestion of fraud or collusion or that the representative will not act in good faith for the protection of all interest represented by the union. Compromise agreement between the union and the company is binding upon the minority members of the union. [Dionela v. Court of Industrial Relations, 8 SCRA 832 (1963)] Compromise of Money Claims Money claims due to laborers cannot be the object of settlement or compromise effected by a union or counsel without the specific individual consent of each laborer concerned. The beneficiaries are the individual complainants themselves. The union can only assist them but cannot decide for them. [Kaisahan ng mga Manggagawa sa La Campana v. Sarmiento 133 SCRA 220 (1984)] When the Union has the Right to be Furnished with Financial Statements 1. After the union has been recognized by the employer as sole bargaining representative of the employees in the bargaining unit. 2. After the union is certified by DOLE as such sole bargaining representative. 3. Written request from the union 4. Within the last 60 days of the life of a CBA 5. During the collective bargaining negotiation Right to Collect Fees Right to collect fees is recognized in Art. 277(a) and discussed under the topic of check-off under Art. 241 (Rights and conditions of membership in a labor organization) C. SPECIAL GROUPS OF EMPLOYEES uicnco kT mpr im es e™s ed) 1. Managerial & Supervisory Employees TI FF Q( U ar e needed to s eeare t and a Under Art. 245, employees dec managerial om pr ess or pi assist ct ur e. not eligible tohis join, or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own.

Manager – one who is vested with the power or prerogative to lay down an execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees Note that the management policies must pertain exclusively to labor relations. Supervisor – one, who, in the interest of the employer, effectively recommends managerial actions Power to recommend Must be both 1. Effective, and 2. Requires the Use of Independent Judgment. 2. Confidential Employees Confidential employees are also prohibited from forming, joining or assisting any labor organization. Confidential Employees – a confidential employee is one who is entrusted with confidence on delicate matters, or with custody, handling, or care and protection of the employer’s property. (National Association of Trade Unions (NATU) – Republic Planters Bank Supervisors Chapter v. Honorable Ruben Torres, 1994) Confidential employees assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations [Philips Industrial Development v. NLRC; G.R. No. 88957 (June 25, 1992)] NOTE: Confidential employees may be managerial, supervisory or even a rank and file employee. Purpose of Disqualification of Confidential Employees Doctrine of Necessary Implication – what is implied in s statute is as much part thereof as that which is expressed Under Art. 245, confidential employees are not prohibited from joining, assisting, or forming any labor organization. But by virtue of necessary implication, confidential employees are similarly disqualified. By the very nature of their functions, they assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. As such, the rationale behind the ineligibility of managerial employees to form, Page 37 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 assist or join a labor union equally applies to them. (Metrolab Industries, Inc. v. RoldanConfesor ,1996) Access to Confidential Labor Relations Information The information must be related labor relations matters. When the employee does not have access to confidential labor relations information, then the prohibition to form, join, or assist a union does not apply. (Sugbuanon Rural Bank v. Laguesma,2000) If the access is merely incidental to his duties and not necessary in the performance of such duties, the access does not render the employee a confidential employee (San Miguel Corp. Supervisors & Exempt Union, et. al. v. Laguesma 1997) 3. Security Guards Under RA 6715, they may now join a abor organization of the rank and file or that of the supervisory union, depending on their rank. (Manila Electric Co. v. Secretary of Labor and Employment, GR No. 91902, 20 May 1991) 4. Members of Cooperatives Benguet Electric Cooperative v. Ferrer-Calleja, 180 SCRA 740 (1989) Issue: Whether employees of a cooperatove are qualified to form or join a labor organization for purposes of collective bargaining. Held: The right to collective bargaining is not available to an employee of a cooperative who at the same time is a member and co-owner thereof. With respect, however, to employees who are neither members nor co-owners of the cooperative they are entitled to exercise the rights to self-organization, collective bargaining and negotiation. The fact that the member-employees of petitioner (cooperative) do not participate in the actual management of the cooperative does not make them uic kT mpr im es e™s ed) eligible to form, assist or Q join a nco labor organization TI FF ( U ar e needed to s ee t and a purposes of collective They cannot dec bargaining. om pr ess or his pi ctbargaining ur e. invoke the right to collective for “certainly an owner cannot bargain with himself or his coowners.” It is the fact of ownership of the cooperative, and not involvement in the management thereof, which disqualifies a member from joining any labor organization within the cooperative.

5. Members of Iglesia ni Kristo Victoriano v. Elizalde Rope Workers’ Union, 59 SCRA 54 (1974) What the Constitution and the Industrial Peace Act recognize and guarantee is the “right” to form or join associations. Nothwithstanding the different theories propounded by the different schools of jurisprudence regarding the nature and contents of a “right,” it can be safely said that whatever theory one subscribes to, a right comprehends at least 2 broad notions, namely: first, liberty or freedom, i.e. the absence of legal restraint, whereby an employee may act for himself without being prevented by law; and second, power whereby an employee may, as he pleases, join or refrain from joining an association. It is therefore, the employee who should decide for himself whether he should join or not in an association. It is clear, therefore, that the right to join a union includes the right to abstain from joining any union. The legal protection granted to such right to refrain from joining is withdrawn by operation of law, where a labor union and an employer have agreed on a closed shop. What the exception provides is that members of said religious sects cannot be compelled or coerced to join labor unions even when said unions have close shop agreements with the employers; that in spite of any closed shop agreement, members of said religious sects cannot be refused employment or dismissed from their jobs on the sole ground that they are not members of the collective bargaining union. It is clear therefore, that the assailed Act, far from infringing the constitutional provision on freedom of association, upholds and reinforces it. It does not prohibit the members of said religious sects from affiliating with labor unions. If, notwithstanding their religious beliefs, the members of said religious sects prefer to sign up with the labor union, they can do so; the law does not coerce them to join; neither does the law prohibit them from joining; and neither may the employer or labor union compel them to join. Kapatiran sa Meat and Canning Division v. FerrerCalleja, 162 SCRA 367 (1988) This Court’s decision in Victoriano v. Elizalde Rope Workers’ Union upholding the right of members of the Iglesia no Kristo sect not to join a labor union for being contrary to their religious beliefs, does not bar the members of that sect from forming their own union. The public respondent correctly observed that the “recognition of the tenets of that sect xxx should not infringe on the basic right of self-organization granted by the constitution to workers, regardless of Page 38 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 religious affiliation. 6. Government Employees Art. 244. Right of employees in the public service. Art. 276. Government employees. Association of Court of Appeals Employees v. Ferrer-Calleja, 203 SCRA 596 (1991) The terms and conditions of employment in the government service are governed by law. Any understanding between the top officials of a government agency and the union which represent the rank-and-file is subordinate to the law governing the particular issue or situation. Davao City Water District v. Civil Service Commission, 201 SCRA 593 (1991) By government owned or controlled corporation with original charter, we mean government owned or controlled corporation created by a special law and not under the Corporation Code of the Philippines. It is clear that what has been excluded from the coverage of the CSC are those corporations created pursuant to the Corporation Code. Government Employees Not Allowed To Unionize 1. Members of the Armed Forces 2. Police Officers/Policemen 3. Firemen 4. Jail Guards High level employees are also not allowed to join the organization of rank and file government employees. o High level employees- one whose functions are normally considered policy determining, managerial or one whose duties are highly confidential in nature. 7. Employees of International Organizations International Catholic Migration Commission v. Calleja, 190 SCRA 130 (1989) Labor organizations in the International Catholic Migration Commission (ICMC) and International Rice Research Institute (IRRI),Qboth international uicnco kT mpr im es e™s ed) FF ( U organizations, filedTIaarpetition for certification e and needed to s eeelection. t a dec om pr ess or ICMC and IRRI claimed his immunity. pi ct ur e. Held: The grant of immunity from local jurisdiction to ICMC and IRRI is clearly necessitated by their international character and respective purposes. The objective is to avoid the danger and partiality and

interference by the host country in their internal workings. The exercise of jurisdiction by the DOLE in these instances would defeat the very purpose of immunity, which is to shield the affairs of international organizations, in accordance with international practice, from political pressure or control by the host country to the prejudice of member states of the organization, and to ensure the unhampered performance of their functions. The immunity granted being “from every form of legal process except in so far as in any particular case they have expressly waived in their immunity,” it is inaccurate to state that a certification election is beyond the scope of that immunity for the reason that it is not a suit against ICMC. A certification election cannot be viewed as independent or isolated process. It could trigger off a series of events in the collective bargaining process together with related incidents and/or concerted activities, which could inevitably involve ICMC in the “legal process,” which includes “any penal, civil and administrative proceedings.” D. ACQUISITION AND RETENTION OF MEMBERSHIP; UNION SECURITY AGREEMENTS Art. 277. Miscellaneous provisions. (c) Any employee, 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. 248. Unfair labor practices of employers. –(e) Discrimination. What the law prohibits is discrimination to encourage or discourage membership in a labor organization. Where the purpose is to influence the union activity of employees, the discrimination is unlawful. However, the inclusion of union security clause in the CBA is not considered ULP. Union Security Clause – generic term which comprehends “closed shop,” “union shop,” or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition of employment. Kinds of Union Security Agreements 1. CLOSED-SHOP – only union members can be hired and they must remain as union members to retain employment. 2. UNION SHOP – Nonmembers may be hired, but must become union members after a certain period to retain employment. 3. MODIFIED UNION SHOP – Employees who are Page 39 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 not union members at the time of the signing the contract is not required to join the union, but all workers hired after is required to join. 4. MAINTENANCE OF MEMBERSHIP SHOP – Employees are not compelled to join the union, but all present or future members must remain in good standing in the union. 5. EXCLUSIVE BARGAINING SHOP – Union is recognized as the exclusive bargaining agent for all employees in the bargaining unit, whether union members or not. 6. BARGAINING FOR MEMBERS ONLY – Union is recognized as the bargaining agent only for its own members. 7. AGENCY SHOP – an agreement whereby employees must either join the union or pay to the union as exclusive bargaining agent a sum equal to that paid by the members. These union security agreements are opposite of OPEN SHOP. Open shop does not require union membership as a condition of employment. Liberty Flour Mills Employees v. Liberty Flour Mills, Inc., GR Nos. 58768-70, 29 December 1989 Union and Company executed a CBA which contained a union shop clause Over a year after the execution of the CBA, 2 employees were dismissed after they formed their own union. Held: It is the policy of the State to promote unionism to enable the workers to negotiate with management on the same level and with more persuasiveness than if they were to individually and independently bargain for the improvement of their respective conditions. To this end, the Constitution guarantees to them the rights "to self-organization, collective bargaining and negotiations and peaceful concerted actions including the right to strike in accordance with law." There is no question that these purposes could be thwarted if every worker were to choose to go his own separate way instead of joining his co-employees in planning collective action and presenting a united front when they sit down to bargain with their employers. It is for this reason that the law has sanctioned stipulations Q(closed uicnco kT im as e™ for the union shop TI andFF the shop a smeans U mpr es ed) ar e needed to s ee tthe and a of encouraging thedec workers joinor and support om prtoess his choice pi ct uras e.their representative labor union of their own in the negotiation of their demands and the protection of their interest vis-a-vis the employer. A closed shop provision is a valid for of union security, and such a provision in a collective bargaining agreement is not a restriction of the

right of freedom of association guaranteed by the constitution. (Manila Mandarin Employees Union v. NLRC, GR No. 76989, 29 September 1987) E. MEMBERSHIP; RIGHTS OF MEMBERS Art. 241. Rights and conditions of membership in a labor organization. Art. 274. Visitorial power. Art. 222. Appearances and Fees. Rights of Union Members 1. POLITICAL RIGHT a. right to vote b. right to be voted for 2. DELIBERATIVE AND DECISION-MAKING RIGHT a. right to participate in deliberations on major policy questions b. decide on major policy questions by secret ballot 3. RIGHTS OVER MONEY MATTERS a. right against excessive fees b. right against unauthorized collection c. right against unauthorized disbursements d. right to require adequate records of income and expenses. e. right to access financial records f. right to vote on officers’ compensation g. right to vote on proposed special assessments h. right to deduction of special assessments only with written authorization from member. 4. RIGHT TO INFORMATION a. right to be informed about the organization’s constitution and by-laws and the collective bargaining agreement and about labor laws. Other Rights & Conditions under Art. 241 1. Labor organizations cannot knowingly admit or continue in membership any individual who belongs to a subversive organization or engaged directly or indirectly in any subversive activity. 2. A member who has been convicted of a crime involving moral turpitude is ineligible for election or appointment in the union. 3. Every payment of fees, dues or other contributions by a member shall be evidenced by a receipt signed by the officer and entered into the record of the organization. 4. Every income shall be evidenced by a record showing its source. And every expenditure shall be evidenced by a receipt from the person who Page 40 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 was paid. The receipt shall state the date, place and purpose of such payment. Eligibility for Membership Eligibility for membership depends upon the union’s constitution and by laws. However, under Art. 277, an employee is already qualified for union membership starting on his first day of service. Election of Union Officers Officers shall be elected directly by members in secret ballot voting. Election shall take place every 5 years. The only qualification requirement for candidacy shall be membership in good standing in labor organization. o Membership in good standing – any person who has fulfilled the requirements for membership in the union and who has neither voluntarily withdrawn from membership nor has been expelled or suspended from membership. The secretary or any other responsible union officer shall give the Secretary with a list of the newly-elected officers, and appointed officers or agents who are entrusted with the handling of funds within 30 days after the election Procedure of elections o GR: in accordance with the union’s constitution and by-laws or agreement among the members. o If the constitution, by laws are silent or if there is no agreement, then Rule 12 of the Implementing rules will apply Elections under Rule 12 of the Implementing Rules (ANNEX F) Eligibility of Voters Only members of the union can take part in the election of union officers. Tancinco v. Pura Ferrer-Calleja GR. No. 78131 (1988) The question of eligibility to vote may be determined through the use of the applicable payroll Q( U uic kT mpr im es e™s ed) period and employee’s during the applicable TI FFstatus nco ar e needed to s ee t and a period. dec om pr ess or hisemployees’ pi ct ur e. name with the Submission of the BLR as qualified members of the union is not a condition sine qua non to enable said members to vote in the election of the union officers. Disqualification of Union Officers 1. Convicted of a crime involving moral turpitude.

2. Individual who belongs to a subversive organization or engaged directly or indirectly in any subversive activity. - one cannot even be a member of the organization Union Election Protest – complaints or protests regarding election of union officers is treated as an intra/inter-union dispute Check-Offs & Assessments Check-Off – a method of deducting from an employee’s pay at prescribed period, the amounts due the union for fees, fines or assessments. Deductions for union service fee are authorized by law and do not require individual check-off authorizations. Agency Fee – amount equivalent to union dues, which a nonunion member pays to the union because he benefits from the CBA negotiated by the union Requisites for a Valid Special Assessments 1. Authorization by a written resolution of the majority of all the members at the general membership meeting duly called for that purpose. 2. Secretary’s record of the minutes of the meeting. o must include list of members present, votes cats, purpose of the special assessments and the recipient of such assessments. 3. Individual written authorization for check-off duly signed by the employee concerned – to levy such assessments Palacol v. Ferrer-Calleja, 182 SCRA 710 (1990) The union president submitted the authorization for the company to deduct union dues and 10% by way of special assessments. Subsequently, members of the union submitted documents stating that they were withdrawing their authorization such that in the end, there ere 528 objectors and only 272 supporters. Petitioners question the special assessments. Held: The failure of the union to comply strictly with the requirements set out by the law invalidates the questioned special assessments. Substantial compliance is not enough in view of the fact that the special assessment will diminish the compensation of the union members. Under Art. 241, (n), the Union must submit to the company a written resolution of a majority of all the members at a general membership meeting called for Page 41 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 the purpose. In addition, the secretary of the organization must record the minutes of the meeting which in turn, must include, among others, the list of all the members present as well as the votes cast. The law would not have specified a general membership meeting had the legislative intent been to allow local meetings in lieu of the latter. There can be no valid check-off considering that the majority of the union members had already withdrawn their individual authorization. Violation of Rights of Members GR: Complaint for violation of rights must be reported by at least 30% of the union members. Exception: when the violation directly affects only one or two members, then only one or two members can report such violation. Consequence of Violation of Rights 1. Cancellation of the union registration 2. Expulsion of the cULPable officers. Remedies for Violation of Rights Litton Mills Employees Association-Kapatiran v. Ferrer-Calleja, GR No. L-78061 (1988) Despite the practical difficulties in complying with the said procedure, petitioners should have shown substantial compliance with said impeachment procedure, by giving the union officer ample opportunity to defend himself, as contrasted to an outright impeachment, right after he failed to appear before the first and only investigation scheduled. Diamonon v. Dept. of Labor, et. al. GR. No. 108951, 07 March 2000 When the Constitution and by-laws of both unions dictated the remedy for intra-union dispute, this should be resorted to not only to give the grievance machinery or appeals’ body of the union the opportunity to decide the matter by itself, but also to prevent unnecessary and premature resort to administrative or judicial bodies. The underlying principle of the rule on exhaustion of administrative remedies rests on the presumption that when the administrative body, or grievance uicnco kT mpr im es e™s ed) TI case, FF Q(isU machinery, as in this afforded ar e and needed toa chance s ee t to a dec itom ess orthe same pass upon the matter, willprdecide his pi ct ur e. correctly. Visitorial Power The Secretary or his duly authorized representative can inquire into the financial activities of any labor organization on the basis of a complaint under oath, supported by 20% of the

membership. II. UNFAIR LABOR PRACTICES Art. 247. Concept of unfair labor practice and procedure for prosecution thereof. Concept of Unfair Labor Practices The aim of labor relations policy is industrial democracy whose realization is most felt in a free collective bargaining or negotiation over terms and conditions of employment. Because self – organization is a prerequisite of industrial democracy, the right to self – organize has been enshrined in the Constitution, and any attack to it – any attack to it – any act intended to defeat or debilitate the right – is regarded by law as an offense. The victim of the offense is not just the workers as a body and the well – meaning employees who value peace, but the State as well. Thus, the attack to this constitutional right is considered a crime which carries both civil and criminal liabilities. Elements of Unfair Labor Practice 1. EER between the offender and the offended. ULP is negation of a counteraction to the right to organize which is available only to employees in relation to their employer. No organizational right can be negated or assailed if the employer – employee relationship is absent in the first place. 2. The act done is expressly defined in the Code as an act of unfair labor practice. Art. 212(k) defines unfair labor practice as any unfair labor practice as defined by this Code. The prohibited acts are all related to the workers’ self – organizational right and to the observance of a collective bargaining agreement. Because ULP is and has to be related to the right to self organization and to the observance of the CBA, it follows that not every unfair act is unfair labor practice. ULP therefore, refers only to acts opposed to workers’ right to organize. When committed by the employer, it commonly connotes anti – unionism. Aspects of Unfair Labor Practice 1. Civil Aspect 2. Criminal Aspect

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Civil aspect may include liability for damages and may be passed upon by the labor arbiter. Prosecution of ULP as a criminal offense can be initiated only after the finality of judgment in the labor. But judgment in the labor case will not serve as evidence of ULP in the criminal case. Jurisdiction of Criminal Charge of ULP The criminal charge fall under the concurrent jurisdiction of the MTC or the RTC. Only substantial evidence is required in the labor case while proof beyond reasonable doubt is need in the criminal prosecution. Recovery of civil liability in the administrative proceedings shall bar recovery under the Civil Code. Who are Liable when ULP is Committed by Other than a Natural Person The penalty shall be imposed upon the guilty officers of a corporation, partnership, association or entity (Art. 289). If the ULP is committed by a labor organization, the parties liable are the officers, members of governing boards, representatives or agents or members of labor associations or organizations who have actually participated in, authorized or ratified such (Art. 249). Prescription of actions for ULP The offense prescribes in 1 year (Art. 290). Art. 248. Unfair labor practices of employers. Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. Conditions precedent to the ULP charge 1. The injured party is within the definition of “employee.” 2. The act charged as ULP must fall under the prohibitions of Art. 248 (acts of the employer) or 249 (acts of the union). The Hongkong and Shanghai Banking Corp. Employees Union ns. NLRC, GR No. 125038, 06 November 1997 uicnco kT mpr e™s ed)of The Code enumerates acts orim categories TI FF Q(the U es ar e needed to s ee t not and a acts considered asdec ULP. The does om pr enumeration ess or pi ct e. incidents. The mean an exhaustivehis listing of ur ULP Labor Code does not undertake the impossible task of specifying in precise and unmistakable language each incident which constitutes an unfair labor practice. Rather, it leaves to the court the work of applying the law’s general prohibitory language in the

light of indefinite combinations of events which may be charged as violative of its terms. When There is no ULP: Instance of Valid Exercise of Management Rights The law on unfair labor practices is not intended to deprive the employer of his fundamental right to prescribe and enforce such rules as he honestly believes to be necessary to the proper, productive and profitable operation of his business. The only condition imposed upon this control is that it must not be exercised so as to effect a violation of the Act and its several prohibitions. Where, however, an employer does violate the Act and is found guilty of the commission of an unfair labor practice, it is no excuse that his conduct was unintentional and innocent. Rubberworld Phils., Inc., et al. v. NLRC, GR No. 75704, 19 July 1989 As a rule, it is the prerogative of the company to promote, transfer or even demote its employees to other positions when the interests of the company reasonably demand it. Unless there are instances which directly point to interference by the company with the employees right’s to self – organization, the transfer of an employee should be considered within the bounds allowed by law, e.g. where despite his transfer to a lower position, his original rank and salary remained undiminished. Enriquez v. Zamora, GR No. 51382, 29 December 1986 Acceptance of a voluntary resignation is not ULP. In a Philippine Airlines case the courts said that the pilot’s protest retirement/resignation was not a concerted activity which was protected by law. They did not assume the status of strikers. They cannot, therefore, validly claim that the company committed unfair labor practice. When the pilots voluntarily terminated their employment relationship with the company, they cannot claim that they were dismissed Wise and Co., Inc. v. Wise & Co., Employees Union, GR No. 87672, 13 October 1989 There can be no discrimination committed by the employer as the situation of the union employees is different from that of the nonunion employees. Discrimination per se is not unlawful. There can be no discrimination where the employees concerned are not similarly situated. The grant by the employer of profit – sharing benefits to the employees outside the bargaining unit falls under the ambit of its managerial prerogative. It appears to have been done in good faith and without Page 43 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 ulterior motive. More so when as in this case there is a clause in the CBA where the employees are classified into those who are members of the union and those who are not. In the case of the union members, they derive their benefits from the terms and conditions of the CBA which constitutes the law between the contracting parties. Both the employer and the union members are bound by such agreement Philippine Graphic Arts, Inc. v. NLRC, et al., GR No. L-80737, 29 September 1988 Where the vacation leave without pay, which the employer requires employees to take in view of the economic crisis, is neither malicious, oppressive nor vindictive, ULP is not committed NLU v. Insular La Yebana Co., 2 SCRA 924 (1961) Except as limited by special laws, an employer is free to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, tools to be used, process to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay – off workers and the discipline, dismissal and recall of work. LVN Picture Workers v. LVN, 35 SCRA 147 (1970) So long as a company’s management prerogatives are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, the Court will uphold them Determination of validity Necessarily, determining the validity of an employer’s acts involve an appraisal of his motives. Thus, there must be a measure of reliance on the administrative agency. It is for the CIR [NLRC now], in the first instance, to weigh the employer’s expressed motive in determining the effect on the employees of management’s otherwise equivocal act. [Republic Savings Bank v. CIR, 21 SCRA 226 (1967)] AHS/Philippines Employees v. NLRC, GR Q( U uicUnion kT mpr im e™s ed) TI FF nco es No. 73721, 30 March 1987 ar e and needed to s ee t a dectreat om pr ess with or an employee An employer may freely his pi ct ur e. and is not obliged to support his actions with reason or purpose. However, where the attendant circumstances, the history of the employer’s past conduct and like considerations, coupled with an intimate connection between the employer’s actions and the union affiliations or activities of the particular employee or employees taken as a whole raise a

suspicion as to the motivation for the employer’s action, the failure of the employer to ascribe a valid reason therefore may justify an interference that his unexplained conduct in respect of the particular employee or employees was inspired by the latter’s union membership or activities. Unfair Labor Practice of Employers 1. interference 2. yellow dog condition 3. contracting out 4. company unionism 5. discrimination for or against union membership 6. discrimination because of testimony 7. violation of duty to bargain 8. paid negotiation 9. violation of CBA First ULP: Interference (Art. 248 (A)) Interference with employee organizational rights were found where the superintendent of the employer threatened the employees with cutting their pay, increasing rent of the company houses, or closing the plant if they supported the union and where the employer encouraged the employees to sign a petition repudiating the union ULP Even Before Union is Registered Judric Canning Corporation v. Inciong, GR No. L51494, 19 August 1982 Under Art. 248 (a) of the Labor Code of the Philippines, “to interfere with, restrain, or coerce employees in their exercise of their right to self – organization” is an unfair labor practice on the part of the employer. Paragraph (d) of said Article also considers it an unfair labor practice for an employers “to initiate, dominate, assist or otherwise interfere the formation or administration of any labor organization, including the giving of financial “or other support to it.” In this particular case, the private respondents were dismissed, or their services were terminated, because they were soliciting signatures in order to form a union within the plant. Samahan ng mga manggagawa sa Bandolino – LMLC et. al. v. NLRC Bandolino Shoe Corp., et. al., GR No. 125195, 17 July 1997 In short, an employer who interfered with the right to self – organization before the union is registered can be held guilty of ULP. Prohibiting organizing activities However, in the absence of showing that the illegal dismissal was dictated by anti – union motives, the same does not constitute an unfair labor practice Page 44 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 as would be a valid ground for strike. The remedy is an action for reinstatement with backwages and damages. (AHS/Philippine Employees Union v. NLRC, G.R. No. 87321, 31 March 1987) Examples of unlawful acts to discourage membership in a labor organization: 1. dismissal of union members upon their refusal to give up their membership, under the pretext of retrenchment due to reduced dollar allocations (Manila Pencil Co. v. CIR, 14 SCRA 953) 2. refusal over a period of years to give salary adjustments according to the improved salary scales in the collective bargaining agreements (Benguet Consolidated v. BCI Employees and Workers Union, 22 SCRA 129) 3. dismissal of an old employee allegedly for inefficiency, on account of her having joined a union and engaging in union activities (East Asiatic Co. v. CIR, 16 SCRA 820). 4. Dismissal of teachers for fear by the school that there would be strike the following semester (Rizal Memorial Colleges Faculty Union, et. al. v. NLRC GR. Nos. 59012-13, 12 October 1989) 5. A company’s capital reduction efforts, to camouflage the fact that it has been making profits to justify the mass lay-off of its employees especially union members. (Madrigal & Company, Inc. v. Zamora, Gr. No. L-4823, 30 June 1987) CLLG E.G. Gochangco Workers Union v. NLRC, GR No. L-67158, 30 May 1988 We have held that unfair labor practice cases are not, in view of the public interest involved, subject to comprise. Totality of Conduct Doctrine The culpability of employer’s remarks is to be evaluated on the basis of their implication, against the background of and in conjunction with collateral circumstances. Under this doctrine, an expression which might be permissibly uttered by one employer, might be deemed improper when spoken by a more hostile employer, and consequently actionable as an unfair labor practice. uicnco kT mpr im es e™s ed) TI FF Q( U This doctrine, expressions of opinion ar e and needed to by s an ee t a decinnocent om pr ess or employer, though in themselves, his pi ct ur e. frequently were held to be culpable because of the circumstances under which they were uttered, the history of the particular employer’s labor relations or anti – union bias or because of their connection with an established collateral plan of coercion or interference.

Lockout or Closure Amounting to ULP A lockout, actual or threatened, as a means of dissuading the employees from exercising their rights under the Act is clearly an unfair labor practice. However, to hold an employer who actually or who threatens to lock out his employees guilty of a violation of this Act, the evidence must establish that the purpose thereof was to interfere with the employee’s exercise of their rights. Sale in Bad Faith The sale of a business enterprise to avoid the legal consequences of an unfair labor practice is necessarily attended with bad faith and both the vendor and the vendee continue to be liable to the affected workers. (Cruz v. PAFLU, G.R. No. L-26519, 29 October 1971) Where the sale of a business enterprise was attended with bad faith, there is no need to consider the applicability of the rule that labor contracts being in personam are not enforceable against the transferee. The latter is in the position of tort – feasor, having been a party likewise responsible for the damage inflicted on the members of the aggrieved union and therefore cannot justly escape liability. (Cruz v. PAFLU, G.R. No. L-26519, 29 October 1971) Doctrine of Successor-Employer A new company will be treated as a continuation or successor of the one that closed in the new or take-over company is engaging in the same business as the closed company or department, or is owned by the same people, and the "closure" is calculated to defeat the worker's organizational right in which case the closure may be declared a subterfuge. The successor-employer doctrine is just an enforcement of the piercing the veil of corporate entity. Factors to Determine Continuity: 1. Retention of CONTROL 2. Use of the SAME PLANT OR FACTORY 3. Use of the SAME OR SUBSTANTIALLY THE SAME EMPLOYEES, workers, supervis ors or managers 4. Similar or substantially the same work or production under SIMILAR OR SUBSTANTIALLY THE SAME WORKING CONDITIONS 5. Use of the SAME MACHINERY AND EQUIPMENT 6. Manufacture of the SAME PRODUCTS or the performance of the same services

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Second ULP: Yellow Dog (Art. 248 (B)) Yellow Dog Contract – a promise exacted from workers as a condition of employment that they are not to belong to, or attempt to foster, a union during their period of employment 3 Usual Provisions under the Yellow Dog Contract 1. a representation by the employee that he is not a member of a labor union 2. a promise by the employee not to join a labor union 3. a promise by the employee that, upon joining a labor union, he will quit his employment Third ULP: Contracting Out [Art. 248 (c)] Contracting Out as ULP Contracting out services or functions being performed by union members when such act will interfere with, restrain, or coerce employees in the exercise of their right to self – organize. However, an employer is not guilty of an unfair labor practice in contracting work out for business reasons such as decline in business, the inadequacy of his equipment, or the need to reduce the cost, even if the employer’s estimate of his cost is based on a projected increase attributable to unionization. Runaway shop An industrial plant moved by its owners from one location to another to escape union labor regulations or state laws or to discriminate against employees at the old plant because of their union activities. Resorting to runaway shop is ULP. Where a plant removal is for business reasons but the relocation is hastened by anti – union motivation, the early removal is unfair labor practice. It is immaterial that the relocation is accompanied by a transfer of title to a new employer who is an alter ego of the original employer. Mere ownership by a single stockholder or by another corporation of all or nearly all of the uicnco kT imofes e™ capital stock ofTIa corporation is mpr not itself FF Q( U s ed) ar e needed to s ee t and a sufficient ground disregarding decforom pr ess or the separate his pi[Sunio ct ur e. corporate personality. v. NLRC, 127 SCRA 390 (1984)] Fourth ULP: Company Domination Of Union (Art. 248 (D)) Manifestations of Domination of a Labor Union

1. Initiation of the company union idea. This may further occur in three styles: a. outright formation by the employer or his representatives b. employee formation on outright demand or influence by employer c. managerially motivated formation by employees 2. Financial support to the union. By defraying the union expenses or pays the attorney’s fees to the attorney who drafted the constitution and by – laws of the union. 3. Employer encouragement and assistance. Immediately granting the union exclusive recognition as a bargaining agent without determining whether the union represents the majority of employees. 4. Supervisory assistance. This takes the form of soliciting membership, permitting union activities during working time or coercing employees to loin the union by threats of dismissal or demotion (Philippine American Cigar & Cigarette Factory Workers Union v. Philippine American Cigar & Cigarette Mfg. Co., Inc., 7 SCRA 375). Oceanic Air Products, Inc. v. CIR, GR No. L18704, 31 January 1963 A labor union is company – dominated where it appears that key officials of the company have been forcing employees belonging to rival labor union to join the former under pain of dismissal should they refuse to do so; that key officials of the company, as well as its legal counsel, have attended the election of officers of the former union; that officers and members of the rival union were dismissed allegedly pursuant to a retrenchment policy of the company, after they had presented demands for the improvement of the working conditions despite its alleged retrenchment policy; and that, after dismissal of the aforesaid officers of the rival labor union, the company engages the services of new laborers Fifth ULP: Discrimination (Art. 248 (E)) Pagkakaisang Itinataguyod ng mga Manggagawa sa Ang Tibay, et. al. v. Ang Tibay, et. al., GR No. L-22273, 16 May 1967 Under the Industrial Peace Act (as under the present Labor Code), to constitute an unfair labor practice, the discrimination committed by the Page 46 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 employer must be in regard to the hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization. The exaction by the Company, from strikers returning to work, of a promise not to destroy company property and no to commit acts of reprisal against the Union members who did not participate in the strike, cannot be considered as intended to encourage or discourage Union membership. Taking the circumstances surrounding the prescribing of that condition, the requirement by the Company is actually an act of self – preservation and designed to inure the maintenance of peace and order in the Company premises Discrimination in Bonus Allocation or Salary Adjustments There is unfair and unjust discrimination in the granting of salary adjustments where the evidence shows that (a) the management paid the employees of the unionized branch; (b) where salary adjustments were granted to employees of one of its non - unionized branches although it was losing in its operations; and (c) the total salary adjustments given every ten of its unionized employees would not even equal the salary adjustments given one employee in the non – unionized branch. (Manila Hotel Company v. Pines Hotel Employees Ass’n. (CUGCO) and CIR, G.R. No. L-30818, 28 September 1972) Discrimination in Layoff or Dismissal Even where business conditions justified a layoff of employees, unfair labor practices in the form of discriminatory dismissal were found where only unionists were permanently dismissed while non – unionists were not. Test of Discrimination For the purpose of determining whether or not a discharge is discriminatory, it is necessary that the underlying reason for the discharge be established. The fact that a lawful cause for discharge is available is not a defense where the employee is actually discharged because of his union activities. If the discharge is actually motivated by a lawful reason, the fact that the employee is Q( U uicnco im e™ engaged in union TI FF activities atkT the mpr time es will s ed) not lie ar e needed to s ee t and a against the employer prevent dec omand pr ess or him from the his pi ctjudgment ur e. exercise of his business to discharge an employee for cause. (NLRB v. Ace Comb Co., 342 F. 2 841) Discharge due to union activity, a question of fact

Philippine Metal Foundries, Inc., v. CIR, GR Nos. L-34948 – 49, 15 May 1979 The question of whether an employee was discharged because of his union activities is essentially a question of fact as to which the findings of the court of Industrial Relations are conclusive and binding if supported by substantial evidence considering the record as a whole. When there is Valid Discrimination: Union Security Clause 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 employees the obligation to acquire or retain union membership as a condition affecting employment. It is indeed compulsory union membership whose objective is to assure continued existence of the union. In a sense, there is discrimination when certain employees are obliged to join a particular union. But it is discrimination favoring unionism; it is a valid kind of discrimination. The employer is not guilty of unfair labor practice if it merely complies in good faith with the request of the certified union for the dismissal of employees expelled from the union pursuant to the union security clause in the collective bargaining agreement. (Soriano v. Atienza, GR No. 68619, 16 March 1989) Villar vs Inciong, 121 SCRA 444 (1983) It is true that disaffiliation from a labor union is not open to legal objection. It is implicit in the freedom of association ordained by the Constitution. But a closed shop is a valid form of union security, and such provision in a collective bargaining agreement is not a restriction of the right of freedom of association guaranteed by the Constitution. Victorias Milling Co., Inc. v. Victorias – Manapla Workers Organization – PAFLU, GR No. L-18467, 30 September 1963 Another reason for enforcing the closed – shop agreement is the principle of sanctity or inviolability of contracts guaranteed by the Constitution. As a matter of principle, the provision of the Industrial Peace Act granting freedom to employees to organize themselves and select their representative for entering into bargaining agreements, should be subordinated to the constitutional provision protecting the sanctity of contracts. Advantages of Closed Shop Agreement

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 1. increases the strength and bargaining power of labor organizations. 2. prevents non – union workers from sharing in the benefits of the union’s activities without also sharing its obligations. 3. prevents the weakening of labor organizations by discrimination against union members. 4. eliminates the lowering of standards caused by competition with non - union workers. 5. enables labor organizations effectively to enforce collective agreements. 6. facilitates the collection of dues and enforcement of union rules. 7. creates harmonious relations between the employer and employee (NLU v. Aguinaldo’s Echague, Inc., 51 O.G. 2898) Disadvantages of a Closed Shop Agreement 1. results in monopolistic domination of employment by labor organizations 2. interferes with the freedom of contract and personal liberty of the individual worker 3. compels employers to discharge all non – union workers regardless of efficiency, length of service, etc. 4. facilitates the use of labor organizations by unscrupulous union leaders for the purpose of extortion, restraint of trade, etc. 5. denies to non – union workers equal opportunity for employment 6. enables union to charge exorbitant dues and initiation fees Valid dismissal because of application of union security clause Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos, GR No. 113907, 28 February 2000 Union security clauses in the collective bargaining agreements, if freely and voluntarily entered into, are valid and binding. Thus, the dismissal of an employee by the company pursuant to a labor union’s demand in accordance with a union security agreement does not constitute unfair labor practice. uicnco kT mpr im es e™ Manalang, et. al. v. TIArtex FF Q(Development U Co., s ed) et. al., ar e needed to s ee t and a GR No. L-20432, 30 1967 decOctober om pr ess or ur e. A union memberhis whopiisctemployed under an agreement between the union and his employer 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.

Petitioners, although entitled to disaffiliation from their union and to forma new organization of their own, must, however, suffer the consequences of their separation from the union under the security clause. Due process required in enforcing union security clause; intra – union matter becomes termination dispute with employer 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 behind the enforcement of union security clauses which is the sanctity and inviolability of contracts cannot override one’s right to due proc ess. While it is true that the issue of expulsion of the local union officers is originally between the local union and the federation, hence, intra – union in character, the issue was later on converted into a termination dispute when the company dismissed the petitioners from work without the benefit of a separate notice and hearing. Thus, 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 a dismissal, the company may still be held liable if it was remiss in its duty to accord the would – be dismissed employees their right to be heard on the matter. Liability of union to pay wage and fringe benefits of illegally dismissed employee Where the employer compelled the employee to go on forced leave upon recommendation of the union for alleged violation by the employee of the closed – shop agreement, the NLRC correctly ordered the reinstatement of the employee and directed the union to pay the wages and fringe benefits which employees failed to receive as a result of her forced leave and to pay attorney’s fees. The employer would not have compelled the employee to go on forced leave were it not for the union’s insistence and demand to the extent that because of the failure of the employer to dismiss the employee as requested, the union filed a notice of strike on the issue of unfair labor practice. Moreover, under the collective bargaining agreement between the union and the employer, the union holds the company free and blameless from any liabilities that may arise should the employee question the dismissal. (Manila Mandarin Employees Union v. NLRC, GR No. 76989, 29 September 1987) Employer in good faith not liable

Villar v. Inciong, 121 SCRA 444 (1983) Page 48 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Where the employer dismissed his employees in the belief in good faith that such dismissal was required by the closed – shop provisions of the collective bargaining contract with the union, he may not be ordered to pay back compensation to such employees although their dismissal is found to be illegal. (Confederated Sons of Labor v. Anakan Lumber co., et. al., GR No. L-12503, 29 April 1960) Employees not covered by the closed shop provision 1. any employee who at the time the closed – shop agreement takes effect is a bona fide member of a religious organization which prohibits its members from joining labor unions of religious grounds 2. employees already in service and already members of a labor union or unions other than the majority union at the time the closed – shop agreement took effect 3. confidential employees who are excluded from the rank and file bargaining unit 4. employees excluded from the closed – shop by express terms of the agreement It is well – settled in this jurisdiction that, in the absence of a manifest intent to the contrary, closed – shop provisions in a collective bargaining agreement apply only to persons to be hired or to employees who are not yet members of any labor organization and that said provisions of the agreement are not applicable to those already in the service at the time of the execution. To hold that the employees in a company who are members of a minority union may be compelled to disaffiliate from their union and join the majority or contracting union, would render nugatory the right of all employees to self – organization and to form, join or assist labor organizations of their own choosing, a right guaranteed by the Industrial Peace Act as well as by the Constitution. (Kapisanan ng mga Manggagawa ng Alak (NAFLU) v. Hamilton Distellery Co., et. al., GR No. L-18112, 30 October 1962) Agency fee instead of union membership Under the agency – shop clause of a CBA, an employee is not required to join the union as a Q( U uicnco kT mpr im must e™s pay condition of continued employment, but TI FF es ed) the ar e needed to s ee t and a union a service feedec (usually om prequivalent ess or to union dues his piact ur e.is required by and initiation fees). Since union statute to act as the bargaining representative of all employees, both union and non – union, within their bargaining unit, the justification for the clause is that the nonmember should contribute towards the cost of collective bargaining process without supporting it financially.

Sixth ULP: Discrimination Because Of Testimony [Art. 248 (f)] The testimony or proceedings might involve wages, employee’s benefits disciplinary rules, or organizational rights, or anything covered by the Labor Code. What is chargeable as ULP is the employer’s retaliatory act regardless of the subject of the employee’s complaint or testimony. Seventh ULP: Violation of the Duty to Bargain [Art. 248 (g)] Four Forms of ULP in bargaining: a. Failure or refusal to meet and convene b. Evading the mandatory subjects of bargaining c. Bad faith in bargaining, including failure or refusal to execute the collective agreement, if requested d. Gross violation of the CBA Eighth ULP: Paid Negotiation [Art. 248 (H)] Self – organization and collective bargaining are treasured rights of the workers. The law zealously shields them from corruption. It is a punishable act of ULP for the employer to pay the union or any of its officers or agents any negotiation fee or attorney’s fees as part of the settlement in collective bargaining or any labor dispute. To do so is not only unlawful. It is ethically reprehensible. Correspondingly, Art. 249 prohibits union officers or agents from asking for or accepting such payments. Such act, furthermore, is a ground for cancellation of union registration under Art. 239 (g). Ninth ULP: Violation of the CBA Implementation of the CBA is still part of the bargaining process. The duty to bargain requires good faith, and good faith implies faithful observance of what has been agreed upon. It logically follows that noncompliance with the agreement is non – observance of good faith in bargaining; therefore, the noncompliance amounts to a ULP. Violation of the CBA must be gross. Relief In ULP Cases 1. Cease and Desist Order To support a cease and desist order, the record must show that the restrained misconduct was an issue in the case; that there was a finding of fact of said misconduct and such finding was supported by evidence. The Court is not authorized to issue blank cease and desist orders, but must confine its Page 49 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 injunc tion orders to specific act or acts which are related to past misconduct. 2. Affirmative Order In addition to a cease and desist order, the court may issue an affirmative order to reinstate the said employee with back pay from the date of the discrimination. If other laborers have been hired, the affirmative order shall direct the respondent to dismiss these hired laborers to make room for the returning employee. 3. Court may order the Employer to Bargain, CBA may be imposed 4. Strike by union members ULP is not subject to compromise CLLC E.G. Gochangco Workers Union, et. al. v. NLRC, GR No. 67158, 30 May 1988 ULP cases are not, in view of the public interest involved, subject to compromises. The relation between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. ULP in a given period should be included in a single charge Dionela, et. al. v. CIR et. al., GR No. L-18334, 31 August 1963 When a labor union accuses an employer of acts of unfair labor practice allegedly committed during a given period of time, the charges should include all acts of unfair labor practice committed against any and all members of the union during that period. The union should not, upon the dismissal of the charges first preferred, be allowed to split its cause of action and harass the employer with subsequent charges, based upon acts committed during the same period of time. Art. 249. Unfair labor practices of labor organizations. Unfair Labor Practices of Q( Labor uicnco kTOrganization im e™s ed) TI FFemployees U mpr 1. To restrain or coerce intothees ar e and needed sexercise ee t a om pr ess or of their right todec self organization. his pi ct ur e. 2. To attempt to or cause an employer to discriminate against an employee to whom membership in the labor organization was denied or to terminate an employee on any ground other than he usual terms and conditions under which

membership or continuation of membership is made available to other members. 3. To refuse to bargain collectively with the employer, if it is the representative of the employee. 4. To attempt to or cause the employer to pay money or other things of value, in the nature of an exaction, for services which are not performed or not to be performed. This includes fee for union negotiations. 5. To ask or accept negotiations or attorney’s fees from employers as part of the settlement in any dispute. 6. Violation of CBA. Restraint or Coercion by Labor Organization; Interference by Union is not ULP [Art. 249 (a)] A labor organization commits ULP when it restrains or coerces employees in their right to self – organization. A labor organization may interfere in the employees’ right to self – organization as long as the interference does not amount to restraint or coercion. Union cannot coerce employees to join a strike Similarly, violation is committed when a union threatens the employees with bodily harm in order to force them to strike. A union violates the law when, to restrain or coerce nonstrikers from working during the strike, it: o assaults or threatens to assault them o threatens them with the loss of their jobs o blocks their ingress to and egress from the plant o damages nonstrikers’ automobiles or forces them off the highway o physically preventing them from working o sabotages the employer’s property in their presence, thereby creating an atmosphere of fear or violence o demonstrates loudly in front of a nonstrikers’ residence with signs and shouts accusing the nonstriker of “scabbing” o holding the nonstriker up to ridicule o seeking public condemnation of the nonstriker Union-Induced Discrimination Arbitrary use of union security clause The broad rule is that the union has the right to determine its membership and to prescribe the conditions for the acquisition and retention

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 thereof. Consequently, admission to membership may not be compelled. This rule, however, is qualified in the case of labor unions holding a monopoly in the supply of labor, either in a given locality, or as regards a particular employer by reason of a closed – shop or similar agreements. In such case, qualified applicants may not be barred by unreasonable rules. Salunga v. Court of Industrial Relations, 21 SCRA 216 (1967) Employee resigned from the union. The union requested the company to enforce the closed shop provision of the CBA. Company deferred action and informed the employee of the possible effects of his resignation from the union. Employee tried to revoke his resignation from the union but this denied by the union. Company finally granted the request of the union and terminated the employee. Employee complained of illegal dismissal. Held: Labor unions are not entitled to arbitrarily exclude qualified applicants for membership and a closed – shop provision will not justify the employer in discharging, or a union in insisting upon the discharge of, an employee whom the union thus refuses to admit to membership, without any reasonable ground thereof. Having been dismissed from service owing to unfair labor practice on the part on the part of the union, petitioner is entitled to reinstatement as member of the union and to his former or substantially equivalent position in the company, without prejudice to his seniority and/or rights and privileges, and with back pay. Manila Mandarin Employees Union v. NLRC, 154 SCRA 369 (1987) Union security clauses are also governed by law and by principles of justice, fair play, and legality. Union security clauses cannot be used by union officials against an employer, much less their own members, except with a high sense of responsibility, fairness, prudence and judiciousness. uicnco kT mpr im es e™s ed) TI FF Q( U ar e and needed to s ee t a dec[Art. om 249(c)] pr ess or Refusal To Bargain his pi ct ur e. A union violates its duty to bargain collectively by entering negotiations with a fixed purpose of not reaching an agreement or signing a contract. Featherbedding And Make – Work Arrangements [Art. 249 (d)]

Featherbedding – employee practices which create or spread employment by unnecessarily maintaining or increasing the number of employees used, or the amount of time consumed, to work on a particular job It may take the form of minimum – crew regulations on the railroad, make – work rules such as the setting of and prompt destruction of unneeded bogus type in the newspaper industry, stand – by pay for musicians when a radio station broadcasts music from phonograph records or production ceilings for work on the assembly lines or at the construction site III. RIGHT TO COLLECTIVE BARGAINING A. DUTY TO BARGAIN COLLECTIVELY Art. 250. Procedure in collective bargaining. Art. 251. Duty to bargain collectively in the absence of collective bargaining agreements. Art. 252. Meaning of duty to bargain collectively. Art. 253. Duty to bargain collectively when there exists a collective bargaining agreement. Art. 253-A. Terms of a collective bargaining agreement. Art. 254. Injunction prohibited. Art. 231. Registry of unions and file of collective bargaining agreements. Collective Bargaining Agreement – a contract executed upon request of either the employer or the exclusive bargaining representative of the employees incorporating the agreement reached after negotiations with respect to wages, hours of work and all other terms and conditions of employment, including proposals for adjusting any grievance or questions under the agreement Parties to Collective Bargaining 1. Employer 2. Employees, represented by the exclusive bargaining agent Jurisdictional Requirements 1. Status of majority representation of the employees’ representative. 2. Proof of majority representation 3. Demand to bargain under art. 250 (a) (Kiok Loy v. NLRC, 141 SCRA 179) The duty of the employer to bargain collectively arises only after the union requests the employer to bargain. If there is no demand, the employer cannot be in default. When there is a legitimate representation issue, Page 51 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 there is no duty to bargain collectively on the part of the employer [Lakas ng Manggagawang Makabayan v. Marcelo Enterprises, 118 SCRA 425 (1982)] Commencement of Bargaining During Certification Year – within 12 months after the determination and certification of the employees’ exclusive bargaining representative. Bargaining Procedure The parties may agree on the bargaining procedure. If there is a procedure agreed upon, the Labor Code Procedure applies suppletorily. Bargaining Procedure under the Labor Code (Art. 250) (ANNEX G) Duty to Bargain Collectively When There Is No Collective Bargaining Agreement 1. the performance of a mutual (employer and the exclusive bargaining agent) obligation to meet and convene, 2. promptly and expeditiously in good faith 3. 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 4. Executing a contract incorporating such agreements. The duty does not compel any party to agree to a proposal or to make any concession. The CBA remains in full force and effect during the 60 day period and until a new agreement is reached. Duty to Bargain Collectively when there is a Collective Bargaining Agreement When there is a CBA, the duty to bargain also means that neither party shall terminate nor modify such agreement during its lifetime. But 60 days before the CBA expires, either party may notify the other in writing that it wants to terminate or modify the agreement. Q( U uicnco kT im Duty e™s to 4 Forms of 7th ULP - Violation ofmpr the TI FF es ed) ar e needed to s ee t and a Bargain Collectively dec om pr ess or pi ctand ur e.convene 1. Failure or refusal his to meet 2. Evading the mandatory subjects of bargaining 3. Bad faith in bargaining 4. Gross violation of the CBA Failure or Refusal to Meet and Convene

Kiok Loy v. NLRC, 141 SCRA 179 (1986) The union gave the employer copies of its proposed CBA and requested the company to make counter-proposals. The company did not reply. The union again wrote the company but this was also ignored. Held: It is unfair labor practice for an employer to refuse to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement for wages, hours of work and other terms of employment. 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. We agree with the pronouncement that it is not obligatory upon either side of a labor controversy to precipitately accept or agree to the proposals of the other. But an erring party should not be tolerated and allowed with impunity to resort to schemes feigning negotiations by going through empty gestures. Evading the Mandatory Subjects Mandatory Subjects 1. Wages 2. Hours of Work 3. Other Terms and Conditions of Employment Where the subject of the 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 nonmandatory, a party may not insist on bargaining to the point of impasse. His insistence may be construed as evasion of the duty to bargain. Bargaining in Bad Faith There is no per 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 NLRB’s expertise. The charge of bad faith should be raised while the bargaining is in progress. Samahang Manggagawa sa Top Form Manufacturing-United Workers of the Philippines v. NLRC, GR No. 13856, 07 September 1998 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 Page 52 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 exhibited an indifferent attitude towards collective bargaining 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.”

2 conspicuous places in the establishment concerned for at least 5 days before its ratification. 3. Statement that the CBA was ratified by the majority of the employees in the bargaining unit.

Lakas ng Manggagawang Makabayan v. Marcelo Enterprises, GR Nos. L-38258, 38260, 19 November 1982 It is also evident from the records that the charge of bargaining in bad faith imputed to the respondent companies, is hardly c redible. In fact, such charge is valid as only against the complainant LAKAS. The parties had a total of 5 conferences for purposes of collective bargaining. It is worth considering that the first strike of Sept. 4 1967 was staged less than a week after the 4t h CBA conference and without any benefit of any previous strike notice. In this connection, it must be stated that the notice of strike filed on June 13, 1967 could not have been the strike notice for the first strike because it was already withdrawn on July 14, 1967. Thus, from these stated facts can be seen that the first strike was held while the parties were in the process of negotiating. The company’s refusal to accede to the demands of LAKAS appears to be justified since there is no showing that these companies were in the same state of financial and economic affairs. There is reason to believe that the first strike was staged only for the purpose of compelling the respondent companies to accede to the inflexible demands of the complainant LAKAS.

The following documents must be certified under oath by the representative of the employer and the labor union. No other document shall be required in the registration of the CBA.

Registration of Collective Bargaining Agreements Where to file With the Regional Office which issued the certificate of registration/certificate of creation of chartered local. If the certificate of creation of the chartered local was issued by the bureau, the agreement shall be filed with the Regional Office which has jurisdiction over the place where it principally operates Multi-employer collective bargaining agreements shall be filed with the Bureau. uicnco kT mpr im es e™s ed) When to file TI FF Q( U ar e needed to s ee t and a within 30 days from dec execution om pr essoforthe CBA. his pi ct ur e. Requirements for registration The application for CBA registration shall be accompanied by the original and 2 duplicate copies of the following documents. 1. CBA 2. A statement that the CBA was posted in at least

Procedure 1. The Regional Office or the Bureau shall act on the applications within 5 days form receipt of the application. 2. The Regional Office or Bureau may within 5 days from receipt of the application, a. approve the application and issue the certificate of registration or b. deny the application for failure to comply with the requirements. c. If the supporting documents are not complete, or are not verified under oath, the Regional Office or the Bureau shall notify the applicants in writing of the requirements needed to complete the registration. o If the applicant fails to complete the requirements within 10 days from receipt of notice, application is denied without prejudice. o The denial shall be in writing, stating in clear terms the reason therefore and served upon the applicant union and employer within 24 hours from issuance. 3. The denial by the Regional Office of the registration of single enterprise collective bargaining agreements may be appealed to the Bureau while the denial by the Bureau of the registration of multi-employer collective bargaining agreements may be appealed to the Office of the Secretary, both within 10 days from receipt of the notice of denial. 4. The memorandum of appeal is filed with the Regional Office or the Bureau, as the case may be. 5. The memorandum of appeal and the entire records of the application shall be transmitted to the Bureau or the Office of the Secretary within 24 hours from receipt of the memorandum of appeal. 6. Bureau or the Office of the Secretary shall resolve within the same period and in the same manner as that prescribed for inter/intra-union disputes.

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Duration of CBA 1. Representation Aspect: 5 years • Refers to the identity and majority status of the union that negotiated the CBA as the exclusive bargaining representative. 2. All other provisions should be renegotiated not later than 3 years from effectivity. • Refers to the rest of CBA, economic as well as non-economic other than representational. Hold Over Principle The CBA shall be in full force and effect until the parties reach a new agreement. New Pacific Timber & Supply Company Inc. v. NLRC, 328 SCRA 404 (2000) It is clear from the above provision of law (Art. 253) that until a new CBA has been executed by and between the parties, they are duty-bound to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement. The law does not provide for any exception nor qualification as to which of the economic provisions of the existing agreement are to retain force and effect, therefore, it must be understood as encompassing all the terms and conditions in the said agreement. It is the duty of both parties 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. To rule otherwise would be to create a gap during which no agement would govern, from the time the old contract expired to the time a new agreement shall have been entered into. Rules on Effectivity and Retroactivity of New CBA (Apply Only to Provisions Other than Representational) I. CBA as a Result of Negotiations A. With Previous CBA 1. Effectivity of new CBA entered into within 6 months after the expiration of the old CBA: retroact to the date following the e™ expiry date. Q( U uicnco kT mpr im FF CBA esafter s ed) 2. Effectivity ofTInew entered into ar e and needed to s ee t 6 a dec om pr ess or months following of the old his pithe ct expiration ur e. CBA: GR: effective on the date agreed upon by the parties. If there is no agreement, the arbitral award will retroact to the day after the end of the 6-month period after the expiry of the old CBA.

B. New and First-Ever CBA (No previous CBA) – effective on date agreed upon by the parties II. Arbitral Awards A. With Previous CBA 1. Arbitral award final within 6 months from old CBA: retroact to the date following the expiry of the old CBA. 2. Arbitral award final after 6 months following the expiration of the old CBA: General Rule: the agreement between the parties. If there is no agreement, retroact to the 1st day following the 6-month period B. New and First-Ever CBA (No previous CBA) Labor Secretary’s discretion will be followed. B. BARGAINING AGENT & CERTIFICATION ELECTION PROCEEDINGS Art. 255. Exclusive bargaining representation and workers’ participation in policy and decisionmaking. Art. 256. Representation issue in organized establishments. Art. 257. Petitions in unorganized establishments. Art. 258. When an employer may file petition. Art. 259. Appeal from certification election orders. Bargaining Unit – a group of employees sharing mutual interests within a given employer unit, comprised of all or less than all of the entire body of employees in the employer unit or any specific occupational or geographical grouping within such employer unit Certification Election/Consent Election – The process of determining through secret ballot the sole and exclusive representative of the employees in an appropriate unit for purposes of collective bargaining or negotiation. A certification election is ordered by the Department, while a consent election is voluntarily agreed upon by the parties, with or without the intervention by the Department. Organized Establishment – an enterprise where there exists a recognized or certified sole and exclusive bargaining agent Run-off Election – an election between the labor unions receiving the 2 highest number of votes in a certification or consent election with 3 or more choices, where such a certified or consent results in Page 54 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 none of the 3 or more choices receiving the majority of the valid votes cast; provided that the total number of votes for all contending unions is at least 50% of the number if votes cast Voluntary Recognition – process by which a legitimate labor union is recognized by the employer as the exclusive bargaining representative or agent in a bargaining unit, reported with the Regional Office in accordance with Rule VII, section 2 of these Rules. 3 Methods to Determine the Bargaining Union 1. Voluntary Recognition 2. Certification Election 3. Consent Election Voluntary Recognition When to file In unorganized establishments with only one legitimate labor organization, the employer may voluntarily recognize the representation status of the union. Within 30 days from such recognition, the employer and union shall submit a notice of voluntary recognition. Where to file Regional Office which issued the recognized labor union’s certificate of registration or certificate of creation of a chartered local. Requirements for Voluntary Recognition The notice of voluntary recognition shall be accompanied by the original copy and 2 duplicate copies of the following documents: 1. A joint statement under oath of voluntary recognition attesting to the fact of voluntary recognition. 2. Certificate of posting of the joint statement of voluntary recognition for 15 consecutive days in at least 2 conspicuous places in the establishment or bargaining unit where the union seeks to operate. 3. Approximate number of employees in the bargaining unit, accompanied by the names of those who support the voluntary recognition uicnco kT im members e™s ed) of comprising at least majority ofmpr the TI FFa Q ( U es ar e needed to s ee t and a the bargaining dec unit.om pr ess or his labor pi ct union ur e. is the only 4. A statement that the legitimate labor organization operating within the bargaining unit. These documents shall be certified under oath by the employer’s representative and president of he recognized labor union.

Procedure: Voluntary Recognition 1. If notice of voluntary recognition is sufficient in form, number and substance, and there is no other registered labor union operating within the bargaining unit, the Regional Office shall record the fact of voluntary recognition within 10 days from receipt of notice. 2. Where notice of voluntary recognition is insufficient, the Regional Office shall notify the labor union of its findings and advise it to comply with the necessary requirements. If the employer or union failed to complete the requirements for voluntary recognition within 30 days from receipt of advisory, the Regional Office shall return. Effects of recording of fact of Voluntary Recognition 1. The recognized labor union shall enjoy the rights, privileges and obligations of an existing bargaining agent of all the employees in the bargaining unit. 2. A petition for certification election cannot be filed for 1 year from the date of entry of the voluntary recognition. Certification Election Who may file 1. any legitimate labor organization 2. employer, when requested to bargain collectively Where to file Regional Office which issued the certificate of registration/certificate of creation. When to file Anytime, except: 1. When voluntary recognition has been entered, or a valid certification, consent or run-off election has been conducted within 1 year prior to the filing. 2. negotiations in good faith with the employer 3. bargaining deadlock had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout. 4. Registered CBA – may file only within 60 days prior to the expiration of the CBA. Grounds for Denying Petition 1. the petitioner is not listed in the Department’s registry of legitimate labor unions or that its legal personality has been revoked or cancelled with finality in accordance with Rule XIV of these Rules; Page 55 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 2. the petition was filed before or after the freedom period of a duly registered collective bargaining agreement; provided that the sixty-day period based on the original collective bargaining agreement shall not be affected by any amendment, extension or renewal of the collective bargaining agreement; (Contract Bar) 3. the petition was filed within 1 year from entry of voluntary recognition or a valid certification, consent or run-off election and no appeal on the results of the certification, consent or run-off election is pending; (12-month Bar/Certification year bar) 4. a duly certified union has commenced and sustained negotiations with the employer in accordance with Article 250 of the Labor Code within the one-year period referred to in Section 14.c of this Rule, or there exists a bargaining deadlock which had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout to which an incumbent or certified bargaining agent is a party; (Negotiation Bar) 5. in case of an organized establishment, failure to submit the 25% support requirement for the filing of the petition for certification election. Procedure: Petition for Certification Election (ANNEX H) Procedure: Conduct of Certification Election (ANNEX I) Preliminary Conference The Med-Arbiter shall conduct a preliminary conference and hearing within 10 days from the receipt of the petition to determine the following: a. the bargaining unit to be represented; b. contending labor unions; c. possibility of consent elections; d. existence of any of the bars to certification election; and e. such other matters as may be relevant for the final disposition of the case In case the contending unions agree to a consent election, the Med-Arbiter shall not issue a formal Q( U uicnco kTcertification im es e™s ed) order calling for of TIthe FFconduct mpr ar e needed to s ee t and a election, but shall fact decenter om prthe ess orof the agreement ct ur e. in the minutes ofhis the pi hearing. Order/Decision on the Petition – within 10 days from the date of the last hearing, the Med-Arbiter shall issue a formal order granting or denying the petition.

In organized establishments, no order or decision shall be issued during the freedom period. The order granting the petition shall state the following: a. Name of the employer or establishment b. Description of the bargaining unit c. Statement that none of the grounds for dismissal exists d. Names of contending labor unions e. Directive upon the employer and the contending union(s) to submit within 10 days from receipt of the order, the certified list of employees in the bargaining unit. Prohibited Grounds for Denial of Petition (must be heard and resolved by the Regional Director in an independent petition for cancellation of registration: 1. validity of petitioning union’s certificate of registration 2. legal personality as a labor organization 3. validity of registration 4. execution of CBAs Appeal a. order granting conduct of certification election in unorganized establishments – NOT appealable b. all others – appealed to the DOLE Sec. within 10 days from receipt thereof. Pre-election Conference Within twenty-four (24) hours from receipt of the assignment for the conduct of a certification election, the Election Officer shall cause the issuance of notice of pre-election conference upon the contending unions and the employer. Must be scheduled within 10 days from receipt of the assignment. Must be completed within 30 days from the last hearing. Purpose of Pre-election Conference The pre-election conference shall set the mechanics for the election and determine the following: 1. date, time and place of the election, not be later than forty-five (45) days from the date of the first pre-election conference on a regular working day within the employer’s premises, unless circumstances require otherwise 2. list of eligible and challenged voters 3. number and location of polling places or booths and the number of ballots to be prepared with appropriate translations, if necessary

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 4. name of watchers or representatives and their alternates for each of the parties during election 5. mechanics and guidelines of the election Consent Election In case the contending unions agree to a consent election, the Med-Arbiter shall not issue a formal order calling for the conduct of certification election, but shall enter the fact of the agreement in the minutes of the hearing. The minutes of the hearing shall be signed by the parties and attested to by the Med-Arbiter. The Med-Arbiter shall, immediately thereafter, forward the records of the petition to the Regional Director or his/her authorized representative for the determination of the Election Officer by the contending unions through raffle. The first pre-election conference shall be scheduled within ten (10) days from the date of entry of agreement to conduct consent election. (See Annex H) Effect of failure to appear during the pre-election conference considered as a waiver to be present and to question or object to any of the agreements reached in said pre-election conference However, the non-appearing party or the employer still has the right to be furnished notices of subsequent pre-election conferences and to attend the same Qualification of Voters All employees who are members of the appropriate bargaining unit at the time of the issuance of the order granting the conduct of a certification election shall be eligible to vote. An employee who has been dismissed from work but has contested the legality of the dismissal in a forum of appropriate jurisdiction at the time of the issuance of the order for the conduct of a certification election shall be considered a qualified voter o unless his/her dismissal was declared valid in a final judgment at the time of the conduct of the certification election. Q( U uicnco kT mpr im es e™s ed) Inclusion-Exclusion of Voters TI FF ar e needed to s ee t and a In case of disagreement dec om prover ess the or voters’ list or pi ctallurcontested e. over the eligibility of his voters, voters shall be allowed to vote. But their votes shall be segregated and sealed in individual envelopes. Posting of Notices of Election 1. at least 10 days before the actual date of the election

2. in 2 most conspicuous places in the company premises Contents of the Notice 1. the date and time of the election 2. names of all contending unions 3. the description of the bargaining unit and the list of eligible and challenged voters The posting of the notice of election, the information required to be included therein and the duration of posting cannot be waived by the contending unions or the employer. Challenging of Votes An authorized representative of any of the contending unions and employer Before it is deposited in the ballot box Grounds: a. that there is no employer-employee relationship between the voter and the company; b. that the voter is not a member of the appropriate bargaining unit which petitioner seeks to represent. Procedure in Challenging of Votes 1. The Election Officer shall place the ballot in an envelope. sealed in the presence of the voter and the representatives of the contending unions and employer. indicate on the envelope the voter’s name, the union or employer challenging the voter, and the ground for the challenge. envelope shall be signed by the Election Officer and the representatives of the contending unions and employer. 2. The Election Officer shall note all challenges in the minutes of the election and shall be responsible for consolidating all envelopes containing the challenged votes. 3. The envelopes shall be opened and the question of eligibility shall be passed upon only if the number of segregated voters will materially alter the results of the election. Protest Any party-in-interest may file a protest based on the conduct or mechanics of the election. Protests shall be recorded in the minutes of the election proceedings. Protests not so raised are deemed waived. The protesting party must formalize its protest with the Med-Arbiter, with specific grounds,

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 arguments and evidence, within five (5) days after the close of the election proceedings. If not recorded in the minutes and formalized within the prescribed period, the protest shall be deemed dropped. Canvassing of Votes Counted and tabulated by the Election Officer in the presence of the representatives of the contending unions. Each representative entitled to a copy of the minutes of the election proceedings and results of the election. The ballots and the tally sheets shall be i. sealed in an envelope ii. signed by the Election Officer and the representatives of the contending unions iii. transmitted to the Med-Arbiter, together with the minutes and results of the election, within 24 hours from the completion of the canvass Where the election is conducted in more than one region, consolidation of results shall be made within 15 days from the conduct thereof. Conduct of Election and Canvass of Votes The election precincts shall open and close on the date and time agreed upon during the preelection conference. The opening and canvass shall proceed immediately after the precincts have closed. Failure of any party or the employer or his/her/their representative to appear during the election proceedings shall be considered a waiver to be present and to question the conduct thereof. Certification of Exclusive Bargaining Agent The union which obtained a majority of the valid votes cast shall be certified as the sole and exclusive bargaining agent of all the employees in the appropriate bargaining unit within 5 days from the day of the election, provided no protest is recorded in the minutes of the election. Failure of Election Where the number of votes cast in a certification uicthan kT the immajority e™s ed) or consent election of the TI FFisQless ( U nco mpr es ar e needed to s ee t and a number of eligible are no dec voters om pr and ess there or his votes. pi ct ur e. material challenged A failure of election shall not bar the filing of a motion for the immediate holding of another certification or consent election within 6 months from date of declaration of failure of election.

Action on the motion for the immediate holding of another certification or consent election Within 24 hours from receipt of the motion, the Election Officer shall immediately schedule the conduct of another certification or consent election within 15 days from receipt of the motion and cause the posting of the notice of certification election at least 10 days prior to the scheduled date of election in 2 most conspicuous places in the establishment. The same guidelines and list of voters shall be used in the election. Proclamation and Certification of the Result of the Election Within twenty-four (24) hours from final canvass of votes. There being a valid election. the Election Officer shall transmit the records of the case to the Med-Arbiter Med-arbiter shall issue an order proclaiming the results of the election and certifying the union which obtained a majority of the valid votes cast as the sole and exclusive bargaining agent in the subject bargaining unit, under any of the following conditions: a. no protest was filed or, even if one was filed, the same was not perfected within the fiveday period for perfection of the protest; b. no challenge or eligibility issue was raised or, even if one was raised, the resolution of the same will not materially change the results of the elections. The winning union shall have the rights, privileges and obligations of a duly certified collective bargaining agent from the time the certification is issued. Run-off Election When an election which provides for 3 or more choices results in none of the choices (unions or “no union” choice) receiving a majority of the valid votes cast, the Election Officer shall motu propio conduct a run-off election within 10 days from the close of the election proceedings between the labor unions receiving the two highest number of votes. Provided, that the total number of votes for all contending unions is at least 50% of the number of votes cast. And there are no objections or challenges which if sustained can materially alter the results, “No Union” shall not be a choice in the run-off election.

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Notice of run-off elections shall be posted by the Election Officer at least five (5) days before the actual date of run-off election. C. BARS TO CERTIFICATION ELECTION Art. 232. Prohibition on certification election Grounds for denying petition for certification election 1. Deadlock Bar 2. Contract Bar 3. 12-month bar/certification year bar 4. Negotiation Bar Contract Bar While a valid and registered CBA is subsisting, the BLR is not allowed to hold an election contesting the majority status of the incumbent union. When contract bar rule not applied 1. CBA is not registered 2. CBA deregistered 3. CBA is incomplete in itself 4. CBA does not foster industrial peace 5. CBA was concluded in violation of an order enjoining the parties from entering into a CBA until the issue of representation is resolved 6. Petition is filed during the 60-day freedom period Deadlock Bar A petition for certification election cannot be entertained if, before the filing of the petition for certification election, a bargaining deadlock to which an incumbent or certified bargaining agent is a party, had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout. Negotiation Bar A petition for certification election cannot be filed if the duly certified union has commenced and sustained negotiations in good faith with the employer in accordance with Art. 250 of the Labor Code within 1 year prior to the filing of the petition for certification election. Q( U uicnco kT mpr im es e™s ed) Certification YearTI Rule FF Bar ar e needed to s ee t and a No petition for dec certification election om pr ess or may be filed ct ur within one year fromhis the pi date of ae.valid certification, consent, or run-off election or from the date of voluntary recognition. R. Transport Corp v. Laguesma, GR No. 106830, 16 November 1993

The 12 month prohibition presupposes that there was an actual conduct of election, i.e. ballots were cats and there was a counting of votes. In a case where there was no certification election conducted precisely because the first petition was dismissed on the ground that it did not include all the employees who should be properly included in the collective bargaining unit, the certification year bar does not apply. Capitol Medical Center Alliance, etc. v. Laguesma, GR No. 118915, 04 February 1997 But in one case the winning union failed to conclude a CBA with the employer within one year, hence another union filed a petition for certification election. Although filed outside the 12-month bar, the petition was nonetheless dismissed, and the court upheld the dismissal and explained that ordinarily, a bargaining agent who failed to secure a CBA within 12 months could be suspected as a tool of management and should deserve to be replaced. But if circumstances show that the reason for not having concluded a CBA was not the union’s fault, such union should not be blamed, and a certification election should not be authorized even though no CBA has been concluded despite passage of 12 months. The situation takes the nature of a “deadlock bar.” Certification year rule will not apply if in fact there was a failure of election because less than majority of the CBU members voted. Another petition for certification election may be filed within 6 months. Certification year rule will apply even if the “No union” choice won. (Samahang Manggagawa sa Permex v. Secretary of Labor, GR No. 107792, 02 March 1998) D. ADMINISTRATION IF AGREEMENT; GRIEVANCE AND VOLUNTARY ARBITRATION Art. 260. Grievance machinery and voluntary arbitration. Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators Art. 262. Jurisdiction over other labor disputes Art. 277. Miscellaneous provisions. (f) A special Voluntary Arbitration Fund is hereby established in the Board to subsidize the cost of voluntary arbitration in cases involving the interpretation and implementation of the Collective Bargaining Agreement, including the Arbitrator’s fees, and for such other related purposes to promote and develop voluntary arbitration. The Board shall administer the Special Voluntary Arbitration Fund in Page 59 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 accordance with the guidelines it may adopt upon the recommendation of the Council, which guidelines shall be subject to the approval of the Secretary of Labor and Employment. Continuing funds needed for this purpose in the initial yearly amount of fifteen million pesos (P15,000,000.00) shall be provided in the 1989 annual general appropriations acts. The amount of subsidy in appropriate cases shall be determined by the Board in accordance with established guidelines issued by it upon the recommendation of the Council. The Fund shall also be utilized for the operation of the Council, the training and education of Voluntary Arbitrators, and the Voluntary Arbitration Program. (g) The Ministry shall help promote and gradually develop, with the agreement of labor organizations and employers, 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. (h) In establishments where no legitimate labor organization exists, labor-management committees may be formed voluntarily by workers and employers for the purpose of promoting industrial peace. The Department of Labor and Employment shall endeavor to enlighten and educate the workers and employers on their rights and responsibilities through labor education with emphasis on the policy thrusts of this Code. Establishment of Grievance Machinery 1. Agreement by the parties 2. Grievance committee shall be created within 10 days from the signing of the CBA. Grievance committee shall be composed of at least 2 representatives each from the members of the bargaining unit and the employer, unless otherwise agreed upon by the parties. o Representatives of the employers designated by the union. uic kT mpr im es e™s ed) Disputes under Grievance Machinery TI FF Q( U nco ar e needed to s ee t and a 1. interpretation ordec implementation om pr ess orof the CBA his pi ct ur of e. company 2. interpretation or enforcement personnel policies Procedure in handling grievances (ANNEX J) Jurisdiction of Voluntary Arbitrators

1. Grievances arising from the implementation or interpretation of CBAs. 2. Arising from interpretation or enforcement of company personnel policies 3. Wage distortion issues arising from the application of any wage orders in organized establishments 4. Arising from interpretation and implementation of the productivity incentive programs under RA 6971 Any other labor disputes upon agreement by the parties. The parties may choose to submit the dispute to voluntary arbitration proceedings before or at stage of the compulsory arbitration proceedings. Powers of the Voluntary Arbitrators 1. hold hearings 2. receive evidence 3. take whatever action is necessary to resolve the dispute. The voluntary arbitrator may conciliate or mediate to aid the parties in reaching a voluntary settlement. Procedure: Voluntary Arbitration All parties to the dispute shall be entitled to attend the arbitration proceedings. The attendance of any third party or the exclusion of any witness from the proceedings shall be determined by the voluntary arbitrator or panel of voluntary arbitrators. Hearing may be adjourned for cause or upon agreement by the parties. It shall be mandatory for the voluntary arbitrator to render an award or decision within 20 calendar days from the date of submission for resolution unless the parties agree otherwise. o Failure on the part of the voluntary arbitrator to render a decision, resolution, order or award within the prescribed period, shall upon complaint of a party, be sufficient ground for the Board to discipline said voluntary arbitrator, pursuant to the guidelines issued by the Secretary. o In cases that the recommended sanction is de-listing, it shall be unlawful for the voluntary arbitrator to refuse or fail to turn over to the board, for its further disposition, the records of the case within 10 calendar days from demand thereof. Decision final and executory after 10 calendar days from receipt of the copy by the parties. No MR allowed. Page 60 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 The voluntary arbitrator or labor arbitrator (if there voluntary arbitrator is absence or incapacitated) may issue a writ of execution upon motion of any interested party. Voluntary arbitrator shall turn over the records of the case to the regional branch of the Board within 10 days upon satisfaction of the final award. E. LABOR MANAGEMENT COOPERATION SCHEMES Creation of Labor Management and Other Councils The Department shall promote the formation of labor-management councils in organized and unorganized councils. Purpose of the Labor-Management Councils 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. Not covered by the Labor-Management Councils 1. Those covered by CBAs 2. Traditional areas of bargaining Services to be rendered by the Department in line with the said policy 1. Conduct awareness campaigns 2. Assist the parties in setting up labor-management structures, functions and procedures 3. Provide process facilitators upon request of the parties 4. Monitor the activities of labor-management structures as may be necessary and conduct studies on best practices aimed at promoting harmonious labor-management relations. Selection of employees’ representatives to the council 1. Organized establishments: Nominated by the exclusive bargaining representatives 2. Where there is no legitimate labor organization: by the employees at large. uicnco kT mpr im es e™s ed) TI FF Q( U ar e needed to s ee t and a IV. STRIKES, dec omLOCKOUTS pr ess or AND his pi ct ACTIONS ur e. CONCERTED Art. 263. Strikes, picketing and lockouts Art. 264. Prohibited activities Art. 265. Improved offer balloting.

Concerted Action – an activity undertaken by two or more employees, by one on behalf of others Strike – any temporary stoppage of work by the concerted action of the employees as a result of an industrial or labor dispute Lockout – temporary refusal of any employer to furnish work as a result of an industrial or labor dispute Internal union dispute – includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by laws of a union, including any violation of the rights and conditions of union membership provided for in this Code Strike-breaker – any person who obstructs, impedes, or interferes with by force, violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours or conditions of work or in the exercise of the right of self-organization or collective bargaining Strike Area – establishment, warehouses, depots, plants or offices, including the sites or premises used as runaway shops, of the employer struck against, as well as the immediate vicinity actually used by picketing strikers in moving to and fro before all points of entrance to and exit from said establishment Characteristics of a Strike 1. There must be an employer-employee relationship. 2. Existence of a dispute. 3. Employment relation is deemed to continue although in a state of belligerent suspension. 4. There is temporary work stoppage. 5. Work stoppage is done through concerted action. 6. The striking group is a legitimate labor organization. In case of bargaining deadlock, it must be the employees’ sole bargaining representative. Grounds for lockout 1. Collective Bargaining Deadlock 2. Unfair Labor Practice violations of CBA must be gross to be considered as ULP Conversion Doctrine A strike may start as economic and, as it progresses, becomes ULP, or vice-versa.

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 When strike or lockout cannot be declared 1. Violations of CBA which are not gross. 2. Grounds involving inter/intra union disputes 3. When there is no notice of strike or lockout or without the strike or lockout vote 4. After assumption of jurisdiction by the Secretary 5. After certification or submission of dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for strike or lockout. Who may declare a strike or lockout 1. Any legitimate labor organization 2. Any certified or duly recognized bargaining representative 3. Employer If there is certified or duly recognized bargaining representative, any legitimate labor organization may declare a strike but only on grounds of unfair labor practice. Notice of strike or lockout 1. In case of bargaining deadlocks: at least 30 days before the intended date of strike 2. In case of unfair labor practice: at least 15 days before the intended date of strike 3. In case of ULP involving the dismissal of a union officer which may constitute union-busting: union may take action immediately after the strike vote and the submission of the results of the strike vote to the regional branch of the Board

parties to submit the dispute to voluntary arbitration. The regional branch of the Board may, upon agreement of the parties, treat a notice as a preventive mediation case. 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 the conciliation meetings called by the regional branch of the Board. A notice, upon agreement of the parties, may be referred to alternative modes of dispute resolution, including voluntary arbitration. Preventive Mediation The regional branch may treat the notice as preventive mediation case upon agreement of the parties. Strike or lockout vote 1. approved by majority of total union membership or by majority of the BOD or partners 2. by a secret ballot 3. in a meeting called for that purpose The regional branch may supervise the conduct of the secret balloting at its own initiative or upon request of any party. Notice of the meeting must be given at least 24 hours before such meeting, and the results of the voting must be given at least 7 days before the intended strike or lockout to the regional branch of the Board. This is subject to the cooling-off period.

Contents of the notice of strike or lockout 1. Names and addresses of employer 2. Union involved 3. Nature of industry to which the employer belongs 4. Number of union members 5. Workers in the bargaining unit 6. Other relevant data 7. In case of bargaining deadlocks: the unresolved issues, written proposals of the union, counterproposals of the employer and proof of request for conference to settle differences 8. In case of unfair labor practice: the acts complained of, and the efforts taken to resolve the dispute uicnco kT mpr im es e™s ed) TI FF Q( U ar e needed to s ee t and a Board shall inform decthe omconcerned pr ess or party in case his pi ctwith ur e.the requirements. notice does not conform

Lapanday Workers’ Union, et. al. v. NLRC, 248 SCRA 96 (1995) The result of the strike (or lockout voting) should be reported to the NCMB at least 7 days before the intended strike or lockout, subject to the cooling off period. This means that after the strike vote is taken and the result reported to NCMB, seven days must pass before the union can actually commence the strike. This seven-day reporting period is intended to give the Dept. of Labor and Employment an opportunity to verify whether the projected strike really carries the imprimatur of the majority of the union members.

Action on notice of strike or lockout Upon receipt of the notice, the regional branch of the Board shall exert all efforts at mediation and conciliation to enable the parties to settle the dispute amicably. It shall also encourage the

Samahan ng Manggagawa in Moldex Products, et. al. v. NLRC, et.al. GR No. 119467, 01 February 2000 A strike tagged without the submission of the result of the strike vote is illegal. Page 62 of 83

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When labor may strike or when the employer may lock out its workers If the dispute remain unsettled after the lapse of the requisite number of days from the filing of the notice of strike or lockout and of the results of the election. The regional branch of the Board shall continue mediating and conciliating. Prohibited activities during strikes and lockouts 1. strike or lock-out without first having bargained collectively strike or lock-out without the necessary notice being filed with the DOLE 2. strike or lock-out without the necessary vote first having been obtained and reported to the DOLE 3. strike or lock-out after DOLE has assumed jurisdiction or the President or after certification or submission of dispute to the compulsory arbitration/voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout 4. knowingly participating in illegal strike or knowingly participates in the commission of illegal acts during a strike ground for termination of employment 5. obstruct, impede, or interfere with by force, violence, coercion, threats, or intimidation any peaceful picketing by employees during any labor controversy or shall abeit or aid such obstruction or interference 6. employment or use of any strikebreaker/ employed as a strike breaker 7. bringing in, introducing, or escorting by any public officer or employee, including officers and personnel of the AFP or PNP, or any armed person in any manner of any individual who seeks to replace strikers in entering or leaving the premises of a strike area or work in place of strikers 8. commit any act of violence, coercion or intimidation while engaged in picketing or obstruct the ingress or egress from the employer's premises for lawful purposes or obstruct public thoroughfares (must be pervasive and widespread/consistently and deliberately resorted to as a matter of policy) uicnco kT mpr im es e™s ed) TI FF Q( U ar e needed to s ee t and a Improved Offer Balloting dec om pr ess or 1. In case of strike his pi ct ur e. • Regional branch of the Board shall, conduct a referendum by secret balloting on the improved offer of the employer. • on or before the 30th day of strike. • at its own initiative or upon the request of any affected party.

• When at least a majority of the union members vote to accept the improved offer, the striking workers shall immediately return to work and the employer shall thereupon re-admit them upon the signing of the agreement. 2. In case of lockout • The regional branch of the Board shall also conduct a referendum by secret balloting on the reduced offer of the union. • on or before the 30th day of the lockout. • When at least a majority of the board of directors or trustees or the partners holding the controlling interest in the case of partnership vote to accept the reduced offer, the workers shall immediately return to work and the employer shall thereupon readmit them upon the signing of the agreement. Injunction GR: No court or entity shall enjoin any picketing, strike or lockout. Exceptions: 1. When prohibited or unlawful acts are being or about to be committed that will cause grave or irreparable damage to the complaining party. 2. National Interest Assumption of Jurisdiction by DOLE Secretary 1. Discretionary 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 may certify the same to the commission for COMPULSORY ARBITRATION Effect: AUTOMATICALLY ENJOINS the intended on impending strike or lockout but if one has already taken place, all striking or locked out employees SHALL IMMEDIATELY RETURN TO WORK and the employer shall immediately resume operations and re-admit all workers under the same terms and conditions prevailing before the strike or lock-out 2. Mandatory: (within 24 hours) In labor disputes adversely affecting the continued operation of HOSPITALS, CLINICS, OR MEDICAL INSTITUTIONS May assume jurisdiction or certify it to the NLRC for compulsory arbitration Duty of striking union or locking out employer to provide and maintain an effective Page 63 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 SKELETAL WORKFORCE of medical and other health personnel, where movement and service shall be unhampered and unrestricted as are necessary to insure the proper and adequate protection of the life and health of its patients most especially emergency cases for the duration of the strike or lock-out Power of the President under Art. 263(g) 1. may determine the industries, which are in his opinion indispensable to national interest 2. may intervene at any time and assume jurisdiction over any such labor dispute in order to settler or terminate the same Decision of the President, DOLE Secretary is final and executory after receipt thereof by the parties. Sarmiento v. Tuico, 162 SCRA 676 (1988) The return-to-work order not so much confers a right as it imposes a duty. While as a right it may be waived, it must be discharged as a duty even against the worker’s will. Returning to work in this situation is not a matter of option or voluntariness but of obligation. If the stoppage of work will be unfruitful not only to bith the employer and the employees, more particularly if the national economy will suffer because if the resultant reduction in our export earnings and our dollar reserves, not to mntion possible cancellation of the contracts of the company with foreign exporters, the labor dispute may properly be certified to the National Labor Relations Commission, to avoid such a development, with the return-to-work order following as a mater of course under the law. 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 he 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.

A strike may be considered legal when the union believed that the respondent company committed unfair labor acts and the circumstances warranted such belief in good faith although subsequently such allegation of unfair labor practices are found out as not true. (People’s Industrial and Commercial Employees and Workers Organization (FFW) v. People’s Industrial and Commercial Corp. GR No. 37687 15 March 1982) Rule on Wages of Strikers GR: Strikers are not entitled to their wages during the period of a strike, even if the strike is legal. Exceptions: 1. In case of a ULP STRIKE, in the discretion of the authority deciding the case. 2. Where the strikers voluntarily and unconditionally offered to return to work, but the employer refused to accept the offer [e.g. of an “unconditional offer”: “we will return tomorrow” and NOT “willing to return provided] o They are entitled to backwages from the date the offer was made. 3. Where there is RETURN-TO-WORK ORDER and the employees are discriminated against. o They are entitled to backwages from the date of discrimination. Rule on Reinstatement of Striking Workers GR: Striking employees are entitled to reinstatement, regardless of whether or not the strike was the consequence of the employer’s ULP. Exceptions: The following strikers are NOT entitled to reinstatement: 1. union officers who knowingly participate in an illegal strike. 2. any striker/union member who knowingly participates in the commission of illegal acts during the strike.

Consequences of Illegal Strike

Sarmiento v. Tuico, 162 SCRA 676 (1988) The return-to-work order should benefit only those workers who comply with it and, regardless of the outcome of the compulsory arbitration proceedings, are entitled to be paid for the work they have actually performed. Conversely, those workers who refuse to obey said order and instead wage a strike are not entitled to be paid for work not done or to reinstatement to the positions they have abandoned by their refusal to return thereto as ordered.

Good-Faith Doctrine

St. Scholastica’s College v. Torres, GR No.

The discretion to assume jurisdiction may be exercised by the Secretary of Labor and uic kT mpr imofes e™ Employment without TI FF Q the ( U necessity nco prior s ed) notice ar e needed to s ee t and a of hearing given to om anypr of ess the parties disputants dec or hisEmployees pi ct ur e.Union, et.al. v. (Magnolia Poultry Sanchez GR. Nos. 76227-28, 05 November 1986)

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 100158, 19 June 1992 A return to work order is immediately effective and executory notwithstanding the filing of a motion for reconsideration. It must be strictly complied with even during the pendency of any petition questioning its validity. The respective liabilities of striking union officers and members who failed to immediately comply with the return-to-work order is outlined in Art. 264 of the Labor Code which provides that any declaration of a strike or lockout after the Secretary of Labor and Employment has assumed jurisdiction over the labor dispute is considered an illegal act. Any worker or union office who knowingly participates in a strike defying a return-to-work order may, consequently “be declared to have lost his employment status.” Batangas Laguna Tayabas Bus Company v. NLRC, GR No. 101858, 21 August 1992 But to justify dismissal, the defiance of the returnto-work order must be proved. In one case the Court said that the mere fact that the majority of the strikers were able to return to work does not necessarily mean that the rest deliberately defied the return to work order or that they had been sufficiently notified thereof. As the Solicitor General correctly adds, some of them may have left Metro Manila and did not have enough time to return during the period given by the period given by petitioner. Gold City Integrated Port Services, Inc. v. NLRC, 245 SCRA 627 (1995) Art. 264 makes a distinction between workers and union officers who participate in a strike. An ordinary striking worker cannot be terminated for mere participation in an illegal strike. There must be proof that he committed illegal acts during a strike. A union officer, on the other hand, may be terminated from work when he knowingly participates in an illegal strike, or when he commits an illegal act during a strike. V. POST-EMPLOYMENT A. REGULAR, CASUAL, PROBATIONARY EMPLOYMENT uicnco kT mpr im es e™s ed) TI FF Q( U ar e needed to s ee t and a Art. 280. Regular dec and om casual employment pr ess or his pi ct ur e. Art. 281. Probationary employment Regular Employment Engaged to perform tasks usually necessary and desirable to the business of the employer Regular employment does not mean permanent employment

- A probationary employee is considered regular after 6 months, becomes regular. May be terminated only for just / authorized causes Test to determine regular employment Universal Robina Corporation v. Catapang, GR No. 164736. October 14, 2005 The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee to the usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. 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. 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. Casual Employment Activity performed is not usually necessary or desirable in the usual business or trade of the employer, not project and not seasonal Except: if he has rendered at least 1 year of service, whether such service is continuous or broken, he is considered a REGULAR employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Despite the distinction between regular and casual employment, every employee 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 employees during the period of their actual employment. Fixed-Term Employment Period is agreed upon knowingly and voluntarily by the parties without force, duress, or improper pressure exerted on the employee. Brent case: fixed-term employment repealed by LC. But the Civil Code, a general law, allows fixedterm employment Employee hired on a fixed-term is regular if job is necessary and desirable to business of employer. (Philips Semiconductor v. Fadriquela, GR No. 141717, April 2004) Page 65 of 83

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Project Employment One whose employment has been fixed for a specific project or undertaking the completion of which has been determined at the time of engagement of the employee; the period is not the determining factor, so that even if the period is more than 1 year, employee does not necessarily become regular Maraguinot v. NLRC, 284 SCRA 539 (1998) Repeated hiring on a project to project basis is considered necessary and desirable to the business of the employer. Thus, employee is regular. FilSystems v. Puente, GR No. 153832, 18 March 2005 Repeated hiring does not necessarily mean regular employment. “Day Certain” Rule – project employment ends on a certain date does not end on an exact date, but on the completion of the project. Phil. Global Communication case: usual and desirable does not matter because employer hires without intent of making them regular. Regularization is not a management prerogative. It is a mandate of law. (PAL v. Pascua, 15 August 2003) Nature of employment determines regular employment. Art. 280 does not apply to OFWs. (LC does not apply to migrant workers, RA 8042 does.) Poseidon Fishing case: if engaged in deep-sea fishing, locally-hired employees, 280 applies Probationary Employment GR: Not to exc eed 6 months Exceptions: a. covered by an apprenticeship agreement stipulating a longer period b. voluntary agreement of parties (especially when nature of work requires a longer period) c. the employer gives the employee a second chance to pass the standards set uicnco kT mpr im es e™s ed) TI FF Q( U Termination of Probationary Employment ar e and needed to s ee t a om pr ess or a. just / authorizeddec causes his pi ct ur e. b. when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to employee at the time of his engagement If allowed to work after the probationary period, he shall be considered a REGULAR employee

After lapse of probationary period (6 months), the employee becomes regular. (Voyeur Visage, 2005) Probationary employee may be dismissed before end of the probationary period. Aberdeen Court, Inc. v. Agustin, GR No. 149371, 13 April 2005 There is probationary employment where the employee, upon his engagement, is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment, based on reasonable standards made known to him at the time of engagement. The services of an employee who has been engaged on probationary basis may be terminated only for a just cause, when he fails to qualify as a regular employee in accordance with the reasonable standards prescribed by the employer. In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee. Mariwasa Manufacturing, Inc. v. Leogardo, Jr., 26 January 1989 Issue: May the employer and the employee validly agree to extend the probationary period beyond six months? Held: YES. Such an extension may be lawfully agreed upon, despite the seeming restrictive language of Article 281. A voluntary agreement extending the original probationary period to give the employee a second chance to pass the probation standards constitutes a lawful exception to the statutory limit. UST v. NLRC, 15 February 1990 Issue: For private school teachers, what are the legal requirements for acquisition of permanent employment? Held: (1) The teacher is a full-time teacher; (2) the teacher must have rendered three consecutive years of service; and (3) such service must have been satisfactory. Seasonal Employment

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Work or services to be performed is seasonal in nature and the employment is for the duration of the season Hacienda Fatima v. National Federation of Sugarcane Workers-Food and General Trade, GR No. 149440, 28 January 2003 The fact that seasonal workers do not work continuously for one (1) whole year but only for the duration of the season does not detract from considering them in regular employment since in a litany of cases, the Court has already settled that seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not separated from service in said period, but merely considered on leave until re-employed. Workers who have performed the same tasks every season for several years are considered regular employees for their respective tasks. B. SECURITY OF TENURE Art. 279. Security of tenure Applies to all establishment or undertakings whether for profit or not Project employees have no security of tenure. (see how full backwages are computed) Full backwages are computed from the time wages are withheld up to the time the employee is actually reinstated. In the case of project employees, you cannot demand wages for the time when there is no project. Thus, 279 does not apply to project employees. C. JUST CAUSES, AUTHORIZED CAUSES, CONSTRUCTIVE DISMISSAL Art. 282. Just Causes for Termination by employer Grounds: (SoMe WiD GAN FWeT CO) 1. Serious Misconduct or Willful Disobedience by the employee of the lawful orders of his employer or representative in connection with his work (work-related) 2. Gross And habitual Neglect by uicnco kTthe imemployee e™s ed)of TI FF Q( U mpr es his duties ar e and needed to s ee t om by pr a ess or 3. Fraud or Willful dec breach employee of the Trust his pi ct ur e. reposed in him by his employer or duly authorized representative (not mere suspicion) 4. Commission of a Crime or offense by the employee against the person of his employer or any immediate member of his family or duly authorized representative 5. Other analogous cases

Serious Misconduct 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 v. Pehid, 04 October 2005) Elements of Serious Misconduct 1. serious; 2. relate to the performance of the employee’s duties; 3. employee has become unfit to continue working for the employer (Phil. Aeolus v NLRC, 2000) Elements of Willful Disobedience 1. employee’s assailed conduct was willful or intentional, the willfulness being characterized by a wrongful and perverse attitude; 2. the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he has been engaged to discharge (Micro Sales Operation Network v. NLRC,11 October 2005) Gross and Habitual Neglect GROSS and HABITUAL must concur together. Implies a want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. Previous infractions by the employee should have been acted upon appropriately by the employer before terminating the former. Fraud or Willful Breach of Trust Can be committed only by confidential and managerial employees - confidential employees – charged with custody and protection of employer’s property like a cashier (this is different from the “confidential employees” in labor relations) A criminal case need not be actually filed. Commission of acts constituting a crime is sufficient. Analogous Cases; Examples violation of safety rules gross inefficiency wrongful acts of employee against the company violation of code of discipline Page 67 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 failure to heed an order not to join an illegal picket immorality sexual harassment Art. 283. Authorized Causes for Termination Grounds: 1. Introduction of labor-saving devices 2. Redundancy 3. Retrenchment 4. Closure of business as a result of grave financial loss 5. Closure not due to losses Redundancy Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. A position has become superfluous as an outcome of a number of factors such as overhiring of workers, decreased volume of business, dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise (thus it only requires superfluity not duplication of work) The redundancy SHOULD NOT have been created by the EMPLOYER. Validity of a Redundancy Program DAP v. CA, GR No. 165811, 14 December 2005 The employer must comply with the following requisites to ensure the validity of the redundancy program: 1. a written notice served on both the employees and the Department of Labor and Employment (DOLE) at least one month prior to the intended date of retrenchment 2. payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher 3. good faith in abolishing the redundant positions 4. fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished uicnco kT mpr im es e™s ed) TI FF Q( U ar e needed to s ee t and a Retrenchment dec om pr ess or pi ct ur Resorted primarilyhis to avoid or e. minimize business losses. Standards to Justify Retrenchment 1. The losses expected should be substantial and not merely de minimis in extent.

2. The substantial loss apprehended must be reasonably imminent. 3. It be reasonably necessary and likely to effectively prevent the expected losses. The employer should have taken other measures prior or parallel to retrenchment to forestall losses. 4. The alleged losses if already realized, and the expected imminent losses must be proved by sufficient and convincing evidence. (Oriental Petroleum & Minerals Corp. v Fuentes, 14 October 2005) Difference between redundancy and retrenchment: In redundancy, company has no financial problems; in retrenchment, company suffers from financial problems. Closure Not Due to Losses In cases of closure not due to losses, it must NOT be in BAD FAITH. If the dismissal is based on a just cause under Article 282 but the employer 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 employee. If the dismissal is based on an authorized cause under Article 283 but the employer failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by the employer’s exercise of his management prerogative Constructive Dismissal 1. No formal dismissal 2. The employee is placed in a situation by the employer such that his continued employment has become UNBEARABLE. Veterans Security Agency v. Vargas, GR No. 159293. 16 December 2005 Constructive dismissal exists when an act of clear discrimination, insensibility or disdain on the part of the employer has become so unbearable as to leave an employee with no choice but to forego continued employment. Abandonment, as a just and valid cause for termination, requires a deliberate and unjustified refusal of an employee to resume his work, coupled with a clear absence of any intention of returning to his or her work. Abandonment is incompatible with constructive dismissal.

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Article 286 applies only when there is a bona fide suspension of the employer’s operation of a business or undertaking for a period not exceeding 6 months. In security agency parlance, being placed “off detail” or on “floating” status means “waiting to be posted.” It is the inherent prerogative of an employer to transfer and reassign its employees to meet the requirements of its business. Be that as it may, the prerogative of the management to transfer its employees must be exercised without grave abuse of discretion. The exercise of the prerogative should not defeat an employee's right to security of tenure. The employer’s privilege to transfer its employees to different workstations cannot be used as a subterfuge to rid itself of an undesirable worker. Art. 284. Disease as ground for termination Disease as Ground for Termination When his continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees There is a certification by a competent public health authority that the disease is of such nature or at such stage that it cannot be cured within a period of 6 months even with proper medical treatment The requirement for a medical certificate cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the employer of the gravity or extent of the employee’s illness and thus defeat the public policy on the protection of labor. (Manly Express v. Payong, 25 October 2005) Art. 285. Termination by employee Termination without Just Cause 1. at least 1 month prior notice 2. employee may be held liable for damages for failure to give notice Termination with Just Cause 1. Grounds a. serious insult on the honor and person of employee by the Q employer his e™ uicnco kTor im TI FF ( U mpr es s ed) representative ar e and needed to s ee t decunbearable om pr a ess or b. inhumane and treatment his pi ct ur e. accorded to the employee c. commission of a crime against person of the employee or any of the immediate members of his family d. other causes analogous to the foregoing 2. Notice not necessary

Resigning employee not entitled to separation pay, unless company policy gives it. No Separation Pay in resignation; Exceptions; Waivers and Quitclaims, when valid Candido Alfaro v. CA, et al., GR No. 140812, 28 August 2001 Generally, separation pay need not be paid to an employee who voluntarily resigns. However, an employer who agrees to expend such benefit as an incident of the resignation should not be allowed to renege in the performance of such commitment. Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represented a reasonable settlement, it is binding on the parties and may not later be disowned, simply because of a change of mind. Art. 286. When employment not deemed terminated The bona-fide suspension of the operation of a business or undertaking for a period not exceeding 6 months, or the fulfillment by the employee of a military or 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 (1) month from the resumption of operations of his employer or from his relief from the military or civic duty. Temporary Lay-off Must not exceed 6 months. Options of employer (i.e. security agency) in case of pull out by client: 1. retrenchment – must give notice 1 month before retrenchment; pay separation pay 2. closure – must comply with 1 month advanced notice; no need to pay separation pay Abandonment means the deliberate, unjustified refusal of an employee to resume his/her employment Two elements must be proved 1. the intention to abandon 2. an overt act from which it may be inferred that the employee has no more intent to resume his/her work

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 This is negated by immediate filing of an action for ILLEGAL DISMISSAL. Employment Not Deemed Terminated a. bona fide suspension of the operation of a business/undertaking for a period of not more than 6 months b. fulfillment by the employee of a military or civic duty Employer shall reinstate the employee to his former position without loss of seniority rights IF employee indicates his desire to resume his work not later than 1 month from resumption of operations of his employer or his relief from the military or civic duty Preventive Suspension justified where the employee’s continued employment poses a serious and imminent threat to the life or property of the employer or of his co-workers (there is a REASONABLE POSSIBILITY of the employee posing such a threat) must not exceed 1 month It is only for the purpose of investigating the offense to determine whether he is to be dismissed or not. IT IS NOT A PENALTY. if more than 1 month, the employee must be actually reinstated or reinstated in the payroll officers liable only if with malice and bad faith Floating Status It is legal, such as in the case of security guards who have no assignment. Such a status should not exceed six-months; if it does, it amounts to a dismissal. D. DUE PROCESS Art. 277. Miscellaneous Provisions (b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought uicnco kT mpr im es e™as ed) to be terminated a TI written containing FF Qnotice ( U ar e needed to s t and a statement of the causes forprtermination andee shall dec om ess or hisopportunity pi ct ur e.to be heard and to afford the latter ample defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to

contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. The Secretary of the Department of Labor and Employment 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 Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass layoff. In cases of dismissal, employer has the burden of proof to show that the dismissal falls under the just and authorized causes. (Tolentino v. PLDT, GR No. 160404, 08 June 2005) 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 employee rests upon the employer since he is in custody of documents that would be able to prove the amount due, such as the payroll. In cases of just and authorized causes, due process must be observed. Due Process Requirements under Art. 277 (b) Just Causes (282) Authorized Causes (283) Twin Notice (Before and One notice only After Investigation - notice to employee1 - notice of the charge month before - notice that employee installation of LSD, is guilty (after retrenchment, or investigation) closure - 1 month advanced Investigation notice to DOLE Non-compliance with due process requirements Before the Agabon case, the doctrine in Serrano v. NLRC (GR No. 117040, 27 January 2000) was followed. It states that termination due to authorized cause without giving the notice required under the Labor Code is not a violation of due process. It is valid although declared irregular / ineffectual. He shall however be entitled to SEPARATION PAY AND BACKWAGES. Agabon v. NLRC, 17 November 2004 modifies Serrano Dismissal for an authorized or just cause, w/o procedural due process is not an illegal dismissal Page 70 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 which warrants backwages; employee entitled only to nominal damages. The Court interpreted Art. 279 to the effect that termination is illegal only if it is not for any of the justified or authorized causes provided by law. Payment of backwages and other benefits, including reinstatement, is justified only if the employee was unjustly dismissed. The Court decided to follow Wenphil that where the dismissal is for a just cause, the lack of statutory due process should not nullify the dismissal or render it illegal. However, the employer should indemnify the employee for the violation of his rights. The indemnity should be stiffer than that provided in Wenphil to discourage the abhorrent practice of “dismiss now, pay later.” The indemnity should be in the form of nominal damages, which is adjudicated in order that a right of plaintiff, which has been violated by the defendant, may be vindicated. Jaka Food Processing v. Pacot, 28 March 2005 If the dismissal is based on a just cause under Article 282 but the employer 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 employee. On the other hand, if the dismissal is based on an authorized cause under Article 283 but the employer failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by the employer’s exercise of his management prerogative. SC distinguished between non-compliance of due process requirements in just and authorized causes. Authorized causes – Php 50,000 nominal damages Just causes – Php 30,000 nominal damages (because in just causes, employee is being dismissed due to his fault) Industrial Timber Corp. v. Ababon, 30 March 2006 Factors to be taken into account in the determination of the amount of nominal damages in dismissal cases: 1. the authorized cause invoked, whether it was a retrenchment or a closure or cessation of operation of the establishment due to serious Q( U uicnco kT mpr im es e™ business losses reverses or s ed) TI orFFfinancial ar e needed to s ee t and a otherwise dec om pr ess or his pi ct to urbe e. awarded 2. the number of employees 3. the capacity of the employers to satisfy the awards, taken into account their prevailing financial status as borne by the records 4. the employer's grant of other termination benefits in favor of the employees 5. whether there was a bona fide attempt to comply

with the notice requirements as opposed to giving no notice at all. SC reduced the nominal damages from Php 30,000 to Php 10,000. Agabon not given retroactive effect The principle in law giving retroactive effect where the subsequent law is corrective in character does not necessarily apply to judicial decisions. Unless the SC provides otherwise, the ruling would have no retroactive effect. E. RELIEFS FOR ILLEGAL DISMISSAL 1. Backwages + Reinstatement without loss of seniority rights, or if reinstatement impossible 2. Backwages + Separation Pay Where reinstatement is ordered, but the position is already filled up, the dismissed employee must still be reinstated if it is still possible. Cases where reinstatement is impossible 1. Doctrine of Strained Relations (applies to confidential and managerial employees only) 2. In case of position has been abolished (applies to both managerial and rank and file) Moral and exemplary damages may also be awarded. Computation of Separation Pay Installation of labor1 month pay or 1 month saving devices pay for every year of service whichever is Redundancy higher.

Retrenchment to prevent losses Closures or cessation of operations of establishments or undertaking NOT due to serious business losses or financial reverses Disease Closures or cessation of operations due to serious business losses or financial reverses

1 month pay for every year is always higher if the employee has served for more than 1 year. 1 month pay or at least 1/2 month pay for every year of service whichever is higher

no separation pay

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 * a fraction of at least 6 months is considered 1 year If the retrenchment is later declared illegal, separation pay of 1 month for every year shall be paid. Such computation is because the retrenchment was illegal and the employee was entitled to reinstatement. Reinstatement; payment of backwages Triad Security & Allied Services, Inc, et al. v Ortega, GR No. 160871, 06 February 2006 An order of reinstatement by the labor arbiter is not the same as actual reinstatement of a dismissed or separated employee. Thus, until the employer continuously fails to actually implement the reinstatement aspect of the decision of the labor arbiter, their obligation to the illegally dismissed employee, insofar as accrued backwages and other benefits are concerned, continues to accumulate. It is only when the illegally dismissed employee receives the separation pay (in case of strained relations) that it could be claimed with certainty that the EER has formally ceased thereby precluding the possibility of reinstatement. In the meantime, the illegally dismissed employee’s entitlement to backwages, 13th month pay, and other benefits subsists. Until the payment of separation pay is carried out, the employer should not be allowed to remain unpunished for the delay, if not outright refusal, to immediately execute the reinstatement aspect of the labor arbiter’s decision. Further, the employer cannot refuse to reinstate the illegally dismissed employee by claiming that the latter had already found a job elsewhere. Minimum wage earners are left with no choice after they are illegally dismissed from their employment, but to seek new employment in order to earn a decent living. Surely, we could not fault them for their perseverance in looking for and eventually securing new employment opportunities instead of remaining idle and awaiting the outcome of the case. Reliefs of local workers vs. migrant workers Art. 279, LC Sec. 10, RA 8042 (local workers) (migrant workers) Reinstatement Full reimbursement of uicnco kT mpr im es e™s ed) TI FF Q(his U placement fee with ar e and needed to s ee t a dec om pr ess orof 12% per interest his pi ct ur e. annum Full backwages from the Salaries for the time his compensation unexpired portion of his was withheld from him employment contract or up to the time of his for 3 months for every actual reinstatement year of the unexpired term, whichever is less

* without valid, just, or authorized cause The option of “three months for every year” is available only if the employment is for at least one year. If the contract is shorter, the salary to be paid should be that for the unexpired portion. (Marsaman Manning Agency v. NLRC, 25 August 1999) F. RETIREMENT Art. 287. Retirement (as amended by the Retirement Pay Law – RA 7641) Exempted: retail, service, agricultural establishments operations employing not more than 10 employees Kinds 1. OPTIONAL – 60 years old / 5 years in service (includes authorized absences/vacations/regular holidays/mandatory military or civic service). This depends on the stipulations in the CBA, company retirement plan, or employment contract. 2. COMPULSARY – 65 years old/ regardless or years of service (company not bound to dismiss employee) Benefits 1/2 month salary per year of service which shall include: 1. 15-day basic wage, plus 2. 1/12 of the 13t h month pay, plus 3. 5-day Service incentive leave pay plus 4. other benefits as maybe agreed upon by employer and employee (a fraction of at least 6 months considered as 1 year) Minimum benefits to be received = (no. 1 + no. 2 + no. 3) x years of service If CBA / retirement plan has no prohibition, an employee can get pay under the law, CBA, and the retirement plan. If what is provided in the CBA is lower that what is provided for in law, the employee is entitled to the higher amount. VI. DISPUTE SETTLEMENT A. JURISDICTIONS OF THE DIFFERENT AGENCIES Bureau of Labor Relations Original jurisdiction: appeal to DOLE Secretary

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Appellate jurisdiction: decision shall be immediately executory upon issuance of entry of final judgment; can be reviewed by the CA in a petition for certiorari under Rule 65 Jurisdiction 1. Inter-union conflicts 2. Intra-union conflicts 3. All disputes, grievances or problems arising from or affecting labor-management relations in all workplaces EXCEPT those arising from the implementation or interpretation of the CBA which shall be the subject of grievance procedure and/or voluntary arbitration 4. Complaint involving federations, national unions, industry unions, its officers or member organizations Compromise Agreements If voluntarily agreed upon by the parties with the assistance of the BLR or the regional office of DOLE final and binding upon the parties The only time NLRC or any courts can assume jurisdiction over issues involved therein: a. in case of non-compliance thereof b. if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation or coercion Power to Issue Subpoena When relevant to a labor dispute under its jurisdiction either at the request of any interested party or at its own initiative Privileged Communication Information and statements made at conciliation meetings shall NOT be used as evidence in the NLRC Conciliators and similar officials shall not testify in any court or body regarding any matters taken up at conciliation proceeding conducted by them Appeal within 10 days to the DOLE Sec retary Grounds: a. grave abuse of discretion b. gross incompetence uicnco kT mpr im es e™s ed) TI FF Q( U ar e needed to s ee t and a Marino, Jr., et. al. dec v. Gamilla, et. or al., 31 January om pr ess his pi ct ur e. 2005 Issue: Does the bureau of labor relations have jurisdiction over claims for actual, moral, exemplary and other forms of damages arising from intra-union or inter-union disputes?

Held: No. Unlike the NLRC which is explicitly vested with the jurisdiction over claims for actual, moral, exemplary and other forms of damages, the BLR is not specifically empowered to adjudicate claims of such nature arising from intra-union or inter-union disputes. As long as the agreement is voluntarily entered into and has a reasonable award, it is valid. It must be approved by the LA (NLRC Rules) At the DOLE Secretary’s level, the Secretary must approve. On appeal, the NLRC must approve the agreement. An offer to settle is not proof that something is due to the employee. Mindoro Lumber and Hardware v. Eduardo D. Bacay, et. al., 08 June 2005 Article 277 of the labor code states that any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the Department of Labor shall be final and binding upon the parties. ‘A’, a member of a labor union and a party to a labor dispute executed a compromise settlement. He appeared before the Office of the Regional Director to file said compromise settlement together with a motion to dismiss the case. Issue: Is the compromise settlement in compliance with Article 277? Held: The assistance of the BLR or the regional office of the DOLE in the execution of a compromise settlement is a basic requirement. Without it, there can be no valid compromise settlement. Mere appearance before BLR or the regional office of the DOLE to file the already executed compromise settlement is not the “assistance” required by the law. As such, the compromise settlement executed by ‘A’ cannot qualify as a valid compromise settlement. Jurisdiction of Labor Arbiters 1. ULP (priority resolved within 30 cal days from submission for decision) 2. termination disputes 3. claims for wages, rates of pay, hours of work and other terms and conditions of employment 4. claims for actual, moral, exemplary and other forms of damages arising from employeremployee relationship Page 73 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 5. cases arising from prohibited activities during strikes, including questions involving the legality of strikes and lockouts 6. all other claims arising from employer-employee relationship involving an amount exceeding P5000 regardless of whether accompanied by a claim for reinstatement except ECC, SSS, Medicare, & maternity benefits 7. Wage distortion cases in unorganized establishments 8. All monetary claims of OFWs arising from EER 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 (RA 8042) 9. Enforcement of compromise agreements when there is non-compliance by any of the parties pursuant to Art. 227 of the Code (Sec. 1, Rule V, 2005 NLRC Rules) Cooperatives Termination of members of cooperatives is not cognizable by the LA (members are not employees) LA has jurisdiction over illegal dismissal cases involving employees of cooperatives LA does NOT have jurisdiction over Intra-corporate disputes Cases involving corporate officers (bec. they are not employees) – BUT in Prudential Bank v. Reyes (G.R. No. 141093, 20 February 2001), it was held that an employee who rose from the ranks is a regular employee and not a mere corporate officer Cases involving GOCCs with original charters Cases involving entities immune from suit (except when the entity performs proprietary functions) Local water districts (since they are quasi-public corporations) Actions based on tort (Tolosa v. NLRC, 10 April 2003 – Claim of a seaman for damages is under torts, regular court has jurisdiction.) Jurisdiction of the NLRC 1. Original Jurisdiction a. Injunction in ordinary labor disputes to enjoin Q( U uic kT mpr im es e™s ed) or restrain TI anyFF actual ornco threatened ar e needed to s ee and a commission of om any pr or ess all prohibited or t dec or pi require ct ur e. the performance of unlawful actshis or to a particular act in any labor dispute which, if not restrained or performed forthwith , may cause grave or irreparable damage to any party b. Injunction in strikes or lockouts under Art. 264

c. Certified labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, certified to it by the DOLE Secretary for compulsory arbitration 2. Exclusive Appellate Jurisdiction a. All cases decided by the LAs, including contempt cases b. Cases decided by the DOLE Regional Directors or his duly authorized hearing officers involving recovery of wages, simple money claims and other benefits not exceeding Php 5,000 and not accompanied by a claim for reinstatement OCULAR INSPECTION by Labor Arbiter & NLRC at any time during working hours Jurisdiction of the POEA Cancellation / Suspension of License of Authority to recruit of Recruitment Agencies (until phase out within 5 years as provided in RA 8042) Disciplinary Action against OFWs Appeal to Secretary of DOLE within 10 calendar days cancellation/ revocation/ supervision of license or authority Appeal to NLRC within 10 calendar days 1. violation of overseas employment contracts 2. disciplinary cases filed against overseas contract workers Jurisdiction of DOLE Regional Directors 1. visitorial power (Art. 128) 2. claims not exceeding Php 5,000 (Art. 129) 3. violation of the constitution & by-laws and rights & conditions membership 4. inter-union and intra-union disputes involving independent unions and chartered locals Jurisdiction of the NCMB conciliation, mediation, and voluntary arbitration cases (SEE ANNEX L) B. PROCEDURE Art. 221. Technical rules not binding and prior resort to amicable settlement Art. 222. Appearances and Fees The rules of evidence prevailing in courts of law or equity shall not be controlling. It is the spirit and intention of this Code which shall be used as reasonable means to ascertain the facts in each case Page 74 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Without regard to technicalities of law and procedure all in the interest of due process Parties may be represented by legal counsel but it shall be the duty of the Chairman, any presiding Commissioner or any labor arbiter to exercise compete control of the proceedings at all stages GR: The only way to acquire jurisdiction is to serve summons Voluntary appearance of the lawyer amounts to voluntary submission to the jurisdiction of the LA. (Santos v. NLRC, GR No. 101699, 13 March 1996) Payment of docket fees is not required in labor standards claims under Art. 277(d). EXCEPT: in case of bargaining deadlock, the fees are shared by the parties Failure to implead a substitute party is not a fatal defect. (Chu v. Pasajo, 13 April 2003) Sec. 3, Rule V of the NLRC Rules allows parties to submit position papers with attachments and they can be made basis of the LA’s decision. Holding of trial on the merits is discretionary on the part of the LA. Due process in Art. 277(b) (termination disputes) end line is hearing with representative of own choice Due process in Art. 221 opportunity to be heard It is wrong to apply opportunity be heard in due process under Art. 277(b). Verification and Certification of Non-Forum Shopping are required BUT Art. 221 can be invoked. NLRC Rules provide that before deciding, LA must inform parties that the case has been submitted for decision. If this is not complied with, decision is still valid because of Art. 221. Art. 218(c) cannot be invoked to support a faulty decision of the LA. The provision refers to a power of the NLRC and not the LA. C. APPEALS Art. 223. Appeal Art. 224. Execution of decisions, orders or awards uicnco kT mpr im es e™s ed) Appeal of LA’s Decision TI FF Q( U ar e and needed to Arbiter s ee t is a Appeal from the dec decision of the Labor om pr ess or his appeal pi ct urtoe.the NLRC within 10 brought by ordinary calendar days from receipt by the party of the decision. From the decision of the NLRC, there is no appeal.

The only way to elevate the case to the CA is by way of the special civil action of certiorari under Rule 65 of the Rules of Civil Procedure. From the ruling of the Court of the Appeals, it may be elevated to the SC by way of ordinary appeal under Rule 45 of the Rules of Civil Procedure. (St. Martin Funeral Home vs. NLRC, et al., GR No. 130866, 16 September 1998) Grounds 1. prima facie evidence of abuse of discretion on the part of LA 2. the decision, order or award was secured through fraud or coercion including graft and corruption 3. pure questions of law 4. raised serious errors in the findings of facts which could cause grave or irreparable damage or injury to the appellant 5. additional Requirement: in case of judgment involving a monetary award-employer (appellant) may perfect the appeal only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the NLRC in the amount equivalent to the monetary award in the judgment appealed from Requisites for Perfection of Appeal 1. filed within the reglementary period 2. Memorandum of Appeal under oath 3. appeal fee 4. cash, property, or surety bond, if judgment involves monetary award 5. proof of service to the adverse party Procedure 1. File Memorandum of Appeal within 10 calendar days, counted from receipt of decision 2. Other party can file an Answer within 20 calendar days from receipt of Appeal 3. NLRC decides 4. NLRC decision becomes final and executory 10 days after it is rendered Appeal Involving Monetary Award No monetary award, no appeal bond required If LA’s decision does not provide for a computation of the monetary award, no appeal bond is required to be filed. Bond should be posted within the 10-day period for filing of appeal If no bond is filed, appeal is not perfected Remedy in case of failure to post bond, remedy is to file a motion to dismiss Motion to Reduce Bond

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Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Motion to reduce bond does not toll the running of the period to perfect appeal In order to effectively stop the running of the period within which to perfect the appeal, the motion to reduce bond must comply with the requisites that: 1. filed within the reglementary period 2. based on meritorious grounds 3. a reasonable amount of bond in relation to the monetary award should be posted together with said motion A substantial monetary award, even if it runs into millions, does not necessarily give the employerappellant a ‘meritorious case’ and does not automatically warrant a reduction of the appeal bond. (Calabash Garments v. NLRC, GR No. 110827, 08 August 1996) Partial payment of the bond is deemed substantial compliance with the rules while the motion to reduce bond is still pending with the NLRC. [Rosewood Processing v. NLRC, 352 Phil 1013 (1998)] But the partial payment must be made within the reglementary period. An appellant cannot invoke financial difficulties as a ground in support of a Motion to Reduce Bond. Suffice it to say that the law does not require outright payment of the total monetary award, but only the posting of a bond to ensure that the award will be eventually paid should the appeal fail. (Times Transportation v. NLRC, GR No. 16378, 16 February 2005) Enforcement Any law enforcement agency may be deputized by the DOLE Secretary or the NLRC Issuance of writ of execution on a judgment within 5 years from date it bec omes final and executory motu proprio or in motion of any interested party Reinstatement Pending Appeal If reinstatement is ordered in an illegal dismissal case, it is immediately executory even pending appeal Self-executing with no need for a writ of uicnco kT mpr im es e™s ed) execution TI FF Q( U ar e needed to s ee t and a Either admitted back to work under dec om pr ess or the same his piprevailing ct ur e. prior to his terms and conditions dismissal or separation or merely reinstated in the payroll (at the option of the employer, i.e. confidential employee, but the choice must be communicated to the employee by the employer) Posting of a bond shall not stay the execution of reinstatement

The unjustified refusal of the employer to reinstate an illegally dismissed employee entitles the employee to payment of his salaries. If despite several writs of execution, the employer still refuses to reinstate the employee, the remedy is not the grant of additional backwages to serve as damages but to file a motion to cite the employer for contempt. (Christian Literature Crusade v. NLRC, 171 SCRA 712, 10 April 1989) LA upheld the validity of the dismissal; NLRC reversed. CA held that dismissal was valid. HELD: The employer is liable to pay for the salary of the employee previously ordered reinstated by the NLRC although later on, the dismissal of the employee was held not to be illegal. (Roquero v. PAL, G.R. No. 152329, 22 April 2003) If the former position is already filled up, the employee ordered reinstated under Article 223 should be admitted back to work in a substantially equivalent position. (Medina v. Consolidated Broadcasting System, 222 SCRA 707) Appeal of Voluntary Arbitrator’s Decision Appealable by ordinary appeal under Rule 43 of the Rules of Civil Procedure directly to the Court of Appeals. From the CA, the case may be elevated to the Supreme Court by way of ordinary appeal under the same Rule 45. (Luzon Development Bank v. Association of Luzon Development Bank Employees, et al., GR No. 120319, 06 October 1995) Appeal of BLR’s Decision 1. Denial of application for registration of a union Denial by the Regional Office, appeal to the BLR Denial is originally made by the BLR, appeal may be had to the DOLE Secretary 2. Cancellation of registration of a union Cancellation by the Regional Office, appeal to the BLR. Cancellation by the BLR in a petition filed directly, appeal to DOLE Secretary by ordinary appeal 3. Decision of the BLR rendered in its original jurisdiction may be appealed to the DOLE Secretary whose decision thereon may only be elevated to the CA by way of certiorari under Rule 65. 4. Decision of the BLR rendered in its appellate jurisdiction may not be appealed to the DOLE Secretary but may be elevated directly to the CA by way of certiorari under Rule 65. (Abbott Page 76 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 Laboratories Philippines, Inc. vs. Abbott Laboratories Employees Union, et al., GR No. 131374, 26 January 2000) Appeal of Regional Director’s Decision under Art. 129 Appeal to NLRC Summary Decision of the Voluntary Arbiter – appeal to CA under Rule 43 (Luzon Dev’t Bank) Decision of the DOLE and other attached agencies (including NLRC) should be brought to the CA under Rule 65 (St. Martin Funeral Homes) Decision of the DOLE Secretary – certiorari to the CA under Rule 65 (NAFLU v. Laguesma) Order of the Med-Arbiter in CE in organized establishments – not appealable under DO 40-03 (2003). Thus, the recourse is certiorari under Rule 65. Decisions of the BLR in its appellate– certiorari under Rule 65 (UST Employees Union v. Bitonio) Certiorari is not a substitute for lost appeal. 10 days to perfect appeal by filing a Memorandum of Appeal Property bond is now allowed. [UERM-Memorial Medical Center v. NLRC, 269 SCRA 70 (1997)] Appeal bond must be strictly complied with. NLRC cannot resuscitate a lost appeal. Only 1 MR is allowed. LA cannot entertain an MR or a petition for relief of judgment After the decision has become final and executory, the writ of execution is NOT appealable. To stay writ of execution, ask for an injunction under Art. 218(e) Period to appeal cannot be extended BUT in a number of cases, SC entertained appeals filed out of time under the interest of justice rule (esp. if the appellants are the employees). Doctrine of supervening event (i.e. closure of company) requires payment of separation pay and full backwages up to the time of the closure of the company.

NLRC cannot order a refund of benefits or salaries. Rationale: for the employee to earn after all he won in the LA level Time to reckon reinstatement is the date of receipt of LA’s decision; not NLRC decision Relief of the employer is to ask for an injunction under Art. 218(e) If the employee is confidential, only payroll reinstatement is required. VII. PENAL PROVISIONS AND LIABILITIES Penalties for Violations of the Provisions of the Labor Code Fine of Php 1,000 to Php 10,000, or imprisonment for 3 months to 3 years, or both at the discretion of the court. Persons liable if an offense is committed by a juridical person The penalty shall be imposed upon the guilty officer or officers of such corporation, trust, firm, partnership, association or entity. Prescriptive period of offenses penalized by the Labor Code GR: 3 years from the time the cause of action accrued Exception: ULP cases prescribe within 1 year from accrual of such unfair labor practice

uicnco kT im es e™s ed) Reinstatement Pending (RPA) TI FF QAppeal ( U mpr ar e needed to s ee t and a 1. Decision of the dec LA om pr ess or 2. Independent right his pi ct ur e. 3. Payroll reinstatement 4. Receipt of LA’s decision Even if NLRC reverses LA decision, the employee is still entitled to the benefit of RPA.

SOCIAL LEGISLATION THIRTEENTH-MONTH PAY (PD 851) Page 77 of 83

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007

All employers are required to pay all their rankand-file employees a 13th month pay not later than December 24 of every year. Such employees are entitled to the benefit regardless of their designation or employment status and irrespective of the method by which their wages are paid, provided that they have worked for at least 1 mo. during a calendar year. 13th Month Pay – 1/12th of the basic salary of an employee within a calendar year Basic Salary – includes all remunerations or earnings paid by an employer to an employee for services rendered but does not include cost of living allowances (COLA), profit-sharing payments and all allowances and monetary benefits (e.g. unused VL and sick leave credits, OT premium, night differential and holiday pay) which are not considered or integrated as part of the regular or basic salary of the employee. However, the above should be included in the computation if by individual or collective agreement, company practice or policy. Exempted Employees: 1. Government and any of its political subdivisions, including GOCCs, except those corporations operating essentially as private subsidiaries of the Government; 2. Employers already paying their employees 13th month pay or more in a calendar year or its equivalent at the time of issuance of PD 851 “Its equivalent” – includes Christmas bonus, mid-year bonus, cash bonuses and other payments amounting to not less than 1/12 of the basic salary but shall not include cash and stock dividends, COLA and all other allowances regularly enjoyed by the E’ee as well as non-monetary benefits. 3. Employers of household helpers and persons in the personal service of another in relation to such workers 4. Employers of those who are paid on commission, boundary, or task basis, and those who are paid a fixed amount for performance of a specific work, irrespective of the time consumed in the performance thereof,QEXCEPT the uicnco kTwhere im es e™ TI on FF a piece-rate ( U mpr s which ed) workers are paid basis, in ar e and needed to s ee t a dec om pr ess or case the employer hisshall pi ctgrant ur e.the required 13th month pay to such workers. Piece Rate – employees who are paid a standard amount for every piece or unit of work produced that is more or less regularly replicated, without regard to the time spent in producing the same.

13th Month Pay for Certain Types of Employees 1. Employees paid by results – entitled to 13th month pay 2. Those with Multiple Employers – entitled to the 13th month pay from all their private employers regardless of their total earnings from each or all of their employers 3. Private School Teachers – 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. 13th Month Pay of Resigned or Separated Employee – entitled to the benefit in proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year up to the time of his resignation or termination from the service May be demanded by the employee upon the cessation of EER. Non-inclusion in Regular Wage – benefit need not be credited as part of regular wage of employees for purposes of determining OT pay and premium pays, fringe benefits as well as contributions to the state insurance fund, Social Security, Medicare, and private retirement plans ANTI-SEXUAL HARASSMENT ACT OF 1995 (RA 7877) Where Committed working, education, training environment (WET) Who Commits 1. employer 2. employee 3. manager 4. supervisor 5. agent of the employer 6. teacher 7. instructor 8. professor 9. coach 10. trainor 11. any other person having authority, influence or moral ascendancy over another How Committed Person liable demands, requests, or otherwise requires any sexual favor from the other, regardless of whether the demand, request or requirement for submission is accepted by the object of said Act Page 78 of 83

criteria as may be defined by the Corporation in

Labor Law & Social Legislation Summer Reviewer Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 PENSIONER - ItAn is SSS the duly or GSIS registered member employees’ who organization Work-Related/Employment having the support of the majority Environment, of the employees Sexual in the appropriate organizational unit (§10) Harassment Committed When 1. The sexual -favor DEPENDENT The is legal made dependents as a condition of a member Voluntary are: a. in hiring Recognition or in the employment, reemployment A duly registered or continued employees’ employment organization of said individual shall be accorded 2. the b. unmarried in granting voluntary and said recognition unemployed individualupon favorable legitimate, a showing that SELF-EMPLOYED - a person who works for himself no other legitimated, compensation, employees’ illegitimate, organization terms, acknowledged conditions, is registered promotions children or is seeking or registration, privileges based on records of the BLR, and adopted c. thatthe the refusal said or stepchildren organization to grant the below has sexual the 21 favor years majority results of agein support 3. children limiting, of the who R&F segregating areemployees 21 yearsorold in classifying and the organizational above thewho are unit suffering (§11) employee from congenital which in any disability, way would either physical discriminate, or mental, deprive or anyordisability diminishacquired employment that Certification renders opportunities them Election totally or otherwise dependentadversely on the member affect Where for there support said employee are 2 or more duly registered 2. The employees’ 4. the parents above organizations acts whowould are 60impair inyears the appropriate the old employee’s or above whose organizational rights or income monthly privileges unit, the is below under BLR shall, an existing amount upon labor petition, to be laws 3. The order determined the above conduct acts byof the would a certification Corporation result in an election in intimidating, accordance and shall certify hostile with the the winner orguiding offensive as principles theenvironment exclusive set forth representative for of thethis employee Act.of the R&F employees in said organization unit (§12) Duty of Employer EMPLOYEE - Any person who performs services for 1. employer Subject an Promulgate of Negotiation in appropriate which eitherrules or both andmental regulations and Terms physical prescribing and efforts conditions are the procedure used of employment and who for investigation receives or of improvements compensation sexual harassment for thereof, such except services, cases as those where wellthat asthere guidelines are fixed is anby law, on employer-employee may proper be the decorum subject relationship. in of the negotiations workplacebetween duly 2. Create aemployees' recognized committee on organizations decorum and and appropriate government EMPLOYER investigation authorities - A natural of cases (§13) oronjuridical sexual harassment. person who employs the services of an employee. Liability of Peaceful Concerted EmployerActivities / Head ofand Office Strikes Solidarily The ENROLLMENT Civil Service liable for - laws The damages process and rules arising togoverning befrom determined the concerted acts of by sexual activities the Corporation harassment and strikes in order committed in the to enlist government in individuals the employment, service as shall education be members observed, or or dependents training subject environment to any covered legislation by if the thethat employer Program. may beis informedby enacted of Congress. such acts by (§14) the offended party and no immediate -action MEMBER Any person is takenwhose premiums have been Public Sector regularly paid toLabor-Management the National Health Council Insurance Prescription: It Program. is the body He may charged 3 years be awith paying implementing member, an and indigent administering member or a pensioner/retiree EO 180. member. MEDICAREEXECUTIVE Composition - The of Council healthORDER insurance NO.program 180 currently 1. being Guidelines Chairman, implemented forCSC the exercise -byChairman the Philippine of the right Medical to organize Care of 2. government Commission. Secretary, ItDOLE employees, consists – Vice-Chairman of: creating a public sector 3.labor-management Secretary, a. Program - DOF I, which -council, Member covers andmembers for otherof purposes. the 4. Secretary, SSS and DOJGSIS – Member including their legal Coverage 5. Secretary, dependents; Department and of Budget and It applies to all government Management – Memberemployees--employees (§15) of all branches, under the instrumentalities, Program and I 1. b. Program II, which is coveredsubdivisions, agencies of of theDisputes government, GOCCs Settlement shall beincluding enrolled in order with intended for those not Beneficiaries Q( laws uicnco kT mpr im e™s ed) original The Civilcharters Service(§1) and labor and procedures, Enrollment TI FF U es ar e needed to s ee t and a whenever applicable, beess followed decshall om pr or in the his pi ct ur e. and cases Excluded of resolution from complaints, Coverage grievances Membersgovernment involving of the Armedemployees. Forces of the In case Philippines, any dispute includingunresolved remains police officers, afterpolicemen, exhaustingfiremen all the available and jail guards (§4) remedies under existing laws and procedures, the parties may jointly refer the dispute to the Council, for Right to Organize appropriate action. (§16)

All government Bautista v. CA,employees GR No. 123375, can form, 28 February join or assist 2005 receives employees’ pensions organizations therefrom. of their own choosing for The SC affirmed its ruling in Association of Court theAppeals of furtherance Employees and protection v Ferrer-Calleja of their interests. (GR No. They can also15form, 94716, RETIREE -Nov. A member in1991), conjunction where of thewith itProgram ruled appropriate thatwho the has BLR government has reached the jurisdiction the authorities, age of to retirement calllabor-management for and or who supervise was retired the on committees, conduct of certification work councils, elections and other in theforms publicofsector. workers’ The Courtparticipation stated that schemes there is noforconstitutional the same objectives objection to(§2) DOLE handling the certification process considering and is therefore its expertise, both employee machinery and employer and experience at the same time. in this particular activity. EO 180 requires Who are Ineligible to Join Organization of Rank & organizations of government employees to register File Government Employees with THE both NATIONAL DOEL and HEALTH CSC. This INSURANCE ambivalence PROGRAM High-level employees whose functions are normally notwithstanding, the CSC has no facilities, considered as policy-making or managerialpersonnel or whose Purpose and experience in theconfidential conduct of certification duties are of a highly nature (§3) legitimate is elections. 1. Tothe provide BLRhealth has spouse toinsurance do thewho job. coverage and ensure affordable, acceptable, available and Protection of Right to Organize health care services for all of Theyaccessible shall not be discriminated against in citizens respect of the Philippines SALIENT PROVISIONS OF THE their employment by reason of their membership or 2. To serve as the means the LAW healthy to help pay LAW &for GSIS participation inSSS employees’ organizations. Their for the care of the sick and for those who canthat (ANNEX O) employment shall not be subject to the condition afford medical care to subsidize those who they shall not join or shall relinquish their cannot. (§5) membership therein (§5) NATIONAL HEALTH INSURANCE ACT OF 1995 Establishment 7875) Non-Interference of (RA Government Authorities not a member 1. Include sustainable system of funds constitution, Government authorities shall not interfere in the collection, management and disbursement General Objectives establishment, functioning or administration of for financing the availment a basic minimum 1. provide allemployees' citizens of organizations theofPhilippines with theacts government through package andtoother supplementary packages of mechanism gain financial access to health designed to place such organizations under the services; health insurance benefits by a progressively control of government authority (§6) expanding proportion of the population. 2. create the National Health Insurance Program to 2. Limited serve as to the paying means for the to help utilization the people of health pay for Place of Registration services by covered beneficiaries or to health care services; CSC and DOLE (§7) purchasing services behalf of 3. prioritize andhealth accelerate the in provision ofsuch health beneficiaries. services to all Filipinos, especially that segment Procedure for the Registration of Employees’ account disability. 3. Prohibited from providing health caresuch directly, of theofpopulation who cannot afford Organizations from buying and dispensing drugs and services; and 1. File application with BLR or Regional Office, 4. establish pharmaceuticals, the transmit Philippine from Health employing Insurance physicians and which shall the application to the BLR other professionals for the purpose of directly Corporation that will administer the Program at within 3 days from receipt central rendering and care, localand levels owning or investing in 2. BLR shall process thefrom application in accordance health care facilities. (§5) with the Labor Code (§7) BENEFICIARY - Any person entitled to health 3. Upon approval, a registration certificate will becare Coverage benefits under this Act. issued, recognizing it as a legitimate employees’ All citizens of the Philippines (§6) organization with the right to represent its CAPITATION - A payment fixed members and undertakemechanism activities to where further aand rate,defend whether per person, family, household or group, its interests is with aofhealth care provider shall be 4. negotiated The certificates registration shall bewho jointly responsible for delivering or arranging for the approved by the Chairman of the CSC anddelivery of health services required Secretary of DOLE (§8)by the covered person under the conditions of a health care provider contract. Appropriate Organizational Unit It is the employers unit consisting of rank-and-file CONTRIBUTION The amount paid by or require. in behalf of employees unless-circumstances otherwise a member to the Program for coverage, based on (§9) salaries or wages in the case of formal sector employees, and on household earnings assets, Sole and Exclusive Representative ofand Employees in the case of the self-employed, or on the other Page 80 79 of 83

accordance with the guiding principles set of this Act.

as appearing in the birth certificate; legally for them

ensur provi 2. doc de Enro e ume univellme afford ntati rsal nt able, on healtproc accep spe h ess table, cifyi avail of benefits.

o be placed under INSURANCE PROGRAM TI FF ( U ncoNATIONAL mpr es s HEALTH ed) ar e coverage needed to sthat ee t dec om pr ess or entitles his pi ct ur them e. to

Q uic kT im e™ and a

government as established in this Act, which shall

beneficiaries, issuance of appropriate

and

t

indicating

how

members

hip

was

obtained

or

is being maintaine d.

P acce 3. ssible h healtEnro ili h llme p carent p iservish Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007

governments as part of Program II of

provisions of this Act, including indigent members, shall also be enrolled in the Program. c. all persons eligible for benefits as members of local health insurance plans shall also be deemed to have enrolled in the Program. Enrollment of persons who have no current health insurance coverage shall be given priority by the corporation; and d. all persons eligible for benefits as members of other government initiated health insurance programs, community-based health care organizations, cooperatives, or private non-profit health insurance plans shall be enrolled in the Program upon accreditation by the Corporation (§7)

ENTITLEMENT TO BENEFITS A. Requisites: 1. A member whose premium contributions for at least 3 months have been paid within the 6 months prior to the first day of his or his dependents' availment; 2. He can show that he contributes with sufficient regularity; and 3. He is not currently subject to legal penalties B. Monthly contributions need not be paid by the following to be entitled to benefits: 1. Retirees and pensioners of the SSS and GSIS prior to the effectivity of this Act 2. Members who reach the age of retirement and have paid at least 120 monthly contributions; and 3. Enrolled indigents (§11)

Benefit Package

these specific policies:

Page 81 of 83

all proceed in accordance with

1. Inpatient hospital care: GRIEVANCE SYSTEM Members, dependents, or health care providers b. services of health care professionals; facilities;

a. room and board;

d. use of surgical or medical equipment and

of the Program who believe they have been c. diagnostic, laboratory, and other medical aggrieved by any decision of the implementors of the examination Program, mayservices; seek redress of the grievance in accordance with the provisions of this Article.

1. any violation of the rights of patients; 2. Outpatient care:

e. prescription drugs and biologicals; subject to Grounds for Grievances f. inpatient education packages

2. a willful neglect of duties of Program

implementors that results in the loss or non-

the limitations stated in Section 37 of this act

enjoyment of benefits by members or their

dependents;

Labor Law & Social Legislation Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2007 2. LHO shall rule on the complaint within 90 calendar days from receipt 3. Appeals from LHO decisions must be filed with the Board within 30 days from receipt of notice of dismissal or disallowance by the Office C. LHO has NO jurisdiction over any issue involving: 1. suspension or revocation of accreditation 2. imposition of fines, or 3. imposition of charges on members or their dependents in case of revocation of their entitlement. D. All decisions by the Board as to entitlement to benefits of members or to payments of health care providers shall be considered final and executory E. Hearing Procedures of Grievance and Appeal Review Committee (GARC) 1. Upon the filing of the complaint, GARC may dismiss the case outright due to lack of verification, failure to state the cause of action, or any other valid ground for dismissal of the complaint after consultation with the Board; or require the respondent to file a verified answer within 5 days from service of summons. 2. Should the defendant fail to answer the b. reglamentary diagnostic, complaint within the five-day laboratory other motion period, GARC, motu proprioand or upon medical of the complainant, shall render the 3. unjustifiable judgment. delay in on are 3. After an answer is filed and actions the issues joined, GARC shall require the parties to claims; submit, within 10examination days from receipt of the order, the affidavits of the witnesses and services; other evidence on4.the factual delay issues in thedefined therein, together processing with a briefofstatement claims of a. services of healthsetting care their positions forth the law and the thatprofessionals; extends facts relied upon c. by them. In personal the event GARC finds, upon consideration of the pleadings, preventive services; the affidavits and other evidence, and and position statements submitted by the parties, beyond the period that a judgment may be rendered thereon agreed upon; and without need of a formal hearing, it may d. prescription Q(judgment uicnco kT im later e™s10 proceed toTI render not days FF U mpr es ed) TI FF ( U nco mpr drugs and a r ar e needed to s ee t and a 3. Emergency and transfer services from the submission theorposition dec om prof ess subject ehisthe ct ur e.dec spibiologicals; ed) om pr statementses of parties to n e e 4. In cases where GARC deems it necessary to ess or 5. any other act or d e d hold a hearing to clarify specific factual neglect tends toit shall t rendering Excludedmatters Personal Health Serviceothat before judgment, undermine s set the case for hearing for the purpose. At the andwhose limitations e witnesses e counseling 2. outpatient such hearing, psychotherapy affidavits for mental weredisorders; previously be asked described may in Section t submitted

h p c u e

37 of thisi s or defeat the i purposest of this Act. (§40) r Act . Q u c k i e a d a

i T m ™ n

clarificatory questions by the proponent and by the Committee and may be crossexamined by the adverse party. The hearing shall be terminated within 15 days, and the case decided by the Committee within15 days from such termination. 5. The decision of GARC shall become final and executory 15 days after notice thereof 6. Such decision is appealable to the Board by filing the appellant's memorandum of appeal within 15)days from receipt of the copy of the judgment appealed from. The appellees shall be given15 days from notice to file the appellee's memorandum after which the Board shall decide the appeal within 30 days from the submittal of the said pleadings. 7. The decision of the Board shall also become final and executory 15 days Such decision is reviewable by the Supreme Court on purely questions of law (§41)

Grievance and Appeal Procedure 3. Health care provider B. Procedure 1. A complaint for grievance must be filed with the Local Health Office (LHO) Page 83 82 of 83