Labor Relations

Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos LABOR CODE OF THE PHILIPPINES BOOK FIVE LABOR RELATIONS TITLE III BUREAU OF LABOR RELATIONS Art. 226. Bureau of Labor Relation -- The Bureau of LaborRelations and the Labor Relations Divisions in the regional offices of the Department of Labor, shall have original and exclusive authority to act, at their own initiative or upon request of either or both parties, on all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or affecting labor-management relations in all workplaces, whether agricultural or non-agricultural, except those arising from the implementation or interpretation of collective bargaining agreements which shall be the subject of grievance procedure and/or voluntary arbitration. The Bureau shall have fifteen (15) working days to act on laborcases before it, subject to extension by agreement of the parties. COMMENT: -­‐ EO No. 126: Transferred the conciliation, mediation, and voluntary arbitration functions of the BLR to the National Conciliation and Mediation Board (NCMB). -­‐ Principal task of BLR is now limited to handling inter-union and intra-union conflicts, registration and cancellation of registration of labor organizations, particularly those involving federations, national unions or industry unions. Intra-Union Disputes: -­‐ A controversy between and among union members. -­‐ Includes grievances from: o Any violation of the rights and conditions of union membership; o Violation or disagreement over any provision of the union’s constitution and by-laws; or o Disputes arising from chartering or affiliation of union. Case: Ilaw at Buklod Ng Manggagawa vs. NLRC (219 SCRA 536) FACTS: On December 3, 1986, IBM, the sole and exclusive bargaining representative of all daily-paid workers of the Metro Manila plants of San Miguel Corporation, entered into a collective bargaining agreement with San Miguel Corporation. Said collective bargaining agreement was ratified by the general membership. Thereafter, IBM assessed each member the amount of P1,098.00 to be deducted from the lump sum of P10,980.00 of which each employee was to receive under the CBA. Several employees protested and refused to sign the authorization slip for the deduction. As a result, the said employees were expelled from the union. The affected employees then filed

a complaint with the Arbitration Branch of the NLRC for illegal and exorbitant deduction and illegal expulsion. ISSUE: Does the Arbitration Branch of the NLRC have jurisdiction? HELD: NO. The NLRC has no jurisdiction because the subject matter of the suit is an INTRA-UNION DISPUTE. This is an intra-union dispute – a dispute between the labor union and its members. Art. 226 of the Labor Code vests on the BLR the jurisdiction to act on all inter-union or intraunion disputes. Inter-Union Disputes: -­‐ A controversy between and among legitimate labor unions. Effect of Pendency of Inter-Union or Intra-Union Disputes -­‐ On the rights and obligations of the PARTIES: o The rights, relationships and obligations of the parties-litigants against each other and other parties-in-interest prior to the filing of the petition continue to remain until the finality of the decision. -­‐ On a Petition for Certification Election: o The pendency of an inter-union or intraunion dispute or other related labor relations dispute is not a prejudicial question to a petition for certification election. o Thus, pendency is not a ground for suspension or dismissal of the petition for certification election. Related Labor Relations Disputes: -­‐ Any conflict between a labor union and the employer or any individual, entity or group that is not a labor organization or workers’ association is a related labor relations disputes. o Example: Cancellation of union registration and interpleader. The National Conciliation and Mediation Board: -­‐ Composed of an Administrator and two (2) Deputy Administrators and as many ConciliatorsMediators as the needs of the public service requires. -­‐ It exercises the following functions: o Formulate policies, programs, standards, procedures, manuals of operation, and guidelines pertaining to effective mediation and conciliation of labor disputes; o Perform preventive mediation and conciliation functions; o Coordinate and maintain linkages with other sectors or institutions and other government authorities concerned with matters relative to the prevention and settlement of labor disputes; o Formulate policies, plans, programs, standards, procedures, manuals of

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos

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operation and guidelines pertaining to the promotion of cooperative and nonadversarial schemes, grievance handling, voluntary arbitration and other voluntary modes of dispute settlement; Administer the voluntary arbitration program; maintain/update a list of voluntary arbitrators; compile arbitration awards and decisions; Provide counselling and preventive mediation assistance particularly in the administration of collective agreements; Monitor and exercise technical supervision over the Board programs being implemented in the regional offices; and Perform such other functions as may be provided by law or assigned by the Secretary of Labor and Employment.

Art. 227. Compromise Agreements -- Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or theregional office of the Department of Labor, shall be final and binding upon the parties. The National LaborRelations Commission or any court, shall not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion. COMMENT: Compromise Agreement: -­‐ “Compromise”: A contract whereby the parties by making reciprocal concessions, avoid a litigation or put an end to one already commenced. o The nature of compromise is such that a party must give up some of the rights that he has in consideration of the same act on the part of the other side. -­‐ Labor Code recognizes compromise settlement as a mode of settling labor or industrial disputes. -­‐ Parties can validly enter into a compromise not only on controversies involving labor standards, but also on other labor disputes. Conclusiveness of Compromise: -­‐ A compromise is conclusive and binding even if it is not judicially approved. -­‐ NLRC or any court shall not assume jurisdiction over issues that have been subject of a compromise settlement, except in case of noncompliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion. -­‐ A compromise cannot later be disowned or set aside merely because a party has changed his mind.

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However, if the consideration for the compromise was very much less than the amount which the employee was entitled, it may be set aside for being contrary to law, morals or public policy.

Case: Olaybar vs. NLRC (237 SCRA 819) FACTS: Ten (10) employees were terminated by X Corporation on the ground of retrenchment. Contesting the legality of their retrenchment, the 10 employees lodged a complaint for illegal dismissal with the Regional Arbitration Branch of the NLRC. The Labor Arbiter dismissed the complaint but ordered X Corporation to pay the 10 employees their respective separation pay. Unsatisfied, the employees appealed to the NLRC. Pending appeal, the employees executed separate affidavits stating, among others, their intention to withdraw their appeal since they had already received the separation pay decreed in the decision of the Labor Arbiter. These affidavits were not, however, submitted to the NLRC. For some inexplicable reason, neither the 10 employees nor X Corporation brought to the attention of the NLRC the crucial fact that they had already amicably settled their dispute. Unaware of the settlement, the NLRC rendered a decision in favour of the 10 employees by ordering their reinstatement with back wages. The employees then moved for the execution of the NLRC decision which X Corporation opposed on the ground that the decision has been rendered moot and academic by the amicable settlement of the case. ISSUE: Whether or not the NLRC acted correctly in denying the motion for execution? HELD: YES. It is true that the NLRC reversed the Labor Arbiter’s decision on appeal, but when the NLRC rendered its decision, it unknowingly adjudicated a case which, for all intents and purposes, had already been closed and terminated by the parties themselves when they agreed on a settlement. This is the clear import of the rule that compromises and settlements have the effect and conclusiveness of res judicata upon the parties. Compromise Through Lawyer or Representative: -­‐ A compromise entered into through a lawyer or representative is conclusive or binding only: o When the client has expressed his consent to compromise; or o When the lawyer or representative is equipped with a special power of attorney. -­‐ Without such express consent or special power of attorney, any compromise entered into by a lawyer or representative will not bind the party concerned, unless the latter signs or avails of the benefits under the compromise agreement. Case: Jag &Haggar Jeans and Sportswear Corp. vs. NLRC (241 SCRA 635) FACTS: A decision was rendered by the NLRC ordering the reinstatement of 114 employees. The Company filed a motion of reconsideration. During the pendency of the motion for reconsideration, the Company and the Union

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos entered into a compromise agreement whereby the Company and the Union agreed that the affected employees will just be paid separation pay. Of the 114 affected employees, 102 availed of the benefits provided for under the Compromise Agreement. The 12 remaining employees then moved for the execution of the NLRC decision. The Company opposed the motion contending that the Compromise Agreement was deemed ratified by the union members. ISSUE: Whether or not the Compromise Agreement entered into by the company and the Union is binding upon the employees? HELD: NO. The Compromise Agreement is not binding upon the 12 employees who neither signed the compromise agreement nor availed of its benefits. Inasmuch as what was being waived under the Compromise Agreement was the right of the affected employees to reinstatement, such waiver must be exercised personally by the employees concerned. Compromise on a Final Judgment: -­‐ The law does not limit compromises to cases about to be filed or cases already pending on court. -­‐ Valid for the parties to enter into a compromise despite the fact that a final judgment has already been rendered. Remedy if the Compromise is Violated: -­‐ The aggrieved party can avail of the following remedies: o In case of violation of a Compromise Agreement, the aggrieved party can: (a) File the necessary action action or motion to enforce the compromise; or (b) Regard the compromise as rescinded and insist upon his original demand. -­‐ In case of violation of a Compromise Judgment: (a) File a motion for execution, in case of non-compliance; (b) File an action to annul the compromise judgment on the ground of mistake, fraud, violence, intimidation, undue influence, or falsity in the execution of the compromise embodied in the judgmentl or (c) File a petition for relief from judgment under Rule 38 of the Rules of Court on the ground that the judgment was obtained through fraud, mistake or excusable negligence. Reduction of Attorney’s Fees – Not a Bar to Approval of Compromise: -­‐ Lawyer’s rights may not be invoked as a ground for disapproving a compromise.

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Lawyer affected can always enforce his right in a proper proceeding but said right may not be used to prevent the approval of the compromise.

Quitclaim: -­‐ A quitclaim executed in favour of a company by an employee amounts to a valid and binding compromise agreement. -­‐ The current doctrinal policy of the Supreme Court is that not all waivers and quitclaims are invalid as against public policy. -­‐ Once an employee executes a quitclaim in favour of the employer, he is thereby estopped from filing any further claim against his employer arising from his employment. Art. 228. (Repealed by B.P. 130) Art. 229. Issuance of subpoenas. - The Bureau shall have the power to require the appearance of any person or the production of any paper, document or matter relevant to a labordispute under its jurisdiction, either at the request of any interested party or at its own initiative. COMMENT: Power of the Bureau of Labor Relations to Issue Subpoena: -­‐ Extends only to matters relevant to the labor dispute under its jurisdiction. Art. 230. Appointment of Bureau Personnel. - The Secretary of Labor and Employment may appoint, in addition to the present personnel of the Bureau and the Industrial Relations Divisions, such number of examiners and other assistants as may be necessary to carry out the purpose of the Code. COMMENT: Authority to Appoint Personnel: -­‐ Authority to the Secretary of Labor and Employment to appoint personnel as may be needed by the Bureau of Labor Relations in carrying out the purposes of the Labor Code. Art. 231. Registry of Unions and File of Collective Bargaining Agreements -The Bureau shall keep a registry of legitimatelabor organizations. The Bureau shall also maintain a file of all collective bargaining agreements and other related agreements and records of settlement of labor disputes and copies of orders and decisions of voluntary arbitrators. The file shall be open and accessible to interested parties under conditions prescribed by the Secretary of Labor and Employment, provided that no specific information submitted in confidence shall be disclosed unless authorized by the Secretary, or when it is at issue in any judicial litigation, or when public interest or national security so requires. Within thirty (30) days from the execution of a Collective Bargaining Agreement, the parties shall submit copies of the same directly to the Bureau or the Regional Offices of the Department of Labor and Employment for registration, accompanied with

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos verified proofs of its posting in two conspicuous places in the place of work and ratification by the majority of all the workers in the bargaining unit. The Bureau or Regional Offices shall act upon the application for registration of such Collective Bargaining Agreement within five (5) calendar days from receipt thereof. The Regional Offices shall furnish the Bureau with a copy of the Collective Bargaining Agreement within five (5) days from its submission. The Bureau or Regional Office shall assess the employer for every Collective Bargaining Agreement a registration fee of not less than one thousand pesos (P1,000.00) or in any other amount as may be deemed appropriate and necessary by the Secretary of Labor and Employment for the effective and efficient administration of the Voluntary Arbitration Program. Any amount collected under this provision shall accrue to the Special Voluntary Arbitration Fund. The Bureau shall also maintain a file and shall undertake or assist in the publication of all final decisions, orders and awards of the Secretary of Labor and Employment, Regional Directors and the Commission. COMMENT: Registration of Collective Bargaining Agreements: -­‐ Purpose of Registration: o To put notice on the existence of such agreement in order to promote its stable and undisturbed administration. -­‐

Legal effect of Registration: o Registration of a collective bargaining agreement is not essential to its validity. o Even if not registered, CBA is still valid and binding between the parties, regardless of whether or not the same has been certified by the BLR. (Liberty Flour Mills Employees vs. Liberty Flour Mills)

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Registration Procedure: o An application for registration should be filed with the Regional Office of the DOLE which issued the union’s certificate of registration or certificate of creation of chartered local. o If the certification of creation of the chartered local was issued by the BLR, application shall be field with the Regional Office of the DOLE which has jurisdiction over the place where it principally operates. o Application for registration of multiemployer collective bargaining agreements shall be filed with the BLR.

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Period within which to Register: o Within thirty (30) days from execution.

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Supporting Documents:

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Application shall be accompanied by two (2) copies of the following documents: (a) Collective bargaining agreement; (b) Statement that the collective bargaining agreement was posted in at least two (2) conspicuous places in the establishment for at least five (5) days before its ratification; and (c) Statement that the collective bargaining agreement was ratified by the majority of the employees in the bargaining unit.

Posting of CBA o The collective bargaining agreement must be posted within five (5) days prior to its ratification, in at least two (2) conspicuous places in the establishment. o This is a mandatory requirement. o Purpose: To inform employees in the bargaining unit of the contents of the agreement so that they could intelligently decide on whether to accept the same or not.(Associated Labor Union vs. FerrerCalleja) o If the collective bargaining agreement was not posted in accordance with the rules, the application for registration shall be disapproved.

Remedy from denial of CBA registration: -­‐ Re-Filing: o If the application for registration was denied for failure to complete the registration requirements within the tenday period from notice, the remedy is to re-file the application with complete supporting documents. -­‐ Appeal: o If the application for registration is denied on other grounds, the remedy is to appeal the order of denial within ten (10) days from receipt to: (a) Bureau of Labor Relations – if the order of denial was issued by the Regional Office of the DOLE; or (b) Office of the Secretary of Labor and Employment – if the order of denial was issued by the BLR. Art. 232. Prohibition on Certification Election - The Bureau shall not entertain any petition for certification election or any other action which may disturb the administration of duly registered existing collective bargaining agreements affecting the parties except under Articles 253, 253-A and 256 of this Code. COMMENT: The Contract-Bar Principle

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos -­‐ -­‐ -­‐

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The existence of a duly registered CBA will bar the holding of a certification election. Purpose: To promote stability and fairness in collective bargaining agreements. If there is a duly registered CBA, a petition for certification election can only be entertained within the 60-day period prior to the expiration of the 5year term of the CBA. A petition for certification election field outside of the 60-day period prior to the expiration of the term of a duly registered CBA will have to be dismissed because it will disturb the administration of duly registered existing CBAs.

Exceptions to the Contract-Bar Principle: -­‐ There are certain type of collective bargaining agreements which do not fall within the operation of the contract-bar principle, namely: (a) Those entered into with a labor organization which has not been certified as the sole and exclusive collective bargaining representative but merely accorded voluntary recognition by the management despite the existence of another labor organization seeking recognition. (b) Those which are not duly registered with the Bureau of Labor Relations or the appropriate regional office of the DOLE. (c) Those which are incomplete, specifically those which do not provide for economic benefits to employees. (d) Those hastily entered into prior to or during the sixty-day freedom period. (e) Those which can no longer foster industrial peace and stability because of the schism in the union. Illustrative Cases: Associated Labor Union vs. Ferrer-Calleja (173 SCRA 178) FACTS: On May 7, 1986, ALU demanded that it be recognized as the sole and exclusive bargaining representative of the employees of GAW Trading. On May 9, 1986, another union (SPFL), who was also demanding recognition, staged a strike against GAW Trading. On May 12, 2986, GAW Trading voluntarily recognized ALU as the sole and exclusive bargaining representative of the employees. ALU and Gaw Trading signed and executed a CBA, but the registration was done without the CBA being posted in at least two (2) conspicuous places in the establishment five days before its ratification. ALU justified the omission by saying it could not post the CBA because of the strike staged by SPFL. On May 28. 1986, SPFL filed a petition for certification election. ALU sought the dismissal of the petition by invoking the contract-bar principle. ISSUE: Will the CBA between ALU and GAW Trading bar the holding of a certification election? HELD: NO. The CBA will not bar the holding of a certification election because it was entered into with the labor union that was merely accorded voluntary recognition by the GAW Trading despite the presence of another union that was also seeking recognition. ALU’s standing as an

exclusive bargaining representative is dubious. Hence, a certification election could be properly ordered. Additionally, the posting requirement was not complied with. Hence, the CBA is defective. Even if it was registered with the DOLE, it cannot be considered as duly registered. Buklod Ng Saulog Transit vs. Cassalla (99 Phil. 16) FACTS: On December 7, 1953, a petition for certification election among the employees of Saulog Transit was filed. Said petition was opposed by the BuklodngSaulog Transit on the ground that it had already entered into a collective bargaining agreement with Saulog Transit on July 15, 1953. One month after the filing of the petition for certification election, the Buklod Ng Saulog Transit and Saulog Transit executed a Supplementary Agreement. The Supplementary Agreement, however, has no clear-cut stipulation on the rates of pay, wages, hours of work and other conditions of employment. ISSUE: Whether or not the collective bargaining agreement and the supplementary agreement will bar the holding of a certification election? HELD: NO. The CBA will not bar the holding of a certification election because it is incomplete, considering it does not touch in substantial terms the rates of pay, wages, hours of work and other terms and conditions of employment but seeks merely to establish a grievance procedure for drivers, conductors and inspectors who are members of Buklod Ng Saulog. Neither can the supplementary agreement bar the holding of a certification election for it was entered into after the filing of the petition for certification election. Associated Trade Unions vs. Noriel (88 SCRA 96) FACTS: ATU and Synthetic Marketing had a CBA which was due to expire on October 31, 1977. The said CBA was renewed five months and twenty-one days prior to the expiration of the old CBA. The new CBA was registered with the BLR. Within the sixty-day freedom period, a petition for certification election was filed by FFW. ATU opposed the petition on the ground that it is contract-barred by virtue of the existence of a duly registered CBA. FFW assailed the validity of the said CBA on the ground that it had been executed 5 months and 21 days prior to the expiration of the old CBA and that it was not ratified by the members of the bargaining unit. ISSUE: Whether or not the new CBA will bar the holding of a certification election? HELD: NO. The new CBA was hastily and prematurely entered into precisely for the purpose of avoiding the holding of a certification election. The new CBA was not yet in existence when the petition for certification election was filed. Clearly, the contract-bar principle will not apply. Firestone vs. Estrella (81 SCRA 49) FACTS: ALU and Firestone had a CBA which was to be effective from February 1, 1973 to January 31, 1976. On February 1, 1974, ALU and Firestone entered into a Supplementary Agreement extending the life of the CBA for one (1) year. The extension was neither ratified nor submitted to the DOLE. On February 10, 1976, ten (10) days after the original expiry date of the CBA, the Firestone

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos Tire and Rubber Company Employees Union filed a petition for certification election. ALU moved for the dismissal of the petition by invoking the contract-bar principle. ISSUE: Is the contract-bar principle applicable? HELD: NO. A collective bargaining agreement does not operate as a bar to representation proceeding, where it is shown that because of a schism in the union, the contract can no longer serve to promote industrial stability and the direction of the election is in the interest of industrial stability as well as in the interest of the employees’ right in the selection of their bargaining agreement. Basic to the contract-bar rule is the proposition that the delay of the right to select representative can be justified only where stability is deemed paramount. Excepted from the contract-bar rule are certain types of contracts which do not foster industrial stability. Effect of Automatic Renewal Clause: - A collective bargaining agreement which provides for automatic renewal in the absence of notice by one of the contracting parties of intention to alter, modify or terminate it prior to a specific period preceding the termination will operate as a bar to certification election. - This rule does not apply where a contesting union has given a timely notice to the employer or has seasonably filed a petition for certification election prior to the specified date for automatic renewal. Art. 233. Privileged communication. - Information and statements made at conciliation proceedings shall be treated as privileged communication and shall not be used as evidence in the Commission. Conciliators and similar officials shall not testify in any court or body regarding any matters taken up at conciliation proceedings conducted by them. COMMENT: The Philosophy Behind the Privilege: -­‐ To encourage the parties to make full disclosure of facts and circumstances without fear in order to facilitate the settlement of labor disputes in line with the policy of the State to promote and emphasize mediation and conciliation as modes of settling labor or industrial disputes. TITLE IV LABOR ORGANIZATIONS CHAPTER I REGISTRATION AND CANCELLATION Art. 234. Requirements of Registration - A federation, national union or industry or trade union center or an independent union shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements: (a) Fifty pesos (P50.00) registration fee; (b) The names of its officers, their addresses, the principal address of the labor organization, the minutes

of the organizational meetings and the list of the workers who participated in such meetings; (c) In case the applicant is an independent union, the names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate; (d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and (e) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it. COMMENT: Labor Organization: -­‐ A 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. Significance of Registration: -­‐ Registration of a labor organization is necessary for it to acquire legal personality and enjoy the rights and privileges enumerated in Art. 242 of the Labor Code. Purpose of Registration: -­‐ To protect both labor and public against abuses, fraud or impostors who pose as organizers, although not truly accredited agents of the union they purport to represent. Constitutionality: -­‐ The law requiring the registration of labor organizations is not unconstitutional because it is a valid exercise of the police power. -­‐ Not a limitation on the right of assembly or association, considering that the right of assembly or association may be exercised with or without registration. Legal Personality of Labor Organizations: -­‐ A labor organization acquires legal personality and attains the status of legitimacy upon the issuance in its name of a Certificate of Registration. -­‐ An unregistered labor organization can acquire legal personality and attain the status of legitimacy by affiliating with a duly registered Federation or National Union; becomes a Chartered Local. -­‐ A Chartered Local, therefore, need not be independently registered. Effect of Incorporation: -­‐ A labor union organized under the Corporation Law merely gives it juridical personality before the regular courts, but it will not entitle such union to the rights and privileges accorded by law to legitimate labor organizations. -­‐ Registration with the DOLE makes a labor organization legitimate. Registration of Independent Union: -­‐ Independent Union: a labor organization operating at the enterprise level whose legal personality is derived through independent registration.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos -­‐

To register an independent union, an application for registration should be filed with the Regional Office of the DOLE where it principally operates.

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The application for registration should be supported by the following documents: (a) Name of the applicant labor union, its principal address, the names of its officers and their respective addresses, approximate number of employees in the bargaining unit where it seeks to operate, and a statement that it is not reported as a chartered local of any federation or local union; (b) Minutes of the organizational meetings and the list of workers who participated in such meetings; (c) Names of all its members comprising at least twenty percent (20%) of the employees in the bargaining unit; (d) Annual financial reports if the applicant has been in existence for one or more years; and (e) Constitution and By-Laws, minutes of its adoption or ratification, and the list of the members who participated in it.

Registration of Workers’ Association: -­‐ Workers’ Association: An organization of workers created for the mutual aid and protection of its members for any legitimate purpose other than collective bargaining. -­‐ To register a workers’ association, an application should be filed with the Regional Office of the DOLE where it principally operates. -­‐ The application should be supported by the following documents: (a) Name of the applicant association, its principal address, the names of its officers and their addresses; (b) Minutes of the organizational meeting, and the names of the individual members who participated therein; and (c) Constitution and By-Laws to which must be attached the names of ratifying members, the minutes of adoption or ratification of the constitution and by-laws and the date when the ratification was made, unless ratification was done in the organizational meeting, in which case such fact shall be reflected in the minutes of the organizational meeting. Change of Name of Labor Organization: -­‐ A Notice of Change of Name shall be filed with the BLR or the Regional Office of the DOLE where the

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labor organization’s certificate of registration or certificate of creation of a chartered local was issued. The notice of change of name shall be accompanied by the following documents: (a) Proof of approval or ratification of change of name; and (b) Amended constitution and by-laws. The change of name of a labor organization does not affect its legal personality.

Merger or Consolidation of Labor Organization: -­‐ A Notice of Merger or Consolidation shall be filed with: (a) Regional Office of the DOLE that issued the Certificate of Registration – in case of independent labor unions and workers’ associations; (b) Regional Office of the DOLE that issued the Certificate of Creation of Chartered Local – in case of chartered locals; or (c) Bureau of Labor Relations – in case of federations or national unions. -­‐

Supporting Documents for Merger: o Notice of merger shall be accompanied by the following documents: (a) Minutes of merger convention or general membership meeting of all the merging labor organizations, and list of their respective members who approved the same; and (b) Amended constitution and by-laws and minutes of its ratification, unless ratification transpired during the merger convention, which fact shall be indicated accordingly.

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Supporting Documents for Consolidation: o Notice of consolidation shall be accompanied by the following documents: (a) Minutes of consolidation convention of all the consolidating labor organizations and list of their respective members who approved the same; and (b) Amended constitution and by-laws and mintues of its ratification, unless ratification transpired during the consolidation convention, which fact shall be indicated accordingly.

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Effect of Merger: o The legal existence of the absorbed labor organization ceases, while the legal existence of the absorbing labor organization subsists.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos o

All rights, interests and obligations of the absorbed labor organizations are transferred to the absorbing organization.

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Effect of Consolidation: o The legal existence of the consolidating labor organization shall cease and a new labor organization is created. Remedy: -­‐ Re-Filing of Application o Re-file application or notice with complete supporting documents. Art. 235. Action on the Application - The Bureau shall act on all applications for registration within thirty (30) days from filing. All requisite documents and papers shall be certified under oath by the secretary or the treasurer of the organization, as the case may be, and attested to by its president. COMMENT: Significance of the 30-Day Period: -­‐ The BLR shall act on all applications for registration within thirty (30) days from filing. -­‐ The mere filing of the requisite documents and papers does not automatically oblige the BLR to issue a certificate of registration. -­‐ The BLR is duty bound to further check if the registration requirements under Art. 234 have been sedulously complied with. Certification and Attestation of Documents: -­‐ Application for registration and all its supporting documents are required to be: (a) Certified under oath by the Secretary Treasurer of the organization; and (b) Attested to by the President. -­‐ Both requirements must be strictly complied with. -­‐ Mandatory attestation requirement also applies to notice of change of name, notice of merger, and notice of consolidation and all their supporting documents. Case: Progressive Development Corporation vs. Secretary of Labor (205 SCRA 802) FACTS: KILUSAN filed a petition for certification election among the rank and file employees of PDC, alleging that it is a legitimate labor federation. PDC sought the dismissal of the petition on the ground that the constitution and bylaws was merely attested to by the union president but it was not certified under oath by the union secretary or the union treasurer, hence not acquiring legal personality. According to the Med-Arbiter, the mere issuance of a Charter Certificate by the federation was sufficient compliance with the rules. ISSUE: Is the Med-Arbiter correct? HELD: NO. A local chapter will become a legitimate labor organization only if the required documents and papers are certified under oath by the secretary or treasurer of the organization and attested to by its president. Hence PDEU

did not acquire legal personality. Consequently, it cannot file a petition for certification election. Purpose of Certification and Attestation: -­‐ Preventive measures against the commission of fraud. Remedies: -­‐ Mandamus: o If registration is refused despite compliance with all the legal requirements for registration, the remedy of mandamus can be availed of to compel the registration of the labor organization. -­‐ Petition for Cancellation of Registration: o If the registration is granted, a petition for cancellation of registration may be filed on any of the grounds provided for in Art. 239 of the Labor Code. o The remedy of certiorari is not available because the act of approving an application for registration of a labor organization is not a judicial function but a ministerial duty. Art. 236. Denial of Registration; Appeal - The decision of the Labor Relations Division in the regional office denying registration may be appealed by the applicant union to the Bureau within ten (10) days from receipt of notice thereof. COMMENT: Grounds for Denial of Registration: (a) Falsification or serious irregularities in the application for registration or its supporting documents; (b) Non-compliance with the requirements for registration, particularly the certification and attestation requirements; or (c) Failure to complete the registration requirements within thirty (30) days from notice. Remedy From Denial of Registration: -­‐ Appeal: o If the application for registration is denied on grounds other than failure to submit the complete requirements, the remedy is to appeal the order within ten (10) days from receipt to the: (a) Bureau of Labor Relations – if the order of denial was issued by the Regional Office of the DOLE; or (b) Office of the Secretary of Labor and Employment – if the order of denial was issued by the BLR. Art. 237. Additional Requirements For Federation or National Unions - Subject to Article 238, if the applicant for registration is a federation or a national union, it

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos shall, in addition to the requirements of the preceding Articles, submit the following: (a) Proof of the affiliation of at least ten (10) locals or chapters, each of which must be a duly recognized collective bargaining agent in the establishment or industry in which it operates, supporting the registration of such applicant federation or national union; and (b) The names and addresses of the companies where the locals or chapters operate and the list of all the members in each company involved. COMMENT: Federation or National Union: -­‐ A labor organization with at least ten (10) affiliates or chartered locals, each of which must be a duly recognized or certified collective bargaining agent. Registration of Federation or National Union: -­‐ Application for registration should be filed with the BLR. -­‐ The application should be supported by the following documents: (a) Statement indicating the name of the applicant federation or national union, its principal address, the names of its officers and their respective addresses; (b) Minutes of the organizational meetings and the list of workers who participated in such meetings; (c) Annual financial reports if the applicant has been in existence for one or more years; (d) Constitution and by-laws, minutes of its adoption or ratification, and the list of the members who participated in it. (e) Resolution of affiliation of at least ten (10) legitimate labor organization, whether independent or chartered locals, each of which must be a recognized or certified bargaining representative on the establishment where it seeks to operate; and (f) Names and addresses of the companions where the affiliates operates and list of all the members in each company involved. Composition of a Federation or National Union: -­‐ Affiliates: o Independently registered unions, hence, they have a legal personality of their own, separate and distinct from that of the mother union. Chartered Locals: -­‐ Not independently registered unions – their legal personality is derived from their mother union or

federation, upon issuance of a Certificate of Creation of Chartered Local. Nature of Relationship Between Federation and Local Union: -­‐ Principal-agent -­‐ The local union or affiliate is the principal, while the federation is the agent. -­‐ Principal-agent relationship exists even if the local union is not independently registered. Case: Filipino Pipe & Foundry vs. NLRC (318 SCRA 68) FACTS: NLU, a national federation of labor unions, filed in behalf of its local chapter, the FPWU-NLU, a notice of strike signed by the president of the federation. Without waiting for the outcome of the conciliation conference, FPWU-NLU staged the strike. Upon petition of the company, the NLRC declared the strike illegal. NLU claimed that it cannot be held liable for damages because it is a mere agent of the local union. ISSUE: Who is liable for damages, NLU (federation) or FPWU-NLU (local union)? HELD: The local union (FPW-NLU) is liable for the damages sustained by the company as a result of the illegal strike. As the local union, it is considered as the principal. Being just an agent, the notice of strike filed by the NLU is deemed to have been filed by its principal, the FPWU-NLU. This is so even if FPWU-NLU is not independently registered. Case: Elisco-Elirol Labor Union vs. Noriel (80 SCRA 682) FACTS: Elisco-Elirol Labor Union affiliated itself with the National Federation of Labor Union (NAFLU). In February 1974, the Elisco-Elirol Labor Union-NAFLU entered into a collective bargaining agreement with the company. On May 28, 1975, the members of Elisco-Elirol Labor Union-NAFLU disaffiliated from NAFLU and formed themselves into an independent union. ISSUE: Which of the two unions has the right to be recognized as the collective bargaining representative and ultimately administer the collective bargaining agreement – NAFLU or Elisco-Elirol Labor Union? HELD: Elisco-Elirol Labor Union has the right to be recognized as the collective bargaining representative and ultimately administer the CBA. As the local union, EliscoElirol Labor Union is the principal party to the CBA. The disaffiliation of Elisco-Elirol Labor Union from NAFLU did not create a new union but merely detached the local union from its mother federation. Creation of a Chartered Local: -­‐ A duly registered federation or national union may directly create a chartered local by submitting to the Regional Office of the DOLE two (2) copies of the following documents: (a) Charter Certificate issued by the federation or national union indicating the creation or establishment of the local/chapter; (b) Names of the local/chapter’s offices, their addresses, and the principal office of the local/chapter;

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos

-­‐

(c) Constitution and by-laws of the local/chapter. Documents should be certified under oath by the Secretary or Treasurer of the local/chapter and attested by its president.

Affiliation of an Independent Union: -­‐ An independent union may affiliate with a federation or national union by obtaining the following: (a) Approval of the majority of the union members in a general membership meeting duly called for the purpose; and (b) Resolution of affiliation from the board of directors of the union. The legal effect of Affiliation: -­‐ When a labor union affiliates with a federation, it becomes subject to the laws of the federation. -­‐ The constitution and by-laws of the federation governs the relationship between the federation and the affiliate or local union. -­‐ An independent union which affiliates with a federtation or national union does not lose its legal personality. Case: Chrysler Philippines vs. Estrella (86 SCRA 338) FACTS: CPLU is a labor union. Sometime in March 1974, CPLU affiliated with a labor federation named ALU. During the affiliation, CPLU-ALU entered into a CBA with CPC. Thereafter, CPLU disaffiliated from ALU. Subsequently, CPLU filed a Petition for Direct Certification praying that it be directly certified as the exclusive collective bargaining agent of the hourly-paid workers of CPC. CPLU-ALU sought to dismiss the petition on the ground that CPLU is a non-existing union since it has been superseded by CPLUALU. ISSUE: Whether or not CPLU has lost its legal personality as a labor organization when it affiliated with its mother union, ALU? HELD: NO. While it is true that its name was changed to CPLU-ALU, such change was only a matter of form designed to convey the idea that CPLU had affiliated with ALU, but it did not affect the legal personality of the affiliating union. The only way by which a labor organization could be disenfranchised is cancellation of its registration. Case: Adamson & Adamson, Inc., vs. CIR (127 SCRA 268) FACTS: The Adamson & Adamson, Inc. Salesmen Association is the union at Adamson & Adamson, Inc. it is affiliated with the FFW. Subsequently, the supervisors of Adamson& Adamson organized themselves into a union named Adamson & Adamson, Inc. Supervisory Union. It is likewise affiliated with FFW. The rank-and-file employees also organized themselves into a union named Adamson & Adamson Independent Workers Union, and affiliated with the FFW. Adamson & Adamson, Inc. questioned the affiliation of the unions with FFW, arguing that the affiliation of the three unions with the same federation transforms them into one union because the three unions would now

be governed by the constitution and by-laws of the federation. ISSUE: Is the contention valid? HELD: NO. The three unions remained a basic unit free to serve the common interest of all its members. The inclusion of the name FFW after the name of the local unions does not mean that the local unions cannot stand on their own. Report of Affiliation: -­‐ The affiliation of an independently registered labor union with a federation or national union shall be reported to the Regional Office of the DOLE that issued its certificate of registration. -­‐ The Report of Affiliation shall be accompanied by the following documents: (a) Resolution of the labor union’s board of directors approving the affiliation; (b) Minutes of the general membership meeting approving the affiliation; (c) Total numbers of members comprising the labor union and the names of members who approved the affiliation; (d) Certificate of affiliation issued by the federation in favour the independently registered labor union; and (e) Written notice to the employer concerned if the affiliating union is the incumbent bargaining agent. Disaffiliation: -­‐ A local union has the right to disaffiliate from its mother federation. -­‐ The right of a local union to disaffiliate from the mother federation is primarily dependent upon the constitution and by-laws of the federation. -­‐ Proper time for Disaffiliation: o Generally, during the 60-day freedom period immediately preceding the expiration of the CBA. o Exceptionally, disaffiliation may be carried out before the onset of the freedom period, if there is a substantial shift of allegiance on the part of the majority of the members of the union. -­‐ Effect of Disaffiliation: o On the Relationship Between the Local Union and the Federation – Disaffiliation severs the relationship between the local union and the mother federation. It divests the federation of any and all power to act in representation of the local union. o On the Collective Bargaining Agreement – Disaffiliation does not disturb the enforceability and administration of the CBA executed by and between an employer and the federation. The reason is because the local union continues to represent the employees notwithstanding the disaffiliation.

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos o

On the Legal Personality of the Local Union – An independent union that disaffiliates from its mother federation does not lose its legal personality because it has its own registration. A chartered local that disaffiliates from its mother federation loses its legal personality because it has no registration of its own.

the constitution and by-laws or amendments thereto, the minutes of ratification and the list of members who took part in the ratification; b.

Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days from adoption or ratification of the constitution and by-laws or amendments thereto;

c.

Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, the list of voters, or failure to submit these documents together with the list of the newly elected/appointed officers and their postal addresses within thirty (30) days from election;

d.

Failure to submit the annual financial report to the Bureau within thirty (30) days after the closing of every fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report itself;

e.

Acting as a labor contractor or engaging in the "cabo" system, or otherwise engaging in any activity prohibited by law;

f.

Entering into collective bargaining agreements which provide terms and conditions of employment below minimum standards established by law;

g.

Asking for or accepting attorney’s fees or negotiation fees from employers;

h.

Other than for mandatory activities under this Code, checking off special assessments or any other fees without duly signed individual written authorizations of the members;

i.

Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau; and

j.

Failure to comply with requirements under Articles 237 and 238.

Art. 238. Cancellation of Registration – The certificate of registration of any labor organization, whether national or local, may be cancelled by the Bureau if it has reason to believe, after due hearing, that the said labor organization no longer meets one or more of the requirements herein prescribed. COMMENT: Administrative Cancellation of Registration: -­‐ The certificate of registration of a labor organization may be cancelled administratively for failure to submit to the Regional Office of the DOLE or the BLR which issued its certificate or registration or certificate of creation of chartered local the following documents: (a) Any amendment to its constitution and by-laws and the minutes of adoption or ratification of such amendments; (b) Annual financial reports; (c) Updated list of newly-elected officers, together with the appointive officers or agents who are entrusted with the handling of funds; (d) Updated list of individual members; (e) Updated list of its chartered locals and affiliates or member organizations, CBAs executed and their effectivity period, including an updated list of authorized representatives, agents or signatories in different regions of the country, in case of federations or national unions. -­‐ No certificate of registration shall be administratively cancelled due to non-compliance with the reportorial requirements unless: (a) Non-compliance is for a continuous period of five (5) years; (b) The procedural rules were complied with; and (c) The labor organization concerned has not responded to any of the notices sent or the notices were returned unclaimed. Art. 239. Grounds for cancellation of union registration. – The following shall constitute grounds for cancellation of union registration: a. Misrepresentation, false statement or fraud in connection with the adoption or ratification of

Grounds for Cancellation of Union Registration 1.1 Fraudulent Acts May be cancelled on the ground of MISREPRESENTATION, FALSE STATEMENT or FRAUD in connection with: a. Adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification and the list of members who took part in the ratification b. Election of officers, minutes of the election of officers, the list of voters; and c. Preparation of the financial report itself. 1.2 Unlawful Acts

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos a.

Acting as a labor contractor or engaging in the "cabo" system Entering into collective bargaining agreements which provide terms and conditions of employment below minimum standards established by law; Asking for or accepting attorney’s fees or negotiation fees from employers; Checking off special assessments or other fees without individual written check- off authorization, except for mandatory activities under the Labor Code; Violation of Article 241 of the Labor Code regarding rights and conditions of membership in a labor organization.

(d) facts and circumstances surrounding the complaint or petition; (e) cause(s) of action or specific violation(s) committed; (f) a statement that the administrative remedies provided for in the constitution and by-laws have been exhausted or such remedies are not readily available to the complainant(s) or petitioner(s) through no (g) fault of his/her/their own, or compliance with such administrative remedies does not apply to complainant(s) or petitioner(s); (h) relief(s) prayed for; (i) certificate of non-forum shopping; and (j) other relevant matters.

1.3 Non- compliance with Certain Requirements a. Failure to submit its constitution and by-laws or amendments thereto, the minutes of ratification and the list of members who took part in the ratification within thirty (30) days from adoption or ratification. b. Failure to submit the list of the newly elected/appointed officers and their postal addresses within thirty (30) days from election; c. Failure to submit the annual financial report to the Bureau within thirty (30) days after the closing of every fiscal year. d. Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau. e. Failure to comply with requirements under Articles 234 and 237.

2.3 VENUE INDEPENDENT UNION, CHARTERED LOCAL, or WORKERS’ ASSOCIATION: Regional Office of DOLE that issued its certificate of creation or chartered local.

b.

c. d.

e.

2. Cancellation Procedure General Rule: The registration of a labor organization can only be questioned DIRECTLY through a petition for cancellation of registration. COLLATERAL ATTACK is not allowed. EXCEPTION: Administrative cancellation is proper. 2.1 The Proper Party GENERAL RULE: Any party-in-interest. EXCEPTION: If the ground for cancellation is based on a violation of Article 241 of the LC, only members of the labor organization or workers’ association concerned can file the petition for cancellation. 2.2 Form of Petition The complaint or petition shall be in WRITING, VERIFIED UNDER OATH and shall contain the following: (a) name, address and other personal circumstances of the complainant(s) or petitioner(s); (b) name, address and other personal circumstances of the respondent(s) or person(s) charged; (c) nature of the complaint or petition;

NATIONAL UNION, INDUSTRY UNION, TRADE UNION CENTERS: Bureau of Labor Relations. 2.4 Appeal Appealable within TEN (10) days from receipt to the following agencies: a. b.

BUREAU OF LABOR RELATIONS: if the case was decided by the REGIONAL DIRECTOR of DOLE. SECRETARY OF LABOR AND EMPLOYMENT: if the case was decided by the BUREAU OF LABOR RELATIONS in the exercise of its ORIGINAL JURISDICTION.

2.4 Finality of Decision Rendered on Appeal • Decisions of Sec of Labor and Employment are FINAL and EXECUTORY • Decisions of BLR in the exercise of its appellate jurisdiction are FINAL and EXECUTORY (Not appealable to the Sec of Labor and Employment) CASE: FACTS: ALEU applied for union registration, the application was approved. Abbott Laboratories filed for its cancellation of ALEU on the ground that the application was not signed by atleast 20% of the rankand-file employees. The Regional Director of DOLE ordered the cancellation of the registration. ALEU appealed to the BLR, rendered a decision reversing the order of the Regional Director. Abbot appealed the decision to Secretary of Labor and Employment, refused due to lack of jurisdiction. ISSUE: Whether Sec of Labor and Employment has jurisdiction? Held: No. the appellate jurisdiction of the Sec of labor and Employment is limited only to a review of

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos cancellation proceedings decided by BLR in the exercise of its EXLUSIVE and ORIGINAL Jurisdiction. 3. Effect of Cancellation Proceedings • During pendency the labor organization continues to enjoy all rights accorded to a legitimate labor organization. o Can still file for certification § Certificate of election proceedings be suspended until the issue have been resolved. (failure: Grave abuse of Discretion) • FINAL ORDER of CANCELLATION: strip a legitimate labor organization of its rights. Art. 240. Equity of the incumbent. – All existing federations and national unions which meet the qualifications of a legitimate labor organization and none of the grounds for cancellation shall continue to maintain their existing affiliates regardless of the nature of the industry and the location of the affiliates. 1. The Import of the Law • Proclaims the right of federation or national union. • It does not in any way prohibit the disaffiliation of a local union from a federation or national union.

or agents who are entrusted with the handling of funds, within thirty (30) calendar days after the election of officers or from the occurrence of any change in the list of officers of the labor organization; (As amended by Section 16, Republic Act No. 6715, March 21, 1989) d.

The members shall determine by secret ballot, after due deliberation, any question of major policy affecting the entire membership of the organization, unless the nature of the organization or force majeure renders such secret ballot impractical, in which case, the board of directors of the organization may make the decision in behalf of the general membership;

e.

No labor organization shall knowingly admit as members or continue in membership any individual who belongs to a subversive organization or who is engaged directly or indirectly in any subversive activity;

f.

No person who has been convicted of a crime involving moral turpitude shall be eligible for election as a union officer or for appointment to any position in the union;

g.

No officer, agent or member of a labor organization shall collect any fees, dues, or other contributions in its behalf or make any disbursement of its money or funds unless he is duly authorized pursuant to its constitution and by-laws;

h.

Every payment of fees, dues or other contributions by a member shall be evidenced by a receipt signed by the officer or agent making the collection and entered into the record of the organization to be kept and maintained for the purpose;

i.

The funds of the organization shall not be applied for any purpose or object other than those expressly provided by its constitution and by-laws or those expressly authorized by written resolution adopted by the majority of the members at a general meeting duly called for the purpose;

j.

Every income or revenue of the organization shall be evidenced by a record showing its source, and every expenditure of its funds shall be evidenced by a receipt from the person to whom the payment is made, which shall state the date, place and purpose of such payment. Such record or receipt shall form part of the financial records of the organization.

CHAPTER II RIGHTS AND CONDITIONS OF MEMBERSHIP Art. 241. Rights and conditions of membership in a labor organization. – The following are the rights and conditions of membership in a labor organization: a. No arbitrary or excessive initiation fees shall be required of the members of a legitimate labor organization nor shall arbitrary, excessive or oppressive fine and forfeiture be imposed; b.

The members shall be entitled to full and detailed reports from their officers and representatives of all financial transactions as provided for in the constitution and by-laws of the organization;

c.

The members shall directly elect their officers, including those of the national union or federation, to which they or their union is affiliated, by secret ballot at intervals of five (5) years. No qualification requirements for candidacy to any position shall be imposed other than membership in good standing in subject labor organization. The secretary or any other responsible union officer shall furnish the Secretary of Labor and Employment with a list of the newly-elected officers, together with the appointive officers

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos Any action involving the funds of the organization shall prescribe after three (3) years from the date of submission of the annual financial report to the Department of Labor and Employment or from the date the same should have been submitted as required by law, whichever comes earlier: Provided, That this provision shall apply only to a legitimate labor organization which has submitted the financial report requirements under this Code: Provided, further, that failure of any labor organization to comply with the periodic financial reports required by law and such rules and regulations promulgated thereunder six (6) months after the effectivity of this Act shall automatically result in the cancellation of union registration of such labor organization; (As amended by Section 16, Republic Act No. 6715, March 21, 1989) k.

l.

The officers of any labor organization shall not be paid any compensation other than the salaries and expenses due to their positions as specifically provided for in its constitution and by-laws, or in a written resolution duly authorized by a majority of all the members at a general membership meeting duly called for the purpose. The minutes of the meeting and the list of participants and ballots cast shall be subject to inspection by the Secretary of Labor or his duly authorized representatives. Any irregularities in the approval of the resolutions shall be a ground for impeachment or expulsion from the organization; The treasurer of any labor organization and every officer thereof who is responsible for the account of such organization or for the collection, management, disbursement, custody or control of the funds, moneys and other properties of the organization, shall render to the organization and to its members a true and correct account of all moneys received and paid by him since he assumed office or since the last day on which he rendered such account, and of all bonds, securities and other properties of the organization entrusted to his custody or under his control. The rendering of such account shall be made:

The account shall be duly audited and verified by affidavit and a copy thereof shall be furnished the Secretary of Labor. m. The books of accounts and other records of the financial activities of any labor organization shall be open to inspection by any officer or member thereof during office hours; n.

No special assessment or other extraordinary fees may be levied upon the members of a labor organization unless authorized by a written resolution of a majority of all the members in a general membership meeting duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or fees. The record shall be attested to by the president.

o.

Other than for mandatory activities under the Code, no special assessments, attorney’s fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee without an individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction; and

p.

It shall be the duty of any labor organization and its officers to inform its members on the provisions of its constitution and by-laws, collective bargaining agreement, the prevailing labor relations system and all their rights and obligations under existing labor laws.

For this purpose, registered labor organizations may assess reasonable dues to finance labor relations seminars and other labor education activities.

1.

At least once a year within thirty (30) days after the close of its fiscal year;

Any violation of the above rights and conditions of membership shall be a ground for cancellation of union registration or expulsion of officers from office, whichever is appropriate. At least thirty percent (30%) of the members of a union or any member or members specially concerned may report such violation to the Bureau. The Bureau shall have the power to hear and decide any reported violation to mete the appropriate penalty.

2.

At such other times as may be required by a resolution of the majority of the members of the organization; and

Criminal and civil liabilities arising from violations of above rights and conditions of membership shall continue to be under the jurisdiction of ordinary courts.

3.

Upon vacating his office.

1. Rights of Union Members 1.1 RIGHT TO RESIGN FROM THE UNION

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos • •

Any member may leave and cancel his union membership at ANYTIME. This right may be restricted by a CLOSED-SHOP agreement, the employee concerned must keep his union membership until the freedom period.

1.2 RIGHT TO FAIR DEALING • The relationship between the union and the union member is fiduciary in nature and arises out of (2) Two factors: 1. The degree of dependence of the individual employee on the labor organization; 2. the comprehensive power vested in the union with respect to the individual. Heirs of Teodulo Cruz vs. CIR (30 SCRA 917) FACTS: The UNION inbehalf of its members file a complaint against SRM. CIR rendered a decision ordering SRM to pay the union member the amount of P423, 756. 74. During the execution stage, SRM negotiated with the Union for the settlement of the case in the amount of P110,000.00 the union president and BOD of the union accepted to offer despite 49 members and 1 board member objected to the settlement. The CIR approved the settlement. HELD: the union leadership was recreant in its duty towards the union members in failing to disclose to the union member the full situation of their judgment credit against SRM. 1.3 RIGHT TO INFORMATION • The union is considered agent of its members, it is under obligation to give the members as its principal, all information relevant to union and labor matters. o Information regarding the provisions of the constitution and by-laws of the union, o Collective bargaining agreement o The prevailing labor relations system o All rights and obligation under existing laws o Full and detailed reports of all financial transactions o Books of accounts and other financial records shall be open to inspection during office hours. 1.4 RIGHT TO DETERMINE MAJOR UNION POLICIES GENERAL RULE: Union members have the right to determine by SECRET BALLOT, any question of MAJOR POLICY affecting the entire membership EXCEPTIONS: the nature of the organization or force majure renders such secret balloting impractical.

The BOD of the organization may make the decision in behalf of the general membership. 1.5 RIGHT TO ELECT UNION OFFICERS o Including national union or federation which their union is affiliated. 1.6 RIGHT TO SEEK INVESTIGATION OF IRREGULARITIES o Union member who invokes his right cannot be considered to have committed misconduct, negligence or disloyalty, and therefore, unlawful to expel such member from the union. 2. Conditions of Union Membership 2.1 Non- membership in subversive Organization o No union shall knowingly admit as member or continue membership any individual who is engaged directly or indirectly in subversive activity. 2.2 No Arbitrary or Excessive Initiation Fees 2.3 No levy of special assessment without written resolution o UNLESS: authorized by a written resolution of a majority of all the members at a general membership meeting duly called for the purpose. 2.3.1 REQUISITES FOR VALID LEVY OF SPECIAL ASSESSMENT a. Written resolution by the majority of all the union members; b. Written resolution must be passed in a general membership meeting duly called for the purpose; c. The minutes of the meeting, including the list of all members present, the votes cast, and the purpose of the special assessment should be recorded by the secretary of the labor organization. d. The record shall be attested to by the president of the labor organization. STRICT COMPLIANCE WITH THE REQUIREMENTS IS REQUIRED. Failure will invalidate the special assessment. SUBSTANTIAL COMPLIANCE will not suffice. 2.4 No Check-off without Individual Written Authorization General rule: No Special assessment, Attorney’s fees or other extraordinary fees may be checked off from any amount due to an employee without an individual written authorization signed by the employee. Exception: MANDATORY ACTIVITIES § Labor relation seminars § Labor education activities

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos PURPOSE: to protect employees unwarranted practices that diminishes compensation without their consent.

from their

NOTE: Compulsory arbitration of collective bargaining deadlock is NOT a mandatory activity. It is a judicial process of settling labor dispute. PALACOL vs. FERRER- CALLEJA (182 SCRA 710) Facts: As a result of new CBA, the president of the Union submitted to the Company the ratification by the union members of the new CBA and authorization for the Company to deduct union dues equivalent to P10.00 every payday or P20.00 every month and, in addition, 10% by way of special assessment, from the CBA lump-sum pay granted to the union members. The purpose of the special assessment sought to be levied is "to put up a cooperative and credit union; purchase vehicles and other items needed for the benefit of the officers and the general membership; and for the payment for services rendered by union officers, consultants and others." There was also an additional proviso stating that the "matter of allocation ... shall be at the discretion of our incumbent Union President." This "Authorization and CBA Ratification" was obtained by the Union through a secret referendum held in separate local membership meetings on various dates. The total membership of the Union was about 800. Of this number, 672 members originally authorized the 10% special assessment, while 173 opposed the same. Subsequently however, one hundred seventy (170) members of the Union submitted documents to the Company stating that although they have ratified the new CBA, they are withdrawing or disauthorizing the deduction of any amount from their CBA lump sum. Later, 185 other union members submitted similar documents expressing the same intent. These members, numbering 355 in all (170 + 185), added to the original oppositors of 173, turned the tide in favor of disauthorization for the special assessment, with a total of 528 objectors and a remainder of 272 supporters. ISSUE: Can the special assessment be checked- off? HELD: NO. the majority of the union members have withdrawn their individual check-off authorization. The labor code requires written resolution passed by all members at a general meeting duly called for that purpose. The failure of the union to comply STRICTLY invalidates the questioned special assessment. GALVADORES vs. TRAJANO (144 SCRA 138) FACTS: the Executive Board of the Union passed a resolution requesting PLDT to deduct P115.00 per employee for the legal services extended to the Union by respondent Counsel. No individual check off authorization was presented. Respondents Union and Counsel argue that compulsory arbitration is a "mandatory activity" and an exception to Article 242(o) of the Labor Code, and that the Union members

approved the questioned deduction in the plebiscite of January, 1984. ISSUE: Attorney’s fees may be Checked-off? HELD: This is not the "mandatory activity" under the Code which dispenses with individual written authorizations for check-offs, notwithstanding its "compulsory" nature. It is a judicial process of settling disputes laid down by law. Besides, Article 222(b) does not except a CBA, later placed under compulsory arbitration, from the ambit of its prohibition. The cardinal principle should be borne in mind that employees are protected by law from unwarranted practices that diminish their compensation without their knowledge and consent. 2.4.2 Check-off during Pendency of Representation Case • The right to check-off union dues and agency fess subsists during the pendency of a petition for certification election or other intraunion or inter-union disputes. 2.4.3 Withdrawal of Check-off Authorization • Need not be done separately or individually. • Upon withdrawal of authorization the obligation to check-off ceases. 2.4.4. Check-off Authorization not Required for Agency Fees • Check-off for agency fees does not apply to non-union members for having accepted the benefits provided for in the CBA. • Violation will be tantamount to ULP. 1. Union Officers 3.1 Qualifications of Union Officers a. He must be an employee of the company where the union operates. b. He must be a member in good standing in the subject labor organization. c. He has not been convicted of a crime involving moral turpitude, or if convicted, he has been granted absolute pardon. LARAP LABOR UNION vs. VICTORIANO 97 PHIL 435 FACTS: PV ran as a candidate for president, however, was contested on the ground that he was not an employee of Philippine Iron Mines. Nevertheless, PV and his partisans still held a rump election which resulted in his asserted majority votes ISSUE: Is the election of PV valid? HELD: NO. He was not an employee of Philippine Iron Mines. Neither he was a member of the Union. FLORA vs. OXIMANA 10 SCRA 212

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos FACTS: X was the president of Benguet-Balatoc Workers Union. It was later discovered that X was previously convicted of the crime abusos dishonestos. When the case was called for a hearing, the president of the Philippines granted X full, absolute and plenary pardon for the crime he committed. ISSUE: is X qualified to hold position of Union president? HELD: YES. X had already been granted an absolute pardon by the president of the Philippines. 3.2 Election of Union Officers • The members shall directly elect their officers including the officers of national union or federation to which the union is affiliated by SECRET BALLOT at intervals of FIVE (5) Years. • Only union members are qualified to vote. • Submission of employees’ names with the BLR as qualified members of the union is not condition sine qua non to enable to vote in the election. • The question of elegibility to vote may be determined through use of the applicable payroll period and employment status during the applicable payroll period o The payroll of the month preceeding the labor dispute in case of regular employees. o Payroll period at or near the peak operations in case of employees in seasonal employees. GUIDELINES: In absence of any agreement in the constitution and by-laws: (a) within sixty (60) days before the expiration of the term of the incumbent officers, the president of the labor organization shall constitute a committee on election to be composed of at least three (3) members who are not running for any position in the election, provided that if there are identifiable parties within the labor organization, each party shall have equal representation in the committee; (b) upon constitution, the members shall elect the chairman of the committee from among themselves, and case of disagreement, the president shall designate the chairman; (c) within ten (10) days from its constitution, the committee shall, among others, exercise the following powers and duties: 1) set the date, time and venue of the election;

2) prescribe the rules on the qualification and eligibility of candidates and voters; 3) prepare and post the voters' list and the list of qualified candidates; 4) accredit the authorized representatives of the contending parties; 5) supervise the actual conduct of the election and canvass the votes to ensure the sanctity of the ballot; 6) keep minutes of the proceedings; 7) be the final arbiter of all election protests; 8) proclaim the winners; and 9) prescribe such other rules as may facilitate the orderly conduct of election. 3.3 Remedy if Officers do not Call for Election of New officers • The said election can be called or conducted and the intervention of DOLE is necessary. • At least 30% of the members of the labor organization may file a petition for the conduct of election. • The petition shall be filed with the Regional Office of the DOLE that issued its certificate of registration or certificate of creation of chartered local. • In case of Federation, national or industry unions and trade centers, the petition shall be filed with the BLR. 3.4 Election Protest • The five day period for filing a protest in a certification election does not apply to a protest in an election of union officers. • Election code is not applicable • It must be filed in the regional office of DOLE where the union is domiciled. o Filing of protest is not invalidated when it was filed with the office of Sec of Labor and Employment, It has the inherent power to entertains petitions filed directly with his office. o In case a winning candidate is disqualified, the candidate who obtained the second highest number of votes should not be declared as the winner. 3.5 Election Attended by Irregularities is Invalid Rodriguez vs. BLR • The SC invalidated the election because of the following irregularities: o Conducted without prior notice to all voting members

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos o o o

Held on dates different from those stated in the notice; Conducted in defiance of the TRO that was issued by the Med-Arbiter; Conducted without any ground rules or guidelines

UST Faculty Union vs. Bitonio The SC upheld the nullity of the election union officers: • Notice of election was not done in a meeting duly called for the purpose. • No committee on elections to oversee the election, • It was not done in secret ballot 3.6 Compensation of Union Officers • GENERAL RULE: Shall not be paid any compensation • EXCEPTION: Salaries and expenses due to their positions as specifically provided for in its constitution and by-laws, or in written resolution duly authorized by the majority of all the members in a general membership meeting duly called for the purpose. 3.7 Expulsion/ impeachment of Union Officers GROUNDS: a. violation of the above rights and conditions of membership in a labor organization as set forth in ART 241 of the LC. b. Commission of irregularities in the approval of the resolution regarding compensation of union officers. c. Membership in another labor organization. d. Culpable violation of the constitution and bylaws of the union. • •

THE BLR has the power to expel or remove union officer from office. If DOLE is confronted with a petition for expulsion or impeachment of union officers, it should decide the case on its merits.

DUYAG vs. INCIONG 98 SCRA 522 FACTS: A complaint for expulsion was filed against the union president, treasurer and auditor. The Med- Arbiter ordered the expulsion of the said union officers, but on appeal the director of BLR reversed the Med- Arbiter’s decision. ISSUE: Whether the BLR has power to expel union officers? HELD: The BLR has the power to expel from the union any officer found guilty of violating any rights and conditions of membership specified in ART 242 of LC. 2.

Union Funds

•

•

•

• •

No agent, officer, member may collect fees unless he is duly authorized under the constitution and by-laws. Shall not be applied for any purpose or object other than those expressly provided by its constitution and by-laws, or in written resolution duly authorized by the majority of all the members in a general membership meeting duly called for the purpose. Everything must be evidenced by a receipt signed by the officer or agent making the collection and entered into the record. Every income or revenue shall be evidenced by a record showing its source Every expenditure shall be evidenced by receipt from the person to whom payment is made which shall state the place and purpose of such payment.

4.1 Accounting of Union Funds • The treasurer is obliged to render correct account of all money received and paid by since he assumed office. • Account shall be duly audited and verified by affidavit and copy thereof shall be furnished the Sec of Labor and Employment. • The rendering of account shall be made: a. Atleast once a year within 30 days after the close of its fiscal year. b. At such other times as may be required by a written resolution of the majority of the members c. Upon vacating his office. 4.2 Request for Examination of Books of Accounts • Request shall not be treated as an intra-union dispute, in the absence of allegation that a violation of Art 241 of the LC has been committed. • The appointment of an audit examiner is not appealable. • May be filed with the following agencies by any union member with the written consent of atleast 20% of the total members; a. BLR: if involed is a federation, national union or trade union center. b. Regional Office of DOLE that issued its certificate of registration or certificate of creation of chartered local: involved is an independent union or chartered local. 4.3 Action for Accounting/ Audit of Union Funds • Petitions for accounting/ audit of union finds arising from mishandling, misappropriation or non- accounting shall be resolved by the Med- Arbiter. • Petition shall be supported by the written consent of at least 30% of the total union membership. However not mandatory.

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos o

Rodriguez vs. BLR § The use of the permissive “may” in the provision at once negates the notion that the assent of 30% is mandatory. § The report may be made alternatively by “any member or members specially concerned. § The assent of 30% is not a factor in the acquisition of jurisdiction by the BLR is furnished by Art 242 of LC

4.4 Appeal • Decision granting the petition for audit is INTERLUCUTORY, hence NOT appealable. • Decision denying or dismissing the petition for audit/accounting of union funds may be appealed within 10 Days to the: a. BLR: if decision was rendered by the Regional Director of DOLE b. Sec of Labor and Employment: if the decision was rendered by BLR in the exercise of its original jurisdiction. 4.5 Prescription of Action • Prescribes after 3 years from the date of submission of the annual financial report to the DOLE or from the date the same should have been submitted as required by law, whichever comes earlier. Chapter III RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS Art. 242. Rights of legitimate labor organizations. – A legitimate labor organization shall have the right: To act as the representative of its members for the purpose of collective bargaining; To be certified as the exclusive representative of all the employees in an appropriate bargaining unit for purposes of collective bargaining; To be furnished by the employer, upon written request, with its annual audited financial statements, including the balance sheet and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the union has been duly recognized by the employer or certified as the sole and exclusive bargaining representative of the employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective bargaining negotiation; To own property, real or personal, for the use and benefit of the labor organization and its members; To sue and be sued in its registered name; and

To undertake all other activities designed to benefit the organization and its members, including cooperative, housing, welfare and other projects not contrary to law. Notwithstanding any provision of a general or special law to the contrary, the income and the properties of legitimate labor organizations, including grants, endowments, gifts, donations and contributions they may receive from fraternal and similar organizations, local or foreign, which are actually, directly and exclusively used for their lawful purposes, shall be free from taxes, duties and other assessments. The exemptions provided herein may be withdrawn only by a special law expressly repealing this provision. 1.

The Right to Act as Collective Bargaining Representative • Only legitimate labor organization can represent employees in collective bargaining. • U.E. Automotive Employees v. Noriel - In the absence of any fatal defect to the application for registration, there is no justification for withholding petitioner to exercise fully its right ti freedom of association.

2. The Right to Request for Audited Financial Statements • The right is only available to legitimate labor organizations which have been recognized or certified as the sole and exclusive collective bargaining agent of the employees. o After it has been accorded recognition by the employer or after it has been certified as collective bargaining representatives o During freedom period. o During collective bargaining negotiations. 3. The Right to Sue and Be Sued • Cannot file in behalf of non- union member even if the non-members signed the complaint. • Should be brought in its own registered name. • The union members whose benefit the action has been filed need not joined as party. • National Brewery and Allied Industries labor Union vs. San Miguel Brewery. o The union may sue thereon without joining the members whose benefit the action has been presented. •

Where Collective bargaining process is not involved and what is at stake are back wages already earned by the individual workers, the

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos

•

real party in interest are the individual workers themselves, Union cannot file complaint in behalf of them. Legal Capacity of labor union cannot be raised for the first time on appeal. (University of pangasinan faculty union vs. University of Pangasinan)

•

3.

4.The Right to tax Exemption • Properties actually, directly and exclusively used for their lawful purposes shall be free from taxes, duties and other assessments. Title V COVERAGE Art. 243. Coverage and employees’ right to selforganization. – All persons employed in commercial, industrial and agricultural enterprises and in religious, charitable, medical, or educational institutions, whether operating for profit or not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection. 1.

Implications of the Right to SelfOrganization The right to self-organization carries with it the right to: a. choose which union he would join b. cancel his union membership anytime c. abstain from joining a union •

B and C are not absolute, Closed Shop arrangement

Victorias Miling vs. Victorias- Manapla Workers’ Organization 9 SCRA 154 FACTS: Victorias Miling co and the free Visayan Workers’ union entered into a CBA with a closed- shop arrangement. During the effectivity 10 employees resigned from Free Visayan and joined another union. The company dismissed the 10 employees? ISSUE: Whether the dismissal valid? HELD: YES because it was made in pursuance of the closed- shop situation in CBA. 2.

Basic Types of Organizations a. Labor Organization • Labor Union created for the purpose of collective bargaining or dealing with employers concerning terms and conditions of employment. b. Workers’ association

For the purpose of mutual aid and protection of its members or for any other legitimate purpose other than collective bargaining.

Kinds of Labor Union a. NATIONAL UNION or FEDERATION- is a mother labor organization with atleast 10 locals/chapters or affiliates. b. LOCAL UNION- operating at the enterprise level. c. CHARTERED LOCAL-labor organization without an independent registration whose legal personality is derived from its mother union or federation upon issuance of a certificate of creation of chartered local. d. AFFLIATE- independent registered union attached to a national union or federation. e. INDEPENDENT UNION- operating at the enterprise level that acquired legal personality through independent registration and is not affiliated with a national union or federation. f. INDUSTRIAL UNION- composed of workers in a particular industry. g. CRAFT UNION- composed of workers engaged in aparticular trade or occupation of a kind that requires skill and training. h. COMPANYTYPE UNIONcomposed of employees in the same company. i. COMPANY UNION- the formation, function or administration of which has been assisted by any act defined as ULP.

4.

Eligibility of Membership in a Labor Organization 4.1 Essential Element • Available only to persons who enjoy employee status. • The existence of employer- employee relationship is a condition sine qua non for the exercise of the constitutional rights to join or form labor organization. ( La Suerte Cigar and Cigarette Factory vs. Dir of BLR) 4.2 employees Eligible for Membership in a Labor Organization • Only RANK-AND-FILE and SUPERVISORY employees in commercial, industrial and agricultural enterprise • Religious, charitable, medical or educational institutions whether operating for profit or not

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos • •

Security Guards may also form or join a labor union. Alien employees with valid working permits may also join or assist labor unions if they are nationals of a country which grants the same or similar rights to Filipino workers certified by DFA.

4.3 When an Employee Qualifies for Membership • On the first day of his employment. 5. • • 6. •

Union

Eligibility for Membership in a Workers’ Association All employees, including ambulant, intermittent, self- employed, rural workers. Managerial employees, but not for collective bargaining purposes. Freedom of Religion and the Right to selforganization Freedom of Religion superior to contract rights.

Art. 244. Right of employees in the public service. – Employees of government corporations established under the Corporation Code shall have the right to organize and to bargain collectively with their respective employers. All other employees in the civil service shall have the right to form associations for purposes not contrary to law. 1. A. B. C.

Employees in the Public Service employees of branches, subdivisions, instrumentalities and agencies of the Government employees of government-owned or controlled corporations with original charters employees of government and controlled corporation established under corporation law.

1.1 Government Employees • Cannot form or join labor organization, but they can form or join an employees’ organization. • High- level employees cannot join the organization of rank-and-file government employees, they must form their own association. • Not available to members of Armed Forces of the Philippines, policemen, firemen, and jail guards. • They are not accorded the right to strike and the right to bargain collectively. Reason: the terms and conditions of employment are governed by law, only congress can modify.

1.2 employees of government-owned or controlled corporations with original charters • Accorded the right to self-organization. • They cannot form labor organization • They cannot strike nor can they bargain collectively. 1.3 Employees of government and controlled corporation established under corporation law • Same rights and obligation as employees of private establishments. • They can form or join labor organization • Stage strike and bargain collectively. • Governed by labor code. EXECUTIVE ORDER NO. 180 June 1, 1987 PROVIDING GUIDELINES FOR THE EXERCISE OF THE RIGHT TO ORGANIZE OF GOVERNMENT EMPLOYEES, CREATING A PUBLIC SECTOR LABOR-MANAGEMENT COUNCIL, AND FOR OTHER PURPOSES In accordance with the provisions of the 1987 Constitution, I, CORAZON C. AQUINO, President of the Philippines, do hereby order: I. Coverage Sec. 1. This Executive Order applies to all employees of all branches, subdivisions, instrumentalities, and agencies, of the Government, including government-owned or controlled corporations with original charters. For this purpose, employees, covered by this Executive Order shall be referred to as "government employees". Sec. 2. All government employees can form, join or assist employees' organizations of their own choosing for the furtherance and protection of their interests. They can also form, in conjunction with appropriate government authorities, labor-management committees, works councils and other forms of workers' participation schemes to achieve the same objectives. Sec. 3. High-level employees whose functions are normally considered as policy-making or managerial or whose duties are of a highly confidential nature shall not be eligible to join the organization of rank-and-file government employees. Sec. 4. The Executive Order shall not apply to the members of the Armed Forces of the Philippines, including police officers, policemen, firemen and jail guards. II. Protection of the Right to Organize Sec. 5. Government employees shall not be discriminated against in respect of their employment by reason of their membership in employees' organizations or participation in the normal activities of their organization. Their employment shall not be subject to the condition that they shall not join or shall relinquish their membership in the employees' organizations. Sec. 6. Government authorities shall not interfere in the establishment, functioning or administration of government employees' organizations through acts designed to place such organizations under the control of government authority. III. Registration of Employees' Organization

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos Sec. 7. Government employees' organizations shall register with the Civil Service Commission and the Department of Labor and Employment. The application shall be filed with the Bureau of Labor Relations of the Department which shall process the same in accordance with the provisions of the Labor Code of the Philippines, as amended. Applications may also be filed with the Regional Offices of the Department of Labor and Employment which shall immediately transmit the said applications to the Bureau of Labor Relations within three (3) days from receipt thereof. Sec. 8. Upon approval of the application, a registration certificate be issued to the organization recognizing it as a legitimate employees' organization with the right to represent its members and undertake activities to further and defend its interest. The corresponding certificates of registration shall be jointly approved by the Chairman of the Civil Service Commission and Secretary of Labor and Employment. IV. Sole and Exclusive Employees' Representatives Sec. 9. The appropriate organizational unit shall be the employers unit consisting of rank-and-file employees unless circumstances otherwise require. Sec. 10. The duly registered employees' organization having the support of the majority of the employees in the appropriate organizational unit shall be designated as the sole and exclusive representative of the employees. Sec. 11. A duly registered employees' organization shall be accorded voluntary recognition upon a showing that no other employees' organization is registered or is seeking registration, based on records of the Bureau of Labor Relations, and that the said organizations has the majority support of the rank-and-file employees in the organizational unit. Sec. 12. Where there are two or more duly registered employees' organizations in the appropriate organizational unit, the Bureau of Labor Relations shall, upon petition, order the conduct of a certification election and shall certify the winner as the exclusive representative of the rank-andfile employees in said organization unit. D. Terms and Conditions of Employment in Government Services Sec. 13. Terms and conditions of employment or improvements thereof, except those that are fixed by law, may be the subject of negotiations between duly recognized employees' organizations and appropriate government authorities. VI. Peaceful Concerted Activities and Strikes Sec. 14. The Civil Service laws and rules governing concerted activities and strikes in the government service shall be observed, subject to any legislation that may be enacted by Congress. VII. Public Sector Labor-Management Council Sec. 15. A Public Sector Labor Management Council, hereinafter referred to as the Council, is hereby constituted to be composed of the following: 1) Chairman, Civil Service Commission Chairman 2) Secretary, Department of Labor and Employment Vice Chairman 3) Secretary, Department of Finance Member 4) Secretary, Department of Justice Member

5) Secretary, Department of Budget and Management Member The Council shall implement and administer the provisions of this Executive Order. For this purpose, the Council shall promulgate the necessary rules and regulations to implement this Executive Order. VIII. Settlement of Disputes Sec. 16. The Civil Service and labor laws and procedures, whenever applicable, shall be followed in the resolution of complaints, grievances and cases involving government employees. In case any dispute remains unresolved after exhausting all the available remedies under existing laws and procedures, the parties may jointly refer the dispute to the Council, for appropriate action. IX. Effectivity Sec. 17. This Executive Order shall take effect immediately. Done in the City of Manila, this 1st day of June, in the year of Our Lord, nineteen hundred and eighty-seven. Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. – Managerial employees are not eligible to join, assist 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. Managerial Employees • One who is vested with powers or prerogatives to lay down and execute management policies and, or hire transfer, suspend, lay-off, recall, discharge, assign or discipline employees. 1.1 Test of managerial status Art. 245. Ineligibility of Managerial Employees to Join Any Labor Organization; Right of Supervisory Employees. – Managerial employees are not eligible to join, assist 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. (As amended by Section 18, Republic Act No. 6715, March 21, 1989) MANAGERIAL EMPLOYEES Ø Those vested with powers prerogatives to lay down and execute management policies and/or hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees TEST OF MANAGERIAL STATUS Ø Nature of the employee’s functions Ø The designation should be reconciled with the actual job description of the employee, for it is the job description that determines the nature of employment Ø Whether the employee possesses authority to act in the interest of his employer

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos Ø

Whether such authority is not merely routinary or clerical in character but requires the use of independent judgment

CHARACTERISTICS OF MANAGERIAL RANK 1. Not subject to the rigid observance of regular office hours 2. Work requires the consistent exercise of discretion and judgment in the performance 3. Output produced or the result accomplished cannot be standardized in relation to a given period of time 4. Manages a customarily recognized department or subdivision of the establishment, customarily and regularly directing the work of other employees therein 5. Has the authority to hire or discharge other employees or his suggestions and recommendations as to hiring and discharging, advancement and promotion or other change o status of other employees are given particular weight 6. As a rule, neither paid hourly wages nor subject to maximum hours of work EXAMPLE OF MANAGERIAL POSITIONS 1. Captain of a vessel 2. Major patron, minor patron, chief mate and chief engineer of a vessel 3. Department managers and assistant managers 4. Farm administrator 5. Route manager 6. Accounting manager 7. Personnel officer RIGHTS OF MANAGERIAL EMPLOYEES TO SELFORGANIZATION Ø Can form their own association for any legitimate purpose other than collective bargaining o Cannot join, form or assist in the formation of a labor organization o They have no collective bargaining rights o REASON: Conflict of interest brought about by the nature of their position CONSTITUTIONALITY OF ARTICLE 245 Ø Not unconstitutional Ø It does not absolutely forbid managerial employees from exercising their right of association o Only prohibits the right to join labor organizations SUPERVISORY EMPLOYEES Ø Those who, in the interest of the employer, effectively recommend the laying down and execution of management policies and/or hiring, transfer, suspension, lay-off, recall, discharge, assignment or discipline of employees o The power to recommend should be effective

The exercise of such authority should not be merely of a routinary or clerical nature, but should require the use of independent judgment Mere designation is not necessarily indicative of supervisory status o

Ø

EXAMPLES OF SUPERVISORY POSITIONS Ø An employee who exercises general supervision over a group of executive assistants in performing a variety of research, performs, administrative and technical duties, or is given the power to recommend action on a variety of matters pertaining to the operation of the business of the office and performs other duties as may be assigned to them by the General Manager Ø The mere fact that the employee also acts as liaison officer between the Sweepstakes Office and those of Congress, the Civil Service Commission and the Office of the President does not nullify his supervisory status Ø Foremen o Chief and often especially-trained workmen with and commonly are in charge of a group of employees in an industrial plant on in construction work RIGHT OF SUPERVISIORY EMPLOYEES TO SELFORGANIZATION Ø Accorded the right to form or join a labor organization BUT not eligible for membership in a labor organization of rank-and-file employees o Should form their own separate organization o REASON: difference in their interests § The peculiar role of supervisors is that they act contrary to the interests of the rank-and-file whenever they recommend action implementing management policy or whenever they ask for the discipline or dismissal of subordinates § Members of the supervisory union might refuse to carry out disciplinary measures against their co-member rank-and-file employees. In the area of collective bargaining, their interest cannot be considered identical Ø GENERAL RULE: Mere affiliation of both the supervisors’ union and the rank-and-file union with the same federation is not per se objectionable Ø EXCEPTIONS: 1. When the rank-and-file employees are directly under the authority of supervisory employees

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos 2.

Ø

When the national federation is actively involved in union activities in the company A labor organization composed of a mixture of rank-and-file and supervisory employees is no labor organization at all o It cannot possess any of the rights of a legitimate labor organization, including the right to file a petition for certification election

RANK AND FILE EMPLOYEES Ø All employees who are neither managerial nor supervisory CONFIDENTIAL EMPLOYEES Ø Confidential employees are those who: 1. Assist or act in a confidential capacity 2. To persons who formulate, determine, and effectuate management policies in the field of labor relations Ø The two criteria are cumulative o The confidential relationship must exist between the employee and his supervisor; and the supervisor must handle the prescribed responsibilities relating to labor relations Ø KEY QUESTION – employee’s necessary access to confidential labor relations information RIGHT OF CONFIDENTIAL EMPLOYEES TO SELFORGANIZATION Ø Disqualified from joining, forming or assisting in the formation of a labor organization under the doctrine of necessary implication Ø Not directly prohibited by Art. 245 of the Labor Code Ø DOCTRINE OF NECESSARY IMPLICATION o The disqualification accorded to managerial employees equally applies to confidential employees o REASON: In the normal course of their duties, they become aware of management policies relating to labor relations Ø BROAD RATIONALE: Employees should not be placed in a position involving a potential conflict of interests Ø Management should not be required to handle labor relations matters through employees who are represented by the union with which the company is required to deal with and who in the normal performance of their duties may obtain advance information of the company’s position with regard to contract negotiations, the disposition of grievances, or other labor relations matters Ø Confidential employees may become the source of undue advantage o May act as spies of either party to a collective bargaining agreement

Ø

Confidential employees who do not have access to labor relations information can form or join a labor union

EMPLOYEES OF COOPERATIVES Ø COOPERATIVE o Organization composed primarily of small producers and consumers who voluntarily join together to form business enterprises which they themselves own, control, and patronize Ø EMPLOYEES WHO ARE THEMSELVES MEMBERS OF THE COOPERATIVE o No right to form or join a labor organization o REASON: They are co-owners of the cooperative § An owner cannot bargain with himself Ø EMPLOYEES WHO ARE NOT MEMBERS OF THE COOPERATIVE o Entitled to exercise their rights to selforganization and collective bargaining Art. 246. Non-abridgment of Right to Self-Organization. – 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. Such right shall include the right to form, join, or assist labor organizations for the purpose of collective bargaining through representatives of their own choosing and to engage in lawful concerted activities for the same purpose for their mutual aid and protection, subject to the provisions of Article 264 of this Code. (As amended by Batas Pambansa Bilang 70, May 1, 1980) FREEDOM OF ASSOCIATION Ø Stresses the freedom of association enshrined in Section 8, Article III of the Constitution o “the right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged.” Ø As a matter of principle, the right to selforganization should be subordinated to the constitutional provision protecting the sanctity of contracts Ø The right to engage in concerted activities (which is an incident of the right to self-organization) is not absolute o LIMITATION: Those aimed at compelling an employer to ignore the clear mandate of the Labor Code Ø The right to picket may be regulated at the instance of third parties or “innocent by-standers” if it appears that the inevitable result of its exercise is to create an impression that a labor dispute with which they have no connection or interest exists

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos between them and the picketing constitute an invasion of their rights

union

or

Ø Ø

TITLE VI UNFAIR LABOR PRACTICES CHAPTER I CONCEPT Art. 247. Concept of Unfair Labor Practice and Procedure for Prosecution Thereof. – Unfair labor practices violate the constitutional right of workers and employees to self-organization, are inimical to the legitimate interests of both labor and management, including their right to bargain collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations. Consequently, unfair labor practices are not only violations of the civil rights of both labor and management but are also criminal offenses against the State which shall be subject to prosecution and punishment as herein provided. Subject to the exercise by the President or by the Secretary of Labor and Employment of the powers vested in them by Articles 263 and 264 of this Code, the civil aspects of all cases involving unfair labor practices, which may include claims for actual, moral, exemplary and other forms of damages, attorney’s fees and other affirmative relief, shall be under the jurisdiction of the Labor Arbiters. The Labor Arbiters shall give utmost priority to the hearing and resolution of all cases involving unfair labor practices. They shall resolve such cases within thirty (30) calendar days from the time they are submitted for decision. Recovery of civil liability in the administrative proceedings shall bar recovery under the Civil Code. No criminal prosecution under this Title may be instituted without a final judgment finding that an unfair labor practice was committed, having been first obtained in the preceding paragraph. During the pendency of such administrative proceeding, the running of the period of prescription of the criminal offense herein penalized shall be considered interrupted: Provided, however, that the final judgment in the administrative proceedings shall not be binding in the criminal case nor be considered as evidence of guilt but merely as proof of compliance of the requirements therein set forth. (As amended by Batas Pambansa Bilang 70, May 1, 1980 and later further amended by Section 19, Republic Act No. 6715, March 21, 1989) UNFAIR LABOR PRACTICES Ø Refers to those acts listed in Articles 248 and 249 of the Labor Code

Acts that transgress the right of employees to selforganization Can be committed only against an employee who exercises or has exercised his right to selforganization o Cannot committed against managerial employees § REASON: Managerial employees are not accorded the right to form or join a labor organization

DEGREE OF PROOF TO ESTABLISH UNFAIR LABOR PRACTICE Ø Substantial evidence o May be direct or circumstantial Ø A complaint for unfair labor dispute is no ordinary labor dispute and therefore, it requires a more thorough analysis, evaluation and appreciation of factual and legal issues involved Ø Employer’s motive should be taken into account Ø It is for the Labor Arbiter, in the first instance, to make the determination to ‘weigh the employer’s motive in determining the effect on the employees of management’s otherwise equivocal act’ Ø The existence of a valid cause for dismissal will negate the charge of unfair labor practice because the idea of dismissal by unfair labor practice is incompatible with dismissal for just cause CRIMINAL PROSECUTION Ø The criminal aspect of unfair labor practice cannot be prosecuted during the pendency of the administrative proceedings o Can only commence when there is a final judgment in the administrative proceedings declaring that unfair labor practice has been committed Ø Final judgment in the administrative proceedings is not binding in the criminal case o Cannot be considered an evidence of guilt o Considered as proof of compliance with the procedural requirements for the filing of the criminal case Ø CRIMINAL LIABILITY o Imposed only upon officers and agents of corporations, associations or partnerships and officers, members of governing boards, representatives or agents or members of labor organizations who have actually participated in, authorized or ratified the unfair labor practices COMPROMISE Ø An unfair labor practice charge can be the subject of a compromise or amicable settlement o In line with the declared policy of the State to promote and emphasize

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos mediation and conciliation as modes of settling labor or industrial disputes If settled through compromise, the criminal aspect can no longer prosper

about harmonious relations between them and maintain the cohesion and integrity of their organization. Ang Tibay merely put in force their agreement.

ACTS NOT CONSTITUTIVE OF UNFAIR LABOR PRACTICE 1. Dismissal of an employee pursuant to a ClosedShop Agreement 2. Dismissal of an employee responsible for the loss of the goods consigned to another 3. Dismissal by reason of retrenchment 4. Closure of a department due to losses 5. Dismissal of a supervisor for organizing a labor union composed of men under his supervision 6. Failure to comply with a reinstatement order 7. Refusal to hire security guards who do not post a bond 8. Refusal to extend CBA benefit due to an honest mistake 9. Reduction of working days 10. Exercising the option to retire employees 11. Filing of a petition for cancellation of union registration 12. Exacting a promise from the strikers not to destroy company property 13. Requiring returning strikers to fill up forms

2. DISMISSAL OF AN EMPLOYEE RESPONSIBLE FOR THE LOSS OF THE GOODS CONSIGNED TO ANOTHER Ø Employer had reasonable grounds to believe that the employee was the person responsible for the disappearance and loss of certain valuable goods consigned to employer’s customer Ø Nature of the employee’s participation rendered him unworthy of the trust and confidence demanded by his position Ø Dismissed not only to punish him and deter a similar behavior on the part of other employees, but also to protect the reputation of the company

Ø

1. DISMISSAL OF AN EMPLOYEE PURSUANT TO A CLOSED-SHOP AGREEMENT Ø An employer who dismisses an employer for violating the closed-shop provision of a collective bargaining agreement does not commit unfair labor practice Ø REASON: This is one of the matters on which the matters on which management and labor can agree in order to bring about harmonious relations between them and maintain the cohesion and integrity of their organization Ø ANG MALAYANG MANGGAGAWA V. ANG TIBAY (102 PHIL. 669) FACTS: Ang Tibay and the National Workers Brotherhood entered into a CBA stipulating that the Union may recommend to the employer the dismissal of any union member for any act of disloyalty to the union. During its effectivity, 22 members organized another union resulting to their expulsion from the union and demand from management that said employees be dismissed from employement, which Ang Tibay complied with. ISSUE: Whether or not Ang Tibay is guilty of unfair labor practice for dismissing the 22 employees DECISION: No, Ang Tibay is not guilty of unfair labor practice for dismissing the 22 employees. RATIO: The stipulation providing that the employer may dismiss an employee whenever the union recommends his separation for disloyalty to the union is one of the matters on which management and labor can agree in order to bring

3. DISMISSAL BY REASON OF RETRENCHMENT Ø REASON: An employer has the legal right to reduce its personnel due to losses, lack of work or reduction in the volume of business Ø LVN PICTURES EMPLOYEES V. LVN PICTURES INC. (35 SCRA 147) FACTS: LVN Pictures Inc. was suffering heavy losses but continued to operate with the expectation that it would recoup part of its losses and investments. In order to avoid immediate closure of business and lay-off of employees, it proposed to the Union a change in the payment of salaries and wages from salary basis to pakiao basis, and subsequently reduction of salaries paid to monthly paid workers. Both proposals were rejected by the Union, leaving LVN no choice but to close its movie production, resulting in the termination of all personnel employed in the movie production. ISSUE: Whether or not LVN is guilty of unfair labor practice DECISION: No RATIO: LVN incurred losses reducing it to a state of bankruptcy. An employer has the right to lay-off or dismiss employees because of losses in the operation of its business, lack of work, and considerable reduction in the volume of its business. 4. CLOSURE OF A DEPARTMENT DUE TO LOSSES Ø PHIL. AM. EMBROIDERIES V. EMBROIDERY & GARMENTS UNION (26 SCRA 634) FACTS: In 1956, the Philippine-American Embroideries Inc. opened its machine-made department for scalloping handkerchiefs. From the time it was opened, the company has been suffering from losses. In 1958, the workers at the Machine-Made Department were informed about the losses incurred by the company. In the last week of October 1958, the workers at the department organized themselves into a union, and n November, the Company received their collective bargaining proposals. On the same day,

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos the Company announced the opening of the closure of the department, dismissing all the members of the union, but announced the opening of the Knitting Gloves Department where the dismissed can file their application for employment so that they can join the company again. The dismissed employees collectively offered to return to work but were refused because the Company wanted the employees to apply individually. Despite the closure of the Machine-Made Department, the company continued to make scalloped handkerchiefs by transferring the pieces of machinery to various contractors in the provinces. ISSUE: Whether or not Philippine-American Embroideries Inc. is guilty of unfair labor practices DECISION: No RATIO: The closure of the Machine-Made Department was not an act of discrimination or means of dismissal but the result of continued losses in operations, which is justified by law. The machine-made department had been suffering financial reverses in its operations. The employees had been forewarned of its closure unless the situation improved. The presentation of the collective bargaining proposals could not have been the motive for the closure of the department on the same day. There was then no existing labor dispute. 5. DISMISSAL OF A SUPERVISOR FOR ORGANIZING A LABOR UNION COMPOSED OF MEN UNDER HIS SUPERVISION Ø A supervisor cannot lawfully organize a labor union composed of men under his supervision Ø

FORTICH V. COURT OF INDUSTRIAL RELATIONS (93 SCRA 1) FACTS: VF was employed as Chief Mechanical Engineer and Plant Superintendent. He organized the union and became an active member, which resulted to his dismissal. ISSUE: Whether or not the company is guilty of unfair labor practice DECISION: No RATIO: Considering that VF was holding a supervisory position, he cannot lawfully organize a labor union composed of men under his supervision. For having done so, he could be validly dismissed from without the company being held liable for unfair labor practice.

6. FAILURE TO COMPLY WITH A REINSTATEMENT ORDER Ø ARRASTRE SECURITY ASSOCIATION V. OPLE (127 SCRA 580) FACTS: The Arrastre Security Association (ASA) is composed of security personnel in the arrastre service at South Harbor and were under the employ of Guacods Marine Terminal and E. Razon Inc. After the declaration of martial law, the

Commissioner of Customs issued a memorandum declaring the Customs Police to take over the function of ASA. Consequently, 350 security guards of ASA were barred from the customs area. ASA filed a complaint for unfair labor practice against Guacods and E. Razon, praying that the 350 security guards of ASA be reinstated with full backwages. ISSUE: Whether or not Guacods and E. Razon are guilty of unfair labor practice DECISION: No RATIO: Since the termination of the employment of the security guards was caused by a government directive to turn over ASA’s function to the Customs Police, not the union activities of the security guards, it cannot be unfair labor practice. 7. REFUSAL TO HIRE SECURITY GUARDS WHO DO NOT POST A BOND Ø It is an exercise of a legitimate right to protect its interests, especially where the guards in question had previously abandoned a ship they were guarding without notice thereby exposing the ship to losses due to theft and pilferage Ø ASSOCIATED WATCHMEN V. LANTING (107 PHIL. 275) FACTS: 38 affiliates of Republic Ships Security Agency, one of the agencies employed by Macondray & Co. in guarding ships or vessels arriving in Manila, belong to the Associated Watchmen and Security Union. On February 18, 1956, the Associated Watchmen and Security Union declared a strike against 19 shipping firms in Manila, but eventually expressed their desire to return to work and maintain the status quo. They also pressed for the reinstatement of 47 strikers who claim to have been discharged. Macondray & Co. expressed its willingness to employ them on the condition that the security agency post a bond to respond for any negligence, misfeasance or malfeasance in the part of any watchmen, which the agency refused. Consequently, Macondray did not employ the watchmen. ISSUE: Whether or not Macondray & Co. is guilty of unfair labor practice for refusing the watchmen of Republic Ships Security Agency who did not post a bond DECISION: No RATIO: The refusal to employ the watchmen was an exercise of a legitimate right to protect its interests, especially where the guards in question had previously abandoned a ship they were guarding without notice thereby exposing the ship to losses due to theft and pilferage. 8. REFUSAL TO EXTEND CBA BENEFIT DUE TO AN HONEST MISTAKE Ø An error in the interpretation of a CBA without malice or bad faith does not constitute unfair labor practice

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos Ø Ø

Honest differences in construction may arise in the actual application of contractual provisions SINGAPORE AIRLINES V. NLRC (130 SCRA 472) FACTS: CM was employed by Singapore Airlines and became a member of Singapore Airlines Local Employees Association which has CBA with Singapore Airlines that grants hospitalization and maternity benefits to employees. She underwent a caesarean operation and sought reimbursement of expenses pursuant to the provision on hospitalization benefits. Singapore Airlines refused to reimburse on the ground that its liability in maternity cases is limited to maternity leave benefit provision in the CBA which does not allow reimbursement. CM argued that the maternity leave benefit under the CBA is separate and distinct from the hospitalization benefits. ISSUE: Whether or not Singapore Airlines is guilty of unfair labor practice DECISION: No RATIO: Its refusal was not a willful evasion of its obligations under the CBA but due to an honest mistake in the belief that the same is not covered by the CBA. An error in the interpretation of a CBA without malice or bad faith does not constitute unfair labor practice.

9. REDUCTION OF WORKING DAYS Ø Cannot be regarded as union busting, therefore not unfair labor practice 10. EXERCISING THE OPTION TO RETIRE EMPLOYEES Ø Not unfair labor practice 11. FILING OF A PETITION FOR CANCELLATION OF UNION REGISTRATION Ø Not per se an unfair labor practice Ø Will only amount to unfair labor practice if it is established by substantial evidence that the filing of the petition for cancellation of union registration was aimed to oppress the Union 12. EXACTING A PROMISE FROM THE STRIKERS NOT TO DESTROY COMPANY PROPERTY Ø Not unfair labor practice Ø Intended not to discourage union membership but to ensure peace and order in the employer’s premises – an act of self-preservation Ø PAGKAKAISANG ITINAGUYOD V. ANG TIBAY (20 SCRA 45) FACTS: The Union declared a strike against Ang Tibay Inc. but was settled the next day and the strikers agreed to return to work. When the strikers returned to work, they were required to sign a pledge not to damage company property and not to commit acts of reprisal against union members who did not join the strike. Ang Tibay took back the strikers except those who did not refused to make the pledge.

ISSUE: Whether or not Ang Tibay is guilty of unfair labor practice in requiring the strikers to sign a pledge as a condition for their re-admission DECISION: No RATIO: The exaction by the Company from the strikers returning to work of a promise not to destroy company property and not commit acts of reprisal against union members who did not participate in the strike cannot be considered as intended to encourage or discourage membership in the union as it was actually intended to insure the maintenance of peace and order in the company premises. 13. REQUIRING RETURNING STRIKERS TO FILL UP FORMS Ø Not unfair labor practice Ø REASON: The purpose is merely to enable the company to plan their schedule of work and not to discriminate against them Ø LAKAS V. MARCELO ENTERPRISES (118 SCRA 422) FACTS: LAKAS staged two strikes, the second one resulting to the complete paralysis of the business of the Marcelo group of companies. Subsequently, Lakas advised the management that all striking workers and employees will return to work upon the same terms and conditions of employment before the strike. However, upon their return, the reporting strikers were required to fill up a certain form to indicate their availability for work in order that they may be scheduled. Strikers who filled up the form were accordingly scheduled for work, while others refused on the ground that it constituted screening and insisted that they be admitted back to work without the requirement. ISSUE: Whether or not Marcelo is guilty of unfair labor practice in requiring returning strikers to fill up a form indicating their availability for work, despite their unconditional offer to return to work DECISION: No RATIO: The requirement was only for purposes of proper scheduling of the start of work for each returning striker since the businesses of the Marcelo group of companies cannot resume operations at once and in the same state or force before the strikes that paralyzed their operations. Chapter II UNFAIR LABOR PRACTICES OF EMPLOYERS Art. 248. Unfair labor practices of employers. – It shall be unlawful for an employer to commit any of the following unfair labor practice: a.

To interfere with, restrain or coerce employees in the exercise of their right to selforganization;

b.

To require as a condition of employment that a person or an employee shall not join a labor

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos organization or shall withdraw from one to which he belongs; c.

To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to self-organization;

d.

To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to it or its organizers or supporters;

e.

To discriminate in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement. Employees of an appropriate bargaining unit who are not members of the recognized collective bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid by members of the recognized collective bargaining agent, if such non-union members accept the benefits under the collective bargaining agreement: Provided, that the individual authorization required under Article 242, paragraph (o) of this Code shall not apply to the non-members of the recognized collective bargaining agent;

f.

To dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under this Code;

g.

To violate the duty to bargain collectively as prescribed by this Code;

h.

To pay negotiation or attorney’s fees to the union or its officers or agents as part of the settlement of any issue in collective bargaining or any other dispute; or

i.

To violate a collective bargaining agreement.

The provisions of the preceding paragraph notwithstanding, only the officers and agents of corporations, associations or partnerships who have actually participated in, authorized or ratified unfair labor practices shall be held criminally liable. (As amended by Batas Pambansa Bilang 130, August 21, 1981)

INTERFERENCE IN THE RIGHT TO SELFORGANIZATION TEST OF INTERFERENCE Ø Whether the employer has engaged in conduct which it may reasonably be said tends to hinder the free exercise of the employees’ right to selforganization Ø Success or purpose is not the criterion in determining whether or not a prohibited act constitutes unfair labor practice Ø Subjecting employees to a series of questioning regarding their membership in the union or their union activities, in such a way as to hamper the exercise of free choice on their part, constitutes interference in the right to self-organization THE TOTALITY OF CONDUCT DOCTRINE Ø The culpability of an employer’s remarks are to be evaluated not only on the basis of their implicit implications, but should be appraised against the background of and in conjunction with collateral circumstances ILLUSTRATIVE CASES INSULAR LIFE ASSURANCE CO. LTD EMPLOYEES V. INSULAR LIFE (37 SCRA 244) HELD: For an employer to offer reinstatement to striking employees individually, when they are represented by a union, is equivalent to an attempt to break a strike since the employees thus offered reinstatement are unable to determine what the consequences of working would be. Indeed it is unfair labor practice for an employer to conduct individual solicitation of the employees and urge them to cease union activity or cease striking SCOTY’S DEPARTMENT STORE V. MICALLER (99 PHIL. 762) FACTS: X was employed as salesgirl in the Scoty’s Department Store. She organized a union among the employees of the store and affiliated it with the NLU. Later, NLU sent a petition to the store containing demands. X and other employees were then called by the management for questioning about the union and their membership, and were even threatened that the store would be closed if they do not dissolve the union. X was later on dismissed from her employment. ISSUE: Whether or not the act of subjecting X and her coemployees to a series of questioning regarding their membership in the union or their union activities constitutes unfair labor practice DECISION: Yes PHILSTEAM V. PMOG (15 SCRA 174) FACTS: PHILSTEAM received a set of collective bargaining proposals from PMOG. Immediately thereafter, PHILSTEAM, apart from requiring PMOG to prove its majority representation, started interrogating and investigating its employees to find out directly from them if they had joined PMOG r authorized PMOG to represent them. PMOG was then constrained to declare a strike on

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos the ground of refusal to bargain and other unspecified unfair labor practices. ISSUE: Whether or not PHILSTEAM committed unfair labor practice in interrogating and investigating its employees to determine whether they had authorized PMOG to act as their bargaining agent DECISION: Yes RATIO: It interferes with or restrains the exercise of the employees’ right to self-organization VISTRANCO V. CIR (19 SCRA 426) FACTS: VISTRANCO’s workers are supplied by the United Workers and Farmers Association (UWFA) whose men have regularly worked as laborers of the Company during every milling season. On November 11, 1955, the Company refused to engage the services of 139 workers. They were told by the Company Branch Manager to sever their connection with UWFA if they wanted to continue working with the Company. ISSUE: Whether or not the Company is guilty of unfair labor practice DECISION: Yes RATIO: The act of refusing the admission of 139 workers unless they sever their connection with UWFA is tantamount to restraint or interference with the exercise of the employees’ right to self-organization. JUDRIC CANNING V. INCIONG (115 SCRA 887) FACTS: X and 5 other employees were employees of Judric Canning who actively engaged themselves in the organization of a union by soliciting signatures of employees. When the Company learned of this activity, it removed the time cards of the said employees from the rack, and they were not allowed to work. ISSUE: Whether or not the Company is guilty of unfair labor practice DECISION: Yes RATIO: By dismissing the employees merely because they solicited signatures needed for the formation of the union, the Company in effect interfered with and retaliated against the employees in the exercise of their right to selforganization EAST ASIATIC CO. LTD. V. CIR (16 SCRA 820) FACTS: X was employed by East Asiatic as Secretary. She became a member of the Asiatic Employees Union and has been an active member thereof. After which, she has been called as inefficient, less efficient than when she was not yet a member of the union. Eventually, she was advised to resign allegedly because she had become inefficient because of union activities. She was warned that if she does not resign, the Company will terminate her services. When she showed her reluctance to resign, the Company dismissed her from employment. ISSUE: Whether or not the Company is guilty of unfair labor practice in dismissing X from her employment DECISION: Yes RATIO: It was motivated by her union activities. Only after she joined the Union was she called to account or reproached for something that under other circumstances might have been overlooked.

VISAYAN BICYCLE V. NLU (14 SCRA 5) FACTS: X and Y were the Vice President and Secretary of VIBEMWU which later affiliated with the National Labor Union through the efforts of its Executive Board headed by X. When this came to the knowledge of the Company, the officers responsible for the affiliation were warned that if they will not withdraw their affiliation, they will be dismissed from their employment. X and Y were later dismissed from their employment for figuring a fight with two employees who were hired only within that week. The dismissal was effected immediately without conducting an investigation. It was established that X and Y were provoked by the two employees into a pre-arranged fight pursuant to the strategy of the Company to give semblance of a lawful cause for their dismissal ISSUE: Whether or not the Company is guilty of unfair labor practice DECISION: Yes RATIO: X and Y were in reality dismissed because of their union activities and not because of their violation of company rules against fights in the premises or during working hours. Furthermore, it has been brought about by the company itself, thru the recent employment of the two employees who provoked the fight. YELLOW DOG CONTRACT Ø An agreement which requires as a condition of employment, that the person or employee: 1. Declare that he is not a member of a labor organization 2. Refrain from joining a labor organization 3. Withdraw his membership in a labor organization 4. Quit his employment upon joining a labor organization Ø An unfair labor practice under Article 248(b) of the Labor Code, hence, null and void for being contrary to law and public policy Ø VELEZ V. PAV WATCHMEN’S UNION FACTS: PV, the owner, operator and manager of the Pablo Velez Special Watchmen’s Agency asked X whether he is a member of the PAV Watchmen’s Union. When X answered in the affirmative, PV bade him to resign from the Union and signed a prepared resignation presented to him. On another occasion, he told another employee to resign from the union, else he would have no work assignment. The employee then signed four copies of a prepared affidavit renouncing his membership from the union. ISSUE: Whether or not PV is guilty of unfair labor practice DECISION: Yes RATIO: He required X and Y to resign from the Union as a condition for their continued employment CONTRACTING OUT SERVICES OR FUNCTIONS PERFORMED BY UNION MEMBERS Ø Does not per se constitute unfair labor practice

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos Ø

UNFAIR LABOR PRACTICE – only when it interferes with, restrains or coerces employees in the exercise of their right to self-organization

Ø Ø

ORGANIZING, ASSISTING OR SUPPORTING A LABOR ORGANIZATION Ø Unfair labor practice Ø Includes giving of financial or other support to it or its organizers or supporters Ø COMPANY UNION or COMPANY-DOMINATED UNION o A labor organization, the formation or administration of which has been initiated or assisted by the employer Ø “COMPANY-TYPE” UNION o A kind of labor organization composed of employees in the same company

Ø

PACC FACTORY WORKERS UNION V. PHIL. AM. CIGAR (7 SCRA 375) FACTS: X filed a complaint for unfair labor practice against Philippine American Cigarette Mfg. Co. Upon learning that a case has been filed, the manager of the Company advised the president of the Union that if X will not withdraw his charge, his brother, Y will be dismissed. X did not withdraw the case, hence, the company dismissed Y from his employment ISSUE: Whether or not the company is guilty of unfair labor practice DECISION: Yes RATIO: It is true that the one dismissed was Y, the brother of the employee who filed the case against the Company, but this does not mean that the Company is no longer guilty of unfair labor practice. If dismissal of an employee who files a case against his employer constitutes unfair labor practice, with greater reason should it be when the employer dismisses an employee by reason of the case filed by his brother.

Ø

ITUGON-SUYOC MINES VS. BALDO (12 SCRA 599) FACTS: B who was employed by Itugon-Suyoc Mines as miner was given a 30-day notice of termination on the ground that his services were no longer needed by the company. When this was served, there was pending certification election case filed by Sangilo-Itogon Workers Union, of which B was a member. B then brought the matter of separation to the grievance committee. While the case was pending in the committee, the Plant Engineer asked B not to testify in the hearing of the certification election case so that he would be reinstated to his job. B testified against the Company resulting in the dropping of his plea for reinstatement ISSUE: Whether or not the Company is guilty of unfair labor practice DECISION: Yes RATIO: Considering that B’s case was pending before the grievance committee when he was asked not to testify, and soon after he had testified adversely to the Company, his case was dropped by the grievance committee. It can be concluded that the Company had much to do with the dropping of the case, and thus B was never reinstated to his work. B has also not committed any serious offense that would warrant his dismissal from service.

INDICATIONS OF A COMPANY-DOMINATED UNION 1. Several employees were forced by the officers of the company into joining a union 2. No union member had been dismissed by the company despite the alleged retrenchment policy which resulted to the dismissal of other employees who are officers and members of another union 3. After dismissing the members of the union on the ground of retrenchment, the company engaged the services of several laborers PREJUDICIAL QUESTION Ø A complaint for unfair labor practice charging the one or more unions participating in the certification election are being aided or controlled by the employer, may be considered a prejudicial question in a certification election proceeding Ø The unfair labor practice case should first be decided before conducting the certification election Ø REASON: To prevent the selection of a companydominated union DISESTABLISHMENT Ø An order requiring an employer to withdraw its recognition of a company-dominated union as the employees’ collective bargaining agent and a bona fide and sufficient communication to the employees of such withdrawal of recognition DISMISSAL OR DISCRIMINATION BECAUSE OF TESTIMONY Ø It is unfair labor practice to dismiss, discharge, or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under the Labor Code Ø Testimony should relate to matters involving the exercise of the right to self-organization o E.g. testimony in another unfair labor practice case or certification election proceeding Ø REASON: Unfair labor practice is a transgression of the right of employees to self-organization

Art. 248(f) equally applies to the dismissal of an employee whose brother has given or is about to give testimony against an employer This is in line with the spirit and purpose of the law – to assure the absolute freedom of employees to establish labor organizations and prefer charges before the proper organs of the Government for violation of our labor laws

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos Ø

H.G. HENARES & SONS V. NLU (3 SCRA 765) FACTS: F requested another employee to take over his shift in order to enable him to testify, as he did testify, in the unfair labor practice case filed against the Company by one of its employees. The arrangement was without the Company’s prior approval. When F’s immediate superior learned of the unauthorized exchange of shift, he was recommended for dismissal which was approved. F was dismissed while the other employee was merely suspended. ISSUE: Whether or not the Company was guilty of unfair labor practice DECISION: Yes RATIO: There is more reason to believe that F was dismissed from work because he testified unfavorably against the Company in another unfair labor practice case, as he was dismissed barely three days after he testified. It is hardly convincing to say that this trivial infraction could have been the immediate cause of his discharge. His action does not by itself show any wanton disregard of the company rules.

VIOLATION OF THE DUTY TO BARGAIN COLLECTIVELY DUTY TO BARGAIN COLLECTIVELY Ø The performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreement if requested by either party, but such duty does not compel any party to make any concession Ø Neither party to the collective bargaining agreement shall terminate nor modify such agreement during its lifetime o Either party can serve a written notice to terminate or modify the agreement at least 60 days prior to its expiration o Both parties must keep the status quo and 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 ESSENTIAL ELEMENTS OF THE DUTY TO BARGAIN Ø Employer-employee relationship Ø WITHOUT EMPLOYER-EMPLOYEE RELATIONSHIP – no duty to bargain o Refusal to bargain is not unfair labor practice Ø WITH EMPLOYER-EMPLOYEE RELATIONSHIP – the duty to bargain collectively will arise only if the labor organization which seeks to collectively

Ø

Ø

bargain represents the majority of the employees in the bargaining unit o Without proof of majority representation, the employer can validly refuse to collectively bargain Negotiating or attempting to negotiate with INDIVIDUAL employees in connection with changes in the collective bargaining agreement is a violation of the duty to bargain collectively o REASON: An employer is bound to bargain, not individually, but collectively and only with the certified collective bargaining agent of the employees Dismissing union members in order to ensure the defeat of the union in the certification election is a violation of the duty to bargain o REASON: It is a scheme to avoid bargaining with the union

ILLUSTRATIVE CASES INSULAR LIFE ASSURANCE CO. LTD. EMPLOYEES V. INSULAR LIFE (37 SCRA 244) FACTS: The Insular Life Assurance Co Ltd. Employees Association submitted to the Company its proposals for the renewal of the collective bargaining agreement. Collective bargaining negotiations were conducted but a deadlock ensued, resulting to a strike. The following day, the Company sent letters to individual strikers offering them reinstatement with promise of comfortable cots, free coffee and occasional movies, overtime pay and arrangements for their families. ISSUE: Whether or not the Company violated its duty to bargain collectively DECISION: Yes RATIO: It is unfair labor practice for an employer operating under a collective bargaining agreement to negotiate or attempt to negotiate with his employees individually in connection with changes in the agreement. The basis is that although the Union is on strike, the employer is still under obligation to bargain with the Union as the employees’ bargaining representative. SAMAVIM V. NORIEL (98 SCRA 507) FACTS: SAMAVIM requested the Via Mare Catering Services to enter into a collective bargaining with it. Instead of acceding to the request, Via Mare terminated the services of four union members. SAMAVIM then filed a Notice of Strike on the ground of harassment of union members. Conciliation meetings were held by the Bureau of Labor Relations but Via Mare refused to negotiate a collective bargaining agreement. As a result of conciliation efforts, the parties agreed to hold a consent election among the employees to determine whether the employees desire to be represented by a Union. Before the parties could meet to set the date of election, Via Mare terminated 73 union members and employed other persons to replace them. ISSUE: Whether or not Via Mare violated its duty to bargain collectively, so as to be held liable for unfair labor practice DECISION: Yes

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos RATIO: The dismissal of the union members is highly suspect as a means to frustrate the intention of Via Mare not to bargain collectively with SAMAVIM. PAYING NEGOTIATION FEES OR ATTORNEY’S FEES TO THE UNION Ø Unfair labor practice VIOLATION OF THE COLLECTIVE BARGAINING AGREEMENT Ø Must be gross in character Ø A simple violation of the collective bargaining agreement is considered an ordinary grievance to be resolved under the grievance machinery provided for in the collective bargaining agreement MEANING OF GROSS VIOLATION Ø Flagrant and/or malicious refusal to comply with the ECONOMIC PROVISIONS of the collective bargaining agreement VIOLATION ARISING FROM AN HONEST MISTAKE Ø Not unfair labor practice Ø REASON: Honest differences in construction may arise in the actual application of a contractual provision, particularly if the stipulation is susceptible to varying interpretation DISCRIMINATION Ø One is denied privileges given to the other under identical or similar conditions Ø Not unfair labor practice per se Ø Becomes unfair labor practice only when it is intended to encourage or discourage membership in any labor organization Ø Does not have to be against a specific employee or employees but may be in favor of a union ILLUSTRATIVE CASES WISE AND CO., INC. V. WISE & CO., INC. EMPLOYEES UNION (178 SCRA 536) FACTS: Wise & Co. introduced a profit sharing scheme for its managers and supervisors. When the Union learned about the scheme, it requested Management to extend such benefit to their members, but Management denied the request on the ground that it had to adhere strictly to the collective bargaining agreement. In the meantime, the Management and the Union sat down to negotiate the renewal of the collective bargaining agreement. The negotiations resulted in a deadlock. Thereafter, the Management distributed the profit sharing benefit not only to managers and supervisors but also to all non-union rankand-file employees. ISSUE: Whether or not the grant of profit sharing benefits to employees not covered by the collective bargaining agreement is discriminatory against employees who are covered by the collective bargaining agreement DECISION: No RATIO: The situation covered by the collective bargaining agreement is different and distinct from the employees not covered by the collective bargaining agreement. Unlike the

union employees, the non-union employees do not derive and enjoy the benefits under the collective bargaining agreement. There can be no discrimination where the employees concerned are not similarly situated. RIZAL CEMENT V. MADRIGAL (10 SCRA 831) FACTS: The Rizal Cement Workers Union staged a strike at the plant of the Company in Biangonan, Rizal. The following day, the warehouseman at the Bodega Tanque received a call from the Manager of the Company informing him that the Union has staged a strike at the Binangonan Plant and advising him to take precautionary measures in protecting the properties of the company stored at the Bodega Tanque because the strikers caused damage to the factory in Binangonan and sabotage may occur. For this reason, he was advised by the manager to request the members of the Union to stay meanwhile outside the premises of the Bodega Tanque. Thus, when the workers arrived for work, the other members of the Union were not allowed to enter the gate. Only non-union members were allowed to enter. ISSUE: Whether or not the Company is guilty of unfair labor practice by discrimination DECISION: No RATIO: The refusal on the part of the Company to allow the union members to work and the requirement that they stay out of the premises in the meantime was borne out of the Company’s justified apprehension and fear that sabotage might be committed in the warehouse where the products, machinery and spare parts were stored, as has been the case in Binangonan. It has never been shown that the act of the Company was intended to induce the union members to renounce their union membership or as a deterrent for non-members to affiliate therewith, nor as a retaliatory measure for activities in the union or in the furtherance of the cause of the union. INSULAR LIFE ASSURANCE CO. LTD. V. INSULAR LIFE (37 SCRA 244) FACTS: The Insular Life Assurance Co. Ltd. Employees Association went on strike. Because of the writ of preliminary injunction as well as the ultimatum of the Company for the strikers to return to their jobs or else be replaced, the striking employees called off their strike and returned to work. However, before readmitting the strikers, the Company required them to secure clearances from the City Fiscal’s Office. They were also screend by a management committee. The screening committee initially rejected 83 strikers with pending criminal charges. However, all non-strikers with pending criminal charges which arose from the violent incident during the strike were readmitted immediately without being required to secure clearances from the City Fiscal’s Office. When practically all strikers had secured clearances from the fiscal’s office, the Company readmitted some but refused t admit 34 strikers who were most active in the strike, on the ground that the acts were inimical to the interest of the Company. ISSUE: Whether or not the Company is guilty of unfair labor practice by discrimination DECISION: Yes

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos RATIO: It did not merely discriminate against all the strikers in general – they separated the active from the less active unionists on the basis of their militancy, or lack of it, on the picket lines. Discrimination undoubtedly exists where the union activity of the hired strikers had been less prominent than that of the strikers who were denied reinstatement. UNION SECURITY AGREEMENTS Ø The legal basis for entering into a union security arrangement is Article 248(e) of the Labor Code TYPES OF UNION SECURITY AGREMENTS 1. CLOSED SHOP o The employer binds himself to hire only members of the contracting union who must continue to remain members in good standing to keep their jobs 2. UNION SHOP o The employer is allowed to hire nonmembers of the contracting union on condition that they should join the contracting union within a specified period of time and must continue to remain members in good standing to keep their jobs 3.

4.

5.

MAINTENANCE OF MEMBERSHIP o Requires those who are members of the contracting union at the time of the execution of the collective bargaining agreement to maintain their membership in good standing during the lifetime of the collective bargaining agreement as a condition of continued employment AGENCY SHOP o Does not require union membership but only support from the employees within the bargaining unit in the form of agency fees, as a condition of continued employment PREFERENTIAL HIRING o The members of the contracting union are given preference in engagement, all circumstances being equal, and for them to maintain their membership in good standing during the lifetime of the collective bargaining agreement as a condition of continued employment

LIMITATIONS Ø A closed shop agreement cannot be enforced against: 1. Employees who are already members of another union at the time of the signing of the collective bargaining agreement 2. Employees whom the union refused admission to membership without any reasonable ground therefor

3.

Employees who are members of religious sects which prohibit their members from joining a labor organization

CONSTRUCTION OF UNION SECURITY AGREEMENTS Ø Strictly construed and any doubt must be resolved against its existence Ø The stipulation to that effect must be clear and unequivocal as to leave no room for doubt thereon Ø Applies to closed shop, union shop and maintenance of membership agreement BINDING EFFECT Ø A union security arrangement is binding even if the employees are not aware of such an agreement ENFORCEMENT Ø To justify the dismissal of an employee pursuant to a closed shop stipulation, the validity of said stipulation must first be shown Ø To dismiss an employee for breach of a union security arrangement, the employer should not merely rely on the request of the union. The employer should conduct an investigation of its own because the employee sought to be dismissed is entitled to due process of law AGENCY SHOP Ø Article 248(e) Ø Applies only to non-union members who belong to the collective bargaining unit Ø Can be enforced only if and when the union covered by the bargaining unit accepts the benefits under the collective bargaining agreement. Ø Individual check-off authorization is not required to check-off agency fees CHAPTER 3 UNFAIR LABOR PRACTICES OF LABOR ORGANIZATIONS ART. 249. Unfair Labor Practices of Labor Organizations. - It shall be unfair labor practice for a labor organization, its officers, agents or representatives: (a) To restrain or coerce employees in the exercise of their rights to self-organization. However, a labor organization shall have the right to prescribe its own rules with respect to the acquisition or retention of membership. (b) To cause or attempt to cause an employer to discriminate against an employee, including discrimination such organization has been denied or to terminate an employee on any ground other than the usual terms and conditions under which membership is made available to other members;

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos (c) To violate the duty, or refuse to bargain collectively with the employer, provided it is the representative of the employees; (d) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other things of value, in the nature of an exaction, for services which are not performed, including the demand for fee for union negotiations; (e) To ask for or accept negotiation or attorney’s fees from employers as part of the settlement of any issue in collective bargaining or any other dispute; or (f) To violate a collective bargaining agreement The provisions of the preceding paragraph notwithstanding, only the officers, members of governing boards, representatives or agents or members of labor organizations who have actually participated in, authorized or ratified unfair labor practices shall be held criminally liable. COMMENT: 1. Coercion/Restraint on the Right to SelfOrganization This is exemplified by a labor organization who recommends the dismissal from employment of an employee who cancels his membership with the union during the freedom period. During the freedom period, a union member is free to exercise his right to selforganization. He may therefore resign from the contracting union or join another union of his choice without being subjected to sanctions. The reason is that the union security agreement is deemed suspended during the freedom period. A labor organization also commits unfair labor practice if it expels a union member who initiates a petition for audit of union funds considering that union members are entitled to a full and detailed reports from their officers of all financial transactions. MD Transit v. De Guzman 7 SCRA 726 FACTS: 3 members of the MD-CAM Local 3 PTGWO secured the signatures of their co-employees to a petition to the DOLE for an audit of the mutual aid fund of the Union. The petition for audit was granted and took place on October 27, 1958, where it was discovered that the mutual aid fund was short of P22k. The matter was referred to the City Fiscal of Quezon City for appropriate action. The President of the Union suspended the 3 members and several days later, the BOD expelled them from the Union. Is the Union guilty of ULP? HELD: The Union is guilty of ULP. The suspension and subsequent expulsion of the union members is ULP because it was motivated by the charges they preferred

against the officers of the Union which led to the discovery of the shortage in the Mutual Aid Fund. 2. Causing an Employer to Discriminate Against an Employee It is unfair labor practice for a labor organization, its officers, agents or representatives to: (a) Cause or attempt to cause an employer to discriminate against an employee; (b) Discriminate against an employee with respect to whom membership in such organization has been denied; or (c) Terminate an employee on any ground other than the usual terms and conditions under which membership is made available to other members. Salunga v. Court of Industrial Relations 21 SCRA 216 FACTS: S tendered his resignation from the Union. The Union transmitted the resignation letter to the company with a request for implementation of the close-shop agreement. Upon being informed by the Company that his resignation would result in the termination of his employment, S wrote the Union a letter withdrawing his resignation. The Union refused to honor the withdrawal because of S’ critical attitude towards certain measures taken by the Union. Instead, the Union pressed the company to dismiss S on the basis of the closed-shop agreement. The Company was then constrained to dismiss S. Is the Union guilty of ULP? HELD: The Union is guilty of ULP. The Union cannot validly invoke the close-shop agreement to justify the dismissal of S whom it refused to re-admit as member without any reasonable ground. Having been denied readmission into the Union and having been dismissed from service owing to an unfair labor practice on the part of the Union, S is entitled to reinstatement as member of the Union and as employee. 3. Violation of the Duty to Bargain Collectively It is ULP on the part of a labor organization, its officers, agents or representatives to violate the duty to bargain collectively or refuse to bargain collectively with the employer, provided it is the representative of the employees. If there is a pending representation issue, it is ULP on the part of a labor organization to stage a strike to compel the management to sit down with it for collective bargaining. LakasngManggagawangMakabayan v. Marcelo Enterprises HELD: The court held that there existed no duty to bargain collectively with complainant LAKAS on the part of said companies. Proceeding from this basis, it follows that all acts instigated by complainant LAKAS such as

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos the filing of the Notice of Strike on June 13, 1967 and the two strikes of September 4, 1967 and November 7, 1967 were calculated, designed and intended to compel the respondent Marcelo Companies to recognize or bargain with it notwithstanding that it was an uncertified union, or in case of respondent Marcelo Tire and Rubber Corporation, to bargain with it despite the fact that the MUEWA of PaulinoLazaro was already certified as the sole bargaining agent in said respondent company. These concerted activities executed and carried into effect at the instigation and motivation of LAKAS are all illegal and violative of the employer’s basic right to bargain collectively only with the representative supported by the majority of its employees in each of the bargaining units.

ART. 250. Procedure in Collective Bargaining. – The following procedures shall be observed in collective bargaining: (a)

(b)

4. Featherbedding Featherbedding is the act of causing or attempting to cause an employer to pay or deliver any money or other things of value for services which were not performed or not to be performed.

(c)

5. Demanding/Accepting Negotiation Fees It is ULP for a labor organization, its officers agents, or representatives to ask for or accept negotiation or attorney’s fees from employers as part of the settlement of any issue in collective bargaining or any other dispute.

(d)

If the labor organization asks an employer to give negotiation fees or attorney’s fees, then it is guilty of ULP, regardless of whether the proposal was accepted by the employer. If the employer agrees to the proposal and gives negotiation or attorney’s fees to the labor organization, then it is equally guilty of ULP under Art. 248(h). If the labor organization did not ask for negotiation fees or attorney’s fees, but nevertheless accepted such fees from an employer, then it is likewise guilty of ULP under Art. 249(e), while the employer would be guilty under Art. 248(h).

(e)

When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals. The other party shall make a reply thereto not later than 10 calendar days from receipt of such notice. Should differences arise on the basis of such notice and reply, either party may request for a conference which shall begin not later than 10 calendar days from the date of request. If the dispute is not settled, the Board shall intervene upon request of either or both parties or at its own initiative and immediately call the parties to conciliation meetings. The Board shall have the power to issue subpoenas requiring the attendance of the parties to such meetings. It shall be the duty of the parties to participate fully and promptly in the conciliation meetings the Board may call. During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may disrupt or impede the early settlement of the disputes; and The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to a voluntary arbitrator.

6. Violation of Collective Bargaining Agreement It is ULP for a labor organization, its officers, agents or representatives to violate a CBA.

COMMENT: 1. Collective Bargaining The term collective bargaining denotes in common usage as well as in legal terminology, negotiations toward a CBA. Collective bargaining is one of the democratic frameworks under the Labor Code designed to stabilize the relation between labor and management and to create a climate of sound and stable industrial peace.

To constitute ULP, the breach of CBA must be gross in character, i.e., flagrant and/or malicious refusal to comply with the economic provisions of the CBA. Thus, a strike staged by a labor organization in violation of the no-strike stipulation in the CBA is not ULP but it will be adjudged as an illegal strike.

Collective bargaining is not equivalent to an adversarial litigation where rights and obligations are delineated and remedies applied. It is simply a process of finding a reasonable solution to a conflict and harmonizing opposite positions into a fair and reasonable compromise. In the absence of grave abuse of discretion, the disposition of the labor agency will not be disturbed in a certiorari proceeding.

TITLE VII COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENTS 2.

The Collective Bargaining Process The collective bargaining process technically starts when the employees within an

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos appropriate bargaining unit organize themselves into a labor organization.

(c)

After obtaining registration with the DOLE, the labor organization either requests the employer for voluntary recognition or files a petition for certification election.

(d)

After, the labor organization serves its written proposals to the employer, after which the employer submits its written counterproposals within 10 days from receipt of the proposals. Collective bargaining negotiations then follow. 2.1 Jurisdictional Preconditions of Collective Bargaining (a) proof of majority representation on the part of the labor organization. (b) voluntary recognition by the employer or certification of the labor organization as the collective bargaining representative of the employees covered by the bargaining unit; and (c) Demand to bargain under Art. 250(a) of the Labor Code. 3.

Multi-Employer Bargaining Legitimate labor organizations and employers may agree in writing to come together for collective bargaining purposes under the following conditions: (a) The legitimate labor organizations must be incumbent exclusive bargaining agents; (b) The employers must have counterpart legitimate labor organizations who are incumbent bargaining agents; and (c) The legitimate labor organizations of employer units must consent to multiemployer bargaining. Each employer or concerned labor organization shall express in writing its willingness or unwillingness to participate in multi-employer bargaining, addressed to its exclusive bargaining agent or employer. Negotiations may commence only with regard to employers and labor organizations that consent to participate in multiemployer bargaining.

3.1. Pre-Requisites of Multi-Employer Bargaining Legitimate labor organizations who desire to collectively negotiate with the employers shall execute among themselves awritten agreement containing the following: (a) Names of the labor unions who desire to avail of multi-employer bargaining; (b) Names of each labor union in the employer unit;

Statement that each of the labor unions are the incumbent exclusive bargaining agents of their respective employer units; Duration of the collective bargaining agreements, if any, between each labor organization and their respective employers.

3.2 Procedure Legitimate labor unions who desire to bargain with multi-employers shall send a written notice to each employer concerned. The written notice shall be accompanied by any of the following documents: (a) written agreement among the labor organizations as regards their desire for multi-employer bargaining; or (b) certificates of registration of the federation, national union or industry union. Employers who desire to engage in multi-employer bargaining shall send to each of their counterpart legitimate labor unions a written notice indicating the following: (a) Names of employers who desire to avail of multi-employer bargaining; (b) Their corresponding legitimate labor organizations; (c) Statement that each corresponding legitimate labor organization is an exclusive bargaining agent; (d) The duration of the current collective bargaining agreement, if any, of each employer with the counterpart legitimate labor organization. 4. Remedies in Case of Deadlock (a) Call upon the National Conciliation and Mediation Board to assist them in arriving at an amicable settlement; (b) Submit the matter for compulsory arbitration by filing a complaint with the National Labor Relations Commission; (c) Submit the matter for resolution by a coluntary arbitrator; or (d) Declare a strike or lockout. Art. 251. Duty to Bargain Collectively in the Absence of Collective Bargaining Agreement. – In the absence of an agreement or other voluntary arrangement providing for a more expeditious manner of collective bargaining, it shall be the duty of the employer and the representative of the employees to bargain collectively in accordance with the provisions of this Code. COMMENT: 1. The Duty to Bargain Collectively – A Mutual Obligation One of the major aims of the law is to make the process of collective bargaining on of the most effective means for ensuring harmonious labor-management relations. It

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos should be noted, however, that while the duty to bargain collectively is a mutual obligation of both employer and employees, the employer is not under obligation to initiate the collective bargaining negotiations. 2.

Essential Elements of the Duty to Bargain Collectively The duty to bargain collectively arises only when the union which seeks to represent the collectively bargaining unit is: (a) a legitimate labor organization (b) composed of employees of the supposed employer; and (c) chosen or designated by the majority of the employees within the bargaining unit as their collective bargaining representative.

2.1. Union Must Be a Legitimate Labor Organization If the labor organization is not registered with the DOLE, the duty to bargain collectively does not exist because the labor organization does not have the legal personality to act as the collective bargaining representative. 2.2. Union Must be Composed of Employees The duty to bargain collectively arises only between “employer” and its “employees.” Where neither party is an “employer” nor an “employee” of the other, the duty to bargain collectively does not exist. Singer Sewing Machine Company v. Drilon 193 SCRA 270 The court finds that since private respondents are not employees of the company, they are not entitled to the constitutional right to join or form a labor organization for purposes of collective bargaining. Accordingly, there is o constitutional and legal basis for their “union” to be granted their petition for direct certification. Allied Free Workers v. Cia. Maritima 19 SCRA 258 FACTS: MARITIMA is a local corporation engaged in the shipping business. It entered into an “ARRASTRE AND STEVEDORING CONTRACT” with AFWU, a legitimate labor organization. MARITIMA complained of unsatisfactory and inefficient service by the laborers. To remedy the situation, AFWU was forced to hire extra laborers. AFQU then presented to MARITIMA a written proposal for a CBA. MARITIMA did not reply. Thereafter, AFWU filed a petition praying that it be certified as the sole and exclusive bargaining agent. MARITIMA

terminated the contract with AFWU. AFWU filed a complaint for ULP for refusal to bargain. Is MARITIMA duty bound to bargain with AFWU? HELD: Under the law, the duty to bargain collectively arises only between the employer and its employees. Where neither party is an employer nor an employee of the other, no such duty would exist. MARITIMA was not the employer of the workers of AFWU. Under the ARRASTRE AND STEVEDORING CONTRACT, AFWU was an independent contractor of MARITIMA. 2.3 Union Must Be Recognized or Certified as Bargaining Agent If the union has not been designated or selected by the majority of the employees in the bargaining unit as their collective bargaining representative, the duty to bargain does not exist. If two or more unions claim to hold the majority of the employees in the bargaining unit, the duty to bargain does not exist until the issue on majority representation is finally settled. 3.

No Duty to Bargain With Minority The duty to bargain does not exist with regard to a minority group of employees. Neither does the duty to bargain exist with regard to individual employees. It should be noted, however, that while the law prohibits individual bargaining or bargaining with a minority group of employees, there is no prohibition against an employer sitting down with an individual employee or a group of employees for the purposes of hearing and discussing their grievances. ART. 252. Meaning of the Duty to Bargain Collectively. The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreements and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession. COMMENT: 1. The Essence of the Duty to Bargain Collectively The duty to bargain collectively does not impose upon the employer the obligation to initiate contract negotiation. Neither does it compel the parties to agree to a proposal or to make any concession, much less to reach an agreement. All that is required is for the parties to approach the negotiations with an

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos open mind and exert reasonable effort to reach a common ground of agreement. Proposals, if unacceptable, should be matched with counterproposals.

new agreement reached. 2.

To offer the union a contract saying “Take it or leave it” is not in consonance with good faith bargaining. Feigning negotiations through empty gestures is not bargaining in good faith. 2.

COMMENT: 1. Duty to Bargain After Execution of CBA The duty to bargain does not end with the execution of the CBA. It is a continuous process. This does not mean, however, that either party can ask for modification of the collective bargaining agreement at any time during its effectivity. The continuous process means that the parties, during the term of the agreement, are mutually obliged to meet and confer promptly and expeditiously and in good faith for the purpose of adjusting any grievance or question arising under the CBA. After the execution of the CBA, the duty to bargain collectively obliges the parties: (a) not to terminate or modify the CBA during its lifetime; (b) to ask for modification of the CBA only during the 60-day period prior to its expiration date; and (c) to observe the terms and conditions of the CBA during the 60day period and until a

The Freedom Period The freedom period is the 60-day period prior to the expiration of the collective bargaining agreement. It is called the freedom period because it is the time when the bargaining agent can validly serve notice to renegotiate the existing CBA.

The Philosophy of Collective Responsibility An employer who bargains in good faith is entitled to rely on the promises and agreements of the union representatives with whom he must deal under the compulsion of law and contract.

ART. 253. Duty to Bargain Collectively When There Exists a Collective Bargaining Agreement. – When there exists a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least 60 days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties.

is

It is the time when a union member can validly resign from the union and the time for a local union to disaffiliate from its mother federation without being subjected to sanctions. It is also the time for challenging the majority status of the incumbent collective bargaining agent through a petition for certification election. 3.

The Hold-Over Principle In the absence of a new CBA, the parties must maintain the status quo and must continue in full force and effect the terms and conditions of the existing agreement until a new agreement is reached.

ART. 253-A. Terms of a Collective Bargaining Agreement. Any Collective Bargaining Agreement that the parties may enter into shall, insofar as the representation aspect is concerned, be for a term of 5 years. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the DOLE outside of the 60-day period immediately before the date of expiry of such five year term of the CBA. All other provisions of the CBA shall be renegotiated not later than 3 years after its execution. Any agreement on such other provisions of the CBA entered into within 6 months from the date of expiry of the term of such other provisions as fixed in such CBA, shall retroact to the day immediately following such date. If any such agreement is entered into beyond six months, the parties shall agree on the duration of effectivity thereof. In case of a deadlock in the renegotiation of the CBA, the parties may exercise their rights under this Code. COMMENT: 1. Collective Bargaining Agreement Collective bargaining agreement is a contract by and between an employer and the collective bargaining representative of the employees within an appropriate bargaining unit, concerning wages, hours of work, and all other terms and conditions of employment. It is the law of the plant.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos The primary purpose of the CBA is the stabilization of labor-management relations in order to create a climate of a sound and stable industrial peace. 2.

3.

Coverage of a Collective Bargaining Agreement A CBA applies to and is binding on all employees covered by the collective bargaining unit – whether they be union members or not. To accord the benefits under the CBA only to union members without any valid reason would constitute undue discrimination against non-members. Construction of a Collective Bargaining Agreement A CBA is not an ordinary contract but one impressed with public interest. As such it must be construed liberally rather than narrowly and technically. Only provisions embodied in the CBA may be interpreted or enforced. The Minutes of the Collective Bargaining Negotiations cannot be invoked because it does not form part of the CBA. The Minutes merely reflects the proceedings and discussions undertaken in the collective bargaining process.

4.

Term of a Collective Bargaining Agreement The term of a CBA, insofar as the representation aspect is concerned, is 5 years reckoned from the date of its effectivity. During the 6-year period, the majority status of the incumbent collective bargaining agent cannot be challenged except during the last 60 days of the 5-year period.

5.

Renegotiation Within the 5-Year Period Except the representation status of the incumbent bargaining agent, all provisions of the CBA, whether economic or noneconomic, may be renegotiated not later than 3 years after its execution.

(c)

Manila Electric v. Quisumbing 302 SCRA 173 FACTS: On September 7, 1995, MEWA informed MERALCO of its intention to re-negotiate the terms and conditions ofhteir existing 1992-1997 CBA covering the remaining period of 2 years starting December 1, 1995 to November 30, 1997. Negotiations proceeded but it resulted in a deadlock. MEWA filed a notice of strike against MERALCO. The Secretary of Labor and Employment assumed jurisdiction over the disputes and on December 28, 1996, an Order was issued resolving the controversies. The effectivity of the CBA was set to retroact to December 1, 1995. Was the Secretary of Labor and Employment correct in retroacting the effectivity of the renegotiated CBA? HELD: There is no sufficient legal ground to justify the retroactive application of the renegotiated agreement. Significantly the law does not specifically cover the situation where 6 months have elapsed but no agreement has been reached with respect to effectivity. The parties must maintain the status quo and must continue in full force and effect the terms and conditions of the existing agreement until a new agreement is reached. Another legal principle that should apply is that in the absence of an agreement between the parties, then an arbitrated collective bargaining agreement takes on the nature of any judicial or quasi-judicial award; it operates and may be executed only retrospectively unless there are legal justifications for its retroactive application. The agreement should be effective for a term of 2 years counted from December 28, 1996 (Date when the Sec of DOLE denied the parties’ motion for reconsideration) up to December 27, 1999. 6.

Effectivity of the Renegotiated Agreement The effectivity of the renegotiated CBA will depend upon the following situations: (a) If the parties are able to come to an agreement within 6 months from rd expiry of the 3 year of the CBA, the effectivity of the renegotiated agreement shall retroact to the day immediately following the expiry of rd the 3 year. (b) If the agreement was arrived at after 6 months of negotiations, the parties – not anybody else – are

given the discretion to fix the effectivity thereof. If 6 months have elapsed and the negotiations result in a deadlock, and to resolve the impasse, the matter is submitted for arbitration, the effectivity of the renegotiated CBA shall be the date when the arbitrator renders his final decision.

5.1.

Ratification of Collective Bargaining Agreement The CBA will be deemed ratified if it is approved by the majority of the employees covered by the bargaining unit. Without ratification the CA cannot be registered. Ratification of a CBA does not validate a void election of union officers because what the membership ratified were the terms of the new CBA and not the issue of union leadership.

7.

Ten-Year Suspension of CBA Valid Under exceptional conditions, the parties can agree to suspend their CBA. The right to

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos free collective bargaining includes the right to suspend it. Rivera v. Espirity G.R. No. 135547, January 23, 2002 FACTS: On June 5, 1998, the Airline Pilots Association of the Philippines (ALPAP) composed of pilots of Philippine Airlines, Inc. (PAL) went on a 3-week strike, causing serious losses to the financially beleaguered flag carrier. Faced with bankruptcy, PAL adopted a rehabilitation plan and downsized its labor force by more than one-third. On July 22, 1998, the Phiilippine Airlines Employees Association (PALEA), composed of ground employees of PAL went on strike to protest the reduction of personnel which affected 1,899 union members. The strike ended 4 days later, when PAL and PALEA agreed to a more systematic reduction in PAL’s work force and the payment of separation benefits to all retrenched employees. 7. 10-year suspension of CBA v The parties can agree to suspend their CBA under exceptional circumstances Ø The right to free Collective Bargaining (CB) includes the right to suspend it Ø SC upheld the validity of an agreement to suspend the CBA for 10 years in the case of Rivera v. Espiritu (Jan. 23, 2002) FACTS: PAL was suffering from a difficult financial situation in 1998. It was faced with bankruptcy and was forced to adopt a rehabilitation plan and downsized its labor force by more than 1/3. PAL pilots went on a three-week strike in June 1998. PALEA (PAL Employees Association) went on a four-day strike to protest retrenchment measures in July 1998. President Estrada issued A.O. No. 16, creating an Inter-Agency Task Force (Task Force) to address PAL’s problems. Espiritu, then Sec of Finance, was chairman of the Task Force. Task Force was empowered to summon all parties concerned for conciliation, mediation for the purpose of arriving at a total and complete solution of the problem. PAL management submitted to the Task Force an offer by Lucio Tan, which was subsequently rejected. PAL then informed the Task Force that rehabilitation was no longer feasible and there was no alternative but to close shop. PAL ceased operations on Sep 23, 1998. PALEA board wrote President Estrada to seek his intervention on Sep 25, 1998. PALEA offered a 10-year moratorium on strikes and similar actions and a waiver of some of the economic benefits in the existing CBA. Tan, however, rejected this counter-offer. PALEA board again wrote the President on Sep 28, 1998. Among others, it proposed the

-

suspension of the PAL-PALEA CBA for a period of ten years, subject to certain conditions. PALEA members accepted such terms through a referendum on Oct 2, 1998. PAL resumed domestic operations on Oct 7, 1998. Seven officers and members of PALEA filed instant petition to annul the Sep 27, 1998 agreement entered into between PAL and PALEA.

ISSUE/S: WON CBA negotiations may be suspended for 10 years? HELD: The primary purpose of CBA is the stabilization of labor-management relations in order to create a climate of sound and stable industrial peace. Hence, in construing a CBA, courts must be practical and realistic and give due consideration to the context in which it was negotiated and the purpose which it is intended to serve. The assailed PAL-PALEA agreement was the result of voluntary collective bargaining negotiations undertaken in the light of the severe financial situation faced by the employer, with the peculiar and unique intention of not merely promoting industrial peace at PAL, but preventing the latter's closure. There is no conflict between said agreement and Article 253-A of the Labor Code. Article 253-A has a two-fold purpose. One is to promote industrial stability and predictability. Inasmuch as the agreement sought to promote industrial peace at PAL during its rehabilitation, said agreement satisfies the first purpose of Article 253-A. The other is to assign specific timetables wherein negotiations become a matter of right and requirement. Nothing in Article 253A, prohibits the parties from waiving or suspecting the mandatory timetables and agreeing on the remedies to enforce the same. It was PALEA, as the exclusive bargaining agent of PAL 's ground employees, that voluntarily entered into the CBA with PAL. It was also PALEA that voluntarily opted for the 10-year suspension of the CBA. Either case was the union's exercise of its right to collective bargaining. The right to free collective bargaining, after all, includes the right to suspend it. The acts of public respondents in sanctioning the 10-year suspension of the PAL-PALEA CBA did not contravene the “protection to labor” policy of the Constitution. The agreement afforded full protection to labor; promoted the shared responsibility between workers and employers; and they exercised voluntary modes in settling disputes, including conciliation to foster industrial peace. ** Article 254. Injunction prohibited. – No temporary or permanent injunction or restraining order in any case

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos involving or growing out of labor disputes shall be issued by any court or other entity, except as otherwise provided in Articles 218 and 264 of this Code. (As amended by Batas Pambansa Bilang 227, June 1, 1982).

hogs (7, 500) and fowls (8, 000) which are maintained and could be killed if not attended to. Judge immediately issued a TRO ISSUE/S: WON the issuance of the TRO by RTC judge is proper

1. No-injunction Policy

HELD: Issuance of TRO was improper. Courts of law have no jurisdiction to act on labor cases or various incidents arising therefrom. Fact that poultry and piggery required close care and attention does not warrant the RTC judge’s assumption of jurisdiction. It does not confer on him the competence he did not have. Jurisdiction is conferred by law and not by demands of emergency.

v

v

GR: Injunction not favoured in law considering that it generally has not proved to be an effective means of settling labor disputes. Ø Policy of the State: encourage the parties to use non-judicial process of: § Negotiation § Compromise § Mediation & § Arbitration EXCEPTION: Injunctions may be issued only in cases of extreme necessity based on legal grounds, after due considerations/hearing and when all efforts at conciliation are exhausted.

2. When Injunction in Labor Disputes May Issue v

v

In case of actual or threatened commission of any prohibited or unlawful acts, or when necessary to require the performance of a particular act, which if not restrained or performed forthwith, may cause grave or irreparable damage to any party or render ineffectual any decision in favour of such party; or In case of a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to national interest.

3. Who May Issue Injunction in Labor Disputes v

v

Only by the ff. Can issue such: Ø NLRC § In ordinary disputes § Cases arising from violation of Art. 264, LC Ø Sec. Of Labor and Employment – in labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest. Ordinary courts cannot issue injunction in cases involving or growing out of a labor dispute Ø Civil court cannot issue such injunction to restrain execution of a final and executor judgement of the NLRC; Nor such civil court can enjoin striking EEs from obstructing the free ingress/egress of an establishment Ø

Case: Associated Labor Union (ALU) v. Borromeo (166 S 99)

FACTS: As a result of a strike staged by ALU, Belyca Corp. filed with the RTC a complaint for injunction alleging that the strikers obstructed the free ingress/egress to the establishment, preventing workers of Belyca farms from attending to the

** Article 255. Exclusive bargaining representation and workers’ participation in policy and decision-making. – The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employees shall have the right at any time to present grievances to their employer. Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules and regulations as the Secretary of Labor and Employment may promulgate, to participate in policy and decisionmaking processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-management councils: Provided, That the representatives of the workers in such labor-management councils shall be elected by at least the majority of all employees in said establishment. (As amended by Section 22, Republic Act No. 6715, March 21, 1989). 1. Right of EEs to participate in Policy and DecisionMaking Such right extends only to matters that directly affect their rights, benefits and welfare. Ø Right not extend to matters pertaining to business operations/management aspect of the business nor to matters covered by CBA or those failing within traditional areas of CB v Right can be exercised thru a Labor-management council to be formed jointly by the ER and the EEs. Ø Unionized establishments à Ees’ representatives to council shall be nominated by the exclusive bargaining representative. Ø NON -Unionized establishments à Ees’ representatives to council shall be elected directly by the Ees at large. v Case: PAL v. NLRC (225 S 301) FACTS: v

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos -

PAL completely revised its 1966 code of discipline and thereafter circulated such among the EEs and immediately implemented. PALEA challenged such on the ground that it was done withour prior notice and hearing but PAL claimed that it was a prerogative of the management and thus, there’s no need to discuss such with the union.

v

v

ISSUE/S: WON PAL may be compelled to share with the union (PALEA) or its Ees its prerogative of formulating a code of discipline HELD: A close scrutiny of the objectionable provisions of the Code reveals that they are not purely business-oriented nor do they concern the management aspect of the business of the company. The provisions of the Code clearly have repercusions on the employee's right to security of tenure. The implementation of the provisions may result in the deprivation of an employee's means of livelihood which, as correctly pointed out by the NLRC, is a property right. In view of these aspects of the case which border on infringement of constitutional rights, we must uphold the constitutional requirements for the protection of labor and the promotion of social justice, for these factors, according to Justice Isagani Cruz, tilt "the scales of justice when there is doubt, in favor of the worker". Verily, a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of the employees. In treating the latter, management should see to it that its employees are at least properly informed of its decisions or modes action. PAL asserts that all its employees have been furnished copies of the Code. Public respondents found to the contrary, which finding, to say the least is entitled to great respect. Such provision in the collective bargaining agreement may not be interpreted as cession of employees' rights to participate in the deliberation of matters which may affect their rights and the formulation of policies relative thereto. And one such mater is the formulation of a code of discipline. Indeed, industrial peace cannot be achieved if the employees are denied their just participation in the discussion of matters affecting their rights. 2. Collective Bargaining Unit (CBU) 2.1. Definition v

CBU– refers to a group of EEs sharing mutual interests within a given ER unit, comprised of all or less than all the entire body of EEs in the ER unit or any specific occupational or geographical grouping within such ER unit

2.2. Appropriate Bargaining Unit (ABU) v

ABU – a group of EEs of a given ER, comprised of all or less than all the entire body of EEs, which the collective interest of all the EEs, consistent with equity to the ER, indicate to the best suited to serve the reciprocal rights and duties of the parties under the CB provisions of law.

v v

To be considered “appropriate” – it must effect a grouping of EEs who have substantial, mutual interests in wages, hrs. Of work, working conditions and other subjects of collective bargaining. Bargaining unit (BU) composed of a mixture of rankand-file and supervisory EEs à not ABU! Ø No mutuality of interest between supervisory and Rank-and-file EEs considering that the former, while in the performance of their functions, become alter ego of management in the making and implementing of key decisions at submanagerial level. BU composed of EEs with entirely different working conditions, hrs. Of work, rates of pay, categories of positions and employment status à not ABU! CASES:

Phil. Phosphate v. Torres (231 S335) FACTS: PMPI sought to be certified as sole and exclusive CBAgent of superintendents, professionals (engineers, analysts, mechanics, accountants, nurses, midwives, etc.), technical and confidential EEs of PHILPHOS. Such “appropriateness” was challenged because it includes professional, technical and confidential EEs. ISSUE/S:WON proposed BU is an ABU HELD: Not an ABU! No community of interest between the supervisiors and the professional/technical EEs. Quite obviously, these professional/technical employees cannot effectively recommend managerial actions with the use of independent judgment because they are under the supervision of superintendents and supervisors. Because it is unrefuted that these professional/technical employees are performing non-supervisory functions, hence considered admitted, they should be classified, at least for purposes of this case, as rank and file employees. Consequently, these professional/technical employees cannot be allowed to join a union composed of supervisors. Conversely, supervisory employees cannot join a labor organization of employees under their supervision but may validly form a separate organization of their own. This is provided in Art. 245 of the Labor Code, as amended by R.A. No. 6715 Toyota Motor Corp. v. TMCPLU (268 S 573) FACTS: Respondent filed a petition for certificate election praying that it be certified as sole and exclusive Bargaining representative of EEs composed of rank-&-file and supervisory EEs of petitioner. But such petition was challenged on the ground of “appropriateness” of the BU since supervisory and rank-&file were lumped together. ISSUE/S: WON the BU is an ABU

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos HELD: No. Because supervisory and rank-&file were lumped/mixed together. No mutuality or unity of interests in the BU of such mixture. Belyca Corp. v. Ferrer-Calleja (168 S 184) FACTS: ALU sought to be certified as the sole and exclusive bargaining representative of all the workers in the integrated business of Belyca Corp comprising piggery, poulty, agricultural crops, supermarket and cinemas ISSUE/S: WON the BU composed of , poulty, agricultural crops, supermarket and cinemas is an ABU HELD: No. It is beyond question that the employees of the livestock and agro division of petitioner corporation perform work entirely different from those performed by employees in the supermarts and cinema. Among others, the noted difference are: their working conditions, hours of work, rates of pay, including the categories of their positions and employment status. As stated by petitioner corporation in its position paper, due to the nature of the business in which its livestock-agro division is engaged very few of its employees in the division are permanent, the overwhelming majority of which are seasonal and casual and not regular employees (Rollo, p. 26). Definitely, they have very little in common with the employees of the supermarts and cinemas. To lump all the employees of petitioner in its integrated business concerns cannot result in an efficacious bargaining unit comprised of constituents enjoying a community or mutuality of interest. 2.3. Fixing the ABU Labor laws did not provide criteria for fixing ABU (apart from the descriptive word in Art. 255 “appropriate”) v Baic test of BU’s acceptability: WON it is fundamentally the combination which will best assure to all EEs the exercise of their CB rights. v Rothenberg’s fundamental factors: Ø (1) will of employees (Globe Doctrine); § The express will/desire of the EEs may be considered in determining the ABU § It sanctions the holding of series of elections, not for the purpose of determining the CBAgent but for the specific purpose of permitting the EEs in each of the several categories to selct the group which chooses as the CBU. § Case: Kapisanan v. Yard Crew Union (109 Phil. 1143) FACTS: Kapisanan filed a petition praying that it be certified as the exclusive Bargaining Agent in Manila Railroad Co. (MRR). CIR promulgated a decision declaring 3 units appropriate: engine crew, train crew and the unit of all the rest of the company (to which Kapnisanan was certified). Both Kapisanan and MRR opposed the separation of the units. CIR thus issued an order to hold a plebiscite among the 3 grps. To determine WON they desire to be separated from the unit of all the rest of the co. personnel. v

ISSUE/S: Is the order of the CIR contrary to law? HELD: No. "the desires of the employees" is one of the factors in determining the appropriate bargaining unit. The respondent Court was simply interested "in the verification of the evidence already placed on record and submitted wherein the workers have signed manifestations and resolutions of their desire to be separated from Kapisanan." Certainly, no one would deny the respondent court's right of full investigation in arriving at a correct and conclusive finding of fact in order to deny or grant the conclusive findings of fact in order to deny or grant the petitions for certification election. On the contrary, all respondent court, or any court for that matter, to investigate before acting, to do justice to the parties concerned. And one way of determining the will or desire of the employees is what the respondent court had suggested: a plebiscite — carried by secret ballot. A plebiscite not to be conducted by the Department of Labor, as contemplated in a certification election under Sec. 12 of the Magna Charter of Labor, R.A. No. 875, but by the respondent court itself. As well as observed by the respondent court, "the votes of workers one way or the other, in these cases will not by any chance choose the agent or unit which will represent them anew, for precisely that is a matter that is within the issues raised in these petitions for certification". Ø

(2) affinity and unity of employee's interest, such as substantial similarity of work and duties or similarity of compensation and working conditions; (Community of interest rule) § The proper Bargaining unit may be fixed on the basis of the affinity and the unity of the EEs’ interest, such as substantial similarity of work and duties or similarity of compensation and working conditions. § Cases

Alhambra Cigar v. Kapisanan (107 S 23) FACTS: Alhambra Employees' Association (AEA) filed a petition praying that it be certified as the sole and exclusive bargaining agent for all the employees in the administrative, sales and dispensary departments. Alhambra Cigar and Kapisanan Ng Manggagawa sa Alhambra (FOITAF) opposed the petition on the ground that the unit sought to be represented by AEA is not an appropriate CBU since it is the employer unit which is the appropriate CBU and not the smaller unit sought by the AEA ISSUE/S: WON the separate bargaining unit composed of EEs in the administrative, sales and dispensary departments would constitute an appropriate CBU HELD: The SC held that the employees in the administrative, sales and dispensary departments can form their own bargaining unit separate and distinct from those involved in the production and maintenance. They have a community of interest which justifies their formation or existence as a separate appropriate collective bargaining unit. The existing CBA covers only those in the production and maintenance.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos UP v. Ferrer-Calleja (211 S 451) FACTS: ONAPUP filed a petition for certification election among the non-academic EEs of UP; thereafter another union (all UP workers union) intervened in the proceedings alleging that its membership covers both academic and non-academic personnel and it aims to unite all UP rank-&file EEs in 1 union. UP expressed it’s view that there should be separate unions. ISSUE/S: WON it is proper to create separate bargaining units for academic and non-academic EEs HELD: In the case at bar, the University employees may, as already suggested, quite easily be categorized into two general classes: one, the group composed of employees whose functions are non-academic, i.e., janitors, messengers, typists, clerks, receptionists, carpenters, electricians, groundskeepers, chauffeurs, mechanics, plumbers; two, the group made up of those performing academic functions, i.e., full professors, associate professors, assistant professors, instructors — who may be judges or government executives — and research, extension and professorial staff. Not much reflection is needed to perceive that the community or mutuality of interests which justifies the formation of a single collective bargaining unit is wanting between the academic and non-academic personnel of the university. It would seem obvious that teachers would find very little in common with the University clerks and other non-academic employees as regards responsibilities and functions, working conditions, compensation rates, social life and interests, skills and intellectual pursuits, cultural activities, etc. On the contrary, the dichotomy of interests, the dissimilarity in the nature of the work and duties as well as in the compensation and working conditions of the academic and non-academic personnel dictate the separation of these two categories of employees for purposes of collective bargaining. The formation of two separate bargaining units, the first consisting of the rankand-file non-academic personnel, and the second, of the rank-and-file academic employees, is the set-up that will best assure to all the employees the exercise of their collective bargaining rights. Ø

(3) prior collective bargaining history; and § It is also a factor but not a decisive factor § It can be disregarded/brushed aside in the ff cases (and thus, only the prevailing factors should control the determination of the bargaining unit): • Where circumstances had been so altered • Where the reciprocal relationship of the ER and particular bargaining agent has been so changed that the past mutual experience can no longer be considered

as a reliable guide to the present determination of the bargaining unit ♦ CASE:NAFTU v. Mainit Lumber (192 S 598) Even if for several years, the sawmill and the logging division have always been treated as separate units in the company (MALDECO), a single unit can still be created in the basis of “community of interests” rule. Moreover, while the existence of a bargaining history is a factor that may be reckoned with in determining the appropriate bargaining unit, the same is not decisive or conclusive. Other factors must be considered. The test of grouping is community or mutuality of interests. This is so because "the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights." Certainly, there is a mutuality of interest among the employees of the Sawmill Division and the Logging Division. Their functions mesh with one another. One group needs the other in the same way that the company needs them both. There may be difference as to the nature of their individual assignments but the distinctions are not enough to warrant the formation of a separate bargaining unit. (4) employment status, such as temporary, seasonal and probationary employees (Similarity of employment status rule) § This rule requires that temporary, seasonal and probationary employees be grouped as 1 category and treat them separately from permanent employees. § Case: PLASLU v. CIR (110 Phil. 176) FACTS: AWA and PLASLU are contending unions. CIR ordered to hold a certification election to determine which will be the sole bargaining agent of the ER (San Carlos Milling Co.) PLASLU question 242 ballots on the ground that they were cast by stevedores and piece-rate workers who were employed on casual/day to day basis, who could not properly be included in the bargaining unit it seeks to represent Ø

ISSUE/S: Is PLASLU correct? HELD: Yes. CIR should’ve excluded the 242 votes cast by by stevedores and piece-rate workers who were employed on casual/day to day basis, who could not properly be included in the bargaining unit PLASLU seeks to represent. Note that these temporary workers had a work of different nature from those labourers permitted to vote; they have no reasonable basis for continued or renewed employment for any appreciable substantial time- not to mention the nature of work they perform – they cannot be considered to have such mutuality of interest as to justify in the bargaining unit composed of regular EEs. 2.4 The One Company-One Union Policy v

GR: LC discourages proliferation of unions in an establishment, unless circumstances otherwise require Ø RATIO: greater mutual benefits which the parties could derive, especially in case of EES whose

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos

Ø

bargaining strength could undeniably be enhanced by their unity and solidarity but diminished by their disunity, division and dissension. Mere fact that certain group of EEs perform functions different from the other EEs does not warrant the formation of a separate bargaining unit § Variety of tasks is to be expected § It would not be in the interest of sound labormanagement relations if each group of EEs assigned to a specialized function or section would decide to break away from their fellowworkers and form their own separate bargaining unit - this could only lead to confusion, discord and labor strife, there being no substantial differences in their functions.

EXCEPTIONS Ø (1) When supervisory EES organize themselves into a bargaining unit separate and distinct from bargaining unit of rank-&-file EES (basis: art. 245, LC – prohibitjng the supervisory EEs from joining rank-&-file EEs) Ø (2) Where the ER unit has to give way to other bargaining units, like craft unit, plant unit or subdivision unit. (e.g. In Airline company – cabin attendants and pilots different from ground personnel; In Educational institution – teaching and non-teaching personnel) Ø (3) When a certain class of EEs are excluded from the coverage of the bargaining unit. (Ratio: separate bargaining unit must be formed so as not to unduly deprive them of the right to collectively bargain; e.g. exclusion of the daily paid EEs from bargaining unit of those monthly paid.) Ø CASES: Knitjoy Manufacturing, Inc. v. Ferrer-Calleja (214 S 174) FACTS: CFW is the certified CR of daily-paid rank-&-file EEs of Knitjoy. While later and CFW were negotiating for renewal of their CBA, KMEU filed a petition for certification election among the monthly-paid rank-&-file EEs of knitjoy. CFW challenged such.

who moved to Magnolia Corp., can no longer be included because they automatically cease to be EEs of SMC. ISSUE/S: WON the bargaining unit at SMC should include the EEs of Magnolia Corp. and San Miguel Foods, Inc. HELD: No. There are 2 distinct corporations in the case at bar. Indubitably, therefore, Magnolia and the feeds and livestock divisions became distinct entities with separate juridical personalities. Thus, cannot be joined in a single bargaining unit. 2.5. Separate Bargaining Units for Every Corporation v

v

ISSUE/S: WON monthly-paid rank-&-file EEs of Knitjoy can constitute an ABU separate and distinct from existing unit composed of daily-paid rank-&-file EEs

2 corporations cannot be treated as a single bargaining unit. Ø RATIO: 2 companies are distinct entities with separate juridical personalities § Not a justification for piercing the corporate veil: • Mere fact that their business are related and that some of EEs of 1 corp. were original EEs of the other • Mere fact that some EEs of 1 corporation are the same persons manning and providing auxiliary services to other corp. and that physical plants, offices are situated in same compound

3. THE CBAgent v

3 modes of determining CBAgent: Ø Voluntary Recognition Ø Certification Election Ø Run-off Election

3.1 Voluntary Recognition v v

Is the process by which legitimate labor organization is acknowledged by the ER as the exclusive bargaining agent in a unit It is proper only in Unorganized establishments with 1 legitimate labor organization operating within the bargaining unit.

3.1.1. Notice of Voluntary Recognition

HELD: Yes. There can be separate bargaining unit on the basis of this. The regular monthly-paid rank-&-file EEs of Knitjoy were never included in the scope of the bargaining unit of the daily-paid rank-&-file EEs of Knitjoy

v

San Miguel Corp. EEs Union v. Confessor (262 S 81) FACTS: SMCEA is the collective bargaining agent of the rank-&-file EEs of SMC in its 4 operating divisions (beer, packaging, feeds & livestock, Magnolia and agri-business). The last 2 divisions became 2 separate and distinct corporations –Magnolia Corp and San Miguel Foods Corp. SMCEA insisted that bargaining unit should still include the EEs of the spun-off corporations. SMC claimed that EEs

v

It is required of the ER and the union to submit, within 30 days from recognition, a NOTICE OF VOLUNTARY RECOGNITION tot he regional office of the DOLE which issued the union’s certificate of registration or certificate of creation of chartered local. Documentary requirements accompanying the notice (which shall be certified under oath by the ER and President of the Labor Union): Ø A. A joint statement under oath of voluntary recognition attesting to the fact of voluntary recognition Ø B. Certificate of posting of the joint statement of voluntary recognition for 15 consecutive days in at

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Ø

Ø

least 2 conspicuous places in the establishment or bargaining unit where the union seeks to operate C. Statement on the approximate number of employees in the bargaining unit, accompanied by the names of those who support the voluntary recognition comprising of at least a majority of the members of the bargaining unit D. A statement that the labor union is the only Legitimate Labor Organization (LLO) operating within the BU

3.1.2. Recording of Voluntary Recognition v

Fact of Voluntary Recognition shall be recorded in the roster of LLO by the Labor Relations Division of the Regional Office of the DOLE Ø Upon such recording, the recognized labor union shall enjoy rights, privileges and obligations of an existing bargaining agent. Ø Entry of voluntary recognition shall bar the filing of petition for certification election by any labor organization for a period of 1 year from date of entry of voluntary recognition Ø Upon expiration of the 1 year period, any LLO may file petition for certification election in the same bargaining unit, UNLESS a collective bargaining agreement was executed and registered with the DOLE

3.2. Certification Election v

Is the process of determining through secret ballot the sole and exclusive CBrepresentative of the EEs in an appropriate bargaining unit. Ø Can be done through: § Order of DOLE § Agreement of parties (called Consent Election)

3.3. Run-Off Election v

If none of the contenders in a certification election (with atleast 3 choices) obtains a majority of the valid votes cast, the labor unions receiving 2 highest number of votes shall be subjected to an election to determine which of them should be the CBrepresentative.

3.3.1. Conditions for Holding a Run-off Election v

v v

Conditions: Ø (a) Certification Election should have at least 3 choices Ø (b) None of the choices obtained a majority of the valid votes cast Ø (c) Total # of votes for ALL contending unions is at least 50 % of the numbers votes cast Ø (d) There are no challenged ballots, which can materially alter the results Only 2 labor unions receiving the highest # of votes can participate in a run-off election “no union” à shall not be a choice of a run-off election

v

Labor union that garners majority of the valid votes cast shall be the exclusive collective bargaining agent of the EEs covered by the bargaining unit.

3.4 Scope of Representation v

CBAgent – represents not only union members but also non-union members within the bargaining unit. Ø Since it voluntarily assumes the responsibility of representing all the EEs in the bargaining unit.

4. The Substitutionary Doctrine v

v

In cases where the contract-bar principle is not applicable (as when the CBA was not duly registered) the EEs may change their CBAgent, but the CBA continues to bind them up to the expiration date. The doctrine: EEs cannot revoke a validly executed CBA by the simple expedient of changing their bargaining agent. Ø The new agent is obliged to respect the CBA, although it could negotiate for the shortening of the life of the said agreement. **

Article 256. Representation Issue in Organized Establishments. - In organized establishments, when a verified petition questioning the majority status of the incumbent bargaining agent is filed by any legitimate labor organization including a national union or federation which has already issued a charter certificate to its local chapter participating in the certification election or a local chapter which has been issued a charter certificate by the national union or federation before the Department of Labor and Employment within the sixty (60)-day period before the expiration of the collective bargaining agreement, the Med-Arbiter shall automatically order an election by secret ballot when the verified petition is supported by the written consent of at least twenty-five percent (25%) of all the employees in the bargaining unit to ascertain the will of the employees in the appropriate bargaining unit. To have a valid election, at least a majority of all eligible voters in the unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit. When an election which provides for three or more choices results in no choice receiving a majority of the valid votes cast, a run-off election shall be conducted 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 fifty percent (50%) of the number of votes cast. In cases where the petition was filed by a national union or federation, it shall not be required to disclose the names of the local chapter’s officers and members. At the expiration of the freedom period, the employer shall continue to recognize the majority status of the

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos incumbent bargaining agent where no petition certification election is filed. (As amended by Section Republic Act No. 6715, March 21, 1989 and Section Republic Act No. 9481 which lapsed into law on May 2007 and became effective on June 14, 2007).

for 23, 10, 25,

1. Purpose of Certification Election v

To ascertain the wishes of the majority of the EEs in the bargaining unit on whether to be represented by a labor organization and which labor organization. Ø Intended to give EEs true representation in their collective bargaining with their ER

2. Significance of Certificate Election v

It is the fairest and most effective way of determining which labor organization can truly represent the working force in the ABU. Ø Thru such, EEs are given the opportunity to make known their choice on who shall represent them in CB Ø Freedom to form labor organizations would be rendered nugatory if EEs could not choose their own leaders to speak on their behalf and to bargain for them.

v

If there is a duly registered CBA Ø Petition for Certification Election can be filed only during the freedom period (60 days prior to expiry of such agreement) Ø Cases:

Associated Labor Unions v. Ferrer-Calleja (179 S 127) FACTS: ALU had a CBA with PASAR due to expire on April 1, 1987. On March 23, 1987, NAFLU filed a petition for certification election. ALU sought dismissal on the ground that it failed to present necessary signatures. Med-Arbiter dismissed and NAFLU appealed. During the pendency of appeal, ALU and PASAR executed a new CBA. Then ALU sought to dismiss the appeal on the grounds that there is a new CBA; but instead of dismissing appeal, BLR ordered a certification election. ISSUE/S:WON it was proper for BLR to order Certification Election despite a new CBA was entered by ALU and PASAR HELD: It was proper. Petition filed within the 60 days freedom period and hence, merely filing within that time is a sufficient basis for ordering certification election. Mere fact that CBA has already ratified and EEs are already enjoying benefits under CBA does not alter the situation. More so because the CBA was not yet in existence when the petition for certification election was filed.

3. Nature of the Certification Proceedings v v

Not a litigation in the sense the term is commonly understood where conventional rules of evidence are strictly observed. It is an investigation of non-adversary, fact-finding character in which the Med-Arbiter plays the part of a disinterested investigator seeking merely to ascertain the desires of EEs as to the matter of their representation, especially so where the petition for certification election and the claim of majority representation are uncontested. Ø When adversarial? à 2 rival unions claim representation, hence, it has to be decided according to lawful evidence.

4. Venue of Certification Proceedings v

Filed with the Regional Office of the DOLE which issued the petitioning union’s certificate of registration or certificate of creation of chartered local.

5. Who May File A Petition For Certification Election v v

GR: LLO can file EXCEPTION: ER can also file when it is requested by a LLO to bargain collectively.

NACUSIP v. Ferrer-Calleja (205 S 478) FACTS: NFSW and DSR Milling Co.’s 3 year CBA expired on Nov. 14, 1987. They renewed such. On Dec. 5, 1988, NACUSIP filed a petition for certification election. NSFW sought the dismissal of such ISSUE/S: WON petition should be dismissed since such was filed outside the freedom period HELD: Yes. Petition for Certification Election in organized establishments can only be entertained within the 60 days prior to the expiry date of an existing CBA and a petition filed after freedom period should be dismissed outright. United Aluminum Fabricators v. Drilon (211 S 104) FACTS: United and UAFW had a CBA which expired on April 29, 1989. During freedom period (April 3, 1989), the two renegotiated and executed a new CBA. After the lapse of 69 days from expiry of the former CBA, KAMPIL filed a petition for certification election. United moved to dismiss. Med-Arbiter dismissed but Sec. Of Labor and Employment ordered the holding of certification election. ISSUE/S: WON secretary was correct HELD: No. 69 days after the expiry was beyond the freedom period set by law.

6. The Proper Time for Filing a Petition for Certification v

Absence of CBA or if CBA has not been duly registered in accordance with Art. 231, LC Ø Such may be filed anytime

7. Form and Contents of Petition

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos v v

Petition for certification shall be in writing and verified by the president of the petitioning union. Allegations need to be contained:

(a) the name of petitioner, its address, and affiliation if appropriate, the date and number of its certificate of registration. If the petition is filed by a federation or national union, the date and number of the certificate of registration or certificate of creation of chartered local; (b) the name, address and nature of employer's business; (c) the description of the bargaining unit; (d) the approximate number of employees in the bargaining unit; (e) the names and addresses of other legitimate labor unions in the bargaining unit; (f) a statement indicating any of the following circumstances: 1) that the bargaining unit is unorganized or that there is no registered collective bargaining agreement covering the employees in the bargaining unit; 2) if there exists a duly registered collective bargaining agreement, that the petition is filed within the sixty-day freedom period of such agreement; or 3) if another union had been previously recognized voluntarily or certified in a valid certification, consent or run-off election, that the petition is filed outside the one-year period from entry of voluntary recognition or conduct of certification or run-off election and no appeal is pending thereon. (g) in an organized establishment, the signature of at least twenty-five percent (25%) of all employees in the appropriate bargaining unit shall be attached to the petition at the time of its filing; and (h) other relevant facts. 8. Intervention Ø Ø Ø Ø Ø Ø

9. The By- Stander Principle Ø Ø

Ø

GR: In certification proceeding, the employer is a mere by- stander because the proceeding is the sole concern of workers. EXP: When the employer files a petition for certification election pursuant to Art 258 of the LC because it was requested to bargain collectively. o After the filing of the petition, the role of the employer ceases. When the employer invokes certain valid defenses.

10. Employer’s Defenses a. b. c. d. e. f. g. h. i.

Lack of employer- employee relationship; Lack of legal personality on the part of the petitioning union; Lack of 25% written consent; Inappropriate bargaining unit; Contract bar rule; Voluntary recognition bar rule; Election bar rule; Negotiation bar rule; and Deadlock bar rule.

10.1 Lack of Employer- Employee Relationship Ø Ø

Failure to establish E-E relationship means ineligibility to file and vote for certification election. Singer Sewing Machine Company v. Drilon: o Private respondent are not employees of the company, they are not entitled to the constitutional right to join and form a labor organization for purposes of CB.

10.2 Lack of Legal Personality on the Part of the Union A labor union lacks legal personality:

Labor unions with substantial interest in the certification election have the right to intervene and take part in the certification proceedings. Intervention is done by filing a MOTION FOR INTERVENTION with the Med-Arbiter assigned to the case. Organized establishment: filed during freedom period Unorganized establishment: filed at any time prior to the decision of the Med-Arbiter. Incumbent CBA automatically becomes a forced intervenor. GR: Forms and contents of a motion for intervention shall be the same as petition for Certification election, o It need not be supported by the written consent of 25% of the employees within the bargaining unit. o The 25% consent applies only to petitions for certification election.

a. b.

If it is not registered with the DOLE; or If its registration has been cancelled by virtue of a final judgment.

Ø

Only legitimate labor organization may file for certification. During the pendency of application for registration, al LO may be allowed to file petition for certification election. U.E. Automotive Employees v. Noriel (74 SCRA 72) o In absence of any fatal defect to the application for registration, there is no justification for withholding it from petitioner to enable it to exercise fully its constitutional right to freedom of association. Cancelled registration by virtue of final judgment, loses legal personality, hence it cannot file a petition for CE.

Ø Ø

Ø

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos o

Mere pendency of the cancellation proceeding does not disqualify LO from filing a petition for certification election because during pendency the legal personality subsists.

10.3 Lack of 25% Consent Requirement Ø

Ø Ø Ø

Organized establishment: petition must be supported by written consent of at least 25% of all the employees in the bargaining unit. o If the CE is supported by the written consent of 25% of the employees within the bargaining unit, it is MANDATORY on the part of the Med-Arbiter to order a CE. (Art. 256) Failure to submit 25% written consent is a ground for dismissal. The 25% requirement should not be applied strictly; prima facie showing of compliance will suffice. However, if the written consent falls short of the 25%, it is no longer mandatory, but discretionary on the part of the med- Arbiter to call a CE.

10.3.1 Effect of Withdrawal of Consent Ø Ø

Ø Ø

Before filing of petition for CE: the Med- Arbiter may not order the holding of CE. La Suerte Cigar and Cigarette Factory v. Dir of Labor Relations: o Withdrawals made before the filing of the petition are presumed voluntary, unless there is convincing proof to the contrary. o Withdrawals made after the filing are deemed involuntary. After filing of petition for CE: the Med- Arbiter can still order the holding of CE. George & Peter Linea Inc. v. ALU: o Withdrawal of 80% of the membership which the union claims to be involuntary, the best forum to determine if there was undue pressure exerted upon employees to retract their membership is the CE itself.

Effect of Withdrawal of Consent -­‐ If the withdrawal or retraction of consent was made before the filing of the petition for certification election, the Med-Arbiter may not order the holding of a certification election. Case: La Suerte Cigar and Cigarette Factory vs. Director of Bureau of Labor Relations (123 SCRA 679) HELD: “xxx whether or not the withdrawal of 31 union members from NATU affected the petition for certification election insofar as the 30% requirement is concerned, We reverse the Order of respondent Director of the Bureau of Labor Relations, it appearing undisputably that the 31 union members had withdrawn their support to the petition before the filing of said petition. It would be otherwise if the withdrawal was made after the filing of the petition for it

would then be presumed that the withdrawal was procured through duress, coercion or for valuable consideration. In other words, the distinction must be that withdrawals made before the filing of the petition are presumed voluntary, unless there is convincing proof to the contrary, whereas withdrawals made after the filing of the petition are deemed involuntary.” -­‐ If the withdrawal or retraction of consent was made after the filing of the petition for certification election, the Med-Arbiter can still order the holding of a certification election. Case: George & Peter Lines Inc. vs. ALU (134 SCRA 82) HELD: “xxx Certification election is the best and most appropriate means of ascertaining the will of the employees as to their choice of an exclusive bargaining representative… Even if the withdrawals of the employees concerned were submitted after the Petition for the Direct Certification had been filed the doubt as to the majority representation has arisen, and it is best to determine the true sentiment of the employees through a certification election.” -­‐ Reason for distinction: o If the withdrawal or retraction is made before the filing of the petition, the names of employees supporting the petition are supposed to be held secret to the opposite party. o When the withdrawal or retraction is made after the petition is filed, the employees who are supporting the petition become known to the opposite party since their names are attached to the petition at the time of filing. Inappropriate Bargaining Unit -­‐ A bargaining unit is not an appropriate bargaining unit: a) If it fragments the employer unit; b) If the composition thereof is a mixture of rank-and-file and supervisory employees, or a mixture of supervisory and managerial employees; c) If it is composed of managerial employees; or d) If it is composed of members of a cooperative -­‐ If the bargaining unit sought to be represented by the petitioning union is not an appropriate bargaining unit, the employer can move for the dismissal of the petition for certification election. The Contract-Bar Rule -­‐ If there is a duly registered collective bargaining agreement, no petition questioning the majority status of the incumbent bargaining agent shall be entertained. -­‐ No certification election shall be conducted outside of the sixty-day period immediately before the expiry of the five-year term of the collective bargaining agreement. The Voluntary Recognition Bar Rule

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos -­‐

Voluntary recognition duly entered in the roster of legitimate labor organization shall bar the filing of a petition for certification election for a period of one (1) year from the date of entry of voluntary recognition. o An employer can ask for the dismissal of a petition for certification election filed within one (1) year from entry of voluntary recognition. -­‐ Upon expiration of the one-year period, any legitimate labor organization may file a petition for certification election in the same bargaining unit represented by the voluntarily recognized union, unless a collective bargaining agreement between the employer and the voluntarily recognized labor union has been executed and registered. The Election-Year Bar Rule -­‐ No petition for certification election may be filed within one (1) year from the date of a valid certification election, consent election or run-off election. -­‐ In case of appeal, the running of the one-year period is suspended until the decision on the appeal has become final and executory. Case: R. Transport Corp. vs. Laguesma (227 SCRA 826) FACTS: CLOP filed a petition for certification election but the same was dismissed by the Med-Arbiter because the bargaining unit sought to be represented did not include all the eligible employees but only drivers, conductors and conductresses to the exclusion of the inspectors, dispatchers, mechanics and washer boys. CLOP rectified its mistake by filing a second petition for certification election, which included all the rank-and-file employees of the company. The Company moved for the dismissal of the second petition on the ground that it was filed within one (1) year from the dismissal of the first petition. ISSUE: Whether or not CLOP was barred from filing the second petition for certification election? HELD:NO. CLOP was not barred from filing the second petition for certification election. The one-year prohibition imposed by the election-year bar rule does not apply because no certification election was ever conducted. The first petition was merely dismissed because of certain defects. The election-year bar rule will apply only when there is actual conduct of election. The Negotiation-Bar Rule -­‐ No representation question may be entertained if, within the one-year period from the date of entry of voluntary recognition, certification election, or runoff election, the duly recognized or certified union has commenced negotiations with the employer in accordance with Article 250 of the Labor Code. Case: KAMPIL vs. Trajano( 201 SCRA 453) FACTS: By virtue of a Resolution of the Bureau of Labor Relations dated February 27, 1981, NAFLU was declared as the exclusive bargaining representative of all the rankand-file workers of Viron Garments. Four (4) years had

lapsed without any collective bargaining agreement being entered into between NAFLU and Viron. ISSUE: Can another labor organization file a petition for certification election? HELD: YES. A petition for certification election can be filed by another union. The one-year period during which the certified union is required to negotiate with the employer has long expired. The Deadlock-Bar Rule -­‐ No representation question may be entertained if, before the filing of a 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. o Purpose: To ensure stability in the relationship of the workers and the management. Case: NACUSIP vs. Trajano (208 SCRA 18) FACTS: NACUSIP is the certified bargaining representative of the rank-and-file employees of Calinog Refinery Corporation. A collective bargaining deadlock ensued between it and the corporation, for which they agreed to submit the deadlock for compulsory arbitration. A month after the deadlock was submitted for compulsory arbitration, FUR filed a petition for certification election alleging that about 45% of the employees had joined FUR; and that while NACUSIP had been certified as the sole and exclusive bargaining representative, it had been unable to conclude a collective bargaining agreement despite the lapse of more than one year. ISSUE: Will the petition prosper? HELD: NO. The petition will not prosper because when FUR filed the petition for certification election, a bargaining deadlock was already submitted for arbitration. Under the deadlock-bar principle, a petition for certification election can only be entertained if there is no bargaining deadlock submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout. QUESTIONS PERTAINING TO VALIDITY OF REGISTRATION v QUESTIONS THAT CANNOT BE RAISED IN A MOTION TO DISMISS THE PETITION FOR CERTIFICATION ELECTION 1. Validity of the registration of the collective bargaining agreement 2. Validity of the union’s registration v REMEDY – File an independent petition for cancellation of registration with the Regional Director of the Department of Labor and Employment v PENDING RESOLUTION OF THE PETITION FOR CANCELLATION OF REGISTRATION o The proper party can ask for the suspension of the certification election proceedings v It would have been more prudent for the MedArbiter and public respondent to have granted

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos petitioner’s request for the suspension of proceedings in the certification election case until the issue of the legality of the Union’s registration shall have been resolved. Grave abuse of discretion. (Progressive Development Corporation – Pizza Hut v. Laguesma) EFFECT OF UNFAIR LABOR PRACTICE CHARGE v GENERAL RULE – A complaint for unfair labor practice file against the union will not affect the holding of a certification election o REASON: It should not be allowed to lend itself as a means to prevent a truly free expression of the will of the labor group as to the organization that will represent it v EXCEPTION – A complaint for unfair labor practice charging a labor organization to be company-dominated o REASON: If there is a union dominated by the company to which some of the workers belong, an election among the workers and the employees of the company would not reflect the true sentiment and wishes of the said workers and employees from the standpoint of their welfare and interest v An unfair labor practice complaint charging a labor organization to be company dominated is a prejudicial question in a petition for a certification election o Must first be decided before ordering a certification election o May render the election process nugatory if the company-dominated union wins and would later on be decertified EFFECT OF STRIKE v None. Certification election is still valid CONDUCT OF CERTIFICATION ELECTION QUALIFIED VOTERS v All employees covered by the appropriate bargaining unit at the time of issuance of the order granting the holding of a certification election v Probationary employees v Strikers o REASON – They continue to enjoy employee status during the strike o EXCEPTION – They are declared to have lost their employee status v Employee dismissed from work but has contested the legality of dismissal in a forum of appropriate jurisdiction at the time of issuance of the order for the conduct of a certification election o EXCEPTION – His dismissal was declared valid in a final judgment at the time of the holding of the certification election v Members of Iglesia ni Kristo

o

o

No law, administrative rule or precedent prescribes forfeiture of the right to vote by reason of neglect to exercise the right in the past certification elections The fact Iglesia ni Kristo members are forbidden by their religious belief from forming, joining or assisting labor organizations does not disqualify them from voting in a certification election

SEGREGATION OF VOTES v In case of disagreement over the voter’s list or over the eligibility of voters, all contested voters shall be allowed to vote o Their ballots shall be segregated and sealed in individual envelopes

NOTICE OF ELECTION v Election Officer to cause posting of notice of election at least ten (10) days before the actual date of election in two most conspicuous places in the company premises v CONTENTS OF THE NOTICE 1. Date and time of election 2. Names of all contending unions 3. Description of the bargaining unit v Cannot be waived by the contending union or employer v One day deficiency will not nullify the election if a substantial number of employees voted accordingly on the election day

CHALLENGING OF VOTES v The authorized representative of any of the contending unions and the employer may challenge a vote before the ballot is deposited in the ballot box v Grounds v When a vote is properly challenged o Election Officer to place the ballot in an envelope and seal in the presence of the voter and representative of the contending unions and employer o Indicate voters name o Envelope to be signed by the Election Officer and representatives of all contending unions and employer o Election Officer to note all the challenges in the minutes of the election and consolidate all the envelopes of the challenged votes o Envelopes hall be opened and the question of elegibility shall be passed only if the number of segregated voters will materially alter the results of the election

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos Election Protest v Any party-in-interest may file a protest based on the conduct or mechanics of the election. -­‐ The protest must be recorded in the minutes of the proceedings. -­‐ Protests not so raised are deemed WAIVED. v A Labor Organization which did not take part in the certification election cannot file a protest. v The protesting party must: -­‐ Formalize its protest with the Med-Arbiter -­‐ With specific grounds, arguments and evidence therefor -­‐ Within five (5) days after the close of the election proceedings. [The phrase “close of the election proceedings” refers to that period from the closing of the polls to the counting and tabulation of votes]. ü The PROTEST shall be DEEMED DROPPED, IF the protest is not recorded in the minutes of the proceedings or if not formalized within the prescribed period. v A certification election may be declared invalid if certain irregularities were committed during the election. BUT a mere general allegation of duress is not sufficient to invalidate a certification election. Example of Irregularities: Ø If the workers of the night shift and afternoon shift were not able to vote Ø The secrecy of ballots was not safeguarded Ø The election supervisors were remiss in their duties and were apparently intimidated by a union representative and the participating unions were overzealous in wooing the employees to vote in their favorby resorting to such tactics as giving free tricycle rides and T-shirts.

Direct Certification -­‐ This is no longer allowed as a method of selecting the exclusive bargaining agent. -­‐ The present law affirms the superiority of certification election over direct certification.

Failure of Election -­‐ is present when LESS THAN a majority of all eligible voters have cast their votes. -­‐ it shall not bar the filing of a motion for the immediate holding of another certification/consent election within six (6) months from the declaration of failure of election.

COMMENT: Employer as Petitioner -­‐ If a legitimate labor organization requests an employer to bargain collectively there are 2 options available to the employer, namely: a. Voluntarily recognize the representation status of the labor organization; or b. File a petition for certification election.

Proclamation The Med-Arbiter shall proclaim the union which obtained the majority of the valid votes cast if the following conditions are met: a. No protest has been filed, OR if one was filed, the same was not perfected within the 5 day period for perfection of the protest; b. No challenge or eligibility issue was raised, OR if one was raised, the resolution of the same will not materially change the result. -In a certification election, the authority of the Med-Arbiter or election officer is LIMITED to certifying the winner as the sole and exclusive bargaining agent.

ART. 257. Petitions in unorganized establishments.- In any establishment where there is no certified bargaining agent, a certification election shall automatically be conducted by the Med-Arbiter upon the filing of a petition by a legitimate labor organization. COMMENT: 1. Unorganized Establishment -­‐ is a firm or company where there is no certified or recognized collective bargaining agent for a particular bargaining unit. 2. Certification Election in Unorganized Establishment -­‐ The mere filing of a petition for certification election by a legitimate labor organization is enough to order the holding of a certification election. ART. 258. When an employer may file petition. - When requested to bargain collectively, an employer may petition the Bureau for an election. If there is no existing certified collective bargaining agreement in the unit, the Bureau shall, after hearing, order a certification election. All certification cases shall be decided within twenty (20) working days. The Bureau shall conduct a certification election within twenty (20) days in accordance with the rules and regulations prescribed by the Secretary of Labor.

Case: Ilaw at Buklod Ng Manggagawa v. FerrerCalleja(182 SCRA 561) FACTS: On September 7, 1987, IBM requested San Miguel Corporation (SMC) for voluntary recognition as the sole and exclusive bargaining representative of all monthly and daily paid employees of the Calasiao Sales Office. SMC denied the request. Instead, it filed a petition on the ground that it did not ask SMC to bargain collectively with it. HELD: IBM’s request for voluntary recognition as bargaining representative was in effect a request to bargain

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos collectively. Hence, SMC’s petition for certification election was proper under Article 258 of the Labor Code. ART. 259. Appeal from certification election orders.- Any party to an election may appeal the order or results of the election as determined by the Med-Arbiter directly to the Secretary of Labor and Employment on the ground that the rules and regulations or parts thereof established by the Secretary of Labor and Employment for the conduct of the election have been violated. Such appeal shall be decided within fifteen (15) calendar days. COMMENT: Remedy From a Decision in a Petition for Certification Election In Unorganized Establishments a. Order Dismissing a Petition for Certification Election -­‐ may be appealed to the Office of the Secretary of Labor and Employment within ten (10) days from receipt thereof. b. Order Granting a Petition for Certification Election -­‐ is NOT appealable. -­‐ any issue arising therefrom may be raised by means of protest on the conduct and results of the certification election. HOWEVER, under certain EXCEPTIONAL SITUATIONS, appeal may be resorted to if the Med-Arbiter orders the holding of a certification election despite the: a. Lack of employer-employee relationship with the members of the bargaining unit; b. Lack of legal personality on the part of the petitioning union either because it is not listed in the registry of legitimate unions or because its registration has been cancelled; or c. Improper composition of the bargaining unit. In Organized Establishments The ORDER DISMISSING or GRANTING the Petition for Certification Election -­‐ may be appealed to the Office of the Secretary of Labor and Employment within ten (10) days from receipt. Form of Appeal -­‐ under oath -­‐ shall consist of a memorandum of appeal -­‐ specifically stating the grounds for appeal -­‐ supporting arguments and evidence Where to File Appeals -­‐ in the Regional Office of the Department of Labor and Employment where the petition originated. Effect of Appeal -­‐ the filing of appeal STAYS the holding of certification election

Title VII-A GRIEVANCE MACHINERY AND VOLUNTARY ARBITRATION ART. 260.Grievance machinery and voluntary arbitration.The parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the mutual observance of its terms and conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the interpretation or implementation of their Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies. All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the Collective Bargaining Agreement. For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or include in the agreement a procedure for the selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the listing of qualified Voluntary Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the Collective Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator or panel of Arbitrators has been selected by the parties as described above. COMMENT: Grievance

-­‐

is a dispute or controversy between an employer and the collective bargaining agent, individual employee or group of employees, arising from interpretation or implementation of the collective bargaining agreement or interpretation or enforcement of company personnel policies.

Grievance Machinery -­‐ where grievances are processed which the parties to a collective bargaining agreement are required to establish under Article 260 of the Labor Code. If NO Grievance Machinery provided in the Collective Bargaining Agreement -­‐ the parties are required to create, within ten (10) days from signing of the collective bargaining agreement, a grievance committee to be composed of at least two(2) representatives from the members of the bargaining unit(which shall be designated by the union) and at least two(2) from the employer.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos Grievance Procedure The following procedures shall be observed, UNLESS a different procedure is prescribed in the collective bargaining agreement: a. - An employee shall present his grievance or complaint orally or in writing to the shop steward. - Upon receipt thereof, the shop steward shall verify the facts and determine whether or not the grievance is valid. b. - if the grievance is VALID, the shop steward shall immediately bring the complaint to the employee’s immediate supervisor. - the shop steward, the employee and his immediate supervisor shall exert efforts to settle the grievance at their level. c. if No settlement is reached, the grievance shall be referred to the grievance committee which shall have ten (10) days to decide the case. Grievance Handling - Part of the Collective Bargaining Process -­‐ it is a continuous process -­‐ the duty to bargain collectively imposes upon the parties during the term of their agreement to meet and confer promptly and expeditiously ad in good faith for the purpose of adjusting any grievance or question arising under such agreement. Voluntary Arbitration -­‐ is a system whereby the parties agree to refer their dispute to an impartial third person for a final and binding resolution, UNLIKE in compulsory arbitration in which the third party is appointed by the government. ART.261.Jurisdiction of Voluntary Arbitrators or Panel of Voluntary Arbitrators.- The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the immediately preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes of this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement. The Commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not entertain disputes, grievances or matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and refer the same to

the Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining Agreement. COMMENT: Voluntary Arbitrator -­‐ is a person accredited as such by the National Conciliation and Mediation Board;or -­‐ any person chosen or designated by the parties in the collective bargaining agreement;or -­‐ one chosen with or without the assistance of the National Conciliation and Mediation Board pursuant to a selection procedure agreed upon in the Collective Bargaining Agreement;or -­‐ any official who may be authorized by the Secretary of Labor and Employment to act as Voluntary Arbitrator upon the written request and agreement of the parties to a labor dispute, whose function is to resolve the disputes submitted to it by the parties. Jurisdiction of Voluntary Arbitrators Original and Exclusive Jurisdiction a. unresolved grievance arising from interpretation or implementation of a collective bargaining agreement; b. unresolved grievance arising from interpretation or enforcement of company personnel policies; c. disputes arising from wage distortion caused by the application any wage order in organized establishments; and d. disputes arising from interpretation and implementation of the productivity incentive programs under RA No. 6971 Jurisdictional Preconditions A voluntary arbitrator can acquire jurisdiction over the foregoing disputes only when the following conditions have been complied with: a. the dispute has been brought to the grievance machinery for resolution; b. the grievance machinery failed to resolve the dispute; and c. the parties agree to submit the dispute for voluntary arbitration. Jurisdiction Over Termination Disputes General Rule: Disputes over the validity of dismissal or severance of employment do not fall within the jurisdiction of voluntary arbitrators BUT within the original and exclusive jurisdiction of the Labor Arbiter. Exception: Disputes over the validity of dismissal or severance of employment will fall within the jurisdiction of voluntary arbitrators only when the issue pertains to interpretation or

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos implementatation of a collective bargaining agreement or company personnel policy. Case involving “interpretation or implementation of collective bargaining agreemen or company personnel policies” vs. case involving “termination” ü Where the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to the GRIEVANCE MACHINERY set up in the collective bargaining agreement OR to VOLUNTARY ARBITRATION. ü Where there was already actual termination, i.e., violation of rights, it is already cognizable by the LABOR ARBITER. CASE: Sanyo Philippines Workers Union v. Canizares 211 SCRA 361 FACTS:PSSLU had an existing collective bargaining with Sanyo Philippines, Inc. which contains a union security clause. On account of anti-union activities, disloyalty and for joining another union, PSSLU expelled twelve (12) employees from the Union. As a result, PSSLU recommended the dismissal of said employees pursuant to the aforequoted union security clause in the CBA. Sanyo approved the recommendation and considered the said employees dismissal. The dismissed employees filed with the Arbitration Branch of the NLRC a complaint for illegal dismissal. PSSLU maintained that the jurisdiction belonged to the voluntary arbitrator. ISSUE: Whether or not the voluntary arbitrator has jurisdiction over the case. HELD: The voluntary arbitrator has no jurisdiction over the case. There is no grievance between the union and management which could be brought to the grievance machinery. The dispute is between PSSLU and Sanyo, on the one hand, and the dismissed union members, on the other hand. The dispute, therefore, does not involve interpretation or implementation of a collective bargaining agreement. CASE: Pantranco North Express Inc. v. NLRC 259 SCRA 161 FACTS: X, who was a member of Pantranco Employees Association-PTGWO, was employed by PNEI as bus conductor. He continued in the employ of PNEI until August 12, 1989, when he was retired at the age of 52 and after having rendered 25 years of service. The basis of his retirement was the compulsory retirement provision in the collective bargaining agreement between PNEI and the Pantranco Employees Association-PTGWO. Claiming that his retirement was tantamount to dismissal, X filed with the Arbitration Branch of the NLRC a complaint for illegal dismissal. PNEI challenged the jurisdiction of the Labor Arbiter on the ground that the dispute concerns a provision of the CBA and its interpretation, the jurisdiction of which falls under the voluntary arbitrator. ISSUE: Whether or not the voluntary arbitrator has jurisdiction over the case. HELD:The voluntary arbitrator has no jurisdiction over the case. No dispute exists between the Union and PNEI, so as to create a grievance, because both have previously

agreed the compulsory retirement of X as embodied in the CBA. It was only X on his own who questioned the compulsory retirement. Thus, this case is properly denominated as “termination dispute” which comes under the original and exclusive jurisdiction of labor arbiters. CASE: Maneja v. NLRC 290 SCRA 603 FACTS: X was employed as Telephone Operator of Manila Midtown Hotel. She was dismissed from her employment for committing the following violations of Offenses Subject to Disciplinary Actions (OSDA), namely: falsifying official documents and culpable carelessness-negligence or failure to follow specific instructions or established procedures. X filed a complaint for dismissal with the Arbitration Branch of the NLRC. The Hotel challenged the jurisdiction of the Labor Arbiter on the ground that the case falls within the jurisdictional ambit of the grievance procedure and voluntary arbitration under the CBA. ISSUE: Whether or not the Labor Arbiter has jurisdiction. HELD: The Labor Arbiter has jurisdiction. The dismissal of X does not call for the interpretation or enforcement of company personnel policies but is a termination dispute which comes under the jurisdiction of the Labor Arbiter. ART. 262.Jurisdiction over other labor disputes.- The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks. COMMENT: The Import of the Phrase “all other labor disputes” -­‐ May include termination disputes, provided that the parties conform to the submission of termination disputes to voluntary arbitration. -­‐ There is a need for an express stipulation in the collective bargaining agreement that the termination disputes should be resolved by a Voluntary Arbitrator or Panel of Voluntary Arbitrators, considering that termination disputes fall within a special class of disputes that are generally within the exclusive original jurisdiction of Labor Arbiters by express provision of law. -­‐ Without such express stipulation, the phrase “all disputes” should be construed as limited to the areas of conflict traditionally within the jurisdiction of Voluntary Arbitrators, i.e., disputes relating to contract-interpretation, contract-implementation, or interpretation or enforcement of company personnel policies. -­‐ Termination disputes – not falling within any of these categories – should then be considered as a special area of interest governed by a specific provision of law.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos Agreement of the Parties is Necessary to Confer Jurisdiction -­‐ The jurisdiction of the voluntary arbitrator over the dispute(particular labor dispute) is acquired upon receipt of the Submission Agreement duly signed by both parties(express and specific agreement). -­‐ HOWEVER, even WITHOUT an express agreement between the parties, no one can arrogate into the powers of Voluntary Arbitrators the original and exclusive jurisdiction of Labor Arbiters over unfair labor practices, termination disputes, and claims for damages. CASE: San Miguel Corporation v. NLRC 255 SCRA 133 FACTS:SMC terminated the services of several mechanics, machinists, and carpenters on the ground of redundancy. As a result, the Union filed with the Arbitration Branch of the NLRC a complaint for unfair labor practice and illegal dismissal against SMC. SMC moved for the dismissal of the complaint on the ground that the Labor Arbiter has no jurisdiction over the subject matter of the complaint. SMC’s thesis is that the dispute as to the termination of the union members and the unfair labor practice should be settled by voluntary arbitration, and not by the labor arbiter following the provision of the CBA, which ought to be treated as the law between the parties. Additionally, SMC theorized that since the Union questioned the discharges, the main question is whether SMC had the prerogative to effect the discharges on the ground of redundancy, and this necessarily calls for the interpretation or implementation of Article III (Job Security) in relation to Article IV (Grievance Machinery) of the CBA. HELD: SMC’s contention is not meritotious because: a. There is no agreement whatsoever between SMC and the Union that would state in unequivocal language that they conform to the submission of termination disputes and unfair labor practice to voluntary arbitration. b. SMC cannot validly invoke Section 2, Article III to show that the dispute is proper subject of grievance because the Union did not exercise its right to seek reconsideration of SMC’s move to terminate the services of the employees concerned. c. There is no connection whatsoever between SMC’s management prerogative to effect the discharges and the interpretation or implementation of Article III and IV of the CBA. Hence, the Union acted well within its right in filing the complaint for illegal dismissal with the Labor Arbiter. The termination disputes are matters falling under the original and exclusive jurisdiction of the Labor Arbiter. ART. 262-A. Procedures.- The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have the power to hold hearings, receive evidences and take whatever action is necessary to resolve the issue or issues

subject of the dispute, including efforts to effect a voluntary settlement between parties. 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. Unless the parties agree otherwise, it shall be mandatory for the Voluntary Arbitrator or panel of Voluntary Arbitrators to render an award or decision within twenty (20) calendar days from the date of submission of the dispute to voluntary arbitration. The award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators shall contain the facts and the law on which it is based. It shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision by the parties. Upon motion of any interested party, the Voluntary Arbitrator or panel of Voluntary Arbitrators or the Labor Arbiter in the region where the movant resides, in case of the absence or incapacity of the Voluntary Arbitrator or panel of Voluntary Arbitrators, for any reason, may issue a writ of execution requiring either the sheriff of the Commission or regular courts or any public official whom the parties may designate in the submission agreement to execute the final decision, order or award. COMMENT: Scope of Arbitration Awards -­‐ The power and authority of voluntary arbitrators to decide a case is limited to those matters which have been submitted to them for arbitration. Judicial Review of Arbitration Awards -­‐ Decisions or awards of voluntary arbitrations are appealable to the Court of Appeals. -­‐ The state of our present law relating to voluntary arbitration provides that “the award or decision of the Voluntary Arbitrator x xx shall be final and executory after 10 calendar days from receipt of the copy of the award or decision by the parties,” while the “decisions,awards, or orders of the Labor Arbiters are final and executory unless appealed to the Commission by any or both parties within 10 calendar days from receipt of such decisions, awards, or orders.” -­‐ Hence, while there is an express mode of appeal from the decision of labor arbiter, RA No. 6715 is silent with respect to an appeal from the decision of a voluntary arbitrator.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos Power to Enforce Arbitration Awards -­‐ The Voluntary Arbitrator has the power to: a. Issue writ of execution b. May require the sheriff of the NLRC or the regular courts or any public official whom the parties may designate in the submission agreement, to execute the arbitration award. -­‐ In the ABSENCE of Voluntary Arbitrator or in case of his INCAPACITY, the motion for issuance of writ of execution may be filed with the Labor Arbiter in the region having jurisdiction over the workplace. ART. 262-B.Cost of voluntary arbitration and Voluntary Arbitrator’s fee. - The parties to a Collective Bargaining Agreement shall provide therein a proportionate sharing scheme on the cost of voluntary arbitration including the Voluntary Arbitrator’s fee. The fixing of fee of Voluntary Arbitrators, whether shouldered wholly by the parties or subsidized by the Special Voluntary Arbitration Fund, shall take into account the following factors: a. Nature of the case; b.

Time consumed in hearing the case;

c.

Professional standing of the Voluntary Arbitrator;

d.

Capacity to pay of the parties; and

e.

Fees provided for in the Revised Rules of Court.

COMMENT: Voluntary Arbitrator’s Fee and Arbitration Cost -­‐ Unless the parties agree otherwise, the cost of voluntary arbitration proceedings and voluntary arbitrator’s fee shall be shared EQUALLY by the parties. -­‐ If their funds is INSUFFICIENT, they may avail of the subsidy under the Special Voluntary Arbitrator’s Fund. Title VIII Strikes and Lockouts and Foreign Involvement in Trade Union Activities CHAPTER I Strikes and Lockouts Art. 263. Strikes, Picketing and Lockouts. – (a) It is the policy of the State to encourage free trade unionism and free collective bargaining. (b) Workers shall have the right to engage in concerted activities for purposes of collective bargaining or for

their mutual benefit and protection. The right of legitimate labor organizations to strike and picket and of employers to lock-out, consistent with the national interest, shall continue to be recognized and respected. However, no labor union may strike and no employer may lockout on grounds involving interunion and intra-union disputes. (c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the employer may file a notice of lockout with the Ministry at least 30 days before the intended date thereof. In cases of unfair labor practice, the period notice shall be 15 days and in the absence of a duly certified or recognized bargaining agent, the notice of strike may be filed by any legitimate labor organization in behalf of its members. However, in case of dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws, which may constitute union busting where the existence of the union is threatened, the 15-day cooling off period shall not apply and the union may take action immediately. (d) The notice must be in accordance with such implementing rules and regulations as the Minister of labor and Employment may promulgate. (e) During the cooling-off period, it shall be the duty of the Ministry to exert all efforts at mediation and conciliation to effect a voluntary settlement. Should the dispute remain unsettled until the lapse of the requisite number of days from the mandatory filing of the notice, the labor union may strike or the employer may declare a lockout. (f) A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in meetings or referenda called for the purpose. A decision to declare a lockout must be approved by the majority of the board of directors of the corporation or association or of the partners in a partnership, obtained by secret ballot in a meeting called for the purpose. The decision shall be valid for the duration of the dispute based on substantially the same grounds considered when the strike or lockout vote was taken. The Ministry may, at its own initiative or upon the request of any affected party, supervise the conduct of the secret balloting. In every case, the union or the employer shall furnish the Ministry the results of the voting at least seven days before the intended strike or lockout, subject to the cooling-off period herein provided. (g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos Such assumption or certification shall have the effect of automatically enjoining the impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of the assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same. In line with the national concern and the highest respect accorded to the right of patients to life and health, strikes and lockouts in hospitals, clinics and similar medical institutions shall, to every extent possible, be avoided, and all serious efforts, not only by labor and management but government as well, be exhausted to substantially minimize, if not prevent, their adverse effects on such life and health, through the exercise, however legitimate, by labor of its right to strike and by management to lockout. In labor disputes adversely affecting the continued operation of such hospitals, clinics or medical institutions, it shall be the duty of the striking union or locking-out employer to provide and maintain an effective skeletal force of medical and other health personnel, whose movement and services 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 lockout. In such cases, therefore, the Secretary of Labor and Employment may immediately assume, within twenty-four (24) hours from knowledge of the occurrence of such a strike or lockout, jurisdiction over the same or certify it to the Commission for compulsory arbitration. For this purpose, the contending parties are strictly enjoined to comply with such orders, prohibitions and/or injunctions as are issued by the Secretary of Labor and Employment or the Commission, under pain of disciplinary action, including dismissal or loss of employment status or payment by the locking out employer of backwages, damages and other affirmative relief, even criminal prosecution against either or both them. The foregoing notwithstanding, the President of the Philippines shall not be precluded from determining the industries that, in his opinion, are indispensable to the national interest, and from intervening at any time and assuming jurisdiction over any such labor dispute in order to settle or terminate the same. (h) Before or at any stage of the compulsory arbitration process, the parties may opt to submit their dispute to voluntary arbitration.

(i) The Secretary of Labor and Employment, the Commission or the voluntary arbitrator shall decide or resolve the dispute, as the case may be. The decision of the President, the Secretary of Labor and Employment, the Commission or the voluntary arbitrator shall be final and executor ten (10) calendar days after receipt thereof by the parties. COMMENT 1. Right to Engage in Concerted Activities Workers shall have the right to engage in concerted activities for purposes of collective bargaining or for their mutual benefit and protection. The more common forms of concerted activities are: a.) strikes; b.) picketing; and c.) boycotts. 2. Strike Strike is any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. The requisites of a strike are as follows: a.) temporary; and 1 b.) the result of a labor dispute. Mass resignation of employees in protest of the dismissal of an employee is not a strike because the stoppage of work, although resulting from a labor dispute, is not temporary. The refusal of employees to work for the purpose of joining a mass demonstration to protest police abuses likewise does not constitute a strike. CASES ALPAP vs. CIR 76 SCRA 274 The members of ALPAP staged a strike against PAL, the result of which the President of the Philippines certified the labor dispute to the Court of Industrial Relations. The CIR then issued a return-to-work order. The strikers returned to work except for two, one of whom was Capt. FG. PAL terminated his services. In reaction, a substantial majority of ALPAP members threatened to resign en masse, which they eventually did. Later on 21 pilots filed a petition praying for readmittance or at least be allowed to retire with benefits, stating that the mass resignation was a strike. Issue: W/N the mass resignation was a strike. Held: NO. The law defines strike as any temporary stoppage of work by the concerted action of employees resulting from an industrial dispute. A strike means only a temporary stoppage of work. What the pilots contemplated was evidently a permanent cut-off of employment relationship with their employer, PAL.

1

Labor dispute is any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos PBMEO vs. Philippine Blooming Mills 51 SCRA 189 PBMEO decided to stage a mass demonstration at the Malacañang to protest the abuses of the Pasig police. Workers from the first, second and third shifts were to participate. PBM objected against the utilization of the workers in the first shift, but PBMEO still included these workers among the protestants. The Company filed a complaint against PBMEO for the violation of the No StrikeNo Lockout clause of the CBA. Issue: W/N the mass demonstration is a strike. Held: NO. Although there was temporary stoppage of work, there was no labor dispute involved. The mass demonstration was not directed against the employer but against the police. This was an exercise of the workers’ freedom of expression. Gold City vs. NLRC 245 SCRA 628 Employees of Gold City who were members of the MLUFFW stopped working, walked out and gathered in a mass th action to protest regarding wages, 13 month pay and hazard pay. Gold City filed a complaint for illegal strike. Issue: W/N the mass action was a strike or a mere protest action? Held: THE ACTION WAS A STRIKE. The cessation of work resulted from a labor dispute. The employees stopped working precisely to press for wages and benefits. The law does not favor strikes because of their disturbing and pernicious effects upon social order and public interest. The employer company is on the defensive and wants the strike stopped and the strikers back to work so as to resume and continue production. Because of this threat or danger of loss to the company, frequently it gives in to the demands of the strikers just so it can maintain the continuity of production. 2.1 Kinds of Strikes. In general: a.) Unfair labor strike b.) Economic strike Unfair labor strike is a concerted activity staged as a result of the employer’s unfair labor practice. To be considered as unfair labor strike, it is not necessary that the employer should actually commit an unfair labor practice. It is enough that the strikers believe in good faith that the employer has committed ULP. Economic strike is a concerted activity staged to force wage or other concessions from the employer which he is not required by law to grant. An economic strike may subsequently turn into a ULP strike if in the process, the employer commits ULP against the strikers. 2.2 Forms of Strikes By Manner of Execution

a.) Walk-out – a form of strike where the employees leave their workplace and establish themselves outside the plant and refuse access to the owners and other employees who want to work. b.) Sit-down – a form of strike where the strikers establish themselves within the plant, stop its production and refuse access to the owners and other employees who want to work. c.) Slowdown – a form of strike where strikers merely retard production d.) Mass leave – a form of strike where the strikers take time-off from work simultaneously. e.) Wildcat – a strike staged without the sanction or authorization of the union. As To The Employer Directed Against a.) Primary strike – directed against the employer because of a labor dispute with him. b.) Secondary strike – directed against the employer connected by product or employment with alleged unfair labor conditions or practices. (E.g., where a manufacturer engages in ULP and the employees of its distributors stage a strike against it.) c.) Sympathy strike – a strike staged to make common cause with other strikers in other establishments or companies, without the existence of any dispute between the striking employees and their employer. There need not be a connection of product or employment in this kind of strike. d.) General strike – directed against all the employers, participated in by the workmen irrespective of the employers for whom they are working. e.) Particular strike – directed solely against the strikers’ employer. 2.3 Requisites of a Valid Strike a.) It should be staged by a certified or duly recognized collective bargaining representative or in the absence thereof, by a legitimate labor organization; b.) It should be declared only on grounds specified by law; c.) It should comply with the requirements prescribed by law. 2.3.1 Employees in Unorganized Establishments cannot Strike Only a certified or duly recognized collective bargaining representative can declare a strike, whether an economic or ULP strike. In the absence of a duly certified or recognized collective bargaining representative, a legitimate labor organization in the establishment can declare a strike but ONLY on grounds of ULP. Employees of establishments without unions cannot strike. 2.3.2 Legal Grounds for Declaring a Strike 2 a.) Collective bargaining deadlock

2

Collective bargaining deadlock the situation between the labor and management of the company where there is failure in the collective bargaining negotiations resulting in a stalemate. There is

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos 3

b.) Unfair labor practice Any strike founded on other grounds is illegal. 2.3.3 Legal Requirements of a Strike a.) Notice of strike b.) Strike vote c.) Strike vote report Failure to comply with any of these requirements will render the strike illegal. 2.4 Notice of Strike Filed with the Regional Branch of the National Conciliation and Mediation Board and served to the company, at least: a.) 30 days before the intended date of strike – if the ground for strike is based on collective bargaining deadlock b.) 15 days before the intended date of strike – if the ground for strike is based on ULP. 2.5 Cooling-off Period Cooling-off Period is the span of time allotted by law for the parties to settle their disputes in a peaceful manner before declaring a strike. a.) 30 days from filing of the notice of strike – if the ground for the strike is CBD b.) 15 days from filing of the notice of strike – if the ground for strike is ULP

The report is filed with the regional branch of the NCMB at least 7 days before the intended strike. The purpose of the report is to give assurance that a strike vote has been taken and also to enable the majority of the union members to take the appropriate remedy before it is too late, if such report turns out to be false. 2.8 7-Day Strike Ban This is the 7-day period reckoned from the submission of the strike vote report. The union cannot strike during this period. This is a reasonable exercise of police power. In computing the period, the first day shall be excluded and the last day included. 2.9 Declaration of Strike The union may go on strike if after the lapse of the cooling-off period and the 7-day strike ban, if the dispute remains unsettled. The NCMB shall continue mediating and conciliating.

Observance of the cooling-off period is mandatory. Strikes which violate the cooling-off period are illegal.

2.10 Strikes in Medical Institutions Strikes in medical institutions are strongly discouraged because of their effects on the life and health of patients. Should a strike be declared, the union must provide and maintain an effective skeletal workforce whose movement and services shall be unhampered and unrestricted. The Secretary of Labor and Employment may immediately assume jurisdiction over the dispute or certify it to compulsory arbitration within 24 hours from knowledge of the occurrence of the strike.

Exception: When in case of ULP involving the dismissal from employment of a union officer duly elected which may constitute union busting and the existence of the union is threatened, the 15-day cooling-off period need not be observed and the union may strike after the strike vote is conducted and reported to the regional branch of the NCMB.

2.11 Return-to-Work Order Strikers are bound to immediate comply with the RTWO issued by the Secretary even if an MR has been filed. A RTWO is immediately executor. It is a matter of obligation. Strikers who defy a RTWO may be declared to have lost their employment status. This does not violate the constitutional provision against involuntary servitude.

2.6 Strike Vote The decision to declare a strike must be approved by the majority of the total union membership in the bargaining unit concerned, through secret ballot in a meeting or referendum called for the purpose. The purpose of the strike vote is to ensure that the intended strike is a majority decision. A strike declared without the approval of a majority of the total union membership is illegal. The decision to declare a strike shall be valid for the duration of the dispute based on substantially the same grounds considered when the strike vote was taken.

2.12 Employment Status of Strikers The mere participation of a worker in a lawful strike is not a ground for termination of employment, even if the employer had hired a replacement during such lawful strike.

2.7 Strike Vote Report a deadlock when there is a complete blocking or stoppage resulting from the action of equal and opposed forces. 3 ULP are those enumerated in Arts 248 and 249. Violations of the collective bargaining agreement is considered ULP only if it is flagrant and/or malicious refusal to comply with the economic provisions of the CBA.

2.13 Reinstatement of Strikers General Rule: Striking employees are entitled to reinstatement, whether or not the strike was the consequence of the employer’s ULP. Exceptions: a.) Union officers who knowingly participate in an illegal strike; b.) Union officers or members who knowingly participate in the commission of illegal acts during the strike; c.) Strikers who defy a RTWO 2.14 Wages During Strike

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos General Rule: Strikers are not entitled to their wages during the period of the strike even if the strike is legal, following the concept of ‘a fair day’s wage for a fair day’s labor’. Exceptions: Backwages may be awarded: a.) When the supposed strikers did not strike but were locked out; b.) Where the strikers voluntarily and unconditionally offered to return to work, but the employer refused to accept the offer without justifiable reason

complying with any of these requirements even if the deficiency is only for one day}

2.15 Legality of a Strike a.) If the purpose is lawful and the means employed are lawful, the strike is LEGAL. b.) If declared for both a legal and illegal purpose, the strike is ILLEGAL in its entirety. c.) If the purpose is lawful but the means employed are unlawful, the strike is ILLEGAL. A strike is not rendered illegal by the mere fact that the demands of the union are unreasonable. The legality of a strike does not depend upon the reasonableness of the demands. If the demands cannot be granted, they should be rejected. Also, the mere fact that the demands of the union were rejected does not make the strike illegal.

c.) Strike declared before the lapse of the cooling-off period or the 7-day strike ban {The requirement of the cooling-off period AND the 7-day strike ban is mandatory. The strike vote may be taken and reported within the cooling-off period.}

A strike staged in good faith that the management committed ULP is not illegal. It suffices if such belief in good faith is entertained by labor as the inducing factor for staging a strike. An unsubstantiated claim of good faith is not enough; it should be supported by factual basis.

d.) Strike declared after the Secretary of Labor and Employment has assumed jurisdiction over the dispute or certified the same for compulsory arbitration {This is a violation of Art 264 (a) of the Labor Code.}

However, the requirements of the notice of strike and the strike vote must still be complied with, else the strike will be declared illegal even if the union acted on good faith on the belief that management committed ULP. 2.16 Illegal Strike The following strikes have been held illegal: a.) Strike staged on grounds other than those prescribed by law{a.) CBD and b.) ULP} Arica vs. Minister of Labor 137 SCRA 267 “xxx Section 1 of PD 823 states: ‘However, any legitimate labor union may strike and any employer may lock out in establishments not covered by General Order No. 5 only on grounds of unresolved economic issues in collective bargaining, in which case the union or the employer shall file a notice with the BLR at least 30 days before the intended strike or lockout. xxx” The Union went on strike not on ‘grounds of unresolved economic issues in collective bargaining.’ The Union struck against the alleged ULP of the management for not paying 50% of the signing bonus; the Union’s strike cannot be a ULP strike or an economic strike. The strike was illegal. b.) Strike staged without complying with any of the legal requirements of the strike {a.) notice of strike; b.) strike vote and c.) strike vote report; a strike is illegal without

Reliance Surety vs. NLRC 193 SCRA 365 “The strike in question was illegal, for failure of the strikers to comply with the legal strike requirements: a.) as to the 15-day notice; b.) as to the 2/3 required vote to strike done by secret ballot; c.) as to the submission of the strike vote to the DOLE at least 7 days prior to the strike.”

NFSW vs. Ovejera 114 SCRA 354 The NFSW declared the strike 6 days after a strike notice, i.e., before the lapse of the mandatory cooling-off period. It also failed to file with the MOLE before launching the strike a report on the strike vote when the report should have been filed at least 7 days before the intended strike. The strike is illegal.

Union of Filipro vs. Nestle 192 SCRA 396 A strike undertaken despite the issuance by the Secretary of Labor of an assumption or certification order becomes a prohibited activity and thus illegal, pursuant to the second paragraph of Art 264 of the Labor Code, as amended. e.) Strike declared after the notice of strike has been converted into preventive mediation {This is illegal because the notice of strike has ceased to be such upon its conversion; hence, it is as if no notice of strike has been filed.} PAL vs. Secretary of Labor 193 SCRA 223 The NCMB declared the notice of strike as ‘appropriate for preventive mediation’. The declaration was not moved for reconsideration or set aside by the PALEA. This dropped the case from the docket of notice of strikes as provided in Rule 41 of NCMB rules, as if there was no notice of strike. During the pendency of preventive mediation, no strike could be legally declared. f.) Strike carried out with the use of force, violence, physical injuries, sabotage and unnecessary obscene language {This is illegal because it is violative of Art 264(e) of the Labor Code. The Constitution also only guarantees peaceful concerted activities.} Liberal Labor Union vs. Philippine Can Co. 91 Phil. 72

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos The strikers, particularly the top officials of the union, all committed coercion, force, intimidation, violence with physical injuries, sabotage and used unnecessary and obscene language. A strike under these circumstances cannot be justified in a regime of law. g.) Strike staged in violation of the no-strike stipulation of a CBA {A strike will be illegal for violation of a no-strike stipulation only if it is an economic strike. If the strike is based on ULP, the no-strike stipulation is not violated.} Philippine Metal Foundries vs. CIR 90 SCRA 135 The strike declared by the Union was not considered a violation of the no-strike clause of the CBA because it was due to ULP committed by the employer. h.) Strike staged without giving the employer ample time to consider and act on the demands of the union {Illegal because of unreasonableness.} INSUREFCO Paper vs. INSUREFCO 95 Phil. 761 The walkout was declared premature because it was done without giving the General Manager or the BoD of the company reasonable time within which to consider and act on the demands submitted by the Union. The strike staged by the Union was unfortunate, ill-considered, considering the great damage caused to the business of the refinery resulting from the complete paralyzation of its operations. The strike was rightly declared illegal. i.) Strike without exhausting or availing of the grievance machinery under the CBA {The illegality of such a strike will be declared even if management failed to do its duty in connection with the formation of the grievance committee. A Union is duty bound to exhaust all available means within its reach before resorting to force.} Liberal Labor Union vs. Philippine Can Co. 91 Phil. 72 The strike staged on March 14, 1949 was illegal. The main purpose of the parties for adopting a procedure in the settlement of disputes is to prevent a strike. Even if the management failed to do its duty in connection with forming the grievance committee, still the union did not have the right to declare a strike for its duty is to exhaust all available means within its reach before resorting to force. j.) Strike staged without first resorting to pacific means provided by law {Illegal because it is unreasonable.} National Labor Union vs. Philippine Match Factory 70 Phil. 300 When the petitioners declared a strike even before the outcome of the investigation had been announced and without previously resorting to the pacific means provided by law, they have acted unreasonably.

k.) Strike declared to correct wage distortion {Strike is not the remedy prescribed by law to correct wage distortion.} Ilaw at Buklod ng Manggagawa vs. NLRC 198 SCRA 586 The legislative intent that solution of the problem of wage distortion shall be sought by voluntary negotiation or arbitration and not by strikes, lockouts or other concerted activities of the employees or management, is made clear in the IRR of RA 6727. The Union was thus prohibited to declare and hold a strike or otherwise engage in nonpeaceful concerted activities for the settlement of its controversy with SMC in respect of wage distortions, or for that matter; any other issue ‘involving or relating to wages, hours of work, conditions of employment and/or employee relations’. l.) Strike staged to compel an employer to negotiate a collective bargaining agreement during the pendency of a petition for certification election {This is illegal because during the pendency of a certification election proceeding, the duty to bargain collectively does not exist.} LAKAS vs. Marcelo 118 SCRA 422; 449 There was a legitimate representation issue confronting respondent company. There was no duty to collectively bargain with LAKAS. All the acts instigated by LAKAS such as filing the notice of strike and the two strikes of September 4, 1967 and November 7, 1967 were calculated, designed and intended to compel respondent to recognize or bargain with it notwithstanding that it was an uncertified union. m.) Strike staged by a minority union to compel the employer to bargain with it despite the existence of a certified bargaining agent {This is illegal because no labor dispute can exist between an employer and a minority union.} n.) Strike declared for trivial, unjust or unreasonable purpose {Illegal because of its unlawful purpose.} o.) Strike on a simple violation of the CBA {An LO cannot strike on a simple violation of the CBA because such violation does not constitute ULP.} p.) Strike on grounds involving inter-union or intra-union disputes {This is illegal because this violates Art 263(b) of the Labor Code. Only gross violations of the CBA are treated as ULP.} q.) Strike declared without first having bargained collectively {Illegal because it violates Art 264(a) of the Labor Code.} 2.16 Sanction for Illegal Strike The Current Doctrine

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos An Illegal strike does not automatically warrant the wholesale dismissal of strikers. Only the following strikers can be penalized with loss of employment status: a.) Union officers who knowingly participate in an illegal strike; b.) Union officers or members who knowingly participate in the commission of illegal acts during a strike. Illegal acts include violence, physical injuries, coercion, intimidation, possession of deadly weapon, obstruction of the free ingress to and egress from the employer’s premises and defiance of RTWO or assumption/certification order. The law is permissive upon granting to the employer the option of declaring a union officer who participated in an illegal strike and any striker who committed illegal acts during the strike as having lost their employment status. If the strike is illegal, the employer cannot be restrained or enjoined from imposing the appropriate sanctions against the union officers who knowingly participated in the illegal strike and against any striking employee who committed illegal acts during the strike. CASE PAL vs. Secretary of Labor and Employment 193 SCRA 223 PALEA filed with the NCMB a notice to strike on the grounds of CBD and ULP. It was found that the real issues involved: a.) determination of the minimum entry rate; b.) wage adjustment; c.) retroactive pay. PALEA was informed that the issues were appropriate only for preventive mediation. PALEA went ahead to conduct a strike vote. PAL filed with the Secretary of Labor a petition for assumption of jurisdiction, which was not acted upon soon enough. PALEA was able to strike. Then the Secretary declared the strike valid and admonished PAL against taking retaliatory measures against the strikers. Issue: W/N the Secretary could rule on the validity of the strike and prevent PAL from taking retaliatory action against the erring strikers. Held: NO on both accounts. Art 263 of the Labor Code only authorizes the Secretary to rule on the issues involved in the labor dispute and not the legality or illegality of the strike that occurred. This jurisdiction is vested with the Labor Arbiters. Also, since the strike was illegal, PAL had the right to take disciplinary action against its guilty employees. 2.17 Liability for Damages Arising from an Illegal Strike The best evidence obtainable must be presented to hold the union and the strikers liable for damages. Actual or compensatory damages cannot be presumed, but must be duly proved. The local union and not the federation are liable for damages resulting from an illegal strike. This is because the local union is the principal and the federation is a mere agent of the union. 2.18 Injunction Against Strikes

General Rule: A strike cannot be enjoined even if it may appear to be illegal. Exceptions: a.) If a strike is declared against an industry indispensable to national interest, wherein the Secretary of Labor may assume jurisdiction or certify the dispute for compulsory arbitration. The assumption or certification automatically enjoins the strike; b.) If the strike is staged by employees who are not accorded the right to strike or employees of government-owned or controlled corporations with original charters; c.) If the strike is staged because of an intra-union or inter-union dispute. 2.19 The Innocent Bystander Doctrine The doctrine provides that the right to strike and picket may be regulated at the instance of third parties or innocent bystanders if it appears that the inevitable result of its exercise is to create an impression that a labor dispute to which they have no connection or interest exists between them and the picketing union or constitute an invasion of their rights. The courts can confine or localize the sphere of communication or the demonstration to the parties to the labor dispute, including those with related interest and to insulate establishments or persons with no industrial connection or having interest totally foreign to the context of the dispute. Requisites 1.) Rule 58 of the Rules of Court on Preliminary Injunction - That the applicant is entitled to the relief demanded, and the whole part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually; - That the commission, continuance or nonperformance of the act or acts complained of during the litigation would probably work injustice to the applicant; or - That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual. 2.) The applicant is entirely different from, without any connection whatsoever to, either party to the dispute 3.) Its interests are totally foreign to the context thereof. CASES MSF Tire & Rubber vs. CA 311 SCRA 784 PTWU declared a strike against PHILTHREAD. Thereafter, PHILTHREAD entered into an agreement with Siam Tyre. PHILTHREAD’s plant was sold to MSF Tire, 80% of which is owned by Siam Tyre and 20% owned by PHILTHREAD. The land on which the plant was located was sold to Sucat Land, 60% of which was owned by PHILTHREAD and 40%

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos by Siam Tyre. MSF then asked the Union to desist from picketing. MSF filed a complaint for Injunction, invoking the innocent bystander doctrine. Issue: W/N MSF Tire is entitled to an Injunction? Held: NO. The contract of sale and transactions between PHILTHREAD and Siam Tyre reveals a legal relation between them. MSF has close ties to PHILTHREAD. MSF cannot be considered an innocent bystander. PAFLU vs. Cloribel 27 SCRA 465 Metrobank and Galang were lessees of Wellington Building. PAFLU declared a strike and picketed the premises of Metrobank. Wellington complained that the picketers were blocking the common passageway of the building. Thereafter Wellington and Galang filed a complaint for Injunction. Issue: W/N Wellington and Galang are entitled to an Injunction? Held: YES. There exists no labor dispute between PAFLU, Wellington and Galang. The strike was against Metrobank, an entity entirely different and separate and without any connection whatsoever with Wellington and Galang. Liwayway Publications vs. Permanent Concrete Workers 108 SCRA 161 Petitioner is a sublessee of the premises of Permanent Concrete. The employees of Permanent Concrete declared a strike and the strikers picketed, stopped and prohibited petitioner from entering the compound. Petitioner thus filed for an Injunction. Issue: W/N Liwayway is entitled to an Injunction Held: YES. There is no connection whatsoever between the strikers and Liwayway Publications apart from the fact that Liwayway is a sublessee of the employer. 3. Picketing Picketing is the marching to and fro before the premises of an establishment involved in a dispute, generally accompanied by the carrying and display of a sign, placard or banner bearing statements in connection with the dispute. Picketing is a freedom guaranteed by the Constitution. If peacefully carried out, it cannot be enjoined even in the absence of employer-employee relationship. But the courts can confine or localize the demonstrations to the disputants and insulate establishments with no industrial connection or interest to the dispute. 3.1 Injunction Against Picketing General Rule: Picketing cannot be enjoined because it is part of the freedom of speech. Exceptions: a.) If necessary to protect the rights of third parties or innocent bystanders; b.) If the picketing is carried out through the use of illegal means; c.) If the picketing is carried out through the use of violence or illegal acts.

4. Boycott Boycott is a combination formed for the purpose of restricting the market of an individual or group of individuals. a.) Primary boycott – one which is applied directly and alone to the offending person by withdrawing from him all business relations on the part of the organization that initiated the boycott. b.) Secondary boycott – a combination to exercise coercive pressure upon the customers of an employer, actual or prospective, in order to cause them to or withhold or withdraw patronage from him through fear of loss or damage to themselves should they deal with him. - Usually held to be illegal because of the principle that one not a party to an industrial strife cannot, against his will, be made an ally of one of the parties for the purpose of accomplishing the destruction of the other. 5. Lockout Lockout is the temporary refusal of an employer to furnish work as a result of an industrial or labor dispute. Requisites: The refusal to furnish work must be: a.) Temporary; and b.) The result of a labor dispute. The refusal of an employer to accept the offer of the strikers to return to work pending resolution of the legality of the strike does not constitute lockout. A strike cannot be converted into a lockout by the mere expedient filing of a notice of offer to return to work during the pendency of a labor dispute. 5.1 Lockout vs. Shut-down Lockout In a lock out, the plant continues to operate.

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Shut-down In a shut-down, the plant ceases to operate. A shut-down is the willful act of the employer himself following a complete lockout.

All shutdowns are lockouts, but not all lockouts constitute shutdowns. 5.2 Requisites of a Valid Lockout a.) It should be declared only on grounds specified by law; and b.) It should comply with the requirements prescribed by law. 5.3 Legal Grounds for Declaring a Lockout a.) Collective bargaining deadlock (CBD) b.) Unfair labor practice (ULP) 5.4 Legal Requirements of a Lockout a.) Notice of lockout;

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos b.) Lockout vote; c.) Lockout vote report 5.5 Notice of Lockout Filed with the NCMB and served to the union, at least: a.) 30 days before intended date – if the ground is CBD b.) 15 days before the intended date – if the ground is ULP 5.6 Cooling-off Period a.) 30 days from the filing of notice of lockout – for CBD b.) 15 days from filing the notice of lockout – for ULP 5.7 Lockout Vote The decision to declare a lockout must be approved by the majority of the BoD, in case of a corporation, or the partners in the case of a partnership, through secret ballot in a meeting called for the purpose. The employer shall furnish the regional branch of the NCMB the notice of meeting at least 24 hours before the holding of such meeting. The NCMB may also supervise the secret balloting at its own initiative or upon instance of any affected party. 5.8 Lockout Vote Report The employer must report the results of the voting at least 7 days before the intended lockout. 5.9 7-day Lockout Ban The 7-day period is reckoned from the submission of the lockout vote report. Observance is mandatory. 5.10 Declaration of Lockout The employer may declare a lockout if after the cooling-off period and the 7-day lockout ban, the dispute remains unsettled. The NCMB shall continue mediating and conciliating. 5.11 Lockout in Medical Institutions The employer must provide and maintain an effective skeletal workforce of medical and health personnel whose movement and services shall be unhampered and unrestricted. The Secretary may immediately assume jurisdiction over the dispute or certify the same for compulsory arbitration within 24 hours from knowledge of the occurrence of the lockout. 5.12 Illegal Lockouts a.) Lockouts on grounds other than those prescribed by law b.) Lockouts without complying with any of the legal requirements c.) Lockout before the lapse of the cooling-off period or the 7-day lockout ban d.) Lockout declared after the Secretary of Labor and Employment has assumed jurisdiction over the dispute or certified the same for compulsory arbitration

e.) Lockout declared without first having bargained collectively 5.13 Sanction for Illegal Lockout An employer guilty of illegal lockout may be held liable for backwages. 6. National Interest Disputes When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary may assume jurisdiction over the dispute and decide it or certify the same to the NLRC for compulsory arbitration. Recommendation of the Undersecretary is not a condition. The Secretary may assume jurisdiction over a labor dispute or certify it for compulsory arbitration even if there is no actual strike or lockout. The existence of a labor dispute likely to cause a strike or lockout is enough basis for the Secretary to assume jurisdiction or to issue a certification. Such powers are not undue delegation of legislative power. It is not an interference with the workers’ right to strike. It simply regulates such right. 6.1 Extent of Authority General Rule: - Encompasses only the issues in the dispute. - Cannot rule on the legality of the strike; this authority and power is with the original and exclusive jurisdiction of the Labor Arbiter. - Cannot restrain the employer from taking disciplinary action against the strikers. Exception (Contrast of International Pharmaceutical and the Philippine Airlines case) Before the Secretary may take cognizance of an issue which falls within the jurisdiction of the Labor Arbiters, the same must be involved in the labor dispute itself, or otherwise submitted to him for resolution. (This is the ruling in the PAL case. Otherwise, the general rule, the ruling in International Pharmaceutical, applies.) This is one instance where the Secretary exercises concurrent jurisdiction with the Labor Arbiter. 6.2 Constitutionality of Article 263(g) of the LC Articles 263(g) was enacted pursuant to the police power of the State. The police power need not be expressly conferred by the Constitution. 6.3 Industries Indispensable to the National Interest The law does not define ‘industries indispensable to the national interest’. The President and the Secretary of Labor and Employment have unlimited discretion to determine such industries. The courts cannot review this exercise of discretion.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos a.) Airline Company b.) Educational Institutions c.) Drug Company d.) Medical Institution e.) Export-Oriented Enterprise f.) Tire Manufacturing Company g.) Mining Company h.) Brokerage Firm

Art. 264. Prohibited activities. – (a) No labor organization or employer shall declare a strike or lockout without first having bargained collectively in accordance with Title VII of this Book or without first having filed the notice required in the preceding Article or without the necessary strike or lockout vote first having been obtained and reported to the Ministry.

6.3 Enforcement of Assumption/Certification Orders - Such orders are immediately executory and are to be strictly complied with even during the pendency of an MR or a petition questioning its validity. - Upon issuance, the striking workers must therefore cease and desist from any and all acts that undermine the authority of the Secretary regardless of the validity of their claims or motives. 6.4 Effect of Defiance of Assumption/ Certification Orders - An assumption/certification order automatically carries a RTWO even if the directive to return to work is not expressly stated in the order. - Strikers commit an illegal act if they defy the order. Consequently, they may be declared to have lost their employment status. - The moment a worker defies an assumption/certification order, he is deemed to have abandoned his employment. The worker may then be validly replaced. CASE St. Scholastica’s College vs. Torres 210 SCRA 565 NAFTEU filed a Notice of Strike against SSC on the ground of collective bargaining deadlock. The Secretary assumed jurisdiction over the dispute. Instead of returning to work, the Union filed an MR for the assumption order. The MR was denied, but the strikers did not comply with the directive to return to work. Issue: W/N SSC can be compelled to accept the strikers who defied the directive. Held: NO. By defying the directive for them to return the work, the strikers were deemed to have abandoned their employment. Liability for Staging Illegal Strike -

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Loss of employment status is imposed on union officers who knowingly participated n he strike. Loss of employment is imposed on union officers or members who committed illegal acts during the strike.

Liability for Defying Assumption/ Certification Order - Loss of employment status is imposed upon all strikers, regardless of the legality of the strike.

No strike or lockout shall be declared after assumption of jurisdiction by the President or the Minister or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout. Any worker whose employment has been terminated as a consequence of any unlawful lockout shall be entitled to reinstatement with full backwages. Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. (b) No person shall obstruct, impede, or interfere with, by force, violence, coercion, threats or intimidation, any peaceful picketing by employees during any labor controversy or in the exercise of the right to self-organization or collective bargaining, or shall aid or abet such obstruction or interference. (c) No employer shall use or employ any strikebreaker, nor shall any person be employed as a strikebreaker. (d) No public official or employee, including officers and personnel of the New Armed Forces of the Philippines or the Integrated National Police, or armed person, shall bring in, introduce or escort in any manner, any individual who seeks to replace strikers in entering or leaving the premises of a strike area, or work in place of the strikers. The police force shall keep out of the picket lines unless actual violence or other criminal acts occur therein: Provided, That nothing herein shall be interpreted to prevent any public officer from taking any measure necessary to maintain peace and order, protect life and property, and/or enforce the law and legal order. (As amended by Executive Order No. 111, December 24, 1986) (e) No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares. (As amended by Batas Pambansa Bilang 227, June 1, 1982)

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos v 1. Limitations on the right to strike or lockout: A strike or lockout cannot be declared: A. Without first having bargained collectively B. Without first having filed the notice of strike/lockout C. Without the necessary strike or lockout vote first having been obtained reported to the DOLE D. After the SOLE assumes jurisdiction or certifies the dispute to compulsory or voluntary arbitration E. During the pendency of cases involving the same grounds for the strike or lockout. 2. Limitations on the right to picket: Persons or employees engaged in picketing are forbidden from: A. committing any act of violence, coercion or intimidation B. obstructing the free ingress to and egress from the employer’s premises and C. Obstructing public thoroughfares. Removal of Illegal Blockade: v Obstruction in public properties, such as streets, sidewalks, alleys, may be summarily removed by the local governments, through their respective law enforcement authorities without consulting with the DOLE, because these obstructions are considered as nuisance per se. Obstructions in points of egress and ingress of private properties during a labor dispute may be removed only in accordance with proper orders issued by the Office of the SOLE or by the NLRC or its arbitration branches. They cannot be summarily demolished by law enforcement authorities. 3. Employment of Strike, Breakers Prohibited v A strike-breaker is a person who obstructs, impedes, or interferes with by force, violence, coercion, threats, or intimidation any peaceful picketing by employees during any labor controversy affecting wages, hours or conditions of work or in the exercise of the right to selforganization or collective bargaining. Employment of strike breakers is prohibited under Article 264 (c) of the Labor Code. 4.) Escorting of Replacements v Article 264 (d) prohibits public officers of personnel of the Armed Forces of the Philippines, PNP or any armed person from bringing in or escorting any individual in entering or leaving the premises of a strike area to replace striking employees. v Prohibition only extends to: the escorting of individuals in entering or leaving the strike area to replace the striking employees. If the person escorted will not replace the strikers, Article 264 (d) is NOT violated.

v v v

Example: If the persons escorted are non-striking employees, no violation is committed because non-striking employees have the right to enter the company premises and work, and they will work not as replacements but as non-striking employees. Likewise, Article 264(d) is not violated if the escorting of replacements was done beyond the premises of the strike area. What the law prohibits is the escorting of replacements WITHIN the striking area. Striking area - the establishment, warehouses, depots, plants or offices, sites or premises used as runaway shops and the immediate vicinity actually used by the picketing strikers in moving to and from before all points of entrance to and exit from said establishment.

ROLE OF POLICE PERSONNEL IN LABOR DISPUTES v The PNP may be called upon to perform the limited role of enforcing the laws and legal orders of duly constituted authorities and maintaining peace and order to protect life and property during strikes, lockouts and other labor disputes. v The peace keeping personnel should not be stationed in the picket or confrontation line, but in such place as their presence may deter the commission of criminal acts from either side. They should maintain themselves at a distance of 50 meters from the picket line, except, if the 50-m radius includes a public thoroughfare, in which case, they may station themselves in such public thoroughfare for the purpose of insuring the free flow of traffic. SERVICE of LAWFUL ORDERS OR WRITS v The primary concern of the representative of DOLE, sheriff or representative of the government agency issuing the order. The role of police is only supportive. Only when specifically stated and requested in the order or writ should police personnel enforce such orders or writs. REMEDIES v For violation of Article 264 (a), remedy is TO FILE with the arbitration branch of the NLRC a PETITON TO DECLARE THE STRKE OR LOCKOUT ILLEGAL. v For violation of Article 264 b, c, d and e - FILE A PETITON FOR INJUNCTION WITH THE NLRC. v Criminal action may be filed for any violation of Article 264 , the penalties of which are set forth in Art. 272 of the Labor Code. Art. 265. Improved offer balloting. – In an effort to settle a strike, the Department of Labor and Employment shall conduct a referendum by secret ballot on the improved offer of the employer on or before the 30th day of the strike. When at least a majority of the union members vote to accept the improved offer the striking workers shall immediately

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos return to work and the employer shall thereupon readmit them upon the signing of the agreement. In case of a lockout, the Department of Labor and Employment 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 a 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. (Incorporated by Section 28, Republic Act No. 6715, March 21, 1989) 1.) Referendum on Improved Offer v Improved offer balloting - a referendum conducted by the DOLE wherein the strikers vote by secret ballots on whether to accept the improved offer of management. 2.) Referendum on Reduced Offer v Reduced offer balloting - a referendum conducted by the DOLE wherein the BOD or trustees or the partners holding the controlling interest in the case of partnership, vote by secret ballot on whether to accept the reduced offer of the strikers. Art. 266. Requirement for arrest and detention. – Except on grounds of national security and public peace or in case of commission of a crime, no union members or union organizers may be arrested or detained for union activities without previous consultations with the Secretary of Labor. 1.) Arrest or Detention of Union Officers/Members GENERAL RULE: union officers, members or organizers cannot be arrested or detained for union activities without previous consultations with the SOLE. v

v

Consultation is not necessary if the arrest is made: A. on grounds of national security and public peace or B. In case of commission of a crime Thus, any person who obstructs the free ingress to and egress from the employer’s premises or who obstructs public thoroughfares may be arrested without such consultation. Similarly, any person who shall have in his possession deadly weapons such as knives, bolos, blunt or pointed instruments and firearms or explosives may be arrested and charged accordingly in court without consultation with the SOLE/

2.) Filing of Criminal Cases v Before filing a criminal case relating to or arising out of a labor dispute, clearance must first be

obtained from the DOLE or office of the President. An injunction order issued in a labor case is considered as compliance with the clearance requirement. Chapter II ASSISTANCE TO LABOR ORGANIZATIONS Art. 267. Assistance by the Department of Labor. – The Department of Labor, at the initiative of the Secretary of Labor, shall extend special assistance to the organization, for purposes of collective bargaining, of the most underprivileged workers who, for reasons of occupation, organizational structure or insufficient incomes, are not normally covered by major labor organizations or federations. Art. 268. Assistance by the Institute of Labor and Manpower Studies. – The Institute of Labor and Manpower Studies shall render technical and other forms of assistance to labor organizations and employer organizations in the field of labor education, especially pertaining to collective bargaining, arbitration, labor standards and the Labor Code of the Philippines in general. 1.) Labor education v It is the duty of every legitimate labor organization to implement a labor education program for its members on their rights and responsibilities as unionists and as employees. v It is mandatory for every labor organization to conduct seminars and similar activities on existing labor laws, collective agreements, company rules and regulations and other relevant matters. The union seminars and similar activities may be conducted independently or in cooperation with the DOLE or other labor educational institutions. Chapter II ASSISTANCE TO LABOR ORGANIZATIONS Art. 267. Assistance by the Department of Labor. – The Department of Labor, at the initiative of the Secretary of Labor, shall extend special assistance to the organization, for purposes of collective bargaining, of the most underprivileged workers who, for reasons of occupation, organizational structure or insufficient incomes, are not normally covered by major labor organizations or federations. Art. 268. Assistance by the Institute of Labor and Manpower Studies. – The Institute of Labor and Manpower Studies shall render technical and other forms of assistance to labor organizations and employer organizations in the field of labor education, especially pertaining to collective bargaining, arbitration, labor standards and the Labor Code of the Philippines in general.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos 1.) Trade Union Activities of Aliens Aliens and foreign organizations are prohibited from engaging to all forms of trade union activities. However, alien employees with valid working permits issued by the DOLE may exercise the right to selforganization and join or assist labor organization, if they are nationals of a country which grants the same or similar rights to Filipino workers, as certified by the DFA. 2) Trade Union Activities 1. Organization, formation, and administrator of labor organizations; 2. Negotiation and administration of collective bargaining agreements 3. All forms of concerted union action 4. Organizing, managing, or assisting union conventions, ,meetings, rallies, referenda, teachins, seminars, conferences and institutes 5. Any form of participation or involvement in representation proceedings, representation elections, consent elections, union elections and 6. Other activities or actions analogous to the foregoing. Art. 270. Regulation of foreign assistance. – (a) No foreign individual, organization or entity may give any donations, grants or other forms of assistance, in cash or in kind, directly or indirectly, to any labor organization, group of workers or any auxiliary thereof, such as cooperatives, credit unions and institutions engaged in research, education or communication, in relation to trade union activities, without prior permission by the Secretary of Labor. "Trade union activities" shall mean: (1) organization, formation and administration of labor organization; (2) negotiation and administration of collective bargaining agreements; (3) all forms of concerted union action; (4) organizing, managing, or assisting union conventions, meetings, rallies, referenda, teach-ins, seminars, conferences and institutes;

or in kind, given directly or indirectly to any employer or employer’s organization to support any activity or activities affecting trade unions. (c) The Secretary of Labor shall promulgate rules and regulations to regulate and control the giving and receiving of such donations, grants, or other forms of assistance, including the mandatory reporting of the amounts of the donations or grants, the specific recipients thereof, the projects or activities proposed to be supported, and their duration. v

v

Prior permission from the SOL is required before a foreign individual, organization or entity can give donations, grants or other forms of assistance, in cash or in kind to any labor organization or any auxiliary thereof. Legitimate L.O. should make a disclosure of donations, donors and their purposes in their annual financial reports.

Art. 271. Applicability to farm tenants and rural workers. The provisions of this Title pertaining to foreign organizations and activities shall be deemed applicable likewise to all organizations of farm tenants, rural workers, and the like: Provided, That in appropriate cases, the Secretary of Agrarian Reform shall exercise the powers and responsibilities vested by this Title in the Secretary of Labor. 1.) Regulatory Body for Farm Tenants v The regulatory functions with respect to foreign assistance for farm tenants and rural workers shall be exercised by the Secretary of Agrarian Reform. Chapter IV PENALTIES FOR VIOLATION Art. 272. Penalties. – (a) Any person violating any of the provisions of Article 264 of this Code shall be punished by a fine of not less than one thousand pesos (P1,000.00) nor more than ten thousand pesos (P10,000.00) and/or imprisonment for not less than three months nor more than three (3) years, or both such fine and imprisonment, at the discretion of the court. Prosecution under this provision shall preclude prosecution for the same act under the Revised Penal Code, and vice versa.

(6) other activities or actions analogous to the foregoing.

(b) Upon the recommendation of the Minister of Labor and Employment and the Minister of National Defense, foreigners who violate the provisions of this Title shall be subject to immediate and summary deportation by the Commission on Immigration and Deportation and shall be permanently barred from reentering the country without the special permission of the President of the Philippines. (As amended by Section 16, Batas Pambansa Bilang 130 and Section 7, Batas Pambansa Bilang 227)

(b) This prohibition shall equally apply to foreign donations, grants or other forms of assistance, in cash

1.) Offenses Penalized Under 272 Art. 272 of the labor code penalizes the following

(5) any form of participation or involvement in representation proceedings, representation elections, consent elections, union elections; and

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos violations of ART. 264: 1. Declaring a strike or lockout without having first bargained collectively 2. Declaring a strike or lockout without complying with the legal requirements 3. Declaring a strike or lockout after an assumption or certification order has been issued or after the dispute has been submitted to compulsory voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout; 4. Obstructing or interfering with by force, violation, coercion, threats or intimidation any peaceful picketing during any labor controversy or aiding or abetting such obstruction or interference 5. Using or employing strike-breakers 6. Brining in, introducing or escorting on the part of an armed person, public officer, personnel of the AFP or PNP, any person who seeks to replace strikers, in entering or leaving the premises of a strike area 7. Committing acts of violence, coercion or intimidation while engaged in picketing. 8. Obstructing the free ingress to and egress from the employer’s premises while engaged in picketing and 9. Obstructing public thoroughfares

BOOK SIX POST EMPLOYMENT Title I TERMINATION OF EMPLOYMENT Art. 278. Coverage. – The provisions of this Title shall apply to all establishments or undertakings, whether for profit or not. Expanded Coverage of the Law on Dismissal Ø Under the previous law, the provisions of the Labor Code on termination of the employment are extended to employees of entitites which are not operated for profit or gain, such as educational, medical, religious, or charitable institutions and organizations. Ø Purpose: to extend the employees of such entitites the same rights and benefits granted to workers of industrial and commercial enterprises. Art. 279. Security of tenure. – In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. (As amended by Section 34, Republic Act No. 6715, March 21, 1989)

Security of Tenure Construed Ø Employee shall not terminate the services of an employee except for a just or authorized cause. Ø Security of tenure is an act of social justice. It is intended to protect an employee against any arbitrary and unjust deprivation of his job. Coverage Ø Security of tenure is principally intended to protect employees who are holding regular employment. However, this does not mean that employees who are holding non-regular employment, such as project employees, seasonal employees or fixed term employees are not entitled to security of tenure. They are entitled to security of tenure although in a qualified manner, in the sense that they cannot be terminated without just cause prior to the completion of the project, season or term of employment. Ø Probationary employees are also entitled to security of tenure, in a sense that during their probationary employment, they cannot be dismissed except for just cause or authorized cause. Ø Managerial employees are likewise entitled to security of tenure although they are subject to stricter norm or discipline than ordinary rank-andfile employees. Ø Even casual employees who have rendered at least 1 year of service are accorded the right to security of tenure in the sense that their employment cannot be terminated without just cause, as long as the activity in which they are employed exists. Extent of the Rights Ø Security of tenure protects an employee not only against arbitrary or unjust dismissal, but also against other personnel actions, which are calcuteed to force an employee to give up his employment without valid reason. Limitation Ø Security of tenure is not a guarantee of perpetual employment because our law, while affording protection to the employee does not authorize oppression or destruction of an employer. It has been held that while security of tenure is constitutionally guaranteed, it cannot be used to deprive an employer of its prerogatives. The law is solicitous of the welfare of the employees, but is also protects the right of an employer to exercise what are clearly management prerogatives. Managerial Prerogatives Ø An owner of a business enterprise is given considerable leeway in managing his business because it is deemed important to society as a whole that he should succeed. The exercise of managerial prerogatives belongs solely to the

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos

Ø

Ø

employer. The employer is free to determine, according to his own discretion and business judgment, all aspects of employment, including hiring, work assignment., working methods, time, place and manner of work, tools to be used, processes to be followed, etc. These prerogatives of management can be availed of without liability provided they 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 and provided further that such prerogatives are not exercised in a malicious, harsh, oppressive, vindictive, or wanton manner or out of malice or spite. The Labor Code does not authorize the NLRC or the Labor Arbiter to interfere with or substitute their judgment for that of the employer in the conduct of his business.

NATIONAL LABOR UNION VS. INSULAR YEBANA TOBACCO CORPORATION National Labor Relations Act was not intended to empower the National Labor Relations Board to substitute its judgment for that of the employer in the conduct of its business and did not deprive the employer of the right to select or dismiss his employees for any cause except where the employee was actually discriminated against because of his union activities or affliation. It did not authorize the Board to absolve employees from compliance with reasonable regulations for their government and guidance. Ø Ø

It is within their power to inquire on whether or not the exercise of managerial prerogatives was tainted with bad faith or grave abuse of discretion. Thus, if the Labor Artbiter, the NLRC or the higher courts find that the penalty of dismissal is grossly disproportionate, harsh or too severe, they may reduce the sanction to a lighter penalty. This can be done by ordering the reinstatement of the employee without backwages or with limited backwages, and the period he was out of work or the period not covered by the backwages will be considered as the penalty. However, in the absence of bad faith or grave abuse of discretion, the exercise by the employer of is inherent prerogatives should be upheld.

The Prerogatives to choose whom to hire Ø The right to select and appoint employees is the prerogative of an employer-- the privilege of management because such right inheres in the conduct and operation of the business by the employer. Ø Corollary to this right is the prerogative to place new employees on probationary status. The employer has the right or is at liberty to choose

whom to hire that the employer may set or fix a probationary period in order to test and observe the conduct of the employee before hiring them permanently. The prerogative to promote employees Ø Promotion - advancement from one position to another with an increase in duties and responsibilities and usually accompanied by an increase in salary. Ø Essence of promotion : the advancement from one position to another with an increase in duties and responsibilities, and usually accompanied by an increase in a salary. Ø Usually - not all promotions may be accompanied by a corresponding salary increase, nothwithstanding the increase in duties and responsibilites of the employee. Ø Promotion of employees to supervisory, managerial or executive positions rests upon the discretion of the management because such positions are offices that can be held by persons who have the trust of the corporation and its officers. Ø A promotion that is manifestly beneficial to the employee should not give rise to a gratuitous speculation that such a promotion was made simply to deprive the union of membership of the promoted employee, who after all appears to have accepted the promotion. Ø An employee has the right to decline a promotion. There is no law that compels an employee to accept a promotion. An employee cannot be subjected to disciplinary action if he refuses to accept the promotion. Ø However, the moment an employee accepts a promotion to a managerial position or to an office requiring full trust and confidence, he gives up some of the rigd guarantees available to ordinary workers. Upon promotion, he would now be subjected to stricter norm of discipline than ordinary rank-and-file emplyees. Dosch vs. NLRC FACTS: HD was the resident manager of northwest airlines in the Philippines. He was promoted to the position of DirectorInternational Sales and he was to hold office at the Northwest’s general office in USA. HD declined the promotion for personal reasons. He made it known that he preffered to remain as manager in the Philippines. As a result, Northwest considered him resigned, although later on, Northwest took the position that HD was guilty of insubordination. Is HD guilty of subordination? HELD: No, HD is not guilty of subordination. While northwest has the prerogative to promote an employee, HD also has the right to decline the promotion and he cannot be punished for it. There is no law that compels an employee to accept a promotion. A manage in a private concern has the right to be secure in his position, to decline

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos a promotion where, although the promotion carries an increase in salary and rank but results in his transfer to a new place of assignment or station away from his family. (F) Dismissal for soliciting signatures to form a union Case: JUDRIC CANNING V. INCIONG FACTS: NP and other 5 EEs of JCC were found to have solicited membership in a union yet to be organized. JCC removed timecards from rack- hence, EEs could not work anymore and thus they filed a complaint for ULP and illegal dismissal ISSUE/S: WON JCC is guilty of dismissal by ULP HELD: Under Article 248(a) of the Labor Code of the Philippines, "to interfere with, restrain, or coerce employees in their exercise of the 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 employer "to initiate, dominate, assist or otherwise interfere with 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. Consequently, dismissal is illegal. (G) Dismissal for refusing to join the union favoured by the employer Case: PROGRESSIVE DEV’T. CORP. V. CIR FACTS: ACEA (legit. Labor org/LLO) formally informed PDC of its existence and sent also its CB proposals. But supervisors of PDC assisted in the formation of another union (PEU) and persuaded members of ACEA to transfer to such. ACEA members were not given work schedules, working days lessened until they were dismissed from service. PDC contended that ACEA members were not dismissed but simply they had no work to do- since they were just casuals/temporary EEs whose services depended upon availability of work.

clear that the services of the members of the ACEA were also needed, their casual status notwithstanding. It appears that the individual complainants, during show days, were always scheduled to work until June 1962 when they were not included in the schedule anymore.12 This virtually amounted to dismissal, without prior notice. Their not being included in the list of schedule since June 1962 could only be the result of petitioners' earlier threat of dismissal should said complainants refuse to heed petitioners' admonition for them to resign from the ACEA. There is reason to believe that had the individual complainants agreed to resign from the ACEA and to transfer to the PEU, they would not have been separated from their work and would even have been made permanent employees. Thus, a Mrs. Concordia Araiza who was a casual employee of the petitioner corporation, upon her suspension for four (4) hours on representation of the ACEA, became a permanent employee after she handed her resignation from the ACEA Union personally to Jose E. Belmonte, the General Manager of the Progressive Development Corporation. From the facts of record, it is clear that the individual complainants were dismissed because they refused to resign from the Araneta Coliseum Employees Association and to affiliate with the Progressive Employees Union which was being aided and abetted by the Progressive Development Corporation. 7. Remedy for Illegal or Unjust Dismissal -­‐ -­‐ -­‐

ISSUE/S: WON PDC’s contention has merit HELD: This contention is without merit. As testified to by President of the Progressive Employees Union, their members were also casual employees but are now regulars. This fact shows that the casual status of the members of ACEA could not have been the cause of their dismissals. Moreover, as testified to by Concordia Araiza, a witness for petitioners, it was the Personnel Manager who was in charge of assigning ushers and usherettes every time there were scheduled shows; and that while the Araneta Coliseum maintained only such number of ushers, usherettes and janitors, if their services were needed, every time there was a scheduled show or during show days, the Coliseum hired additional personnel. 11 It is, therefore,

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Complaint for Illegal Dismissal (ID) filed with Labor Arbiter (LA)à only recourse available to EE who is illegally or unjustly dismissed Art. 277 as the basis Petition for injunction NOT THE REMEDY o It is not a cause of action in itself but only a provisional remedy- adjunct to the main suit. o Art. 218 emphasizes that the power of the NLRC to issue injunctive writ originates from “any labor dispute” § Without a complaint filed of ID before the LA, there is no labor dispute Case: PAL Inc. v. NLRC

FACTS: FP and GC were flight stewards of PAL who were dismissed because of currency smuggling. Instead of filing a complaint for ID before the LA, they directly filed with the NLRC a petition for injunction praying PAL to be enjoined from dismissing them and to reinstate them to their former position. NLRC issued injunction. ISSUE/S: WON NLRC is correct HELD: No. Power of the NLRC to issue an injunctive writ originates from “any labor dispute”. Without a complaint

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos filed of ID before the LA, there is no labor dispute. This case, there’s no complaint. 8. Relief for unjust or illegal dismissal 8.1. Migrant Workers (MW) -­‐

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Those MW unjustly/illegally dismissed is entitled to: o Full reimbursement of his placement fee with 12% interest per annum o Salaries for the unexpired portion of his employment contract, or 3 mos. Salary for every yeas of the unexpired term, whichever is less. Choice of which amount to award an illegally dismissed MW (WON his salaries for unexpired term, whichever is less, comes into play when employment contract has a term of atleast 1 year. o Evident from words “for every year of the unexpired term” which follows the words “salaries xxx for 3 months.” o To say that worker is only entitled to 3 mos. Salary simply because it is lesser amount is to completely disregard/overlook some words used in statute while giving effect to some § This is contrary to wellestablished rule in legal hermeneutics that in interpreting a statute, care should be taken that every part or word thereof be given effect since the lawmaking body is presumed to know the meaning of the words employed by statute and to have used them advisedly.

8.2. Locally employed workers (LEW) -­‐

If unjustly or illegally dismissed, is entitled to: o Reinstatement without loss of seniority rights and other privileges o Backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from time his compensation was withheld from him up to the time of actual reinstatement o Moral and exemplary damages if dismissal was tainted with malice/BF o Separation pay, under certain conditions

9. Reinstatement -­‐ Relief separate and distinct from Backwages o Usually is a concomitant of Backwages; but the two are not necessarily complements nor award of one is a condition precedent to an award of the other -­‐ Simply means, restores the lost position (while Backwagesà restores lost income)

9.1. Meaning of reinstatement -­‐ -­‐ -­‐

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Restoration to state from which one has been removed/separated Return to position from which he was removed NO reinstatement in cases: o To a position EE which never occupied o To a permanent position of an originally temporary EE A reinstated EE may be required to undergo physical/medical examination in order to determine fitness to work but such should not be a precondition for reinstatement Case: Phil-Am Drug v. CIR

FACTS: AC was employed by PADC as sales supervisor. He was one of the 40 EES terminated because of business losses. Dismissal upheld by CIR but the validity was upon the condition that PADC terminated EEs should be given first priority should it thereafter employ addt’l personnel. FG was appointed branch manager in place of another dismissed, AF. AC contested such and claimed that he should be given first priority. Lower court ruled in favor of AC. ISSUE/S: WON PADC can be compelled to appoint AC as branch manager HELD: No. AC’s position when he was terminated is a sales supervisor and thus he cannot claim to be appointed as branch manager even though there is preferential hiring. Because such privilege does not carry with it the right to be appointed to higher position. -­‐

Case: San Miguel Brewery vs. Santos

FACTS: Temporary guard of petitioner was recommended by union to be hired but instead of hiring him, petitioner dismissed him. Union filed a complaint for ULP against company. Lower court find ULP and ordered company to reinstate temporary guard as permanent guard ISSUE/S: WON lower court was correct HELD: No. On the date of his separation from service, guard was occupying position of temporary guard. In order to be reinstated (restoration to a state from which he was generally removed), he must be reinstated to his former position- temporary guard. 9.2 Meaning of Reinstatement “without loss of seniority rights” -­‐

That upon reinstatement, EE is to be treated in matters involving rank, position and continuity of employment as though he has not been absent from work.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos 9.3. Alternative Relief if reinstatement is no longer possible -­‐

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Cases where reinstatement is no longer possible: o Position no longer exist at time of reinstatement § EE should be given substantially equivalent position o Position previously occupied by EE is already filled up § EE should be given substantially equivalent position • To insist on reinstatement would merely compound the injusticeER to terminate the services of the new hire who replaced the illegally dismissed EE just for latter to assume former position Cases where reinstatement is rendered impossible and Substantially equivalent position is not available à REMEDY: separation pay in lieu of reinstatement o ER has closed down business o ER undertook reorganization resulting to abolition of position previously occupied by EE o ER undertook retrenchment measures or drastic reduction of personnel UNFEASIBLE reinstatementà EE dismissed has reached retirement age of 60 o Relief separation pay is not available o EE entitled only to Backwages up to time when he reached retirement age plus retirement pay Case: Philippine Engineering Corp. V. CIR

FACTS: Petitioner is engaged with purchase, sale and installation and repair of machinery and maintained a machine at Raon Quiapo. But on 1965, such operation machine closed down and was dismantled and transferred resulting to termination of 57 EEs, mostly mechanics and mechanic helpers. Union filed complaint for ULP and lower court ordered for reinstatement of 57 EEs

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9.5. Effect of Employment Elsewhere -­‐

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Unjustly dismissed EE cannot be denied the right to reinstatement simply because he has obtained employment elsewhere o RATIO: dismissed EE cannot be expected to remain idle while his claim is pending adjustment, particularly if he has dependents looking to him for sustenance. If ever he obtained employment elsewhere, it was out of necessity rather than choice. It would be against all justice and equity to force EE to choose between starvation and loss of reinstatement. As long as reinstatement order had not been carried out, dismissed EE is free to seek employment anywhere including in a foreign country. o His departure from Philippines cannot be considered as waiver of his rights to reinstatement o Bare fact of his being actually employed elsewhere in any capacity cannot affect his right to reinstatement, for option on whether to return to his employment or not, is upon EE to decide. If he opts to return, he has to be reinstated, if refuses to return/imposes uncalled for conditions, then and only then would his rights to reinstatement cease.

9.6. Circumstances that preclude reinstatement -­‐

ISSUE/S: WON lower court was correct in ordering reinstatement of 57 EEs HELD: No. AC’s Reinstatement presupposes that the previous position from which one has been removed still exists, or that there is an unfilled position more or less of similar nature as the one previously occupied by the EE. With machine shop being dismantled and transferred, some sold, dismissed EEs could not be returned for reinstatement becomes impossible.

Relief is available only to EEs who is unjustly/illegally dismissed. o If not, as when severance of employment was brought by abandonment/refusal to work, reinstatement cannot be properly ordered.

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Transfer of Business Ownership o If ER sells business during pendency of ID case and EE is adjudged to have been illegally dismissed à reinstatement is precluded o Reason: New owner/buyer is not obliged to absorb the EEs of old owner/seller § Unless there is an expressed assumption of liabilities by the new owner Business reverses o If between time of wrongful discharge and proposed order of reinstatement, ER’s commercial or financial circumstances have changed, ER (even if guilty of ULP) cannot be compelled to reinstate such # of EEs as may exceed his needs under the altered conditions

9.4. Propriety of Reinstatement

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos Reason: ER cannot be compelled by an order of reinstatement to give employment to greater # of persons that economic operations of business required. o But even though reinstatement is not possible, such condition does not justify refusal or denying Backwages Abolition of Position o Position of ID EE has already been abolished, or there’s no substantially equivalent position à reinstatement cannot be carried out Closure of business o Reinstatement presupposes that the previous position from which one has been removed still exists, or that there is an unfilled position more or less of similar nature as the one previously occupied by the EE o If establishment closed its operations à reinstatement impossible Incapacity of EE o Fairness dictates that ER should not be compelled to reinstate an EE who is no longer physically fit for the job from which he was illegally ousted. Attainment of Retirement Age o EE held to be ID cannot be reinstated if he has reached retirement age of 60 y/o Conviction in Criminal case o If EE was dismissed for offense constituting a crime (e.g. theft of company property) and dismissal was held unjust, consequence of which he was reinstated, subsequent conviction will preclude his reinstatement and (payment of Backwages) § Reason: subsequent conviction is a supervening event that rendered unjust and inequitable the reinstatement of EE and conviction affirmed the existence of a valid ground for the dismissal Laches o If reinstatement is not demanded within reasonable time, such will be barred. o This is to give justice to ER too; to allow the management to conduct its business and affairs, considering the dismissal and possibility of the dismissed EE resorting to court action to vindicate his right to continue his employment § E.g. within reasonable time, say 1 year, management may keep the post vacant by not filling it or cover it with temporary EE, giving the latter to understand that should the management be later ordered to make o

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§

reinstatement, temporary EE should vacate his post à this period of uncertainty should not be allowed to continue indefinitely Cases: • NASSCO v. CIR – EE guilty of laches because action for reinstatement was filed after lapse of 17 mos. • Gutierrez v. Bachrach Motor Co. – action for reinstatement barred by laches since it ws filed only after lapse of 17 mos. • Litton Mills Workers Union v. Litton Mills Inc. – 5-year delay was held to be barred by laches.

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Prescription o Action for reinstatement filed after 4 years from date of dismissal will be barred by prescription -­‐ When complaint merely prays for separation pay o When EE merely prays for separation pay, he forecloses his right to reinstatement -­‐ Strained Relations o Even if dismissal is found to be unjust/illegal, reinstatement should not be ordered anymore if the relationship between the parties has become so strained and ruptured as to preclude a harmonious working relationship o Instead, EE should be afforded separation pay § This way, EE is spared the agony of having to work anew with his ER under the atmosphere of antipathy and antagonism while ER does not have to endure the continued services of an EE whom it has lost confidence o Reinstatement is not practical for EE who is no longer welcome and imposing the EE’s position in the company where he is no longer welcome would only poison their relations to their mutual prejudice à irritations would only recur if unwanted EE has to be tolerated by the reluctant ER § This is not conducive to industrial peace o Case: Equitable Banking Corp. v. NLRC: “While the Court agrees with private respondent that execution pending appeal may be ordered by the NLRC it

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos is equally true, however, that where the dismissed employee's reinstatement would lead to a strained relation between the employer and the employee or to an atmosphere of antipathy and antagonism, the exception to the twin remedies of reinstatement and payment of backwages can be invoked and reinstatement, which might become anathema to industrial peace, could be held back pending appeal.” 9.7. When to Invoke Doctrine of Strained Relations -­‐

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Such matter of strained relations should be raised and proved before the LA o UNLESS: strained relations arose after the filing of the case, as when antagonistic feelings that stemmed from the filing of the complaint deepened during the 8-year pendency of the case Such doctrine should not be applied indiscriminately since every labor dispute invariably results in strained relations o Mere filing of complaint for ID à does not by itself justify the application of the doctrine of strained relations o Where differences of the ER with EE are neither personal nor physical much less serious in nature à does not by itself justify the application of the doctrine of strained relations § Otherwise, reinstatement can never be possible because some hostility is engendered between the parties as a result of their disagreement

9.8. Remedy for Refusal to comply with reinstatement order -­‐

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Remedy for refusal to comply with a final order of reinstatement is not a separate action for ID but a motion for issuance of writ of execution o If ER still, despite issuance of writ, refuses to comply à remedy is contempt proceeding (not additional Backwages) Case: Christian Literature v. NLRC

FACTS: Petitioner filed an application for clearance to dismiss LDR on ground of incompetence. Pending resolution, LDR was placed under preventive suspension. Labor Arbiter (LA) rendered decision ordering reinstatement of LDR with 3 years Backwages. Decision became final and executor and hence a writ of execution was issued. Petitioner complied except for the reinstatement part. After 5 mos, lapse, LDR filed motion for issuance of Alias Writ of Execution (reinstatement, th Backwages, allowances and 13 mo. Pay from date of dismissal up to present). LA issued such aside from the 3 year Backwages that has been satisfied. ISSUE/S: WON LDR is entitled to additional backwages

HELD: No. LDR is not entitled to additional Backwages because that would in effect amend the decision sought to be enforced. Once judgement has become final and executor, it may no longer be amended, modified or altered. It must be noted that decision sought to be enforced merely awarded 3 years Backwages. Said award has already been fully satisfied. CLC refused to reinstate LDR and the remedy of such is not the grant of alias writ of execution for additional/continuing Backwages because that would have no basis in the decision sought to be reinforced. Remedy must be contempt proceedings. -­‐

Case: Medina v. Consolidated Broadcasting System o SC held that unjustified refusal of an ER to reinstate an illegally dismissed EE entitles the EE to Backwages, effective from the date the ER failed to reinstate despite an executor writ of execution served upon him. o Ruling here is quite in apparent conflict with Christian Literature v. NLRC which involved refusal to comply with reinstatement order that has become final and executory (whereas in Medina, such involved refusal to comply with reinstatement order pending appeal) o SC held thus:

Petitioners would have us rule on whether or not the refusal of the private respondent to reinstate them would make it liable to pay their salaries pursuant to Republic Act No. 6715: Article 223 of the Labor Code, as amended by Republic Act 6715, pertinently provides: In any event. the decision of the labor Arbiter reinstating a dismissed or separated employee insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of the bond shall not stay the execution for reinstatement provided herein. (Emphasis supplied) xxx Petitioners construe the above paragraph to mean that the refusal of the employer to reinstate an employee as directed in an executory order of reinstatement would make it liable to pay the latter's salaries. This interpretation is correct. Under Article 223 of the Labor Code as amended, an employer has two options in order for him to comply with an order of reinstatement, which is immediately executory, even pending appeal. Firstly, he can admit the dismissed employee back to work under the same terms and conditions prevailing prior to his dismissal or separation or to a substantially equivalent position if the former position is already filled up as we have ruled in Union of Supervisors

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos (RB) NATU vs. Sec. of Labor, 128 SCRA 442 [1984]; and Pedroso vs. Castro, 141 SCRA 252 [1986]. Secondly, he can reinstate the employee merely in the payroll. Failing to exercise any of the above options, the employer can be compelled under pain of contempt, to pay instead the salary of the employee. This interpretation is more in consonance with the constitutional protection to labor (Section 3, Art. XIII, 1987 Constitution). The right of a person to his labor is deemed to be property within the meaning of constitutional guaranty that no one shall be deprived of life, liberty and property without due process of law. Therefore, he should be protected against any arbitrary and unjust deprivation of his job (Bondoc vs. People's Bank and Trust Co., Inc., 103 SCRA 599 [1981]). The employee should not be left with any remedy in case the employer unreasonably delays reinstatement. Therefore, we hold that the unjustified refusal of the employer to reinstate an illegally dismissed employee entitles the employee payment of his salaries, effective from the date the employer failed to reinstate despite an executory writ of execution served upon him. Such ruling is in accord with the mandate of the new law awarding full backwages until actual reinstatement (Article 279 of the Labor Code as amended.)

o o

o

10.4 Full Backwages -­‐

10. Backwages -­‐ -­‐ -­‐

It is not the principal cause of action in an illegal dismissal case Merely one of the reliefs extended to an EE who is unjustly dismissed In illegal dismissal case à Principal cause of action is the unlawful deprivation of one’s employment by the employer in violation of the right of security of tenure

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A form of relief that restores the income that was lost by reason of unlawful dismissal RATIO: an EE whose dismissal is found to be illegal is considered as not having left his office so that he is entitled to all the rights and privileges that accrue to him by virtue of the office that he held

10.2 Distinction between Backwages and Unpaid wages -­‐ -­‐

Backwages à compensation which an EE would have earned had he not be unjustly dismissed Unpaid wages à compensation for services already rendered by the withheld by the ER

10.3 Amount of Backwages that may be awarded -­‐

Art. 279 of the LC provides that an unjustly dismissed EE is entitled to full Backwages from time his compensation was withheld up to the time of his actual reinstatement

Entitles EE who was dismissed on grounds specifically prohibited by law o Under Art. Art. 118, 137, 248(f) and 286 of LC o Ratio: EE should not have been dismissed in the first place Entitles EE who was dismissed without any cause o Ratio: EE does not deserve any penalty considering he has not committed any offense

10.5. Limited Backwages -­‐

10.1 Meaning of Backwages -­‐

This must not mean that unjustly dismissed EE is auto-entitled to full Backwages LA and NLRC have discretion to determine how much Backwages should be awarded taking into account the facts and circumstances of each case Note that dismissal could be illegal or unjust because the EE was dismissed: § On grounds specifically prohibited by law (Art. 118, 248(f) and 286 of LC) § Without any cause whatsoever (EE not committed an offense) § Without just cause (EE committed an offense but penalty of dismissal was not commensurate)

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In situation where EE was dismissed without just cause like EE committed an offense and the penalty of dismissal was found to be too harsh, full Backwages should not be awarded because that would in effect absolve the EE from his wrongdoing Awarded also when there is delay in filing of the complaint of ID (e.g. 2 years lapse) o Period of delay in instituting the action for reinstatement may be deducted from liability for Backwages o A ruling that would permit a dismissed laborer to earn back wages for all time, or for a very long period of time, is not only unjust to the employer but the same would foster indolence on the part of the laborers. The laborer is not supposed to be relying on a court judgment for his support, but should do everything a reasonable man would do; he should find employment as soon as an employment has been lost, especially when the employment has to depend on a litigation. He should try to minimized the loss that may be caused to the employer by looking for other work in which he can be employed

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10.6 No Backwages -­‐

Backwages may not be awarded in any of the following circumstances: o GF on part of ER – as e.g. § ER honestly believed that dismissal was the proper penalty for offense committed, reinstatement without Backwages would be appropriate relief § When ER honestly believed that it could dismiss EE based on a closed shop provision of the CBA o Cessation of employment brought about neither by dismissal nor abandonment § Where the EE’s failure to work was caused neither by his abandonment nor by dismissal, burden of eco. Loss is not rightfully shifted to ER • Each party must bear his own loss and hence, ER not to be liable for bckwages. § Case: Chong Guan v. NLRC

FACTS: JC was employed by CGT as Sales Manager. A customer who borrowed the telephone directory accidentally dropped it on the top of glass of the store’s showcase causing it to break- but JC covered up for the customer. CGT owner got angry and hurled “unprintable words and invectives” and told JC “lumayas ka rito”. Hence, JC did not report to work anymore. JC filed a complaint for ID. Defense of CGT was that it expressed its willingness to accept JC back to work but it was the latter who stopped. LA ruled reinstatement without Backwages. ISSUE/S: WON LA was correct in not awarding backwages HELD: Yes. the Court is convinced that private respondent was never dismissed by the petitioner. Even if it were true that Mariano Lim ordered private respondent to go and that at that time he intended dismiss private respondent, the record is bereft of evidence to show that he carried out this intention. Private respondent was not even notified that he had been dismissed. Nor was he prevented from returning to his work after the incident. The only thing that is established from the record, and which is not disputed by the parties, is that private respondent did not return to his work after his heated argument owners. Moreover, petitioner has consistently manifested its willingness to reinstate private respondent to his former position. This negates any intention on petitioner's part to dismiss private respondent. Petitioner first expressed its willingness to reinstate private respondent during the initial hearing of the case before the Labor Arbiter. Therefore, considering the

Court's finding that private respondent was never dismissed by the petitioner, the award of three years backwages was not proper. Backwages, in general are granted on grounds of equity for earnings which a worker or employee has lost due to his illegal dismissal from work. Where the employee was not dismissed and his failure to work was not due to the employer's fault, the burden of economic loss suffered by the employee should not be shifted to the employer. In this case, private respondent's failure to work was due to the misunderstanding between the petitioner's management and private respondent. As correctly observed by the Labor Arbiter, private respondent must have construed the October 28 incident as his dismissal so that he opted not to work for many days thereafter and instead filed a complaint for illegal dismissal. However, there was no intent to dismiss private respondent since the petitioner is willing to reinstate him. Nor was there an intent to abandon on the part of private respondent since he immediately filed a complaint for illegal dismissal soon after the October 28 incident. It would be illogical for private respondent to abandon his work and then immediately file an action seeking his reinstatement. o

Cessation of employment due to EE’s refusal to work § If cessation of employment was not caused by dismissal but by EE’s refusal to work, ER should not be held liable for Backwages. • E.g. EE who stops working because of her erroneous belief that she was being harassed and persecuted § Case: Dangan v. NLRC

FACTS: AD was employed by TFC as Purchasing Clerk. On may 1, 1980, she was promoted as secretary to the manger of financial services department. In 1981, her boss resigned as clerk-typist in Logistics department. After 3 mos., she was pulled out of the Logistics department and temporarily assigned as billing clerk in the accounting department. After AD’s maternity leave, TFC transferred her to Bicutan as Secretary to Technical Senior Manager. AD viewed this as demotion- that she was harassed for being the secretary of the finance manager whom the management hated. Complaint for illegal demotion was filed and AD told the management that she will not report for work until case has been decided and terminated. NLRC ordered reinstatement but without Backwages. ISSUE/S: WON NLRC was correct in not awarding backwages HELD: Yes. the employer cannot be compelled to pay her backwages during a period when she was not working because of a sincere but mistaken belief that she was being harassed and persecuted for having worked as private secretary to an executive who resigned. The

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos petitioner has the option of accepting a reassignment to the respondent's Bicutan offices without any backwages. Otherwise, she may avail herself of the separation pay to which an employee laid off due to retrenchment is entitled under the law. 10.7. Determination of amount due the EE -­‐

How should the amount due to EE be determined? o “Deduction of earning elsewhere” doctrine § Earnings obtained by the EE elsewhere should be deducted from Backwages awarded to EE pursuant to the principle that EEs should not be permitted to enrich themselves at the expense of their ER and also because of the law’s abhorrence for double compensation o Mercury drug doctrine § Doctrine after the “Deduction of earning elsewhere” doctrine was discarded § Enunciated in the case of Mercury Drug v. CIR § The Backwages due an illegally dismissed EE is fixed at a certain amount (usually 3 years where the case is not terminated sooner) without deduction or qualification § such formula was a realistic, reasonable, and mutually beneficial solution for it relieve(s) the employees from proving their earnings during their lay-offs and the employer from submitting counter-proofs, and thus obviate(s) the twin evils of idleness on the part of the employees and attrition and undue delay in satisfying the award on the part of the employer. o Bustamante doctrine § Backwages to be awarded to an illegally dismissed EE should not, as GR, be diminished/reduced by the earnings derived by him elsewhere during the period of his illegal dismissal • Ratio: EE while litigating the matter of his dismissal, must still earn a living to support himself and family, while full bacwages have to be paid by the ER as part of the

price/penalty he has to pay for illegally dismissing his EE. 10.8. Computation of Backwages of Irregular Workers -­‐

Only fair way to fix Backwages of irregular workers, like piece-rate/seasonal, would be to determine what these workers would have normally earned had they not been dismissed, using basis for that purpose the wages actually earned by other irregular workers doing the same kind of work who have not been dismissed. o Considering such workers do not work continuously throughout the year, it would not be fair to fix their Backwages as if they had worked without interruption, otherwise, they would be receiving compensation greater than those actually earned by other irregular workers who were not separated from service

10.9 Circumstances that forestall the running of Backwages -­‐

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Death o

EE dies during pendency of case, Backwages cannot extend beyond time of death o Ratio: worker can only earn wages only when alive Physical/mental Incapacity o EE becomes physically/mentally incapacitated during pendency of case, Backwages will extend only up to the date of such incapacity because a worker can earn wages only when not totally and permanently incapacitated Attainment of retirement age o Backwages cannot go beyond the retirement age Permanent closure of establishment o Backwages cannot go beyond the date of permanent closure of business Temporary closure of establishment o Backwages cannot accrue in this case § E.g. plant did not operate because of electrical power interruptions/lack of materials/machine repair Confinement in Prison o Backwages cannot accrue during the time when EE was confined in prison (for such worker could not possibly render service to ER and could not earn salary while under detention) Re-Employment of the dismissed EE o Once dismissed EE is re-employed, right to Backwages auto-ceases, otherwise double compensation would result.

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10. 10 Other Benefits -­‐

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Art. 279, LC provides an EE who is unjustly dismissed shall be entitled “to his full Backwages, inclusive of allowances, and to his other benefits or their monetary equivalent” “Other benefits” include: o Transportation and emergency allowances o Vacation leave or Service Incentive leave th o 13 month pay “Other benefits” DO NOT include: o Facilities that are used only during official tour of duty and not for private or personal purpose- uniform, shoes, helmets, and ponchos o Benefits that are enjoyable only if approved by the ER, such as free trip passes. § Reason: because the grant thereof is not a matter of right but subject to discretion of the ER

11. Separation Pay (SP) -­‐ -­‐

Intended to provide the EE money during period in which he will be looking for another employment Distinct from”Backwages” (which is designed to restore income that was lost by reason of unjust dismissal)

11.1 Concept of SP -­‐ -­‐

An aid given to an EE upon his separation from service so that he may have something on which to fall back when he loses his means of livelihood. Amount designed to provide him with the wherewithal during the period that he is looking for employment.

11.2 Purpose of SP -­‐

a social legislation, to alleviate the difficulties which confront a dismissed employee thrown into the streets to face the harsh necessities of life. It is for this reason that the said statute compels the employer to dole out money, reasonable under circumstances, to cushion the adverse effects of sudden separation from employment. This gives the employee a leeway, commensurate to his years of service, to tide him and his family over in the meantime that he goes job hunting. To one who has been accustomed to a certain type of job in one company, adjustment to other job opportunities becomes a problem. Advanced age, too, may reduce him to a low priority in the labor market

11.3 When SP is Proper

Awarded to EE’s who are terminated by reason of: o Redundancy o Installation of labor-saving devices o Retrenchment o Closure of establishment not due to serious business losses o Disease o Lay-off/suspension of operations for more that 6 mos. -­‐ If EE have been unjustly dismissed, is SP proper? o Exceptional circumstances entitling such EE to SP: § If the reinstatement of the EE has been rendered impossible by supervening events (such as: • closure of establishment, • sale/transfer of business ownership, • abolition of position • reduction of personnel • physical incapacity of EE) § If the reinstatement of the EE is no longer feasible • Doctrine of Strained Relations • No substantially equivalent position is available -­‐ If EE was dismissed for a just and valid cause, is he entitled to SP? o GR: Such worker is not entitled o EXCEPTION: SC held that SP may be awarded as measure of social justice even if the dismissal is found to be valid and justified, but only in those instances where EE was validly dismissed for a cause other than serious misconduct or offenses reflecting on his moral character. § Case: Phil. Long Distance Telephone Company v. NLRC “xxx henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than punishing the erring employee for his offense. And we do not agree that the punishment is his dismissal only and that the separation

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos pay has nothing to do with the wrong he has committed. Of course it has. Indeed, if the employee who steals from the company is granted separation pay even as he is validly dismissed, it is not unlikely that he will commit a similar offense in his next employment because he thinks he can expect a like leniency if he is again found out. This kind of misplaced compassion is not going to do labor in general any good as it will encourage the infiltration of its ranks by those who do not deserve the protection and concern of the Constitution” -­‐

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EE resigned from employment, is he entitled to SP? o GR: NO o EXCEPTION: it is stipulated in the employment contract, CBA or established employer practice/policy EE retires from employment, entitled to SP? o GR: NO § He is only entitled to retirement pay, which is different for SP. § Retirement à result of a bilateral act of parties, a voluntary agreement between ER and EEs whereby latter after reaching a certain age agrees and/or consents to sever his employment with the former. § Dismissal à refers to unilateral act of ER in terminating the services of an EE.

12. Damages -­‐ Damages, specifically moral and exemplary damages in unjust dismissal are reliefs prescribed not by the Labor Code but by the Civil Code. -­‐ Entitlement thereto should be established along the principles established by the Civil Code. -­‐ It is not enough for an employee to just prove that he was dismissed without just or due process. Additional facts must be pleaded and proven to warrant the grant of moral damages. -­‐ The employee should prove that his dismissal was attended by bad faith or fraud, or constituted an act contrary to morals, good customs or public policy, and of course, that social humiliation, wounded feelings, grave anxiety, and similar injury resulted therefrom. -­‐ With regard to exemplary damages, the employee should prove that his dismissal was effected in a wanton, oppressive or malevolent manner. Philippine Airlines, Inc. vs. NLRC Held: “Not every employee who is illegally dismissed or suspended is entitled to damages. As a rule, moral damages are recoverable only where the dismissal of the employee was attended by bad faith or fraud, or committed an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. Bad faith does not simply mean negligence or bad judgment. It

involves a state of mind dominated by ill will or motive. It implies a conscious and intentional design to do a wrongful act for a dishonest purpose or some moral obliquity. The person claiming moral damages must prove the existence of bad faith by clear and convincing evidence for the law always assumes good faith.” 13. Relief When There is Neither Dismissal nor Abandonment -­‐ If the employee stops working without him being dismissed and without any intention on his part to abandon his employment, the only relief that could be accorded to the employee would be reinstatement. -­‐ The employee would be entitled neither to back wages nor to separation pay. Under this situation, each party must bear his own loss. Leonardo vs. NLRC FACTS: AF was employed by RMC as supervisor. RMC informed AF that he would be transferred to the Sucat Plant because of his failure to meet his sales quota and that his supervisor’s allowance would be withdrawn. AF reported for work at the Sucat Plant. However, stopped reporting for work and filed a complaint for illegal dismissal on the premise that his transfer was violative of his security of tenure. RMC claimed that it never terminated the services of AF. It merely demoted AF pursuant to company policy. NLRC, finding that AF was not dismissed, ordered his reinstatement but without backwages. Was the NLRC correct? HELD: The NLRC was correct because the demotion of AF was valid and justified. An employer, RMC is entitled to impose productivity standards for its workers, and in fact, non-compliance may be visited with a penalty even more severe than demotion. But the mere fact that AF did not report for work after his demotion should not be construed as abandonment, considering that he immediately filed a complaint for illegal dismissal. The filing of a complaint for illegal dismissal is inconsistent with the idea of abandonment. Accordingly, given that AF may not be deemed to have abandoned his job and neither was he dismissed, the NLRC did not err in ordering his reinstatement without backwages. In a case where the employee’s failure to work was occasioned neither by his abandonment nor by a termination, the burden of economic loss is not rightfully shifted to the employer; each party must bear his own loss. 14. Liability of Corporate Officers -­‐ General rule: Corporate officers cannot be held personally or solidarily liable with the corporation for backwages, damages or other money claims of employees, even if they were impleaded in the complaint. -­‐ Obligations incurred by them, acting as such corporate agents, are not heirs but the direct accountabilities of the corporation they represent.

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This is so because a corporation is invested by law with a personality of its own, separate and distinct from that of its stockholders and officers who manage and run its affairs. Exception: corporate directors and officers can be held personally or solidarily liable with the corporation for backwages, damages or other money claims of employees: a) If the corporate officer acted in bad faith; or b) If the corporation is no longer existing and unable to satisfy the judgment in favor of the employee, in which case, the officers should be held liable for acting on behalf of the corporation. Usually, solidary liability is imposed upon the highest and most ranking officer of the corporation. In Aurora Land Projects vs. NLRC, solidary liability was imposed upon the Administrator/Manager, he being the most ranking officer of the corporation at the time of the dismissal of the employee. In Naguiat vs. NLRC, solidary liability was imposed upon the President of the corporation, he being the highest ranking officer who actively managed the business. Solidary liability, however, does not extend to the Vice President, unless the VP happens to be the highest ranking officer, as when the President of the corporation is the complainant himself. To justify solidary liability, it must be shown that the officers of the corporation deliberately or maliciously designed to evade the financial obligation of the corporation to its employees, or a showing that the officers indiscriminately stopped its business to perpetrate an illegal act, as a vehicle for the evasion of existing obligations, in circumvention of statutes, and to confuse legitimate issues.

A.C. Ransom Labor Union vs. NLRC FACTS: The employees of RANSOM went on strike that was lifted after 15 days. Notwithstanding the lifting of the strike, RANSOM refuse to reinstate 22 strikers, prompting the said strikers to file a complaint for ULP. The lower court ordered the reinstatement of the 22 strikers with backwages. In the meantime, ROSARIO corporation was organized and RANSOM closed down its business. Several motions for execution were filed to enforce the award of backwages, but all of them could not be implemented for failure to find leviable assets of RANSOM. In its last motion for execution, the UNION asked that the officers and agents of RANSOM be held personally liable for the backwages. The LA granted the motion and ordered the issuance of a writ of execution against RANSOM and its 7 officers and directors. HELD: The Labor Arbiter is correct. Under Art. 212 C of the Labor Code, the term “employer” is defined as “any person acting in the interest of an employer, directly or indirectly.” Since RANSOM is an artificial person, it must have an

officer who can be presumed to be the employer, being the person acting in the interest of RANSOM. The corporation is the employer only in the technical sense. The responsible officer of an employer corporation can be held personally liable for non-payment of backwages. If the policy of the law were otherwise, the corporation employer can have devious ways for evading payment of backwages. In the instant case, it would appear that RANSOM, foreseeing the possibility of being held liable for backwages to the 22 strikers, organized ROSARIO to replace RANSOM, with the latter to be eventually phased out if the 22 strikers win their case. RANSOM actually ceased operations after the decision of the lower court was promulgated against RANSOM. In the absence of definite proof as to who is the officer of RANSOM directly responsible to pay the backwages of the 22 strikers, it should be presumed that it is the President of the corporation who can be deemed the chief operation officer. Yuseco vs. Simmons FACTS: HZY was employed by the National City Bank of New York, a foreign banking corporation doing business in the Philippines pursuant to a contract of employment which stipulates: “I understand that I am being hired as a single female employee. In the event of my marriage you may terminate this employment in which case I shall be entitled to no other benefits except my salary through the last day on which I worked.” HZY intended to marry soon. She submitted a resignation letter. Thereafter, HZY filed a complaint for damages against the Manager of the Bank alleging that the manager forced her to resign in implementation of the aforementioned illegal and immoral agreement. The trial Court dismissed the complaint on the ground that HZY was not an employee of the Manager, but of the Bank, hence the cause of action should have been directed against the Bank. Was the trial Court correct? HELD: The trial court was correct. HZY does not have the right to compel the Manager of the Bank to pay damages by reason of her separation. Admittedly, the Manager merely acted as agent of the Bank. There is no allegation that the Manager exceeded his power. Therefore, her remedy should have been to sue the Bank. Such reasoning is in line with well-known principles of agency. “The agent who acts as such is not personally liable to the party with whom he contracts, unless he expressly binds himself or exceeds the limits of his authority.” The principal must comply with all the obligations which the agent may have contracted within the scope of his authority.” Mindanao Motor Line Inc. vs. CIR “xxx respondents Enrique Ponce and Jesus Moraga who were included as such should not be made solidarily responsible for the payment of backwages, together with their employer, the Mindanao Motor Line Inc., for it clearly appears from the record that they were merely agents who acted within the scope of their corporate positions as resident manager and general manager, respectively, of the aforesaid company. Since they were impleaded merely as officers of the company and have acted only as such within the scope of their authority, if any one should be held responsible for the consequences of their acts as such

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos officers, it is their employer, unless of course, it is shown that they have acted negligently or in bad faith. It is a wellknown principle of law that an agent who acts in behalf of a disclosed principal within the scope of his authority cannot be held liable to third persons.” ART 280. Regular and casual employment. – The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.

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Pantranco North Express vs. NLRC FACTS: In 1971, PNEI hired RP as driver. In 1973, RP was dismissed from his employment for being absent without leave for 107 calendar days. 15 years after his dismissal, RP reappeared and implored PNEI to reconsider his dismissal that PNEI initially denied. But due to insistent appeals by RP, PNEI eventually acceded and hired him as driver, but on contractual bases for 1 month. PNEI did not renew the employment contract because of RP’s involvement in a vehicular mishap in Nueva Vizcaya. Is the employment contract valid? HELD: The employment contract is valid. It should be noted that the re-hiring of RP was merely an act of generosity on the part of PNEI and not because PNEI was impressed with the credentials of RP. What Article 280 seeks to prevent is the practice of some unscrupulous and covetous employers who wish to circumvent the law that protects lowly workers from capricious dismissal from their employment. The said provision, however, should not be interpreted in such a way as to deprive employers of the right and prerogative to choose their own workers if they have sufficient basis to refuse an employee a regular status. In the present case, the services of RP was validly terminated 15 years before he was re-hired as contractual driver for just 1 month. Definitely, his rehiring cannot be construed to mean that RP reacquire his former permanent status.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. COMMENT: 1. Significance of the Law -­‐ Article 280 reinforces the Constitutional mandate to protect the interest of labor. -­‐ Its language evidently manifests the intent to safeguard the tenurial interest of the worker who may be denied the rights and benefits due a regular employee by virtue of lopsided agreements with the economically powerful employer who can maneuver to keep an employee on temporary or casual status for as long as convenient. -­‐ To carry out this objective, the law generally considers an employment as regular when the activities performed by the employee are usually necessary or desirable in the usual business or trade of the employer, contrary agreements notwithstanding. -­‐ This is significant because under Article 279 of the Labor Code, in cases of “regular employment,” the employer cannot terminate the services of an employee except for a just cause or for an authorized cause. 2.

Construction of Article 280 -­‐ Article 280 should not be interpreted in such a way as to deprive employers of the right and prerogative to choose their own workers if they have sufficient basis to refuse an employee a regular status. -­‐ Considering that Article 280 is intended to prevent circumvention of the employee’s right to be secure

in his employment, the clause in the said article indiscriminately and completely ruling out all written or oral agreements in conflict with the concept of regular employment should be construed to refer only to the substantive evil the Labor Code itself has singled out – agreements entered into precisely to circumvent security of tenure. It should have no application to instances where a fixed period of employment was agreed upon knowingly and voluntarily by the parties, without force, duress or improper pressure being brought to bear upon the employee and absent any other circumstance vitiating his consent, or where it appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter.

3.

Article 280 – Not a Test of Employer-Employee Relationship. -­‐ Article 280 merely establishes the classification of employment – it is not the yardstick for determining the existence of an employment relationship. -­‐ The existence of EER should be established along the four-fold test laid down in Viana vs. AlLagadan, to wit: a) Selection and engagement b) Payment of wages c) Power of dismissal

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos d)

Power to control the employees’ conduct

4.

Classification of Employment -­‐ Article 280 classifies employment into 3 types: a) regular or permanent b) non-regular or temporary c) casual

5.

Regular or Permanent Employment -­‐ An employment is deemed regular where the employee has been engaged to perform activities that are usually necessary or desirable in the usual business or trade of the employer -­‐ As to whether or not an employment is regular should be determined neither by the employment contract nor by the nomenclature given to it by the employer, but by the nature of the job. -­‐ The primary standard in determining whether an employment is regular or not, is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. If the job is usually necessary or desirable to the main business of the employer, then the employment is, as a general rule, regular. -­‐ In some cases, repeated rehiring and the continuing need for the employee’s service may indicate that the activity is usually necessary or desirable in the usual business or trade of the employer.

Pure Foods Corporation vs. NLRC FACTS: PFC is a corporation engaged in the export of canned tuna fish. Employees performed the task of receiving, skinning, loining, packing and casing-up of tuna fish. Upon expiration of the 5-month contract, the said employees were terminated and replaced with another set of employees. Claiming that they were regular employees who cannot be dismissed without just cause, the affected employees filed a complaint for illegal dismissal with the NLRC. PFC claimed that the complainants were nonregular employees because they were employed for a specific period, hence they are estopped from questioning their separation from service because they had expressed their conformity with the 5-month duration of their employment contracts. Are the complainants regular employees? HELD: The complainants held regular employment, considering that the activities they performed were usually necessary or desirable in the business or trade of PFC which was the processing and canning of tuna fish for export. The mere fact that they were hired on a 5-month contract basis does not mean that their employment was for a specific project or undertaking. The term “specific project or undertaking” contemplates an activity which is not commonly or habitually performed or such type of work which is done on a daily basis but only for a specific

duration of time or until completion. The fact that PFC repeatedly and continuously hired workers to do the same kind of work as that performed by those whose contracts had expired indicates that the said employees were not hired for a specific project or undertaking only. The scheme of PFG was apparently designed to prevent the terminated employees from attaining the status of regular employees. It was a clear circumvention of the employees’ right to security of tenure and to other benefits. The 5-month period should be struck down or disregarded as contrary to public policy and morals. To uphold the contractual arrangement would in effect permit PFC to avoid hiring permanent or regular employees by simply hiring them on a temporary or casual basis. Baguio Country Club vs. NLRC FACTS: BCC is a recreational establishment certified by the DOLE as “entertainment service” establishment. It employed JC on a day-to-day basis in various capacities as laborer and dishwasher for a period of 10 months. Thereafter, JC was hired as gardener and rehired for 1 month and 20 days and his services were thereafter terminated. JC challenged the validity of the termination of his employment. He argued that he could not be dismissed without just cause because he was holding a regular employment. On the other hand, BCC maintained that JC was a contractual employee whose employment was for a fixed and specific period as evidenced by the contracts of employment. Was JC a regular employee? HELD: Considering that JC was repeatedly re-hired to perform tasks ranging from dishwashing and gardening, he held regular employment. Such repeated rehiring and the continuing need for his services are sufficient evidence of the necessity and indispensability of his service to BCC’s business or trade. The law demands that the nature and entirety of the activities performed by the employee be considered. It is not tenable to argue that the aforementioned tasks of JC are not necessary as a recreational establishment, just as it cannot be said that only those who are directly involved in providing entertainment service may be considered as necessary employees. Otherwise, there would be no need for the regular maintenance section of the company. It is of no moment that JC was told when he was hired that his employment would only be on a day-to-day basis for a temporary period may be terminated at any time subject to the company’s discretion. Precisely, the law overrides such conditions which are prejudicial to the interest of the worker. Beta Electric Corporation vs. NLRC FACTS: LP was hired by BEC as clerk typist III for a period of 1 month. Her employment contract was extended 5 times for 1-month each. BEC terminated the services of LP. On the same day she went to the Labor Arbiter on a complaint for illegal dismissal. BEC argued that LP was merely hired on a temporary basis for the purpose of meeting the seasonal or peak demands of the business, hence, hence she may be terminated at will after the accomplishment of her task. Was LP a regular employee?

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos HELD: LP was a regular employee. The fact that her employment has been on a contract-to-contract basis cannot alter the regular character of her employment because contracts cannot override the mandate of the law. Hence, by operation of law, she has become a regular employee. BEC cannot rightfully say that since LP’s employment hinged from contract-to-contract, ergo, it was “temporary.” Under the Labor Code, an employment may only be said to be “temporary” where [it] has been fixed for a specific undertaking the completion of or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. Quite to the contrary, LP’s work is far from being “specific” or “seasonal” but rather, one which is usually necessary or desirable in the usual business or trade of BEC. 6. Non-Regular or Temporary Employment -­‐ General rule: an employment is deemed regular where the employee has been engaged to perform activities that are usually necessary or desirable in the usual business or trade of the employer. -­‐ Exceptions: a. Project employment b. Seasonal employment c. Fixed-term employment -­‐ The activities performed by the employee are usually necessary or desirable in the usual business or trade of the employer, but the law does not consider them a regular employment because the engagement of the employee is only for a limited period.

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-­‐ 6.1 Project Employment -­‐ Project employment is a job that is confined to a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee, regardless of the number of years that it would take to finish the undertaking. -­‐ The mere fact that the employment of employees engaged to perform a specific project has gone beyond 1 year does not detract from, or legally dissolve, their status as project employees. -­‐ The term “specific project or undertaking” contemplates: a. An activity which is not commonly or habitually performed b. A type of work which is done on a daily basis but only for a specific duration of time until completion. -­‐ The term “project” could refer to one or the other of at least 2 distinguishable types of activities: a. A project could refer to a particular job or undertaking that is within the regular or usual business of the employer, but which is distinct and separate, and identifiable as such, from the other undertakings of the company. Example:

construction of a residential condominium. b. A project could also refer to a particular job or undertaking that is not within the regular business of the employer. Such job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer. Example: Five-year expansion program of the National Steel Corporation. Length of service is not the controlling test of project employment. The test of project employment is whether or not the engagement of the employee has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee. The proviso “any employee who has rendered at least one year of service shall be considered a regular employee” relates only to casual employment and not to project employment. In project employment, the duration of employment is coterminous with the work to which the employee was assigned. Once the project is completed, the employment terminates. The employees affected cannot compel the employer to keep them in the payroll because it is unjust to require the employer to maintain them in the payroll while they are doing absolutely nothing except waiting until another project is begun, if at all. If the employment of project employees is terminated by reason of completion, they are not entitled to separation pay.

6.2. Seasonal Employment -­‐ Seasonal employment is a job that is limited to the duration of particular season. -­‐ Example: additional department store employees during Christmas. -­‐ The employment of seasonal employees is coterminus with the duration of the season. -­‐ However, if the same employees are repeatedly engaged every season, they become regular seasonal employees, in which case, they cannot be terminated without just cause. -­‐ During off-season, the employment of regular seasonal employees is not severed but merely suspended. -­‐ The fact that during off-season, the regular seasonal employees are able to get employment elsewhere does not by itself cut their employment relations. Neither can the fact of subjecting them to medical examinations at the beginning of each season make them new employees, because such medical examination is nothing but a mere precautionary measure for the benefit of both the employer and employee.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos 6.3. Fixed-Term Employment -­‐ Temporary employment is not limited to those by nature seasonal or for specific projects with predetermined dates of completion. -­‐ It also includes those to which the parties by free choice have assigned a specific date of termination. -­‐ In an employment for a fixed period, the determining factor is not the activity that the employee is called upon to perform but the day certain agreed upon by the parties. -­‐ A day certain means that which must necessarily come, although it may not be known when. -­‐ If there is no intent to circumvent the law, the validity of the temporary employment should be upheld. -­‐ By way of resume, employment contracts for a fixed period cannot be said to be in circumvention of security of tenure: a. If the fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress or improper pressure being brought to bear upon the employee and without any other circumstances vitiating consent. b. If it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former on the latter. -­‐ Example: overseas employment contracts, appointments to the positions of dean, assistant dean, college secretary, principal, and other administrative offices in educational institutions. -­‐ DOLE implicitly recognizes through its Policy Instructions No. 8 that certain company officials may be elected for what would amount to fixed periods, at the expiration of which they would have to step down, because the stockholders or the board of directors for one reason or another did not reelect them. Brent School vs. Zamora FACTS: DA was engaged by Brent School as Athletic Director under a contract which fixed a specified term of 5 years. 3 months before the expiration of the stipulated period, Brent School advised DA that his employment will be terminated on the expiration date of the employment contract. DA protested the termination of his employment. He argued that although his contract did stipulate that the th same would terminate on the 5 year, he could not be dismissed because he had acquired the status of a regular employee considering that his services were necessary and desirable in the usual business of his employer and that he has already served for 5 years. Is DA correct? HELD: DA is not correct. Considering that there is an employment contract validly entered into without any indication that it was intended to deny DA his right to security of tenure, the employment of DA was validly terminated. The expiration of the employment contract

automatically terminated the employment of DA without the necessity of notice.

Philippine Village Hotel vs. NLRC FACTS: PVH closed down its operations due to serious financial and business reverses. As a result, the services of its employees were terminated. Thereafter, the Union filed a complaint for separation pay, ULP and illegal lockout. NLRC upheld the validity of the closure after finding the losses suffered by PVH to be actual, genuine and of such magnitude as to validly terminate the services of the employees. However, the NLRC directed PVH to give them priority in the hiring of personnel should the operations resume. After almost 3 years, PVH decided to have a 1month dry-run operation to ascertain the feasibility of resuming its business operations. PVH hired the workers whose employments were terminated for 1 month. After which, PVH terminated their services. They claimed that their employment could not be terminated because they were regular employees. Is the contention correct? HELD: The contention is not correct. Their engagement was only for a period of 1 month, which they voluntarily and knowingly agreed. The fact that they were required to render services usually necessary or desirable in the operation of the business during the 1-month dry-run operation does not in any way impair the temporary nature of their employment. In a fixed-term employment, the decisive determinant is not the activities that the employee is called upon to perform, but the day certain agreed upon by the parties – day certain being understood to be that which must necessarily come although it may not be known when. Panaligan vs. General Milling Corporation FACTS: GMC is engaged in the production and sale of livestock and poultry. It employs hundreds of employees, some on a regular basis and others on a casual basis, as “emergency workers.” On different dates, GMC employed emergency workers at its poultry plant under separate “temporary/ casual contracts of employment” for a period of 5 months. Upon expiration of their respective contract, their services were terminated. Claiming that they are regular employees because the work they performed was usually necessary or desirable in the usual business of GMC, the said workers filed a complaint for illegal dismissal. Were the workers regular employees? HELD: The employment of said workers is non-regular. While their employment was necessary in the usual business of GMC, they were employed on a mere temporary basis, since their employment was limited to a fixed period. There was no illegal dismissal when their services were terminated upon the expiration of their contracts. Lack of notice is of no consequence, because when the contract specifies the period of its duration, it terminates on the expiration of such period. 7.

Casual Employment -­‐ Casual employment is a job wherein the activities performed by the employee are not usually

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necessary or desirable in the usual business or trade of the employer. Casual means occasional, coming without regularity. Example: In a sawmill, if a power unit running the mill gets out of order and a mechanic is contracted to fix the engine, the work of the mechanic would be considered as casual because the reparation of the mill is not the actual business of the sawmill but the sawing of lumber. A person hired to repair and paint a building being leased by a company engaged in leasing buildings is not a casual employee because the job is usually necessary or desirable in the business of leasing buildings.

7.1. Casual Employment on Regular Status -­‐ A casual employee who has rendered at least 1 year of service, whether such service is continuous or broken, is considered a regular employee with respect to the activity in which he is employed. -­‐ The regular status attaches to the casual employee on the day immediately after the end of the first year of service. -­‐ The significance of this is that his employment cannot be terminated without just cause while such activity exists. 8.

Article 280 vis-à-vis Article 106 -­‐ Article 106 applies to employees hired through a contractor. -­‐ Article 280 applies to employees directly hired by an employer. DEPARTMENT ORDER NO. 19 (Series of 1993) GUIDELINES GOVERNING THE EMPLOYMENT OF WORKERS IN THE CONTRUCTION INDUSTRY

In the interest of stabilizing and promoting harmonious EER in the construction industry and in order to ensure the protection and welfare of workers employed therein, the following guidelines are hereby issued for all concerned: Section 1. Coverage -­‐ This issuance shall apply to all operations and undertakings in the construction industry and its subdivisions, namely: 1. General building construction 2. General engineering construction and 3. Special trade construction 4. To companies and entities involved in demolition works 5. To those falling within the construction industry as determined by the Secretary of Labor and Employment

Section 2. Employment Status 2.1 Classification of employees a. project employees – those employed in connection with a particular construction project or phase thereof and whose employment is coterminous with each project or phase of the project to which they are assigned. b. non-project employees – those employed without reference to any particular construction project or phase of a project. c. 2.2 Indicators of project employment a. The duration of the specific/ identified undertaking for which the worker is engaged in reasonably determinable. b. Such duration, as well as the specific work/service to be performed, is defined in an employment agreement and is made clear to the employee at the time of hiring. c. The work/service performed by the employee is in connection with the particular project/ undertaking for which he is engaged. d. The employee, while not employed and awaiting engagement, is free to offer his services to any other employer. e. The termination of his employment is reported to the DOLE Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed form on employees’ terminations/ dismissals/suspensions. f. An undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most construction companies. 2.3 Project completion and rehiring of workers a. The employees of a particular project are not separate from work at the same time. b. Upon completion of the project or a phase thereof, the project employee may be rehired for another undertaking provided that such rehiring conforms with the provisions of law and this issuance. In this case, the last day of service in the preceding project should be indicated in the employment agreement. 2.4 Types of non-project Employees a. Probationary employees b. Regular employees c. Casual employees 2.5 Contracting and subcontracting Section 3. Conditions of Employment

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos 3.1 Security of Tenure 3.2 Project employees not entitled to separation pay – if services are terminated as a result of the completion of the project or any phase thereof.

purpose of securing by united action the most favorable conditions regarding wages, hours of labor and other terms and conditions of employment for its members.

3.3 Project employees entitled to separation pay a. Project employees whose aggregate period of continuous employment in a construction company is at least 1 year in the absence of a “day certain” agreed upon. b. If the project or phase of the project has not yet been completed and his services are terminated without just cause or authorized cause, and there is no showing his services are unsatisfactory, the project employee is entitled to reinstatement with backwages to his former position or substantially equivalent position. If reinstatement is no longer possible, the employee is entitled to his salaries for the unexpired portion of the agreement.

Section 6. Liabilities/Responsibilities of the Employer and the Workers 6.1 Requirements of labor and social legislation -­‐ The construction company and the general contractor and/or subcontractor shall be responsible for the workers in its employ on matters of compliance with the existing laws and regulations. -­‐ The prime/general contractor shall exercise sound judgment and discretion in contracting out projects to ensure compliance with labor standards -­‐ Project and non-project employees shall observe the requirements of labor and social legislations and reasonable company rules and regulations on matters pertaining to their obligations. 6.2 Implementation of safety and health standards -­‐ Regional Offices shall strictly enforce the Occupational Safety and Health Standards particularly Rule 1005 on Duties of Employers, Workers and Others Persons, Rule 1410 on Construction Safety. 6.3 Wage Increases -­‐ The wage rates shall be borne by the principals or clients of the construction contractors and the contracts shall be deemed amended accordingly. -­‐ The wage rates shall depend on the skills or level of competence of such employee as determined by NMYCT Trade and Standards subscribed to by the Philippine Construction Industry under the 5 Year Construction Manpower Development Plan date Nov 1991

3.4 Completion of the project - project employees who are separated from work as a result of completion are entitled to the pro-rata completion bonus if there is undertaking for the grant of such bonus. - based on industry practice which is at least ½ month salary for 12 months service. 3.5 Statutory Benefits - monetary and non-monetary 3.6 Payment by results - based of not less than the minimum wage applicable in the region. Section 4. Preventive Suspension -­‐ Project employees may be preventively suspended if their continued employment poses a serious and imminent threat to the life or property of the employer or of their co-workers. -­‐ Shall not last longer than 15 days. -­‐ May extend period provided that during the period of extension, he pays the wages and other benefits due to the worker. -­‐ Notice to the employee to hold a fact- finding investigation Section 5. Self-Organization and Collective Bargaining -­‐ The Department encourages the formation of “trade” unions provided that the formation or activities of a recognized trade union will not prejudice existing bargaining units. -­‐ Trade union refer to a combination of worker of the same trade or of several allied trades, for the

Section 7. Effect on Existing Issuances and Agreements Department Order No. 19 series of 1993 applies only to the construction industry and not to general services contractor. ART 281. Probationary employment. – Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. Art. 281. Probationary Employment. - Probationary employmentshall not exceed six (6) months from the date the employee started working, unless it is covered

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. COMMENT: Concept of Probationary Employment -­‐ A situation 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. -­‐ Employment contract or appointment paper should expressly and specifically state that the engagement of the employee is on probationary basis -­‐ Purpose of probationary employment: To allow the employer to test the working habits and other personal traits of the employee with respect to his fitness for regularization in its company. -­‐ Prerogative of an employer to place new employees on probation. o Prerogative an incident of the employers inherent right to choose whom to hire and whom to decline. Duration of Probationary Employment of Ordinary Employees -­‐ Generally: Probationary period of employment of ordinary employees is limited to six (6) months. -­‐ Exceptions: (a) When the parties to an employment contract or collective bargaining agreement agree on a longer period; (b) When a longer probationary period is established by company policy; or (c) When a longer period is required by the nature of work. Case: Buiser vs. Leogardo (131 SCRA 151) FACTS: B was hired by GDTC as Sales Representative whose job was to solicit advertisements for inclusion in a telephone directory. In her employment contract, B was placed on probationary status for a period of eighteen (18) months. B maintained that her 18-month probationary employment is not valid, considering that the Labor Code fixes the probationary employment as six (6) months. ISSUE: Is the 18-month probationary employment of B valid? HELD: YES. While the Labor Code sets the probationary period of employment at six (6) months, the parties to an employment contract may validly agree on a longer period, such as when the same is established by company policy or when the same is required by the nature of work is to be performed by the employee. In the latter case, there is a recognition of the exercise of managerial prerogatives in

requiring a longer period of probationary employment, especially where the employee must learn a particular kind of work such as selling, or when the job requires certain qualifications, skills, experience or training. In the case at bar, it has been shown that GTDC needs at least 18 months to determine the character and selling capabilities of B as sales representative. Moreover, the 18-month probationary period is recognized by the CBA. -­‐ Where the work for which the employee has been engaged is learnable or apprenticeable in accordance with the standards prescribed by the DOLE, the period of probationary employment shall be limited to the authorized learnerhsip or apprenticeship period. o Upon graduation or upon completion of the learning period, an apprentice or learner may not be put under probationary employment in the same companyin which they trained. § In another company: may be placed on probationary status for six (6) months. Case: Holiday Inn Manila vs. NLRC (226 SCRA 417) FACTS: EH applied for employment with HIM. On April 15, 1991, EH was accepted for “on-the-job training” as a telephone operator for a period of three weeks. On May 13, 1991, after completing her training, she was employed on a “probationary basis” for a period of six (6) months ending November 12, 1991. On November 8, 1991, four (4) days before the expiration of the stipulated deadline, HIM terminated her probationary employment on the ground that her performance had not come up to the standards. Claiming that she was not a probationary employee but a regular employee, EH then filed a complaint for illegal dismissal. ISSUE: Whether or not EH was a probationary employee or a regular employee at the time of her dismissal? HELD: EH was already a regular employee at the time of her dismissal. She had already undergone probationary employment during her “on-the-job training”. Thus, when her services were continued after her training, HIM in effect recognized that she had passed probation and was qualified to be a regular employee. Her services were continued, presumably because they were acceptable, although she was formally placed this time on probation. In effect, therefore, EH was placed on probation twice, first during her 3-week on-the-job training and second during another period of six (6) months. Her probation clearly exceeded the period of six months prescribed by the Labor Code. Duration of Probationary Employment of Teachers -­‐ The standards set or promulgated jointly by the Department of Education and the Department of Labor and Employment shall be applied by the Department of Labor and Employment. -­‐ The probationary period for teaching and academic non-teaching personnel are as follows (DOLE-DECS-CHED-TESDA Order No. 1, 1996):

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(a) For elementary and secondary level -- three (3) consecutive school years of satisfactory service; (b) For tertiary and graduate level – six consecutive semesters of satisfactory service; (c) For tertiary level on trimester service – nine (9) consecutive trimesters of satisfactory service. The School, as employer, is the one who is to set the standards and determine whether or not the services of an employee are satisfactory. It is the right of the employer to shorten the probationary period if he is not impressed with the services of the employee. This prerogative is in accordance with academic freedom and constitutional autonomy which give educational institution the right to choose who should teach.

Case: Cagayan Capitol College vs. NLRC (188 SCRA 658) FACTS: X was initially hired by C College as probationary instructor on a 10-month contract basis which ended on March 31, 1982. Upon expiration of the said contract, he reapplied and was given a new contract commencing on June 1, 1982 and ending March 31, 1983. Thereafter, he re-applied for employment and was given a contract for a fixed period starting June 1, 1983 to March 31, 1984. Upon mutual agreement, the contract was extended to include the summer of 1984 up to May 31, 1984 which is still part of the school year 1983-1984. Upon expiration of said period X sent a letter re-applying for employment with the School. His application, however, was turned down because of various complaints from his students. X filed a complaint for illegal dismissal, claiming that C College had no right to reject his employment on the ground that he had become a regular employee. C College argued that there was no illegal dismissal because it merely terminated the probationary employment of X for failure to qualify for regular employment. ISSUE: Whether or not the termination of X’s employment is valid. HELD: YES. The termination of X’s employment is valid. His employment did not automatically become regular and permanent because his services during the probationary period were not satisfactory. -­‐ With regard to teaching or academic personnel, only those employed on full-time basis can acquire regular or permanent status. -­‐ Part-time teaching or academic personnel are not eligible for regular or permanent employment even if they have satisfactorily completed the required number of years, semesters or trimesters of probationary employement. Extension of Probationary Employment -­‐ Can be extended to give the employee a chance to improve. -­‐ Such extension should be done on or before the expiration of the prescribed period otherwise the

employee will automatically become a regular employee by operation of law. Case: Mariwasa Manufacturing Inc. vs. Leogardo (169 SCRA 465) FACTS: JAD was engaged by MMI as general utility worker on probationary status for a period of six (6) months. Upon expiration of the probationary period, MMI informed JAD that his work was unsatisfactory and had failed to meet the required standards. To give him a chance to improve his performance and qualify for regular employment, instead of dispensing with his service then and there, with his written consent MMI extended his probation period for another three (3) months. His performance, however did not improve and on that account MMI terminated the employement of JAD at the end of the extended period. ISSUE: Whether or not the 6-month probationary period of employment may be validly extended by agreement of the employer and employee? HELD: YES. The extension of the 6-month probationary employment was valid. The extension of JAD’s probation was an act of liberality on the part of MMI in order to afford him a chance to make good after having initially failed to prove his worth as an employee. Such an act cannot now unjustly be turned against MMI’s account to compel it to keep on its payroll one who could not perform according to its work standards. By voluntarily agreeing to an extension of the probationary period, JAD in effect waived any benefit attaching to the completion of the said period if he still failed to make the grade during the period of extension. There is nothing in the law which by any fair interpretation prohibits such a waiver. Termination of Probationary Employment -­‐ The services of an employee who has been engaged on a probationary basis may be terminated for: (a) Any of the causes enumerated in Articles 282, 283 and 284 of the Labor Code; or (b) Failure to qualify as a regular employee in accordance with reasonable standards made known by the employer at the time of his engagement. -­‐ It is not necessary that the entire probationary period be exhausted before the employment could be terminated. o Termination may be done even before the expiration of the probationary period. Case: Manila Electric Co. vs. NLRC (178 SCRA 198) FACTS: RM was hired by MERALCO as messenger on probationary status for five (5) months. In the course of his employment, RM demonstrated a performance that was not satisfactory. Because of this, MERALCO terminated the probationary employment of RM on the fourth month. ISSUE: Whether or not the dismissal was valid.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos HELD: YES. RM was neglectful of his duties. He frequently “played hookey”, taking the rest of the day off and not returning to the office after having performed his errands. The fact that the dismissal was effected one (1) month before the expiration of his probationary employment does not invalidate the dismissal. The provision of Article 280 of the Labor Code that “probationary employment shall not exceed six (6) months” means that the probationary employee may be dismissed for cause anytime before the expiration of six (6) months after hiring. If after working less than six months, he is found to be unfit for the job, he can be dismissed. But if he continues to be employed longer than six months, he ceases to be a probationary employee and becomes a regular or permanent employee. Case: International Catholic Migration Commission vs. NLRC (169 SCRA 606) FACTS: On January 24, 1983, ICMC engaged the services of BG as cultural orientation teacher on probationary status for a period of six (6) months. Three (3) months thereafter, ICMC terminated the employment of BG for failure to meet the prescribed standards as reflected in the performance evaluation. Thereafter, BG filed a complaint for illegal dismissal against ICMC. The Labor Arbiter upheld the validity of the dismissal but ordered ICMC to pay BG her salaries for the unexpired portion of her probationary employment on the ground that the six-month probationary employment was for a definite period which the employer should exhaust in order to give the employees the opportunity to meet the required standards. ISSUE: Whether or not BG is entitled to salaries for the unexpired portion of her probationary employment? HELD: NO. The legal basis of the Labor Arbiter is erroneous. A probationary employee may be dismissed for cause anytime before the expiration of six months after hiring. A probationary employee is one who is on trial by an employer during which the employer determines whether or not he is qualified for regular employment. A probationary appointment is made to afford the employer an opportunity to observe the fitness of a probationer while at work, and to ascertain whether he will become a proper and efficient employee. The word “probationary” as used to describe the period of employment, implies the purpose of the term or period, but not its length. Limitations on the Right to Terminate a Probationary Employment -­‐ The power of an employer to terminate a probationary employment is subject to the following limitations: (a) It must be exercised in accordance with the specific requirements of the contract. (b) The dissatisfaction of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law; and (c) There must be no unlawful discrimination in the dismissal. Policy Instructions No. 11: Summary (pg. 545) TO: All Regional Directors SUBJECT: PROBATIONARY EMPLOYMENT

Under the Labor Code, six (6) months is the general probationary period, but the probationary period is actually the period needed to determine fitness for the job. This period, for lack of a better measurement, is deemed to be the period needed to learn the job. Thus, if the job is apprenticeable then the probationary period is the apprenticeship period, which may be six (6) months, less than six (6) months, or more than six (6) months, depending upon the nature of the job. The probationary employment of professors, instructors and teachers shall be subject to standards established by the Department of Education and Culture. For purposes of determining regular employment, the probationary period served or rendered shall be considered part of the service rendered. The purpose of this policy is to protect the worker and at the same time enable the employer to make a meaningful employee selection. Art. 282. Termination by Employer. - An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and (e) Other causes analogous to the foregoing. COMMENT: Serious Misconduct -­‐ “Misconduct”: improper or wrong conduct. o The transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, wilful in character, and implies a wrongful intent and not a mere error of judgment. -­‐ To constitute a just cause for dismissal, the misconduct must be: (a) Serious; and (b) Related to or in connection with the employee’s work. Misconduct Must Be Serious -­‐ If not serious, it will merely warrant a penalty lesser than dismissal. -­‐ The utterance of a slightly disrespectful language is a misconduct that is not serious so as to call for the imposition of the penalty of dismissal. Case: Samson vs. NLRC (330 SCRA 460) FACTS: During the informal Christmas party of SPC’s Sales and Marketing Division on December 17, 1993, RFS was heard to have uttered, “Si EDT (referring to the

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos General Manager and President of the company) bullshit yan,” while making the “dirty finger” gesture. RFS likewise told his co-employees that the forthcoming national sales conference would be “very bloody one”. For this, RFS was dismissed from his employment on the ground of serious misconduct. ISSUE: Whether or not RFS is guilty of serious misconduct to warrant his dismissal from service? HELD: NO. The misconduct of RFS is not of such serious and grave character as to warrant his dismissal. First, RFS made the alleged offensive utterances and obscene gesture during an informal Christmas gathering of the company’s district sales managers and marketing staff. The gathering was just a casual get-together of employees. Employees should be allowed wider latitude to express their sentiments during these kinds of occasions which are beyond the disciplinary authority of the employer. Second, RFS’ outburst was in reaction to the decision of the management in the “Cua Lim” case. Admittedly, using the words “bullshit” and making lewd gesture to express his dissatisfaction over said management decision were clearly in bad taste but these acts were not intended to malign or cast aspersion on the person of the president and general manager of the company. -­‐ The Samson vs. NLRC case should be distinguished from the following cases where the use of insulting and offensive language was held to constitute serious misconduct justifying the employee’s dismissal. (a) In de la Cruz vs. NLRC, the dismissed employee shouted “saying angpagkaprofessional mo!” and “putanginamo” at the company’s physician when the latter refused to give him a referral slip. (b) In Autobus Workers’ Union vs. NLRC, the dismissed employee called his supervisor “gagoka” and taunted the latter by saying “bakitanong gusto mo, tang ina mo.” -­‐ In these cases, the dismissed employees were held guilty of serious misconduct because they personally subjected their respective superiors to the foregoing verbal abuses. The utter lack of respect for their superiors was patent. (c) In Asian Design & Manufacturing Corporation vs. Deputy Minister of Labor, the dismissed employee made false statements against the foreman (his superior). (d) In Reynolds Philippines Corporation vs. Eslava, the dismissed employee circulated several letters to the members of the company’s board of directors calling the executive vice-president and general manager a “big fool”, “antiFilipino” and accusing him of mismanagement. -­‐ In these cases, the dismissed employees were held guilty of serious misconduct because they made false and malicious statements against their superiors.

Misconduct Must Be in Connection with Employee’s Work -­‐ The act complained of must be related to the performance of the duties of the employee such as would show him to be thereby unfit to continue working with the employer. Case: Aris Philippines vs. NLRC (238 SCRA 59) FACTS: Inside the canteen of the company, EB, a canteen helper, questioned AS about his use of somebody else’s identification card. AS flared up and said: “Walakangpakialam! Kung gusto mo, itaponkoitongmgapagkainninyo.” Forthwith, he began smashing some food items on display for sale at the canteen and then slapped EB which caused her to fall. ISSUE: Whether or not the dismissal is valid? HELD: NO. Although the misconduct committed by AS was serious, still it was not in connection with his work. In order to constitute a just cause for dismissal, the acts complained of must be related to the performance of the duties of the employee such as would show him to be thereby unfit to continue working for the employer. The penalty of dismissal is, therefore, excessive. -­‐ A series of irregularities when put together may constitute serious misconduct. -­‐ Fitness for continued employment cannot be compartmentalized into tight cubicles of aspects of character, conduct and ability separate and independent of each other. Examples of Serious Misconduct -­‐ The following offenses have been held as serious misconduct: (a) Assaulting an agent of a person in authority committed by a security guard. (b) Assaulting a co-employee (c) Drunken and disorderly and pugnacious behaviour. (d) Fighting within company premises. (e) Instigating labor unrest. Willful Disobedience -­‐ Wilful or intentional disobedience thereof, as a general rule, justifies the peremptory dismissal of the employee. -­‐ In order that disobedience to employer’s order can constitute a valid cause for dismissal, the following requisites must be complied with: (a) The disobedience must be wilful or intentional; (b) The order must be reasonable and lawful; (c) The order must be known to the employee; and (d) The order must pertain to or must be in connection with the duties which the employee had been engaged to discharge. Disobedience Must be Willful

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos -­‐

-­‐

Wilfulness of disobedience is characterized by a wrongful and perverse mental attitude rendering the employee’s act inconsistent with proper subordination. Disobedience must be done intentionally, knowingly and purposely, without justifiable excuse.

Order Must be Reasonable -­‐ Reasonableness pertains to the kind or character of directives and commands and to the manner in which they are made. -­‐ Example: A directive prohibiting employees from using company vehicles for private purpose without authority from management is a reasonable order. However, a directive transferring an employee to a position that is nonexistent is an unreasonable order. Order Must be Lawful -­‐ An order is lawful if it is not contrary to law, morals, good customs, public policy or public order. -­‐ A directive obliging employees to purchase goods from the store owned by the employer is an unlawful order because it is contrary to Art. 112 of the Labor Code. o Hence, refusal on the part of the employee to comply with said directive does not constitute wilful disobedience. Order Must be Known to the Employee -­‐ An employee cannot be expected to comply with an unknown order. Order Must be in Connection with the Duties of the Employee -­‐ If the order is not connected with the nature of the employee’s engagement, refusal to obey will not constitute wilful disobedience. Illustrative Cases of Willful Disobedience (a) Refusal to obey a transfer order Homeowners Savings & Loan Association vs. NLRC (262 SCRA 406) FACTS: X was employed as Branch Accountant of the HSLA-San Carlos City (Pangasinan) Branch. She was transferred to the HSLA-Urdaneta (Pangasinan) Branch because of the “exigency to uplift the operational efficiency of the branch.” However, after citing many reasons, X first requested the deferment of her new assignment, but eventually refused to transfer alleging that the new assignment would entail additional expenses and physical exhaustion as Urdaneta is too far away to commute everyday. This prompted HSLA to terminate X’s employment on the ground of wilful disobedience. ISSUE: Is X guilty of wilful disobedience? HELD: YES. X’s refusal to obey the transfer order constitutes wilful disobedience of a lawful order of her employer, and therefore, a valid cause for her dismissal. Castillo vs. CIR (39 SCRA 76)

FACTS: X was employed as lobby boy of a theatre. He was transferred by the floor manager of the theatre from the day shift to the night shift, and at the same time was assigned from Esquire Theater to the Savoy Theater pursuant to the standard practice of rotating employees from one shift to another. X disliked the new assignment because he did not report for work anymore. After three days, X was dismissed from his employment for insubordination and abandonment of work. ISSUE: Is X guilty of insubordination and abandonment? HELD: YES. His dismissal was justified. Isabelo vs. NLRC (276 SCRA 141) FACTS: X, Y & Z were workers at the cocoa plantation of UCPI in Balabagan, Lanaodel Sur. They were directed to transfer to the other project sites at Maguindanao and Sultan Kudarat to augment the undermanned workforce thereat. As a matter of policy, UCPI offered to grant them relocation allowances, relocation expense and living quarters with their family at the transfer site. They refused to obey the transfer order, for which reason, UCPI dismissed them from service. ISSUE: Is the dismissal valid? HELD: YES.Because X, Y and Z are guilty of wilful disobedience. It is perfectly within the prerogative of UCPI to transfer its employees to other sites in order to augment the workforce therein. Their dismissal was justified. (b) Refusal to comply with an order requiring that food requirements should be bought from a single source. St. Lukes Hospital vs. Minister (116 SCRA 240) FACTS: X was Chief Dietician of SLHI. As such, she was tasked with the responsibility of purchasing the food supplies of SLHI. To meet its mounting financial problems, SLHI adopted a policy of purchasing its foodstuffs from SFS only. X was directed to comply with this policy. However, X refused to obey the instruction and continued to purchase food supplies from the old suppliers. As a result, SLHI dismissed X for insubordination. ISSUE: Is X guilty of subordination? HELD: YES. By and large, it is clear that her reaction was one of resistance rather than dutiful obedience, which subordinates owe to orders of superiors. Her dismissal is, valid and justified. (c) Repeated disregard by a bank employee of an office order against temporary overdrafts and drawings against uncollected deposits. Associated Citizens Bank vs. Ople (103 SCRA 130) FACTS: CBTC through its President, issued an office order directing that all temporary overdrafts, whether secured or unsecured by assignment of deposits, should be phased out by April 15, 1975. In disregard of the said order, X, the manager of CBTC-Ayala Branch, allowed the current account of CV to be overdrawn by P574,962.51 because the checks deposited were dishonoured. For violating the office order, CBTC dismissed X from his employment. ISSUE: Whether or not the dismissal is valid? HELD: YES. The violation by X of the office order against temporary overdrafts is insubordination. Hence, his dismissal was valid.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos Gross and Habitual Neglect of Duty -­‐ “Gross”: glaringly noticeable usually because of inexcusable badness or objectionableness. -­‐ “Habitual”: connotes more than just a single or isolated act. -­‐ Reason for authorizing the termination of an employee on the ground of gross and habitual neglect of duty is because of the reciprocal obligations entailed in an employer-employee relationship. o i.e. for the employer to give a just wage and a just treatment and for the employee to render good work, diligence and good behaviour. -­‐ The obligation to give just compensation and treatment carries with it the corollary right to expect from the employee adequate work, diligence and good behaviour. Neglect Not the Same as Negligence -­‐ “Neglect”: indicates that a person has not done that which it was his duty to do – it does not indicate the reason for this failure. -­‐ “Negligence”: a subjective state of the mind o Indicates a particular reason why the man has failed to do his duty, namely because he has not kept the performance of the duty in his mind as he ought to have done. Damage not Essential -­‐ Not necessary for the employer to show that he has suffered damage or prejudice as a result of the employee’s neglect of his duties. o It is enough that the act tends to damage or prejudice the employer. Illustrative Cases of Gross and Habitual Neglect of Duty (a) Prolonged absences Philippine Geothermal vs. NLRC (236 SCRA 371) FACTS: On May 31, 1989, X, who was employed as Steam Test Operator, was accidentally injured when the steampressured chicksan swivel joint assembly exploded while he was checking a geothermal well. As a result, X was confined in a hospital from May 31, 1989 to June 3, 1989. On July 29, 1989, X was certified by the doctor to be fit to return to work with the qualification that he could only perform light work. On November 13, 1989, X was again examined by a doctor who certified that he can go back to his previous job on the sixth month. Despite this certification, X did not report for work and by the end of 1989, he had used 10 days of vacation leave, 18 days of sick leave, 15 days of WCA leave and 4 days of emergency leave. On December 28, 1989, the doctor certified that X’s injury had completely healed and that he could return to his pre-injury work. On the basis of the doctor’s finding, PGI directed X to report for work. But instead of reporting for work, X sent a note to PGI stating to wait for the doctor’s medical

certificate. Notwithstanding the medical findings, X continued to incur numerous absences. He did not report for work in the months of January and February 1990. Thus, on February 7, 1990, PGI sent another letter to X directing him to report for work with warning that failure to do so would subject him to disciplinary action. Still, X did not report for work, prompting PGI to send another letter with a final warning that failure to do so will result in the termination of his employment. Still X failed to report for work; neither did he inform PGI of the reasons for his continued absences. Hence, PGI was constrained to terminate the employment of X. ISSUE: Whether or not the dismissal of X was valid and justified? HELD: YES. X is guilty of gross and habitual neglect of duty. (b) Delivering newly approved credit cards on five (5) occasions to a person hardly known to the employee. Citibank N.A. vs. Gatchalian (240 SCRA 212) FACTS: X was employed by Citibank as clerk-typist. Thirtyone (31) applications for credit cards of alleged APBCI employees were approved by Citibank and the corresponding new and unsigned credit cards were issued. On five (5) separate occasions, upon request of Y, X personally picked up the new and unsigned credit cards issued to seven APBCI employees. Yet at that time, she had not personally met nor previously seen Y. On the mere description over the telephone, X delivered the credit cards to Y. It turned out that the credit card applications of the alleged APBCI employees were fictitious. Some of the credit cards were used to purchase goods from various establishments worth P200,000.00. Hence, Citibank dismissed X for gross and habitual neglect of duty. ISSUE: Is X guilty of gross and habitual neglect of duty? HELD: YES. It was proved that she picked up the newly approved credit cards on five (5) separate occasions and delivered them to Y and the latter’s messenger. Certainly, these repetitive acts bespeak of habituality. (c) Repeated and numerous infractions in the handling of monies. Allied Banking Corporation vs. NLRC (156 SCRA 789) FACTS: X was employed as teller of ABC Bank. During the last six months of her employment, X was found to have committed the following offenses: (1) Incurring a series of shortages; (2) Incurring a long string of overages; (3) Violation of the procedures requiring verification of drawer’s signature and approval of authorized officers prior to payment of checks presented for encashment over the counter; and (4) Failure to observe instructions of superiors to report to the Central Bank Cash Units. For committing the foregoing offenses, ABC Bank dismissed X from service. ISSUE: Is the dismissal valid? HELD: YES. The repeated and numerous infractions committed by her in handling monies entrusted to her

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos cannot be considered minor. Taking into account the nature of the teller’s job, the infractions are too numerous to be ignored or treated lightly. D. Repeated anomalous transactions NASUEFCO v. NLRC (286 SCRA 478) FACTS: Pabiona was appointed as Sugar AccountantBookkeeper. She was tasked to maintain records of all transactions pertaining to the Raw and Refined Sugar Exchange Program, validate Raw Sugar Quedans submitted by Exchange participants prior to issuance of the Refined Sugar Delivery Orders and prepare and issue Refined Sugar Delivery Orders only after validation procedures have been properly complied with. When the books of NASUREFCO were audited in 1990 anomalous and irregular transactions were uncovered in the Raw Sugar Movement Report. After the formal investigation, NASUREFCO terminated the services of Pabiona for willful violation of company policies, gross and habitual neglect of duties, and willful breach of trust. ISSUE: Is SP Guilty of gross and habitual neglect of duty? HELD: Pabiona’s neglect of duty was gross. As her position related to money matters, she was expected and required to be extra vigilant in the performance of her job as it involved the financial interest of the company. She was also habitually remiss in her duties. he fact that NASUREFCO did not suffer losses from the anomalies committed by Pabiona because of timely discovery does not excuse the latter as she was very much aware that her acts would be greatly prejudicial to NASUREFCO. 4. FRAUD Ø Is the knowing misrepresentation of the truth Ø Concealment of a material fact to induce another to act to his or her detriment. Ø To constitute a just cause for dismissal, the fraud must be: a. Committed against the employer; and b. In connection with the employee’s work. Ø Fraud committed against third person without connection whatsoever with work will not justify the dismissal of an employee. Ø Philippine Airlines v. NLRC (328 SCRA 273) FACTS: X was employed as load controller. X reflected a lighter weight of baggage Cominero's ticket to make it appear that the same was within the allowable level. Cominero's excess baggage was pooled with other passengers with lesser baggage weight or no baggage at all. ISSUE: Whether X is guilty of Fraud? HELD: Yes. That private respondent attempted to deprive petitioner of its lawful revenue is already

tantamount to fraud against the company, which warrants dismissal from the service. It must be stressed that actual defraudation is not necessary in order that an employee may be held liable. 5. WILLFUL BREACH OF TRUST Ø Breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse. Ø To constitute a valid cause for dismissal, the breach of trust must be: a. Willful; and b. Related to the performance of the employee’s functions. Ø The basic premise for the dismissal on the ground of willful breach of trust is that employee concerned holds a position of trust and confidence. Ø An employee holds a position of trust and confidence if he is entrusted with responsibility involving: a. Delicate matters b. Where the employees has access to the employer’s property in the form of articles or merchandise for sale. Ø There must be basis for dismissal, mere suspicion or simple apprehension of danger or prejudice is note enough. Ø Proof beyond reasonable doubt is not required, it is enough that there is reasonable grounds. Ø Guidelines for the application of the doctrine of loss of confidence: a. Loss of confidence should not be simulated; b. It should not be used as subterfuge for causes which are improper, illegal or unjustified; c. It may not be arbitrarily asserted in the face of over whelming evidence to the contrary; and d. It must be genuine, not mere afterthought to justify earlier action taken in bad faith. 5.1 POSITIONS OF TRUST AND CONFIDENCE Ø The following have been held as positions of trust and confidence: a. Bank teller; b. Cashier c. Credit and collection supervisor d. District sales supervisor e. Salesman f. Vice president for marketing g. General manager h. Warehouseman i. Miner j. Teachers 5.2 ILLUSTRATIVE CASES A. Engaging in business competitive with that of the employer

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos ELIZALDE INT’L V. CA (103 SCRA 247) FACTS: X was a salesman of Y Co. During the term of his employement X formed an entity which sold competitive product of Tanduay Rhum. Y Co. dismissed X for willful breach of trust. ISSUE: Is X guilty of willful breach of trust? HELD: Engaging in a business in competition with petitioner was not only an act of disloyalty but more specifically a willful breach of the trust reposed in him by petitioner as his employer, which is a just cause for termination. it was the duty of Celestino Galan to promote and sell the products of petitioner, which duty is incompatible with his undisclosed ownership of a company, found to be the source of the new product with the label "TDY RHUM" manufactured by the Mabuhay Distillery Inc., distributed and sold in Cebu, in competition with the Tanduay Rhum" distributed by petitioner.

petitioner had valid and legitimate reasons to lose its confidence in respondent Sevilla and to order his dismissal. E. Failure to return service firearm DI Security Services v. NLRC (264 SCRA 458) FACTS: X was employed as security guard. He was issued a service firearm which he failed to turn over to his employer at the end of his duty. When asked to explain the whereabout of the firearm, X claimed that he gave it to the shift-in-charge, which was denied under oath. X was dismissed. ISSUE: Is the dismissal valid? HELD: Yes, constitute dishonesty which calls for the corresponding penalty of dismissal. F. Failure to return cash bond for unreasonable length of time.

B. Rendering services to a business rival

San Miguel Corporation v. NLRC (125 SCRA 805)

ABS-CBN Employees Union v. NLRC (276 SCRA 123)

FACTS: REBOLOS figured in a vehicular collision. A Criminal case was filed against REBOLOS for Reckless Imprudence resulting in Damage to Property. A bail bond in the amount of P7,000.00 being needed, SMC furnished the amount in cash. REBOLOS posted the cash bond in his name. The case was dismissed on November 22, 1977 when the insurance company paid for the damage sustained. Sometime in May 1978, or six months after, REBOLOS withdrew the cash bond without informing nor remitting the amount to SMC. REBOLOS retained the amount for one year and three months. He was dismissed.

FACTS: A, a camera man of ABS-CBN did not report for the taping of an ABS- CBN production, because he rendered service to another television station PTV4. ABS_CBN terminated X on the ground of disloyalty and willful breach of trust. ISSUE: is X guilty of willful breach of trust? HELD: Yes. He is guilty of disloyalty and serious misconduct of willful breach of trust.

ISSUE: Is the dismissal valid? C. Using a chit already paid by one customer as a means to pocket the payment of another customer. Baguio Country Club v. NLRC (118 SCRA 557) FACTS: X, who was employed as bartender pocketed the payment of the customer and to conceal his misconduct, X utilized the chit that was already paid by another customer. ISSUE:Is X guilty of willful breach of trust? HELD: X is guilty of willful breach of trust, dismissal valid. D. Using double or fictitious requisition slips as a means to withdraw company materials.

HELD: that there was, indeed, breach of trust and confidence by REBOLOS. It was incumbent upon him to have returned the amount of P7,000.00 upon withdrawal knowing that it constituted company funds put up on his behalf only because he was an employee and was driving a company vehicle at the time of the accident. He was accountable for those funds. Instead, he clung to the amount for the long period of one year and three months for reasons of his own. The fact that he returned the amount to SMC upon demand does not exculpate nor mitigate the delay. REBOLOS' act in withdrawing the cash bond and retaining the same for one year and three months and merging it with his family funds without justifiable reason constitutes willful breach of the trust resposed on him.

PLDT v. NLRC (129 SCRA 1630 G. Fomenting distrust and discontent in the company We agree with the petitioner that private respondent Sevilla is guilty of acts inimical to the interests of his employer. The records show that Sevilla took advantage of his position as Cable Splicer Headcrew (Sj-5) to withdraw company properties which should never have been issued to him on the strength of double and/or fictitious requisition slips. The

Reynolds Phils v. Eslava (137 SCRA 259) FACTS: Three anonymous letters were received by W. W. Dunkum, Jr., Reynolds' executive vice-president and general manager, and the members of its board of directors. The first letter called Dunkum a "big fool",

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos criticized his alleged unfairness in giving salary increases and. The second letter was of the same tenor as the first. The third letter informed Reynolds' president, chairman and board of directors that the company was headed for destruction because of the "mismanagement, inefficiency, lack of planning and foresight, petty favoritism, dictatorial policies, one-man rule, contemptuous attitude to labor, antiFilipino utterances and activities of Mr. Dunkum, etc." The letter was written by the personnel manager of the company. He was dismissed.

USDI's demand. On May 25, 1993, he received his letter of dismissal. ISSUE Is X guilty of willful breach of trust? HELD: YES. He occupied a position of trust and confidence. Petitioner relied on him to protect the properties of the company. X betrayed this trust when he ordered the subject lamp posts to be delivered to the Adelfa Homeowners' Association. The offense he commits involves moral turpitude.

ISSUE: Is X guilty of willful breach of trust? HELD: Yes. The company had reason to lose confidence in X because of his misfeasance and malfeasance. His misconduct amounts to breach of trust. H. Pilferage Philippine Airlines v. NLRC (279 SCRA 553) FACTS: X and two other station loaders were ordered to handle the loading of cargoes and pieces of baggage in PAL Flight bound for Manila. The SG allegedly noticed private respondent taking something from one of the loaded baggage and wrapping the same in his PAL service polo shirt. He allegedly threw something into a nearby canal which, when later retrieved, turned out to be a lady's wallet. X was dismissed. ISSUE: Is the dismissal valid? HELD: Yes. The act of taking a wallet of a passenger is tantamount to breach of trust.

K. Violation by a bank cashier of Sec 38 of the Banking Act regarding loans to bank officers and directors. Monte de Piedad v. minister of labor (122 SCRA 444) FACTS: It appears that Mendiola was maintaining a personal savings account of P4,000 with the bank's Fugoso Branch. On May 30, 1978 she deposited to her account a check payable to herself amounting to P4,000 thereby increasing her outstanding balance to P8,000. On June 1, 1978 she withdrew from her account the amount of P5,000 even before her check for P4,000 could be cleared. On June 5, 1978 her check for P4,000 was dishonored, which resulted in an overdrawing of P1,000. However, instead of immediately debiting her savings account she looked for the drawer who replaced the dishonored check on June 8, 1978. ISSUE: guilty of willful breach? HELD: Yes. Guilty of willful breach. L. Concealment by bank manager of true balance of customer’s account.

I.

Theft of company property. Dela Cruz v. NLRC (210 SCRA 680)

Firestone v. Lariosa (148 SCRA 187) FACTS: X was about to leave the company premises Lariosa submitted himself to a routine check by the security guards at the west gate. He was frisked by Security Guard while his personal bag was inspected sixteen [16] wool flannel swabs, all belonging to the company, were found inside his bag, tucked underneath his soiled clothes.

FACTS: X was the branch manager of Y bank. He picked up a cash deposit of 200,000, he did not count the money, alleging it was not practicable. Later, the teller discovered that the money was short of 5,000. To conceal the shortage, X directed to offset the amount to another client of the bank. ISSUE: is X guilty of willful breach of trust?

ISSUE: is the dismissal valid? HELD: X is guilty of breach of trust. HELD: There is no gainsaying that theft committed by an employee constitutes a valid reason for his dismissal by the employer.

M. Repeated and numerous infractions by a bank teller in handling funds.

J. QUALIFIED THEFT

Allied bank v. NLRC (156 SCRA 789)

United South Dockhandlers v. NLRC (267 SCRA 401)

FACTS: X was employed as a teller off Y Bank. She was found guilty of a. incurring a series of shortages; b. incurring a long string of overages; c. violation of procedures and d. failure to observe instructions of superiors to report to the CBU.

FACTS: X ordered his subordinates to load the lamp posts into a cargo truck and had them delivered to Adelfa Homeowners Association. X admitted he took the subject lamp posts and manifested that it was unnecessary to conduct an investigation. He returned the lamp posts upon

ISSUE: Is the dismissal valid?

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos HELD: YES, the acts committed amounts to willful breach of trust. N. Misappropriation of Company Funds San Miguel Corporation v. NLRC (128 SCRA 180) FACTS: X, who was employed as budget clerk, received form acting plant cashier the total amount of 278,805.43 for him to remit. X failed to remit. ISSUE: is the dismissal valid? HELD: yes, breached of trust and confidence reposed in him by his employer. O. Repeated incurrence of cash shortage Piedad v. Lanao Electric Cooperative FACTS: X was a bill collector. It was discovered that X’s collections were short, later he remitted the shortage to the cashier. ISSUE: Is the dismissal valid? HELD: YES. P. Engaging in an anomalous scheme to cover up past due accounts. Gonzales v. NLRC (355 SCRA 195) FACTS: His dismissal stemmed from alleged irregularities attributed to him as Route Manager and concurrently as dealer of Pepsi Cola products. His dealership contract with PCPPI started in 1990. Under the said contract, petitioner was extended by PCPPI a credit line of P300,000.006 payable in thirty (30) days. On November 25, 1992, petitioner as proprietor of RR Store purchased Pepsi Cola products on credit amounting to P116,182.00. The credit transaction was covered by Charge Invoice No. 365508. To cover this transaction, petitioner Gonzales issued a postdated check in the amount of P116,182.00 payable on December 25, 1992. Petitioner calculated that his receivables from respondent PCPPI by way of "concession" amounted to P109,766.00. In another vain effort to undo the damage he had done, petitioner on December 31, 1992 issued a third post-dated check dated January 15, 1993, now covered with the supposed post-dated check receipt which, however, was signed by the petitioner himself and not by the Sales Office Manager who has the sole authority to issue the same. ISSUE: Is X guilty of willful breach of trust? HELD: YES. Private respondent PCPPI has sufficiently shown that petitioner has become unworthy of the trust and confidence demanded of his position. Petitioner betrayed his employer's trust and confidence when he instigated the

issuance by his subordinate salesman of an official receipt for his post-dated check on December 22, 1992 whereby he (petitioner) could have evaded payment to private respondent PCPPI of his debt amounting to P116,182.00. These acts committed by petitioner adversely reflected on his integrity. As Route Manager he disregarded the private respondent company's rules and regulation prohibiting the issuance of official receipt for post-dated check payment unless the same is done by the Sales Office Manager. 6. COMMISSION OF A CRIME Ø Commission of a crime is a ground for dismissal if it is committed by an employee against the person of the: a. Employer; b. Immediate member of his family, or c. Authorized representative of the employer Ø Prior conviction is not required- mere commission of the crime is enough justify the dismissal. 7. ANALOGOUS CAUSES Ø The offense must have an element similar to those found in the specific just causes enumerated under Art 282 of LC. Ø Analogous causes contemplate an act that is due to voluntary or willful act of employee. Ø Illness is not analogous because it is neither voluntary nor willful. Ø Conviction of a crime involving moral turpitude is not analogous to commission of a crime by the employee or to fraud and willful breach of trust. 7.1 ILLUSTRATIVE EXAMPLE OF ANALOGOUS CAUSES a. Gross inefficiency Ø Is closely related to gross neglect b. Inflicting or attempting to inflict bodily injury on the job site on company time c. Unreasonable behavior, quarrelsome, bossy and difficult to deal with Ø Is closely related to just causes enumerated in Art 282 of the LC. Cathedral School of Technology v. NLRC (214 SCRA 551) FACTS: On January 29, 1988, private respondent formally applied for and was appointed to the position of library aide with a monthly salary of P1,171.00. It was at around this time, however, that trouble developed. The sisters began receiving complaints' from students and employees about private respondent's difficult personality and sour disposition at work. Before the opening of classes, or more specifically on June 2, 1989, private respondent was summoned to the Office of the Directress by herein petitioner Sister Apolinaria

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos Tambien, RVM, shortly after the resignation of the school's Chief Librarian, Heraclea Nebria, on account of irreconcilable differences with said respondent, for the purpose of clarifying the matter. Petitioner also informed private respondent of the negative reports received by her office regarding the latter's frictional working relationship with co-workers and students and reminded private respondent about the proper attitude and behavior that should be observed in the interest of peace and harmony in the school library. Private respondent resented the observations about her actuations and was completely unreceptive to the advice given by her superior. She reacted violently to petitioner's remarks and angrily offered to resign, repeatedly saying, "OK, I will resign. I will resign." Thereafter, without waiting to be dismissed from the meeting, she stormed out of the office in discourteous disregard and callous defiance of authority.

A.

VIOLATION OF THE RULE SLEEPING WHILE ON DUTY

AGAINST

OSCO Workers fraternity labor union v. Ormoc Sugar Co. (1 SCRA21) FACTS:X was caught sleeping while on duty. He was warned that repetition will result in his dismissal. on the next month, X was again caught sleeping. HELD: Dismissal is valid. B. VIOLATION OF THE RULE PROHIBITING DRINKING LIQUOR ON COMPANY TIME AND COMPANY PREMISES AND ENGAGING IN AN ADULTEROUS ACT OF SEXUAL INTERCOURSE WITH A MARRIED FEMALE SECURITY GUARD ON COMPANY TIME AND IN COMPANY PREMISES. Standard Microsystems v. NLRC (157 SCRA 410)

ISSUE: Whether the dismissal is valid? HELD: YES. Her unreasonable behavior and unpleasant deportment is analogous to the other “just causes” enumerated in ART 282 of the LC. 8. OTHER VALID CAUSES FOR DISMISSAL a. Violation of company rules and regulations; b. Breach of union security arrangements; c. Participation in an illegal strike; d. Commission of illegal acts during a strike; e. Defiance of return-to-work order in a strike; and f. Sexual harassment 8.1 Violation of company rules and regulations; Ø An employer has the right to promulgate rules and regulations and punish employees violating the same. Ø Despite the employee’s right to self organization, the employers still retains his inherent right to discipline his employees, his normal prerogative to hire or dismiss them. Ø Whether or not dismissal is an appropriate penalty for violation of company rules and regulations will depend upon the surrounding facts and circumstances of each case. Ø Factors such as gravity of the offense, position occupied, and habitualness would have to be considered. Ø In the case of Stanford Microsystems, Inc. v. NLRC: • The imposable penalty is suspension for not more than 30 days, but the SC upheld appropriateness of the penalty of dismissal by the employer because the gravity of the offense. Ø The following violations of the company rules have been held to constitute valid cause for dismissal:

FACTS: X was employed as security coordinator. X allowed two female SG to come inside the security office and drinks with them. X also had sexual intercourse with on of the female SG on the top of the desk of the security head. ISSUE: is the dismissal proper? HELD: Yes. No employer may rationally be expected to continue in employment a person whose lack of morals, respect and loyalty to his employer. C. VIOLATION OF SAFETY RULES. Northern Motors v. NLU (102 SCRA 958) FACTS: it is company policy that smoking is prohibited. It has been proved and is not disputed that Alcantara was an experienced painter and, having worked with the petitioner for some time, he knew that smoking in a painting booth is extremely hazardous. ISSUE: Is the dismissal Valid? HELD: YES. Such smoking has been shown to be dangerous, because the painting booth contained inflammable dusts and materials and there were painters who could proceed to take up a spray gun and paint without warning, thereby multiplying the danger of conflagration from any flame. Indeed, the petitioner insisted in the rule against smoking in the painting booth to protect the very lives of its employees, especially those in the painting booth. D.

VIOLATION OF ABSENTEEISM.

RULES

AGAINST

Manila Electric Co. vs. NLRC (263 SCRA 531) FACTS: After such administrative investigation was conducted by petitioner, it concluded that private respondent was found to have grossly neglected his duties by not attending to his work as lineman from Aug. 2, 1989 to September 19, 1989 without notice to his superiors. ISSUE: Valid dismissal?

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos HELD: Yes. An employee's habitual absenteeism without leave, which violated company rules and regulations is sufficient cause to justify termination from service. E.

VIOLATION PROCEDURE

OF

AIRCRAFT

PARKING

Philippine Airlines Inc., v. NLRC (194 SCRA 139)

HELD: Dismissal is valid. Needless to state, a pilot must be sober all the time for he may be called upon to fly a plane even before his regular scheduled hours, otherwise so many lives will be in danger if he is drunk. It would be unjust for an employer like herein petitioner PAL to be compelled to continue with the employment of a person whose continuance in the service is obviously inimical to its interests.

FACTS: On or about 12:55 in the afternoon, the aircraft was towed from the PAL technical center to Bay 16 area at the NAIA. While the Boeing 747 was being towed, the airplane collided with the bridge at Bay 16 causing damage to the plane's left landing light and the left wing flop and scratching its No. 2 engine. Consequently, on June 1, 1985, Pinuela was placed under preventive suspension and was charged administratively. After investigation by the PAL Administrative Board, he was dismissed from the service effective July 1, 1985.

G. VIOLATION OF THE RULE REQUIRING THAT THE TICKET- BOOTH OF THE THEATER SHOULD BE CLOSED AT ALL TIMES AS A PRECAUTION AGAINST HOLD-UPS

The Labor Tribunal opined that "Pinuela could not be blamed for the accident as he relied on the signal of the headsetman (Camina) who still signaled to him despite the fact that the nose of the aircraft being towed was about to overshoot the yellow line and the aircraft wing was about to hit the airbridge."

HELD: The dismissal is valid. X violated company policy.

ISSUE: valid dismissal? HELD: YES. towing an aircraft is a group activity necessitating group coordination. This is explicit in petitioner's Engineering and Maintenance Manual which states, "that the tug operator must undertake and/or continue on towing/pushing procedure only when positive visual contact with all guidemen is possible." The use of, "all necessary guidemen" indicates plurality or group coordination. Thus, instead of relying solely on the signals of Camina, Pinuela should have also checked with the other ground crew personnel.

Castillo v. CIR (39 SCRA 76) FACTS: Mayfair theater has a standing instruction that ticket booth should be closed all the time. X was caught leaving the ticket booth open.

8.2 BREACH OF UNION SECURITY ARRANGEMENT. Ø

The recognition of this ground is set forth in ART 248 a. “Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement.“

8.2.1 LIMITATIONS A.

F.

VIOLATION OF THE RULE PROHIBITING PILOTS FROM DRINKING LIQUOR PRIOR TO A FLIGHT.

Philippine Airlines, Inc. v. NLRC (124 SCRA 538) FACTS: The charge of petitioners against Gempis was “serious misconduct (abuse of authority)” for forcing First Officers A. Barcebal and J. Ranches to drink on February 27, 1980, at 10:30 in the evening at the coffee shop of the Triton Hotel at Cebu, six (6) bottles of beer each, within thirty minutes. Unable to consume the bottles of beer within the time limit set by private respondent Salvador Gempis, the two pilots were ordered to stand erect and were hit on the stomach by private respondent. The petition alleged that “the incident occurred with the full knowledge of private respondent that the two (2) affected co-pilots have flight duties the next day with initial assignments as early as 0710 H (7:10 a.m.) and as late as 1200H (12:00 p.m.).

Employees who are already members of another union at the time of the signing of the CBA cannot be dismissed for refusing to join the contracting union. B. Employees who refuse to join the contracting union because of prohibition imposed by their religion cannot likewise be dismissed. C. If it was the contracting union itself who refused to accept the employee as its member, the union cannot validly ask for the dismissal of the employee. D. If the employee resigns from the contracting union during freedom period, the union cannot validly ask for the dismissal of the employee. 8.3 PARTICIPATION IN AN ILLEGAL STRIKE Ø Any union officer or worker who knowingly participates in illegal strike may be declared to have lost his employment

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos 8.4 COMMISSION OF ILLEGAL ACTS DURING A STRIKE Ø Any union officer or worker who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment 8.5 DEFIANCE OF RETURN-TO-WORK ORDER Ø If the strikers do not return to work, an illegal act is committed. 8.6 SEXUAL HARASSMENT Ø Is committed by an employer, employee, manager, supervisor, or agent of the employer who, having authority, influence or moral ascendancy over another, demands, requests or otherwise requires any sexual favor from another, regardless of whether the demand, request or requirement is accepted. Ø Sexual harassment is committed: a. The sexual favor is made as a condition in the hiring or in the employment, reemployment or continued employment of said individual, or in granting said individual favorable compensation, terms, conditions, promotions, or privileges; or the refusal to grant the sexual favor results in limiting, segregating or classifying the employee which in any way would discriminate, deprive or diminish employment opportunities or otherwise adversely affect said employee; b. The above acts would impair the employee’s rights or privileges under existing labor laws; or c. The above acts would result in an intimidating, hostile, or offensive environment for the employee. Ø

Ø

The power emanates from the fact that the superior can remove the subordinate from the workplace if the latter would refuse his amorous advances. The act of an assistant manager in touching a female’s subordinate hand, massaging her shoulder and caressing her nape, was considered as sexual harassment.

VILLARAMA VS. NLRC (236 SCRA 283) FACTS: X, a Materials Manager invited Y and the other female employees of the Materials Department to a dinner. After taking them to dinner, Y thought that X would bring her home, but instead brought her to a motel. Because of this, Y resigned. The employer conducted an investigation and required an explanation from X. for failure to submit, X was terminated. ISSUE: W/n the dismissal was valid and justified HELD: YES. As a managerial employee, X is bound by a more exacting work ethics. He failed to live up to this higher

standard of responsibility when he succumbed to his moral perversity. And when such moral perversity is perpetrated against his subordinate, he provides a justifiable ground for his dismissal for lack of trust and confidence. ADDITIONAL CAUSES FOR TERMINATING SCHOOL PERSONNEL 1. Gross inefficiency and incompetence in the performance of his duties, such as, but not necessarily limited to habitual and inexcusable absences and tardiness from his classes, willful abandonment of employment or assignment 2. Negligence in keeping school or student records, or tampering with or falsification of the same 3. Conviction of a crime, or an attempt on or a criminal act against the life of any school official, personnel, or student, or upon the property or interest of the school 4. Notoriously undesirable 5. Disgraceful or immoral conduct 6. Selling tickets or the collecting of any contributions in any form or for any purpose or project whatsoever, whether voluntary or otherwise, from pupils, students and school personnel, except membership fees of pupils and students in: a. Red Cross b. Girl Scouts of the Philippines c. Boy Scouts of the Philippines 7. In the event of phasing out, closure or cessation of the educational program or course or the school itself 8. Other causes analogous to the foregoing as may be provided by Secretary of Education, Technical Education and Skills Development Authority (TESDA), or in the school rules or in a collective bargaining agreement REPUBLIC ACT No. 7877 AN ACT DECLARING SEXUAL HARASSMENT UNLAWFUL IN THE EMPLOYMENT, EDUCATION OR TRAINING ENVIRONMENT, AND FOR OTHER PURPOSES. Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Section 1. Title. - This Act shall be known as the "AntiSexual Harassment Act of 1995." Section 2. Declaration of Policy. - The State shall value the dignity of every individual, enhance the development of its human resources, guarantee full respect for human rights, and uphold the dignity of workers, employees, applicants for employment, students or those undergoing training, instruction or education. Towards this end, all forms of sexual harassment in the employment, education or training environment are hereby declared unlawful. Section 3. Work, Education or Training -Related, Sexual Harassment Defined. - Work, education or training-related sexual harassment is committed by an employer, employee, manager, supervisor, agent of the employer, teacher, instructor, professor, coach, trainor, or any other person who, having authority, influence or moral ascendancy over another in a work or training or education

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos environment, 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. (a) In a work-related or employment environment, sexual harassment is committed when: (1) The sexual favor is made as a condition in the hiring or in the employment, re-employment or continued employment of said individual, or in granting said individual favorable compensation, terms of conditions, promotions, or privileges; or the refusal to grant the sexual favor results in limiting, segregating or classifying the employee which in any way would discriminate, deprive ordiminish employment opportunities or otherwise adversely affect said employee; (2) The above acts would impair the employee's rights or privileges under existing labor laws; or (3) The above acts would result in an intimidating, hostile, or offensive environment for the employee. (b) In an education or training environment, sexual harassment is committed: (1) Against one who is under the care, custody or supervision of the offender; (2) Against one whose education, training, apprenticeship or tutorship is entrusted to the offender; (3) When the sexual favor is made a condition to the giving of a passing grade, or the granting of honors and scholarships, or the payment of a stipend, allowance or other benefits, privileges, or consideration; or (4) When the sexual advances result in an intimidating, hostile or offensive environment for the student, trainee or apprentice. Any person who directs or induces another to commit any act of sexual harassment as herein defined, or who cooperates in the commission thereof by another without which it would not have been committed, shall also be held liable under this Act. Section 4. Duty of the Employer or Head of Office in a Work-related, Education or Training Environment. - It shall be the duty of the employer or the head of the work-related, educational or training environment or institution, to prevent or deter the commission of acts of sexual harassment and to provide the procedures for the resolution, settlement or prosecution of acts of sexual harassment. Towards this end, the employer or head of office shall: (a) Promulgate appropriate rules and regulations in consultation with and joint1y approved by the employees or students or trainees, through their duly designated representatives, prescribing the procedure for the investigation of sexual

harassment cases and the administrative sanctions therefor. Administrative sanctions shall not be a bar to prosecution in the proper courts for unlawful acts of sexual harassment. The said rules and regulations issued pursuant to this subsection (a) shall include, among others, guidelines on proper decorum in the workplace and educational or training institutions. (b) Create a committee on decorum and investigation of cases on sexual harassment. The committee shall conduct meetings, as the case may be, with officers and employees, teachers, instructors, professors, coaches, trainors, and students or trainees to increase understanding and prevent incidents of sexual harassment. It shall also conduct the investigation of alleged cases constituting sexual harassment. In the case of a work-related environment, the committee shall be composed of at least one (1) representative each from the management, the union, if any, the employees from the supervisory rank, and from the rank and file employees. In the case of the educational or training institution, the committee shall be composed of at least one (1) representative from the administration, the trainors, instructors, professors or coaches and students or trainees, as the case may be. The employer or head of office, educational or training institution shall disseminate or post a copy of this Act for the information of all concerned. Section 5. Liability of the Employer, Head of Office, Educational or Training Institution. - The employer or head of office, educational or training institution shall be solidarily liable for damages arising from the acts of sexual harassment committed in the employment, education or training environment if the employer or head of office, educational or training institution is informed of such acts by the offended party and no immediate action is taken. Section 6. Independent Action for Damages. - Nothing in this Act shall preclude the victim of work, education or training-related sexual harassment from instituting a separate and independent action for damages and other affirmative relief. Section 7. Penalties. - Any person who violates the provisions of this Act shall, upon conviction, be penalized by imprisonment of not less than one (1) month nor more than six (6) months, or a fine of not less than Ten thousand pesos (P10,000) nor more than Twenty thousand pesos (P20,000), or both such fine and imprisonment at the discretion of the court. Any action arising from the violation of the provisions of this Act shall prescribe in three (3) years. Section 8. Separability Clause. - If any portion or provision of this Act is declared void or unconstitutional, the remaining portions or provisions hereof shall not be affected by such declaration. Section 9. Repealing Clause. - All laws, decrees, orders, rules and regulations, other issuances, or parts thereof

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos inconsistent with the provisions of this Act are hereby repealed or modified accordingly. Section 10. Effectivity Clause.- This Act shall take effect fifteen (15) days after its complete publication in at least two (2) national newspapers of general circulation. Approved: February 14, 1995 (Sgd.) FIDEL V. RAMOS President of the Philippines Art. 283. Closure of establishment and reduction of personnel. – The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. ECONOMIC JUSTIFICATIONS FOR TERMINATING AN EMPLOYMENT 1. Installation of labor saving devices 2. Redundancy 3. Retrenchment to prevent losses 4. Closing or cessation if operation of the establishment v v

Grounds for terminating an employment that are not attributable to the fault of the employee Although the employee is not at fault, the law nevertheless authorizes the termination of employment in recognition of certain business realities, particularly, the prerogative of every business concern to institute appropriate measures to ensure increased productivity, economic viability and competitiveness

INSTALLATION OF LABOR SAVING DEVICE v Right of the employer to effect more economy and efficiency in its method of production v Employer’s right to follow economic policies that would insure profit to itself o PURPOSE: To mechanize or modernize its business even in the process, it results in the dismissal of a number of employees

REDUNDANCY v The services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise v A position is superfluous o FACTORS: o Overhiring of workers o Decreased volume of business o Dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise v Exercise of business judgment, the wisdom or soundness of which is beyond the discretionary view of the labor courts v Does not necessarily refer to duplication of work v Can exist even if there is no other person holding the same position as that held by the employee declared to be redundant v REASON: An employer cannot be compelled to give employment to a greater number of person than the economic operations of his business requires REQUISITES OF A VALID REDUNDANCY PROGRAM 1. Good faith in abolishing the redundant positions 2. Faith and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished 3. Written notice served in both the employees and the Department of Labor and Employment (DOLE) at least one (1) month prior to the intended date of termination v

The employer’s good faith in implementing a redundancy program is not necessarily destroyed by the engagement of an independent contractor to replace the services of the terminated employees

RETRENCHMENT v Reduction of personnel due to actual or anticipated losses, lack of work, or reduction in the volume of business v “Retrenchment to prevent losses” o Art. 283, Labor Code o An employer can adopt retrenchment measures even before the anticipated losses are actually sustained o Resorted to by an employer primarily to avoid or minimize business losses o The lawmaker did not intend that the losses shall have in fact materialized before adopting retrenchment measures v Potential losses that are speculative cannot justify retrenchment THE FOUR STANDARDS OF RETRENCHMENT (Substantive Requirements of Retrenchment) 1. The expected losses should be substantial and not merely de minimis in extent

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos 2.

3.

4.

That substantial loss apprehended must be reasonably imminent, as such imminence can be perceived objectively and in good faith by the employer It must be reasonably necessary and likely to effectively prevent the expected loss. It must be resorted to as a means of last resort, after less drastic means, have been tried and found wanting or insufficient The alleged losses already realized and the expected imminent losses sought to be forestalled, must be proven by sufficient and convincing evidence

REQUISITES OF VALID RETRENCHMENT 1. That the retrenchment is reasonably necessary and likely to prevent losses which, if already incurred, are not merely de minimis but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer 2. That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees’ right to security of tenure 3. That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as: a. Less preferred status, i.e., whether they are temporary, casual, regular, or managerial employees b. Efficiency c. Seniority d. Physical fitness e. Age f. Financial hardship for certain workers 4. That the employer served written notice both to the employee and the Department of Labor and Employment at least one month prior to the intended date of retrenchment 5. That the employer pays the retrenched employees separation pay v

Must be proved by clear and convincing evidence

CLOSURE OF ESTABLISHMENT v Permanent closure v Temporary closure – legal effect is governed by Art. 286 of the Labor Code v The right to close the entire establishment carries with it the right to close a part thereof, hence, closure may be TOTAL or PARTIAL v Can be exercised even if the employer is not suffering from serious business losses or financial reverses v Must be done in good faith or with no intent to lockout its employees as a means to coercing them to its demands

REQUISITES OF VALID CLOSURE 1. The closure of business must be bona fide in character 2. A written notice must be served upon the employees and the DOLE at least one month before the intended date of closure 3. The employer must give separation pay to the employees, if the closure was not due to serious business losses RELOCATION OF PLANT v Relocation of plant may amount to closure PROCEDURAL REQUIREMENT v The employer should serve a written notice at least once (1) month in advance to the: 1. Affected employees 2. Department of Labor and Employment v Must be served personally upon the employee concerned v The mere posting of the notice of termination of employment on the employees’ bulletin board does not substantially comply with the statutory requirement v “One month” = thirty (30) days v FAILURE TO COMPLY – Subject the employer to sanction in the nature of indemnification or penalty, the amount of which will depend on the facts of each case and the gravity of the omission committed by the employer PURPOSE OF NOTICE v To obviate abrupt and arbitrary dismissal and to enable the employee to survive while he is looking for another job v EMPLOYEE – to give him some to prepare for the eventual loss of his job v DOLE – opportunity to ascertain the veracity of the alleged cause for termination AMOUNT OF SEPARATION PAY v At least one (1) month pay or the following amount, whichever is higher 1. ONE (1) MONTH PAY FOR EVERY YEAR OF SERVICE a. Installation of labor-saving device b. Redundancy 2. ONE-HALF (½) MONTH PAY FOR EVERY YEAR OF SERVICE a. Retrenchment to prevent losses b. Closure of establishment NOT due to serious business losses v NO SEPARATION PAY – Closure of establishment due to losses

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos PHILOSPHY BEHIND THE GRANT OF SEPARATION PAY v To enable the employee to have something on which to fall back when he loses his job COMPUTATION OF SEPARATION PAY v The latest salary shall be used o EXCEPTION – latest salary was reduced by the employer to defeat the intention of the Labor Code o Salary rate before deduction shall be used v SEASONAL EMPLOYEES – one-half of their respective average monthly pay during the last season multiplied by the number of years they actually rendered service o SEPARATION PAY = ½ of average monthly pay last season X number of years they actually rendered service o Worked at least 6 months Art. 284. Disease as ground for termination. – An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year. CONDITIONS FOR TERMINATING AN EMPLOYMENT DUE TO ILLNESS 1. That the continued employment of the sick employee is prohibited by law or is prejudicial to his health or to the health of his co-employees 2. That there is a certification from 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 six (6) months even with proper medical unit v v

The mere fact that an employee is suffering from a disease does not ipso facto make him a sure candidate for dismissal The required medical certificate cannot be dispensed with

Art. 285. Termination by employee. – (a) An employee may terminate without just cause the employeeemployer relationship by serving a written notice on the employer at least one (1) month in advance. The employer upon whom no such notice was served may hold the employee liable for damages. (b) An employee may put an end to the relationship without serving any notice on the employer for any of the following just causes:

1. 2. 3.

4.

Serious insult by the employer or his representative on the honor and person of the employee; Inhuman and unbearable treatment accorded the employee by the employer or his representative; Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his family; and Other causes analogous to any of the foregoing.

TERMINATION OF EMPLOYMENT BY THE EMPLOYEE 1. Voluntary resignation 2. Constructive resignation (abandonment of employment) 3. Involuntary resignation (constructive dismissal) VOLUNTARY RESIGNATION v Formal renouncement or relinquishment of an office v Voluntary act of severing an employment relation at the initiative of the employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of service that he has no other choice but to dissociate himself from his employment v Must be unconditional and WITH INTENT to operate as such v There must be an INTENTION TO RELINQUISH a portion of the terms of the office accompanied by an act of relinquishment v Can be inferred from the wordings of the letter or memorandum v Inferred from the actuations of the employee PHILIPPINES TODAY V. NLRC (267 SCRA 202, 215) v Incendiary words and sarcastic remarks negate alleged desire to improve relations v Allegre’s choice of words and the way of expression betray his allegation that the memorandum was simply an ‘opportunity to open the eyes of Belmonte to the work environment in petitioner’s newspaper with the end of persuading her to take a hand at improving said environment.’ Apprising his employer (or top-level) management of his frustrations in his job is certainly not done in an abrasive, offensive and disrespectful manner. A cordial or, at the very least, civil attitude, according due deference to one’s superiors, is still observed, especially among high-ranking management officers. Here, respondent Alegre was anything but respectful and polite. His memorandum is too affrontive, combative and confrontational. It certainly causes resentment, even when read by an objective reader.

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos JOHN CLEMENTS CONSULTANTS, INC. V. NLRC (157 SCRA 635) FACTS: X sent a telex message to the President of the company advising of his desire to discuss terms of his separation from employment even by telex. Thereafter, X and the President met whereupon X reiterated his desire to resign. The President, however, advised him to first take a 2-week leave to meditate on his future with the company. When his leave ended, X again met with the President and for the third time expressed his wish to resign irrevocably. His resignation was then accepted, and he was told that a written communication was expected and should state that it would be effective immediately, conformably with the usual practice. Unaccountably, X did not submit any resignation letter. Thus, the President issued a memorandum announcing the resignation of X. Three months later, X filed a complaint for illegal dismissal. ISSUE: W/n X was dismissed from his employment HELD: NO. He resigned voluntarily, his offer to resign being unconditional and irrevocable. RESIGNATION BECAUSE OF THREAT TO FILE CRIMINAL ACTION v The voluntariness of resignation is not negated by the fact that the resignation was brought about by the threat of the employer to file criminal action for estafa against the employee who has misappropriated company funds. v A threat to enforce one’s claim through competent authority, if the claim is just or legal, does not vitiate consent. CALLANTA V. NLRC (225 SCRA 526) FACTS: During a spot audit, VC was found to have incurred a tentative shortage. When he was showed the spot audit report, VC was handed a readymade resignation letter and he was made to sign the same, otherwise an estafa case will be filed against him. On the basis of this threat, he tendered his resignation. He filed a complaint for illegal dismissal seven (7) months after. ISSUE: W/N the resignation of VC was voluntary HELD: YES. There is no showing that his resignation was obtained by means of coercion and intimidation. The threat of his employer to file an estafa case against him does not constitute intimidation because such threat is not an unjust act, but rather a valid and legal act to enforce a claim. RESIGNATION AS ALTERNATIVE TO DISMISSAL v The voluntariness of resignation is not negated by the fact that the employer persuades an employee to resign instead of being dismissed for cause v If a result of reorganization, the employee is given the option to resign or be terminated with separation pay, and the employee chooses to resign, the resignation is still voluntary SAMANIEGO V. NLRC (198 SCRA 111) FACTS: Because of serious financial crisis, the management resolved to reorganize by streamlining its operations and eliminating middle management positions. The management gave the affected employees the

following option: (a) termination of employment with separation pay or (b) voluntary resignation with terms more financially advantageous than the first option. X chose the second option and signed the company-prepared resignation letters. Accordingly, he was paid the benefits under the second option. Later on, X changed his mind saying that he received the benefits under protest, and thereafter filed a complaint for illegal dismissal. ISSUE: W/N the resignation of X was voluntary HELD: YES. Notwithstanding the intended reorganization of the company, the affected employees were given the option to resign from the company with corresponding benefits attending such option. X and the other affected employees opted for resignation on account of these negotiated benefits. In termination cases, the employee is not afforded any option; the employee is dismissed and his only recourse is to institute a complaint for illegal dismissal against his employer, assuming that there are valid grounds for doing so. In this particular case, X and the other affected employees were given the option to resign. It was the option they chose. Thus, there is no illegal dismissal to speak of. SICANGCO V. NLRC (235 SCRA 96) FACTS: The Company informed RS that his position will be declared redundant. He was assured of benefits due him under the law. He did not protest. In fact, he negotiated for, and was able to get, higher separation benefits. In accordance with his agreement with the company and before the declared redundancy of his position took effect, RS tendered his resignation. Accordingly, the company paid him separation benefits. Thereafter, he filed a complaint for illegal dismissal. ISSUE: W/N the resignation of RS was voluntary HELD: YES. He resigned from his employment after he was informed that his position has become redundant. There is no indication that he was coerced into resigning from the company. There is nothing illegal with the practice of allowing an employee to resign instead of being separated for just cause, so as not to smear his employment. ONE MONTH NOTICE v An employee who intends to voluntarily resign from his employment should give his employer a written notice (resignation letter) at least one (1) month in advance v WITHOUT 1-MONTH NOTICE – employer can hold him liable for damages v The employer cannot compel him to render service during the period as it amounts to involuntary servitude. PURPOSE OF THE ONE-MONTH NOTICE v To enable the employer to look for a replacement and therefore, prevent a disruption of work WAIVER OF THE ONE-MONTH RULE v The one-month notice may be waived by the employer

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos v

The rule requiring an employee to stay or complete the 30-day period prior to the effectivity of his resignation is discretionary on the part of the employer

PHIMCO INDUSTRIES V. NLRC (273 SCRA 286) FACTS: On August 14, 1991, RC tendered his letter of resignation to take effect on August 30, 1991. During the 15-day period, he continued to report for work. In the meantime, no action was taken by the company with respect to his letter of resignation. After the lapse of the 15day period, the Human Resources Manager directed RC, who was already in the US, to explain why he did not observe the 30-day notice requirement. Thereafter, the company terminated his services for failure to observe the 30-day notice. It also forfeited his separation benefits. ISSUE: W/N RC is entitled to separation benefits HELD: YES. While RC failed to comply with company rules and regulations regarding resignation, he did not outrightly disregard the same. Before the expiration of the 15-day period, he still reported for work. Significantly, the fact that his letter of resignation was acted only after he had left for the US opens avenues for speculations and suspicions. While he continued to work to await the acceptance of his resignation, he was not even informed of the status thereof or that he had to stay for fifteen (15) days more. Evidently, there was bad faith in the manner his resignation was resolved. The rule of requiring an employee to stay or complete the 30-day period prior to the effectivity of his resignation becomes discretionary on the part of management as an employee who intends to resign may be allowed a shorter period before his resignation becomes effective. In the instant case, the non-compliance with the period should not be used by management as a subterfuge to avoid the payment of separation (resignation) benefits due the employee. EFFECT OF ACCEPTANCE OF RESIGNATION v Resignation may not be withdrawn without the consent of the employer. v The moment an employee resigns and his resignation is accepted, he no longer has any right to the job v IF EMPLOYEE CHANGES HIS MIND – he must ask for approval of the withdrawal of his resignation from his employer o EMPLOYER ACCEPTS – employee retains his job o EMPLOYER DOES NOT ACCEPT – employee cannot claim illegal dismissal REASON: Employer has the right to determine who his employees will be This is in recognition of the contractual nature of employment which requires mutuality of consent between the parties. An employment contract is CONSENSUAL and VOLUNTARY A resigned employee who desires to take his job back has to re-apply therefor, and he shall have

the status of a stranger who cannot unilaterally demand an appointment. ENTITLEMENT TO SEPARATION PAY v GENERAL RULE: An employee who voluntarily resigns from his employment is not entitled to separation v EXCEPTION: 1. Stipulation in the employment contract 2. Collective bargaining agreement 3. Sanctioned by established employer practice or policy CONSTRUCTIVE RESIGNATION (Abandonment of Employment) v Deliberate, unjustified refusal of an employee to resume his work v Voluntary act of the employee akin to voluntary recognition v Employee just quits his employment without notice v When an employee his employment, there is constructive resignation 2.7 Entitlement to Separation Pay General Rule: An employee who voluntarily resigns from his employment is not entitled to separation pay. Exception: When stipulated in the employment contract When stipulated in the CBA If sanctioned by established employer practice or policy. 3. Constructive Resignation (Abandonment of Employment) Abandonment of Employmentis the deliberate, unjustified refusal of an employee to resume his work. When an employee abandons his employment, there is constructive resignation. The difference between abandonment of employment and voluntary resignation is that the employee quits his employment without notice. 3.1 Elements of Abandonment of Employment a.) Absence without notice, permission or justifiable reason b.) Intent to sever the employer-employee relationship. Mere absence does not by itself indicate abandonment of employment. There must be overt acts unerringly pointing to the fact that the employee does not want to work anymore.

§

v

v

Intent can be inferred from the following: a.) Failure of the employee to comply with notices or directives for him to report for work; b.) Failure to report for work within a reasonable time after expiration of leave of absence without pay; c.) Failure to report for work despite disapproval of application for indefinite leave of absence; d.) Prolonged absences without justifiable reason

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos General Rule: Intent to abandon is negated by the immediate filing of a complaint for illegal dismissal. Exception: When the complaint for illegal dismissal does not pray for reinstatement, but only for separation pay. 3.2 Abandonment and Absence Without Leave (AWOL) Abandonment AWOL There is no There is intent to intention to return return to work. to work. The issue of whether or not an employee abandoned his employment is a question of fact. The burden is on the employer to show clear and deliberate intent on the part of the employee to discontinue employment without intention of returning. An employee can still be sanctioned for absence without leave, in the event abandonment is not proven. 4. Involuntary Resignation (Constructive Dismissal) Involuntary resignationis a situation where an employee is constrained to quit his job because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank, diminution in pay or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee. Grounds Under Art 285(b) a.) Serious insult by the employer or his representative on the honor and person of the employee; b.) Inhuman and unbearable treatment accorded the employee by the employer or his representative; c.) Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his family; and d.) Other causes analogous to any of the foregoing. 4.1 Serious Insult Upon the Honor and Person of the Employee Where an employee who quits his employment after being demoted without just cause. CASES Jarcia Machine Shop vs. NLRC 266 SCRA 97 AT was employed at JMS for 16 years. On January 11, 1993 he absented himself from work to take care of his children. When he returned the next day, he was informed that he was under suspension and the employer forthwith insulted him. AT tried several times to return to work, but he was met with the same circumstances. AT was constrained to quit his employment. Issue: W/N AT was constructively dismissed? Held: YES. AT was constructively dismissed because he was forced to quit his employment as a result of his demotion without just cause. Gaco vs. NLRC 230 SCRA 260 X was employed as Production Recorder in Orient Leaf Tobacco Corporation. She held this position for 14 years.

Then on April 1990 she returned for her working season but found another employee occupied her position. She had been demoted to the position of Picker. Issue: W/N X was constructively dismissed? Held: YES. Demotion without justifiable cause is tantamount to constructive dismissal. 4.2 Inhuman and Unbearable Treatment Where an employee quits his employment because of a legitimate desire for self-preservation. CASE Singa Ship Management Phils.vs. NLRC 288 SCRA 692 MS worked on the vessel Crown Odyssey, which had Greek and Filipino crewmembers. There were hostilities between the Greeks and Filipinos on board. The Greek deck steward, constraining him to leave his employment, subjected MS to several intimidation and scuffles. Issue: W/N there was illegal dismissal? Held: YES. MS quit his employment because he feared for his life and his fear was well-founded. 4.3 Commission of a Crime Where the employer or his representative commits rape, physical injuries, mutilation, abortion, infanticide, homicide, murder, parricide, etc. against the employee or the immediate members of his family. 4.4 One-Month Notice Not Required The employee can leave his employment immediately. 4.5 Relief for Constructive Dismissal The appropriate relief is separation pay plus indemnities in the form of nominal damages or back wages. Reinstatement is not a proper relief because of strained relations between the parties. ART.286.When Employment Not Deemed Terminated.– The bona fide suspension of the operation of a business or undertaking for a period not exceeding six (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. COMMENT 1. Suspension of Business Operations The standard by which to judge the validity of the exercise of the prerogative to lay-off or suspend business operations is good faith. If done in bad faith, the employment relationship is deemed uninterrupted. The affected employees are entitled to their wages during the lay-off. Some grounds for lay-off a.) Lack of work b.) Lack of materials

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Arts. 226-286, Labor Code (Labor Relations) Atty. Paulino Ungos c.) Reduction in volume of business d.) Losses in business operations e.) Repair and cleaning of machinery f.) Year-end inventory If the lay-off exceeds 6 months, constructive dismissal ensues. The employees would be entitled to separation pay, except when there are serious business losses. 1.1 Temporary Off-Detail/Floating Status Temporary Off-Detailin security parlance means waiting to be posted. The inactivity should not exceed six months, or the security agency is liable for constructive dismissal. CASES Agro Commercial Security vs. NLRC 175 SCRA 790 Agro is a service corporation which provided security and janitorial services. Subsequently, Agro’s contracts with clients were terminated because of sequestration by the PCGG. The employees were put under floating status. Issue: W/N being under floating status amounts to constructive dismissal? Held: NO. Being put under floating status does not per se amount to dismissal. But if it continues beyond 6 months, then it can be considered as such. Valdez vs. NLRC 286 SCRA 87 NELBUSCO hired V as driver. Subsequently the bus driven by V suffered from faulty air-conditioning. V was told to wait as the air-conditioning of the bus was repaired. Several months later, V discovered that the bus he was previously driving was assigned a new route as an ordinary bus under a new driver. Issue: W/N there was constructive dismissal? Held: YES. The floating status of V lasted beyond six months, hence he can be considered dismissed from service. 2. Fulfillment of Military or Civic Duty The worker’s employment is deemed suspended even if the service rendered to military or civic duties exceed six months. Requisites: a.) The employee must signify his desire to resume work not later than 1 month from his relief from said military or civic duty. The payment of wages and benefits shall be subject to special laws, decrees and to applicable individual or collective bargaining agreement and voluntary employer practice or policy.

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