LAW ON LABOR RELATIONS.pdf

NOTES ON LABOR RELATIONS

Kenneth & King Hizon (2A)- UST Faculty of Civil Law

UNIVERSITY OF SANTO TOMAS Faculty of Civil Law A.Y. 2011-2012 Second Semester

LAW ON LABOR RELATIONS

PRELIMINARIES

basis for organizing for purposes of collective bargaining (CB) since there is no labor relation to speak of.

Q: WHAT DOES LABOR RELATIONS MEAN? Four-Fold Test A: It refers to the interactions between employer and employees or their representatives and the mechanism by which the standards and other terms and conditions of employment are negotiated, adjusted and enforced. Q: WHAT IS LABOR RELATIONS LAW? A: It defines the status, rights, and duties and the institutional mechanisms that govern the individual and collective interactions of employers, employees or their representatives. It is concerned with the stabilization of relations of employer and employees and seeks to forestall and adjust differences between them by the encouragement of collective bargaining (CB) and the settlement of labor disputes through conciliation, mediation and arbitration.

Q: WHAT FACTORS DETERMINE THE EXISTENCE OF SUCH RELATIONSHIP? A: In determining the existence of employer–employee relationship, the elements that are generally considered comprises of the so-called “four–fold test” namely: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee with respect to the means and methods by which the work is to be accomplished. (The Labor Code with Comments and Cases 2007, Azucena, Vol I, p.158) Pertinent Constitutional Provisions on Labor Relations Q: WHAT ARE THE PERTINENT CONSTITUTIONAL PROVISIONS ON LABOR RELATIONS?

Q: WHAT IS COLLECTIVE BARGAINING (CB)? A: It is a democratic framework to stabilize the relation between labor and management to create a climate of sound and stable industrial peace. It is the process of negotiation between an employer and employee’s organization or union to reach agreement on the terms and conditions of employment for a specified period. Q: CAN THERE BE COLLECTIVE BARGAINING WITHOUT AN EMPLOYER-EMPLOYEE RELATIONSHIP?

A: Labor Relations policy is embodied in Section 3, Article XIII of the 1987 Constitution which guarantees to all workers their right, among others, to: a. Self – organization; b. Collective bargaining and negotiations; c. Peaceful concerted activities including right to strike in accordance with law; d. Security of tenure; e. Humane conditions of work; f. Living wage; and g. Participation in policy and decision-making processes involving their rights and benefits as may be provided by law.

A: NO. Employer-employee relationship must exist so that labor relations law may apply within an enterprise. Absent an employer-employee relation, there is no

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NOTES ON LABOR RELATIONS

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BOOK FIVE LABOR RELATIONS Title I - POLICY AND DEFINITIONS Chapter I -POLICY Art. 211. Declaration of Policy. A. It is the policy of the State: a. To promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes; b. To promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social justice and development; c. To foster the free and voluntary organization of a strong and united labor movement; d. To promote the enlightenment of workers concerning their rights and obligations as union members and as employees; e. To provide an adequate administrative machinery for the expeditious settlement of labor or industrial disputes; f. To ensure a stable but dynamic and just industrial peace; and g. To ensure the participation of workers in decision and policy-making processes affecting their rights, duties and welfare. B. To encourage a truly democratic method of regulating the relations between the employers and employees by means of agreements freely entered into through collective bargaining, no court or administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or other terms and conditions of employment, except as otherwise provided under this Code. LABOR STANDARDS v. LABOR RELATIONS Q: Differentiate labor standards from labor relations.

LABOR STANDARDS Refers to the minimum terms and conditions of employment which employees are legally entitled to and employers must comply with.

LABOR RELATIONS Refers to the interactions between employer and employees or their representatives and the mechanism by which the standards and other terms and conditions of employment are negotiated, adjusted and enforced.

NOTE: The government labor relations policy is declared in Art. 211 which is a focused elaboration of the basic labor policy announced in Art.3 which, in turn, echoes the constitutional mandates. The policy intends to attain social justice through industrial peace and progress. The latter is founded on employee participation and collective interactions between employer and employees. In Management parlance, the input is the parties’ rights and duties, the process is worker’s organization and collective bargaining, and the output is industrial peace and progress towards social justice as the end goal. WORK STOPPAGE NOT FAVORED BY LAW Work stoppage—known as “strike” by employees or “lockout” by the employer—is not favoured in law. It is recognized as a legal right but regulated as to the purpose and manner of doing it. Deviation from the mandatory requirements has adverse consequences to the violators. Work stoppage, because it is counterproductive, is and has to be considered a measure of last resort. RATIONALE BEHIND LABOR UNIONISM The principle behind labor unionism in private industry is that industrial peace cannot be secured through compulsion by law. Relations between private employers and their employees rest on an essentially voluntary basis. Subject to the minimum requirements of wage laws and other labor and welfare legislation, the terms and conditions of employment in the unionized private sector are settled through the process of collective bargaining.

A:

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Because labor relations are primarily “domestic,” third parties, even the Government, shy away from meddling, as much as it can be helped. This is why an in-house problem solving structure, called grievance machinery, is a requirement in CBAs. If this machinery fails, the parties themselves are free to select any third party, called voluntary arbitrator, to resolve their differences. The laws, as a force that balances the parties’ rights and obligations, are admittedly necessary in the industrial setting. WORKER’S ORGANIZATION

NOTE: The union is the recognized instrumentality and mouthpiece of the laborers. VOLUNTARY MODES OF SETTLING DISPUTES UNDER ART. 211 Q: WHAT ARE THE ALTERNATIVE MODES OF SETTLEMENT OF LABOR DISPUTE MENTIONED UNDER ART. 211 OF THE LABOR CODE? A: The modes mentioned are voluntary arbitration, conciliation and mediation.

Q: WHAT IS A WORKER’S ORGANIZATION?

Q: WHAT IS ARBITRATION?

A: A labor or trade union is a combination of workmen organized for the ultimate purpose of securing through united action the most favourable conditions as regards wages, hours of labor, conditions of employment, etc., for its members.

A: It is the submission of a dispute to an impartial person for determination o the basis of evidence and arguments of the parties. The arbiter’s decision or award is enforceable upon the disputants. It may be voluntary (by agreement) or compulsory (enforced by statutory provision).

In the popular sense a labor union is understood to be a completely organized body of dues-paying members, operating through elected officers and constituting a militant, vital and functioning organ. It may be said that while every labor union is a labor organization, not every labor organization is a labor union. The difference is one of organization, composition and operation.

Q: WHAT IS MEDIATION? A: It is when a third party studies each side of the dispute then makes proposals for the disputants to consider. The mediator cannot make an award nor render a decision.

Q: WHY DO WORKERS ORGANIZE?

Q: WHAT IS CONCILIATION?

A: Self-help through economic action necessarily requires increasing the bargaining power of employees; hence one of the basic purposes of a labor union is to eliminate competition among employees in the labor market.

A: It is the process where a disinterested third party meets with management and labor, at their request or otherwise, during a labor dispute or in collective bargaining conferences, and by cooling tempers, aids in reaching an agreement.

Q: WHAT ARE THE FORCES THAT LED WORKERS TO ORGANIZE?

Q: CAN THE COURT FIX RESORT TO VOLUNTARY ARBITRATION?

A:

A: Except for compulsory arbitration under Art. 263 par.(g), resort to voluntary arbitration dispute, should not be fixed by the court but by the parties relying on their strengths and resources.

1.) One is the desire for job security. 2.) Employees wished to substitute what we should term “the rule of law” for the arbitrary and often capricious exercise of power by the boss. 3.) Finally, unions helped to give employees a sense of participation in the business enterprises of which they are part—a function of labor unions which became important as organizations spread into mass production industries.

Q: WHO ARE THE PARTIES TO LABOR RELATIONS CASES? The parties to a labor relation case are as follows: (a) the employee’s organization; (b) the management; and

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(c) the public. NOTE: Employer and employees are active parties while the public and the state are passive parties. CONCEPT OF TRIPARTISM Q: WHAT IS THE CONCEPT OF TRIPARTISM IN LABOR RELATIONS? A: Tripartism is the representation of the three sectors – the public or the government, the employers, and the workers – in policy-making bodies of the government. Q: CAN WORKERS INSIST THAT THEY BE REPRESENTED IN THE POLICY MAKING IN THE COMPANY? A: NO. Such kind of representation in the policy-making bodies of private enterprises is not ordained, not even by the Philippine Constitution. What is provided for is workers participation in policy and decision-making process directly affecting their rights, benefits, and welfare.

Chapter II -DEFINITIONS Art. 212. Definitions. a. "Commission" means the National Labor Relations Commission or any of its divisions, as the case may be, as provided under this Code. b. "Bureau" means the Bureau of Labor Relations and/or the Labor Relations Divisions in the regional offices established under Presidential Decree No. 1, in the Department of Labor. c. "Board" means the National Conciliation and Mediation Board established under Executive Order No. 126. d. "Council" means the Tripartite Voluntary Arbitration Advisory Council established under Executive Order No. 126, as amended. e. "Employer" includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer. f. "Employee" includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless the Code so explicitly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair

labor practice if he has not obtained any other substantially equivalent and regular employment. g. "Labor organization" means any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment. h. "Legitimate labor organization" means any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof. i. "Company union" means any labor organization whose formation, function or administration has been assisted by any act defined as unfair labor practice by this Code. j. "Bargaining representative" means a legitimate labor organization whether or not employed by the employer. k. "Unfair labor practice" means any unfair labor practice as expressly defined by the Code. l. "Labor dispute" includes 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. m. "Managerial employee" is one who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book. n. "Voluntary Arbitrator" means any person accredited by the Board as such or any person named or designated in the Collective Bargaining Agreement by the parties to act as their Voluntary Arbitrator, 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 that 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.

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o. "Strike" means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. p. "Lockout" means any temporary refusal of an employer to furnish work as a result of an industrial or labor dispute. q. "Internal union dispute" includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by-laws of a union, including any violation of the rights and conditions of union membership provided for in this Code. r. "Strike-breaker" means any person who obstructs, impedes, or interferes with by force, violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours or conditions of work or in the exercise of the right of self-organization or collective bargaining. s. "Strike area" means the establishment, warehouses, depots, plants or offices, including the sites or premises used as runaway shops, of the employer struck against, as well as the immediate vicinity actually used by picketing strikers in moving to and fro before all points of entrance to and exit from said establishment.

EMPLOYER Q: WHO IS AN EMPLOYER? A: “Employer” refers to any person or entity who employs the services of others, one for whom employees work and who pays their wages or salaries. An employer includes any person directly or indirectly acting in the interest of an employer. It shall also refer to the enterprise where a labor organization operates or seeks to operate. An employer may be brought into bargaining and economic relationship with persons not in his actual employ; such persons are given the status and tights of “employees” in relation to him, in order to accord to them the protection of the Act. Thus, The nature of a “labor dispute” does not require that the disputants should stand in the proximate relation of employer and employee, with consequent protection of concerted activities carried out by many persons belonging to several employers. Q: WHAT IS THE RULE REGARDING CESSATION OF WORK?

EMPLOYEE Q: WHO ARE EMPLOYEES? A: The term “employee”: 1.) shall include any employee 2.) and shall not be limited to the employee of any particular employer, unless the Act so explicitly states otherwise 3.) and shall include any individual (a) whose work has ceased as a result of, or in connection with any current labor dispute (b) and who has not obtained any other substantially equivalent and regular employment. Thus, “employee” refers to any person working for an employer. It includes one whose work has ceased in connection with any current labor dispute or because of any unfair labor practice and one who has been dismissed from work but the legality of the dismissal is being contested in a forum of appropriate jurisdiction.

A: Cessation of work due to strike or lockout, or to dismissal or suspensions constituting unfair labor practices, does not in itself affect the “employee” status, in the sense that the rights and benefits of the employee are protected as though there had been no interruption of service, effective upon actual return to work. Q: WHEN IS A LABOR ORGANIZATION DEEMED AN EMPLOYER? A: A labor organization may be deemed an “employer” when it is acting as such in relation to persons rendering services under hire, particularly in connection with its activities for profit or gain. TYPES OF EMPLOYEES UNDER LABOR CODE Q: WHAT ARE THE TYPES OF EMPLOYEES UNDER THE LABOR CODE? A: The types of employees are: 1. Managerial employees 2. Supervisory employees 3. Rank-and-file employees

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BARGAINING UNIT Q: WHAT IS A BARGAINING UNIT? A: Group of employees, sharing mutual interests, within a given employer unit, comprised of all or less than all of the entire body of employees in the employer unit or any specific occupational or geographical grouping within such employer unit.

A: Any labor organization which id duly registered with DOLE; the term included a local/chapter of the Bureau of Labor relations directly chartered by a legitimate federation or national union which has been duly reported to the Department in accordance with Section 2, Rule VI, Book V, IRR of LC of the Rules Implementing the LC. Q: WHAT IS A COMPANY UNION? A: Any labor organization whose formation, function or administration has been assisted by any act defined as ULP under the Labor Code (Art.212[i]).

Q: WHAT IS A WORKER’S ASSOCIATION? A: Any association of workers organized for the mutual aid and protection of its members for any legitimate purpose other than collective bargaining.

LABOR MANAGEMENT COUNCIL Q: WHAT IS A LABOR MANAGEMENT COUNCIL?

Q: WHO IS AN REPRESENTATIVE?

EXCLUSIVE

BARGAINING

A: Any legitimate labor organization duly recognized or certified as the sole and exclusive bargaining agent of all the employees in a bargaining unit. Q: CAN THERE BE SEVERAL UNIONS IN ONE BARGAINING UNIT? A: YES. There may be several unions in one bargaining unit but only one will be chosen as the bargaining agent thru certification election. Q: CAN THERE BE SEVERAL AGENTS IN ONE UNIT? A: NO.

A: It deals with the employer on matters affecting the employee’s rights, benefits and welfare. Q: WHAT IS A LABOR ORGANIZATION? A: Any union or association of employees which exists in whole or in part for the purpose of collective bargaining with employers concerning terms and conditions of employment (Art.212[g]). LABOR DISPUTE Q: What is a labor dispute? A: The test of whether a labor controversy comes within the definition of a labor dispute depends on whether it involves or concerns terms, conditions of employment or representation.

Q: CAN THERE BE SEVERAL AGENTS IN ONE COMPANY? A: YES. Q: CAN THERE BE SEVERAL COLLECTIVE BARGAINING AGREEMENT (CBA) IN ONE COMPANY? A: YES, provided that only one CBA per bargaining unit. Q: ARE ALL LEGITIMATE UNIONS A BARGAINING UNIT? A: NO. Union may be legitimate but not a bargaining agent.

The existence of a labor dispute is not negative by the fact that the plaintiffs and defendants do not stand in the proximate relation of employer and employee. “Labor Dispute” includes 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. TEST OF A LABOR DISPUTE

Q: WHAT IS A LEGITIMATE LABOR ORGANIZATION? Q: What are the tests for a labor dispute?

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A: a. Nature: Dispute arises from employer-employee relationship, although disputants need not be proximately “employee” or “employer” of the other. b. Subject matter: Dispute concerns (1) terms or conditions of employment; or (2) association or representation of persons in negotiating, fixing, maintaining, or changing terms or conditions of employment. KINDS OF LABOR DISPUTE Q: What are the kinds of labor disputes? A: A. Labor Standards Disputes: 1.) Compensation – (underpayment of minimum wage) 2.) Benefits – (nonpayment of holiday pay) 3.) Working conditions – (unrectified work hazards) B. Labor Relations Disputes: 1.) Organizational Right Dispute/ ULP – (coercion) 2.) Representation Disputes – (determination of appropriate collective bargaining unit) 3.) Bargaining Disputes – (refusal to bargain) 4.) Contract Administration or Personnel Policy Disputes – (noncompliance with CBA provision) 5.) Employment Tenure Disputes – (nonregularization of employees) Q: WHO ARE THE PARTIES TO A DISPUTE? A: The primary parties are the employer, employees and the union. The secondary parties are the voluntary arbitrator, agencies of DOLE, NLRC, Secretary of Labor and the Office of the President.

Title II NATIONAL LABOR RELATIONS COMMISSION Chapter I CREATION AND COMPOSITION

shall be attached to the Department of Labor and Employment for program and policy coordination only, composed of a Chairman and fourteen (14) Members. Five (5) members each shall be chosen from among the nominees of the workers and employers organizations, respectively. The Chairman and the four (4) remaining members shall come from the public sector, with the latter to be chosen from among the recommendees of the Secretary of Labor and Employment. Upon assumption into office, the members nominated by the workers and employers organizations shall divest themselves of any affiliation with or interest in the federation or association to which they belong. The Commission may sit en banc or in five (5) divisions, each composed of three (3) members. Subject to the penultimate sentence of this paragraph, the Commission shall sit en banc only for purposes of promulgating rules and regulations governing the hearing and disposition of cases before any of its divisions and regional branches, and formulating policies affecting its administration and operations. The Commission shall exercise its adjudicatory and all other powers, functions, and duties through its divisions. Of the five (5) divisions, the first, second and third divisions shall handle cases coming from the National Capital Region and the parts of Luzon; and the fourth and fifth divisions, cases from the Visayas and Mindanao, respectively; Provided that the Commission sitting en banc may, on temporary or emergency basis, allow cases within the jurisdiction of any division to be heard and decided by any other division whose docket allows the additional workload and such transfer will not expose litigants to unnecessary additional expense. The divisions of the Commission shall have exclusive appellate jurisdiction over cases within their respective territorial jurisdictions. [As amended by Republic Act No. 7700]. The concurrence of two (2) Commissioners of a division shall be necessary for the pronouncement of judgment or resolution. Whenever the required membership in a division is not complete and the concurrence of two (2) commissioners to arrive at a judgment or resolution cannot be obtained, the Chairman shall designate such number of additional Commissioners from the other divisions as may be necessary.

Art. 213. National Labor Relations Commission. There shall be a National Labor Relations Commission which

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The conclusions of a division on any case submitted to it for decision shall be reached in consultation before the case is assigned to a member for the writing of the opinion. It shall be mandatory for the division to meet for purposes of the consultation ordained herein. A certification to this effect signed by the Presiding Commissioner of the division shall be issued and a copy thereof attached to the record of the case and served upon the parties. The Chairman shall be the Presiding Commissioner of the first division and the four (4) other members from the public sector shall be the Presiding Commissioners of the second, third, fourth and fifth divisions, respectively. In case of the effective absence or incapacity of the Chairman, the Presiding Commissioner of the second division shall be the Acting Chairman. The Chairman, aided by the Executive Clerk of the Commission, shall have administrative supervision over the Commission and its regional branches and all its personnel, including the Executive Labor Arbiters and Labor Arbiters. The Commission, when sitting en banc shall be assisted by the same Executive Clerk and, when acting thru its Divisions, by said Executive Clerks for the second, third, fourth and fifth Divisions, respectively, in the performance of such similar or equivalent functions and duties as are discharged by the Clerk of Court and Deputy Clerks of Court of the Court of Appeals.

NATIONAL LABOR RELATIONS COMMISSION History Before the advent of the Labor Code the labor court was the Court of Industrial Relations. When martial law was declared in September 1972, PD No. 21 (October 14, 1972) abolished the CIR and replaced it with an ad hoc National Labor Relations Commission. This NLRC was short-lived as it gave way to the NLRC which the Labor Code created in 1974. Administrative Supervision Delegated to the DOLE Secretary Executive Order No. 204 delegated to the Secretary of Labor “administrative supervision over the NLRC, its regional branches and all its personnel.” The Order cited two objectives: 1.) to further improve the rate of disposition of cases and 2.) to enhance existing measures for the prevention of graft and corruption in the NLRC. NLRC as a collegial body Under Republic Act No. 6715 in 1989, as under the former law, the National Labor Relations Commission continues to act collegially, whether it performs administrative or rule-making functions or exercises appellate jurisdiction to review decisions and final orders of the Labor Arbiters. Tripartite Composition

Art. 214. Headquarters, Branches and Provincial Extension Units. The Commission and its First, Second and Third divisions shall have their main offices in Metropolitan Manila, and the Fourth and Fifth divisions in the Cities of Cebu and Cagayan de Oro, respectively. The Commission shall establish as many regional branches as there are regional offices of the Department of Labor and Employment, sub-regional branches or provincial extension units. There shall be as many Labor Arbiters as may be necessary for the effective and efficient operation of the Commission. Each regional branch shall be headed by an Executive Labor Arbiter.

The same Article 213, as amended, provides that the Chairman and twenty-three members composing the National Labor Relations Commission shall be chosen from the workers, employers and the public sectors. Q: IS THERE A NEED FOR THE COMMISSION ON APPOINTMENTS TO CONFIRM SUCH POSITIONS IN THE NLRC? A: There is no need for the Commission on Appointments to confirm the positions in the NLRC. Such requirement has no constitutional basis.

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NLRC EN BANC & DIVISIONS Q: HOW IS THE NLRC’s ADJUDICATORY POWER DISTRIBUTED? A: The Commission may sit en banc or in eight (8) divisions, each composed of three (3) members. Q: WHAT IS A DIVISION? A: It is a legal entity, not the persons who sit in it. Hence, an individual commissioner has no adjudicatory power, although, of course, he can concur or dissent in deciding a case. The law lodges the adjudicatory power on each of the eight divisions, not on the individual commissioners not on the whole commission. Q: WHAT ARE THE INSTANCES IN WHICH THE NLRC IS REQUIRED TO SIT EN BANC? A: The Commission may sit en banc: a. only for purposes of promulgating rules and regulations governing the hearing and disposition of cases before any of its divisions and regional branches; b. formulating policies affecting its administration and operations; and c. on temporary or emergency basis, to allow cases within the jurisdiction of any division to be heard and decided by any other division whose docket allows the additional workload and such transfer will not expose litigants to unnecessary additional expenses. Q: DURING WHAT INSTANCES SHALL THE NLRC ACT AS A DIVISION? A: The Commission shall exercise its adjudicatory and all other powers, functions, and duties through its divisions. Q: HOW IS THE ADJUDICATION OF CASES IN NLRC MADE? A: The NLRC adjudicates cases by division. A concurrence of two (2) commissioners of a division shall be necessary for the pronouncement of a judgment or resolution. Whenever the required membership in a division is not complete and the concurrence of two (2)

Commissioners to arrive at a judgment or resolution cannot be obtained, the Chairman shall designate such number of additional Commissioners from the other divisions as may be necessary. The conclusions of a division on any case submitted to it for decision shall be reached in consultation before the case is assigned to a member for the writing of the opinion. It shall be mandatory for the division to meet for purposes of the consultation ordained therein. A certification to this effect signed by the Presiding Commissioner of the division shall be issued, and a copy thereof attached to the record of the case and served upon the parties.

Art. 215. Appointment and Qualifications. The Chairman and other Commissioners shall be members of the Philippine Bar and must have engaged in the practice of law in the Philippines for at least fifteen (15) years, with at least five (5) years experience or exposure in the field of labor-management relations, and shall preferably be residents of the region where they are to hold office. The Executive Labor Arbiters and Labor Arbiters shall likewise be members of the Philippine Bar and must have been engaged in the practice of law in the Philippines for at least seven (7) years, with at least three (3) years experience or exposure in the field of labor-management relations: Provided, However, that incumbent Executive Labor Arbiters and Labor Arbiters who have been engaged in the practice of law for at least five (5) years may be considered as already qualified for purposes of reappointment as such under this Act. The Chairman and the other Commissioners, the Executive Labor Arbiters and Labor Arbiters shall hold office during good behavior until they reach the age of sixty-five years, unless sooner removed for cause as provided by law or become incapacitated to discharge the duties of their office. The Chairman, the division Presiding Commissioners and other Commissioners shall be appointed by the President, subject to confirmation by the Commission on Appointments. Appointment to any vacancy shall come from the nominees of the sector which nominated the predecessor. The Executive Labor Arbiters and Labor Arbiters shall also be appointed by the President, upon recommendation of the Secretary

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of Labor and Employment and shall be subject to the Civil Service Law, rules and regulations. The Secretary of Labor and Employment shall, in consultation with the Chairman of the Commission, appoint the staff and employees of the Commission and its regional branches as the needs of the service may require, subject to the Civil Service Law, rules and regulations, and upgrade their current salaries, benefits and other emoluments in accordance with law. (As amended by Section 7, Republic Act No. 6715, March 21, 1989)

Art. 216. Salaries, benefits and other emoluments. The Chairman and members of the Commission shall receive an annual salary at least equivalent to, and be entitled to the same allowances and benefits as those of the Presiding Justice and Associate Justices of the Court of Appeals, respectively. The Executive Labor Arbiters shall receive an annual salary at least equivalent to that of an Assistant Regional Director of the Department of Labor and Employment and shall be entitled to the same allowances and benefits as that of a Regional Director of said Department. The Labor Arbiters shall receive an annual salary at least equivalent to, and be entitled to the same allowances and benefits as that of an Assistant Regional Director of the Department of Labor and Employment. In no case, however, shall the provision of this Article result in the diminution of existing salaries, allowances and benefits of the aforementioned officials.

OF

TERM OF OFFICE Q: WHAT IS THE TERM OF OFFICE OF THE CHAIRMAN, COMMISSIONERS AND LABOR ARBITER? A: The Chairman, and the other Commissioners and the Labor Arbiters shall hold office during good behavior until they reach the age of sixty-five (65) years, unless sooner removed for cause as provided by law or become incapacitated to discharge the duties of their office. Provided, however, That the President of the Republic of the Philippines may extend the services of the Commissioners and Labor Arbiters up to the maximum age of seventy (70) years upon the recommendation of the Commission en banc. 2 KINDS OF JURISDICTION OF THE NLRC Q: WHAT ARE THE TWO KINDS OF JURISDICTIONS OF THE NLRC? A: The NLRC exercises two kinds of jurisdiction: 1. exclusive and original jurisdiction; and 2. exclusive appellate jurisdiction. I.

QUALIFICATIONS OF CHAIRMAN AND THE COMMISSIONERS Q: WHAT ARE THE QUALIFICATIONS CHAIRMAN AND THE COMMISSIONERS?

A: The Labor Arbiters shall likewise be: a. members of the Philippine Bar; b. must have been engaged in the practice of law in the Philippines for at least ten (10) years; and c. with at least five (5) years experience or exposure in the field of labor-management relations.

THE

A: The Chairman and other Commissioners shall be: a. members of the Philippine Bar; b. must have been engaged in the practice of law in the Philippines for at least fifteen (15) years; c. with at least five (5) years experience or exposure in the field of labor-management relations; and d. preferably be residents of the region where they SHALL hold office. Q: WHAT ARE THE QUALIFICATIONS OF A LABOR ARBITER?

Exclusive Original Jurisdiction

a. Certified labor disputes causing or likely to cause a strike or lockout in an industry indispensable to national interest, certified to it by the Secretary of Labor or the President for compulsory arbitration; b. Injunction in ordinary labor disputes to enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to require the performance of a particular act in any labor dispute which, if not restrained or performed forthwith, may cause grave or irreparable damage to any party; c. Injunction in strikes or lockouts under Art.264 of the LC; and d. Contempt cases. II. Exclusive Appellate Jurisdiction

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a. All cases decided by the Labor Arbiters under Art.217(b) of the LC and Sec.10 of R.A.8042 (Migrant Worker’s Act); and b. Cases decided by the Regional Offices of DOLE in the exercise of its adjudicatory function under Art.129 of the LC over monetary claims of worker’s amounting to not more than 5000 pesos and not accompanied by claim for reinstatement. JUDICIAL REVIEW ON COMMISSION’S DECISION Q: IS JUDICIAL REVIEW OF THE COMMISSION’S DECISION AVAILABLE? A: Findings of facts of a labor tribunal are accorded with utmost respect by the courts and are well-nigh conclusive if supported by substantial evidence. Petitions for certiorari (Rule 65) against decisions of the NLRC should henceforth be initially filed with the Court of Appeals in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief desired. The Court of Appeals is procedurally equipped to resolve unclear or ambiguous factual finding, aside from the increased number of its component divisions. (St. Martin’s Funeral Homes v. NLRC) NON-AVAILABILITY OF BARANGAY CONCILIATION Q: IS BARANGAY CONCILIATION AVAILABLE IN LABOR CASES? A: NO. Labor cases are not subject to Barangay Conciliation since ordinary rules of procedure are merely suppletory in character vis-à-vis labor disputes which are primarily governed by labor laws

Chapter II POWERS AND DUTIES Art. 217. Jurisdiction of the Labor Arbiters and the Commission. a. Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the

absence of stenographic notes, the following cases involving all workers, whether agricultural or nonagricultural: 1. Unfair labor practice cases; 2. Termination disputes; 3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment; 4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; 5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and 6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. b. The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. c. Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements. NLRC v. LABOR ARBITERS Q: WHAT IS THE DISTINCTION BETWEEN THE JURISDICTION OF THE LABOR ARBITERS AND THE NLRC? A: The NLRC has exclusive appellate jurisdiction on all cases decided by the Labor Arbiter. The NLRC does not have original jurisdiction on the cases over which the Labor Arbiter have original and exclusive jurisdiction. If a claim does not fall within the exclusive original jurisdiction of the Labor Arbiter, the NLRC cannot have appellate jurisdiction thereover. NATURE OF JURISDICTION Q: WHAT IS THE NATURE OF JURISDICTION OF LABOR ARBITERS?

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A: The jurisdiction is original and exclusive in nature. Labor Arbiters have NO appellate jurisdiction.

COMPULSORY ARBITRATION BY LABOR ARBITERS

The NLRC Rules describe the proceedings before the Labor Arbiter as non-litigious. Subject to the requirements of due process, the technicalities of law and procedure in the regular courts do not apply in NLRC/labor arbiter proceedings (Art. 221). The arbiter may avail himself of all reasonable means, including ocular inspection, to ascertain the facts speedily; he shall personally conduct the conference or hearings and take full control of the proceedings. (Rule V, Sec. 2, NLRC 2005 Rules of Procedure)

In its broad sense, arbitration is the reference of a dispute to an impartial third person, chosen by the parties or appointed by statutory authority to hear and decide the case in controversy. When the consent of one of the parties is enforced by statutory provisions, the proceeding is referred to as compulsory arbitration. In labor cases, compulsory arbitration is the process of settlement of labor disputes by a government agency which has the authority to investigate and to make an award which is binding on all the parties.

ADDITIONAL JURISDICTION

NOTE: Although the provision speaks of EXCLUSIVE AND ORIGINAL jurisdiction of Labor Arbiters, the cases enumerated may instead be submitted to a voluntary arbitrator by agreement of the parties under Art.262. The law prefers voluntary over compulsory arbitration.

1. Money claims arising out of employer-employee relationship or by virtue of any law or contract, involving Filipino workers for overseas deployment, including claims for actual, moral, exemplary and other forms of damages, as well as employment termination of OFWs; 2. Wage distortion disputes in unorganized establishments not voluntarily settled by the parties pursuant to Republic Act No. 6727, as reflected in Article 124; 3. Enforcement of compromise agreements when there is non-compliance by any of the parties pursuant to Article 227 of the Labor Code, as amended; and

EMPLOYER-EMPLOYEE RELATIONSHIP AS CRUCIAL ELEMENT The cases that a Labor Arbiter can hear and decide are employment related. Where no Er-Ee relationship exists between the parties and no issue is involved which may be resolved by reference to the LC, other labor statutes, or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction (Lapanday Agricultural Dev’t. Corp v. CA, January 31, 2000).

4. Other cases as may be provided by law. Q: DO LABOR ARBITERS EXERCISE CONCURRENT JURISDICTION WITH THE NLRC? A: YES. The Labor Arbiter has concurrent jurisdiction with the NLRC with respect to contempt cases. Q: WHAT ARE THE CASES REFERRED TO GRIEVANCE MACHINERY AND VOLUNTARY ARBITRATION?

The Labor Arbiter has jurisdiction over controversies involving employers and employees on if there is a “reasonable causal connection” between the claim asserted and the Er-Ee relations. Absent such link, the complaint is cognizable by the regular court (EVIOTA v. CA, July 29, 2003). RULES ON VENUE The NLRC Rules of Procedure provides:

A: The following cases must be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration: 1. Disputes on the interpretation or implementation of the CBA; and 2. Disputes on the interpretation or enforcement of company personnel.

Section 1. Venue. – a) All cases which Labor Arbiters have authority to hear and decide may be filed in the Regional Arbitration Branch having jurisdiction over the workplace of the complainant or petitioner. For purposes of venue, the workplace shall be understood as the place or locality where the employee is regularly assigned at the time the cause of action arose. It shall include the place where the employee is supposed to report back after a temporary detail, assignment, or travel. In case of field employees, as well as ambulant or itinerant workers, their workplace is where they are regularly assigned, or where they are supposed to regularly receive

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Kenneth & King Hizon (2A)- UST Faculty of Civil Law their salaries and wages or work instructions from, and report the results of their assignment to, their employers. b) Where two (2) or more Regional Arbitration Branches have jurisdiction over the workplace of the complainant or petitioner, the Branch that first acquired jurisdiction over the case shall exclude the others. c) When venue is not objected to before the filling of position papers such issue shall be deemed waived. d) The venue of an action may be changed or transferred to a different Regional Arbitration Branch other than where the complaint was filed by written agreement of the parties or when the Commission or Labor Arbiter before whom the case is pending so orders, upon motion by the proper party in meritorious cases. e) Cases involving overseas Filipino workers may be filed before the Regional Arbitration Branch having jurisdiction over the place where the complainant resides or where the principal office of any of the respondents is situated, at the option of the complainant.

Q: WHO HAS THE OPTION TO CHOOSE THE VENUE? A: The worker, being the economically-disadvantaged party—whether as complainant/petitioner or as respondent, as the case may be—the nearest governmental machinery to settle the dispute must be placed at his immediate disposal. NOTE: The 2005 NLRC Rules, in Sec. 1(c), Rule IV states: “When venue is not objected to before the filling of position papers such issue shall be deemed waived.” The Rules of Procedure on Venue was merely permissive, allowing a different venue when the interest of substantial justice demands a different one (Dayag v. Canizares, March 6, 1998). Q: WHAT IS THE EFFECT IF NO SERVICE OF SUMONS WAS MADE? A: In the absence of service of summons or a valid waiver thereof, the hearings and judgment rendered by the labor arbiter is null and void. CBA VIOLATION AMOUNTING TO ULP Certainly, violations of the collective bargaining agreement would be unfair labor practice which falls under the jurisdiction of the Labor Arbiters and the National Labor Relations Commission.

CASES WHICH DO NOT FALL UNDER LABOR ARBITER’S JURISDICTION Q: WHAT ARE THE CASES WHICH DO NOT FALL UNDER THE JURISDICTION OF THE LABOR ARBITER? A: Labor Arbiters have no jurisdiction over the following: 1. Foreign governments (JUSMAG-Philippines v. NLRC, August 17, 1998); 2. International agencies (Lasco v. NLRC, February 23, 1995); 3. Intra-corporate disputes which fall under P.D. 902-A and now falls under the jurisdiction of the regular courts pursuant to the new Securities Regulation Code (Nacpil v. IBC, March 21, 2002); 4. Executing money claims against government (DAR v. NLRC, November 11, 1993); 5. Cases involving GOCCs with original charters which are governed by civil service law, rules or regulations (Art. IX-B, Sec.2, No.1, 1987 Constitution); 6. Local water district (Tanjay Water District v. Gabaton, April 17, 1989) except where NLRC jurisdiction is invoked (Zamboanga City Water District v. Buat, May 27, 1994); 7. The aggregate money claim does not exceed 5000 pesos and without claim for reinstatement (Rajah Humabon Hotel, Inc. v. Trajano, September 17, 1993); 8. Claim of employee for cash prize under the Innovation Program of the company, although arising from Er-Ee relationship, is one requiring application of general civil law on contracts which is within the jurisdiction of the regular courts (San Miguel Corp. v. NLRC, May 31, 1988); 9. Cause of action based on quasi-delict or tort which has no reasonable connection with any of the claims enumerated in Art.217 of the LC (Ocheda v. CA, October 16, 1992); 10. Complaint arising from violation of training agreement (Singapore Airlines v. Pano, June 22, 1983); 11. The Labor Arbiter is without jurisdiction over the case once his judgment has assumed the character of finality (Cayena v. NLRC, February 18, 1991).

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Termination of Corporate Officer

Rule on Money Claims Not Arising from CBA

The dismissal of a corporate officer by a corporate board is a corporate dispute that should be brought to the regular courts.

The Voluntary Arbitrator or Panel of Voluntary Arbitrators will have original and exclusive jurisdiction over money claims "arising from the interpretation or implementation of the Collective Bargaining Agreement and, those arising from the interpretation or enforcement of company personnel policies", under Article 261.

A corporate officer’s dismissal is always a corporate act, or an extra-corporate controversy and the nature is not altered by the reason or wisdom with which the Board of Directors may have in taking such action. In intra-corporate matters, such as those affecting the corporation, its directors, trustees, officers and shareholders, the issue of consequential damages may just as well be resolved and adjudicated by the SEC. Undoubtedly, it is still within the competence and expertise of the SEC to resolve all matters arising from or closely connected with all intra-corporate disputes. Test of SEC Jurisdiction The better policy to be followed in determining jurisdiction over a case should be to consider concurrent factors such as the status or relationship of the parties or the nature of the question that is the subject of their controversy. Q: WHAT IS AN INTRA-CORPORATE CONTROVERSY? A: An “intra-corporate controversy” is one which arises between a stockholder and the corporation. There is no distinction, qualification, nor any exemption whatsoever. The provision is broad and covers all kinds of controversies between stockholders and corporations.

NOTE: Money claims of workers which do not arise out of or in connection with their employer-employee relationship fall within the general jurisdiction of regular courts of justice. Where the claim to the principal relief sought is to be resolved not by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the Labor Arbiter and the National Labor Relations Commission. Claims for Damages Money claims of workers which the labor arbiter has original and exclusive jurisdiction are comprehensive enough to include claims for moral damages of a dismissed employee against his employer. NOTE: Splitting of Actions is not Allowed. An employee who has been illegally dismissed so as to cause him moral damages has a cause of action for reinstatement, back wages and damages. When he institutes proceedings before the Labor Arbiter, he should make a claim for all said reliefs.

Money Claims Q: When are money claims within Labor Arbiter’s jurisdiction? A: A money claim arising from employer-employee relations, excepting SSS/ECC/Medicare claims, is within the jurisdiction of a labor arbiter— 1. if the claim, regardless of amount, is accompanied with a claim for reinstatement; or 2. if the claim, whether or not accompanied with a claim for reinstatement, exceeds five thousand pesos (P5,000.00) per claimant.

An employer’s claim for damages against an employee may be filed as counterclaim in the illegal dismissal case filed by the employee. Such claim for damages, arising from employment relationship, is outside the jurisdiction of the regular court. EXTENT OFLABOR ARBITER’S JURISDICTION ON STRIKE AND LOCKOUTS Questions relating to strikes or lockouts or any form of work stoppage including incidents thereof under Art. 264 fall within the labor arbiter’s jurisdiction.

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But the power to issue injunction is lodged with an NLRC division, not a labor arbiter. Moreover, “national interest’ cases are handled differently. Art. 263 (g) empowers the DOLE Secretary or the President of the Republic to assume jurisdiction or refer the case to the NLRC if the labor dispute or impending strike or lockout involves an industry indispensible to national interest. Still another limit to the arbiter’s jurisdiction is the jurisdiction of the regular courts to hear and decide actions filed by third parties being affected by a strike of people who are not their employees. Finally, if a crime is committed, whether in relation to a strike or not, the prosecution of the crime has to be done not before a labor arbiter but a regular court, because in such a case the laws to be administered are primarily the penal laws of the land. LABOR ARBITER’S JURISDICTION ON OFW’S MONEY CLAIMS OR DISMISSAL Section 10 of RA 8042, approved on June 7, 1995, known as the Migrant Workers and Overseas Filipinos Act of 1995, transfers from the POEA to Labor Arbiters the original and exclusive jurisdiction to hear and decide claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment, including claims for actual, moral, exemplary and other forms of damages. Based on [Article 217, Labor Code and Section 10, R.A. No. 8042], labor arbiters, clearly have original and exclusive jurisdiction over claims arising from employeremployee relations, including terminations disputes involving all workers, among them whom are Overseas Filipino Workers (OFW). LABOR ARBITER’S JURISDICTION ON WGAE DISTORTION A salary distortion case, referred to in the Article 124, is resolved either through the CBA mechanism or, in unorganized establishments, through the NCMB. IF the NCMB fails to resolve the dispute in ten days of conciliation conferences, it shall be final to the appropriate branch of the NLRC. LABOR ARBITER’S JURISDICTION ON DISPUTES OVER COMPROMISE SETTLEMENTS

ordinarily final and binding upon the parties. But a compromise settlement may itself become the subject of dispute. If there is noncompliance with the compromise agreement or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion, then, according to Article 227, the NLRC through the labor arbiter may assume jurisdiction over such dispute. EFFECT OF ACTIVE PARTICIPATION Q: What is the effect of active participation of a party against whom an action was brought? A: The active participation of the party against whom the action was brought coupled with his failure to object to the jurisdiction of the Court or quasi-judicial body where the action is pending, is tantamount to an invocation of that jurisdiction, and a willingness to abide by the resolution of the case will bar said party from later on impugning the court or body’s jurisdiction. The Supreme Court frowns upon the undesirable practice of a party submitting his case for decision and then accepting the judgment only if favourable, and attacking it for lack of jurisdiction when adverse. BASIS FOR IMMUNITY OF FOREIGN GOVERNMENTS "Immunity" is commonly understood as an exemption of the state and its organs from the judicial jurisdiction of another state. This is anchored on the principle of the sovereign equality of states under which one state cannot assert jurisdiction over another in violation of the maxim par in parem non habet imperium (an equal has no power over an equal). As it stands now, the application of the doctrine of immunity from suit has been restricted to sovereign or governmental activities (jure imperii). The mantle of state immunity cannot be extended to commercial, private and proprietary acts (jure gestionis). RULE AS TO MONEY CLAIMS AGAINST THE GOVERNMENT Even when a government agency enters into a business contract with a private entity, it is not the Labor Code but C.A. No. 327 that applies in pursuing a money claim (against the Government) arising from such contract.

Because labor law policy encourages voluntary resolution of disputes, compromise settlements are

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LOCAL WATER DISTRICT They are quasi public corporations whose employees belong to the civil service, hence, the dismissal of those employees shall be governed by the civil service law, rules and regulations. NLRC HAS EXCLUSIVE APPELLATE JURISDICTION OVE ALL CASES DECIDED BY LABOR ARBITERS Q: WHO HAS THE EXCLUSIVE APPELLATE JURISDICTION OVE ALL CASES DECIDED BY LABOR ARBITERS? A: The National Labor Relations Commission (NLRC) has the exclusive appellate jurisdiction over the cases decided by labor arbiters. Q: IS A MOTION FOR RECONSIDERATION REQUIRED BEFORE CERTIORARI MAY BE AVAILED OF? A: YES. Before certiorari may be availed of, the petitioner must have filed a motion for reconsideration to enable it to correct its mistakes, within 10 days from receipt of such order or resolution. If no MR is filed, NLRC’s decision becomes final and executory for certiorari before the Supreme Court. [XPN] in the interest of substantial justice, MR on the decision of the NLRC may not be required. Q: WHAT IS THE EFFECT OF THE DENIAL OF THE MOTION FOR RECONSIDERATION? A: If the motion is denied, the aggrieved party may file the petition within the remaining period, but which shall not be less than 5 days in any event, reckoned from the notice of the denial. No extension of time to file the petition shall be granted except for the most compelling reason and in no case to exceed 15 days.

Art. 218. Powers of the Commission. The Commission shall have the power and authority: a. To promulgate rules and regulations governing the hearing and disposition of cases before it and its regional branches, as well as those pertaining to its internal functions and such rules and regulations as may be necessary to carry out the purposes of this Code; (As amended by Section 10, Republic Act No. 6715, March 21, 1989)

b. To administer oaths, summon the parties to a controversy, issue subpoenas requiring the attendance and testimony of witnesses or the production of such books, papers, contracts, records, statement of accounts, agreements, and others as may be material to a just determination of the matter under investigation, and to testify in any investigation or hearing conducted in pursuance of this Code; c. To conduct investigation for the determination of a question, matter or controversy within its jurisdiction, proceed to hear and determine the disputes in the absence of any party thereto who has been summoned or served with notice to appear, conduct its proceedings or any part thereof in public or in private, adjourn its hearings to any time and place, refer technical matters or accounts to an expert and to accept his report as evidence after hearing of the parties upon due notice, direct parties to be joined in or excluded from the proceedings, correct, amend, or waive any error, defect or irregularity whether in substance or in form, give all such directions as it may deem necessary or expedient in the determination of the dispute before it, and dismiss any matter or refrain from further hearing or from determining the dispute or part thereof, where it is trivial or where further proceedings by the Commission are not necessary or desirable; and d. To hold any person in contempt directly or indirectly and impose appropriate penalties therefor in accordance with law. A person guilty of misbehavior in the presence of or so near the Chairman or any member of the Commission or any Labor Arbiter as to obstruct or interrupt the proceedings before the same, including disrespect toward said officials, offensive personalities toward others, or refusal to be sworn, or to answer as a witness or to subscribe an affidavit or deposition when lawfully required to do so, may be summarily adjudged in direct contempt by said officials and punished by fine not exceeding five hundred pesos (P500) or imprisonment not exceeding five (5) days, or both, if it be the Commission, or a member thereof, or by a fine not exceeding one hundred pesos (P100) or imprisonment not exceeding one (1) day, or both, if it be a Labor Arbiter. The person adjudged in direct contempt by a Labor Arbiter may appeal to the Commission and the execution of the judgment shall be suspended pending the resolution of the appeal upon the filing by such person of a bond on condition that he will abide by

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and perform the judgment of the Commission should the appeal be decided against him. Judgment of the Commission on direct contempt is immediately executory and unappealable. Indirect contempt shall be dealt with by the Commission or Labor Arbiter in the manner prescribed under Rule 71 of the Revised Rules of Court; and (As amended by Section 10, Republic Act No. 6715, March 21, 1989) e. To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to require the performance of a particular act in any labor dispute which, if not restrained or performed forthwith, may cause grave or irreparable damage to any party or render ineffectual any decision in favor of such party: Provided, That no temporary or permanent injunction in any case involving or growing out of a labor dispute as defined in this Code shall be issued except after hearing the testimony of witnesses, with opportunity for cross-examination, in support of the allegations of a complaint made under oath, and testimony in opposition thereto, if offered, and only after a finding of fact by the Commission, to the effect: 1. That prohibited or unlawful acts have been threatened and will be committed and will be continued unless restrained, but no injunction or temporary restraining order shall be issued on account of any threat, prohibited or unlawful act, except against the person or persons, association or organization making the threat or committing the prohibited or unlawful act or actually authorizing or ratifying the same after actual knowledge thereof; 2. That substantial and irreparable complainant’s property will follow;

injury

to

3. That as to each item of relief to be granted, greater injury will be inflicted upon complainant by the denial of relief than will be inflicted upon defendants by the granting of relief; 4. That complainant has no adequate remedy at law; and 5. That the public officers charged with the duty to protect complainant’s property are unable or unwilling to furnish adequate protection.

whom relief is sought, and also to the Chief Executive and other public officials of the province or city within which the unlawful acts have been threatened or committed, charged with the duty to protect complainant’s property: Provided, however, that if a complainant shall also allege that, unless a temporary restraining order shall be issued without notice, a substantial and irreparable injury to complainant’s property will be unavoidable, such a temporary restraining order may be issued upon testimony under oath, sufficient, if sustained, to justify the Commission in issuing a temporary injunction upon hearing after notice. Such a temporary restraining order shall be effective for no longer than twenty (20) days and shall become void at the expiration of said twenty (20) days. No such temporary restraining order or temporary injunction shall be issued except on condition that complainant shall first file an undertaking with adequate security in an amount to be fixed by the Commission sufficient to recompense those enjoined for any loss, expense or damage caused by the improvident or erroneous issuance of such order or injunction, including all reasonable costs, together with a reasonable attorney’s fee, and expense of defense against the order or against the granting of any injunctive relief sought in the same proceeding and subsequently denied by the Commission. The undertaking herein mentioned shall be understood to constitute an agreement entered into by the complainant and the surety upon which an order may be rendered in the same suit or proceeding against said complainant and surety, upon a hearing to assess damages, of which hearing, complainant and surety shall have reasonable notice, the said complainant and surety submitting themselves to the jurisdiction of the Commission for that purpose. But nothing herein contained shall deprive any party having a claim or cause of action under or upon such undertaking from electing to pursue his ordinary remedy by suit at law or in equity: Provided, further, That the reception of evidence for the application of a writ of injunction may be delegated by the Commission to any of its Labor Arbiters who shall conduct such hearings in such places as he may determine to be accessible to the parties and their witnesses and shall submit thereafter his recommendation to the Commission.

Such hearing shall be held after due and personal notice thereof has been served, in such manner as the Commission shall direct, to all known persons against

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Art. 219. Ocular inspection. The Chairman, any Commissioner, Labor Arbiter or their duly authorized representatives, may, at any time during working hours, conduct an ocular inspection on any establishment, building, ship or vessel, place or premises, including any work, material, implement, machinery, appliance or any object therein, and ask any employee, laborer, or any person, as the case may be, for any information or data concerning any matter or question relative to the object of the investigation.

b. Proceed to hear and determine the disputes in the manner laid down under par (c) of Art.218. 4. Contempt power The Commission has the power to hold any person in direct or indirect contempt under Rule IX of the NLRC Rules of Procedure. Contempt Power

POWERS OF THE NLRC Q: WHAT IS CONTEMPT? Q: WHAT ARE THE POWERS OF THE NLRC? A: The following are the powers of the NLRC: 1. Rule-Making power The Commission has the power to promulgate rules and regulations: a. Governing the hearing and disposition of cases before it and its regional branches; b. Pertaining to its internal functions; and c. Those that may be necessary to carry out the purposes of this Code. NOTE: It is an elementary rule in administrative law that administrative regulations and policies enacted by administrative bodies, such as the Revised Rules of the NLRC, to interpret the law which they are entrusted to enforce, have the force of law, and are entitled to great respect. 2. Power to issue Compulsory processes The Commission has the power to: a. Administer oaths b. Summon parties; and c. Issue subpoenas ad testificandum and duces tecum

A: Contempt is defined as a disobedience to the Court by setting up an opposition to its authority, justice and dignity. It signifies not only a willful disregard or disobedience of the court's orders but such conduct as tends to bring the authority of the court and the administration of law into disrepute or in some manner to impede the due administration of justice. 5. Power to conduct Ocular inspection NOTE: Under Article 219, the Chairman, any Commissioner, Labor Arbiter or their duly authorized representatives, may, at any time during working hours: a) conduct an ocular inspection on any establishment, building, ship or vessel, place or premises, including any work, material, implement, machinery, appliance or any object therein; and b) ask any employee, laborer, or any person, as the case may be, for any information or data concerning any matter or question relative to the object of the investigation. 6. Power to issue injunctions and restraining orders Injunction order and TRO

3. Power to investigate and hear disputes within its jurisdiction

Q: WHAT IS AN INJUNCTION ORDER OR A TEMPORARY RESTRAINING ORDER (TRO)?

The Commission has the power to: a. Conduct investigations for the determination of a question, matter or controversy within its jurisdiction;

A: It is an order which may require, forbid, or stop the doing of an act. The power of the NLRC to enjoin or restrain the commission of any or all prohibited or unlawful acts under Art.218 of the LC can only be exercised in a labor dispute.

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A restraining order is not an injunction at all but a writ to compel parties to maintain the matters in controversy in status quo until the question of whether or not a temporary or preliminary injunction ought to be issued may be determined NOTE: The action for injunction is distinct from the ancillary remedy of preliminary injunction which cannot exist except only as part or an incident of an independent action or proceeding. A writ of preliminary injunction is generally based solely on initial and incomplete evidence.

a. Prohibited or unlawful acts have been threatened and will be committed or have been committed and will be continued unless restrained, but no injunction or temporary restraining order shall be issued on account of any threat, prohibited or unlawful act, except against the persons, association or organization making the threat or committing the prohibited or unlawful act or actually authorizing or ratifying the same after knowledge thereof; b. That substantial and irreparable injury to the complainant’s property will follow; Q: WHAT IS IRREPARABLE INJURY?

Q: WHO MAY ISSUE A RESTRAINING ORDER? A: The following persons may issue a restraining order: 1. The president (Art.263[g]); 2. Secretary of Labor (Art.263[g]); and 3. NLRC (Art.218). NOTE: Article 218 limits the grant of injunctive power to the “Commission” meaning the Commission en banc or any of its divisions.

PROCEDURE FOR THE ISSUANCE OF RESTRAINING ORDER/INJUNCTION Q: WHAT IS THE PROCEDURE FOR THE ISSUANCE OF RESTRAINING ORDER/INJUNCTION? A: The procedures are as follows: 1. Filing of a verified petition. 2. Hearing after due and personal notice has been served in such manner as the Commission shall direct, to: a. All known persons against whom the relief is sought; b. Also to the chief executive or other public officials of the province or city within which the unlawful acts have been threatened or committed charged with the duty to protect the complainants property. 3. Reception of the hearing of testimonies of witnesses with opportunity for cross-examination, in support of the allegations of the complainant made under oath as well as testimony in opposition thereto. 4. Findings of fact of the Commission to the effect that:

A: Irreparable injury pertains to an injury which cannot be adequately compensated in damages due to the nature of the injury itself or the nature of the right or property injured or when there exists no pecuniary standard for the measurement of damages. c. That as to each item of relief to be granted, greater injury will be inflicted upon the complainant by the denial of the relief than will be inflicted upon the defendants by the granting of the relief; d. That complainant has no adequate remedy at law; and Q: WHAT IS AN ADEQUATE REMEDY? A: An adequate remedy is one that affords relief with reference to the matter in controversy and which is appropriate to the particular circumstances of the case. If the remedy is specifically provided by law, it is presumed to be adequate. e. The public officers charged with the duty to protect complainant’s property are unable or unwilling to furnish adequate protection. f. Posting of a bond. Conditions for the Ex Parte issuance Q: WHAT ARE THE CONDITIONS FOR THE EX PARTE ISSUANCE OF A TRO? A: A temporary restraining order (valid only for 20 days) may be issued ex parte under the following conditions: a) the complainant "shall also allege that, unless a temporary restraining order shall be issued without

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notice, a substantial and irreparable injury to complainant's property will be unavoidable; b) there is "testimony under oath, sufficient, if sustained, to justify the Commission in issuing a temporary injunction upon hearing after notice;" c) the "complainant shall first file an undertaking with adequate security in an amount to be fixed by the Commission sufficient to recompense those enjoined for any loss, expense or damage caused by the improvident or erroneous issuance of such order or injunction, including all reasonable costs, together with a reasonable attorney's fee, and expense of defense against the order or against the granting of any injunctive relief sought in the same proceeding and subsequently denied by the Commission;" and d) the "temporary restraining order shall be effective for no longer than twenty (20) days and shall become void at the expiration of said twenty (20) days. NOTE: “Property” includes not only tangible property but also the right to use such property. “Public officers” means local law enforcing officers. The “protection” contemplated is that which would enable the employer to proceed with the work. The intent of this requirement is to take the executive function of law enforcement out of the court and leave it to the appropriate executive officers, unless they fail to function. Requirement of Cash Bond Under the NLRC Rules of 2005, no temporary restraining order or writ of preliminary injunction shall be issued except on the condition that petitioner shall first file an undertaking to answer for the damages and post a cash bond in the amount of Fifty Thousand Pesos (P50,000.00), or such higher amount as may be determined by the Commission. The purpose of the bond is to recompense those enjoined for any loss, expense or damage caused by the improvident or erroneous issuance of such order or injunction, including all reasonable costs, together with a reasonable attorney’s fee, and expense of defense against the order or against the granting of any injunctive relief sought in the same proceeding and subsequently denied by the Commission.

Q: WHAT IS THE SCOPE OF AN INJUNCTION ISSUED? A: As to the scope of an injunction issued under the Act, both the Act itself and the cases restrict the operation of such injunction not only to the specific acts complained of in the pleadings and proven at trial as wrongful, but further, limits the injunction to only those alleged and proven guilty of actual participation, authorization or ratification of such acts. The power of the NLRC to enjoin or restrain the commission of any or all prohibited or unlawful acts as provided in Art. 218 of the Labor Code, can only be exercised in a labor dispute. Q: HOW LONG IS THE LIFETIME OF A TRO? A: A temporary restraining order (TRO), if issued at all in a petition for injunction, is valid only for twenty (20) days and becomes void ipso facto at the end of that period. Q: WHEN DOES THE TRO TAKE EFFECT? A: The TRO takes effect upon its issuance and not upon receipt of the parties. NOTE: The maximum period of 20 days includes Saturdays, Sundays, and holidays.

Art. 220. Compulsory arbitration. The Commission or any Labor Arbiter shall have the power to ask the assistance of other government officials and qualified private citizens to act as compulsory arbitrators on cases referred to them and to fix and assess the fees of such compulsory arbitrators, taking into account the nature of the case, the time consumed in hearing the case, the professional standing of the arbitrators, the financial capacity of the parties, and the fees provided in the Rules of Court.

Art. 221. Technical rules not binding and prior resort to amicable settlement. In any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Code that the Commission and its members and the

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Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process. In any proceeding before the Commission or any Labor Arbiter, the parties may be represented by legal counsel but it shall be the duty of the Chairman, any Presiding Commissioner or Commissioner or any Labor Arbiter to exercise complete control of the proceedings at all stages.

A: It is true that administrative and quasi-judicial bodies like the NLRC are not bound by the technical rules of procedure in the adjudication of cases. However, this procedural rule should not be construed as a license to disregard certain fundamental evidentiary rules. While the rules of evidence prevailing in the courts of law or equity are not controlling in proceedings before the NLRC, the evidence presented before it must at least have a modicum of admissibility for it to be given some probative value.

Any provision of law to the contrary notwithstanding, the Labor Arbiter shall exert all efforts towards the amicable settlement of a labor dispute within his jurisdiction on or before the first hearing. The same rule shall apply to the Commission in the exercise of its original jurisdiction.

Not only must there be some evidence to support a finding or conclusion, but evidence must be "substantial." "Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.

TECHNICAL RULES NOT STRICTLY FOLLOWED PROHIBITED PLEADINGS Q: ARE TECHNICAL RULES STRICTLY FOLLOWED IN PROCEEDINGS BEFORE THE NLRC AND THE LABOR ARBITER? A: No. Administrative and quasi-judicial bodies like the NLRC, are not bound by the technical rules of procedure in the adjudication of cases. Simplification of procedure, without regard to technicalities of law or procedure and without sacrificing the fundamental requisites of due process, is mandated to insure a speedy administration of social justice. This Court construed Article 221 of the Labor Code as to allow the NLRC or a labor arbiter to decide a case on the basis of position papers and other documents submitted without resorting to technical rules of evidence as observed in regular courts of justice. Rules of evidence are not strictly observed in the proceedings before the NLRC (Bantolino, et al. v. CocaCola Bottlers Phils. Inc., June 10, 2003). A formal or trial type hearing is not at all times and in all instances essential to due process, the requirements of which are satisfied where the parties are afforded reasonable opportunity to explain their side of the controversy at hand. QUANTUM OF EVIDENCE REQUIRED Q: WHAT IS THE QUANTUM OF EVIDENCE REQUIRED?

Q: IN LIEU OF EMPHASIZING THE AVOIDANCE OF LEGAL TECHNICALITIES, WHAT ARE THE PROHIBITED PLEADINGS AND MOTIONS AS PROVIDED FOR UNDER THE NLRC 2005 RULES OF PROCEDURE? A: The rules do not allow the following motions or pleadings: 1. Motion to dismiss the complaint except on the ground of lack of jurisdiction over the subject matter, improper venue, res judicata, prescription and forum shopping; 2. Motion for Bill of Particulars; 3. Motion for New Trial 4. Petition for relies from judgment when filed with the Labor Arbiter; 5. Petition for Certiorari, Mandamus or Prohibition; 6. Motion to declare the respondent in default; 7. Motion for reconsideration or appeal from any interlocutory order of the Labor Arbiter. Q: WHAT IS THE NATURE OF THE PROCEEDINGS BEFORE THE LABOR ARBITER? A: The proceedings before the Labor Arbiter shall be non-litigious in nature. Subject to the requirements of due process, the technicalities of law and procedure and the rules obtaining in the courts of law shall not strictly apply thereto. The Labor Arbiter may avail himself of all reasonable means to ascertain the facts of the controversy speedily, including ocular inspection

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and examination of well-informed persons (Sec.2, Rule V, NLRC 2005 Rules of Procedure). CARDINAL RIGHTS IN QUASI-JUDICIAL PROCEEDINGS Q: WHAT ARE THE CARDINAL RIGHTS IN A QUASIJUDICIAL PROCEEDINGS? A: There are cardinal primary rights which must be respected even in proceedings of this character: 1) right to a hearing; 2) tribunal must consider the evidence presented; 3) decision must be supported by something (evidence); 4) supporting evidence must be substantial; 5) Decision must be rendered on the evidence presented or at least contained in the record and disclosed to the parties affected; 6) the body or CIR or any of its judges must act on his own independent considerations of the law and facts, and not simply accept the views of the subordinate in arriving at a decision; and 7) decide in such manner that parties can know the various issues involved and the reason for the decision. IMPORTANCE OF VERIFICARTION Verification is intended to assure that the allegations in the pleading have been prepared in good faith or are true and correct, not mere speculations. Generally, lack of verification is merely a format defect that is neither jurisdictional nor fatal. MANDATORY CONCILIATION AND MEDIATION CONFERENCE; COMPROMISE ENCOURAGED Section 2. Nature of Proceedings. - The proceedings before the Labor Arbiter shall be non-Iitigious in nature. Subject to the requirements of due process, the technicalities of law and procedure and the rules obtaining in the courts of law shall not strictly apply thereto. The Labor Arbiter may avail himself of all reasonable means to ascertain the facts of the controversy speedily, including ocular inspection and examination of well-informed persons. Section 3. Mandatory Conciliation and Mediation Conference. – a) The mandatory conciliation and mediation conference shall be called for the purpose of (1) amicably settling the case upon a fair compromise; (2) determining the real parties in interest; (3) determining the necessity of amending the complaint and including all causes of action; (4) defining and simplifying the issues in the case; (5) entering into admissions or stipulations of facts; and (6) threshing out all other preliminary matters. The Labor Arbiter shall preside and take full control of the proceedings.

b) Conciliation and mediation efforts shall be exerted by the Labor Arbiters all throughout the proceedings. Should the parties arrive at any agreement as to the whole or any part of the dispute, the same shall be reduced to writing and signed by the parties and their respective counsel or authorized representative, if any, before the Labor Arbiter. c) In any case, the compromise agreement shall be approved by the Labor Arbiter, if after explaining to the parties, particularly to the complainants, the terms, conditions and consequences thereof, he is satisfied that they understand the agreement, that the same was entered into freely and voluntarily by them, and that it is not contrary to law, morals, and public policy. d) A compromise agreement duly entered into in accordance with this Section shall be final and binding upon the parties and shall have the force and effect of a judgment rendered by the Labor Arbiter. e) The mandatory conciliation and mediation conference shall, except for justifiable grounds, be terminated within thirty (30) calendar days from the date of the first conference. f) No motion for postponement shall be entertained except on meritorious grounds. Section 4. Effect of Failure of Conciliation and Mediation. - Should the parties fail to agree upon an amicable settlement, either in whole or in part, during the mandatory conciliation and mediation conference, the Labor Arbiter shall terminate the conciliation and mediation stage and proceed to pursue the other purposes of the said conference as enumerated in the immediately preceding Section. Thereafter, the Labor Arbiter shall direct the parties to simultaneously file their respective position papers on the issues agreed upon by the parties and as reflected in the minutes of the proceedings. Section 5. Non-Appearance of Parties. - The non-appearance of the complainant or petitioner during the two (2) settings for mandatory conciliation and mediation conference scheduled in the summons, despite due notice thereof, shall be a ground for the dismissal of the case without prejudice.

In case of non-appearance by the respondent during the first scheduled conference, the second conference shall proceed as scheduled in the summons. If the respondent still fails to appear at the second conference despite being duly served with summons, the Labor Arbiter shall immediately terminate the mandatory conciliation and mediation conference. The Labor Arbiter shall thereafter allow the complainant or petitioner to file his verified position paper and submit evidence in support of his causes of action, and thereupon render his decision on the basis of the evidence on record. It is true that a compromise agreement once approved by the court has the effect of res judicata between the parties and should not be disturbed except for vices of consent and forgery. However, settled is the rule that Facultad de Derecho Civil 22 IVERSITY OF SANTO TOMAS

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the NLRC may disregard technical rules of procedure in order to give life to the constitutional mandate affording protection to labor and to conform to the need of protecting the working class whose inferiority against the employer has always been earmarked by disadvantage. Q: HOW IS MANDATORY CONCILIATION MEDIATION CONFERENCES CONDUCTED?

AND

A: The procedure are as follows: 1. The mandatory conciliation and mediation conference shall be called for the purpose of (a) amicably settling the case upon a fair compromise; (b) determining the real parties in interest; (c) determining the necessity of amending the complaint and including all causes of action; (d) defining and simplifying the issues in the case; (e) entering into admissions or stipulations of facts; and (f) threshing out all other preliminary matters. The Labor Arbiter shall preside and take full control of the proceedings. 2. Conciliation and mediation efforts shall be exerted by the Labor Arbiters all throughout the proceedings. Should the parties arrive at any agreement as to the whole or any part of the dispute, the same shall be reduced to writing and signed by the parties and their respective counsel or authorized representative, if any, before the Labor Arbiter. 3. In any case, the compromise agreement shall be approved by the Labor Arbiter, if after explaining to the parties, particularly to the complainants, the terms, conditions and consequences thereof, he is satisfied that they understand the agreement, that the same was entered into freely and voluntarily by them, and that it is not contrary to law, morals, and public policy. 4. A compromise agreement duly entered into in accordance with this Section shall be final and binding upon the parties and shall have the force and effect of a judgment rendered by the Labor Arbiter. 5. The mandatory conciliation and mediation conference shall, except for justifiable grounds, be terminated within thirty (30) calendar days from the date of the first conference. 6. No motion for postponement shall be entertained except on meritorious grounds. (Sec.3, Rule V, NLRC 2005 Rules of Procedure)

EFFECT OF FAILURE OF CONCILIATION AND MEDIATION Q: WHAT IS THE EFFECT OF FAILURE OF CONCILIATION AND MEDIATION? A: Should the parties fail to agree upon an amicable settlement, either in whole or in part, during the mandatory conciliation and mediation conference, the Labor Arbiter shall terminate the conciliation and mediation stage and proceed to pursue the other purposes of the said conference as enumerated in the immediately preceding Section. Thereafter, the Labor Arbiter shall direct the parties to simultaneously file their respective position papers on the issues agreed upon by the parties and as reflected in the minutes of the proceedings (Sec.4, Rule V, NLRC 2005 Rules of Procedure). EFFECT OF NON-APPEARANCE OF PARTIES Q: WHAT IS THE EFFECT OF NON-APPEARANCE OF PARTIES IN A CONCILIATION OR MEDIATION PROCEEDING? A: 1. Non-appearance by petitioner The non-appearance of the complainant or petitioner during the two (2) settings for mandatory conciliation and mediation conference scheduled in the summons, despite due notice thereof, shall be a ground for the dismissal of the case without prejudice. 2. Non-appearance by respondent In case of non-appearance by the respondent during the first scheduled conference, the second conference shall proceed as scheduled in the summons. If the respondent still fails to appear at the second conference despite being duly served with summons, the Labor Arbiter shall immediately terminate the mandatory conciliation and mediation conference. The Labor Arbiter shall thereafter allow the complainant or petitioner to file his verified position paper and submit evidence in support of his causes of action, and thereupon render his decision on the basis of the evidence on record (Sec.5, Rule V, NLRC 2005 Rules of Procedure). AMICABLE SETTLEMENT

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Q: WHAT IS THE CONCEPT OF AMICABLE SETTLEMENT? A: It is where the Labor Arbiter shall exert all efforts to arrive at an amicable settlement of a labor dispute within its jurisdiction on or before its first hearing or during the mandatory conferences set for the purpose. Q: WHEN MAY THE LABOR ARBITER RENDER THE APPROVAL OF A COMPROMISE AGREEMENT? A: The compromise agreement shall be approved by the Labor Arbiter, if: 1. After explaining to the parties, particularly to the complainants the terms and conditions and consequences thereof; 2. He is satisfied that they understand the agreement; 3. That the same was entered into freely and voluntarily by them; and 4. That it is not contrary to law, morals, and public policy.

shall, motu proprio, determine whether there is a need for a hearing or clarificatory conference. At this stage, he may, at his discretion and for the purpose of making such determination, ask clarificatory questions to further elicit facts or information, including but not limited to the subpoena of relevant documentary evidence, if any, from any party or witness. Section 9. Role of the Labor Arbiter in Hearing and Clarificatory Conference. - a) The Labor Arbiter shall take full control and personally conduct the hearing or clarificatory conference. Unless otherwise provided by law, the Labor Arbiter shall determine the order of presentation of evidence by the parties, subject to the requirements of due process. He shall examine the parties and their witnesses with respect to the matters at issue; and ask questions only for the purpose of clarifying points of law or fact involved in the case. He shall limit the presentation of evidence to matters relevant to the issue before him and necessary for a just and speedy disposition of the case. b) In the cross-examination of witnesses, only relevant, pertinent and material questions necessary to enlighten the Labor Arbiter shall be allowed. c) The Labor Arbiter shall make a written summary of the proceedings, including the substance of the evidence presented, in consultation with the parties. The written summary shall be signed by the parties and shall form part of the records.

QUITCLAIM AND WAIVERS

SUBMISSION OF THE CASE FOR DECISION

A deed of release or quitclaim cannot bar an employee from demanding benefits to which he is legally entitled.

Q: WHAT IS THE BASIS OF THE DECISION BY THE LABOR ARBITER?

FINAL AND EXECUTORY JUDGMENT CANNOT BE NEGOTIATED

A: The affidavits in such case may take the place of their direct testimony. The labor arbiter may choose, if he deems it necessary, to set the case for hearing on the merits where witnesses may be presented and examined by the parties. In both instances, the burden of proving that the termination was for valid or authorized cause rests on the employer.

The judgment may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land. MOTION TO DISMISS Section 6. Motion to Dismiss. - On or before the date set for the mandatory conciliation and mediation conference, the respondent may file a motion to dismiss. Any motion to dismiss on the ground of lack of jurisdiction, improper venue, or that the cause of action is barred by prior judgment, prescription, or forum shopping, shall be immediately resolved by the Labor Arbiter through a written order. An order denying the motion to dismiss, or suspending its resolution until the final determination of the case, is not appealable.

CLARIFICATORY CONFERENCE Section 8. Determination of Necessity of Hearing or Clarificatory Conference. - Immediately after the submission by the parties of their position paper or reply, as the case may be, the Labor Arbiter

Q: WHAT IS THE EFFECT OF LACK OF VARIFICATION? A: The lack of verification of the position paper-affidavit is a formal, rather than a substantial, defect. It is not fatal. It could be easily corrected by requiring an oath. INHIBITION Section 12. Inhibition. - A Labor Arbiter may voluntarily inhibit himself from the resolution of a case and shall so state in writing the legal justifications therefor. Upon motion of a party, either on the ground of relationship within the fourth civil degree of consanguinity or affinity with the adverse party or counsel, or on question of impartiality, the Labor Arbiter may inhibit himself from further hearing and deciding the case. Such motion shall be resolved within five (5) days from the filing thereof.

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Kenneth & King Hizon (2A)- UST Faculty of Civil Law An order denying or granting a motion for inhibition is inappealable.

ADMINISTRATIVE DUE PROCESS Q: WHAT IS DUE PROCESS? A: The simple meaning of procedural due process is that a party to a case must be given sufficient opportunity to be heard. Its very essence is to allow all parties opportunity to present evidence. A formal or trial-type hearing is not at all times and in all instances essential to due process, the requirements of which are satisfied where parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand. Q: WHAT DOES ADMINISTRATIVE DUE PROCESS INCLUDE? A: a) the right to notice, be it actual or constructive, of the institution of the proceedings that may affect a person's legal right; b) reasonable opportunity to appear and defend his rights and to introduce witnesses and relevant evidence in his favor; c) a tribunal so constituted as to give him reasonable assurance of honesty and impartiality, and one of competent jurisdiction; and d) a finding or decision by that tribunal supported by substantial evidence presented at the hearing or at least ascertained in the records or disclosed to the parties.

Section 14. Contents of Decisions. - The decisions and orders of the Labor Arbiter shall be clear and concise and shall include a brief statement of the: a) facts of the case; b) issues involved; c) applicable laws or rules; d) conclusions and the reasons therefor; and e) specific remedy or relief granted. In cases involving monetary awards, the decisions or orders of the Labor Arbiter shall contain the amount awarded. In case the decision of the Labor Arbiter includes an order of reinstatement, it shall likewise contain: a) a statement that the reinstatement aspect is immediately executory; and b) a directive for the employer to submit a report of compliance within ten (10) calendar days from receipt of the said decision.

Art. 222. Appearances and Fees. a. Non-lawyers may appear before the Commission or any Labor Arbiter only: 1. If they represent themselves; or 2. If they represent their organization or members thereof. b. No attorney’s fees, negotiation fees or similar charges of any kind arising from any collective bargaining agreement shall be imposed on any individual member of the contracting union: Provided, However, that attorney’s fees may be charged against union funds in an amount to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null and void. (As amended by Presidential Decree No. 1691, May 1, 1980) APPEARANCE OF NON-LAWYERS

SUSPENSION OF PROCEEDINGS To allow labor cases to proceed would clearly defeat the purpose of the automatic stay and severely encumber the management committee’s time and resources. DECISION OF LABOR ARBITER Section 13. Period to Decide Case. - The Labor Arbiter shall render his decision within thirty (30) calendar days, without extension, after the submission of the case by the parties for decision, even in the absence of stenographic notes; Provided however, that cases involving overseas Filipino workers shall be decided within ninety (90) calendar days after the filing of the complaint which shall commence to run upon acquisition by the Labor Arbiter of jurisdiction over the respondents.

Section 8. Appearances. - b) A non-lawyer may appear as counsel in any of the proceedings before the Labor Arbiter or Commission only under the following conditions: (1) he represents himself as party to the case; (2) he represents a legitimate labor organization, as defined under Article 212 and 242 of the Labor Code, as amended, which is a party to the case: Provided, that he presents: (i) a certification from the Bureau of Labor Relations (BLR) or Regional Office of the Department of Labor and Employment attesting that the organization he represents is duly registered and listed in the roster of legitimate labor organizations; (ii) a verified certification issued by the secretary and attested to by the president of the said organization stating that he is authorized to represent the said organization in the said case; and (iii) a copy of the resolution of the board of directors of the said organization granting him such authority;

Contents of Decisions

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Kenneth & King Hizon (2A)- UST Faculty of Civil Law (3) he represents a member or members of a legitimate labor organization that is existing within the employer's establishment, who are parties to the case: Provided, that he presents: (i) a verified certification attesting that he is authorized by such member or members to represent them in the case; and (ii) a verified certification issued by the secretary and attested to by the president of the said organization stating that the person or persons he is representing are members of their organization which is existing in the employer's establishment; (4) he is a duly-accredited member of any legal aid office recognized by the Department of Justice or Integrated Bar of the Philippines: Provided, that he (i) presents proof of his accreditation; and (ii) represents a party to the case; (5) he is the owner or president of a corporation or establishment which is a party to the case: Provided, that he presents: (i) a verified certification attesting that he is authorized to represent said corporation or establishment; and (ii) a copy of the resolution of the board of directors of said corporation, or other similar resolution or instrument issued by said establishment, granting him such authority.

2) there must be filed the written consent of the client to the substitution; 3) there must be filed the written consent of the attorney to be substituted, if such consent can be obtained; 4) in case such written consent cannot be procured, there must be filed with the application for substitution, proof of the service of notice of such motion in the manner required by the rules, on the attorney to be substituted. RULE AS TO AUTHORITY TO BIND PARTY Section 9. Authority to Bind Party. - Attorneys and other representatives of parties shall have authority to bind their clients in all matters of procedure; but they cannot, without a special power of attorney or express consent, enter into a compromise agreement with the opposing party in full or partial discharge of a client's claim.

ATTORNEY’S FEE Q: MAY A NON-LAWYER APPEAR BEFORE THE NLRC? Q: WHO HAS THE OBLIGATION TO PAY THE ATTOYNEY’S FEES?

A: Yes. Q: WHEN MAY A NON-LAWYER APPEAR BEFORE THE COMMISSION OR LABOR ARBITER? A: Under the NLRC Rules of 2005, a non-lawyer may appear before the Commission or Labor Arbiter only if: 1. he represents himself as party to the case; 2. he represents a legitimate labor organization which is a party to the case provided that he shall be made to present a verified certification that he is authorized to represent the said organization in the said case; 3. he represents a member or members of a legitimate labor organization that is existing within the employer's establishment; 4. he is a duly-accredited member of any legal aid office recognized by the Department of Justice or Integrated Bar of the Philippines; 5. he is the owner or president of a corporation or establishment which is a party to the case. CHANGE OF LAWYER Q: HOW CAN SUBSTITUTION BE MADE? A: No substitution of attorneys will be allowed unless the following requisites concur:

A: The purpose of the provision is to prevent imposition on the workers of the duty to individually contribute their respective shares in the fee to be paid the attorney for his services on behalf of the union in its negotiations with the management. The obligation to pay the attorney's fees belongs to the union and cannot be shunted to the workers as their direct responsibility. Q: WHAT IS THE BASIS OF THE AWARD OF ATTORNEY’S FEES FROM WHERE SHOULD IT BE TAKEN? A: With respect to simple monetary claim under Art.111 of the LC, the maximum amount to be given a lawyer for his legal assistance rendered is 10% of the total monetary award adjudged the employees excluding the award for moral and exemplary damages. To demand more than this is unlawful. The purpose of which is to fix the limit on the amount of attorney’s fees. Under Art.222, attorney’s fees for CBA negotiations and conclusion shall be in the amount agreed upon by the parties taken from the union funds and not from individual union members. Q: WHAT IS THE EFFECT OF AN AGREEMENT THAT THE INDIVIDUAL WORKERS SHALL ASSUME RESPONSIBILITY IN PAYING THE FEES?

1) there must be filed a written application for substitution;

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A: This article prohibits the payment of attorney’s fees only where the same is effected through forced contributions from the workers from their own funds as distinguished from union funds. Neither the lawyer nor the union may require the individual workers to assume the obligation to pay the attorney’s fees from their own pockets. Any agreement to the contrary shall be null and void.

In all cases, the appellant shall furnish a copy of the memorandum of appeal to the other party who shall file an answer not later than ten (10) calendar days from receipt thereof.

Chapter III -APPEAL

Any law enforcement agency may be deputized by the Secretary of Labor and Employment or the Commission in the enforcement of decisions, awards or orders.

Art. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds: a. If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter; b. If the decision, order or award was secured through fraud or coercion, including graft and corruption; c. If made purely on questions of law; and d. If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant. In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from. 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 a bond by the employer shall not stay the execution for reinstatement provided herein. To discourage frivolous or dilatory appeals, the Commission or the Labor Arbiter shall impose reasonable penalty, including fines or censures, upon the erring parties.

The Commission shall decide all cases within twenty (20) calendar days from receipt of the answer of the appellee. The decision of the Commission shall be final and executory after ten (10) calendar days from receipt thereof by the parties.

Q: IS THE DECISION OF THE LABOR ARBITER APPEALABLE TO THE NLRC? A: YES. Q: IS A MOTION FOR RECONSIDERATION OF LABOR ARBITER’S DECISION A PRECONDITION TO AN APPEAL TO THE NLRC? A: NO. If any of the grounds mentioned in Art.223 exists, the losing party may appeal the Labor Arbiter’s decision to the NLRC within 10 days from receipt of decision. NO motion for reconsideration need to be filed. Q: WHAT IF THE DECISION WAS NOT APPEALED TIME? A: If not appealed on time, the Labor Arbiter’s decision becomes final and cannot be amended. The perfection of an appeal within the statutory or reglementary period is not only mandatory but also jurisdictional and failure to do so renders the questioned decision final and executor, thus depriving the appellate court of jurisdiction to alter the final judgment, much less entertain the appeal. PERIOD TO APPEAL FROM LABOR ARBITER A: A period of ten (10) days from receipt of any order is granted to either or to both parties involved to appeal to the National Labor Relations Commission. “After mature and careful deliberation, We have arrived at the conclusion that the shortened period of ten (10) days fixed by Article 223 contemplates calendar days and not working days. We are persuaded to this conclusion, if only because We believe that it is

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precisely in the interest of labor that the law has commanded that labor cases be promptly, if not peremptorily, dispose of.

questioned decision final and executory as to deprive the appellate court of jurisdiction to alter the final judgment of the Regional Directors and Labor Arbiters

This Court reiterates the doctrine enunciated in said case that the 10-day period provided in Art. 223 of the Labor Code refers to 10 calendar days and not 10 working days. This means that Saturdays, Sundays and Legal Holidays are not to be excluded, but included, in counting the 10-day period. This is in line with the objective of the law for speedy disposition of labor cases with the end in view of protecting the interests of the working man.”

Section 1. Periods of Appeal. - No motion or request for extension of the period within which to perfect an appeal shall be allowed.

2005 NLRC Rules of Procedure Section 1. Periods of Appeal. - Decisions, resolutions or orders of the Labor Arbiter shall be final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt thereof; and in case of decisions, resolutions or orders of the Regional Director of the Department of Labor and Employment pursuant to Article 129 of the Labor Code, within five (5) calendar days from receipt thereof. If the 10th or 5th day, as the case may be, falls on a Saturday, Sunday or holiday, the last day to perfect the appeal shall be the first working day following such Saturday, Sunday or holiday.

RECKONING POINT: DATE OF RECEIPT BY MAIL The rule is that service by registered mail is complete either upon actual receipt by the addressee or at the end of five (5) days, if he does not claim it within five (5) days from the first notice of the postmaster. (Rule 13, §8) The purpose is to place the date of receipt of pleadings, judgments and processes beyond the power of the party being served to determine at his pleasure. Q: WHAT IS THE EFFECT OF THE FAILURE TO GIVE COPY OF APPEAL TO ADVERSE PARTY WITHIN TEN DAYS? A: The failure to give copy of appeal to the appellee within ten (10) days is not fatal if the appellee was not prejudiced by the delay in the service of said copy of appeal. Q: CAN THERE BE A PERIOD OF EXTENSION?

GROUNDS OF APPEAL UNDER 2005 NLRC Rules of Procedure Section 2. Grounds. - The appeal may be entertained only on any of the following grounds: a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter or Regional Director; b) If the decision, resolution or order was secured through fraud or coercion, including graft and corruption; c) If made purely on questions of law; and/or d) If serious errors in the findings of facts are raised which, if not corrected, would cause grave or irreparable damage or injury to the appellant.

GROUNDS OF APPEAL Q: WHAT ARE THE GROUNDS FOR APPEAL TO THE NLRC? A: Such appeal may be entertained only on any of the following grounds: 1. If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter; 2. If the decision, order or award was secured through fraud or coercion, including graft and corruption; 3. If made purely on questions of law; and 4. If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant. WHERE TO FILE APPEAL Section 3. Where Filed. - The appeal shall be filed with the Regional Arbitration Branch or Regional Office where the case was heard and decided.

Q: WHERE IS THE APPEAL FILED? A: No Extension of Period. A motion or request for extension of the period within which to perfect an appeal shall not be allowed. Note: The perfection of an appeal within the statutory or reglementary period is not only mandatory but also jurisdictional and failure to do so renders the

A: The appeal shall be filed with the Regional Arbitration Branch or Regional office where the case was heard and decided (Sec.3, Rule VI, NLRC 2005 Rules of Procedure). REQUISITES FOR PERFECTION OF APPEAL

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Section 4. requisites For Perfection Of Appeal. - a) The appeal shall be: 1) filed within the reglementary period provided in Section 1 of this Rule; 2) verified by the appellant himself in accordance with Section 4, Rule 7 of the Rules of Court, as amended; 3) in the form of a memorandum of appeal which shall state the grounds relied upon and the arguments in support thereof, the relief prayed for, and with a statement of the date the appellant received the appealed decision, resolution or order; 4) in three (3) legibly typewritten or printed copies; and 5) accompanied by i) proof of payment of the required appeal fee; ii) posting of a cash or surety bond as provided in Section 6 of this Rule; iii) a certificate of non-forum shopping; and iv) proof of service upon the other parties. b) A mere notice of appeal without complying with the other requisites aforestated shall not stop the running of the period for perfecting an appeal. c) The appellee may file with the Regional Arbitration Branch or Regional Office where the appeal was filed, his answer or reply to appellant's memorandum of appeal, not later than ten (10) calendar days from receipt thereof. Failure on the part of the appellee who was properly furnished with a copy of the appeal to file his answer or reply within the said period may be construed as a waiver on his part to file the same. d) Subject to the provisions of Article 218 of the Labor Code, once the appeal is perfected in accordance with these Rules, the Commission shall limit itself to reviewing and deciding only the specific issues that were elevated on appeal. Q: HOW MUCH IS THE APPEAL FEE TO BE PAID BE THE APPELLANT? A: The appellant shall pay an appeal fee of One Hundred Fifty Pesos (P150.00) to the Regional Arbitration Branch or Regional Office of origin, and the official receipt of such payment shall form part of the records of the case.

EFFECT OF NON-PAYMENT OF THE APPEAL FEE

Q: WHAT IS THE EFFECT OF NON-PAYMENT OF THE APPEAL FEE? A: The failure to pay the appeal docketing fee confers a directory and not a mandatory power to dismiss an appeal and such power must be exercised with a sound discretion and with a great deal of circumspection considering all attendant circumstances. It is true that in Acda v. Minister of Labor, the Supreme Court said that the payment of the appeal fee is by no means a mere technicality but is an essential requirement in the perfection in an appeal. However, where the fee had been paid belatedly, the broader interest of justice and the desired objective in deciding the case on the merits demand an appeal be given due course. Q: IS THE POSTING OF AN APPEAL BOND REQUIRED FOR THE PERFECTION OF AN APPEAL FROM A LABOR ARBITER’S DECISION INVOLVING MONETARY AWARD? A: YES. In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal by the employer may be perfected only upon the posting of a bond, which shall either be in the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages and attorney's fees. In case of surety bond, the same shall be issued by a reputable bonding company duly accredited by the Commission or the Supreme Court, and shall be accompanied by original or certified true copies of the following: a) a joint declaration under oath by the employer, his counsel, and the bonding company, attesting that the bond posted is genuine, and shall be in effect until final disposition of the case. b) an indemnity agreement between the employerappellant and bonding company; c) proof of security deposit or collateral securing the bond: provided, that a check shall not be considered as an acceptable security; d) a certificate of authority from the Insurance Commission; e) certificate of registration from the Securities and Exchange Commission; f) certificate of authority to transact surety business from the Office of the President; g) certificate of accreditation and authority from the Supreme Court; and h) a notarized board resolution or secretary's certificate from the bonding company showing its

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authorized signatures.

signatories

and

their

specimen

A cash or surety bond shall be valid and effective from the date of deposit or posting, until the case is finally decided, resolved or terminated, or the award satisfied. This condition shall be deemed incorporated in the terms and conditions of the surety bond, and shall be binding on the appellants and the bonding company. The appellant shall furnish the appellee with a certified true copy of the said surety bond with all the abovementioned supporting documents. The appellee shall verify the regularity and genuineness thereof and immediately report any irregularity to the Commission. Upon verification by the Commission that the bond is irregular or not genuine, the Commission shall cause the immediate dismissal of the appeal, and censure or cite in contempt the responsible parties and their counsels, or subject them to reasonable fine or penalty. No motion to reduce bond shall be entertained except on meritorious grounds, and only upon the posting of a bond in a reasonable amount in relation to the monetary award. The mere filing of a motion to reduce bond without complying with the requisites in the preceding paragraphs shall not stop the running of the period to perfect an appeal (Sec.6, Rule VI, NLRC 2005 Rules of Procedure).

Q: WHAT ARE THE OPTIONS OF AN EMPLOYER IN COMPLYING WITH AN ORDER OF REINSTATEMENT WHICH IS IMMEDIATELY SELF-EXECUTORY? A: The employer has the following options: 1. He can admit the dismissed employee back to work under 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; OR 2. He can reinstate the employee merely in the payroll with payment of the accrued salaries. NOTE: The exercise of one of the foregoing may be compelled under pain of contempt and the employer may be made to pay the salary of the employee instead. Payroll Reinstatement Q: WHAT IS MEANT BY PAYROLL REINSTATEMENT? A: It is one where an employee is paid his monthly salary without making him perform actual work. It applies in termination cases where the labor court declares the dismissal illegal and orders reinstatement of the employee, but the employer does not want to actually or physically reinstate him and instead, at the employer’s option, merely reinstates the employee in the payroll pending appeal. PETITION FOR RELIEF FROM JUDGMENT

NO BOND, NO APPEAL PERFECTED The lawmakers intended the posting of a cash or surety bond by the employer to be the exclusive means by which an employer’s appeal may be considered completed. EFFECT OF APPEAL OF ARBITER’S DECISION Section 9. Perfection Of Appeal; Effect. - Without prejudice to immediate reinstatement pending appeal under Section 6 of Rule XI, once an appeal is filed, the Labor Arbiter loses jurisdiction over the case. All pleadings and motions pertaining to the appealed case shall thereafter be addressed to and filed with the Commission.

Q: WHAT IS THE EFFECT OF PERFECTION OF AN APPEAL ON EXECUTION? A: The perfection of an appeal shall stay the execution of the decision of the Labor Arbiter on appeal, except execution for reinstatement pending appeal.

Q: IS A PETITION FOR RELIEF AVAILABLE TO THE APPELLANT? A: YES. A petition for relief from the decision of the Labor Arbiter is available. Q: WITHIN WHAT PERIOD SHOULD A PETITION FOR RELIEF MAY BE FILED? A: A petition for relief from the decision of the Labor Arbiter must strictly comply with 2 reglementary periods: 1. The petition must be filed within 60 days from knowledge of judgment; and 2. The petition must be filed within a fixed period of 6 months from entry of such judgment. NOTE: Petitions filed beyond said period will no longer be entertained.

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Q: WHAT ARE THE APPLICABLE RULES ON JUDICIAL REVIEW? A: 1. No law allows an appeal from a decision of the Secretary of Labor or the NLRC or of a voluntary arbitrator. NOTE: Decisions of Voluntary Arbitrators are appealable to the CA under Rule 43 of the Rules of Court in relation to Sec.9 of BP Blg. 129. Voluntary Arbitrators are to be considered as quasi-judicial agencies whose decisions are appealable to the CA (Luzon Dev’t. Bank v. Association of Luzon Dev’t. Bank, octobet 6, 1995). 2. The way to review NLRC decisions is by special civil action for certiorari, prohibition or mandamus under Rule 65 of the Rules of Court. NOTE: A petition for certiorari shall not stay the execution of the assailed decision of the NLRC unless a TRO is issued by the CA or SC. 3. Jurisdiction belongs to SC and CA, but in line with the doctrine on hierarchy of courts, the petition should be initially presented to the CA (St. Martin’s Funeral Home v. NLRC, September 16, 1988). 4. No motion for reconsideration is allowed for any order, decision or award of a Labor Arbiter. However, a motion for reconsideration of a Labor Arbiter’s decision, award or order which has all the elements of an appeal may be treated as appeal. 5. Only one motion for reconsideration of the decision, award or order of the commission in cases appealed before it is allowed.

exercising judicial functions has acted without or in excess of its jurisdiction, or with grave abuse of discretion, and praying that judgment be rendered annulling or modifying the proceedings, as the law requires, of such tribunal, board or officer. In spite of statutory provisions making ‘final’ the decisions of certain administrative agencies, the Supreme Court [or Court of Appeals] using the power of judicial review, has taken cognizance of petitions questioning the decisions where want of jurisdiction, grave abuse of discretion, violation of due process, denial of substantial justice, or erroneous interpretation of the law were brought to its attention. The writ of certiorari will issue to undo those acts, and do justice to the aggrieved party. Q: WHAT IS GRAVE ABUSE OF DISCRETION? A: By grave abuse of discretion is meant capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. Mere abuse of discretion is not enough. It must be grave abuse of discretion as when the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and so gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. EXHAUSTION OF ADMINISTRATIVE REMEDIES; MOTION FOR RECONSIDERATION REQUIRED The remedy of an aggrieved party in a decision or resolution of the Secretary of the DOLE is to timely file a motion for reconsideration as a precondition of or any further or subsequent remedy, and then seasonably file a special civil action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure.

APPEAL TO LABOR SECRETARY ABOLISHED Presidential Decree No. 1391 amended Article 223 and abolished appeals to the Secretary of Labor.

Q: WHAT IS THE EFFECT OF FAILURE TO FILE A MOTION FOR RECONSIDERATION? A: Petitioner’s failure to file its motion for reconsideration seasonably is fatal to its cause and in effect, renders final and executor the Resolution of the Secretary of the DOLE.

GROUNDS FOR CERTIORARI

A petition for certiorari should be preceded by exhaustion of administrative remedies.

A party may seasonably avail of the special civil action for certiorari, where the tribunal, board or officer

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When an administrative remedy is provided by law, relief must be sought by first exhausting that remedy before seeking judicial intervention. Failure to do so is fatal. Q: WHAT ARE THE EXCEPTIONS TO THIS RULE ON MOTION FOR RECONSIDERATION? A: It has been held that the requirement of a motion for reconsideration may be dispensed with in the following instances: 1.) when the issue raised is one purely of law; 2.) where public interest is involved; 3.) in cases of urgency; and 4.) where special circumstances warrant immediate or more direct action.

Q: WHAT IS THE RULE REGARDING THE FINDINGS OF FACTS BY THE NLRC? NOTE: The doctrine that the findings of facts of the NLRC are binding on this Court if supported by substantial evidence is well established. However, in the same way that the findings of facts unsupported by substantial and credible evidence do not bind the Supreme Court [or Court of Appeals], neither will we uphold erroneous conclusions of the NLRC when we find that the latter committed grave abuse of discretion in reversing the decision of the labor arbiter, especially if the findings of NLRC based on practically the same facts established in the hearings before the arbiter are speculative and conjectural Q: GIVE SOME EXCEPTIONS.

Q: GIVE SOME EXCEPTIONS TO THE RULE ON EXHAUSTION OF ADMINISTRATIVE REMEDIES. A: On the other hand, among the accepted exceptions to the rule on exhaustion of administrative remedies are: 1.) where the question in dispute is purely a legal one; and 2.) where the controverted act is patently illegal or was performed without jurisdiction or in excess of jurisdiction. CERTIFICATION OF NON-FORUM SHOPPING Q: WHAT IS FORUM-SHOPPING? A:Forum shopping is the act or attempt to present the same dispute to different adjudicators in the hope of securing a favourable ruling. Q: WHO SHOULD MAKE THE CERTIFICATE OF NONFORUM SHOPPING? A: The certification must be made by petitioner himself and not by counsel since it is petitioner who is in the best position to know whether he has previously commenced any similar action involving the same issues in any other tribunal or agency.

FINDINGS OF FACTS BY THE NLRC PRESUMED TO BE CONCLUSIVE

A: 1.) when the findings are grounded entirely on speculation, surmises, or conjectures; 2.) when the inference made is manifestly mistaken, absurd, or impossible; 3.) when there is grave abuse of discretion; 4.) when the judgment is based on a misapprehension of facts; 5.) when the findings of facts are conflicting; 6.) when in making its findings, the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; 7.) when the findings are contrary to the trial court; 8.) when the findings are conclusions without citation of specific evidence on which they are based; 9.) when the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; 10.) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and 11.) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.

Art. 224. Execution of decisions, orders or awards. a. The Secretary of Labor and Employment or any Regional Director, the Commission or any Labor

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Arbiter, or Med-Arbiter or Voluntary Arbitrator may, motu proprio or on motion of any interested party, issue a writ of execution on a judgment within five (5) years from the date it becomes final and executory, requiring a sheriff or a duly deputized officer to execute or enforce final decisions, orders or awards of the Secretary of Labor and Employment or regional director, the Commission, the Labor Arbiter or medarbiter, or voluntary arbitrators. In any case, it shall be the duty of the responsible officer to separately furnish immediately the counsels of record and the parties with copies of said decisions, orders or awards. Failure to comply with the duty prescribed herein shall subject such responsible officer to appropriate administrative sanctions. b. The Secretary of Labor and Employment, and the Chairman of the Commission may designate special sheriffs and take any measure under existing laws to ensure compliance with their decisions, orders or awards and those of the Labor Arbiters and voluntary arbitrators, including the imposition of administrative fines which shall not be less than P500.00 nor more than P10,000.00. WRIT OF EXECUTION Q: WHAT IS A WRIT OF EXECUTION? A: It is an order to carry out, to implement, a final judgment. Q: WHEN IS A DECISION OF THE COMMISSION, LABOR ARBITER, THE BUREAU OR REGIONAL DIRECTOR, THE MED-ARBITER, VOLUNTARY ARBITRATOR AND SECRETARY OF LABOR BECOMES FINAL AND EXECUTORY? A: A decision of the Commission, labor Arbiter, Bureau or Regional Director, Med-Arbiter, voluntary Arbitrator and Secretary of Labor shall become final and executory after ten (10) calendar days from receipt thereof by the parties and shall be executory within ten (10) years.

3. 4. 5. 6. 7.

The Commission; Any Labor Arbiter; Any med-Arbiter; The Voluntary Arbitrator; or The Panel of Arbitrators.

Q: WHEN MAY A WRIT OF EXECUTION BE ISSUED? A: The writ of execution on a judgment may be issued motu proprio or on motion of any interested party within five (5) years from the date it becomes final and executory. An independent action is required for the execution of the final judgment within the next 5 years (Phil. National Railways v. NLRC, September 19,1989). Q: MAY THE MANNER OF EXECUTION BE APPEALED FROM? A: YES. Generally, once a judgment becomes final and executory, it can no longer be disturbed, altered or modified. The principle however, admits of exceptions as in cases where, because of supervening events, it becomes imperative, in the higher interest of justice, to direct its modification in order to harmonize the disposition with the prevailing circumstances or whenever it is necessary to accomplish the aims of justice Although the decision of the Labor Arbiter has become final, the correctness of the execution of the decision may be appealed to and reviewed by the NLRC. NOTE: A judgment becomes final and executory by operation of law, not by judicial declaration. Accordingly, finality of judgment becomes a fact upon the lapse of the reglementary period of appeal if no appeal is perfected. In such a situation, the prevailing party is entitled as a matter of right to a writ of execution; and issuance thereof is a ministerial duty, compellable by mandamus.

Q: WHO ARE THE OFFICIALS WHO MAY ISSUE A WRIT OF EXECUTION? A: Under Art.224, a writ of execution may be issued by the following officials for the final decisions, orders, or awards promulgated by them: 1. Secretary of Labor and Employment; 2. Any Regional Director;

RTC CANNOT ISSUE INJUNCTION AGAINST NLRC Q: CAN THE RTC ISSUE INJUNCTION AGAINST NLRC?

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A: Precedents abound confirming the rule that said courts have no labor jurisdiction to act on labor cases or various incidents arising therefrom, including the execution of decisions, awards or orders. Jurisdiction to try and adjudicate such cases pertains exclusively to the proper labor official concerned under the Department of Labor and Employment. To hold otherwise is to sanction split jurisdiction which is obnoxious to the orderly administration of justice. REMEDIES OF A THIRD PARTY WHOSE PROPERTY HAS BEEN WRONGFULLY LEVIED TO ENFORCE A DECISION Q: WHAT ARE THE REMEDIES OF A THIRD PARTY WHOSE PROPERTY HAS BEEN WRONGFULLY LEVIED TO ENFORCE A DECISION? A: A third party whose property has been levied upon by a sheriff to enforce a decision against a judgment debtor is afforded with several alternative remedies to protect its interests. The third party may avail himself of alternative remedies cumulatively, and one will not preclude the third party from availing himself of the other alternative remedies in the event he failed in the remedy first availed of. A third party may avail himself of the following alternative remedies: a) File a third party claim with the sheriff of the Labor Arbiter, and b) If the third party claim is denied, the third party may appeal the denial to the NLRC. NOTE: Even if a third party claim was denied, a third party may still file a proper action with a competent court to recover ownership of the property illegally seized by the sheriff.

resulting from the allegedly wrongful seizure and detention thereof despite the third-party claim. The remedies above mentioned are cumulative and may be resorted to by a third-party claimant independent of or separately from and without need of availing of the others. Q: WHEN CAN THE RTC ISSUE AN INJUNCTION AGAINST THE LA OR THE NLRC? A: The regional trial court where the reinvindicatory action is filed can issue an injunction or temporary restraining order against the execution ordered by a labor arbiter or the NLRC. The general rule that no court has the power to interfere by injunction with the judgments or decrees of another court with concurrent or coordinate jurisdiction possessing equal power to grant injunctive relief, applies only when no third-party claimant is involved. Jurisprudence is likewise replete with rulings that since the third-party claimant is not one of the parties to the action, he could not, strictly speaking, appeal from the order denying his claim, but should file a separate reinvindicatory action against the execution creditor or the purchaser of the property after the sale at public auction, or a complaint for damages against the bond filed by the judgment creditor in favor of the sheriff.

Art. 225. Contempt powers of the Secretary of Labor. In the exercise of his powers under this Code, the Secretary of Labor may hold any person in direct or indirect contempt and impose the appropriate penalties therefor.

The right of a third-party claimant to file an independent action to vindicate his claim of ownership over the properties seized is reserved by Section 17 (now 16), Rule 39 of the Rules of Court. The aforesaid remedies are nevertheless without prejudice to 'any proper action' that a third-party claimant may deem suitable to vindicate 'his claim to the property. Quite obviously, too, this 'proper action' would have for its object the recovery of ownership or possession of the property seized by the sheriff, as well as damages

Title III BUREAU OF LABOR RELATIONS Art. 226. Bureau of Labor Relations. The Bureau of Labor Relations and the Labor Relations Divisions in

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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.

INTER-UNION AND INTRA-UNION DISPUTES Q: WHAT IS INTER-UNION DISPUTE? A: "Inter-Union Dispute" refers to any conflict between and among legitimate labor unions involving representation questions for purposes of collective bargaining or to any other conflict or dispute between legitimate labor unions. Q: WHAT IS INTRA-UNION DISPUTE?

The Bureau shall have fifteen (15) working days to act on labor cases before it, subject to extension by agreement of the parties. BLR’s JURISDICTION AND FUNCTIONS Q: WHAT IS COVERED BY THE BLR’s JURISDICTION AND FUCNTIONS? A: The Bureau of Labor Relations (BLR) no longer handles “all labor management dispute; rather its functions and jurisdiction are largely confined to union matters, collective bargaining registry and labor education. Such is the effect of E.O No.251 of 1987 which transferred to the newly-created National Conciliation and Mediation Board (NCMB) the mediation, conciliation, and arbitration functions of BLR NOTE: Jurisdiction over labor management problems or disputes is also exercised by other offices such as DOLE regional offices, the Office of the Secretary of labor, NLRC, POEA, OWWA, SSS-ECC, the regional wage and productivity board, NWPC and even regular courts over intra-corporate disputes.

A: "Intra-Union Dispute" refers to any conflict between and among union members, including grievances arising from any violation of the rights and conditions of membership, violation of or disagreement over any provision of the union's constitution and by-laws, or disputes arising from chartering or affiliation of union. NOTE: In inter/intra-union dispute the complaint may be filed by a union or union members; in a “related labor relations dispute” the complaint may be filed by a party-in-interest who is not necessarily a union or union member. Whether the dispute be of the first or the second category, the complainant or petition, if it involves an independent union, a chartered local, or a worker’s association, shall be filed with the DOLE Regional Office where the labor organization is registered. But if the complaint involves a federation or an industry/national union, it shall be filed with the BLR itself. Q: WHAT IS THE COVERAGE IF INTER / INTRA-UNION DISPUTES?

Q: WHO IS A MED-ARBITER? A: A Med-Arbiter is an officer in the regional office or bureau authorized to hear, conciliate and decide representation cases or assist in the disposition of intra or inter-union disputes. Q: WHAT KINDS OF CASES FALL WITHIN BLR’S JURISDICTION? A: The BLR has original and exclusive jurisdiction over the following: 1. inter-union disputes; 2. intra-union disputes; and other related labor relations disputes.

A: Inter/intra-union disputes shall include: 1. cancellation of registration of a labor organization filed by its members or by another labor organization; 2. conduct of election of union and worker’s association officers/nullification of election of union and workers’ association officers; 3. audit/accounts examination of union or workers’ association funds; 4. deregistration of collective bargaining agreements; 5. validity/invalidity of union affiliation or disaffiliation;

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6. validity/invalidity of acceptance/ nonacceptance for union membership; 7. validity/invalidity of impeachment/ expulsion of union and workers association officers and members; 8. validity/invalidity of voluntary recognition; 9. opposition to application for union and CBA registration; 10. violations of or disagreements over any provision in a union or workers’ association constitution and by-laws; 11. disagreements over chartering or registration of labor organizations and collective bargaining agreements; 12. violations of the rights and conditions of union or workers’ association membership; 13. violations of the rights of legitimate labor organizations, except interpretation of collective bargaining agreements; 14. such other disputes or conflicts involving the rights to self-organization, union membership and collective bargaining – i. between and among legitimate labor organization; ii. between and among members of a union or workers’ association (Sec.1, Rule XI, D.O. 40-03). Q: WHAT IS MEANT BY THE TERM “OTHER RELATED LABOR RELATIONS DISPUTES”? A: This includes any conflict between a labor union and the employer or any individual, entity or group that is not a labor organization or worker’s association. Q: WHAT IS THE COVERAGE OF THE TERM “OTHER RELATED LABOR RELATIONS DISPUTES”? A: Such dispute includes: 1. cancellation of registration of unions and workers’ association; and 2. a petition for interpleader.

EFFECTS OF FILING/PENDENCY OF INTER/INTRAUNION DISPUTES AND OTHER RELATION LABOR RELATIONS DISPUTES

Q: WHAT ARE THE EFFECTS OF FILING/PENDENCY OF INTER/INTRA-UNION DISPUTES AND OTHER RELATION LABOR RELATIONS DISPUTES? A: As provided under Sec.3, Rule XI, D.O. 40-03: The rights, relationships and obligations of the party-litigants against each other and other parties-ininterest prior to the institution of the petition shall continue to remain during the pendency of the petition and until the date of finality of the decision rendered therein. Thereafter, the rights, relationships and obligations of the party-litigants against each other and other party-in-interest shall be governed by the decision so ordered. The filing or pendency of any inter/intra-union dispute and other related labor relation dispute is not a prejudicial question to any petition for certification election and shall not be a ground for the dismissal of a petition for certification election or suspension of proceedings for certification election. Q: WHO MAY FILE A COMPLAINT OR PETITION INVOLVING DISPUTES ENUMERATED UNDER SEC.1, RULE XI, D.O. 40-03? A: A complaint involving intra/inter-union dispute may be filed by a legitimate labor organization or its members. Where the issue, however, involves the entire membership, the complaint must be signed by at least 30% of the entire membership of the union. If the issue involves a member only, only the affected member may file the complaint (Sec.5, Rule XI, D.O. 40-03). NOTE: Redress must first be sought within the union itself in accordance with its constitution and by-laws except under any of the following circumstances: 1. futility of intra-union remedies; 2. improper expulsion procedure; 3. undue delay in appeal as to constitute substantial injustice; 4. the action is for damages; 5. lack of jurisdiction of the investigating body; action for the administrative agency is patently illegal, arbitrary and oppressive; 6. issue is purely a question of law; 7. where the administrative agency had already prejudged the case; and 8. where the administrative agency was practically given the opportunity to act on the case but it did not.

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VENUE WHERE THE COMPLAINT IS FILED Q: WHERE IS THE COMPLAINT OR PETITION FILED? A: Complaints or petitions involving labor unions with independent registrations, chartered locals, workers’ associations, its officers or members shall be filed with the Regional Office that issued their certificate of registration or certificate of creation of chartered local. Complaints involving federations, national unions, industry unions, its officers or member organizations shall be filed with the Bureau. Petitions for cancellation of registration of labor unions with independent registration, chartered locals and workers’ association and petitions for deregistration of collective bargaining agreements shall be resolved by the Regional Director. He/She may appoint a hearing officer from the Labor relations Division. Other Inter/Intra-union disputes and related labor relations disputes shall be heard and resolved by the Med-Arbiter in the regional office.

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 fault of his/her/their own, or compliance with such administrative remedies does not apply to complainant(s) or petitioner(s); g. relief(s) prayed for; h. certificate of non-0forumshopping; i. other relevant matters.(Sec.6, Rule XI, D.O. 4003). APPEAL Q: MAY A DECISION IN AN INTER/INTRA-UNION DISPUTE BE APPEALED FROM? A: YES. Q: HOW MUST THE APPEAL BE MADE?

Complaints or petitions involving federations, national or industry unions, trade union centers and their chartered locals, affiliates or member organizations shall be filed either with the Regional Office or the Bureau. The complaint shall be heard and resolved by the Bureau. Where two or more petitions involving the same parties and the same causes of action are filed, the same shall be automatically consolidated (Sec.5, Rule XI, D.O. 4003). FORMAL REQUIREMENTS OF THE COMPLAINT OR PETITION Q: WHAT ARE THE FORMAL REQUIREMENTS OF THE COMPLAINT OR PETITION? A: The complaint or petition shall be: 1. in writing; 2. verified under oath; and 3. shall contain the following: a. name, address and personal circumstances of the complainant(s) or petitioner(s) b. name, address and personal circumstances of the respondent(s) or person(s) charged; c. nature of the complaint or petition;

A: The appeal must be: 1. under oath; 2. consists of a memorandum of appeal; 3. based on either of the following grounds: a. grave abuse of discretion or b. gross violation of the rules. 4. With supporting arguments and evidence (Sec.16, Rule XI, D.O. 40-03). Q: WITHIN WHAT PERIOD MAY AN APPEAL TO A DECISION OF THE MED-ARBITER OR REGIONAL DIRECTOR IN AN INTER/INTRA-UNION DISPUTE BE FILED? A: The decision may be appealed by any of the parties within ten (10) days from receipt thereof (Sec.16, Rule XI, D.O. 40-03). Q: TO WHOM IS THE DECISION APPEALABLE? A: The decision is appealable to: 1. the Bureau of Labor Relations (BLR) if the case originated from the Med-Arbiter or regional Director; 2. the Secretary of Labor, if the case originated from the Bureau.

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Q: WHERE IS THE APPEAL FILED? A: The memorandum of appeal shall be filed in the Regional Office or Bureau where the complaint or petition originated. (Within 24 hours from receipt of the memorandum of appeal, the Bureau of Regional Director shall cause the transmittal thereof together with the entire records of the case to the Office of the Secretary or the Bureau, as the case may be.) EXTENT OF THE BLR’S AUTHORITY

4. maintenance of a file of all settlements or final decisions of the Supreme Court, Court of Appeals, NLRC and other agencies on labor disputes. Q: WHAT ARE THE CASES WHERE THE BLR HAS NO JURISDICTION? A: Those arising from the implementation or interpretation of collective bargaining agreements which shall be subject of grievance procedure and/or voluntary arbitration.

Q: WHAT IS THE EXTENT OF THE BLR’S AUTHORITY? A: It may hold a referendum election among the members of a union for the purpose of determining whether or not they desire to be affiliated with a federation. But the BLR has no authority to order a referendum among union members to decide whether to expel or suspend union officers. Neither does the BLR have authority to forward a case to the Trade Union Congress of the Philippines for arbitration and decision. KATARUNGANG PAMBARANGAY INAPPLICABLE Q: IS KATARUNGANG PAMBARANGAY APPLICABLE TO LABOR DISPUTES? A: NO. Art.226 of the LC grants original and exclusive jurisdiction over the conciliation and mediation of disputes grievances or problems in the regional offices of the Department of Labor. It is the Bureau and its divisions and not the Barangay Lupong Tagapamayapa which are vested by law with original and exclusive authority to conduct conciliation and mediation proceedings on labor controversies before endorsement to the appropriate labor arbiter for adjudication. Note: Conciliation-Mediation is now done by the NCMB, not BLR.

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 the regional office of the Department of Labor, shall be final and binding upon the parties. The National Labor Relations 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. COMPROMISE AGREEMENTS Q: WHAT IS A COMPROMISE AGREEMENT? A: It is a contract whereby the parties, by making reciprocal concessions, avoid litigation or put an end to one already commenced. Q: MAY LABOR STANDARDS VIOLATIONS BE SETTLED BY COMPROMISE? A: YES. The assistance of the BLR or the regional office of the DOLE in the execution of a compromise settlement is a basic requirement; without it, there can be no valid compromise settlement.

ADMINISTRATIVE FUNCTIONS Q: WHAT ARE THE ADMINISTRATIVE FUNCTIONS OF THE BLR? A: The BLR has the following administrative functions: 1. regulation of the labor unions; 2. keeping the registry of labor unions; 3. maintenance of a file of the CBAs; and

The NLRC or any court shall not assume jurisdiction over issues involved therein, except: a) in case of noncompliance with the compromise agreement, or b) if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion.

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Q: WHAT ARE THE SUBSTANTIAL REQUIREMENTS OF A COMPROMISE AGREEMENT? A: The compromise agreement: 1. must be freely entered into; 2. must not be contrary to law, morals or public policy; 3. must be reasonable; and 4. must be approved by the authority before whom the case is pending. Q: WHAT ARE THE FORMAL REQUIREMENTS OF COMPROMISE AGREEMENTS? A: Compromise agreements involving labor standards cases must be: 1. reduced into writing; and 2. signed in the presence of the Regional Director or his duly authorized representative. COMPROMISE AND QUITCLAIM The law looks with disfavor upon quitclaims and releases by employees who are inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities. On the other hand, there are legitimate waivers that represent a voluntary settlement of laborer's claims that should be respected by the courts as the law between the parties. Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking. Q: WHAT ARE THE REQUISITES OF A VALID QUITCLAIM?

1. must be voluntary arrived at by the parties; 2. must be with the assistance of the Bureau of Labor Standards, Bureau of Labor Relations or any representative of the DOLE; and 3. the consideration must be reasonable (required only when enforced without the assistance of DOLE) Q: WHEN MAY A COMPROMISE BE EFFECTED? A: It may be effected at any stage of the proceedings and even when there is already a final and executory judgment (Art. 2040, NCC). It cannot be entered into when the final judgment is already in the process of execution (Jesalva, et al. v. Bautista, March 24, 1959.) Q: WHAT ARE THE OPTIONS WHEN A COMPROMISE AGREEMENT IS VIOLATED? A: There are two options: 1. enforce compromise by writ of execution; or 2. regard it as rescinded and insist upon original demand. Q: CAN THERE BE WAIVER OF REINSTATEMENT? A: YES. Like waivers of money claims, a waiver for reinstatement may be regarded as personal right which must be exercised personally by the workers themselves.

Art. 228. Indorsement of cases to Labor Arbiters. a. Except as provided in paragraph (b) of this Article, the Labor Arbiter shall entertain only cases endorsed to him for compulsory arbitration by the Bureau or by the Regional Director with a written notice of such indorsement or non-indorsement. The indorsement or non-indorsement of the Regional Director may be appealed to the Bureau within ten (10) working days from receipt of the notice. b. The parties may, at any time, by mutual agreement, withdraw a case from the Conciliation Section and jointly submit it to a Labor Arbiter, except deadlocks in collective bargaining.](Repealed by Section 16, Batas Pambansa Bilang 130, August 21, 1981)

A: The quitclaim:

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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 labor dispute under its jurisdiction, either at the request of any interested party or at its own initiative.

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. (As amended by Section 15, Republic Act No. 6715, March 21, 1989)

Art. 231. Registry of unions and file of collective bargaining agreements. The Bureau shall keep a registry of legitimate labor 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.

(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. REGISTRY OF UNIONS AND CBAs The Bureau shall keep a registry of legitimate labor organizations. The Bureau shall also maintain a file of all Collective Bargaining Agreements (CBAs) and other related agreements.

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. THE CONTRACT-BAR RULE Q: WHAT IS MEANT BY “CONTRACT-BAR RULE”?

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 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

A: Contract-bar rule means that while a valid and registered CBA is subsisting, the Bureau is not allowed to hold and election contesting the majority status of the incumbent union except during the 60-day period immediately prior to its expiration, which period is called the freedom period. NOTE: In the absence of such timely notice or filing of petition, the contract executed during the automatic renewal period is bar to certification election. There shall be no amendment, alteration, or termination of any of the provisions of the CBA except to give notice of one party’s intention to amend, alter and terminate the provisions within the freedom period.

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Economic provisions of the CBA shall be renegotiated not later than three (3) years. The economic provisions with specific termination dates when renegotiated and signed within 6 months from their termination or expiration become retroactively effective the day after their expiration if beyond sex (6) months, the effectivity will depend upon the agreement of the parties. Q: WHAT ARE THE REQUISITES FOR CONTRACT-BAR RULE? A: The following are the requisites for the contract-bar rule: 1. the agreement is existing (i.e. the parties have duly executed it in conformity with the necessary formalities) 2. it was ratified by the union membership; 3. it was adequate for it contains substantial terms and conditions of employment; 4. it encompasses the employees in the appropriate bargaining unit; 5. it was not prematurely extended, the CBA was not hastily entered into (doctrine of premature extension does not bar a certification election) 6. it is for a definite period; 7. No schism or mass disaffiliation affects the contracting union during the lifetime of the agreement; 8. The contracting union is not defunct; 9. The contracting union is not companydominated.

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. PRIVLEIGE COMMUNICATION

Q: CAN THE INFORMATION AND STATEMENTS OBTAINED DURING THE CONCILIATION PROCEEDINGS BE USED AS EVIDENCE? A: NO. 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 may not testify in any court or body regarding any matters taken up at conciliation proceedings conducted by them.

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.

Q: WHAT IS A PRIVILEGED COMMUNICATION? A: It refers to any statement of such privacy that the law exempts the person receiving the information from the duty to disclose it.

Art. 234-A. Chartering and Creation of a Local Chapter. - A duly registered federation or national union may directly create a local chapter by issuing a charter certificate indicating the establishment of the local chapter. The chapter shall acquire legal personality

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only for purposes of filing a petition for certification election from the date it was issued a charter certificate. The chapter shall be entitled to all other rights and privileges of a legitimate labor organization only upon the submission of the following documents in addition to its charter certificate: (a) The names of the chapter's officers, their addresses, and the principal office of the chapter; and (b) The chapter's constitution and by-laws: Provided, That where the chapter's constitution and by-laws are the same as that of the federation or the national union, this fact shall be indicated accordingly. The additional supporting requirements shall be certified under oath by the secretary or treasurer of the chapter and attested by its president.

Art. 235. Action on 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.

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.

Art. 237. Additional requirements for federations or national unions. Subject to Article 238, if the applicant for registration is a federation or a national union, it 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.

Art. 238. Conditions for registration of federations or national unions. No federation or national union shall be registered to engage in any organization activity in more than one industry in any area or region, and no federation or national union shall be registered to engage in any organizational activity in more than one industry all over the country. The federation or national union which meets the requirements and conditions herein prescribed may organize and affiliate locals and chapters without registering such locals or chapters with the Bureau. Locals or chapters shall have the same rights and privileges as if they were registered in the Bureau, provided that such federation or national union organizes such locals or chapters within its assigned organizational field of activity as may be prescribed by the Secretary of Labor. The Bureau shall see to it that federations and national unions shall only organize locals and chapters within a specific industry or union.] (Repealed by Executive Order No. 111, December 24, 1986)

LABOR ORGANIZATION: TWO BROAD PURPOSES A “labor organization” is not always a union; it may be an “association of employees.” And, the purpose is not only or necessarily “collective bargaining” but also dealing with employers concerning terms and conditions of employment. Q: WHAT IS THE EXTENT OF THE RIGHT TO SELFORGANIZATION? A: The extent of the right includes the right: 1. To form, join and assist labor organizations for the purpose of collective bargaining through representatives of their own choosing; and

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2. To engage in lawful and concerted activities for the purpose of collective bargaining or for their mutual aid and protection (Art.246, LC). Q: MAY THE RIGHT TO SELF-RGANIZATION BE BARGAINED AWAY? A: NO. The right to self-organization must be upheld in the absence of express provision of the law to the contrary. It cannot be curtailed by a CBA.

Q: WHAT IS A LABOR ORGANIZATION? A: "Labor Organization" refers to any union or association of employees in the private sector which exists in whole or in part for the purpose of collective bargaining, mutual aid, interest, cooperation, protection, or other lawful purposes. Q: WHAT IS A LEGITIMATE LABOR ORGANIZATION? A: "Legitimate Labor Organization" refers to any labor organization in the private sector registered or reported with the Department in accordance with Rules III and IV of these Rules. Q: WHAT IS A UNION? A: "Union" refers to any labor organization in the private sector organized for collective bargaining and for other legitimate purposes. NOTE: Not every union is “legitimate;” only those properly registered are considered LLO. But nonregistration does not mean it is “illegitimate;” it simply is unregistered and has no legal personality. It exists legally but does not possess the rights of an LLO. Q: WHAT IS EXCLUSIVE BARGAINIG REPRESENTATIVE? A: "Exclusive Bargaining Representative" refers to a legitimate labor union duly recognized or certified as the sole and exclusive bargaining representative or agent of all the employees in a bargaining unit.

Q: WHAT IS A LEGITIMATE WORKERS’ ASSOCIATION? A: "Legitimate Workers' Association" refers to an association of workers organized for mutual aid and protection of its members or for any legitimate purpose other than collective bargaining registered with the Department in accordance with Rule III, Sections 2-C and 2-D of these Rules. EMPLOYEES ELIGIBLE TO JOIN A LABOR ORGANIZATION FOR PURPOSES OF COLLECTIVE BARGAINING Q: WHO ARE THE PERSONS/EMPLOYEES ELIGIBLE TO JOIN A LABOR ORGANIZATION FOR PURPOSES OF COLLECTIVE BARGAINING? A: The entities covered are: 1. All persons employed in commercial, industrial, and agricultural enterprises; and 2. In religious, charitable, medical or educational institutions whether operating for profit or not (Art.243, LC). EMPLOYEES ELIGIBLE TO JOIN A LABOR ORGANIZATION FOR MUTUAL AID AND PROTECTION Q: WHO ARE THE PERSONS/EMPLOYEES ELIGIBLE TO JOIN A LABOR ORGANIZATION FOR MUTUAL AID AND PROTECTION? A: The following enjoys the right to self- organization for mutual aid and protection: 1. Ambulant workers; 2. intermittent workers; 3. itinerant workers; 4. self–employed people; 5. rural workers; and 6. those without any definite employers (Art.243, LC). NON-ABRIDGEMENT OF RIGHT TO SELF ORGANIZATION

Q: WHAT IS A WORKERS’ ASSOCIATION?

Q: WHAT IS THE CONCEPT OF NON-ABRIDGEMENT OF RIGHT TO SELF ORGANIZATION?

A: "Workers' Association" refers to an association of workers organized for the mutual aid and protection of its members or for any legitimate purpose other than collective bargaining.

A: As provided for under Art. 246 of the LC, “It shall be unlawful for any person to restrain, coerce, discriminate against or unduly interfere with employees in their exercise of the right to self-organization.”

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Q: WHO IS AN EMPLOYER? An employer includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer (Art.212[e]). An employer is defined as any person or entity that employs the services of others; one for whom employees work and who pays their wages of salaries; any person acting in the interest of an employer; refers to the enterprise where the labor organization operates or seeks to operate. (D.O No. 40-03, March 15, 2003). Q: WHO IS AN EMPLOYEE? A: An employee is any person in the employment of an employer. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment (Art.212[f]). Under D.O No. 40-03 (March 15, 2003), “employee” refers to any person working for an employer. It includes one who has been dismissed from work but the legality of the dismissal is being contested in a forum of appropriate jurisdiction. Note: The terms shall not be limited to the employees of a particular employer, unless this Code so explicitly states. SPECIAL GROUPS OF EMPLOYEES Q: WHAT ARE THE SPECIAL GROUPS OF EMPLOYEES? A: The following are the special groups of employees: 1. managerial and supervisory employees; 2. confidential employees; 3. security guards; 4. members of cooperatives; 5. religious objectors; 6. government employees; and employees of international organizations.

recognized or certified by DOLE as the exclusive bargaining representative (EBR) of the employees. Dealing with employer, on the other hand, is a generic description of interaction between employer and employees concerning grievances, wages, work hours and other terms and conditions of employment, even if the employee’s group is not registered with the Department of Labor and Employment. CLASSIFICATION OF LABOR ORGANIZATIONS Q: WHAT IS A NATIONAL UNION? A: "National Union/Federation" means any labor organization with at least ten (10) locals or chapters each of which must be a duly recognized collective bargaining agent. Q: WHAT IS AN INDUSTRY UNION? A: “Industry Union” means any group of legitimate labor organizations operating within an identified industry, organized for collective bargaining or for dealing with employers concerning terms and conditions of employment within an industry, or for participating in the formulation of social and employment policies, standards and programs in such industry, which is duly registered with the Department. D.O. No. 40-03, however, does not carry this term and this definition, although under Rule III, Section 2-B, “labor organizations operating within an identified industry may also apply for registration as a federation or national union within the specified industry by submitting to the Bureau the same set of documents (as required of federations and national unions.)” Q: WHAT IS A TRADE UNION CENTER? A: “Trade Union Center” means any group of registered national unions or federations organized for the mutual aid and protection of its members, for assisting such members in collective bargaining, or for participating in the formulation of social and employment policies, standards and programs, which is duly registered with the Department.

COLLECTIVE BARGAINING v. DEALING WITH EMPLOYER Q: WHAT IS AN ALLIANCE? To bargain collectively is a right that may be acquired by a labor organization after registering itself with the Department of Labor and Employment and after being

A: An “alliance” is an aggregation of unions existing in one line of industry, or in a conglomerate, a group of franchises, a geographical area, or an industrial center.

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Q: WHAT IS A COMPANY UNION? A: A “company-union” is a labor organization which, in whole or in part, is employer-controlled or employerdenominated. Article 248(d) prohibits being a company union. Q: EXPLAIN THE UNIONS AT ENTERPRISE LEVEL? A: A labor union at the enterprise level may be created either by (a) independent registration or (b) chartering. Independent registration is obtained by the union organizers in an enterprise through their own action instead of through issuance of a charter by a federation or national union. An independent union has a legal personality of its own not derived from that of a federation.

A: Registration is merely a condition sine qua non for the acquisition of legal personality by labor organizations, associations or unions and the possession of the rights and privileges granted by law to legitimate labor organizations. Q: STATE THE BASIS OF THE REQUIREMENT OF REGISTRATION? A: Such requirement is a valid exercise of the police power, because the activities in which labor organizations, associations and union of workers are engaged affect public interest, which should be protected. Effect of Registration Under the Corporation Law

A: "Independent Union" refers to a labor organization operating at the enterprise level that acquired legal personality through independent registration under Article 234 of the Labor Code and Rule III, Section 2-A of these Rules.

A labor organization may be organized under the Corporation Law as a non-stock corporation and issued a certificate of incorporation by the Securities and Exchange Commission. But such incorporation has only the effect of giving to it juridical personality before regular courts of justice. Such incorporation does not grant the rights and privileges of a legitimate labor organization.

Q: WHAT IS CHARTERING?

Q: WHERE SHOULD THE UNIONS REGISTER?

A: Chartering, on the other hand, takes place when a duly registered federation or national union issue a charter to a union in an enterprise and registers the creation of the chapter with the Regional Office where the applicants operates. The union recipient of the charter s called a chapter or local or chartered local. Its legal personality is derived from the federation/ national union but it may subsequently register itself independently.

A: Applications for registration of independent labor unions, chartered locals, and worker’s association shall be filed with the Regional Office where the applicant principally operates.

Q: WHAT IS AN INDEPENDENT UNION?

3. REGISTRATION RATIONALE A labor organization may be registered or not. If registered with DOLE, it is considered “legitimate labor organization” (LLO). But the reverse us not true, that is, a labor organization is not “illegitimate” just because it is unregistered. It is still lawful organization and can deal with the employer, but it has no legal personality to demand collective bargaining with the employer. It cannot petition for a certification election and cannot hold a legal strike. Q: WHAT IS THE IMPORTANCE OF REGISTRATION?

If the Regional Office denies the application, the denial is appealable to the Bureau and from there to the Court of Appeals (not to the Secretary of Labor) if proper grounds exist. REGISTRATION REQUIREMENTS Q: WHAT ARE THE REGISTRATION REQUIREMENTS Independent Labor Union Section 2. Requirements for application. - A. The application for registration of an independent labor union shall be accompanied by the following documents: (a) the name of the applicant labor union, its principal address, the name of its officers and their respective addresses, approximate number of employees in the bargaining unit where it seeks to operate, with a statement that it is not reported as a chartered local of any federation or national union;

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Kenneth & King Hizon (2A)- UST Faculty of Civil Law (b) the minutes of the organizational meeting(s) and the list of employees who participated in the said meeting(s);

(a) the name of the applicant association, its principal address, the name of its officers and their respective addresses;

(c) the name of all its members comprising at least 20% of the employees in the bargaining unit;

(b) the minutes of the organizational meeting(s) and the list of members who participated therein;

(d) the annual financial reports if the applicant has been in existence for one or more years, unless it has not collected any amount from the members, in which case a statement to this effect shall be included in the application;

(c) the financial reports of the applicant association if it has been in existence for one or more years, unless it has not collected any amount from the members, in which case a statement to this effect shall be included in the application;

(e) the applicant's constitution and by-laws, minutes of its adoption or ratification, and the list of the members who participated in it. The list of ratifying members shall be dispensed with where the constitution and by-laws was ratified or adopted during the organizational meeting. In such a case, the factual circumstances of the ratification shall be recorded in the minutes of the organizational meeting(s).

(d) the applicant's 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 ratification was made, unless ratification was done in the organizational meeting(s), in which case such fact shall be reflected in the minutes of the organizational meeting(s).

CHARTERED LOCAL Federation or National Union Q: WHEN DOES A CHARTERED LOCAL BECOME AN LLO? B. The application for registration of federations and national unions shall be accompanied by the following documents: (a) a statement indicating the name of the applicant labor union, its principal address, the name of its officers and their respective addresses; (b) the minutes of the organizational meeting(s) and the list of employees who participated in the said meeting(s); (c) the annual financial reports if the applicant union has been in existence for one or more years, unless it has not collected any amount from the members, in which case a statement to this effect shall be included in the application; (d) the applicant union's constitution and by-laws, minutes of its adoption or ratification, and the list of the members who participated in it. The list of ratifying members shall be dispensed with where the constitution and by-laws was ratified or adopted during the organizational meeting(s). In such a case, the factual circumstances of the ratification shall be recorded in the minutes of the organizational meeting(s); (e) the resolution of affiliation of at least ten (10) legitimate labor organizations, whether independent unions or chartered locals, each of which must be a duly certified or recognized bargaining agent in the establishment where it seeks to operate; and (f) the name and addresses of the companies where the affiliates operate and the list of all the members in each company involved. Labor organizations operating within an identified industry may also apply for registration as a federation or national union within the specified industry by submitting to the Bureau the same set of documents.

Worker’s Association C. The application for registration of a workers' association shall be accompanied by the following documents:

A: The acquisition of legal personality cannot be the date of filing of the documents. Section 3 (Department Order No. 9, 1997) was defeating the very purpose of registration of unions which was to block off fly-by-night unions. Section 8. Effect of registration. - The labor union or workers' association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration or certificate of creation of chartered local

The determinative date now is not the date the required documents were filed but the date the certificate was issued. And the date of issuance is likely to be the date the documents were filed because D.O. No. 40-D-05, supplementing D.O. No. 40-03, requires the Regional Office or the Bureau to either approve or deny the application for registration “within one (1) day from receipt thereof.” RECOGNITION BY BLR NOT A MINISTERIAL DUTY Q: WHAT ARE THE REGISTRATION REQUIREMENTS FOR A CHARTERED LOCAL? A: A duly-registered federation or national union may directly create a chartered local by submitting to the Regional Office two (2) copies of the following: a.) A charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter;

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b.) The names of the local/chapter’s officers, their addresses, and the principal office of the local/chapter; and c.) The local/chapter’s constitution and by-laws, provided that where the local/chapter’s constitution and by-laws is the same as that of the federation or national union, this fact shall be indicated accordingly.

A: A union’s constitution and by-laws may be amended, modified and extended by the duly constituted union authorities under the laws of the state, In the absence of other requirements, and subject to vested rights, a union constitution may be made, changed, unmade, or superseded by a majority vote of the members or its constituent body.

All of the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested by its President. (As amended by DO 40-B-03.)

Under Art. 241(d), major policy questions are to be deliberated upon and decided by secret ballot by the members. AFFILIATION

UNION’S LEGITIMACY NOT SUBJECT TO COLLATERAL ATTACK Such legal personality may be questioned only through an independent petition for cancellation of union registration in accordance with Rule XIV of these Rules, and not by way of collateral attack in petition for certification election proceedings under Rule VIII.

Q: WHAT IS AN AFFLILIATE? A: An affiliate is an independently registered union that enters into an agreement of affiliation with a federation or a national union. It also refers to a chartered local which applies for and is granted an independent registration but does not disaffiliate from its mother federation or national union.

COLLECTIVE BARGAINING UNIT (CBU) Q: WHAT IS A BARGAINING UNIT? A: "Bargaining Unit" refers to a group of employees sharing mutual interests within a given employer unit, comprised of all or less than all of the entire body of employees in the employer unit or any specific occupational or geographical grouping within such employer unit. While officers lead and represent a union, a union represents a CBU. The representative is the union; the group represented is the CBU. The representative union, once determined, will represent even the members of other unions as long as they are part of the CBU. This is why the representative union (also called bargaining agent or majority union) is called “exclusive bargaining representative” (EBR). LIMITATION TO BY-LAWS Under Art. 234(e) it is implied that the members are the ones to adopt or ratify the union’s constitution and bylaws. It being a governing law of the union, the CBL should be democratically ratified. Q: MAY THE UNION’S CONSTITUTION BE AMENDED?

A union, either an independent or a local, affiliates with a federation or national union for a number of reasons. The most common ones are to secure support or assistance particularly during the formative stage of unionization; or to utilize expertise in preparing and pursuing bargaining proposals; or to marshal mind and manpower in the course of a group action such as strike. The relationship between a local or chapter and the labor federation or national union is generally understood to be that of agency, where the local is the principal and the federation the agent. DISAFFILIATION The sole essence of affiliation is to increase, by collective action, the common bargaining power of local unions for the effective enhancement and protection of their interests. Admittedly, there are times when without succor and support local unions may find it hard, unaided by other support groups, to secure justice for themselves. Yet the local unions remain the basic units of association, free to serve their own interests subject to the restraints imposed by the constitution and by-laws of the national federation, and free also to renounce the affiliation upon the terms laid down in the

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agreement existence.

which

brought

such

affiliation

into

To disaffiliate is a right, but to observe the terms of affiliation is an obligation

This ruling is true ONLY if the contract of affiliation does not specify the period for possible disaffiliation. THE SUBSTITUTIONARY DOCTRINE Q: WHAT IS THE SUBSTITUTIONARY DOCTRINE?

Q: WHAT ARE THE EFFECTS OF DISAFFILIATION? A: 1. Disaffiliation of employees from their mother union and their formation into a new union do not terminate their status as employees of the corporation, as the employees and members of the local union did not form a new union but merely exercised their right to register their local union. 2. When a union which is not independently registered disaffiliates from the federation, it is not entitled to the rights and privileges granted to a legitimate labor organization. It cannot file a petition for certification election. 3. The obligation of an employee to pay union dues is coterminous with his affiliation or membership. Q: WHEN SHOULD DISAFFILIATION BE MADE?

A: The “substitutionary doctrine” provides that the employees cannot revoke the validly executed collective bargaining contract with their employer by the simple expedient of changing their bargaining agent. The new agent must respect the contract. REVOCATION OF CHARTER A federation, national union or workers’ association may revoke the charter issued to a local/chapter or branch by serving on the latter a verified notice of revocation, copy furnished the Bureau, on the ground of disloyalty or such other grounds as may be specified in the constitution and bylaws of the federation, national union or workers’ association. The revocation shall divest the local/chapter of its legal personality upon receipt of the notice by the Bureau, unless in the meantime the local/chapter has acquired independent registration in accordance with these Rules.

A: While it is true that a local union is free to serve the interest of all its members and enjoys the freedom to disaffiliate, such right to disaffiliate may be exercised and is thus considered a protected labor activity only when warranted by circumstances. Generally, a labor union may disaffiliate from the mother union to form a local or independent union only during the 60-day freedom period immediately preceding the expiration of the CBA.

Q: WHAT IS THE EFFECT OF CANCELLATION OF REGISTRATION OF FEDERATION OR NATIONAL UNION ON LOCALS/CHAPTER?

FREEDOM PERIOD

MERGER AND CONSOLIDATION

Q: WHAT IS FREEDOM PERIOD? A: The “freedom period” refers to the last 60-days of the fifth and last year of a CBA. But even before the onset of the freedom period (and despite the closed-shop provision in the CBA between the mother union and management) disaffiliation may still be carried out, but such disaffiliation must be effected by a majority of the members in the bargaining unit.

A: The cancellation of registration of a federation or national union shall operate to divest its local/chapter of their status as legitimate labor organizations, unless the locals/chapters are covered by a duly registered collective bargaining agreement.

Section 10. Effect of merger or consolidation. - Where there is a merger of labor organizations, the legal existence of the absorbed labor organization(s) ceases, while the legal existence of the absorbing labor organization subsists. All the rights, interests and obligations of the absorbed labor organizations are transferred to the absorbing organization.

Q: WHAT IS THE EFFECT OF CONSOLIDATION? A: Where there is consolidation, the legal existence of the consolidating labor organizations shall cease and a new labor organization is created. The newly created labor organization shall acquire all the rights, interests and obligations of the consolidating labor organizations.

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Q: DIFFERENTIATE MERGER FROM CONSOLIDATION. A: Consolidation usually occurs between two unions that are approximately the same size, whereas merger often involves a larger union merging with a smaller union. Q: WHY DO UNIONS MERGE? A: Why do unions merge? They merge for reasons similar to those behind corporate mergers. 1. a small union may merge with a larger union in order to gain access to greater resources and expertise 2. unions that have traditionally competed with each other for members may merge in order to eliminate inter-organizational conflicts 3. unions whose members’ skills have been outmoded by technological and economic changes may merge with a stronger union in order to maintain job security and institutional survival.

CHANGE OF NAME Section 3. Notice of change of name of labor organizations; Where to file. - The notice for change of name of a registered labor organization shall be filed with the Bureau or the Regional Office where the concerned labor organization's certificate of registration or certificate of creation of a chartered local was issued. Section 4. Requirements for notice of change of name. The notice for change of name of a labor organization shall be accompanied by the following documents: (a) proof of approval or ratification of change of name; and (b) the amended constitution and by-laws. Q: WHAT IS THE EFFECT OF CHANGE OF NAME? A: The change of name of a labor organization shall not affect its legal personality. All rights and obligations of a labor organization under its old name shall continue to be exercised by the labor organization under its new name.

Q: WHERE SHOULD THE NOTICE OF MERGER AND CONSOLIDATION BE MADE? A: Section 8. Notice of Merger/Consolidation of labor organizations; Where to file. - Notice of merger or consolidation of independent labor unions, chartered locals and workers' associations shall be filed with and recorded by the Regional Office that issued the certificate of registration/certificate of creation of chartered local of either the merging or consolidating labor organization. Notice of merger or consolidation of federations or national unions shall be filed with and recorded by the Bureau.

REQUIREMENTS OF NOTICE OF MERGER/CONSOLIDATION The notice of merger of labor organizations shall be accompanied by the following documents: (a) the minutes of merger convention or general membership meeting(s) of all the merging labor organizations, with the list of their respective members who approved the same; and

Art. 238. Cancellation of Registration. - The certificate of registration of any legitimate labor organization, whether national or local, may be cancelled by the Bureau, after due hearing, only on the grounds specified in Article 239 hereof. (As amended by Republic Act No. 9481, May 25, 2007)

Art. 238-A. Effect of a Petition for Cancellation of Registration. - A petition for cancellation of union registration shall not suspend the proceedings for certification election nor shall it prevent the filing of a petition for certification election. In case of cancellation, nothing herein shall restrict the right of the union to seek just and equitable remedies in the appropriate courts. (As amended by Republic Act No. 9481, May 25, 2007)

(b) the amended constitution and by-laws and minutes of its ratification, unless ratification transpired in the merger convention, which fact shall be indicated accordingly.

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Art. 239. Grounds for Cancellation of Union Registration. - The following may constitute grounds for cancellation of union registration:

monetary or other consideration whether in the capacity of an agent of the employer or as an ostensible independent contractor.

(a) Misrepresentation, false statement or fraud in connection with the 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;

REPORTORIAL REQUIREMENTS

(b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, and the list of voters; (c) Voluntary dissolution by the members. (As amended by Republic Act No. 9481, May 25, 2007)

Art. 239-A. Voluntary Cancellation of Registration. The registration of a legitimate labor organization may be cancelled by the organization itself. Provided, That at least two-thirds of its general membership votes, in a meeting duly called for that purpose to dissolve the organization: Provided, further, That an application to cancel registration is thereafter submitted by the board of the organization, attested to by the president thereof. (As amended by Republic Act No. 9481, May 25, 2007)

Section 1. Reporting requirements. - It shall be the duty of every legitimate labor unions and workers associations to submit to the Regional Office or the Bureau which issued its certificate of registration or certificate of creation of chartered local, as the case may be, two (2) copies of each of the following documents: (a) any amendment to its constitution and by-laws and the minutes of adoption or ratification of such amendments, within thirty (30) days from its adoption or ratification; (b) annual financial reports within thirty (30) days after the close of each fiscal year or calendar year; (c) updated list of newly-elected officers, together with the appointive officers or agents who are entrusted with the handling of funds, within thirty (30) days after each regular or special election of officers, or from the occurrence of any change in the officers of agents of the labor organization or workers association; (d) updated list of individual members of chartered locals, independent unions and workers' associations within thirty (30) days after the close of each fiscal year; and (e) updated list of its chartered locals and affiliates or member organizations, collective bargaining agreements executed and their effectivity period, in the case of federations or national unions, within thirty (30) days after the close of each fiscal year, as well as the updated list of their authorized representatives, agents or signatories in the different regions of the country.

GROUNDS FOR CANCELLATION OF REGISTRATION While registration is the act that converts a labor organization to a legitimate labor organization, cancellation is the government act that [divests] it of that status. It thereby reverts to its character prior to the registration. Although it does not cease to exist or become an unlawful organization, its juridical personality as well as its statutory rights and privileges [are] suspended. It loses entitlement to the rights enumerated in Article 242 of the Labor Code. It cannot demand recognition by or bargaining with the employer, cannot file a petition for certification election, and cannot strike. CABO SYSTEM Q: WHAT IS CABO/ A: "Cabo" refers to a person or group or persons or to a labor group which, in the guise of a labor organization, supplies workers to an employer, with or without any

NOTE: Failure of the labor organization to submit the reports mentioned above for five (5) consecutive years authorizes the Bureau to institute cancellation proceedings upon its own initiative or upon complaint by any party-in-interest. Q: WHO FILES PETITION FOR CANCELLATION? A: Section 2. Who may file. - Any party-in-interest may commence a petition for cancellation of registration, except in actions involving violations of Article 241, which can only be commenced by members of the labor organization concerned. Section 3. Grounds for cancellation. - The following shall constitute grounds for cancellation of registration of labor organizations: (g) commission of any of the acts enumerated under Article 241 of the Labor Code; provided that no petition for cancellation based on this ground may be granted unless supported by at least thirty (30%) percent of all the members of the respondent labor organization;

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Kenneth & King Hizon (2A)- UST Faculty of Civil Law The petition shall be under oath and shall state clearly and concisely the facts and grounds relied upon, accompanied by proof of service to the respondent. But such petition cannot be entertained in the petition for certification election filed by the union.

Q: WHERE TO FILE PETITION? A: Section 1. Where to file. - Subject to the requirements of notice and due process, the registration of any legitimate independent labor union, chartered local and workers' association may be cancelled by the Regional Director, or in the case of federations, national or industry unions and trade union centers, by the Bureau Director, upon the filing of an independent complaint or petition for cancellation.

Cancellation orders issued by the Regional Director are appealable to the BLR. The latter’s decision is final and executory, hence, not appealable to the DOLE Secretary but it may be elevated to the Court of Appeals by certiorari.

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.

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 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. 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

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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. 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; l. 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: 1. At least once a year within thirty (30) days after the close of its fiscal year; 2. At such other times as may be required by a resolution of the majority of the members of the organization; and 3. Upon vacating his office. 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. 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. Criminal and civil liabilities arising from violations of above rights and conditions of membership shall continue to be under the jurisdiction of ordinary courts. RIGHTS OF UNION MEMBERS The rights and conditions of membership laid down in Art. 241 may be summarized as follows: (1) Political right – the member’s right to vote and be voted for, subject to lawful provisions on qualifications and disqualifications.

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(2) Deliberative and decision-making right – the member’s right to participate in deliberations on major policy questions and decide them by secret ballot. (3) Rights over money matters – the member’s right against excessive fees; the right against unauthorized collection of contributions or unauthorized disbursements; the right to require adequate records of income and expenses and the right of access to financial records; the right to vote on officers’ compensation; the right to vote on proposed special assessments and be deducted a special assessment only with the member’s written authorization. (4) Right to Information – the member’s right to be informed about the organization’s constitution and bylaws and the collective bargaining agreement and about labor laws. Although not so denominated, Article 241 of the Labor Code carries the character of a bill of rights of union members. ELECTION OF UNION OFFICERS The officers of the union are elected by the members in secret ballot voting. The election takes place at intervals of five years which is the term of office of the union officers including those of a national union, federation, or trade union center. The Implementing Rules (Rule XII, Section 1) require the incumbent president to create an election committee within 60 days before expiration of the incumbent officers’ term. If the officers with expired term do not call an election, the remedy, according to Rule XII, is for at least 30% of the members to file a petition with the DOLE Regional Office. The member’s frustration over the performance of the union officers, as well as their fear of a “fraudulent” election to be held under the latter’s supervision, does not justify disregard of the union’s constitution and bylaws. ELIGIBILITY OF VOTERS Only members of the union can take part in the election of union officers.

Ember in good standing is any person who has fulfilled the requirements for membership in the union and who has neither voluntarily withdrawn from membership nor been expelled or suspended from membership after appropriate proceedings consistent with the lawful provisions of the union’s constitution and by-laws. A labor organization may prescribe reasonable rules and regulations with respect to voting eligibility. A labor organization may condition the exercise of the right to vote on the payment of dues, since paying dues is a basic obligation of membership. However, this rule is subject to two qualifications in that (a) any rule denying dues-delinquent members the right to vote must be applied uniformly; and (b) members must be afforded a reasonable opportunity to pay dues, including a grace period during which dues may be paid without any loss of rights. Submission of the employees names with the BLR as qualified members of the union is not a condition sine qua non to enable said members to vote in the election of union's officers. DISQUALIFICATION OF UNION OFFICERS "Moral turpitude" has been defines as an act of baseness, vileness, or depravity in the private and social duties which a man owes his fellow men, or to society in general, contrary to the accepted and customary rule of right and duty between man and man or conduct contrary to justice, honesty, modesty, or good morals. EXPULSION OF MEMBER Just as an officer is entitled to due process, so does a member. In a case, the Court explicitly ruled that a member of a labor union may be expelled only for a valid cause and by following the procedure outlined in the constitution and by-laws of the union. Expulsion of a member for arbitrary or impetuous reason may amount to unfair labor practice by the union. CONSEQUENCES OF VIOLATION OF RIGHTS If the conditions of membership, or the right of the members, are violated, the violation may result in the cancellation of the union registration or the expulsion of the culpable officers.

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Kenneth & King Hizon (2A)- UST Faculty of Civil Law Section 4. Actions arising from Article 241. - Any complaint or petition with allegations of mishandling, misappropriation or nonaccounting of funds in violation of Article 241 shall be treated as an intra-union dispute. It shall be heard and resolved by the MedArbiter pursuant to the provisions of Rule XI.

_

Chapter III RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS

VISITORIAL POWER Article 247 authorizes the Secretary of Labor and Employment or his duly authorized representative to inquire into the financial activities of any labor organization on the basis of a complaint under oath, supported by 20 percent of the membership in order to determine compliance or noncompliance with the laws and to aid in the prosecution of any violation thereof. CHECK-OFF AND ASSESSMENTS Q: WHAT IS CHECK-OFF? A: A check-off is a method of deducting from an employee’s pay at prescribed period, the amounts due the union for fees, fines, or assessments. The right of a union to collect union dues is recognized under Article 277(a). Q: WHAT ARE DUES? A: Dues are defined as payments to meet the union’s general and current obligations. The payment must be regular, periodic, and uniform. Payments used for a special purpose, especially if required only for a limited time, are regarded as assessment. Q: WHAT ARE THE THREE REQUISITES TO COLLECT SPECIAL ASSESSMENT? A: Article 241 speaks of three (3) requisites that must be complied with in order that the special assessment for Union's incidental expenses, attorney's fees and representation expenses, as stipulated in Article XII of the CBA, be valid and upheld namely: 1) authorization by a written resolution of the majority of all the members at the general membership meeting duly called for the purpose; (2) secretary's record of the minutes of the meeting; and (3) individual written authorization for check-off duly signed by the employee concerned. JURISDICTION OVER CHECK-OFF DISPUTES

Art. 242. Rights of legitimate labor organizations. A legitimate labor organization shall have the right: a. To act as the representative of its members for the purpose of collective bargaining; b. To be certified as the exclusive representative of all the employees in an appropriate bargaining unit for purposes of collective bargaining; c. 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; d. To own property, real or personal, for the use and benefit of the labor organization and its members; e. To sue and be sued in its registered name; and f. 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. (As amended by Section 17, Republic Act No. 6715, March 21, 1989)

The Regional Director of DOLE, not the labor arbiter, has jurisdiction over check-off disputes.

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Art. 242-A. Reportorial Requirements. - The following are documents required to be submitted to the Bureau by the legitimate labor organization concerned: (a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification of the constitution and by-laws within thirty (30) days from adoption or ratification of the constitution and by-lam or amendments thereto; (b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from election; (c) Its annual financial report within thirty (30) days after the close of every fiscal year; and (d) Its list of members at least once a year or whenever required by the Bureau. Failure to comply with the above requirements shall not be a ground for cancellation of union registration but shall subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty. (As amended by Republic Act No. 9481, May 25, 2007) NOTE: The first three rights mentioned in this article do not pertain to just about any union but only to the union that has been selected as the bargaining representative of the employees in the bargaining unit. This article must be read in relation to Article 255. RIGHTS OF UNION TO REPRESENT ITS MEMBERS It is the function of a labor union to represent its members against the employer’s unfair labor practices. It can file in their behalf without the cumbersome procedure of joining each and every member as a separate party. A labor union has the requisite personality to sue on behalf of its members for their individual money claims. It would be an unwarranted impairment of the right to self-organization if such collective entities would be barred from instituting an action in their representative capacity.

COMPROMISE BINDING UPON MINORITY MEMBERS OF UNION; EXCEPTION It is an accepted rule under our laws that the will of the majority should prevail over the minority and that the action taken by petitioners as minority members of the Union is contrary to the policy of the Magna Carta of Labor, which promotes the settlement of differences between management and labor by mutual agreement, and that if said action were tolerated, no employer would ever enter into any compromise agreement for the minority members of the Union will always dishonor the terms of the agreement and demand for better terms. COMPROMISE OF MONEY CLAIMS Money claims due to laborers cannot be the object of settlement or compromise effected by a union or counsel without the specific individual consent of each laborer concerned. The beneficiaries are the individual complainants themselves. The union to which they belong can only assist them but cannot decide for them. Awards in favor of laborers after long years of litigation must be attended to with mutual openness and in the best of faith. Only thus can we really give meaning to the constitutional mandate of giving laborers maximum protection and security. Under the philosophy of collective responsibility, an employer who bargains in good faith should be entitled to rely upon the promises and agreements of the union representatives with whom he must deal under the compulsion of law and contract. The collective bargaining process should be carried on between parties who can mutually respect and rely upon the authority of each other." Where, however, collective bargaining process is not involved, and what is at stake are back wages already earned by the individual workers by way of overtime, premium and differential pay, and final judgment has been rendered in their favor, the present case, the real parties in interest with direct material interest, as against the union which has only served as a vehicle for collective action to enforce their just claims, are the individual workers themselves. Authority of the union to waive or quitclaim all or part of the judgment award in favor of the individual workers cannot be lightly presumed but must be expressly granted, and the employer, as judgment debtor, must deal in all good faith with the union as the agent of the individual workers. The Court in turn should certainly verify and assure itself of the fact and

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extent of the authority of the union leadership to execute any compromise or settlement of the judgment on behalf of the individual workers who are the real judgment creditors. RIGHT TO BE FURNISHED WITH FINANCIAL STATEMENT To better equip the union in preparing for or in negotiating with the employer, the law gives it the right to be furnished with the employer’s audited financial statements. There are four points in time when the union may ask in writing for these statements: (1) after the union has been recognized by the employer as sole bargaining representative of the employees in the bargaining unit; or (2) after the union is certified by DOLE as such sole bargaining representative; or (3) within the last 60 days of the life of a CBA; or (4) during the collective bargaining negotiation. The audited statements, including the balance sheet and the profit and loss statement, should be provided by the employer within 30 calendar days after receipt of the union’s request. 6. RIGHT TO COLLECT DUES

Title V COVERAGE Article 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. (As amended by Batas Pambansa Bilang 70, May 1, 1980).

service shall have the right to form associations for purposes not contrary to law. (As amended by Executive Order No. 111, December 24, 1986). Article 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 the collective bargaining unit of the rank-and-file employees but may join, assist or form separate collective bargaining units and/or legitimate labor organizations of their own. The rank-and-file union and the supervisors’ union operating within the same establishment may join the same federation or national union. (As amended by Section 18, Republic Act No. 6715, March 21, 1989 and Section 8, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became effective on June 14, 2007). Article 245-A. Effect of inclusion as members of employees outside the bargaining unit. - The inclusion as union members of employees outside the bargaining unit shall not be a ground for the cancellation of the registration of the union. Said employees are automatically deemed removed from the list of membership of said union. (Introduced as new provision by Section 9, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became effective on June 14, 2007). Article 246. Non-abridgment of right to selforganization. – 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 or 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). EXTENT OF THE RIGHT TO SELF-ORGANIZATION Q: What is the extent of the right to self-organization?

Article 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

A: 1. To form, join and assist labor organizations for the purpose of collective bargaining through representatives of their own choosing

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2. To engage in lawful concerted activities for the same purpose or for their own mutual aid and protection Q: May this right be bargained away? A: No. It cannot be curtailed by a CBA. The right must be upheld in the absence of express provision of law to the contrary. EMPLOYEES ENTITLED TO THE RIGHT TO SELFORGANIZATION FOR THE PURPOSE OF COLLECTIVE BARGAINING

6. Workers without any definite employers NOTE: Even workers who are not employees of any particular employer may form their organization to protect their interests. Example: movie workers Q: Is the right to self-organization limited to the right to “form” such organization? A: No. It also includes joining and assisting labor organization.

Q: Under Art. 243 of the Labor Code, who are the employees entitled to the right to self-organization for the purpose of collective bargaining? A: The employees in the following are entitled to the right to self-organization for the purpose of collective bargaining: 1. 2. 3. 4. 5. 6. 7.

Commercial Industrial Agricultural enterprises Religious Charitable Medical Educational



The employees in the above mentioned enterprises are eligible to join a labor organization for purposes of collective bargaining whether a. For profit b. Not for profit



Aliens with valid working permits may also exercise this right if there is a reciprocal right extended to Filipino workers in their country EMPLOYEES WHO ARE ELIGIBLE TO JOIN A LABOR ORGANIZATION FOR MUTUAL AID AND PROTECTION

Q: Who are the employees who are eligible to join a labor organization for mutual aid and protection? A: 1. 2. 3. 4. 5.

Ambulant Intermittent Rural Self-employed people Itinerant workers

EXEMPTED TO EXERCISE THE RIGHT TO SELFORGANIZATION Q: Who are not granted with the right to selforganization? A: 1. High level or managerial government employees 2. Employees of international organizations with immunities 3. Managerial employees a. Whose functions are normally considered as policy-making or managerial b. Whose duties are of a highly confidential or highly technical in nature 4. Members of the Armed Forces of the Philippines, including police officers, policemen, firemen, and jail guards 5. Confidential employees 6. Employee-members of cooperatives 7. Employees of cooperatives who are its members 8. Non-employees 9. Government employees including GOCCs with original charter 10. Aliens without valid working permits 11. Aliens with valid working permits but are nationals of country which do not grant Filipinos to exercise the right to selforganization and to join or assist labor organizations

MANAGERIAL EMPLOYEES Q: Why are managerial employees not allowed to join?

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A: By nature of their work, they may unduly represent the interest of the employers. Also, they cannot be allowed tp share in concessions obtained by the labor union through collective negotiation.

Ex:

United Nations World Health Organization Red Cross

Q: Why are they exempted? There is nothing to prevent the employer from granting benefits to managerial employees equal to or higher than those afforded to union members SUPERVISORS Supervisors are allowed to organize but they cannot form, join, assist a rank-and-file union. EMPLOYEE-MEMBERS OF A COOPERATIVE Q: Why are cooperative members not allowed? A: A cooperative is where its own owners and members are the ones who run and operate the business while the others are its employees. However, if it involves who are not members or co-owners thereof, such employees are entitled to exercise the right of all workers to organization, collective bargaining and negotiations, etc.  



The employee-members are governed by the Cooperative Code of the Philippines. Member-employees of a cooperative may withdraw as members of the cooperative in order to join a labor union The law, however, does not prohibit them from forming an association for their mutual aid and protection. WORKERS ASSOCIATION

A: The Philippines has granted to them immunity from local jurisdiction which is based on the Principle of Reciprocity which our Constitution adheres to. This is to ensure smooth and unimpeded operation or performance of functions. Q: May they waive their immunity? A: Yes, through recognizing or forming a union. The waiver is discretionary. Without an express waiver, the NLRC or the Labor Arbiter have no jurisdiction over IRRI even in cases of alleged illegal dismissal of any of its employees. Q: What are the principles underlying the grant of international immunities to international organizations? A: 1. International Organizations should have a state which protects them against control or interference by any one government on the performance of their functions 2. No country should derive any national financial advantage by levying fiscal charges on common international funds 3. They should be accorded the facilities for the conduct of their official business customarily extended to each other by its individual memberstates.

Q: What is a worker’s association?

Q: May aliens exercise the right to self-organization?

A: It is organized for the mutual aid and protection of its members as for any legitimate purpose other than for collective bargaining.

A:

INTERNATIONAL ORGANIZATIONS Q: What is an international organization? A: An organization set-up by agreement between 2 or more states which has an international legal personality.

General rule: All aliens, natural or juridical, as well as foreign organizations are strictly prohibited from engaging directly or indirectly in all forms of trade union activities without prejudice to normal contacts between Philippine labor unions and recognized international labor centers. Exception: Alien employees with valid working permits issued by the DOLE may exercise the right to self-

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organization and join or assist labor organizations for purposes of collective bargaining, if they are nationals of a country which grants the same or similar rights to Filipino workers, as certified by the Department of Foreign Affairs.

A: Yes. A government employee has the right to organize and negotiate, but he has no right to strike. Q: May employees in the public service exercise their right to self-organize?

RELIGIOUS OBJECTORS Example: Iglesia Ni Cristo (INC) members NOTE: In the case of Victoriano v. Elizalde, the Court upheld the right of members of the Iglesia ni Kristo sect not to join a labor union for being contrary to their religious beliefs, does not bar the members of that sect from forming their own union. The public respondent correctly observed that the “recognition of the tenets of the sect xxx should not infringe on the basic right of self-organization granted by the constitution to workers, regardless of religious affiliation.”

A: Employees of government corporations established under the Corporation Code (without original charters) 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. 

 INDUSTRIAL PEACE ACT OF 1953 The Er and the union may enter into a “closedshop agreement” which could compel employees to become union workers as condition of continued employment. R.A. 3350 OF 1961 E xempts from compulsory union membership the followers of any religious sect whose teachings forbid membership in unions

The right to self-organization shall not be denied to government employees but they cannot strike in view of the fact that their work is imbued with public interest. They should focus on their service works. The right of government employees to deal and negotiate with respective employers is not quite as extensive as that of private employees.

Q: What are the items which are excluded from negotiation between the government and its employees? A: Excluded from negotiation by government employees are the terms and conditions of employment. Only those items and conditions which are not otherwise fixed by law that may be subject to negotiation between the duly recognized employees organizations and appropriate government authorities.

NOTE: NEGOTIABLE ITEMS FOR GOVERNMENT EMPLOYEES 



The freedom of religion enjoys a preferred position in the hierarchy of values. The contractual right (right to self-organization) must yield to the freedom of religion. However, the recognition of the tenets of the sect should not infringe on the basic right to selforganization granted by the constitution to workers, regardless of religious affiliation.

Q: Does INC members have the right to vote in a certification election? A: Yes. GOVERNMENT EMPLOYEES Q: Does a government employee have the right to organize?

Q: Give examples of negotiable terms and conditions of employment in GOCCs with original charter? A: 1. 2. 3. 4.

Schedule of vacation and other leaves Work assignment of pregnant women Personnel growth and development Communication system a. Lateral b. Vertical 5. Provision for protection and safety 6. Provision for facilities for handicapped personnel 7. Provision for first aid medical services for married women

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8. Annual medical, physical examination 9. Recreational, social, athletic, and cultural activities and facilities NON-NEGOTIABLE ITEMS FOR GOVERNMENT EMPLOYEES Q: Give examples of non-negotiable items for government employees. A: 1. Matters that require appropriation of funds a. Increase in salary emoluments and other allowances not presently provided by law b. Facilities requiring capital outlays c. Car plan d. Provident fund e. Special hospitalization, medical, dental expenses f. Rice, sugar, and other subsidies g. Travel expenses h. Increase in retirement benefits 2. Those which involve the exercise of management prerogatives such as: a. Appointment b. Promotion c. Assignment d. Detail e. Penalties imposed as a result of disciplinary actions f. Revision of compensation structure g. Selection of personnel to attend seminar, trainings, study grants h. Distribution of workload i. External communication linkages SIGNING BONUS FOR GOVERNMENT EMPLOYEES Q: Can government employees negotiate to have “signing bonus”? A: No. The process of collective negotiations in the public sector does not encompass terms and conditions of employment requiring appropriation of public funds. GOCC WITH ORIGINAL CHARTER v. GOCC WITHOUT ORIGINAL CHARTER GOCC WITH ORIGINAL CHARTER

GOCC WITHOUT ORIGINAL CHARTER

Right to Strike EEs cannot stage strikes The GOCC is created since they are governed under the Corporation by Civil Service Law. They Code, the EEs are are enjoined by Civil covered by the Labor Service Memorandum Code. Therefore, the EEs Circular No. 6, under pain have the same rights as of administrative those as EEs of the sanctions from staging private corporations, one strikes, demonstrations, of which is the right to mass leaves, walkouts, strike. and other concerted activities. Bargaining Rights Corporations with The GOCC created under original charters cannot the Corporation Code bargain with the being governed by the LC government concerning can bargain with the the conditions of their government concerning employment. However, the terms and conditions they can negotiate of employment. Thus, (through collective they have unlimited negotiation agreements bargaining rights. or MOA) with the government on those terms and conditions of employment which are not fixed by law. Thus, they have limited bargaining rights. Purpose of Organization Can only form, join or Can form, join, or assist assist LO for purposes not LO for purposes of CBA, contrary to law. etc. Q: What are the rules regarding the protection of the right to organize? A: 1. Government EEs shall not be discriminated against by reason of their membership in EEs’ organiztaions or participation in the normal activities of their organization. 2. Their employmnet shall not be subject to the condition that they shall not join or shall relinquish their membership in the EE’s organization. 3. Government authorities shall not interfere in the establishment, functioning or administration of government EEs’ organization

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through acts designed to place suhc organizations under the control of government authority. HIGH-LEVEL EMPLOYEE Q: Who is a high-level employee? A: He is one whose duties and functions are policy determining, managerial or one whose duties are highly confidential in nature.

A: Any dispute which remains unresolved after exhausting all available remedies under existing laws and procedures may be jointly referred by the parties to the PSLMC for appropriate action. Likewise, the PSLMC has jurisdiction to hear charges of ULP filed by government EEs against their ER. Q: What is the composition of the PSLMC? A:

Q: What is included in the managerial function? A: 1. to effectively recommend such managerial actions 2. formulate or execute management policies and decisions 3. to hire, transfer, suspend, lay-off, recall, dismiss, aassign or discipline employees Q: What is the community or mutuality of interest test? A: The employees sought to be represented by the collective bargaining agent must have substantial mutual interests in terms of employment and working conditions as evinced by the type of work they perform. NOTE: Profeesors, associate professors, and assistant professors not exercisng managerial or highlyconfidential functions are rank-and-file employees. PUBLIC SECTOR-MANAGEMENT COUNCIL

1. Chairman- Civil Service Commissioner; 2. Vice-Chairman- Secretary of Labor; and 3. Members: a. Secretary of Finance b. Secretary of Justice c. Secretary of Justice Q: State the pertinent provisions of E.O. 180: A: "SECTION 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. REGISTRATION FOR LABOR ORGANIZATIONS IN THE GOVERNMENT

Q: What is the “Public Sector-Management Council”? A: If there be any unresolved grievances which concerns government employees, the dispute may be referred to the Public Sector Labor-Management Council for appropriate action. Accordingly, it has jurisdiction to hear charges of unfair labor practice by government employers against their employee. NOTE: Executive Order No. 180 provides that since the terms and conditions of employment in the government including GOCCs with original charters are governed by law, the employees shall not strike for purposes of securing changes thereof.

Q: How do the labor organizations in government sector register? A: They shall register with: a. 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. b. With the Regional Offices of the DOLE which shall transmit the applications to the BLR within 3 days upon receipt (Sec. 7, E.O. 180).

Q: What is the jurisdiction of the PSLMC?

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REGISTRATION CERTIFICATE Q: When will a Registration Certificate be issued? A: A Registration Certificate shall be issued upon approval of the application to the organization recognizing it as a legitimate EEs’ organization with the right to represent its members and undertake activities to further and defend its interest. NOTE: The certificates of registration shall be jointly approved by the Chairman of the Civil Service Commission and Secretary of Labor. Q: When shall a duly registered EEs’ organization be accorded voluntary recognition?

A: Yes. Temporariness is only incidental. The constitutional right of employees is superior to the right of the management not to renew the temporary appointment of its employees. Q: What is the legal basis for this? A: Art. 277 of the Labor Code which provides: (c) Any employee, whether employed for a definite period or not, shall, beginning on his first day of service, be considered as an employee for purposes of membership in any labor union. (As amended by Section 33, Republic Act No. 6715). NOTE: Republic Act 6715 is also known as the “HerreraVeloso Law”

A: 3 TYPES OF MANAGERIAL EMPLOYEES 1. Upon a showing that no other EEs’ organization is registered or is seeking registration, based on records of the Bureau of Labor Relations; and 2. The said organization has the majority support of the rank-and-file Ees in the organizational unit. Q: Can there be a certification election in government? A: Yes, where there are 2 or more duly registered EEs’ organizations in the appropriate organizational unit, the BLR, upon petition, shall: 1. Order the conduct of a certification election; and 2. Certify the winner as the exclusive representative of the rank-and-file EEs in said organization unit.

Q: What are the three types of managerial employees? A: The three (3) types of managerial employees are as follows: 1. Top management; 2. Middle management; and 3. First-line management. Q: Who belongs to the top management? A: It is composed of a comparatively smal group of executives. They are responsible for the over-all management of the organization. Ex: Chief Executive Officer, President, Senior Vice-President Q: Who belongs to the Middle Level Management?

NOTE: It may be conducted with the Bureau of Labor Relations whether governed by the Labor Code or the Civil Service Rules. Q: Who has jurisdiction in the dispute involving election of officers in government unions? A: Bureau of Labor Relations has original and exclusive jurisdiction on all inter-union and intra-union conflicts.

A: It can refer to more than one level in an organization. They direct activities of other managers and sometimes also those of operating employees. Its responsibilities are to direct the activities that implement their organization’s policies and to balance the demands of their supervisors with the capacities of their subordinates. Ex: Plant manager

TEMPORARY EMPLOYEES Q: Who are the first-line managers? Q: May temporary employees organize?

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A: They are at the lowest level in an organization at which individuals are responsible for the work of others. They do not supervise other employees. Ex: foremen, production supervisors in manufacturing plant, technical supervisors in research department, and clerical supervisors in large offices.

This right is subject to the condition that its exercise should be for purposes not contrary to law. There is a rational basis from prohibiting managerial employees from joining or forming labor organizations. The union may not be assured of the loyalty of the managerial employees, in view of the evident conflict of interest. The union may also become company-dominated with the presence of managerial employees.

NOTE: There should be a distinction between: NOTE: a. Those who have authority to devise, implement, and control strategic and operational policies (Top and Middle managers) b. Those who make sure that such policies are carried-out by the rank-and-file

 

What distinguishes them with the rank-and-file is that they act in the interest of the employer. Q: What are the 2 categories of managerial employees? A: 1. Managers per se 2. Supervisors

Former Chief Justice Davide, Jr., however, believes that Art. 245 of the Labor Code is unconstitional. For former Chief Justice Puno, on the other hand, managerial employees are not absolutely disqualified. What it prohibits is merely the right to join labor organizations. They may form associations or organizations as long as they are not labor organizations. SUPERVISORS’ RIGHT TO SELF-ORGANIZE

Q: Discuss the evolution of the supervisor’s right to self-organization? A:

MANAGERIAL v. SUPERVISORY EMPLOYEES Q: What is the distinction between managerial employees and supervisory employees? A: The principal distinction between managerial employees and supervisory employees is: the former have the power to decide and do managerial acts; while the latter have the power only to recommend managerial acts such as laying down policy, hiring or dismissal of employees and the like. JURISPRUDENCE: United Pepsi Cola Supervisory Union case- route managers whose responsibility is to meet the sales plan to be achieved through the skillful management of the job and the management of the people are ineligible for union membership. Q: Is Art. 3, Sec. 8 of the Constitution constitutional in the light of the prohibition with respect to managerial employees? A: The said provision provides "(t)he 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."

1. Under the Industrial Peace Act- the Caltex case ruling included managers in the term “supervisors.” Thus, it allowed the managers to unionize 2. Under the LC before the amendment by R.A. 6715- LC dropped the old term “supervisors” but replaced it with “managerial employees” who are not allowed to unionize. Supervisors are banned from unionizing as held in the case of Bulletin Publishing Corp. v. Sanchez (1986). 3. LC as amended by RA 6715- retains the ineligibilty of managerial employees to organize but revived the right of supervisory employees to unionize under the Industrial Peace Act.

Q: Who are supervisors? A: Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment.

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Q: What are the recommendation?

requisites

for

the

said

2. Whether such authority is not merely routinary or clerical in nature but also requires independent judgment.

A: 1. Discretionary or judgmental 2. Independent 3. Effective Q: Who are managers? A: "Managerial employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire transfer, suspend, lay off, recall, discharge, assign or discipline employees.

NOTE: The power of supervisors is subject to evaluation, review, and final action by the Department heads or other high executives. Q: What is the rule on the nomenclature of one’s work? A: It is the nature of an employee’s functions and not the nomenclature or title given to the job which determines whether he is rank-and-file or managerial status.

Q: What is the difference between Managerial EEs under Labor Standars and those under Labor Relations?

CHARACTERISTICS OF MANAGERIAL RANK Q: What are the characteristics of managerial rank?

MANAGERIAL EEs UNDER MANAGERIAL EEs UNDER LABOR STANDARDS LABOR RELATIONS Powers and Duties The primary duty consists Lay down and execute of the management of the management policies establishment in which and/or to hire, transfer, they are employed or of suspend, lay-off, recall, department or discharge, assign, or subdivision discipline EEs Extent Includes the officers and Does not include the members of the managerial staff since they managerial staff are classified as supervisory EEs Purpose of Definition To determine whether or To determine an EEs’ not certain EEs are eligibility in covered by Book III of the joining/forming a labor LC on the Conditions of union. Employment

A: Among the characteristics of managerial rank are: (1) He is not subject to the rigid observance of regular office hours; (2) His work requires the consistent exercise of discretion and judgment in its performance; (3) The output produced or the result accomplished cannot be standardized in relation to a given period of time; (4) He manages a customarily recognized department or subdivision of the establishment, customarily and regularly directing the work of other employees therein; (5) He either 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 of status of other employees are given particular weight; and (6) As a rule, he is not paid hourly wages nor subjected to maximum hours of work. (National Waterworks and Sewerage Authority vs. NWSA Consolidated Unions, 11 SCRA 766)

TESTS OF SUPERVISORY STATUS TWO-FOLD REASONS FOR EXCLUSION OF MANAGERIAL EMPLOYEES

Q: What are the tests of supervisory status? A: 1. A person possesses authority to act in the interest of his employer

Q: What are the two-fold reasons for the exclusion of managerial employees? A:

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1. Conflict-of-interest 2. Preclude the risk of union’s becoming a company union SEPARATION OF UNIONS” DOCTRINE

Q: What is the rule in the affiliation of supervisors and rank-and-file unions? A: Even in affiliating with the federation, the unions of the supervisors and of the rank-and-file should be segregated.

Q: What is the “separation of unions” doctrine? Q: What are the 2 conditions that must concur? A: The “separation of unions” doctrine simply means that the affiliation of both the rank-and-file union and supervisory union in the same company with one and the same federation is not allowed if the rank-and-file employees are under the direct supervision of the supervisors composing the supervisory union. If not, said affiliation with one and the same federation is allowed. NOTE: The segregation of Rank-and-file and supervisors is founded on the fairness to the employer-employee themselves. THE EFFECT OF MIXED-UP MEMBERSHIP Q: What is the effect of mixed-up membership? A: The organization cannot become a legitimate labor organization. It cannot petition for a certification election, much less ask to be recognized as the bargaining representative of the employees.

A: 1. The rank-and-file employees are directly under the authority of the supervisory employees 2. The national federation is actively involved in the union activities in the company CONFIDENTIAL EMPLOYEE” DOCTRINE Q: What is the “confidential employee” doctrine? A: Under the “confidential employee rule”, confidential employees are not allowed to join any union (as they are treated like managers) when they: (1) assist or act in a confidential capacity, (2) to persons who formulate, determine, and effectuate management policies specifically in the field of labor relations. Otherwise, if these two conditions do not concur, they can join a union. Simply put, if the confidential information to which an employee has access has nothing to do with labor relations, such employee cannot be considered a confidential employee under this rule.

NOTE:  

It must be shown by substantial evidence to prove that the union membership is mixed up. The inclusion of disqualified employees in a union is not among the grounds for cancellation unless such inclusion is due to misrepresentation, false statement or fraud. Said EEs are automatically deemed removed from the list of membership of said union.

Q: How may the legal personality be attacked? A: The legal personality of the petitioner union cannot be subject to collateral attack but may be questioned only in an independent and direct petition for cancellation. AFFILIATION OF SUPERVISORS & RANK-AND-FILE UNIONS

The above-mentioned requisites must be cumulative and present. Q: What is meant by the phrase “in the field of labor relations? A: Such phrase stresses labor nexus—confidentiality of the position is related or linked to labor relations matters. 

Access to information which is regarded by the ER to be confidential from the business standpoint, such as financial information or technical trade secrets will not render an EE a confidential EE.

Q: Are all managerial position considered as confidential? A: Every managerial position is confidential because one does not become a manager without having gained the confidence of the appointing authority. But not every

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confidential EE is managerial he may be a supervisory or even a rank-and-file EE. 

 

Confidential employees do not constitute a distinct category of employees for purposes of the right to self-organization They may attach to a managerial, supervisory or even rank-and-file employee. It is measured by the significance of the jobholder’s role in the pursuit of corporate objectives and strategy. NON-ABRIDGEMENT OF THE RIGHT TO SELFORGANIZATION

Q: What are the acts which are considered as unlawful with regard to the abovementioned right? A: It shall be unlawful for any person to: 1. 2. 3. 4.

Restrain; Coerce; Discrimiante against; or Unduly interfere with EEs and workers in the exercise of the right to self-organization.

NOTE: Any act intended to weaken or defeat the right is regarded by law as an offense, which is technically called “unfair labor practice.”

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 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.

Title IV UNFAIR LABOR PRACTICES

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 administrative proceeding, referred to 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. Q: What are unfair labor practices (ULP)?

CHAPTER I CONCEPT ART. 247. Concept of unfair labor practice and procedure for prosecution thereof (Labor Code)

A: They are any act intended to weaken or defeat the right of self-organization. It includes any act to discriminate in regard to wages, hours of work, and other terms and conditions of employment in order to

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encourage or discourage membership in any labor organization.



As for the second element, it must be specifically stated in Arts. 248 and 261 for an employer and Art. 249 for a labor organization.

Q: Who may be the offender in ULP? A: The offender may either be an employer or a labor organization Q: Relate Art. 246 (Non-abridgement of right to selforganization) with the succeeding provisions on ULP? A: Art. 246 is the conceptual mother of ULP. It declares that it is unlawful for any person to restrain, coerce, discriminate against or unduly interfere with the right to self-organization Q: Who are the victims of the offense ULP? A: The victim of the offense is not just the workers as a body and the employers who value industrial peace, but the State as well. NOTE:  The attack to this constitutional right is considered a crime which therefore carries both civil and criminal liabilities. Q: Distinguish ULP and a mere violation of an employer of its contractual obligation towards the employee (as discussed in National Labor Union v. Insular-Yebana Tobacco Corporation) ULP Involves violation of public right or public policy to be prosecuted like criminal offenses

BREACH OF OBLIGATION a contractual breach to be redressed like an ordinary contract or obligation

Q: What are the elements for the commission of ULP? A: 1. Employer-employee relationship between the offender and the offended 2. Act done is expressly defined in the Code as an act of ULP NOTE:

Q: Why is the first element (existence of employeremployee relationship) required? A: The first element is required because ULP is a negation of, a counteraction to, the right to organize which is available only to employees in relation to their employer. No organizational right can be negated or assailed if the employer-employee relationship is absent in the first place. Q: What is the consequence of the second element, i.e., the act done is expressly defined in the Code as an act of ULP? A: ULP, therefore, has a limited, technical meaning because it is a labor relations concept with a statutory definition. It refers only to acts opposed to worker’s right to self-organize. Without this element, the act, no matter how unfair, is not ULP as legally defined. Q: Without the second element, what act is probably committed? A: Stripped of legalese, ULP, when committed by the employer commonly connotes anti-unionism. Q: When is violation of the CBA considered as ULP? A: Violation of the CBA is considered as ULP when that violation is gross in character. Q: Is there an exception to the rule that the prohibited acts should be related to the workers’ right to selforganization and observance of the CBA? If yes, state the exception. A: Yes. The only possible exception is Art. 248 (f) referring to dismissing or prejudging an employee for giving testimony, regardless of the subject of the testimony. NOTE:  “Not every unfair act is ULP”  Promoting an employee not on the basis of merits may be a bad human resource management but does not amount to ULP. Q: Is prejudice to public interest an element of ULP?

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A: No. A showing of prejudice to public interest is not a requisite for ULP charges to prosper. Q: How is ULP prosecuted? A: ULP has both civil and criminal aspects. The civil aspect may include liability for damages and these may be passed upon by a labor arbiter. To prosecute ULP as criminal offense is not possible until after finality of the judgment in the labor case, finding that the respondent indeed committed ULP. But such judgment will not serve as evidence of ULP in labor case. While only substantial evidence is required in the labor case in the NLRC, proof beyond reasonable doubt is needed in the criminal case of ULP. Q: Which regular court has jurisdiction over the criminal aspect of ULP? A: Under Art. 288, the criminal charge falls under the concurrent jurisdiction of the Municipal Trial Court or Regional Trial Court. Q: If the offender is a juridical person (such as corporations), to whom will the penalty be imposed? A: The penalty, which is either a fine and/or imprisonment, shall be imposed upon the guilty officers of a corporation, partnership, association or entity. If the ULP is committed by a labor organization the parties liable are those mentioned in Art. 249. Q: When will the offense of ULP prescribe? A: The offense prescribes in one year (Art. 290).

CHAPTER II UNFAIR LABOR PRACTICES OF EMPLOYERS ART. 248. Unfair labor practices of employers (Labor Code) It shall be unlawful for an employer to commit any of the following unfair labor practices:

(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 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 officers; (e) To discriminate in regard to hire or tenure of employment in order to encourage or discourage membership in any labor organization. Nothing in this Code or in any other law shall prevent 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 belonging to an appropriate collective 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 nonunion members accept the benefits under the collective 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

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actually participated in, authorized or ratified unfair labor practices shall be held criminally liable.

Q: Does the law on ULP intended to deprive the employer of his valid exercise of management rights?

Q: What are the ULP acts of an employer under Art. 248?

A: No. The law on ULP is not intended to deprive the employer of his fundamental right to prescribe and enforce such rules as he honestly believes to be necessary to the proper, productive, and profitable operation of his business.

A: 1. 2. 3. 4. 5. 6. 7. 8. 9.

Interference Yellow-dog condition Contracting out Company unionism Discrimination for or against union membership Discrimination because of testimony Violation of duty to bargain Paid negotiation Violation of CBA.

JURISPRUDENCE Marioano v. Royal Interocean Lines, 1961  Considering that the employee’s dismissal, because of charges against the manager is not connected with or necessarily arising from union activities, the dismissal did not constitute ULP. Despite the employee’s right to selforganization. The employer still retains his inherent right to discipline his employees, his normal prerogative to hire or dismiss them. Q: Is specific denomination of the act necessary to prosecute ULP? A: No. Specific denomination of the act is not necessary to prosecute ULP. In resolving the question of whether or not an employer committed the act charged in the complaint, it is of no consequence, either as a matter of procedure or substantive law, how the act is denominated. What is important is that it constituted an unfair labor practice Q: The Code enumerates the acts or categories of acts of ULP. Is the enumeration exclusive? A: No. The enumeration does not mean an exhaustive listing of ULP incidents. The Labor Code does not undertake the impossible task of specifying in precise and unmistakable language each incident which constitutes ULP. It leaves to the court the work of applying the law’s general prohibitory language in light of infinite combinations of events which may be charged as violative of its terms.

Q: Is intention or innocence an excuse of the conduct of ULP? A: No. Where an employer violates the Act and is found guilty of the commission of ULP, it is no excuse that his conduct was intentional and innocent. NOTE: Instances of valid exercise of management rights  Where despite his transfer to a lower position, his original rank and salary remained undiminished.  If the employer exercises the option given to him in the CBA to retire an employee who either has rendered 25 years of service or reached the age of 60.  It is the company’s prerogative to promote its employees to managerial positions Q: Is acceptance of mass resignation constitutive of ULP? A: Acceptance of a voluntary resignation is not ULP. When pilots voluntarily terminated their employment relationship with the company, they cannot claim that they were dismissed. Q: Did the management commit ULP when it granted profit-sharing benefits to non-union members A: No. Management has the prerogative to regulate, according to its discretion and judgment, all aspects of employment. Labor law does not authorize the substitution of judgment of the employer in the conduct of its business. Such management prerogative can be availed of without fear of any liability so long as it is exercised in good faith. Wise and Co., Inc. v. Wise & Co., Inc. Employees Union, 1989 

There can be no discrimination committed by the employer as the situation of the union employees is

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

different from that of the non-union employees. There can be no discrimination where the employees concerned are not similarly situated. The grant by the employer of profit-sharing benefits to the employees outside the bargaining unit falls under the ambit its managerial prerogative.

Q: Did the employer commit ULP when it required forced vacation leave to its employees? A: No. Where the vacation leave without pay, which the employer requires employees to take in view of the economic crisis, is neither malicious, oppressive nor vindictive. San Miguel Brewery Sales Force Union v. Ople and SMC, 1989 Issuance of Rules or Policy  Even as the law is solicitous of the welfare of the employees, it must also protect the right of the employer to exercise what are clearly management prerogatives. The free will of management to conduct its business affairs to achieve its purpose cannot be denied. Q: Did the employer commit ULP when it discharged its employees who engaged in a slowdown? A: No. Employees have the right to strike, but they have no right to continue working on their own terms while rejecting the standards desired by their employer. Hence, an employer does not commit an ULP by discharging employees who engage in slowdown, even if their object is a pay increase which is lawful. Q: How do you determine the validity of an employer’s act involves an appraisal of his motives? A: Determining the validity of an employer’s act involves an appraisal of his motives. It is for the NLRC to weigh the employer’s expressed motive in determining the effect on the employees of management’s otherwise equivocal act. Q: Are employers required to support his actions with reason or purpose? A: The general rule is NO. But, as a matter of exception, where the attendant circumstances, history of the employer’s past conduct and like considerations,

coupled with an intimate connection between the employer’s action and the union affiliations or activities of the particular employee or employees taken as a whole raise a suspicion as to the motivation for the employer’s action, the failure of the employer to ascribe a valid reason therefor may justify an inference that his unexplained conduct in respect of the particular employee was inspired by the latter’s union membership or activity. INTERFERENCE   a. b. c. d. 

Outright or unconcealed intimidation is the most obvious form of interference Instances of interference: Threat of the employer to cut the pay for the employees Increasing rent of the company houses Closing of plant if they supported the union Employer encouraged the employees to sign a petition repudiating the union. Interrogation is also under this act

Q: Is the act of persistent interrogation of employees to illicit information as to what had happened at a union meeting and identity of the active union employees violative of the organizational right of the employees. A: Yes. The act of persistent interrogation of employees to illicit information as to what had happened at a union meeting and identity of the active union employees are held violative of the organizational right of the employees as enunciated in the case NLRB v. Associated Naval Architects. Q: In order that questioning of an employee concerning his union activities would not be deemed coercive, how should it be made? A: The employer must communicate to the employee the purpose of the questioning, assure him that no reprisal would take place, and obtain his participation on a voluntary basis. The union questioning must also occur in a context free from employer hostility to union organization and must not in itself be coercive in nature. Q: Can the management commit ULP while there was no union yet?

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A: Yes. Under Art. 248 (a), “to interfere with, restrain, or coerce employees in the exercise of their exercise of the right to self-organization” is an ULP on the part of the employer. Par. (d) of said Article also considers it an ULP for an employer “to initiate, dominate, assist or otherwise interfere with the information or administration of any labor organization, including the giving of financial or other support to it. In short, an employer who interfered with the right to selforganization before the union is registered can be held guilty of ULP. 



A rule prohibiting solicitation of union membership in company is unlawful if it applies to non-working time as well as to working time. Where the majority of the employees live on the premises of the employer and cannot be reached by any means or procedures practically available to union organizers, the employer may be required to permit non-employee union organizers to come within its premises, in order to solicit employees.

Q: Give other instances of unlawful acts to discourage membership in a labor organization? A: 1. Dismissal of union members upon their refusal to give up their membership, under the pretext of retrenchment due to reduced dollar allocations 2. Refusal over a period of years to give salary adjustments according to the improved salary scales in the collective bargaining agreements 3. Dismissal of an old employee allegedly for insufficiency, on account of her having joined a union and engaging in union activities.

A: It consists of using one or a small group of employees, or other agents, inspired by profit, opportunism, vengeance or some kindred human frailty to use his or their access to employee’s quarters and affairs for the purpose of spying upon fellow employees and reporting back to the employer. Q: Is the act of employer of announcing benefits prior to a representation election violative? A: Yes, if it is intended to induce the workers to vote against the union. It is a well-settled rule that while a representation election is pending, the conferral of employee benefits for the purpose of inducing the employees to vote against a union is unlawful. “TOTALITY OF CONDUCT DOCTRINE” Q: What is the “Totality of Conduct Doctrine” or the “principle of determination”? A: The doctrine holds that the culpability of the employer’s remarks (expression of opinion) was to be evaluated not only on the basis of their implications, but against the background of and in conjunction with collateral circumstances. Q: What are the factors that have to considered under the doctrine of totality of conduct? A: Under the doctrine, expressions of opinion by an employer, though innocent in themselves, frequently were held to be culpable because of the circumstances under which they were uttered, the history of the particular employer’s labor relations or anti-unionism bias or because of their connection with an established collateral plan of coercion or interference.

ULP NOT SUBJECT TO COMPROMISE The Insular Life Assurance Co., Ltd., Employees Association-ATU, et al. v. The Insular Life Assurance Co., Ltd., 1971

Q: Are ULP cases subject to compromises? A: No. In the case CLLG E.G. Gochangco Workers Union v. NLRC (1988), the Court held that ULP cases are not, in view of the public interest involved, subject to compromises. ESPIONAGE AND SURVEILLANCE Q: As an ULP, how is espionage and surveillance committed?



Letter to individual employees- it is an act of interference for the employer to send letters to all employees notifying them to return to work at a time specified therein, otherwise new employees would be engaged to perform their jobs. Individual solicitation of the employees or visiting their homes, with the employer or his representative urging the employees to cease union activity or cease striking, constitutes ULP.

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Strike-breaking- when the employer offered reinstatement and attempted to bribe the strikers with comfortable cots, free coffee, and occasional movies, overtime pay for work performed in excess of 8 hours, and arrangements for their families, so they would abandon the strike and return to work, it was guilty of strike-breaking and union-busting and of ULP

 Acts violative of right to unionizea. Offer of a Christmas bonus to all loyal employees shortly after the union requested to bargain with the employer b. Giving of wage increases so as to mollify the employees after the employer has refused to bargain with the union c. Promise of benefits in return for strikers’ abandonment of their strike, etc. 

Test of interference or coercion- whether the employer has engaged in conduct which it may reasonably be said tends to interfere with the free exercise of employee’s right LOCK-OUT WHEN EQUIVALENT TO ULP

Q: When is lock-out or closure equivalent to ULP? A: A lock-out, actual or threatened, as a means of dissuading the employees from exercising their rights under the Act is clearly an ULP. However, the evidence must establish that the purpose thereof was to interfere with the employees’ exercise of their rights. An honest closing of one’s plant is not a violation of the Act. It may be proven by circumstantial evidence.  The rule is that it is unlawful for the employer to threaten its employees with moving or shutting down the plant and consequent loss of employment, as the result of their support for the union.

bad faith and both the vendor and the vendee continue to be liable to the affected workers. If such was the case, there is no need to consider the applicability of the rule that labor contracts being in personam are not enforceable against the transferee. The latter is in the position of tort-feasor, having been a party likewise responsible for the damage inflicted on the members of the aggrieved union and therefore cannot justly escape liability. RULE ON SUCCESSOR EMPLOYER Q: When will the rule on “successor employer” apply? A: Closure is not legal and the employees cannot be separated if there is no closure because the “closed” department or company reappeared although under a new name. If the new company is engaging in the same business as the closed company or department, or is owned by the same people, and the “closure” is calculated to defeat the workers’ right to selforganization, the closure may be declared a “subterfuge” and the doctrine of successor employer will apply, i.e., the new company will be treated as a continuation or successor of the one that closed. DOCTRINE OF PIERCING THE VEIL OF CORPORATE ENTITY Q: What is the so-called “doctrine of piercing the veil of corporate entity”? A: Under the doctrine of piercing the veil of corporate entity, the legal fiction that a corporation is an entity with a juridical personality separate and distinct from its members or stockholders may be disregarded. In such cases, the corporation will be considered as a mere association of persons. The members or stockholders of the corporation will be considered as the corporation, that is, liability will attach directly to the office and stockholders. Q: When will the doctrine apply?

EFFECT OF SALE IN BAD FAITH Q: When is sale of the company or business considered as “sale in bad faith”? A: The sale of business enterprise to avoid the legal consequences of an ULP is necessarily attended with

A: The doctrine will apply when the corporate fiction is used to defeat public convenience, justify wrong, protect fraud, or defend crime, or when it is made as a shield to confuse the legitimate issues or where a corporation is the mere alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as to make it

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merely an instrumentality, agency, conduit or adjunct of another corporation. Q: What facts and circumstances may be considered to apply the doctrine? A: As held in the case H. Aronson Co., Inc. v. Associated Labor Union (1971), the ff. facts and circumstances may be considered? 1. The capitalization and corporate functions of the petitioner corporation and the new corporations are exactly the same. 2. The new corporation started business a day after the dissolution of the petitioner corporation and they made use of the office equipment, stores, and bodegas of the later corporation. 3. The members of the family of the controlling stockholders hold the same position in the new corporation that they used to hold in the previous corporation and, lastly, only the employees who were non-union members were hired by the new corporations. YELLOW-DOG CONDITION (ART. 248 (B) Q: What is a yellow-dog condition?

CONTRACTING-OUT Q: What will make this act an ULP? A: It is the ill intention that makes it so. It is considered as an ULP when it is motivated by a desire to prevent his employees from organizing and selecting a collective bargaining representative, rid himself of union men, or escape his statutory duty to bargain collectively with his employees’ bargaining representative. Q: What may negate employer’s act of contracting-out as equivalent to ULP? A: An employer is not guilty of an ULP in contracting work out for business reasons such as: 1. Decline in business 2. Inadequacy of his equipment 3. Need to reduce cost RUNAWAY SHOP Q: What is a “runaway shop”?

A: A contract provision whereby an employee agrees that during the period of his employment he will not become a member of a labor union. It is American in origin which is already outlawed in some states.

A: A run-away shop is defined as an industrial plant moved by its owners from one location to another to escape union labor regulations or state laws. The term is also used to describe a plant removed to a new location in order to discriminate against the employees at the old plant because of their union activities.

Q: What are the usual provisions for employment contracted in the yellow-dog contract?

Runaway shop refers to business relocation animated by anti-union animus.

A: 1. A representation by the employee that he is not a member of a labor union; 2. A promise by the employee not to join a labor union; 3. A promise by the employee that, upon joining a labor union, he will quit his employment.

Q: Is sameness of business enough reason to show runaway shop? A: No. Sameness of business enough reason to show runaway shop to pierce the veil of separate corporate entity. Q: Does the fact that one or more corporations are owned and controlled by same or single stockholder sufficient ground for disregarding separate corporate personalities?





The exacting of such written promise was known in England as “signing the document,” and in the United States as the “iron clad” at first, and after 1917 as the “yellow dog contract.” Only a yellow dog, cried the unionists, would sign such a contract. The term itself has an odious connotation.

A: No. The mere fact that one or more corporations are owned and controlled by the same or single stockholder is not sufficient ground for disregarding separate corporate personalities. Well-settled is the rule that a corporation has a personality separate and distinct from

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that of its officers and stockholders. The fiction of corporate entity can only be disregarded in certain cases such as when it is used to defeat public convenience, justify wrong, protect fraud, or defend crime. To disregard said separate juridical personality of a corporation, the wrongdoing must be clearly and convincingly established. Q: How may an employer legitimately blunt the effectiveness of an anticipated strike?

NOTE: Discrimination is not the same as differentiation or classification. It is common management practice to classify jobs and grant them varying levels of pay or benefits package. These are valid differentiations that recognize differences in job requirements or contributions. Discouraging membership in a labor organization includes not only discouraging adhesion to union membership but also discouraging participation in union activities such as a legitimate strike.

A: 1. Stockpiling activities 2. Readjusting contract schedules 3. Transferring work from one plant to another COMPANY-DOMINATION OF UNION Q: How is domination of a labor union manifested? A: 1. Initiation of the company union idea a. Outright formation by the employer or his representatives b. Employee formation on outright demand or influence by employer c. Managerially motivated formation by employees 2. Financial support to the union 3. Employer encouragement and assistance 4. Supervisory assistance a. Soliciting membership b. Permitting union activities during work time c. Coercing employees to join the union by threats of dismissal or demotion

Other important notes: 

Discrimination in Work Quota- It was held that the uneven application of company’s marketing plan is patently an act of discrimination, considered as ULP.  Discrimination in Bonus Allocation or Salary Adjustments- there is ULP in the granting of salary adjustments where the evidence shows: a. The management paid the employees of the unionized branch b. Where the salary adjustments were granted to employees of one of its non-unionized branches although it was losing in its operations c. The total salary adjustments given every ten of its unionized employees would not even equal the salary adjustments given one employee in the nonunionized branch.  Discrimination in Lay-Off or Dismissal- where only unionists were permanently dismissed while nonunionists were permanently dismissed while nonunionists were not. BLACKLIST

NOTE: A labor union is company dominated where it appears that key officials of the company have been forcing employees belonging to a rival labor union to join the former under pain of dismissal should they refuse to do so; key officials have attended the election of officers of the former union.

Q: How is “blacklist” defined? A: A blacklist has been defined as “a list or persons marked out for special avoidance, antagonism or enmity on the part of those who prepare the list, or those among whom it is intended to circulate.

DISCRIMINATION Q: When is blacklisting considered as ULP? Q: What does the law prohibit with respect to discrimination? A: What the law prohibits is discrimination to encourage or discourage membership in a labor organization.

A: When blacklisting is resorted to by a combination of employers to prevent employment of employees for union activities, it may constitute ULP. It may also give rise to a right of action for damages by the employees prejudiced.

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Nonetheless, unless the action of then ERs in combining or in passing communications among themselves for the purpose of excluding unwanted workers from employment constitutes a libel or slander, the excluded EE possesses no right of action because the employer’s community of interest acts both to justify the combination and to privilege the communication. INDIRECT DISCRIMINATION Q: What is Indirect Discrimination? A: Art. 248 (f) of the Code provides that it shall be unfair for an ER to discriminate against an EE for having filed charges or for having given or being about to give testimony under the law. Accordingly, the intent of the legislature is to assure absolute freedom of the EEs to establish labor organizations and unions as well as to proper charges for violations of the labor laws. NOTE: What is prohibited to be done directly shall not be allowed to be accomplished indirectly. Example of acts which are considered as Unfair Labor Practice: 1. Dismissal of a laborer on account of union activities of his brother; 2. The discharge of an EE due to the union activities of the wife; and 3. The discharge of a wife due to the union activities of the husband Q: What is the test of Discrimination? A: To determine whether or not a discharge is discriminatory, it is necessary to establish the underlying reason for the discharge. Accordingly, if the discharge is actually motivated by lawful reason, the fact that the EE is engaged in union activities at the time will not lie against the ER and to prevent him from the exercise of his business judgment to discharge an EE for cause. In the case of DC International v. NLRB, a discharged EE filed a suit, contending that such discharge was a reprisal for his frequent and persistent filing and processing of grievances. On the other hand, the ER contended that the EE was actually discharged for absenteeism and lateness based on prior sufficient warnings against violation of company rules requiring

each EE to give timely notice of inability to report for work. The Court accordingly held that more substantial evidence establishes that the discharge was made with the proper motive. Accordingly, if it can be established that the true and basic inspiration for the ER’s union affiliations or activities, the assignment by the ER of another reason, whatever its semblance of validity is unavailing. Thus, it has been held that the facts disclosed that the ER’s acts in discharging the EEs were actually prompted by the ERs improper interest in the affected EEs’ union affiliations and activities, even though the ER urged that his acts were predicated on economic necessity, desire to give employment to more needy persons, lack of work, cessation of operations, refusal to work overtime, refusal of non-union EEs to work with union EEs, seasonal layoff, libelous remarks against the management and violation of company rules. Q: What is necessary to prove that the discharge of an EE was motivated by his union activity? A: It must be based on evidence, direct or circumstantial and not upon mere suspicion. Q: What is Constructive Discharge? When does the same occur? A: Where the ER prohibits EEs from exercising their rights under the Act, on pain of discharge and the EE quits as a result of the prohibition, a constructive discharge occurs. Accordingly, in NLRB v. Vacuum Platers, the Court held that an EE was held to be constructively discharged when she quit her job because of discriminatory assignment requiring heavy lifting work which the ER knew she was physically unable to perform. Note: The question of whether an EE was discharged because of his union activities is essentially a question of fact as to which the finding of the CIR are conclusive and binding if supported by substantial evidence. Accordingly, the CIR is governed by the rule on substantial evidence rather than by the rule of preponderance of evidence as in ordinary civil cases. SUBSTANTIAL EVIDENCE Q: What is Substantial Evidence?

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A: It is such relevant evidence as a reasonable mind might accept to support a conclusion. It is such evidence which affords a substantial basis from which the fact in issue can be reasonably inferred.

bargaining agent a sum equal to that paid by the members. This is directed against “free rider” EEs who benefit from union activities without contributing financially to union support.

UNION SECURITY CLAUSE OPEN SHOP AGREEMENT Q: What is Union Security Clause? Q: What is an Open Shop agreement? A: It requires membership in the union so that an EE may retain his job and the union’s existence is assured. It is a generic term which s applied to and comprehends “closed shop,” “union shop,” “maintenance of membership,” or any other form of agreement which imposes upon EEs the obligation to acquire or retain union membership as a condition affecting employment. Accordingly, its purpose is to assure continued existence of the union. In a sense, it is a valid kind of discrimination which obliged certain EEs to join a particular union. Q: What are the kinds of Union Security Agreements? A: 1. Closed-Shop- only union members can be hired by the company and they must remain as union members to retain employment. 2. Union-Shop- nonmembers may be hired, but to retain employment must become members after a certain period. 3. Modified Union Shop- EEs who are not union members at the time of signing of the contract need not to join the union, but all workers hired thereafter must join. 4. Maintenance of Membership Shop- No EE is compelled to join the union, nut all present or future members must remain in god standing in the union as a condition of employment. 5. Exclusive Bargaining Shop- the union is recognized as the exclusive bargaining agent of all EEs in the bargaining unit, whether union members of not. 6. Bargaining for Members Only- union is recognized as the bargaining agent only for its own members. 7. Agency Shop or Maintenance of Treasury Shop- an agreement whereby EEs must either join the union or pay to the union as exclusive

A: It is the opposite of the above mentioned; it an arrangement which does not require union membership as a condition of employment. Note: A closed shop is a valid form of union security. It is not therefore a restriction of the right of freedom of association guaranteed by the Constitution. It is the policy of the State to promote unionism to enable the workers to negotiate with management on the same level and with more persuasiveness than if they were to individually and independently bargain for the improvement of their respective conditions. Correspondingly, the law has sanctioned stipulations for the union shop and closed shop as a means of encouraging the workers to join and support the labor union of their own choice as their representative in the negotiation of their demands and the protection of their interests with respect to the ER. Therefore, a closed-shop agreement is the most prized achievement of unionism. It wields up solidarity and is an effective form of union security agreement. Another reason for enforcing such agreement is the principle of sanctity of inviolability of contracts. Accordingly, the freedom of EEs to organize themselves and select their representative should be subordinated to the constitutional provision protecting the sanctity of contracts. We cannot conceive how freedom to contract (which should be allowed to be exercised without limitation) should be subordinated to the freedom of the laborer to choose the organization they desire to represent them. Q: What are the advantages and disadvantages of Closed-Shop Agreement> A: 1. It is advantageous because it:

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a. Increases the strength and bargaining power of LOs; b. Prevents non-union workers from sharing in the benefits of the union activities without sharing its obligations; c. Prevents the weakening of LOs by discrimination against union members; d. Eliminates the lowering of standards caused by the competition with non-union members; e. Enables LOs effectively to enforce collective agreements; f. Facilitates collection of dues and the enforcement of union rules; and g. Creates harmonious relations between ER and EE. 2. It is disadvantageous as it: a. Results in monopolistic domination of employment by the LOs; b. Interferes with the freedom of contract and personal liberty of the individual worker; c. Compels ERs to discharge all non-union workers regardless of efficiency, length of service; d. Facilitates the use of the LOs for the purpose of extortion, restraint of trade, etc; e. Denies the non-union workers equal opportunity for employment; f. Enables the union to charge exorbitant dues and initiation fees. Nonetheless, in the United States, a clause on compulsory union membership is being subjected to effective restrictions. The effect of these restrictions is to create a form of compulsory “agency shop.” On the other hand, in the Philippines, union security clauses in collective bargaining agreements if freely and voluntarily entered into are valid and binding. Furthermore, even if the union member were unaware of the closed-shop stipulation in the CBA they are bound by it. Accordingly, he is bound by the provisions thereof since it is a joint and several contract of the members of the union entered into by the union as their agent. Tanduay Distellery Labor Union v. NLRC 1987 

The ER did nothing but to put in force their agreement when it separated the disaffiliating union members upon the recommendation of the



union. It is necessary to maintain loyalty and preserve the integrity of the union. The law requires loyalty to the union on the part of the members in order to obtain to the full extent its cohesion and integrity. Villar v. Inciong—although petitioners are entitled to disaffiliation from the union and to form a new organization of their union, they must, however, suffer the consequences of their separation from the union under the security clause of the CBA.

Nonetheless, there should be a clear and unequivocal statement that the loss the status of a member of good standing in the union shall be a cause for dismissal. Hence, there must be an express and unequivocal requirement of membership in the union as a condition or continuance in the employment. Thus, a union-shop as with closed-shop provisions should be strictly construed against the existence of union shop. NOTE: Although a union security clause in a CBA may be validly enforced and dismissal pursuant thereto may likewise be valid, this does not erode the fundamental requirement of due process. Accordingly, the sanctity and inviolability of contracts cannot override one’s right to due process. Intra-union dispute, in its character, although originally between the local union and the federation was later on converted into a termination dispute when the company dismissed the petitioners from work without the benefit of a separate notice and hearing. In one case, the respondent company immediately suspended its EEs and thereafter effected their dismissal, this is certainly not in fulfillment of the mandate of due process which is to afford the EE to be dismissed an opportunity to be heard (Tropical Hut EEs’ Union-CGW, et al. v. Tropical Hut Food Market, Inc., 1990).

Also, where the ER compelled the EE to go on forced leave upon recommendation of the union for the alleged violation by the EE of the closed-shop agreement, the NLRC is correct in ordering the reinstatement of the EE and directed the union to pay wages and fringe benefits which the EE failed to receive as a result of her forced leave and to pay attorney’s fees.

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Q: What is the rule when the ER is in good faith? A: When the ER dismissed his EEs in the belief in good faith that such dismissal was required by the closedshop provision, he may not be ordered to pay back compensation to such EEs although their dismissal is found to be illegal. CLOSED-SHOP AGREEMENT T O WHOM NOT APPLICABLE Q: To whom is the closed-shop agreement not applicable? A: GR: All EEs in the bargaining unit are covered by a closed-shop agreement and are subject to its terms. EXC: 1. Any EE who at the time of the agreement takes effect is a bona fide member of religious organization which prohibits its members from joining Lobar Unions on religious grounds; 2. EEs already in the service and already members of a labor union other than the majority union at the time the agreement takes effect; 3. Confidential EEs who are excluded from the rankand-file bargaining unit; and 4. EEs excluded by the express terms of the agreement.

A: This is based on quasi-contract—that non-union EEs may not unjustly enrich themselves by benefiting from employment conditions negotiated by the bargaining union (Holy Cross of Davao College, Inc. v. Joaquin, 1996). Accordingly, the union served as agent of the EEs and the agency fee is recognition of the agent’s efforts. The fee is collectible only from EEs deriving economic benefits from the union-negotiated CBA. Furthermore, since the union is required by law to act as the bargaining representative of all EEs, both union and nonunion, within the bargaining unit, the justification for the clause is that the nonmember should contribute toward the cost of collective bargaining and should not be allowed to benefit from the collective bargaining process without supporting it financially. The law does not permit “free riders.” DISCRIMIANTION BECAUSE OF TESTIMONY 

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The law protects not only ER’s right to form, join, or assist LOs but also their right to testify on matters covered by the Code. Subsequently, the law shields the worker’s right to self-organization from indirect assault by the ER. The ER’s reprisal against a testifying EE is ULP because it violates the right to engage in concerted activity, a right included in the right to self-organize. Nonetheless, concerted activity does not require a number of people acting in unison.

RULE REGARDING AGENCY FEE Q: What is the rule regarding Agency Fee?

Q: Does the same rule apply too to a situation where the ER retaliates against an EE who refused to testify in the favor of the ER?

A: The EEs who are benefiting from the CBA, without being members of the bargaining union, may be required to pay an Agency Fee.

A: Mabeza v. NLRC

Q: Is a written authorization required in case of an Agency Fee? A: No, a written authorization from the non-union EE is not required. Accordingly, the EEs’ acceptance of benefits from a collective bargaining agreement justifies the deduction of agency fees from his pay and the union’s entitlement thereto. Q: What is the basis of the agency fee?



The act of compelling EEs to sign an instrument indicating that the ER observed labor standards provisions of law when he might have not, together with the act of terminating or coercing those who refuse to cooperate with the ER’s scheme, constitutes unfair labor practice.

ART. 118. Retaliatory measures. - It shall be unlawful for an employer to refuse to pay or reduce the wages and benefits, discharge or in any manner discriminate against any employee who has filed any complaint or instituted any proceeding under this Title or has testified or is about to testify in such proceedings.

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Art. 248 and 118 are related. Both articles speak of EEs’ filing a complaint or giving of testimony although the latter is limited to wages. VIOLATION OF THE DUTY TO BARGAIN PAID NEGOTIATION 

It is punishable for the ER to pay the union or any of its officers or agents any negotiation fee or attorney’s fee as part of settlement in collective bargaining or any labor dispute. VIOLATION OF THE CBA

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After the CBA is concluded, implementation follows. Implementation is still part of bargaining process. The duty to bargain requires good faith which implies faithful observance of what has been agreed upon. Such violation must be “gross.”

Q: What are the reliefs in cases involving ULP? A: a. Cease and desist order- this affirmative action will effectuate the policies of the law including but not limited to reinstatement of the EE with or without back pay and including rights of EEs prior to dismissal like seniority. Requirements: 1. Record must show that the restrained conduct was an issue in the case; 2. Finding of fact of said misconduct 3. Filing of fact was supported by evidence. b. Affirmative or positive order- the Court may issue an affirmative order to reinstate the EE which back pay from the date of the discrimination. c. Order to bargain- when the ER has failed or refused to bargain with the proper bargaining unit of his EEs, the Court may issue an affirmative order to compel the respondent to bargain with the bargaining agent. d. Disestablishment- where the ER had initiated, dominated, or assisted in or interfered with the formation or establishment of any LO or contributed financial or other support to it, the

Court may issue, in addition to the abovementioned remedies, an order directing the ER to withdraw all recognition from the dominated labor union and to disestablish the same. An order for disestablishment comprehends and ordains the withdrawal of recognition of such LO as the EEs bargaining agent and a bona fide and sufficient communication to the EEs of such withdrawal of recognition of such organization by the ER. Q: Are ULP subject to compromise? A: No, ULP cases are not subject to compromises. There relation between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. But in the case of Reformist Union of R.B Liner, Inc. v. NLRC (1997), the Court affixed the stamp of approval to a compromise settling a ULP-based strike. Accordingly, while it did not abandon the rule that ULP acts are beyond and outside the sphere of compromises; the agreement in this case was voluntarily entered into and represents a reasonable settlement which therefore binds the parties/ Q: Does the law allow splitting of action with regard to ULP cases? A: When a labor union accuses an ER of acts of ULP allegedly committed during a given period of time, the charges should include all acts of ULP that period. Hence, the union should not be allowed to split its cause of action and harass the ER with subsequent charges. Q: Are ERs responsible and liable for ULP acts by subordinate Officials? A: If violations were traceable back to the ER, either by way of authorization or ratification, the ER, despite the fact that he himself was not the actual actor, was held to be responsible for such violations. Nonetheless, where the facts in the case made doubtful the propriety or equity of imputing to the ER responsibility for the acts of a particular EE, the following considerations were often employed:

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a. Knowledge by the ER of the EEs’ improper acts: the ER’s failure to prevent continuation of the course of conduct or his failure to renounce any connection or affinity therewith, invited the imputation of fault and responsibility to the ER.

Q: What may be done during the 60-day Freedom period? A: 1. A labor union may disaffiliate from the mother union to form a local or independent union 2. Either party can serve a written notice to terminate or modify the agreement 3. A petition for certification election may be filed.

b. Continuity of improper conduct by the EE: Continued, repeated, or widespread activities by a supervisory EE in affront of the rights of the body of the EEs was deemed ample justification for ascribing knowledge and blame to the ER. c. ER’s past policy and attitude: Similarity between the past attitude or policy of the ER and that of the offending supervisory EE might, in certain cases, be indicative of a concert of effort between the two. YELLOW DOD UNION Q: What is a yellow-dog union? A: It is sometimes known as a company union. It refers to an employee association calling itself a trade union but which, in fact, is affiliated covertly or which is operated openly by an employer.

SUCCESSOR-IN-INTEREST DOCTRINE Q: What is the so-called “Successor-in-interest” doctrine? A: When an employer with an existing CBA is succeeded by another employer, the successor-in-interest who is a buyer in good faith has no liability to the employees in continuing employment and the collective bargaining agreement because these contracts are in personam. Q: What are the exceptions to the doctrine? A: 1. When the successor-in-interest expressly assumes the obligation 2. The sale is a device to circumvent obligation 3. The sale or transfer is made in bad faith?

FEATHER-BEDDING Q: What is the symbolism behind feather-bedding?

PRINCIPLE OF RELATIVITY OF CONTRACTS A: The term "featherbedding" originally referred to any person who is pampered, coddled, or excessively rewarded. The term originated in the use of feathers to fill mattresses in beds, providing for more comfort. The modern use of the term in the labor relations setting began in the United States railroad industry, which used feathered mattresses in sleeping cars.

Q: What is the principle of relativity of contracts? A: The rule is that contracts take effect only between the parties, their assigns and heirs (Article 1311, New Civil Code). Q: What are the exceptions to the rule?

SWEETHEART DOCTRINE A: Q: What is a “sweetheart doctrine” A: It is well-settled that it is considered an unfair labor practice for a labor organization to ask for or accept negotiation or attorney’s fees from the employer in settling a bargaining issue or dispute. It is essentially a CBA that does not substantially improve the employees’ wages and benefits and whose benefits are far below those that are provided by law.

a. Where the obligation arising from the contract are not transmissible by their nature, by stipulation, or by provision of law. b. Where there is stipulation pour atrui (a stipulation in favor of a third party) c. Where a third person induces another to violate his contract d. Where, in some cases, third persons may be adversely affected by a contract where they did not participate. e. Where the law authorizes the creditor to sue on a contract entered into by his debtor.

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SUBSTITUTIONARY DOCTRINE Q: What is the substitutionary doctrine? A: Where there occurs a shift in the employee’s union allegiance after the execution of a collective bargaining contract with the employer, the employees can change their agent but the collective bargaining contract which is still subsisiting continues to bind the employees up to its expiration date. Q: May they, however, bargain for the shortening of the said expiration date?

A: In this manner, the law prevents the existence of a gap in the relationship between the collective bargaining parties. PRINCIPLE OF CO-DETERMINATION Q: What is the “principle of co-determination”? A: It is a practice whereby the employees have a role in management of a company. It covers: a. Rights b. Benefits c. welfare

A: Yes.

4 FORMS OF ULP IN BARGAINING WILEY DOCTRINE

Q: What is the so-called Wiley Doctrine?

Q: What are the 4 forms of ULP in bargaining? A: 1. Refusal or failure to meet and convene 2. Evading the mandatory subjects of bargaining 3. Bad faith in bargaining (boulwarism) including failure or refusal to exclude the CBA, if requested; and 4. Gross violation of the CBA

A: The disappearance by merger of a corporate employer which has entered into a collective bargaining agreement with a union does not automatically terminate all the rights of the employees covered by the agreement, even though the merger is for genuine business reasons.

Failure or refusal to meet and convene In the U.S. landmark case of John Wiley & Sons v. Livingston, the Court held that a successor-employer had a duty to arbitrate under the arbitration provisions of a predecessor employer’a labor contract, although the suceessor had neither been a party to nor assumed the CBA. The Court added that while the principles of law governing ordinary contracts would not bind to a contract an unconsenting successor to a contracting party, a collective bargaining agreement is not an ordinary contract. PRINCIPLE OF HOLD-OVER IN CBAs Q: What is the “principle of hold-over” in CBAs? A: The principle dictates that 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. Q: What is the rationale for the rule?

Q: What are the acts not deemed refusal to bargain? A: 1. Adoption of an adamant bargaining position in good faith particularly where the company is operating at a loss; 2. Refusal to bargain over demands for commission of ULP; and 3. Refusal to bargain during the period of illegal strike. NOTE: An ER is under no obligation to bargain with a union which is striking in violation of a no-strike clause in the applicable CBA or in violation of the statutory notice requirement of 29 USCS Sec.158 (d). 4. There is no request for bargaining 5. The union seeks recognition for an inappropriately lagre unit. 6. The union seeks to represent some persons who are excluded from the act 7. The rank-and-file unit includes supervisors or inappropriate otherwise

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8. The demand for recognition and bargaining is made within the year following a certification election in which the clear choice was no union and no ad interim significant change has taken place in the unit 9. The Union makes unlawful bargaining demands. INTERFERENCE IN THE SELECTION OF THE UNION’S NEGOTIATING PANEL: In the case of Standard Chartered Bank Employess Union v. Hon. Confesor the Court held that if the ER interferes in the selection of union negotiators or coerces the Union to exlude from its panel of negotiators a representative of the Union, and it can be inferred that said act was adopted to yield adverse effects on the free exercise of the right to selforgnization or on the right to collective barganing of EEs, then ULP is committed. Q: What is the rule in case of non-reply to proposal? A: Collective bargaining designed to stabilize the relations between labor and management for the purpose of industrial peace is a mutual responsibility between the parties. It is an ULP for an ER to refuse to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement for wages, hours, and other terms of employment. Q: What are the preconditions for bargaining?

2. 3. 4. 5. 6. 7.

Hours of work Grievance machinery Voluntary arbitration Family planning Rates of pay Mutual observance clause

NOTE: An ER’s duty to bargain is limited to the mandatory bargaining subjects; as to other matters, he is feee to brgain or not to bargain. Q: What is necessary in order for a matter to be subject to mandatory collective bargaining? A: It must materially or significantly affect the terms or condtions of employment. It depends not on its form but on its practical effect. Q: What is included in the conditions of employment? A: It includes not only what an ER has already granted, but also what it has announced it intends to grant. Q: What does the term wage include? A: The term wages include not only compensation but also other emoluments of value furnished by the ER to his EE. It refers to remuneration or earnings, capable of being expressed in terms of money, etc. Q: Are benefits accorded to retirees mandatory objects of bargaining unit?

A: 1. Possession of majority representation 2. Proof of majority representation 3. Demand to bargain A company’s refusal to make counter to make counter proposal if considered in relation to the entire bragaining process may indicate BF and this s especially true where the Union’s request for a counter proposal is left unaswered.

A: No. Pension and insurance benefits for active EEs are mandatory objects of bargaining but not those benefits accorded to retirees. NOTE: The law specifies “terms and conditions of employment” not “working conditions.” Terms and conditions of employment are more inclusive.

Evading the Mandatory Subjects

Other mandatory subjects of bargaining

Q: What are the “mandatory provisions” of the CBA?

Q: Give other mandatory subjects of bargaining?

A:

A: 1. Wages

1. Wages and other types of compensation

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2. Working hours and working days, including work shifts 3. Vacations and holidays 4. Bonuses 5. Pensions and retirement plans 6. Seniority 7. Transfer 8. Lay-offs 9. Employee workloads 10. Work rules and regulations 11. Rent of company houses 12. Union security arrangements SOLOMONIC APPROACH

A: Work rules are commonly compiled into a booklet usually called “Code of Conduct” or “Code of Discipline.” These rules form part of the terms and conditions of employment and are proper subjects of collective bargaining. UNION DISCIPLINE CLAUSE Q: May an employer validly bargain a so-called “Union Discipline Clause”? A: An employer may bargain to an impasse over his proposal that the union eliminate a piecework ceiling imposed by the union rule which subjects members to discipline for exceeding the proudction quota.

Q: What is the so-called “solomonic approach”? A: Also known as the middle ground approach employed by the Secretary in certain cases. Merely finding the midway point between the demands of the company and the union, and “splitting the difference” is a simplistic solution that fails to recognize that the parties may already be at the limits of the wage levels they can afford. Thus, rather than encourage agreement, a “middle ground approach” instead promotes a “play safe” attitude that leads to more deadlocks than a successfully negotiated CBAs. Q: What subjects are covered by workrules (as a mandatory subject of CBA)?

Q: May an employer validly bargain arbitration, strikevote, or no-strike clauses? A: Yes. An employer may lawfully bargain to an impasse over his proposal that the collecitve bargaining agreement include an arbitration clause, or a no-strike clause which prohibits the employees from striking during the life of the agreement. SIGNING BONUS Q: What is a signing bonus? A: Signing bonus is a grant motivated by the goodwill created when a CBA is successfully negotiated and signed between the employer and the union.

A: 1. 2. 3. 4. 5. 6. 7.

Coffebreaks Lunch periods Smoking Employee discipline Dress Plant safety rules General regulations

CODE OF CONDUCT Q: What is a “Code of Conduct” or “Code of Discipline”?

Q: May signing bonus exist without goodwill existing? A: No. Without the good will, the payment of signing bonus cannot be justified and any order for such payment constitutes grave abuse of discretion. Ergo, if the reason behind a signing bonus is absent, no signing bonus need be given. NOTE: The law does not compel agreements between ERs and EEs and neither party is legally obligted to yield even on mandatory bargaining subject. Accordingly, the duty to bargain does not obligate a party to make concessions or yield a position fairly held (as long as the negatve reply can be explained in good faith). NON-MANDATORY SUBJECTS

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It is lawful to insist on the inclusion of a provision in a CBA if the provision is within the scope of a statutory subject of bargaining.

A: It exists where GF bargaining on the part of the parties has failed to resolve the issue and there are no definite plans for further efforts to break the deadlock.

Thus, when the subject under discussion is not mandatory, it may be discussed if both parties agree, but a strike or lockout may not be used to compel negotiation or agreement.

Impasse presupposes a reasonable effort at GF bargaining which, despite noble intentions, does not conclude in an agreement between parties.

Subsequently, bargaining to the point of deadlock may or may not amount to bargaining in BF depending on whether the insistence refers to a mandatory or nonmandatory subject of the bargaining. In case of the former, a party may insist on bargaining, even to the point of deadlock, and his insistence will not be construed as bargaining in BF since the duty to bargain requires meeting and convening on terms and conditions of employment but does not require assent to the other party’s proposals. In the latter, on the other hand, a party may not insist on bargaining on the point of impasse, otherwise his insistence can be construed as bargaining in BF. It may be construed as evasion of the duty to bargain; such evasion is ULP. Thus, if A insists on first settling a non-mandatory subject before tackling a mandatory subject, B may complain that A’s posture is just an excuse to avoid bargaining on the mandatory subjects of bargaining.

Q: What determines whether a bargaining impasse exists? A: 1. 2. 3. 4.

Bargaining history Parties good faith in negotiations Length of the negotiations Importance of the issue or issues as to which there is disagreement 5. Contemporaneous understanding of the parties as to the state of negotiations. Q: What is necessary to break an existing impasse? A: A substantial change in the bargaining position of one party is necessary to break an existing impasse so as to render unlawful the other party’s subsequent refusal to meet and bargain. NOTE: No valid bargaining impasse can be said to occur when bargaining deadlock is caused by the failure of one of the parties to bargain in GF.

Examples: 1. Insistence that the union should change its negotiator before bargaining on the EEs’ wages and benefits—the composition of the negotiation panel is not a mandatory subject 2. Removal of a certain supervisor or manager Q: Does that mean that non-mandatory subjects cannot be proposed or that the proponent cannot demand serious discussion of such proposal? A: No, what the ruling forbids is the posture of making settlement on a non-mandatory subject as a precondition to the discussion or settlement of a mandatory subject. DEADLOCK OR IMPASSE

Q: Does deadlock mean end of bargaining? A: No, it signals rather the need to continue the bargaining with the assistance of a third party as conciliator or arbitrator whose first aim is to get the parties back to the negotiating table and help them craft a win-win solution. NOTE: An ER cannot be held to have violated the obligation to bargain collectively with representatives of its EEs where the negotiations with the union had resulted in a deadlock, causing the ER to shut down the plant and the union made no request to further negotiate until after the plant had reopened with a new set of EEs operating under an agreement with another LO.

Q: When is there deadlock or impasse? Strike or Lockout in case of Deadlock

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The law recognizes bargaining deadlock as a valid reason to declare a strike or lockout. At this point, strike/lockout is supposed to be a method of resolving an impasse, a device to constrain the parties to end an impasse and go back to the negotiation table. Nonetheless, frequently, they become a problem in themselves. Q: May a bargaining deadlock be resolved through arbitration by a L.A? A: In the case of Manila Central Line Corp. v. Manila Central Line Free Workers Union, the Court held that there is nothing in the law that prohibits LAs from also acting as voluntary arbitrators as long as the parties agree to have him hear and decide their dispute.

A: A fair criterion of GF requires that the parties involved deal with each other with open and fair mind and sincerely endevour to overcome obstacles or difficulties existing between them to the end that employment reletions may be established and obstruction to the free flow of commerce prevented. Q: When can bargaining in BF be raised? A: If one will be charged with bargaining in BF, the charge should be raised while the bargaining is in progress. When the bargaining is finished and the CBA has been executed voluntarily by the parties, a charge of bargaining in BF is too late and untenable. Q: What are the instances to be considered as BF?

Bad Faith A: Bargaining deadlock may also arise because of lack GF in bargaining. Q: What does good-faith include? A: Good faith demands more than sterile and repetitive discussion of formalites precluding actual negotiation, more than formal replies which constitute in effect a refusal to treat with the union, and more than a willingness to enter upon a sterile discussion of unionmanagement differences. It requires sincere effort to reach agreement, although it does not require agreement itself. NOTE: An ER cannot be guilty of a refusal to bargain if the union is not itslef bargaining in good faith. Q: What determines GF? What is the test of GF in bargaining? A: There is no per se test of GF in bargaining. GF or BF is an inference to be drawn from the facts and is largely a matter of NCRB’s expertise. To some degree, the question of GF may be a question of cerdibility. -it must be based entirely upon the consideration of the negotiations as a whole. - the effect of an ER’s actions individually is not the test of good-faith bargaining but the impact of all such occassions or actions, considered as a whole, and th inferences fairly drawn therefrom collectively, may offer a basis for the finding of the NLRB. Q: What may be a good criterion of GF?

1. Delay in negotiations 2. If the negotiation is motivated by a desire to gain time so as to be able to undermine the union. 3. There was a refusal to bargain collectively in GF within the meaning of the statute where an ER imposed a 7-month bargaining hiatus because of the unavailability of ts negotiators; where the ER postponed several meetings and made no attempt to reach an agreement when meetings took place; where the ER’s negotiator frequently interrupted bargaining sessions with time-consuiming discussions, and no new areas of agreement were reached in spite of some counter proposals offered by the union and its often-indicated willingness to listen to other offers by the ER; delaying tactics; 4. ER refused to bind himself contractually as to wage rates, hours of work, holidays, vacations and bonuses, insisting upon the right to grant such conditions of employment as grautities, and rejected a clause against lockouts; 5. By failing to vest its negotiators with sufficient authority to make agreements on their own initiative or to accept tentatively comnitments which would have reasonable likelihood of final acceptance by its Board of Directors. NOTE: The prior adjudication of BF on an earlier occasion is not itself substantial evidence of present bad faith. COLEGIO DE SAN JUAN DE LETRAN v. ASSOC. OF EMPLOYEE AND FACULTY OF LETRAN AND AMBAS

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The ER’s utter lack of interest in bargaininh with the union is obvious in tis failure to make a timely reply to the proposals presented by the latter. As the Court ruled in the case of Kiok Loy v. NLRC, the company’s refusal to make counter-proposal to the union’s proposed CBA is an indication of BF.

it was the petitoner Lakas and not the respondent company which refused to negotiate in the pending collective bargaining process. Accordingly, the petitioner’s bargaining position was inflexible and that it was in line with this uncompromising attitude that the strikes were declared, significantly after notice that management did not or could not meet all their 17point demand.

Q: Does the mere filing of a petition for certification election suspend the negotiation? A: No, mere filing of for a certification election does not ipso facto justify the suspension of negotiation by the ER. The petition must first comply with the provisions of the Labor Code and its Implementing Rules. SURFACE BARGAINING Q: What is Surface Bargaining? Does it discharge the duty to bargain? A: It is a sophisticated pretense in the form of apparent bargaining. It does not satisfy the statutory duty to bargain by merely meeting together or simply manifesting willingness to talk. Accordingly, collective bargaining is not simply an occasion for purely formal meetings between management and labor while each maintains an attitude of “take it or leave it.” In the case of Standard Chartered Bank Employess Union v. Hon. Confesor, the Court held that Surface bargaining is going through the motions of negotiating wthout any legal intent to reach an agreement. It involves the question of whether an ER’s conduct demonstrates willingness to bargain in good faith or is merely had bargaining.

BOULWARISM Q: What does the Boulware Approach states? A: One of the central tenets of this approach is that the “product” or “firm, fair offer” must be marketed vigorously to the “consumers” or EEs, to convince them that the Company and not the Union is the true representative. Accordignly, the aim of this approach was to deal with the Union through the EEs, rather than with the EEs through the Union. Q: Does the propose modifications to the expiring CBA constitute BF? A: It is not BF when a party proposes modifications to the expiring CBA. Nonetheless, the proposed changes require honest explanation. NOTE: Part of good-faith bargaining and a method to expidite the process is supplying information to the other party. According to Art. 242, one of the rights of a legitimate labor organization is to ask for and be furnished with the ER’s annaul audited financial statements including the balance sheet and the profit and loss statement. Q: What are considered as relevant information or data?

BLUE-SKY BARGAINING A: Q: What is “blue-sky bargaining” A: It is defined as making exagerated or unreasonable proposals. Q: What is the test in determining whether or not the union is engaged in blue-sky bargaining? A: It is determined by the evidence presented by the union as to its economic demands. NOTE: In the case of Lakas ng Manggagawang Makabayan v. Marcelo Enterprises, the Court held that

1. 2. 3. 4. qN

Names and Seniority standing Financial status of the ER; and Job and production data Gross Violation of the Contract

At this stage, the negotiations are over; the document has been signed, sealed and delivered. Implementation should follow. But at this stage the collective bargaining is not yet over, and the duty to bargain is still operative because such duty further requires faithful adherence to the contractual provisions.

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Q: What is required in case of ratification by the CBU? A: The agreement negotiated by the EEs’ bargaining agent should be ratified by the majority of all the workers in the bargaining unit.

requirements of providing for grievance machinery or voluntary arbitartion 3. If it has not fulfilled the formal requirements of registration with the Bureau or Regional Office of the DOLE which requirements are held to be mandaroty.

Q: Which comes first, ratification or the execution?

Q: When is ratification not needed?

A: The Labor Code does not specify. In practice however, the sequence depends on the likelihood of ratification as judged by the union. If the union strongly feels there will be no ratification problem, the CBA is finalized, signed by the parties, and posted. Otherwise, the CBA is drafted, initiated by the parties and this “clean draft” is posted.

A: Ratification is not needed when the CBA is a product of an arbitral award (may result from voluntary arbitration or from the secretary’s assumption of jurisdiction or certification of the dispute to the NLRC by appropriate government authority or by a Voluntary Arbitrator.

NOTE: The IRR require posting of the CBA in 2 conspicious places for 5 days. Also, the CBA submitted to the MOLE must carry the sworn statement of the union secretary, attested by the union president that the CBA had been duly posted and ratified. Such requirements are mandatory and non-compliance therewith rendered the said CBA ineffective. Q: What is the rule in case of invalid ratification? A: In the case of Associated Labor Union v. Calleja, the Court held that the failure to post the CBA in at least 2 conspicious places in the establishment for at least 5 days before the ratification held that such failure is unacceptable. The purpose of the requirement, accordingly was precisely to inform the EEs of the bargaining unit of the contents of said agreement. Hence, the agreement should be annulled.

Nonetheless, the CBA still needs to be posted in the 2 conspicious place in the workplace, but the posting is for the information of and not ratification by the EEs affected. Also, the CBA has to be registered with the DOLE regional office. Q: In case of arbitral award, what is the reason behind the rule which exempts it from ratification? A:To require ratification of CBA in case of arbitral award will be inconsistent with the nature of arbitration as a dispute-settelement device. Otherwise, if that would be so, arbitration should not have begun at all. Q: What is the rule if the agreement was ratified but unsigned?

Q: What is the “Contract Bar Rule?”

A: The same is effective on ratification by unionmembers, even without the signature by the union president or union secretary-treasurer. Accordingly, the lack of the purely ministerial act of signing the formal contract did not obviate the fact that there was a binding contract.

A: A valid and existing CBA is a bar to a petition for certification election.

Q: What is the rule in case of unratified but implemented agreement?

Q: What are the exceptions to the rule?

A: In the case of Planters Products, Inc. v. NLRC, the Court held that the CBA is not invalid or void considered void notwithstanding that the same s unratified because the EEs have enjoyed benefits from it. It is iniquitous to receive benefits from a CBA and later on disclaim its validity.

CONTRACT BAR RULE

A: 1. If petition is made within 60 days before expiration of the CBA known as the Freedom Period 2. If the CBA is defective or inadequate in substance, as where it does not fulfill the legal

Q: What is the rule in case of an unwritten or unsigned agreement?

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A: The CBA is valid though not reduced to writing or signed, if neither party requires a written instrument. ZIPPER CLAUSE Q: What is a “zipper clause”? A: It is a stipulation in a CBA indicating that issues that could have been negotiated upon but not contained in the CBA cannot be raised for negotiation when the CBA is already in effect. REGISTRATION

Q: When may an appliction be denied? A: If the supporting documents are incomplete or not verified under oath. The denial is appealable to the Bureau within 10 days or to the Secretary if the denial is by the Bureau. Q: What is an “automatic renewal clause” A: Art. 253 provides that CBA shall remain effective and enforceable even after the expiration of the period fixed by the parties as long as no new agreement is reached by them.

Q: What is the rule with respect to the registration of CBA? PART 1. Collective Bargaining Concept and Procedure A: The CBA should be registered with the DOLE Regional Office where the bargaining union is registered or where it principally operates. Accordingly, Art. 231 requires that the registration within 30 calendar days from execution of the agreement. Multi-employer CBAs shall be filed with the Bureau. Q: Does the failure to register the CBA make the same invalid and inoperative? A: No. However, its nonregistration renders the contract-bar rule inoperative. Q: Is the certification of the CBA by the BLR required for its validity? A: No, once duly entered into and signed by the parties, a CBA becomes effective as between the parties. Q: What are the requirements for Registration? A: The application for CBA registration shall be accompanied by the original and 2 duplicate copies of the following documents which must be certified by the representatives of the ER and the labor union concerned: a. b.

c.

The CBA; A statement that the CBA was posted in at least 2 conspicous place in the establishment concerned for at least 5 days before its ratification; and A statement that the CBA was ratified by the majority of the EEs in the bargaining unit of the ER concerned.

Article 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 five (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 Department of Labor and Employment outside of the sixty-day period immediately before the date of expiry of such five-year term of the Collective Bargaining Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution. Any agreement on such other provisions of the Collective Bargaining Agreement entered into within six (6) months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement, 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 retroactivity thereof. In case of a deadlock in the renegotiation of the Collective Bargaining Agreement, the parties may exercise their rights under this Code. DURATION OF THE CBA Q: What is the duration of the C.B.A.? A: R.A. 6715 has introduced a significant change in setting the durations or terns of a CBA at five years for

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the “representation aspect” and not more than three years for “all other provisions.” Q: What is the difference between the representation aspect and the “all other provisions” with respect to the C.B.A? A: The former refers to the identity and majority status of the union that negotiated the CBA as the exclusive representative of the bargaining unit. The latter, on the other hand refers to the rest of the CBA, economic as well non-economic other than representational. NOTE: Senator Ernesto Herrera argued against the prevailing 3-year term of a CBA. The first year, according to him, was largely spent in the CBA negotiation and the third year in preparations and campaign for a certification election to dislodge the incumbent union. Thus, only the second year was the period of effective industrial peace. Such situation, accordingly, discouraged investors and stifled union growth. Thus, he wanted to create a legal framework to promote industrial peace and develop responsible and fair labor movement. Q: What is the purpose of the 5-year term espoused by the senator? A: In order to prevent “outside union” from disturbing the political situation in the enterprise except in the last 60 days of the fifth year. It would also train the members to be careful in choosing their union. Accordingly, within the 5-year period, the union that negotiated the CBA could not be replaced. But the union officers could be changed because usually, the member’s problem was usually more than the union officers than the union itself. NOTE: The bargaining agent is the union itself, not the union officers; hence, the bargaining agent is not necessarily changed by changing its officers. *The lawmakers believed that 3 years was too short for the representation aspect while five years was too long for the economic provisions. Duration of the economic provisions Q: What is the duration of the economic provisions?

A: The economic provisions should lapse not later than three years and be renegotiated before the end of the third year. Q: In such case, what is the term of the new economic provisions? Is it two or three? A: According to Sen. Herrera, if a new union won in the certification election held towards the end of the fiveyear representation system, then the new union would have to administer the contract for one year. Thus, he is assuming that the economic provisions should have been renegotiated for another three years. Thus, the 3-year economic provisions may be renegotiated for another three years; if upon the expiration of the 5-year representation, a new union wins, then the new union will have to administer the CBA for its remaining one year, after which the new union may negotiate with the ER for a new CBA. NOTE: There is no mandate, although there is the expectation that the renegotiated economic provisions should again last for three years. Neither is there is a prohibition to make it good only for two years to make it coincide with the expiration on the fifth year of the representation provision. SAN MIGUEL CORP. EMPLOYEES UNION-PTGWO v. CONFESOR, SAN MIGUEL CORP. et al The framers of the law wanted to maintain industrial peace and stability by having both management and labor work harmoniously together without disturbance. Thus, the terms and conditions of employment cannot be questioned by the ERs or EEs during the period of effectivity of the CBA. In a Memorandum of the SOLE dated February 24, 1994, it was stated that it is a matter of policy to encourage parties to enter into a renegotiated CBA with A term which would coincide with the 5-year term of the bargaining representative. Nonetheless, the parties may, by mutual agreement enter into renegotiated contract with a term of 3-years or one which does not coincide with the said 5-year term. The same will however not adversely affect the right of another union to challenge the majority status of the incumbent bargaining agent within 60 days before the lapse of the original 5-year term of the CBA.

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Q: Does it follow that all renegotiated nonrepresentation provisions of the CBA should be for a term of 3 years? A: No. Accordingly, the said Memorandum of the SOLE does not require either 2 or 3 years; rather, it recognizes the primacy of “mutual agreement” between the parties. Q: What is the date of effectivity of a CBA? What is the rule on retroactivity of CBA? A: If the CBA is the very first for the bargaining unit, the parties have to decide it for themselves. But if the ensuing CBA is renewal, modification or renegotitation of an expiring one, the Code provides: if entered into 6 months from the expiry date of the old one, it shall retroact to the date following such expiry date. Thus, if the CBA expired on December 31 and the new one is concluded on March 31, its effectivity is January 1. But if the new agreement is concluden on June 30, then the matter of retroaction and the possible retroactive date are left to the parties. Q: When is he date is “concluded” or “entered into”? A: The determining point is the date the parties agreed and not the date the signed. AGREEMENT DEFINED Q: What is an agreement? A: It is the coming together of minds; the coming together in accord of two minds on a given proposition.

must continue in full force and effect the terms and conditions of the existing agreements until a new agreement is reached. The purpose of which is to prevent the existence of a gap in the relationship between the collective bargaining parties; or 2. An arbitrated CBA takes on the nature of any judicial or quasi-judicial award. It operates and may be executed only respectively unless there are legal justifications for its retroactive application. In the case of Manila Electric Co. v. Quisumbing, the Court ruled that “CBA arbitral awards granted after six months from the expiration of the last CBA shall retroact to such time agreed upon by both ER and EEs or their union. Absent such an agreement as to retroactivity, the award shall retroact to the first day after the 6-month period following the expiration of the last day of CBA should there be one. In the absence of a CBA the secretary’s determination of the date of retroactivity as part of the discretionary powers over arbitral awards shall control. On the other hand, in the case of Union of Filipino EEs v. NLRC, the CBA signed by the parties was promulgated on June 5, 1989, which was outside the 6-month period from June 30, 1987, the expiry date of the past CBA. Accordingly, based on Art. 253-A, its retroaction should be agreed upon by the parties. But since no agreement to that effect was made, the NLRC is within its authority vested by existing laws. NOTE: Art. 253-A which leaves to the parties the determination of retroactivity, refers to the negotiation concluded by the parties beyond six months, but it does not restrict effectivity date of arbitral awards by the Secretary of Labor.

Q: What is the required form of a CBA? A: As in case of contracts, agreements may be oral or written. Hence, even without any written evidence of the CBA made by the parties, a valid agreement existed in this case from the moment the minds of the parties met on all matters they set out to discuss. Q: What is the rule with respect to a situation where 6 months have elapsed but the parties have reached no agreement with respect to effectivity? A:

Q: When will the extension of the effectivity of CBA be valid? A: In the case of Cruz v, Hon. Calleja, the Court held that the BLR Director’s view that the 1-year extension of the CBA was null and void is not quite correct. The extension was approved by the union in a referendum which was properly supervised by the DOLE. Thus, since the holding of the referendum was within the authority of the Interim Board “to administer the CBA and operate the union, and the extension was acceptable to both parties to the agreement and did not violate any law, it is valid and binding on them.

1. Principle of hold over-- in the absence of a new CBA, the parties must maintain the status quo and

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NON-INJUNCTION POLICY 10-YEAR SUSPENSION OF CBA Q: What is the so-called non-injunction policy? Q: What is the rule in case of a ten-year suspension of the CBA? A: In the case of Rivera v. Espiritu, the assailed PALPALEA agreement was the result of voluntary collective bargaining negotiations undertaken in the light of the severe financial situation faced by the ER, with the peculiar and unique intention of not merely promoting industrial peace at PAL, but preventing the latter’s closure. Such agreement does not conflict Art. 253-A. Q: What is the two-fold purpose of Art. 253-A? A: 1. To promote industrial stability and predictability; 2. To assign specific timetables wherein negotiations become a matter of right and requirement. In the abovementioned case, it was PALEA (the exclusive bargaining agent of PAL’s ground EEs), that voluntarily entered into the CBA with PAL. It was PALEA that voluntarily opted for the 10-year suspension of the CBA. Also, the petitioner’s contention that the agreement installs PALEA as a virtual company is untenable. Under 248 (d) of the Labor Code, a company union exists when the ER’s acts 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. Such was not the case of PAL.

A: Art. 254 announces the policy that labor disputes are generally not subject to injunction. Otherwise, it will contradict the declared policy in Art. 211 (a) that promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation, and conciliation as modes of settling labor or industrial disputes. Accordingly, freedom at the workplace is the policy. The law allows management and labor to fashion the contents and incidents of their relationship. If there is dispute between parties, the responsibility to solve it devolves upon them primarily, not upon the government. Q: When will an injunction be valid in case on noninjunctive disputes? A: Any injunctive order in “non-national interest” disputes can be directed only against the illegal acts being committed in connection with the labor dispute; it cannot be directed against the dispute itself. Any injunction is valid when it was issued not against the strike or picketing itself but against acts of violence and intimidation committed against officials of the ER and non-striking EEs. NOTE: Injunctions or restraining orders are frowned upon as a matter of labor relations policy. It is not favored and it contradicts the constitutional preference for voluntary modes of dispute settlement. Q: What is the exception to the abovementioned rule?

Article 254. Injunction prohibited. – No temporary or permanent injunction or restraining order in any case 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. INJUNCTION Q: What is an injuction? A: It may require or restrain the doing of an act.

A: The protective force of law will be applied when prohibited or unlawful acts are being or about to be committed that will cause grave or irreparable damage to the complaining party. Accordingly, Art. 254 indicates that where Art. 264 (regarding prohibited acts) is being violated, the anti-injunction or restraining order will issue in accordance with Art. 218 (e). NOTE: The issuance of an injunction in the early phases of a strike can critically sway the balance of the economic struggle against the union. It has a deceptive appeal of the quick and easy solution and therein lies the danger, for disputes between workers and ERs are often complicated and are not always of a comparable

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simplicity. Hence, injunctions have generally not proved to be an effective means of settling labor disputes. Q: Are regular courts authorized to issue injunction orders? A: No, they are without authority to issue injunction in cases involving or originating from labor disputes even if the complaint was filed by non-striking EEs and the ER was also made a respondent to the action Accordingly, where the issue in an action filed in the CFI (RTC) was tied up with an ULP case pending in the CIR (NLRC), the action was outside the jurisdiction of the regular courts even if violence, intimidation and coercion were imputed to the Union. The injunction should have been obtained from the industrial court which was empowered to restrain such acts under the Industrial Peace Act. INJUNCTION BY REGULAR COURTS Q: When is an injunction issued by Regular Court be proper? A: A regular court may issue injunction to protect the interest of neutral ERs in common situs picketing. In the case of Republic Flour Mill Workers Association v. Reyes, the court upheld the validity of the injunction issued by the CFI which ordered the petitioner Unions to desist from preventing the EEs of respondent company from entering its premises. Accordingly, the injunction issued is not a labor injunction. Thus, the court may only issue an injunction in a case involving or growing out of a labor dispute. In the given case, there was no labor dispute and was therefore was within its jurisdiction to issue. Also, the writ did not prevent the petitioner Unions from picketing against the ER.

TITLE VII COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENT 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 decision-making 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 labormanagement councils shall be elected by at least the majority of all employees in said establishment. EXTENT OF THE WORKER’S RIGHT TO PARTICIPATE IN POLICY AND DECISION-MAKING Q: What is the meaning or extent of the worker’s right to participate in policy and decision-making? A: It refers to the participation in grievance procedures and voluntary modes of settling disputes and not to formulation d corporate programs or policies. THREE LEVELS OF EMPLOYEE PARTICIPATION Q: What are Participation?

the

three

levels

of

Employee

A: There are three levels in which EEs could influence management in their decision-making: 1. Corporate level- strategic policies pertaining to mergers, acquisitions, pricing and marketing policies, disposition of profits and the like. 2. Plant or department level- this is where administrative decisions are made. It may refer

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to hiring, firing, and promotion of EEs, cost and quality control, resource allocations, achievement of target quotas, etc. 3. Shop-floor level- it is where the operating decisions are made. It would refer to scheduling of work, safety regulations, work methods, training or new EEs. NOTE: The worker’s participatory right shall include the basic premise that at least at the barest basic minimum, the workers’ are consulted on matters pertaining to their interests and the parameters would be references to the negotiations in the CBA and its terms. Q: What are the processes included in the phrase? A: It would refer to the grievance procedures, conciliation proceedings, voluntary modes of settling labor disputes and negotiations in free CBA. Thus, the focus of participation s now introverted to the rights and benefits of the workers. Q: What does it not include? A: What it is not to the practice in the industrialized nations in Europe and in Japan referring to codetermination which pertains to charting of corporate programs and policies.

code therefore may result in the deprivation of an EEs means of livelihood which is a property right. Such decision should be differentiated from the cases of San Miguel Brewery Sales Force Union v. Ople and SMC and GTE Directories Corp. v. Sanchez. In both cases the authority and power of the ER to make policy without EEs’ participation is recognized and upheld. Accordingly, the cases involve sales operation policies while the PAL case involves EEs’ conduct and discipline. Q: Does participation mean co-management of the business? A: No, such participation is not in the nature of a comanagement control of the business. There is no impairment of management prerogatives. NOTE: Collective Bargaining is just one of the forms of EE participation. Despite so much interest in and promotion of collective bargaining, it is not correct to say that the device which secures industrial democracy is collective bargaining and no other. Also, it is misleading to say that collective bargaining is the endgoal of EE participation. Rather, the real aim is EE participation in whatever form it may appear— bargaining or no bargaining, union or no union. LABOR MANAGEMENT COUNCIL Q: What is the labor-management council (LMC)?

Q: Are EEs allowed to demand participation in making the company’s code of discipline? A: Yes. There are differences between management prerogatives regarding business operations and those which affect the EEs’ rights. To the latter category belongs the making of a code of conduct which the EEs have the right to participate. Thus, EEs have the right to participate in the deliberation of matters which may affect their rights and the formulation of policies relative thereto. In the case of PAL v. NLRC (1993), the court upheld the union’s right to participate in the formulation of the new Code of Discipline. Accordingly, a close scrutiny of the objectionable provisions of the Code reveals that they are not purely business-oriented nor do they concern management aspect of the business of the company. The Coe clearly have repercussions on the EEs right to security of tenure. The implementation of the

A: Individual representation in dealing or bargaining with the ER is weak. The LMC is another forum aside from and instead of a union. It can exist where there is no union or co-exist with a union. Nonetheless, it cannot replace a union. While a labor union is hamstrung by such legal prescriptions as formal registration, limited bargaining unit, majority status, mandatory and non-mandatory subjects, an LMC need not be held back by any of these. It can represent EEs across the enterprise, present grievances regardless of the grievant’s rank and proffer proposals unhindered by formalities. Thus, it can deal with ERs on matters affecting the EEs’ rights, benefits, and welfare. Such dealing is said to be broader, freer and less threatening method than collective bargaining. Q: Is an LMC merely a disguised ER-dominated group? A: It might be but it does not have to be so.

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NOTE: An LMC is a challenged at maturity, conviction and vigilance.

Q: Can this individual right be taken away by a union’s constitution and by-laws? A: No.

  

Maturity in understanding and respecting the rights not only of the workers but also of the ER. Conviction in pursuing or safeguarding the EEs’ rights and welfare; Vigilance against allowing itself to become a cold and unthinking management rubber stamp or a lifeless and voiceless management mannequin.

3 DEMOCRATIC DEVICES STATUTORILY EMBEDDED TO ADVANCE THE CAUSE OF INDUSTRIAL PEACE Q: What are the 3 democratic devices statutorily embedded to advance the cause of industrial peace? A:

PURPOSE OF THE FORMATION OF LMCs Q: What is the purpose of the formation of labormanagement councils? A: To enable the workers to participate in policy and decision-making processes in the establishment, in so far as said processes will directly affect their rights, benefits and welfare, except those which are covered by CBA or are traditional areas of bargaining. Q: In organized establishments, the worker’s representatives to the council shall come from? A: In organized establishments, the worker’s representatives to the council shall be nominated by the exclusive bargaining representative. Q: What about in unorganized establishments? A: In establishments where no legitimate labor organization exists, the workers representative shall be elected directly by the employees at large. Q: Does the presence of employees organization or unions, LMC or other forums replace the individual employees’ right to pursue their grievances? A: No. The labor organization is a representative of the collective employees, but this fact does not mean that an employee can act only through the representative. The law preserves and respects the right of an individual employee or any group of employees to directly present grievances to their employees at any time. NOTE: Even under investigation, an employee can choose to handle personally his defense, unassisted by any representative.

1. Airing of grievance by an individual employee directly to the employer anytime 2. Participation in policy and decision-making by employees, whether unionized or not; 3. Collective bargaining with the employer by unionized employees. COLLECTIVE BARGAINING UNIT Q: What is a collective bargaining unit (CBU)? A: It refers to a group of employees sharing mutual interests within a given employer unit, comprised of all or less than all of the entire body of employees in the employer unit or any specific occupational or geographical grouping within such employer unit. NOTE: The group may comprise of all the supervisors, or separately, all the rank-and-file population in the company. The law prefers to have only one grouping per category in one enterprise because the more solid the unit, the stronger its bargaining capacity. Q: It is said that if a single-unit is not feasible, the law allows subgroups as bargaining units, provided that each sub-group is “appropriate.” What is the test for the appropriateness? A: It is “appropriate” if its members share substantially common concerns and interests. NOTE: The following terms are one and the same. 1. Representative union 2. Bargaining union 3. Majority union 4. Bargaining agent 5. Bargaining representative

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BASIC TEST OF A BARGAINING UNIT’S ACCEPTABILITY OR APPROPRIATENESS Q: According to jurisprudence, what is the basic test of a bargaining unit’s acceptability or appropriateness? A: According to Democratic Union v. Cebu Stevedoring Co., et al., the basic test is whether it will best assure to all employees the exercise of their collective bargaining rights. The most efficacious bargaining unit is one which is comprised of constituents enjoying a community of interest. Q: How is the community of interest reflected? A: It is reflected in groups having substantial similarity of work and duties or similarity of compensation and working conditions.

Q: Is bargaining history not decisive factor? A: No. While the existence of a bargaining history is a factor that may be reckoned with in determining the appropriate bargaining unit, the same is not decisive or conclusive. Other factors must be considered. The test of grouping is community or mutuality of interests. Q: Are confidential employees allowed to join unions? A: No. By the very nature of their functions, they assist and act in confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. KINDS OF EMPLOYMENT Q: What are the kinds of employment in the Philippines?

COMMUNITY OF INTERESTS; FACTORS A: Q: In making judgments about “community of interest,” what factors should be considered? A: 1. Similarity in the scale and manner of determining earnings 2. Similarity in employment benefits, hours of work and other terms and conditions of employment 3. Similarity in the kinds of work performed 4. Similarity in the qualifications, skills and training of the employees 5. Frequency of contact or interchange among the employees 6. Geographic proximity 7. Continuity or integration of production processes 8. Common supervision and determination of labor relations policy 9. History of collective bargaining 10. Desires of the affected employees 11. Extent of union organization SUBSTANTIAL MUTUAL INTERESTS RULE Q: What are included in the so-called “Substantial Mutual Interests Rule”? A: It includes the affinity and unity of the employees’ interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions.

1. Project Employment 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 in the Philippines. 2. Seasonal Employment Where the work or services to be performed is seasonal in nature and the employment is for the duration of the season in the Philippines. 3. Casual Employment Where the employment is not covered by the foregoing, provided that an employee who has rendered at least one year of service, whether continuous or broken, shall be considered regular with respect to the activity in which he or she is employed and his or her employment shall continue while the activity exists. 4. Term or Fixed Employment Another category of employment in the Philippines recognized in jurisprudence is “term” or “fixed-period employment.” This is based on art. 1193 of the CC, which states that obligations with a resolutory period

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take effect at once, but terminate upon arrival of the day certain – understood to be a day that must necessarily come. The decisive determinant in “term employment” should not be the activities that the employee is called upon to perform, but the day certain agreed upon by the parties for the commencement and termination of the employment relationship. Stipulations in employment contracts providing for “term employment” or “fixed-period employment” are valid when the period has been agreed upon knowingly and voluntarily by the parties, without force, duress or improper pressure exerted on the employee, and when such stipulations were not designed to circumvent the laws on security of tenure.

A: Yes. Regular part-time employees are included even if they are students or work less than 20 hours a week. Q: May Seasonal employees be also included? A: The full-time seasonal employees who have reasonable expectation of substantial seasonal employment from year to year have been held properly includable in the unit. However, part-time seasonal employees have insufficient common interest with the full-time employees to be included in the same bargaining unit. Q: Are casual employees also includable?

5. Probationary Employment Probationary employment is not necessarily a category of employment in the Philippines. It pertains to a period of time in which the employee is being observed and evaluated to determine whether or not he is qualified for permanent employment. Under art. 281 of the LC, probationary employment shall not exceed six months. An employee who is allowed to work after a probationary period shall be considered a regular employee. A probationary employee is, for a given period of time, under observation and evaluation to determine whether or not he or she is qualified for permanent employment. During the probationary period, the employer is given the opportunity to observe the skills, competence and attitude of the employee while the latter seeks to prove to the employer that he or she has the qualifications to meet the reasonable standards for permanent employment. PART-TIME WORKERS MAY JOIN UNIONS Q: May temporary or part-time employees join unions? A: Some part-time employees may join bargaining units. In determining whether a temporary or part-time employees are sufficiently identified with the regular employees in the bargaining unit to have community of interest with the regular employees, one of the important factors is the reasonable likelihood that the temporary or part-time workers will eventually become adequately identified in employment with the other members of bargaining unit. Q: May part-time working students be included in the bargaining unit?

A: Casual employees are excluded. However, casual employees working for an employer who operates a referral system for unskilled labor have been held an appropriate unit. Q: May probationary employees be excluded? A: No. They are eligible. Q: What is the best way to determine the “preference” of the workers with regard the choosing of which union should they join or form? A: Referendum. GLOBE DOCTRINE Q: What is the so-called “Globe Doctrine”? A: The desires of the employees are relevant to the deterination of the appropriate bargaining unit. The relevancy of the wishes of the employees concerning their inclusion or exclusion from a proposed bargaining unit is inherent in the basic right to self-organization. ONE UNIT POLICY Q: Does the law favor single or employer unit? A: Yes. It is the policy of the BLR to encourage the formation of an employer unit unless circumstances otherwise require. NOTE: The proliferation of unions in an employer unit is discouraged as a matter of policy unless there are compelling reasons which would deny a certain class of

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employees the right to self-organization for purposes of collective bargaining. Q: What are the exceptions to One-Unit policy? A: The usual exception is where the employer unit has to give way to other units such as the craft unit, plant unit, or a subdivision thereof. These exceptions are to assure employees of the fullest freedom in exercising their rights. Ex: A group monthly-paid rank-and-file employees may constitute a CBU apart from that of daily-paid.

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.

Two Companies with Related Business NOTE: Two corporations cannot be treated as a single bargaining unit even if their businesses are related. It is important to note that the legal corporate entity is disregarded only if it is sought to hold the offices and stockholders directly liable for a corporate debtor obligation. Q: What are subsidiaries? A: Subsidiaries are corporations formed out of former divisions of a mother company following a bona fide reorganization. Q: May they constitute a separate bargaining unit? A: Yes.

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

At the expiration of the freedom period, the employer shall continue to recognize the majority status of the incumbent bargaining agent where no petition for certification election is filed.

Article 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 any legitimate labor organization, including a national union or federation which has already issued a charter certificate to its 1ocal/chapter participating in the certification election or a local/chapter which has been issued a charter certificate by the national union or federation. 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.

Article 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

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the rules and regulations prescribed by the Secretary of Labor.

the sole and exclusive bargaining representative or agent of all the EEs in a bargaining unit.” ORGANIZED ESTABLISHMENT

Article 258-A. Employer as Bystander. - In all cases, whether the petition for certification election is filed by an employer or a legitimate labor organization, the employer shall not be considered a party thereto with a concomitant right to oppose a petition for certification election. The employer’s participation in such proceedings shall be limited to: (1) being notified or informed of petitions of such nature; and (2) submitting the list of employees during the preelection conference should the Med-Arbiter act favorably on the petition. (As amended by Section 12, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became effective on June 14, 2007).

Q: What is an organized establishment? A: It refers to an enterprise where there exists a recognized or certified sole and exclusive bargaining agent. In an organized establishment, voluntary recognition is not possible. A petition to hold a CE has to be filed within the “freedom period” which means the last sixty (60) days of the fifth year of the expiring CBA. The petition may be filed by any LLO, but the petition must have the written support of at least 25 % of the EEs in the bargaining unit. NOTE: It is rare (although conceivable) that an ER may also file a petition for CE. UNORGANIZED ESTABLISHMENT

Article 259. Appeal from certification election orders. – Any party to an election may appeal the order or results of the election as determined by the MedArbiter 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. (As amended by Section 25, Republic Act No. 6715, March 21, 1989).

Determining the Bargaining Union: Overview of the Methods BARGAINING REPRESENTATIVE

Q: What is an unorganized establishment? A: It is where no union has yet been duly recognized or certified as bargaining agent. In an unorganized establishment, the ER may voluntarily recognize the bargaining agent. If there are obstacles to this, the petition to hold an election may be filed anytime by any LLO, except within 12 months from the previous CE, run-off or consent election. NOTE: Whether the proceedings take place in an organized or unorganized bargaining unit, whether the proceedings are called consent election or certification election, the objective is the same: to identify the union that will represent the EEs in bargaining with the ER. Until this representation dispute is resolved, no CBA can be entered into.

Q: What is a bargaining representative? ELECTION; HOW CONDUCTED A: It is the legitimate labor organization or any officer or agent of such organization whether or not employed by the ER.

Q: How is the election conducted?

Under the IRR, however, it drops the “officer or agent”: “Exclusive bargaining representative means any legitimate labor union duly recognized or certified as

A: The election is conducted under the supervision and control of DOLE officials. It ends up with a formal and official statement of results, certifying which union won, if any. Hence, the election is appropriately called certification election.

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NOTE: Where one casting of votes is not decisive enough to elect a union, the election officials may require a run-off election if certain other conditions exist. But a certification election, a run-off election, or a consent election is needed only when 2 or more unions vying for the “office” of exclusive bargaining representative (EBR). If there’s only 1 union in the bargaining unit and there is ample proof that the union carries the majority of the EEs, the law allows the ER to voluntarily recognized such union. (3) METHODS TO DETERMINE THE BARGAINING UNION Q: What are the three (3) methods to determine the bargaining union? A: 1. Voluntary recognition; 2. Certification election with or without run-off; and 3. Consent election VOLUNTARY RECOGNITION Q: What are the 3 concurrent conditions required in VR?

A: In an organized establishment with only 1 LLO, the ER may voluntarily recognize the representation status of such a union. Within 30 days from such recognition, the ER and the union shall submit a notice of VR with the Regional Office which issued the recognized labor union’s certificate of registration or certificate of creation of a chartered local. Q: What are recognition?

the

requirements

for

voluntary

A: The notice of VR shall be accompanied by the original copy and 2 duplicate copies of the following documents: a. A joint statement under oath of VR attesting to the fact of VR; b. Certificate of posting of the joint statement of VR for 15 consecutive days in at least 2 conspicuous places in the establishment or bargaining unit where the union seeks to operate; c. The approximate no. of EEs in the bargaining unit, accompanied by the names of those who support the VR comprising at least a majority of the members of the bargaining unit; and d. A statement that the labor union is the only LLO operating with the unit. All accompanying documents of the notice for VR shall be certified under oath by the ER representative and president of the recognized labor union.

A: 1. VR is possible only in an unorganized establishment. In an organized establishment, the ER cannot voluntarily recognize any new union because the law requires him to continue recognizing and dealing with the incumbent union as long as it has not been properly replaced by another. 2. Only one union is seeking recognition; otherwise, the rivalry must be resolved through an election. 3. The union voluntarily recognized must be the majority union as indicated by the fact the members of the bargaining unit did not object to the projected recognition. If the objection is raised, the recognition is barred, and a certification election or consent election will have to take place. Prescribed procedure and requirements of voluntary recognition under D.O. No. 40-03: Q: When and Where to file?

Q: What will be the action in case the notice of VR is sufficient in form, number and substance and where there is no other registered labor union operating within the bargaining unit concerned? A: The Regional Office, through the LR Division shall, within 10 days from receipt of the notice, record the fact of VR in its roster of LLUnions and notify the labor union concerned. Otherwise, it shall notify the labor union of its findings and advise it to comply with the necessary requirements. Q: What is the effect of recording of fact of VR? A: From the time of recording of VR, the recognized labor union shall enjoy the rights, privileges and obligations of an existing bargaining agent of all the EEs in the bargaining unit.

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The entry of VR shall bar the filing of a petition for certification election by any LO for a period of 1 year from the date of entry of voluntary recognition. Upon the expiration of this period, any LLO 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 ER and voluntary recognized labor union was executed and registered with the Regional Office. CERTIFICATION ELECTION (CE)

WHEN NO UNION WINS THE ELECTION Q: What if the “No Union” wins in the election? A: If no union wins, the company or the bargaining unit remains ununoinized for at least 12 months, the period known as the 12-month bar. After that period, a petition for a CE mat be filed again. Q: What is the difference between CE and Union Election?

Q: What is a Certification Election? A: It is the process of determining through secret ballot the sole and exclusive representative of the EEs in an appropriate bargaining unit, for purposes collective bargaining or negotiation. -It is the most democratic method of determining the EEs’ choice of their bargaining representative. It is the appropriate means whereby controversies and disputes on representation may be laid to rest, by the unequivocal vote of the EEs themselves. -It serves as the official, reliable, and democratic basis for the Bureau to determine and certify the union that shall be exclusive representative of the EEs in the bargaining unit for the purpose of bargaining with the ER. 1. Fact-Finding- Certification proceedings is not litigation in the sense but an investigation of non-adversary and fact-finding character. It is not bound by the technical rules of evidence. Q: What are the 2 issues involve in Certification proceedings? A: a. Proper composition and constituency of the bargaining unit; and a. Veracity of majority membership claims of the competing unions so as to identify the one union that will serve as the bargaining representative of the entire bargaining unit.

A: A Union Election is held pursuant to the Union’s constitution and bylaws and the right to vote in it is enjoyed only by the union members. Its object is to elect officers of the union. On the other hand, a CE is the process, ordered and supervised by the DOLE, of determining, through secret ballot, whether or not a majority of the EEs wish to be represented by a LO and, in the affirmative case, by which particular LO. In a CE, all EEs whether union member or not, who belong to the appropriate bargaining unit can vote. However, the reverse is not always true; an EE who belongs to the bargaining unit but who is not a union member cannot vote in the union, unless otherwise authorized by the union constitution and bylaws. The winners in a union election become officers and representatives of the union only. The winner in a certification election is an entity, a union, which becomes the representative of the whole bargaining unit that includes even the members of the defeated union. 2. Direct Certification No longer allowed- Even in case where a union has filed a petition for certification election, the mere fact that there was no opposition does not warrant a direct certification. The holding of a CE at the proper time is not necessarily a mere formality where there is a compelling reason not to directly and unilaterally certify a union whose legitimacy is precisely the object of litigation in a pending cancellation case filed by a group of EEs who also claim majority status. Q: Who files Petition for CE? A: Any LLO or any ER may file a petition for CE.

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Unorganized enterprise In an unorganized establishment, once petition is filed by a LLO, the Med-Arbiter shall automatically order the conduct of a certification election. Such order is not appealable; otherwise it will contradict the objective of promoting free trade unionism. Nonetheless, the Med-Arbiter is still tasked to satisfy himself that all the conditions of the law are met—that the petitioning union must be the LLO in good standing. Organized enterprise In an organized establishment, the incumbent agents will not file a PCE because it will not contest its own incumbency. The filer will most likely be a union that was defeated in the CE held some five years before. Q: When can an ER file a PCE? A: The ER may file a PCE when it is asked to bargain. If this happens, the holding of a CE becomes mandatory if there is no existing registered CBA. However, instead of itself filing a petition, the ER usually lets the unions interplead to determine who among them will bargain with the ER.

A: The same shall be automatically consolidated with the Med-Arbiter who first acquired jurisdiction. Where the petitions are filed in different Regional Offices, the Regional Office in which the petition was first filed excludes all others; in such case, the latter shall indorse the petition to the former for consolidation. Q: When to file the petition? A: It depends on whether the CBU has a CBA or not. If it has no CBA, the petition may be filed anytime outside the 12-month bar. If it has a CBA, it can be filed only within the last 60 days of the fifth year of the CBA. PRELIMINARY CONFERENCE Q: What is a Preliminary Conference? What is its purpose? A: The Preliminary Conference shall determine the following: a. b. c. d.

The bargaining unit to be represented; Contending labor unions; Possibility of consent election; Existence of any of the bars to certification election; and e. Such other matters as may be relevant for the final disposition of the case.

Q: What if the PCE was filed by the federation? A: If the PCE was filed by the federation which is merely an agent, the petition is deemed to be filed by the chapter, the principal, which must be a LLO. The chapter cannot merely rely on the legitimate status of the mother union. NOTE: A union that has no legal personality to file a petition for CE has no personality either to file a petition-in-intervention. Q: Where to file the petition for CE?

If at the preliminary conference the unions agree to hold a consent election, then the PCE will no longer be heard and the unions will instead prepare for the consent election. Otherwise, the Med-Arbiter proceeds to consider the petition. He may deny and dismiss or he may grant the petition. The denial or grant of the petition is always appealable to the Secretary. Never appealable however, is the approval of a PCE in an organized (ununionized) bargaining unit, the reason being that the law wants the ununionized unionized. Q: What if the contending unions failed to agree to a consent election during the preliminary conference?

A: A PCE shall be filed with the Regional Office which issued the petitioning union’s certificate of registration or certificate of creation of chartered local. The petition shall be heard and resolved by the Med-Arbiter.

A: The Med-Arbiter may conduct as many hearings as he may deem necessary.

Q: What will happen if there are 2 or more petitions involving the same bargaining unit?

NOTE: The conduct of the hearings cannot exceed 15 days from the date of the scheduled preliminary conference. After that time the petition shall be considered submitted for decision.

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Within the same 15-day period, the contending labor unions may file such pleadings as they may deem necessary for the immediate resolution of the petition. Q: May extensions of time be entertained? A: No. Q: What will happen if one fails to appear in the hearings? A: The failure of any party to appear when notified or to file its pleadings shall be deemed a waiver of its right to be heard. Q: May the Med-Arbiter order the cancellation of scheduled hearings? A: Yes, upon agreement of the parties for meritorious reasons. Q: What are the grounds for denial by the MedArbiter of the petition? A: 1. Not an LLO- The petitioner is not listed in DOLE’s registry of legitimate labor organization or that its personality has been revoked or cancelled with finality. - Even if the union is listed as LLO or is a party to a CBA, its legitimacy may still be questioned in a separate and independent action for cancellation to be heard and decided by the BLR Director or the Regional Director. Q: Does the filing of a PCE cause the suspension or dismissal of the PCE? A: No, the mere filing does not. To serve as a ground for dismissal of a PCE, the legal personality of the petitioner should have been revoked or canceled with finality.

union by the ER. The same bar applies if “no union” won in the previous election. Q: What is the rule in case the winning union failed to conclude a CBA because of the ER’s evasive maneuver? A: In such case, although filed outside the 12-month bar, the petition was nonetheless dismissed. Accordingly, a bargaining agent who failed to secure a CBA within 12-months could be suspected as a tool of management and should deserve to be replaced. But if circumstances show that the cause of not having concluded a CBA was not the union’s fault, such union should not be blamed and a CE should not be authorized even though no CBA has been concluded despite the passage of 12 months. Q: In what circumstances will the 12-month bar rule will not apply? A: a. In cases where there was no certification election because the first petition was dismissed since it did not include all the EEs who should be properly included in the CBU; b. Failure of election (like when less than majority of the CBU members voted); c. Invalid election; d. A second election held among a group of EEs who had not participated in the first election and had not been given the opportunity to be represented as part of the unit in the first election. 3. Negotiation Bar or Deadlock Bar - The fact the duly recognized or certified union has commenced negotiation with the ER within the one-year period, and the negotiation is ongoing. - Neither will the PCE prosper if the negotiation is caught in a deadlock. Such deadlock, accordingly, does not erase the fact that there is negotiation which is a barrier to holding a CE.

TWELVE-MONTH BAR DEADLCOK BAR RULE 2. Twelve-month bar- Petition was filed within 1 year from entry of voluntary recognition or a valid certification, consent or run-off election and no appeal on the results of the certification, consent or run-off election is pending. - No petition for CE may be filed within 1 year from the date of a valid certification, consent or run-off election or from the date of entry of a VR of the

Q: What does the “deadlock bar” rule provide? A: It provides that a petition for certification election can only be entertained if there is no pending bargaining deadlock submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout.

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Q: When is there a deadlock? A: There is deadlock when there is a complete blocking or stoppage resulting from the action of equal and opposed forces. NOTE: The deadlock that bars CE must be genuine and not a drama. One indicator that it is genuine is the submission of the deadlock to a third-party conciliator or arbitrator. Artificial Deadlock Q: What is an artificial deadlock? A: It is a deadlock that is prearranged or preserved by collusion of the ER and the majority union. It is deception of the workers and therefore is not a barrier to a petition for a CE. 4. No 25% Support in case of organized establishment- failure to submit the 25% support requirement for the filing of PCE. - ART. 256 requires that the PCE in an organized establishment should be supported by at least 25% of the bargaining unit. - Such requirement is explained by the government policy to favor the self-organization of the workers. Without this minimum support, the challenge to the incumbent looks like a nuisance. Q: If a company’s rank-and-file EEs are unionized but the supervisors are not, does the supervisor’s petition need the 25% minimum support? A: No, in so far as the supervisors are concerned, the “establishment” is considered ununionized. Hence, the requirement for 25% support to the petition does not apply. NOTE: In deciding whether the 25% requirement is applicable or not, the law considers the CBU involved, not the whole enterprise. Q: Can there be election despite the lack of 25% support? A: Even that the statutory requirement of 25% of the labor force asking for CE had not been strictly complied with, the Med-Arbiter is still empowered to order that it

be held precisely for the purpose of ascertaining which of the contending Los shall be the exclusive collective bargaining agent. The requirement is relevant only when it becomes mandatory to conduct a CE. In all other circumstances, the discretion ought to be ordinarily exercised in favor of a petition for certification. Q: What is the effect of the withdrawal of signatories? A: A critical fact to consider is whether the withdrawal happened before or after the filing of the petition. If it happened before the filing, the withdrawal is presumed voluntary and it does not affect the propriety of the petition; if after, the withdrawal is deemed involuntary and it does not necessarily cause the dismissal of the petition. 5. Contract Bar; PCE filed outside the Freedom Period. CONTRACT BAR RULE Q: What is the contract bar rule? What is its purpose? A: This means that there exists in the bargaining unit a CBA still in effect at the time the PCE is filed. The existence of the CBA, assuming it is duly registered, bars the filing of a petition for CE. The ban spans for 5 years excluding the last 60 days of the fifth year of the CBA. It is intended to ensure stability in the relationships of the workers and the management by preventing frequent modifications of any CBA earlier entered into by them in good faith and for the stipulated original period. FREEDOM PERIOD Q: What is the so-called “freedom period”? A: It refers to the time when unions are legally allowed to challenge openly and formally the status of a union as the exclusive bargaining representative of the bargaining unit. Also during that time switching of allegiance among union members or among affiliates or chapters may be done without risking a charge for disloyalty under the union bylaws or the CBA’s union security clause.

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NOTE: The freedom period under Articles 253-A and 256 is different from and ought not to be mistaken fro the other 60-day period mentioned in ART. 253. The latter refers to the right of the parties to propose modifications to the existing CBA. It does not refer to the representative status of the incumbent union since the acquisition or loss of such status is to be resolved through a certification election. It refers to modifying or renegotiating the CBA provisions other than the representational. They refer to “economic” or “nonpolitical stipulations.” NOTE: To bar a CE it is no longer necessary that the CBA be “certified”; it is enough that it is registered in accordance with Art. 231. Contract-Bar rule applied: a. No petition for CE may be filed neither before the onset of the freedom period nor after such period. The old CBA is extended until a new one is signed. b. Even if the existing CBA is registered surreptitiously, but no evidence is presented proving the alleged surreptitious registration, the petition for CE cannot be granted. Contract-Bar rule not applied a. Defective CBA; a defective CBA is unproductive of legal effects attributed to it and therefore, to bar a CE, the CBA must be adequate in that it comprises substantial terms and conditions of employment. b. Holding of a referendum to determine whether or not they are in favor of having an independently registered union in the establishment. This referendum is neither union disaffiliation nor severance; it is not disallowed by law even while a CBA exists. c. CBA signed before or within Freedom period despite Injunction Order. A CBA which was prematurely renewed is not a bar to the holding of a CE. Q: What is the status or the validity of a CBA signed during the representation dispute? A: In the case of Associated Labor Union v. Calleja, the Court had the occasion to state that a CBA may be renegotiated before, during, or after the 60-day freedom period. But if during such period a PCE is filed, the Med-Arbiter can order the suspension of the

renegotiation until the representation proceedings finally end. Q: What is the legal basis for the above? A: Secs. 14 and 24 of Rule VIII of the D.O. No. 40-03 which states: Section 14. Denial of the petition; Grounds. - The MedArbiter may dismiss the petition on any of the following grounds: (a) the petitioner is not listed in the Department's registry of legitimate labor unions or that its legal personality has been revoked or cancelled with finality in accordance with Rule XIV of these Rules; (b) the petition was filed before or after the freedom period of a duly registered collective bargaining agreement; provided that the sixty-day period based on the original collective bargaining agreement shall not be affected by any amendment, extension or renewal of the collective bargaining agreement; (c) the petition was filed within one (1) year from entry of voluntary recognition or a valid certification, consent or run-off election and no appeal on the results of the certification, consent or run-off election is pending; (d) a duly certified union has commenced and sustained negotiations with the employer in accordance with Article 250 of the Labor Code within the one-year period referred to in Section 14.c of this Rule, or there exists a bargaining deadlock which had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout to which an incumbent or certified bargaining agent is a party; (e) in case of an organized establishment, failure to submit the twenty-five percent (25%) support requirement for the filing of the petition for certification election. Section 24. Effects of early agreements. - The representation case shall not be adversely affected by a collective bargaining agreement registered before or during the last sixty (60) days of a subsisting agreement or during the pendency of the representation case.

Q: Why does the law allow a PCE during the freedom period? A: To preserve the democratic contest between unions and in the same breath, to safeguard the opportunity to possible upgrade the employee’s employment conditions. Also, in one case, the Court reasoned that the law allows such in order to prevent a gap or interregnum during which no agreement would govern, in one case, the Court reasoned that the law allows such in order to prevent a gap or interregnum during which no agreement would govern, that is, from the time the old collective bargaining contract expired to the time the petition for certification election is decided and a new agreement entered into with the union that may be certified as the proper bargaining unit.

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Q: What would be the effect on the renegotiated CBA if a union other than the one that executed it should win the C.E.? A: The union thus certified would have to respect the contract, but that it may bargain with the management to shorten the life of the contract if it is too long. In the case of Associated Trade Unions v. Trajano (1988)¸the Court also had the occasion to say that the said CBA cannot be deemed permanent, precluding the commencement of negotiations by another union with the management. In the meantime, so as not to deprive the workers of the benefits of the said agreement, it shall be recognized and given effect on a temporary basis, subject to the results of the C.E. Q: What are the 2 possible scenarios in such case? A: 1. The agreement may be continued in force if the union that negotiated it is certified again as the exclusive bargaining representative ; or 2. It may be rejected and replaced in the event the rival union emerges as the union. Me-Shurn Corp. v. Me-Shurn Workers Union-FSM In 2005, the Court invalidated the hasty recognition of a union and the signing of a CBA with that union where such acts were done while there was pending petition for certification election by another union. It is said that the delay of the right to select representatives can be justified only where stability is deemed paramount. Excepted from the contract-bar rule are certain contracts which do not foster industrial stability such as contracts where the identity of the representatives is in doubt. A CBA automatically renewed usually operates as bar to a C.E. But it is not a bar if the employer has reserved notice that will terminate the contract if and when the union no longer represents the majority of the employees. Q: Give invalid grounds for the denial or suspension of the petition. A: 1. Questions pertaining to the validity of petitioning union’s C.E.

2. The legal personality as a labor organization 3. Validity of registration 4. Execution of CBA Q: Does the med-arbiter have the authority to decide on the existence of employer-employee relationship? A: All issues pertaining to the existence of ER-EE relationship or to the eligibility to union membership shall be resolved in the order or decision granting or denying the petition for C.E. It is absurd to suggest that the Med-Arbiter and the Sec. of Labor cannot make their independent finding as to the existence of such and must rely and wait for such determination by the L.A. or the NLRC. The authority to determine the ER-EE relationship is necessary and indispensable in the exercise of jurisdiction by the Med-Arbiter. Q: Is the employer a bystander? Or one who cannot oppose the PCE? A: Notwithstanding the drift in the IRR tending to recognize the involvement of the employer in petitions for C.E., the Court maintains in recent decisions that employers are mere “bystanders” in the CE. In one case, the Court added that an employer has no right or material interest to assail the CE. It is thus, a good policy of the employer not to have any participation or partisan interest in the choice of the bargaining representative. Additionally, while employers may rightfully be notified or informed of petitions of such nature, they could not however be considered parties thereto with an inalienable right to oppose it. Q: If there exists no ground to dismiss or deny the petition for C.E., the order of the Med-Arbiter granting the conduct of a C.E. shall state: A: 1. The name of the employer or establishment 2. The description of the bargaining unit 3. A statement that none of the grounds for dismissal exists 4. The names of contending labor unions which shall appear as ff.: petitioner union/s in the order in which their petitions were filed, forced intervenor, and no union; and

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5. A directive upon the employer and the contending union/s to submit within 10 days from receipt of the order, the certified list of employees in the bargaining unit, or where necessary, the payrolls covering the members of the bargaining unit for the last 3 months prior to the issuance of the order. Q: What are the rules in appeal to order of granting or denying petition? A: 1. The Order granting the conduct of a certification election in an unorganized establishment shall not be subject to appeal. 2. The Order granting the conduct of a certification election in an organized establishment and the decision dismissing or denying the petition, whether in an organized or unorganized establishment may be appealed to the Office of the Secretary within 10 days from receipt thereof. NOTE: Denial of any petition for C.E. is always appealable, but never appealable is the approval of any PCE in an enterprise still ununionized. The reason is simple: the law wants to unionize the ununionized.

FAILURE OF ELECTION Q: When is there a “failure of election”? A: Where the number of votes cast in the certification of election or consent election is less than the majority of the number of eligible voters and there are no material challenged votes, the Election Officer shall declare a failure of election in the minutes of the election proceedings.

RUN-OFF ELECTION Q: What is run-off election? A: When an election which provides for 3 or more choices results in none of the contending unions receiving a majority of the valid votes cast, and there are no objections or challenges which if sustained can materially alter the results, the Election Officer shall motu propio conduct a run-off election within 10 days from the close of the election proceedings between the labor unions receiving the 2 highest number of votes; provided, that the total number of votes for all contending unions is at least 50% of the number of votes cast. Q: Can “no union” be a choice in the run-off election? A: No. Q: What are the 5 concurrent conditions which have to be present in order for a run-off election to be proper? A: 1. A valid election took place because majority of the CBU members voted. 2. The election presented at least 3 choices 3. Not one of the unions obtained the majority of valid votes 4. The total number of votes for all the unions is at least 50% of the valid votes cast 5. There is no unresolved challenge of voter or election protest. Q: To whom the appeal as a result of the C.E. be given? A: The recourse should be with the Secretary. Q: May an employer file protest as a result of a C.E?

Q: What is the effect of failure of election? A: The failure of election shall not bar the filing of a motion for the immediate holding of another certification or consent election within 6 months from the date of declaration of failure of election.

A: Yes, in case of election irregularities. What an employer is prohibited from doing is to interfere with the conduct of the C.E. for the purpose of influencing its outcome. CONSENT ELECTION

NOTE: Within 24 hours from receipt of the motion, the Election officer shall immediately schedule the conduct of another C.E. or consent election within 15 days from receipt of motion and cause the posting of the notice of C.E. at least 10 days prior to scheduled date of election in 2 conspicuous places in the establishment.

Q: What is “consent election”? A: Like a C.E., its purpose is the same, that is, to find out which union should serve as the bargaining unit.

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Q: What is the difference between the C.E. and consent election (Co.E.)? A: CERTIFICATION CONSENT ELECTION ELECTION Ordered by the Voluntarily agreed Department upon by the parties, with or without the intervention of the Department Both involves 2 or more unions Both may take place in unorganized or organized establishment

A: Under the American jurisprudence and implicitly in Philippine law, it obligates the majority union to serve the interest of all members of the whole bargaining unit without hostility or discrimination. The minority union, although a loser in the election, does not lose its character as a lawful labor organization entitled to protection under Art. 246. Q: Is the bargaining union a majority union? A: For a union to win in C.E., only a majority of valid votes cast. The majority of the valid votes may be lesser than the majority of the employees in the bargaining unit.

Q: What is the effect of consent election?

Q: May the bargaining agent represent retired employees?

A: Where a petition for certification election had been filed, and upon the intercession of the Med-Arbiter, the parties agreed to hold a consent election, the result shall constitute a bar to the holding of a certification election for 1 year from the holding of such consent election. Where an appeal has been filed from the results of the consent election, the running of the 1 year period shall be suspended until the decision on appeal has become final and executory.

A: Yes. When the retired employees were requesting that their retirement benefits be granted, they were not pleading for generosity but were merely demanding their rights, as embodied in the CBA, be recognized. Even if the employee retires, he still retains, for the purpose of prosecuting his claims, the status of an employee entitled to the protection of the Labor Code, one of which is the protection of the labor union.

Where no petition for certification election was filed but parties themselves agreed to hold a consent with the intercession of the Regional Office, the results thereof shall constitute a bar to another petition for Certification election.

Title VII-A GRIEVANCE MACHINERY AND VOLUNTARY ARBITRATION

Q: What is the meaning of “exclusive” when the law states “exclusive representative of the employees”? A: The term exclusive means that the employer must treat with the representative to the exclusion of all other claiming bargaining agents. Furthermore, it represents even the members of the minority union. The decision, therefore, binds even the minority union, which, therefore, is barred from filing another case from the same cause of action against the same employer. The action is barred by the principle of res judicata. DUTY OF FAIR REPRESENTATION

Article. 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.

Q: What is the so called “Duty of Fair Representation”?

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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.

wit: In case of doubt, all labor legislation and all other contracts shall be construed in favor of the safety and decent living for the laborer. But contracts which are not ambiguous are to be interpreted according to their literal meaning and should f not be interpreted beyond their obvious intendment. Proposal contained in minutes but not in CBA itself 

 NOTE: 

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



Contract negotiations are the legislative process of collective bargaining; the day-to-day working-out plant problems are its administrative or judicial aspects. The provisions of the CBA must be respected since its terms and conditions constitute the law between the parties. In case that an obligation therein imposed is not fulfilled, the aggrieved party has the right to go to court for redress. An employer violates his duty to bargain collectively where he unilaterally alters or changes a term or condition of employment maintained pursuant to an existing collective bargaining agreement. RULE OF CONSTRUCTION FOR THE CBA

Q: What is the rule in construing the CBA? A: The CBA, being a contract, the rule embodied in Civil Code on the interpretation of contracts should govern. The intent of the parties should be ascertained by considering relevant provisions of the CBA. The intention of the parties is primordial. If the terms of the contract are clear, the literal meaning of the stipulations shall control, but if the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former. Any doubts or ambiguity in the contract be between management and the union members should be resolved in the light of Art. 1702 of the Civil Code, to

A proposal mentioned in the negotiation minutes but not embodied in the collective bargaining contract itself is not part of the CBA. It cannot serve as basis for a charge of violating the CBA or of bargaining in bad faith. Where a proposal raised by a contracting party does not find in print in the CBA, it is not part thereof and the proponent has no claim whatsoever to its implementation. ZIPPER CLAUSE

Q: What is the so-called “zipper clause”? A: It is a devise to forestall negotiation proposals after the CBA has been signed. It is a stipulation in the CBA indicating that issues that could have been negotiated upon but not contained in the CBA cannot be raised for negotiation when the CBA is already in effect. In short, the CBA is a complete agreement; negotiation is closed, as a zipper does. NOTE:  

The law is deemed written in every contract. The rule is that the law forms part of contracts, and is read into every contract, unless clearly excluded therefrom in those cases where such exclusion is allowed.

Q: When does the collective bargaining agreement has binding effect? A: A CBA entered into by officers of a union, as agent of the members, and an employer, gives rise to a valid enforceable contractual relations, against the individual union members in matters that affect them peculiarly, and against the union in matters that affect the entire membership or large classes of its members.

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Q: Who are entitled to the benefits?

Q: What is the reason behind the rule?

A: The employees and the employer, even the nonmember employees are entitled to the benefits of the contract. To afford its benefits only to members of the union without any valid reason would constitute undue discrimination against non-members.

A: It stems from the right of an employer to select his employees and to decide when to engage them as protected under our Constitution, which can only be restricted through the exercise of police power. Q: What are the exception to the rule?

Q: What if the employee resigned from the union? A: He is still entitled as held in Kapisanan ng mga Manggagawang Pinagyakap vs. Franklin Baker Co. of the Phil. (1949). It is said that a laborer can claim benefits from a CBA entered into between the company and the union of which he is a member at the time of the conclusion of agreement, even after he has resigned from said union. Q: Are managers entitled to CBA benefits? A: Managers, who are not allowed to unionize to bargain collectively with the employer, cannot claim the benefits contained in the CBA negotiated by the workers under them.

A: The parties are liable to the employees if the transaction between the parties are clothed or colored with bad faith. MERGER Q: What is merger? A: Merger takes place when 2 or more corporations join into a single corporation which is one of the merging corporations; the separate existence of the other constituent corporation ceases. CONSOLIDATION Q: What is consolidation?

Q: What is the reason for this rule? A: Otherwise, they would be exposed to the temptation of colluding with the union during the negotiations to the detriment of the manager. Q: What is the effect of the CBA on the individual contracts of employment? A: When a collective agreement is concluded between a labor union and an employer, the members of the labor union are precluded from entering into individual contracts of employment. But if the agreement merely fixes wages and working conditions, the employer may enter into particular contracts of employment with his employees even though both are bound by the general contracts as to wages and working conditions. Q: What is the rule on enforceability against transferee of enterprise? A: The rule is that unless expresslu assumed, labor contracts, such as employment contracts and CBAs are not enforceable against a transferee of an enterprise, labor contracts being in personam, thus, binding only between parties.

A: Consolidation occurs when 2 or more corporations join into a new single corporation; the separate existence of all the constituent corporation ceases, except that of the consolidated corporation. NOTE: Under the Corporation Code, the surviving or consolidated corporation shall be responsible and liable for all the liabilities and obligations of each of the constituent corporations in the same manner as if such surviving or consolidated corporation had itself incurred such liabilities or obligations. Any pending claim, action, or proceeding brought by or against any of such constituent corporations may be prosecuted by or against the surviving or consolidated corporation, as the case may be. The rights of CRs or liens upon the property of any such constituent corporations shall not be impaired by such merger or consolidation. WILEY DOCTRINE Q: State the so-called “Wiley Doctrine” A: The disappearance by merger of a corporate ER which has entered into a CBA with a union does not automatically terminate all the rights of the EEs covered by the agreement, even though the merger is for

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genuine business reasons. According to this doctrine, a duty to arbitrate arising from a CBA survives the ER’s ceasing to do business as a separate entity after its merger with a substantially large corporation, so as to be binding on the larger corporation, where relevant similarity and continuity of operations across the change in ownership is evidenced by the wholesale transfer of the smaller corporation’s EEs to the larger corporation’s plant. NOTE: A duty to arbitrate arising from CBA does not survive in every case in which the ownership or corporate structure of an enterprise is changed. It does not survive where there is lack of any substantial continuity of identity in the business enterprise before and after a change, or where the union abandons its right to arbitration by failing to make its claims known. SUBSTITUTIONARY DOCTRINE

organization’s matters.

top

authority

regarding

personnel

NOTE: The usual source of grievances is the rules and regulations governing disciplinary actions. By-passing the Grievance Machinery: ULP The grievance procedure provided in the CBA should be adhered to by the parties. Refusal or failure to do so is an ULP because the grievance procedure is part of the continuous process of collective bargaining. It is intended to promote friendly dialogue between labor and management as a means of maintaining industrial peace. Thus, any court should not entertain any complaint by an aggrieved EE until proper use has been made of the contract grievance procedure agreed upon by ER and the bargaining representative.

Q: How does disaffiliation affect the CBA? A: The agreement is binding on the parties for the period therein specified. The EEs cannot revoke the validly executed CBA with the ER by the simple expedient of changing their bargaining representative. Hence, when there occurs a shift in the EEs’ union allegiance after the execution of such contract with their ER, and the EEs change their bargaining representative, the contract continues to bind them up to its expiration date. The new agent, however, may bargain for the shortening of the contract period.

The grievance machinery is the very heart of industrial self-government.

Hence, where the procedural requirements of such CBA were disregarded, the purported dismissal for just cause of an EE was invalid, particularly where the company acted post haste and without affording the EE the time and opportunity to present his side. Q: May a grievance be brought to VA without passing through the grievance procedure under the CBA?

GRIEVANCE Q: What is grievance? A: It is any question by either the ER or the union regarding the interpretation or application of the CBA or company personnel policies or any claim by either party that the other party is violating any provision of the CBA or company personnel policies. -it refers to any dispute or controversy respecting terms and conditions of employment which an EE or group of EEs may present to the ER can be a grievance. PERSONNEL POLICIES

A: In view of the State policy to encourage VA of all labor-management disputes, it is submitted that a grievance may be brought directly to VA without passing through the grievance machinery, especially when the latter has been to be ineffective in the past, or when the parties inadvertently failed to include a grievance machinery provision in their CBA. Q: What is the rule in case of waiver of the grievance machinery procedure and submission to VA? A: The EE’s waiver of her option to submit her case to grievance machinery did not amount to relinquishing her right to avail herself of VA.

Q: What are Personnel policies? Structure and Procedure for the grievance handling A: They are guiding principles stated in broad, longrange terms that express the philosophy or beliefs of an

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NOTE: The structure and mechanics for grievance handling are suggested in the Implementing Rules.



In the Philippine context, the judge in voluntary arbitration is called arbitrator; while in compulsory arbitration is the labor arbiter.

Salient provisions in the Implementing Rules 1. Voluntary arbitration: A private judicial system  

A grievance committee shall be created within 10 days from signing the CBA. The committee shall be composed of at least 2 representatives each from the members of the bargaining unit and the employer, unless otherwise agreed upon by parties.

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

A voluntary arbitrator is not a public tribunal imposed upon the parties by a superior authority which the parties are obliged to accept. Arbitrators have no tenure of office and are not politically appointed or elected.

VOLUNTARY ARBITRATION Q: What is voluntary arbitration? A: It is a contractual proceeding where parties to a dispute select a judge of their own choice and by consent submit their controversy to him for determination. Q: What if the parties fail to select a voluntary arbitrator or panel of voluntary arbitrators?

Functions of a voluntary arbitration Q: What are the primary functions of a voluntary arbitrator? A: 1. To provide a process for the orderly disposition of disputes; and 2. A foundation for stable labor-management relations 2. Voluntary arbitration, A master procedure

A: The regional branch of the Board shall designate the voluntary arbitrator or panel of voluntary arbitrators, as may be necessary, which shall have the same force and effect as if the parties have selected the arbitrator. Q: How many should the voluntary arbitrators be? A: The law does not specify the number of arbitrators. The parties to a CBA shall decide on the number of arbitrators who may hear a dispute.

 Any and all kinds of labor disputes may be submitted to, settled, or resolved through voluntary arbitration, if the parties so desire.  Money claims, bargaining deadlocks, strike or lockout, employment termination, and even questions about the existence or absence of ER-EE relationship, may be resolved by the parties, with finality, by availing themselves of voluntary arbitration.  Being master procedure, it takes precedence over other dispute settlement devices.

COMPULSORY ARBITRATION Q: What is compulsory arbitration? A: It is the process of settlement of labor disputes by a government agency (or other means provided by the government) which has the power to investigate and make an award binding upon the parties. It is a system whereby the parties to a dispute are compelled by the government to forego their right to strike and are compelled to accept the resolution of their dispute through arbitration by 3rd party. NOTE:

Q: What if the case is one of national interest? Can the parties withdraw the same to the Secretary of Labor or NLRC and lodge it to the Voluntary Arbitrator? A: Yes. NOTE: A dispute pending in voluntary arbitration or compulsory arbitration cannot be the subject of a strike or lock-out notice. Q: Who may be accredited as voluntary arbitrator? A: The list of the National Conciliation & Mediation Board consists of persons mostly involved as employees or officials in the government or in education, civic or religious institutions, trade union organizations and

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private enterprises. Many are members of the Philippine Association on Voluntary Arbitration (PAVA) which has regional chapters. Q: What are the minimum criteria for accreditation as V.A.? A:

Q: Who is permanent arbitrator? A: He is one selected before dispute arises, usually during the negotiation of CBA. He is to serve for a period of time, usually during the life of the CBA, rather than for just one case or specific group of classes. Q: Distinguish procedures in arbitration case from those in court of law:

1. A Filipino citizen residing in the Philippines 2. A holder of a Bachelor’s Degree in any field of behavioral or applied sciences or equivalent trainings short of a Bachelor’s Degree 3. At least 5 years experience in labor-management relations 4. Completion of a training course on VA conducted by the Board 5. A person of good moral character, noted for impartiality, probity, and has not been civilly, criminally and administratively adjudged guilty of any offense involving moral turpitude as evidenced by a duly sworn affidavit. Q: How is voluntary arbitrator chosen? A: A VA is chosen by the parties themselves. Their choice is not limited to the arbitrators accredited by the NCMB. The choice is usually influenced by the trust in the person’s fairness and knowledge of the dynamics, including law, of labor-management relations. Q: What is the preferred method of selection? A: By mutual agreement of the parties. Q: What is the alternative method of selection? A: 1. Selection or appointment by an administrative agency like the NCMB TEMPORARY or AD HOC ARBITRATOR Q: Who is temporary or ad hoc arbitrator? A: He is selected when dispute is already at hand. He is named to arbitrate specific dispute or a specific group of disputes and there is no commitment to select him again. PERMAMENT ARBITRATOR

ARBITRATION COURT OF LAW PROCEEDINGS PROCEEDINGS Informal Formal A judge must follow Arbitrators are not stare decisis obliged to follow precedents set by other arbitrations in similar cases Rules of evidence are not Rules of evidence are followed: what might be followed admissible in arbitration case may not necessarily be admissible in court of law There is no comparable Decisions are appealed appeal recourse to a higher court Has specialized Judges are not usually experience in industrial experts in the particular relations subject matter brought before them Hearings and procedures Impossible to pursue a are simple, and the claim without the aid of services of an attorney an attorney are not essential Fees paid to an arbitrator are shared equally by parties Non-technical and relatively inexpensive procedure for obtaining a quick solution to industrial disputes by persons who have specialized knowledge of labor-management relations.

Article. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. - The Voluntary

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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.

A: These are disputes arising under an existing CBA, involving such matters as the interpretation and application of the contract, or alleged violation of its provisions. This is also known as arbitration of grievance or rights. JURISDICTION OF L.A. and V.A. Pertinent Provisions: Article. 217. Jurisdiction of the Labor Arbiters and the Commission. (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: 1. Unfair labor practice cases; 2. Termination disputes; 3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment; 4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; 5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and

Article. 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.

6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.

2 KINDS OF ARBITRABLE DISPUTES

(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.

Q: What are the 2 kinds of Arbitrable Disputes? A: 1. Contract-Negotiation Disputes 2. Contract-Interpretation Disputes

(c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements. (As amended by Section 9, Republic Act No. 6715, March 21, 1989).

CONTRACT-NEGOTIATION DISPUTES Important Points: Q: What are Contract-negotiation disputes?  A: This are disputes as to terms of a CBA. This is also known as arbitration of interest.

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CONTRACT-INTERPRETATION DISPUTES  Q: What are Contract-Interpretation disputes?

The jurisdiction of LA and VA can possibly include money claims in one form or another The cases where the LA have original and exclusive jurisdiction are enumerated in Art. 217 and that of VA in Art. 261. The original and exclusive jurisdiction of LA is qualified by an exception:

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Article. 217. Jurisdiction of the Labor Arbiters and the Commission. - (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: 

The jurisdiction of VA is provided in Art. 261 and Art. 262 of the Labor Code.

Q: The Original and exclusive jurisdiction of VA or panel of VA is limited to only what circumstances? A: 1. All unresolved grievances arising from the interpretation or implementation of the CBA; and 2. Those arising from the interpretation or enforcement of company personnel policies NOTE: Violations of CBA, except, those which are gross in character shall no longer be treated as ULP and shall be resolved as grievance under the CBA. 3. Any and all disputes between an employer and a union or individual worker as provided in Art. 262 It must be emphasized that the jurisdiction of the VA or Panel of VAs must be voluntarily conferred by both labor and management. 4. Hear and decide wage distortion issues arising from the application of any wage orders in organized establishments; and 5. Unresolved grievances arising from the interpretation and implementation of the productivity incentive programs under R.A. No. 6071. NOTE: It is the LA and not the grievance machinery which has jurisdiction over dismissals pursuant to the union security clause. Violations if CBA, except those which are gross in character, shall no longer be treated as ULP and shall be resolved as grievances.

The preference or bias of the law in favor of VA justifies the view that employment termination disputes, arising from CBA or personnel policy implementation, are cognizable by a VA and not a LA. Such termination cases, if filed with a LA, is to be dismissed for lack of jurisdiction and referred to the concerned NCMB Regional Branch for appropriate action. The parties will proceed to select a VA based on the procedure outlined in their CBA. NOTE: Only disputes involving the union and the company shall be referred to the grievance machinery or VA. In the case of Sanyo Philippines Workers Union v. Cañizares, the problem or dispute is between the union and the company, on one hand and, some union and non-union members who were dismissed, on the other hand. The dispute has to be settled before an impartial body. The grievance machinery with members designated by the union and the company cannot be expected to be impartial against the dismissed EEs. Art. 261 grants to VAs original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the CBA and those arising from the interpretation or enforcement of company personnel policies. Also, Art.260 provides that the parties to a CBA shall name or designate their respective representative to the grievance machinery and if the grievance is unsettled in that level, it shall automatically be referred to the VA designated in advance by the parties to a CBA of the union and company. COMPANY PERSONNEL POLICIES Q: What are Company personnel policies? A: These are guiding principles stated in broad, longrange terms that express the philosophy or beliefs of an organization’s top authority regarding personnel matters. Company policies must be issued by top management which is responsible for making major policies that are by their nature country-wide in application. MINOR POLICIES

Jurisdiction over termination disputes:

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Q: What are Minor policies? A: Minor policies or rules and procedures are the extension of major policies and are usually formulated by minor executives or department managers. Rules are specific guides intended to govern conduct and action of operative supervisors and EEs in the performance of their designated activities. Procedures are made to satisfy ways or methods of carrying out policies and rules. Q: Which has jurisdiction over CBA violations? A: CBA violations not constituting ULP are cognizable by a VA if not resolved though the grievance machinery. If they are “gross” in character, these are to be treated as ULP to be heard and decided by a LA.

1. By submission or 2. By a demand or notice invoking a collective agreement arbitration clause. SUBMISSION Q: What is submission? When is it applicable? A: Submission or stipulation or an agreement to arbitrate is used where there is no previous agreement to arbitrate. It is used where there is no previous agreement to arbitrate. The submission describes an existing dispute; it often names the arbitrator, procedures in the hearing and it sometimes contains considerable details of the arbitrator’s authority and other matters which the parties wish to control. It is often entered into after the dispute has materialized and the issues can already be defined.

GROSS VIOLATIONS OF CBA Q: When is demand or notice applicable? Q: What are gross violations of CBA? A: They refer to flagrant and or malicious refusal to comply with the economic provisions of the CBA. Yet, even in gross violation cases, the parties are allowed to submit the ULP case to VA. For a ULP case to be cognizable by the LA, and the NLRC to exercise its appellate jurisdiction, the allegations in the complaint should show prima facie the concurrence of things: a. Gross violation of the CBA; and b. the violation pertains to the economic provisions of the CBA. Other Cases: VA also have exclusive and original jurisdiction to hear and decide wage distortion issues arising from the application of any wage orders in organized establishments, as well as unresolved grievances arising from the interpretation and implantation of the productivity incentive programs. NOTE: A union’s petition to enjoin the implementation of the company’s drug policy is a labor dispute beyond RTC’s jurisdiction. It is a personnel policy dispute within the jurisdiction of a VA.

A: Demand or notice of intent to arbitrate is more applicable to rights dispute because collective agreements are required by the law to provide for a grievance procedure and a VA clause with respect to disputes arising from the application or interpretation of the agreement. INITIATION OF VOLUNTARY ARBITRATION Q: How is voluntary arbitration initiated? A: 1. A submission, or 2. By Demand or Notice invoking a collective agreement arbitration clause 3. Both Q: What is submission? A: Also known as a “Stipulation” or an agreement to arbitrate. It is used where there is no previous agreement to arbitrate. The submission, which must be signed both parties, describes an existing dispute; it often names the arbitrator, procedures in the hearing and it sometimes contains considerable details of the arbitrator’s authority and other matters which the parties wish to control.

Q: How voluntary arbitration is initiated? Q: When is submission appropriate? A: VA may be initiated either by:

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A: It is more appropriate in interest disputes since collective agreement generally do not provide for the arbitration of such disputes that may arise in the future. It is more often entered into after the dispute has materialized and the issues can already be defined. Q: When is Demand or Notice of Intent to Arbitrate more appropriate? A: It is more applicable to rights dispute because collective agreements are required under R.A. 6715 to provide for a grievance procedure and voluntary arbitration clause with respect to disputes arising from the application or interpretation of the agreement. Thus, there is an agreement to arbitrate future dispute that may arise under and during the term of the CBA. Q: What is the extent of arbitrator’s authority? A: Although the contract may establish the extent of arbitrator’s power and the limits of his authority, his power may be more sharply defined in the submission agreement. NOTE:  



Parties jointly formulate in writing the specific issues to be decided by arbitrator. In general, arbitrator is expected to decide whose questions expressly stated and limited in the submission agreement. However, arbitrator will assume that he has the power to make a final settlement. Arbitrator will normally not prescribe proper procedures for future relations of the parties unless expressly authorized to do so. POWERS OF ARBITRATOR

Q: What are the powers of the arbitrator? A: The “Contract Clause” that gives the arbitrator the broadest scope of power is commonly known as the disputes clause.

matters specifically stated in the contract. It is common, for some relationship to be shown between the matter in dispute and the provisions of the contract. Q: Does the arbitrator have the power to add to or to subtract from the contract? A: Some arbitration clauses limit the power of the arbitrator to an interpretation and application of the contract and specifically provide that he shall have no power to add or subtract from the contract. Q: What are the general powers under the authority of the arbitrator? A: 1. General authority to investigate and hear the case upon notice to the parties to render an award based on the contract and record of the case 2. Incidental authority to perform all acts, necessary to an adequate discharge of his duties and responsibilities like setting and conduct of hearing, attendance of witnesses and production of documents and other evidences, fact-finding and other modes of discovery, re-opening of hearing, etc. 3. Special powers in aid of his general contractual authority like the authority to determine arbitrarily of any particular dispute and to modify any provision of existing agreement upon which a proposed change is submitted for arbitration. 4. Authority to issue writ of execution. FUNCTIONS OF ARBITRATOR Q: What are the functions of arbitrator? A: He performs functions which are not normal to the courts, and the considerations which help him to fashion his judgment may be foreign to the competence of courts. Also, the arbitrator is confined to interpretation and application of the CBA; he does not sit to dispense his own brand of industrial justice.

DISPUTES CLAUSE Q: What is disputes clause? A: This type of clause grants the arbitrator jurisdiction to hear and determine practically any matter in dispute between the parties. He is not necessarily limited to

The arbitrator’s authority is contractual rather than judicial in nature. His power is conferred by the CBA; and his duty with respect to that agreement is to settle disputes arising there under by applying and interpreting that agreement.

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But so long as an arbitrator is not arbitrary he has wide latitude in exercising his authority, especially in fashioning an appropriate remedy. Q: Give instances when an arbitral award does not draw its essence from CBA (unauthorized amendment or alteration)? A: 1. It is so unfounded in reason and fact 2. It is so unconnected with the wording and purpose of the agreement 3. It is without factual support in view if its language, its context, and any other indicia of the parties’ intention 4. It ignores or abandons the plain language of the contract 5. It is mistakenly based on a crucial assumption which concededly is a non-fact. 6. It is unlawful, arbitrary or capricious 7. It is contrary to public policy.

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.

NOTE: 





If the terms of a CBA are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall prevail. But, the VA may also consider and rely upon negotiating and contractual history of the parties, evidence of past practices interpreting ambiguous provisions. CBA must be construed liberally rather than narrowly and technically and the Court must place a practical and realistic construction upon it.

ARTICLE 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.

Q: What is the effect if the CBA requires settlement of disputes exclusively by arbitration? A: Then, the arbitration is needed before court suits for breach of contract may be filed. It is well-settled that an employee is precluded from bringing a court suit against his employer unless the parties to the CBA expressly agreed that arbitration was not to be exclusive remedy under the contract. Q: May the parties to CBA waive arbitration content? A: Yes, parties to a CBA may waive the arbitration covenants of the agreement, but their conduct must clearly show that intention. Q: Who determines the arbitration procedures? A: In practice, VA of labor cases use: a. Procedures based on the Labor Code and its Implementing Rules b. RA 6715 c. CBA d. Other agreement of the parties e. Directives of the arbitrator f. Procedural rules of appropriate agencies like NCMB Procedural Guidelines in Conduct of Voluntary Arbitration Proceedings

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But in the appreciation of evidence, the arbitrator is not bound by the Rules of Court. Q: State the ethical standards of arbitrators: A: An arbitrator is obliged to maintain a high level of professional ethics in his relationships with the parties and the appointing agencies. He also has responsibility to society. Since in effect, he is a judge, and his ethics must be on the same high level as the code that governs the conduct of judicial tribunal.

NOTE:  A VA by nature of his functions acts in a quasijudicial capacity. There is no reason why his decisions involving interpretation of law should be beyond the SC’s review.  Administrative officials are presumed to act in accordance with law and yet the SC does not hesitate to pass upon their work where a question is involved or where a showing of abuse of authority or discretion in his official acts is properly raised in petitions for certiorari.  The decisions of the VA may be modified and set aside only upon grounds on which decision of NLRC itself may be modified or set aside by SC.

Q: Does the absence of judicial rituals minimize the judicial functions of the arbitrator? A: No.

MOTION FOR RECONSIDERATION 

NOTE:    

Decisions made by the arbitrator virtually affect the rights and responsibilities of the parties. When a judge makes a decision, it can be appealed to a higher tribunal. The absence of a similar appeal procedure in arbitration places a much heavier responsibility upon the arbitrator.

Q: What is the effect of failure of VA to render a decision, resolution, order or award within the prescribed period, upon complaint of a party?

R.A. 6715- inserted Art. 262-A providing for a period of 10 calendar days before the VA decision or award becomes final and executory. This was confirmed in Coca-Cola Bottlers Phils, et al. v. Coca-Cola (2005). REVIEW OF AWARD BY CERTIORARI

  

 A: It shall be sufficient ground for the Board to discipline said VA, pursuant to the guidelines issued by the Secretary.

The Court of Appeals have concurrent jurisdiction with the Supreme Court. The Mode of Appeal from the VA to CA is Rule 43 and not 65. In the case of Luzon Developmemt Bank¸it was settled that an appeal from the decision of VA falls within the exclusive appellate jurisdiction of the CA. The mode, therefore, is Rule 43 of the 1997 Rules of Court. It is not Rule 65 because a petition for certiorari under that rule lies only where there is no appeal and no plain, speedy, and adequate remedy in the ordinary course of law. Certiorari cannot be allowed remedy. Certiorari and appeal are mutually exclusive and not alternative or successive.

VOLUNTARY ARBITRATION AWARD GENERALLY FINAL; EXCEPTIONS

 

Q: What are the exceptions to the rule that decisions of VA are final?

NOTE:

A: The Supreme Court may take cognizance of petitions questioning these decisions where there is:



1. 2. 3. 4. 5.



Want of jurisdiction Grave abuse of discretion Violation of due process Denial of substantial justice Erroneous interpretation of the law

The findings of fact and conclusions drawn therefrom the VA have to be supported by substantial evidence. There is no merit in the contention that only questions of law and not findings of fact, of a voluntary may be reviewed by Court.

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JUDICIAL REVIEW Q: What are the grounds for judicial review? 1. 2. 3. 4. 5.

Lack of jurisdiction Grave abuse of discretion Violation of due process Erroneous interpretation of law Denial of substantial justice

ARTICLE 262-B. Cost of voluntary arbitration and Voluntary Arbitrators fee. - The parties to a Collective Bargaining Agreement shall provide therein a proportionate sharing scheme on the cost of voluntary arbitration including the Voluntary Arbitrators 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.

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.

COMPLIANCE WITH DUTY TO ARBITRATE If a CBA requires settlement of disputes “exclusively” by the arbitration, then arbitration is needed before court suits for breach of the contract may be filed. Nonetheless, the parties to a CBA may waive the arbitration covenants of the agreement, but their conduct must clearly show that intention. WHO DETERMINES THE ARBITRATION PROCEDURES

Article. 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.

In practice, voluntary arbitration of labor cases use procedures based on the Labor Code as amended by RA 6715 and its Implementing Rules, the CBA, and other agreements of the parties, the directives of the arbitrator, and the procedural rules of appropriate agencies like the NCMB Procedural Guidelines in Conduct of Voluntary Arbitration Proceedings. ETHICAL STANDARDS OF ARBITRATORS An arbitrator is obliged to maintain a high level of professional ethics in his relationship with the parties and the appointing agencies. He also has a responsibility to society. His conduct should be above reproach. Since in effect, he is a judge, and his ethics must be on the same high level as the code that governs the conduct of judicial tribunals. Failure on the part of the voluntary arbitrator to render a decision, resolution, order or award within the prescribed period, shall upon complaint of a party, be

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sufficient ground for the Board to discipline said voluntary arbitrator, pursuant to the guidelines issued by the Secretary. In cases that the recommended sanction is de-listing, it shall be unlawful for the voluntary arbitrator to refuse or fail to turn over to the board, for its further disposition, the records of the case within ten (10) calendar days from demand thereof. VOLUNTARY ARBITRATION AWARD GENERALLY FINAL; EXCEPTIONS The decisions of voluntary arbitrators must be given the highest respect and as a general rule must be accorded a certain measure of finality. This is especially true where the arbitrator chosen by the parties enjoys the first rate credentials. It is not correct, however, that this respect precludes the exercise of judicial review over their decisions. Inspite of statutory provisions making 'final' the decisions of certain administrative agencies, we have taken cognizance of petitions questioning these decisions where want of jurisdiction, grave abuse of discretion, violation of due process, denial of substantial justice, or erroneous interpretation of the law were brought to our attention. A voluntary arbitrator by the nature of her fucntions acts in quasi-judicial capacity. There is no reason why herdecisions involving interpretation of law should be beyond this Court's review. Administrative officials are presumed to act in accordance with law and yet we do hesitate to pass upon their work where a question of law is involved or where a showing of abuse of authority or discretion in their official acts is properly raised in petitions for certiorari. The Labor Code and its Implementing Rules thus clearly reflect the important public policy of encouraging recourse to voluntary arbitration and of shortening the arbitration process by rendering the arbitral award nonappealable to the NLRC. The result is that a voluntary arbitral award may be modified and set aside only upon the same grounds on which a decision of the NLRC itself may be modified or set aside, by the Supreme Court.

Article. 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.

Title VIII STRIKES AND LOCKOUTS AND FOREIGN INVOLVEMENT IN TRADE UNION ACTIVITIES Chapter I STRIKES AND LOCKOUTS Article. 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 lockout, consistent with the national interest, shall continue to be recognized and respected. However, no labor union may strike and no employer may declare a lockout on grounds involving inter-union and intra-union disputes. (c) In case 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 day before the intended date thereof. In cases of unfair labor practice, the period of 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 15day cooling-off period shall not apply and the union may take action immediately. (As amended by Executive Order No. 111, December 24, 1986).

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(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 that purpose. A decision to declare a lockout must be approved by a 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 that 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. (As amended by Batas Pambansa Bilang 130, August 21, 1981 and further amended by Executive Order No. 111, December 24, 1986). (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. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return-towork 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 for 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 workforce 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 immediate disciplinary action, including dismissal or loss of employment status or payment by the lockingout employer of backwages, damages and other affirmative relief, even criminal prosecution against either or both of 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 executory ten (10) calendar days after receipt thereof by the parties. (As

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amended by Section 27, Republic Act No. 6715, March 21, 1989).

Article. 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.chan robles virtual law library 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 selforganization 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).

Article. 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 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).

Article. 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.

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Chapter II ASSISTANCE TO LABOR ORGANIZATIONS Article. 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.

Article. 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.

Chapter III FOREIGN ACTIVITIES Article. 269. Prohibition against aliens; exceptions. - All aliens, natural or juridical, as well as foreign organizations are strictly prohibited from engaging directly or indirectly in all forms of trade union activities without prejudice to normal contacts between Philippine labor unions and recognized international labor centers: Provided, however, That aliens working in the country with valid permits issued by the Department of Labor and Employment, may exercise the right to self-organization and join or assist labor organizations of their own choosing for purposes of collective bargaining: Provided, further, That said aliens are nationals of a country which grants the same or similar rights to Filipino workers. (As amended by Section 29, Republic Act No. 6715, March 21, 1989).

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

Article. 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.

Article. 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

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Chapter IV PENALTIES FOR VIOLATION Article. 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. (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). Title IX SPECIAL PROVISIONS Article. 273. Study of labor-management relations. The Secretary of Labor shall have the power and it shall be his duty to inquire into: (a) the existing relations between employers and employees in the Philippines; (b) the growth of associations of employees and the effect of such associations upon employer-employee relations; (c) the extent and results of the methods of collective bargaining in the determination of terms and conditions of employment; (d) the methods which have been tried by employers and associations of employees for maintaining mutually satisfactory relations; (e) desirable industrial practices which have been developed through collective bargaining and other voluntary arrangements; (f) the possible ways of increasing the usefulness and efficiency of collective bargaining for settling differences;

(g) the possibilities for the adoption of practical and effective methods of labor-management cooperation; (h) any other aspects of employer-employee relations concerning the promotion of harmony and understanding between the parties; (i) the relevance of labor laws and labor relations to national development. The Secretary of Labor shall also inquire into the causes of industrial unrest and take all the necessary steps within his power as may be prescribed by law to alleviate the same, and shall from time to time recommend the enactment of such remedial legislation as in his judgment may be desirable for the maintenance and promotion of industrial peace.

Article. 274. Visitorial power. - The Secretary of Labor and Employment or his duly authorized representative is hereby empowered to inquire into the financial activities of legitimate labor organizations upon the filing of a complaint under oath and duly supported by the written consent of at least twenty percent (20%) of the total membership of the labor organization concerned and to examine their books of accounts and other records to determine compliance or noncompliance with the law and to prosecute any violations of the law and the union constitution and by-laws: Provided, That such inquiry or examination shall not be conducted during the sixty (60)-day freedom period nor within the thirty (30) days immediately preceding the date of election of union officials. (As amended by Section 31, Republic Act No. 6715, March 21, 1989).

Article. 275. Tripartism and tripartite conferences. – (a) Tripartism in labor relations is hereby declared a State policy. Towards this end, workers and employers shall, as far as practicable, be represented in decision and policy-making bodies of the government. (b) The Secretary of Labor and Employment or his duly authorized representatives may, from time to time, call a national, regional, or industrial tripartite conference of representatives of government, workers and employers for the consideration and adoption of voluntary codes of principles designed to promote industrial peace based on social justice or to align labor movement relations with established priorities in

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economic and social development. In calling such conference, the Secretary of Labor and Employment may consult with accredited representatives of workers and employers. (As amended by Section 32, Republic Act No. 6715, March 21, 1989).

Article. 276. Government employees. - The terms and conditions of employment of all government employees, including employees of governmentowned and controlled corporations, shall be governed by the Civil Service Law, rules and regulations. Their salaries shall be standardized by the National Assembly as provided for in the New Constitution. However, there shall be no reduction of existing wages, benefits and other terms and conditions of employment being enjoyed by them at the time of the adoption of this Code.

Article. 277. Miscellaneous provisions. – (a) All unions are authorized to collect reasonable membership fees, union dues, assessments and fines and other contributions for labor education and research, mutual death and hospitalization benefits, welfare fund, strike fund and credit and cooperative undertakings. (As amended by Section 33, Republic Act No. 6715, March 21, 1989). (b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. The Secretary of the Department of Labor and Employment may suspend

the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off. (As amended by Section 33, Republic Act No. 6715, March 21, 1989). (c) Any employee, whether employed for a definite period or not, shall, beginning on his first day of service, be considered as an employee for purposes of membership in any labor union. (As amended by Section 33, Republic Act No. 6715). (d) No docket fee shall be assessed in labor standards disputes. In all other disputes, docket fees may be assessed against the filing party, provided that in bargaining deadlock, such fees shall be shared equally by the negotiating parties. (e) The Minister of Labor and Employment and the Minister of the Budget shall cause to be created or reclassified in accordance with law such positions as may be necessary to carry out the objectives of this Code and cause the upgrading of the salaries of the personnel involved in the Labor Relations System of the Ministry. Funds needed for this purpose shall be provided out of the Special Activities Fund appropriated by Batas Pambansa Blg. 80 and from annual appropriations thereafter. (Incorporated by Batas Pambansa Bilang 130, August 21, 1981). (f) A special Voluntary Arbitration Fund is hereby established in the Board to subsidize the cost of voluntary arbitration in cases involving the interpretation and implementation of the Collective Bargaining Agreement, including the Arbitrator’s fees, and for such other related purposes to promote and develop voluntary arbitration. The Board shall administer the Special Voluntary Arbitration Fund in accordance with the guidelines it may adopt upon the recommendation of the Council, which guidelines shall be subject to the approval of the Secretary of Labor and Employment. Continuing funds needed for this purpose in the initial yearly amount of fifteen million pesos (P15,000,000.00) shall be provided in the 1989 annual general appropriations acts. chan robles virtual law library The amount of subsidy in appropriate cases shall be determined by the Board in accordance with established guidelines issued by it upon the recommendation of the Council. The Fund shall also be utilized for the operation of the Council, the training and education of Voluntary

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Arbitrators, and the Voluntary Arbitration Program. (As amended by Section 33, Republic Act No. 6715, March 21, 1989). (g) The Ministry shall help promote and gradually develop, with the agreement of labor organizations and employers, labor-management cooperation programs at appropriate levels of the enterprise based on the shared responsibility and mutual respect in order to ensure industrial peace and improvement in productivity, working conditions and the quality of working life. (Incorporated by Batas Pambansa Bilang 130, August 21, 1981). (h) In establishments where no legitimate labor organization exists, labor-management committees may be formed voluntarily by workers and employers for the purpose of promoting industrial peace. The Department of Labor and Employment shall endeavor to enlighten and educate the workers and employers on their rights and responsibilities through labor education with emphasis on the policy thrusts of this Code. (As amended by Section 33, Republic Act No. 6715, March 21, 1989). (i) To ensure speedy labor justice, the periods provided in this Code within which decisions or resolutions of labor relations cases or matters should be rendered shall be mandatory. For this purpose, a case or matter shall be deemed submitted for decision or resolution upon the filing of the last pleading or memorandum required by the rules of the Commission or by the Commission itself, or the Labor Arbiter, or the Director of the Bureau of Labor Relations or Med-Arbiter, or the Regional Director. Upon expiration of the corresponding period, a certification stating why a decision or resolution has not been rendered within the said period shall be issued forthwith by the Chairman of the Commission, the Executive Labor Arbiter, or the Director of the Bureau of Labor Relations or Med-Arbiter, or the Regional Director, as the case may be, and a copy thereof served upon the parties. Despite the expiration of the applicable mandatory period, the aforesaid officials shall, without prejudice to any liability which may have been incurred as a consequence thereof, see to it that the case or matter shall be decided or resolved without any further delay. (Incorporated by Section 33, Republic Act No. 6715, March 21, 1989).

CHAPTER XIII Post-Employment RIGHT TO SECURITY OF TENURE Under previous laws, an ER could terminate the services of an EE with or without just cause by merely giving the EE his one-month pay or “mesada” as required by Article 302 of the Code of Commerce, or by giving him a similar minimum period of notice under the Termination Pay Law or R.A. 1052. Under the present laws, the concept of employment termination is constricted and radically changed. Q: What is/are the legal of the EE’s security of tenure? A: a. Constitutional Basis 1. Art. III, Sec.1 of the 1987 Constitution Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws. 2. Art. XIII, Sec.3 of the 1987 Constitution Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to selforganization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth.

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b. Statutory Basis 1. Book VI of the Labor Code POST EMPLOYMENT TITLE I TERMINATION OF EMPLOYMENT ARTICLE 278. Coverage. - The provisions of this Title shall apply to all establishments or undertakings, whether for profit or not. ARTICLE 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). ARTICLE 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. 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. ARTICLE281. 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. ARTICLE 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. ARTICLE 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. ARTICLE 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

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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. ARTICLE 285. Termination by employee. – (a) An employee may terminate without just cause the employee-employer 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:

A: An EE who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, and to full back wages, inclusive of allowances and to his benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Q: What is the rule for a dismissal or termination to be valid and lawful? A: It should either be for a just cause or authorized cause as prescribed by law, and after observance of the EE’s right to due process. APPLICATION OF THE RIGHT; REGULAR EMPLOYMENT

1. Serious insult by the employer or his representative on the honor and person of the employee; 2. Inhuman and unbearable treatment accorded the employee by the employer or his representative; 3. 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 4. Other causes analogous to any of the foregoing. ARTICLE 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.

RIGHT TO SECURITY OF TENURE Q: What is involved in the right of security of tenure of EEs? A: It means that in cases of regular employment, the ER shall not terminate the services of an EE except for just or authorized cause as provided by law, and after due process. Q: What are the rights of an EE who is unjustly dismissed from work?

Q: To whom does the full protection of the right to security of tenure applies? A: It applies to regular EEs (Art. 279 of the LC) Q: What is a regular employment? A: An employment is deemed regular where the EE has been engaged to perform activities which a usually necessary or desirable in the usual business or trade of the ER (Art. 280, LC). EXC: 1. Project EEs 2. Seasonal EEs PROJECT EMPLOYEES Q: Who are Project EEs? A: 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 EE. Q: Are members of the work pool from which a construction company draws its EEs considered project EEs? A: No, they are not project EEs if considered EEs of the construction firm while in the work pool. Q: What is the rule re: the tenure of project EEs?

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A: They are generally coterminous with the project or undertaking for which they are hired. Q: What does “project” in the realm of business and industry mean? A: It refers to a particular job or undertaking that is within the regular or usual business of the ER, but which is distinct and separate and identifiable as such, from the undertakings of the company. It could also refer to a particular job or undertaking that is not within the regular business of the company, but such job or undertaking, must also be identifiably separate and distinct from the ordinary or regular business or undertakings of the company. In both cases, such job or undertaking begins and ends at determined or determinable times. Q: What is the principal test for determining whether an EE is a project and not a regular EE? A: The principal test is whether he was assigned to carry out a specific project or undertaking, the duration and scope of which are specified at the time he was engaged for that project. The particular work or service performed and its duration are defined in an agreement and made clear to the EEs at the time of the hiring. Accordingly, the end or termination of a project effectively terminates the employment of the project EEs. NOTE: After termination of the project, an ER may wind up operations only to complete the project. In such a case the remaining Ees do not necessarily lose their status as project Ees. Q: What if the EE’s services are extended long after the supposed project was completed? Similarly, what if they are retained beyond the completion date and are assigned other jobs? A: In such a case, the Ees are removed from the scope of project Ees and shall be considered regular Ees. They correspondingly acquire a regular and permanent status and thus may no longer be dismissed without just cause.

NOTE: In the case of PNCC v. Villa, the Court held that a termination letter was deemed an express admission by the ER that his Ees were not project Ees. Q: What is/are the requirement/s in case of dismissal of a project EE? A: In such case, the project EE must be furnished with a written notice of his impending dismissal, and must be given the opportunity to dispute the legality of his removal. Q: Are they entitled to a separation pay? A: Yes, if the project they are working on has not been completed when their services are terminated. Q: Does the proviso that any EE who has rendered at least 1 year of service shall be considered a regular EE apply to project Ees? A: No. But if such an EE is given successive contracts of employment where he continued to do the same kind of work, it manifests that his tasks were usually necessary or desirable in the usual business or trade of the ER. Hence, he shall be considered as a regular EE. Q: Upon completion of the project, are project Ees entitled to termination pay? A: No, also the ER is not required to obtain clearance from the SOLE in connection with such termination. Q: What is then required of the ER to do in case of completion of the project? A: The ER should report to the nearest public employment office the termination of the workers every time a project is completed for statistical purposes. Q: What is the consequence in case of failure to comply with such requirement? A: Failure to comply with such requirement proves that its Ees are not project Ees but regular Ees. Q: What is the standard to determine the status of an EE? A: The primary standard is the reasonable connection between the particular activity performed by the EE in

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relation to the usual business or trade of the EE and not by the number of hours of work. Hence, by the nature of work and by the length of time one has been in that particular job not by the mode or even the reason for hiring him.

In a case, an EE whose work consisted mainly of photocopying documents, sorting out telephone bill and disconnection notices was deemed engaged in activities “necessary or desirable to her ER’s business. Q: When is a project EE considered as regular?

NOTE: If the EE has been performing the job for at least 1 year, even if the performance is not continuous or only intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of the activity to the business. SEASONAL EMPLOYEES Q: Who are Seasonal EEs? A: Where the work or service to be performed is seasonal in character, the employment is deemed to last only for the duration of the season. However, seasonal EEs who are consistently rehired after every season are considered merely on leaves of absence with pay. Their employment relationship is not severed but merely suspended. Q: In case of Private School teachers, when are they considered as regular EEs? A: 1. They must be hired successively for 3 years; 2. That they are teaching full time; and 3. Their service is satisfactory. NOTE: A part-time faculty member cannot acquire permanence in employment under the Manual of Regulations for Private Schools in relation to the LC. CASUAL EMPLOYMENT Q: When is employment considered as Casual? A: Employment is casual if the EE is engaged to perform activities which are not usually necessary or desirable in the usual business or trade of the ER. However, an EE who has rendered at least 1 year of service, whether continuous or broken, shall be considered a regular EE with respect to the activity in which he is employed, and his employment shall continue while such activity actually exists.

A: 1. Once project or pool EE has been continuously, as opposed to intermittently, rehired by the same ER for the same task; and 2. These tasks are vital, necessary and indispensable to the usual business or trade of the ER. NOTE: The status of regular employment attaches to the casual worker on the day immediately after the end of his first year of service. Q: What are the 2 kinds of Regular EEs? A: 1. Those who are engaged to perform activities which are usually necessary and desirable in the usual business or trade of the ER; and 2. Those who have rendered at least one year of service, whether continuous or broken with respect to the activity in which they are employed. PROBATIONARY EMPLOYMENT Q: What is the period of probationary employment? A: It should not exceed six (6) months. NOTE: The parties may stipulate an extension of the period. This applies in the absence of any indication that the extension is a mere stratagem of the ER to avoid the legal consequences of a probationary period satisfactorily completed. This is subject to the written consent of the EE in order to give him a chance to improve his performance and to qualify for regular employment. In one case, a probationary period of 18 months for sales representatives hired by a company engaged in advertisements in the yellow pages of a telephone directory was deemed reasonable considering that the publication of ads are only made a year after the sale has been made.

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Q: When may a probationary EE be terminated? A: The services of an EE who has been engaged on probationary basis may be terminated for just cause or when he fails to qualify as a regular EE in accordance with reasonable standards made known to him at the time of his engagement. NOTE: This may be done even before the end of the probationary period, and the ER will not be liable for wages for the unexpired portion of the period.

Q: What is the rule regarding a system of double probation (the first, an OJT)? A: The Court held in one case that it is a transparent scheme to circumvent the plain mandate of the law, and make it easier for the ER to dismiss its EEs even after they had passed probation. Q: What are the limitations on the power of the ER to terminate a probationary employment contract? A:

Q: When can a probationary EE be considered as a regular one? A: An EE who is allowed to work after a probationary period shall be considered a regular EE and is entitled to security of tenure. Q: Can probationary employment be implied? A: No, probationary employment cannot be implied. If there is no statement in the employment contract as to probationary status, and no statement of requirements to be complied with, these do not justify the conclusion that the worker concerned is a probationary EE.

1. It must be exercised in accordance with the specific requirements of the contract. If a particular time is prescribed, the termination must be done within such time. Should the contract require a written notice, then such from should be used. 2. The dissatisfaction of the ER must be real and in good faith, not feigned so as to circumvent the contract or the law. 3. There must be no unlawful discrimination in the dismissal. CONTRACTUAL EMPLOYMENT Q: What is a contractual employment?

Q: Do they enjoy security of tenure? A: Probationary EEs enjoy security of tenure, such protection extends only during the probationary period. Once the period expires, the constitutional protection can no longer be invoked. Q: What are the rights of probationary EEs who are unjustly dismissed during the probationary period? A: They are entitled to the following: a. Reinstatement; and b. Payment of full backwages and other benefits and privileges Q: What must the ER present to justify such termination? A: The ER must present sufficient evidence to substantiate the cause of the probationary EE’s dismissal and cite particular instances to show the latter’s poor performance.

A: It is one wherein the EE is hired by agreement for a definite term. Q: When is such EE deemed a regular worker for the duration of his contract? A: 1. Where the activities for which he is engaged are usually necessary or desirable to the course of the ER’s business; and 2. He has been on the job for an aggregate period of at least one year. NOTE: This rule will not apply if the services rendered are not integral aspects of the essential operations of the ER. Q: Are seafarers considered as contractual EEs? A: In one case, the Court held that seafarers are considered contractual EEs even if their contracts are repeatedly renewed. Their employment is governed by the contracts they sign every time they are hired, and

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terminated when the contract expires. Their employment is for a fixed period only. Their national, cultural and lingual diversity necessitates the limitation of its period.

c. d. e. f. g. h. i. j. k.

Q: What is/are the requirements for a stipulation providing for term employment to be valid? A:

Working methods Time, place and manner of work Tools to be used Processes to be followed Supervision of workers Working regulations Transfer of EEs Lay-off of workers Discipline, dismissal and recall or work

1. Where the period was agreed upon knowingly and voluntarily by the parties without force, duress or improper pressure exerted on the EE (hence, the fixed term of that employment must be known to the EE at the time of his engagement); and 2. Where such stipulations were not designed to circumvent the laws on security of tenure.

Q: What is the limitation of such prerogative?

Thus, good faith and voluntariness are crucial determinants of the validity of such stipulation.

NOTE: This right should not be confused with the manner in which that right is exercised. Accordingly, the ER must show in order to justify a transfer or assignment of an EE that such action is not unreasonable, inconvenient or prejudicial to the EE. Otherwise, the EE’s transfer shall be tantamount to constructive dismissal.

NOTE: This practice is however legally questionable if done in a more or less continuous basis with the objective of avoiding regularization as it in effect circumvents the law on security of tenure of the workers. Thus, the practice of hiring workers on uniformly fixed contract basis of 5 months, only to replace them upon the expiration of their contracts with other workers on the same employment duration, was imposed precisely to circumvent the constitutional guarantee on security of tenure, and therefore, contrary to public policy. MANAGEMENT PREROGATIVES Q: What is/are involved in management prerogatives? A: The owner of a business enterprise is given considerable leeway in managing his business based on the principle of managerial control of business enterprise which is maximization of profit. They include the owner’s freedom to administer the affairs of his business enterprise in his quest for profits.

A: An ER’s prerogative and power to discipline and terminate EE’s services may not be exercised in an arbitrary or despotic manner as to erode and render meaningless the Constitutional guarantees of security of tenure and due process.

Q: What is demotion? What s the rule regarding its exercise? A: It is the movement from one position to another, involving diminution in duties responsibilities, status or rank, which may or may not involve reduction in salary. It is management’s prerogative to demote EEs when interests of the firm reasonably demand it. But this is not absolute. Its exercise should always be for cause and done in equity, reasonableness and good faith. To be valid, it must be given due process. If management finds the EE’s explanation unsatisfactory, it must notify the EE of its decision in writing. Valid causes of demotion Q: What are the examples of the causes of demotion? A:

Accordingly, unless limited by special laws, an ER is free to regulate, according to his own discretion and judgment, all aspects of employment including: a. Hiring b. Work assignments

a. b. c. d.

Lack of diligence at work Indolence Habitual tardiness absences

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Q: What is the rule regarding the closure or suspension of operations? A: The determination to cease or suspend operations is a management prerogative that the State usually does not interfere with, as no business can be required to continue operating at a loss simply to maintain the workers in employment. Such would be tantamount to a taking of property without due process of law, which the ER has a right to resist. MANAGEMENT PREROGATIVE Q: What are the aspects covered by management prerogatives?

A: 1. Serious misconduct or willful disobedience by the EE of the lawful orders of his ER or representative in connection with his work 2. Gross and habitual neglect by the EE of his duties 3. Fraud or willful breach by the EE of the trust reposed in him by his ER or duly authorized representative 4. Commission of a crime or offense by the EE against the person of his ER or any immediate member of his family or hi duly authorized representative 5. Other causes analogous to the foregoing Serious misconduct or willful disobedience

A: Q: What is the rationale behind this rule? A. Operation of the Business: -transfer or relocation of the plant -Introduction of new machines or processes (even if resulting in lay-offs) -transformation of the company (like mergers and spinoffs) -suspension of operations -sale or other disposition of the business -total closure, if in goof faith B. -

Q: What do you mean by serious misconduct? A: It is the transgression of some established and definite rule of action, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment.

Personnel Actions:

Hiring of personnel and imposing reasonable conditions therefor Determining size of the work force Transfers or assignments of Es Disciplining EEs Terminating EEs for cause

-

A: Accordingly, while the law protects the right of workers, it does not authorize the self-destruction of the ER.

REQUIREMENTS FOR LAWFUL DISMISSAL: JUST CAUSES Q: What are the 2 basic requirements for a lawful dismissal?

Q: What is necessary to constitute just cause for dismissal? A: It must be grave and not trivial or unimportant, and must be in connection with the EE’s work. NOTE: Uttering obscene and offensive words during an EE’s party as a reaction to management’s decision in the case of another EE, does not constitute serious misconduct to warrant dismissal. To warrant dismissal, the EE’s act must relate to the performance of the EE’s duties as would show her unfit to continue working for her ER.

A: 1. A just cause or authorized cause as prescribed by law (Substantive requirement) 2. Observance of due process (Procedural requirement) Q: What are the just causes for termination?

Q: In case of willful disobedience, what must concur in order to justify dismissal? A: The following requisites must concur: 1. The EE’s assailed conduct must have been willful and intentional (willfulness being);

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2. Characterized by a wrongful and perverse attitude inconsistent with proper subordination; 3. The order violated must have been reasonable, lawful , made known to the EE and must pertain to the duties which he had been engaged to discharge 4. His misconduct must also show that he has become unfit to continue working for the ER. 5. To be lawful cause for termination, it must be serious and grave malfeasance to justify the deprivation of a means of livelihood. NOTE: Company policies and regulations, unless shown to be grossly oppressive or contrary to law, are generally valid and binding, and must be complied with. Hence, deliberate disregard or disobedience or rules and defiance of management authority cannot be countenanced, until and unless the rules or orders are declared to be illegal and improper.

A: Immorality per se does not justify dismissal unless it is prejudicial or detrimental to the ER’s interest or unless the employment concerned requires a certain standard of conduct. NOTE: Two private school teachers, both married, were dismissed due to their illicit relationship known by their fellow teachers and school officials. The dismissal is justified because the parties violated Sec. 94 of the Manual of Regulations for Private Schools on “disgraceful or immoral conduct” and because of their harmful impression it might have on the students. Gross and habitual neglect by the EE of his duties Q: What does the abovementioned cause include? A:

Reasonable opposition to management orders is not a cause for termination. Q: In case of company rules, when may willful disobedience be a ground for termination?

a. Gross and habitual (both inefficiency b. Negligence and carelessness

must

concur)

Q: What is the basis for such cause? A:Repeated violation of company rules may be considered willful disobedience, provided the rules are in writing and made known to the EEs. Q: In case of insubordination, what is necessary to be a ground for dismissal? A: There must be a reasonable proportionality between the act of insubordination and the penalty imposed therefor. Q: Does refusal of an EE to be transferred to a new assignment unless a bigger salary increase is given constitute insubordination? A: Yes and it is a just cause for termination. Yet, if the transfer is tantamount to removal due to the hardships involved, it is not a just cause. Q: What if the transfer is a promotion, is refusal a just cause for termination? A: No, it is not a just cause for termination because promotion is in the nature of a reward, which a person has the right to refuse.

A: It is derived from the right of the ER to select and engage his EEs. Q: What is gross negligence? A: It is the want of any slight care or the utter disregard of consequences. Q: Are repeated absences a just cause for dismissal? A: Yes, repeated absences despite warnings and suspensions were not only a violation of company rules, but also constituted gross and habitual neglect of duties which is a just cause for dismissal. NOTE: It is the totality and not the compartmentalization of company infractions consistently committed which justifies the penalty of dismissal. Yet, if an EE has been penalized with suspension in some infractions imputed to him, he cannot again be penalized for those misconduct. Also, a single or isolated act of negligence does not constitute a just cause for the dismissal of the EE.

Q: What about immorality, does it justify dismissal?

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Fraud or willful breach by the EE of the trust Q: What is/are included in the abovementioned rule? A: It includes acts like: a. b. c. d.

Competing with the ER Making clandestine profits Accepting bribes Other acts that result in loss of trust and confidence on the part of the ER.

Also, the act complained of must be work-related and shows that the EE is unfit to work for his ER. The act upon which the loss of trust is predicated must be related to the performance of the duties of the EE such as would thereby show him to be indeed unfit to continue working for the ER. Position of Trust and Confidence

grounds that reasonably evince an actual breach thereof by an EE. Ordinary breach of trust will not suffice; it must be willful (done intentionally); knowingly and purposely without justifiable cause, as distinguished from an act done carelessly, heedlessly or inadvertently. Q: What is the quantum of proof required to prove this ground in case of rank-and-file EEs? A: This ground must be based on facts established by the ER who must clearly and convincingly prove by substantial evidence the facts and incidents upon which loss of confidence in the EE may fairly be made to rest; otherwise, the dismissal will be rendered illegal. The burden of proof lies on the ER to first convincingly establish valid bases for that loss of trust and confidence. Q: What is required with respect to managerial EEs to justify termination?

Q: What is a position of trust and confidence? A: It is one where a person is entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the ER’s money or property. In a case, the Court made an observation that it should be restricted to managerial EEs. It includes: a. Managerial EEs b. Cashiers, auditors, property custodians, etc. or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property. NOTE: As a general rule, ERs are allowed a wider latitude of discretion in terminating managerial personnel or those of similar rank performing functions which by their nature require the ER’s full trust and confidence, than in the case of ordinary rank and file EEs. Thus, the rule has been laid that in rank-in-file EEs, loss of trust and confidence requires proof of involvement in the events in question, and that mere uncorroborated assertions and accusations of the ER will not suffice.

A: Proof beyond reasonable doubt is not required, it being sufficient that there is some basis for such loss of confidence, or if the ER has reasonable ground to believe or to entertain the moral conviction that the EE concerned is responsible for the misconduct, and that the nature of his participation therein renders him unworthy of the trust and confidence demanded by his position. Hence, mere existence of a basis is sufficient, and does not require proof beyond reasonable doubt. Q: What are the guidelines set by the SC for the correct use of loss of confidence as a valid cause for termination? A: 1. Loss of confidence should not be simulated; 2. It should not be used as a subterfuge for causes which are improper, illegal or unjustified; 3. It may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; 4. It must be genuine, not a mere afterthought to justify earlier action taken in bad faith. 

Although loss of trust and confidence constitutes a valid cause for termination, it must nonetheless rest on solid

The breach must be don intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, etc. It must rest on substantial

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grounds and not on the ER’s arbitrariness, whims, caprices or suspicion; otherwise, the EE would remain eternally at the mercy of the ER. Q: Is sexual harassment a just and valid cause for termination of a managerial EE? A: Yes, such EE is bound by more exacting work ethics and thus by perpetrating this crime against a subordinate, he provides a justifiable ground for dismissal for lack of trust and confidence. NOTE: Delay on the subordinate’s part in initiating the complaint does not reduce the significance of the case. Q: Is conviction in a criminal case indispensable to warrant dismissal? A: Where the dismissal for loss of confidence is based on suspected theft of company property, it remains a valid cause for dismissal even if the EE is subsequently acquitted or is dropped by the fiscal for insufficient evidence. Hence, it is sufficient that the ER have a basis for believing that the EE breached the trust and confidence reposed on him. Q: What s the rule re: theft to justify dismissal? A: Theft is not a basis for loss of confidence, nor is it a just cause for dismissal if the property involved is of negligible value and the worker concerned is a longservice EE. Commission of a crime or offense Q: What is involved in the abovementioned ground? A: This cause deals with crimes or offenses against the person of the ER, his immediate family members or his representatives, and not against his property which is covered by the preceding cause.

1. Abandonment of the job 2. Imprisonment of the EE 3. Instigating a labor unrest by the EE such that his continuance in service is inimical to the ER’s interest, unless committed by a long-service EE wherein an equitable judgment may rest not only secundum rationem, but also secundum caritatem 4. Fighting with a supervisor. Q: For abandonment to arise there must be a concurrence of the following: A: a. Intention that the EE has no more desire to work b. Positive act indicating that intention; there must be overt acts pointing to the fact the EE simply does not want to work anymore Q: What are the 2 elements for a valid abandonment? A: a. Failure to report to work or absence without valid or justifiable reason; and b. Clear intention to sever the ER-EE relationship (the more determinative factor being manifested by some overt acts). NOTE: An EE who takes steps to protest his dismissal cannot be said to have abandoned his work. His prompt contest negates this cause as it is illogical for an EE to dispute dismissal from a job he has abandoned. Also, a worker who joins a strike cannot be said to have abandoned his job, for he is precisely trying to assert or improve the terms and conditions of his employment. Q: Is old age a just cause for dismissal? A: No, old age is not a just cause for dismissal.

Q: In this case, is conviction necessary to constitute ground for dismissal? A: No, it is enough that such offense was committed.

NOTE: A dismissal of a school teacher for unreasonable behavior and unpleasant deportment in dealing with people in the course of employment is justified.

Other causes Q: What are included in this basket provision? A:

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AUTHORIZED CAUSES Q: What are the authorize causes of termination?

A: Authorized causes for termination are basically management prerogatives derived from ownership of property and the rationale of business enterprise which is the maximization of profits.

A: The law requires ER to pay the workers affected thereby to a separation pay equivalent to 1-month’s pay or at least ½ months pay for every year of service, whichever is higher and to serve a written notice on the workers and the DOLE at least 1 month before the intended date of the termination. Reduction of personnel due to redundancy Q: When does redundancy exist?

a. Reduction of personnel due to the installation of labor-saving devices; b. Reduction of personnel due to redundancy; c. Retrenchment to prevent losses; d. Closure of establishment or cessation of operations; and e. Disease NOTE: The State recognizes these prerogatives but regulates them in the exercise of its paramount police power. They are subject to legal requirements regarding procedure: a. One-month’s written notice on the workers and the DOLE; b. Separation pay and others

A: It exist where the services of an EE are in excess of what is reasonably demanded b the actual requirements of the enterprise. Thus, a position becomes redundant if it is superfluous. Q: What are the factors resulting to redundancy? A: 1. 2. 3. 4.

Overhiring Decreased volume of business Reorganization Dropping of product line or service previously undertaken by the enterprise. Retrenchment to prevent losses

Also, if the termination is due to an authorized cause, like retrenchment, it is not subject to discretionary review by the LA or the NLRC so long as violation of the law or arbitrary and malicious action is not shown. Correspondingly, they do not have to observe the due process requirement of other types of dismissals, only the procedural requirements of the LC.

Q: What is retrenchment? A: It is a management prerogative which is a means to protect and preserve the ER’s viability and ensure his survival, subject to faithful compliance with the rules laid down by law and jurisprudence.

Reduction of personnel due to the installation of laborsaving devices

Q: What is the difference between retrenchment and redundancy?

This is a management prerogative to ensure efficiency in the operation of the enterprise. Thus, when there is need to reduce the work force, management has the right to choose whom to lay-off, depending on the work still required to be done, and the qualities of the workers retained. The following are the fair and reasonable criteria:

A: Redundancy exists when the services of an EE are in excess of what is required by an enterprise. Retrenchment is resorted to primarily avoid or minimize business losses. Thus, an ER’s purported “redundancy program” is precisely termed “retrenchment” because it is primarily intended to prevent serious business losses.

a. Less preferred employment status, b. Efficiency rating c. Seniority

In many cases, the SC has affirmed the right of the ER to layoff or dismiss EEs because of losses in the operation of its business, lack of work and considerable reduction in the volume of business.

Q: What is/ are the rights of the workers affected?

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NOTE: It is necessary that business reverses or losses be serious, actual and real. The burden of establishing the truth as to these losses or reverses falls upon the ER (to prove economic or business reverses) with clear and convincing evidence, it being in the nature of an affirmative defense. Thus, the same must be supported by adequate proof. Retrenchment is no reason for mass dismissals if the company is not losing money. Q: What is the reason for requiring clear and convincing evidence?

-improving efficiencies -cutting marketing and advertising costs 4. The alleged losses incurred, must be proved by sufficient and convincing evidence. NOTE: Yet, aside from sufficient proof, there must be a reasonable necessity of such drastic test. Accordingly, retrenchment is only a measure of last resort when other less drastic means have been tried and found to be inadequate. Thus, it is justified only when all other less drastic means have been tried and found insufficient. Kinds of Retrenchment

A: Any less exacting standard of proof would render too easy the abuse of this ground for termination of the services of the EEs.

Q: What are the kinds of retrenchment? A:

Q: What are the requirements in case of dismissal for retrenchment? A: 1. An application for reduction of EEs; or 2. Written notice to the DOLE

NOTE: This one-month notice is mandatory to enable the proper authorities to ascertain whether the closure of the business is being done in good faith, and not merely a pretext for evading compliance with just obligations of ERs to EEs. The ER must observe fair and reasonable standards to effect retrenchment, and that he institute costreduction measures in other areas of production before undertaking retrenchment as a last resort. Q: To prove losses, what are the requirements set forth by the Constitution?

1. Total-means cessation of operations of the establishment or undertaking; and 2. Partial-cessation of only a part of a company’s operations or a reduction of work days. 3. Permanent- means closure of business due to grave financial losses; and 4. Temporary-means bona fide suspension of work for not over 6 months. Q: What is the kind of retrenchment authorized by law? A: For retrenchment to be termination, the same must Thus, when a worker is employment status is not suspended.

an authorized cause for be total and permanent. temporarily laid-off, his terminated but merely

Accordingly, partial retrenchment is allowed by the Bureau of Working Conditions subject to its conditions while temporary retrenchment is covered by Art. 281 of the LC.

A: 1. The expected losses be substantial, not minimal; 2. The losses anticipated must be reasonably imminent as can be perceived objectively and in good faith; 3. Retrenchment must be reasonably necessary and likely to effectively prevent the expected losses, and that other measures prior or parallel to retrenchment have been taken: -cost-reduction programs

NOTE: An ER who lays off an EE with a promise to rehire him when the economic conditions improve, but refuses to do so, the ER may be guilty of illegal dismissal and made liable for moral damages depending on the manner of dismissal. Also, terminations due to retrenchment entail actual dismissals, not mere forced leaves. A forced leave due to economic conditions is deemed a management prerogative in the absence of showing that it was for

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the purpose of defeating or circumventing the rights of EEs.

A: The EE will be paid separation pay equivalent to t least one month’s pay or to one-half month’s pay for every year of service, whichever is greater.

Closure of establishment NOTE: The cause is qualified by the condition—“unless the closing is for the purpose of circumventing the provisions of this Title.” Q: What is involved in the closure of establishment or cessation of operations? A: It may or may not be caused by business reverses. Accordingly, an ER may close or cease his business operations even if not suffering business losses or financial reverses if done in good faith and for causes beyond his control, provided he pays his EEs their termination pay. Q: In case the closure is not due to serious business losses or financial reverses, to what right or benefit are the EEs entitled? A: They are entitled to separation pay. Hence, if the reason for the same is serious business losses or reverses, there is no obligation to pay separation pay to the workers adversely affected thereby Disease Q: To justify termination of services, what are the conditions or requirements?

NOTE: The fraction of at least 6 months is considered as one whole year. Q: In case of disability, what is required to justify the EE’s dismissal? A: Total disability does not require that the EE be absolutely disabled or totally paralyzed; what is necessary is that the injury must be such that the EE cannot pursue his usual work and earn there from. Q: When is disability or paralysis considered permanent? A: It is considered as permanent if it lasts continuously for more than 120 days. Q: What are the 2 legal requirements for dismissals for any of the abovementioned causes to be valid? A: 1. A written notice on the worker and on the DOLE at least 1 month before the intended date of termination (this is a mandatory requirement); and 2. Separation pay to the workers affected. NOTICE Q: What is the purpose of this requirement?

A: The EE must be suffering from any disease and his continued employment is prohibited by law or is prejudicial to his health, as well as to the health of his co-EEs. In case of occupational diseases, there should be a certification by a competent health authority that the disease is of such a nature or stage that it cannot be cured within 6 months with proper medical treatment. NOTE: A dismissal based only on the recommendation of company doctors and without proof that the sickness cannot be cured within 6 months even with proper medical treatment is illegal. Q: What is the entitlement of an EE who is dismissed due to this cause?

A: The purpose of the previous notice is to give the worker some time to prepare for the eventual loss of his job and the DOLE to ascertain the verity of the alleged authorized cause of termination. SEPARATION PAY Q: What is the amount of the separation pay to be given to the EE? A: It shall be equivalent to one-month’s pay or at least ½ month’s pay for every year of service, whichever is higher. A fraction of at least 6 months shall be considered one whole year. Q: In case of termination due to disease, is written notice a requirement?

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A: No, but he should be given a separation pay. JUST CAUSES AND AUTHORIZED CAUSES COMPARED

from work of an EE for a just cause does not entitle him to the termination pay provided in the Code, without prejudice, however, to whatever rights, benefits and privileges he may have under the applicable individual CBA which the ER or voluntary ER policy or practice.

Q: What are the similarities and differences of the just causes and authorized causes? A: Both are valid causes for termination. The difference are:

JUST CAUSES

AUTHORIZED CAUSES

SEPARATION PROCEDURAL PAY DUE PROCESS G.R: LC does not It is necessary provide for a for the ER to separation pay comply with the procedural EXC: Equity requirements to considerations ensure the EE’s and on the right to due constitutional process provisions of social justice and protection to labor. LC provides ER has to comply with the requirements prescribed in the LC and jurisprudence

NOTE: Separation pay is allowed in cases where the EE is validly dismissed for causes other than serious misconduct or those reflecting on his/her moral character. Thus, separation pay may be awarded for the ff: a. Dismissals for lack of confidence due incompatibility b. Absenteeism due to a sick child c. Inefficiency for failing to meet sales quotas

to

On the other hand, separation pay is not required under the ff: circumstances: a. Habitual intoxication b. Offense involving moral turpitude like theft or illicit sex According to jurisprudence (and supported by Sec.7, Book VI of the Omnibus Rules), the separation

DUE PROCESS Q: What is required in due process? A: Due process in dismissal cases entails compliance with the twin requirement of due notice and hearing: a. The ER shall furnish the worker a written notice containing a statement of the cause/s for dismissal; b. The worker is given ample opportunity to be heard and to defend himself with the assistance of a representative, if he so desires; c. The decision is made by the ER without prejudice to the right of the worker to contest the validity or legality of dismissal by filing a complaint with the arbitration division of the regional office of the NLRC. Q: What are the 2 written notices required? A: 1. Notice of particular acts constituting the cause/s of dismissal; and 2. The notice of decision to dismiss, citing reasons therefor. Q: What is the result of the absence of the abovementioned procedures? A: The judgment of the management would then be void and inexistent. NOTE: Consultations and conferences may not be a valid substitute for actual observance of notice and hearing. Neither can audit take the place of the twin requirements of due process. Requirement of Notice Q: What does notice refer? A: It refers to the right of a person to be informed of the charges against him.

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Requirement of Hearing Q: What does hearing mean? A: It means the right of such person to be heard to defend his case personally or with the help of a representative. It is not the denial of the right to be heard but denial of the opportunity to be heard that constitutes violation of due process. NOTE: There is no violation of due process if its observance was aborted by the EE himself. Also, whatever defects were committee on an alleged denial of due process is deemed cured by the filing of an appeal or M/R. In sum, what due process abhors is not lack of previous notice, but the absolute lack of opportunity to be heard. The requirement of hearing is complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted. A formal or trial-type of hearing is not at all times and in all instances essential. It means an opportunity to seek reconsideration of the action or ruling complained of. It is mandatory and substantial to assure that the ER’s prerogative to dismiss or lay off was not abused or exercised in an arbitrary manner.

Q: What do you mean by substantial evidence? A: It is more than mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Nonetheless, it does not excuse administrative agencies from considering contrary evidence which fairly detracts from the evidence supporting a finding. NOTE: The evidence presented before the NLRC must at least have a modicum of admissibility for it to be given some probative value. Q: What are the evidence to be presented in case of a charge of misappropriation? A: It must be supported by documentary evidence such as collection reports, invoices, denomination slips, cash count sheets and individual deposit slips. Q: In case of business losses, what is necessary to support a cause for retrenchment? A: It must be supported with financial statements by independent auditors to show imminent substantial losses, and whether such losses increased or decreased, as well as cost reduction measures instituted before undertaking retrenchment. EQUIPOISE RULE Q: What is the rule regarding equipoise?

Also, the denial of the EE’s right to counsel would render the dismissal illegal because the right to counsel is a basic requirement of substantive due process, and must be observed for it is a Constitutional right. BURDEN OF PROOF Q: Who has the burden of proving that the dismissal was for a just cause?

A: An equipoise is not adequate, the ER must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. NOTE: Non-submission of documents or records in the control of the ER raises the presumption that such records would be adverse to the ER if produced. EXCEPTIONAL CASES

A: The burden of proof rests on the ER. Failure to do so would necessarily mean the dismissal was not justified. Q: What is the quantum of evidence required to support the dismissal? A: Substantial evidence

G.R: A valid dismissal is one for just and authorized cause and after observance of due process EXC: 1. If the worker has been employed for a long time in the service of the ER, and it is his first offense; in such a case the dismissal is too severe a penalty.

SUBSTANTIAL EVIDENCE

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EXC: Considerations of first offense and length of service are overshadowed by the seriousness of the offense NOTE: As to whether an offense is minor or serious will have to be determined according to the peculiar facts of the case. Nonetheless, first offense and length of service are factors considered in the application of social and compassionate justice to the dismissed EE. Like a long service EE dismissed for just cause, such EE has been afforded some equitable relief in the form of separation pay. Such award was based on equity considerations because labor determinations are not only secundum rationem (according to reason), but also secundum caritatem (according to charity) 2. Non-observance of the due process requirement will not necessarily render a dismissal defective like when an EE s dismissed because he appears to be violent temper, troublesome and defiant of superiors. In such case, the dismissal is upheld. Nevertheless, the ER shall indemnify the EE for breach of legal procedure. Accordingly, rewarding them re-employment and back-wages may only encourage then to do even worse and render a mockery of the rules of discipline that the EEs are required to observe. NOTE: A distinction should be made between the legality of the act of dismissal (substantive requirement of a valid cause) and the legality of the manner by which the act of dismissal and the legality of the manner (procedural requirement) by which the act of dismissal was performed. Where the dismissal of the EE is proven to be for just and valid cause, but he is not accorded his right to procedural due process, the dismissal shall be upheld, but the ER must be sanctioned for non-compliance with the requirements of due process. The indemnity for damage may range from P 1000.00 to P 10,000.00. It is indemnity not separation pay that is imposed on the ER for failure to observe the procedural requirements of notice and hearing.

ARTICLE 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). NOTE: Jurisprudence has added the reliefs of separation pay, moral damages and attorney’s fees in proper cases. Accordingly, an EE who is reinstated assumes the position he had occupied prior to his dismissal and is entitled only to his last salary in that position. Q: When is separation pay granted in cases involving dismissals? A: Separation pay is granted where reinstatement is not in the best interests of the parties, as where their relations are so strained that reinstatement poses a risk to the ER, or his interests, or to co-EEs or where the EE has become antagonistic with the ER due to loss of confidence, although found to be wrong. This is especially true in cases where the illegally dismissed EE holds a managerial or key position where he can only work effectively if he enjoys the full trust and confidence of the top management. DOCTRINE OF STRAINED RELATIONS Q: How is the doctrine of strained relations be construed? A: In the case of Mercury Drug Corp. v. NLRC, the Court held that the doctrine of strained relations should be strictly applied. Accordingly, every labor dispute almost always results in strained relations, and the phrase cannot be given an over-arching interpretation, otherwise an unjustly dismissed EE can never be reinstates. Q: In cases where reinstatement is barred through no fault of the ER, what are the rights of the EE dismissed?

RELIEFS IN ILLEGAL CASES

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A: In such case, discretionary award or damages may be given corresponding to the period during which the EE could locate a substantially equivalent employment.

Q: How are separation pay and backwages be computed? A:

Q: What if the ER has already replaced the EE with other EEs who had become regular EEs? A: Then, the ER may be ordered to reinstate the EE to a substantially equivalent position without loss of seniority rights.

Basis

SEPARATION PAY Length of service of the EE (usually onemonth pay for every year of service, unless otherwise provided)

BACKWAGES Actual period when he was unlawfully prevented from working

Q: When should a separation pay be given? A: Separation pay is granted in an illegal dismissal case where reinstatement is no longer advisable due to the strained relations between ER an EE. BACKWAGES

A: No, and besides the EE cannot waive such constitutional right to security of tenure. Q: Is the amount of backwages subject to qualification or deduction? Why?

Q: What are backwages? A: Backwages represent compensation that should have been earned but were not collected because of unjust dismissal. They are what an EE has lost in the way of wages due to his dismissal. They are granted on grounds of equity for earnings which a worker has lost due to his illegal dismissal. Q: Are backwages compensation?

Q: Is the acceptance of separation pay a bar from questioning by the dismissed EE of such termination?

considered

as

private

A: No, although it has the practical effect of enriching the individual, the award of backwages is not in redress of a private right but rather is in the nature of a command upon the ER to make public reparation for his violation of the LC—dismissal of an EE due to the unlawful act of the ER or the latter’s bad faith. Q: What if the award of backwages is inadequate, what is the remedy of the dismissed EE? A: He should appeal the decision, otherwise it cannot be modified. NOTE: However, where the EE’s dismissal is for a just cause, there is no factual or legal basis to order payment of backwages, otherwise he would be unjustly enriching himself at the expense of the ER. SEPARATION PAY v. BACKWAGES

A: No, they are not subject to deduction to avoid protracted delay in the award of backwages due to extended hearings in determining the application of the theory of mitigating damages. Q: According to Justice Teehankee, what is the formula to be used in granting a fixed backwages award? A: Justice Teehankee observed that normally the tral and resolution of the appeal should be given preference and terminated within a period of 3 years (1 year for trial and decision in the industrial court and 2 years for appeal and decicion in the SC). This base figure of 3 years is first applied in Feati case. NOTE: However, in subsequent cases, the Court ruled that where the illegal dismissals transpired before the effectivity of R.A 6715 on March 21, 1989, backwages are limited to the 3 years without deduction or qualification. But where the illegal dismissal was effected after such effectivity date, the Mercury Drug formula should no longer be applied. Instead, the EE should be awarded full backwages computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Thus, an illegally dismissed EE may now be paid his backwages, allowances, and other benefits for the entire period he was out of work. Q: What is the theory of mitigating damages?

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A: This theory is based on the principle against unjust enrichment. Accordingly, the ER may deduct any amount which the EE may have earned during his illegal dismissal. NOTE: The recent rule however is that backwages shall not be dismissed or reduced by the earnings derived by the dismissed EE during the period of his illegal dismissal. Accordingly, the EE while litigating the illegality of his dismissal must still earn a living to support himself and his family, while full backwages have to be paid by the ER as part of the price or penalty he has to pay for illegally dismissing his EE. Q: How should the computation of full backwages and presentation of proof as to income earned be ventilated?

so provides or when the nature of the obligation so requires. NOTE: All forms of damages, if proven, are also available to unjustly dismissed EEs. Q: Are the awards of damages limited to those sanctioned by the LC? A: No, it may include those imposed by the Civil Code such as torts, human relations, breach of contract, etc. provided these arise from ER-EE relationship. Q: Who has jurisdiction over termination cases and over claims for actual, moral, exemplary and other forms of damages?

A: It should be ventilated in the execution proceedings before the LA.

A: The LA has original and exclusive jurisdiction over termination cases. This has erased the distinction to determine jurisdiction between the right to dismiss and the manner of dismissal.

Q: In the computation of the said awards, what must be taken into consideration? A:

NOTE: A dismissed E cannot justify moral damages solely upon the premise that he was fired without just cause.

1. 2. 3.

Furthermore, when he institutes proceedings before the LA, he should claim for all said reliefs, and should not split his causes of action and sue in 2 forums. This is to avoid multiplicity of suits and for the efficient administration of justice.

Transportation and emergency allowances; Vacation, service incentive leaves and sick leaves; 13th month pay

NOTE: Interest at 6% per annum may be imposed on unpaid wages and separation pay.

MORAL DAMAGES Q: Can corporate directors and officers be held solidarily liable with corporation for the termination of EEs? A: Yes, if such termination is done with malice or in bad faith. Q: What about directors? A: Yes, if such director had a direct hand in the illegal dismissal of the EE. In such case, the directors can be held jointly and severally liable with the corporation for all the money claims of the EEs.

Q: When should moral damages be recoverable? A: Only when the EE’s dismissal was attended by bad faith, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs, or public policy. Yet, he is entitled to moral damages only where the grounds for actual or compensatory damages are established. Otherwise, such claim has no leg to stand on. EXEMPLARY DAMAGES Q: When are exemplary damages recoverable?

Q: How should a solidary liability be inferred? A: It should be inferred strictly because there is solidary liability only when the obligatin so states, when the law

A: It should be awarded only when the dismissal was effected in a wanton, oppressive or malevolent manner.

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NOTE: An EE who was forced to litigate and incur expenses to protect his rights and interests is entitled to an award of attorney’s fees. RESIGNATIONS AND CONSTRUCTIVE DISMISSALS Q: Is an EE who voluntarily resigned entitled to separation pay? A: No, unless stipulated in an employment contract or a CBA, or sanctioned by established ER practice or policy. Q: What is the status of a resigned EE who desires to take his job back? A: He has to reapply therfor, and shall have a status of a stranger who cannot unilaterally demand an appointment. NOTE: Resignation, after its acceptance, can no longer be withdrawn without the consent of the ER. Q: What do you mean by a constructive dismissal? A: It is quitting because continued employment is rendered impossible, unreasonable, or unlikely—as an offer involving a demotion in rank and diminution in pay (including salary, benefits and other prerogatives). NOTE: A transfer that entails greater transportation expenses means that the EE would earn less. Hence, he would suffer a cut in his salary. Unnecessary or inconvenient and prejudicial transfers cannot be justified. As a rule, management’s prerogative to transfer personnel must be exercised without grave abuse of discretion and putting to mind the basic elements of justice and fair play.

A: Yes and as such (if there’s no proof of losses and if dine 3 years prior to the EE’s retirement age), the EE concerned is entitled to full backwages, allowances, and benefits for 3 years, plus retirement benefits equivalent to gross monthly pay, allowances and other benefits equivalent to gross monthly pay, allowances and other benefits for every year of service up to the age of 60. But the imposition of a forced leave due to economic conditions without a showing that it was for the purpose of defeating or circumventing the rights of the EEs is a management prerogative. NOTE: The placing of security guards on “floating status” (meaning no work assignment and no wages), exceeding 6 months constitute termination. Accordingly, suspension of the operations of a business or undertaking which does not terminate employment should be for a period not exceeding 6 months. After such period, they should either be recalled to work or permanently retrenched following the requirements of the law. PREVENTIVE SUSPENSION Q: When can an ER place an EE under preventive suspension? A: If his continued employment poses a serious and imminent threat to the life or property of the ER or his co-workers. If the threat is absent, preventive suspension is not proper if the EE is charged with willful disobedience for violation of company rules due to repeated absences and tardiness. Preventive suspension does not prejudge the EE’s guilt, but is necessary for the protection of the company, its operations and assets pending investigation of the alleged malfeasance of the EE.

RESIGNATION Q: What is the duration of the preventive suspension? Q: What is resignation? A: It means voluntary relinquishment of a position or office. NOTE: Failure to file a courtesy resignation cannot automatically result in dismissal or inclusion in a retrenchment program.

A: It should not last longer than 30 days. After such period, the ER shall reinstate the worker in his former or in a substantially equivalent position, or the ER may extend the period of suspension provided that during the period of extension, he pays the wages and other benefits due to the worker. Also, a preventive suspension going beyond 30 days incurs a P 1,000.00.

Q: Is compulsory retirement considered as dismissal?

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The period of preventive suspension shall be included in computing the time when compensation was withheld from the dismissed EE if his dismissal is found to be illegal. TERMINATION BY THE EE Q: When can an EE terminate his employment? A: He may terminate his employment with or without just cause. If without cause, he may do this by serving a written notice to the ER at least 1 month in advance. Absent such notice, such EE may be held liable for damages. Q: Is the EE required to stay or complete the 30-day period prior to the effectivity of his resignation?

WHEN EMPLOYMENT IS NOT DEEMED TERMINATED Q: What are the instances when employment is not deemed terminated? A: 1. Bona fide suspension of the operation of a business or undertaking for a period not exceeding 6 months (otherwise the EE will be deemed constructively dismissed); and 2. Fulfillment by the EE of a military or civic duty. NOTE: The ER shall reinstate the EE to his former position without loss of seniority rights if he indicates his desire to resume his work not later than 1 month from the resumption of his ER or from his relief from military or civic duty.

A: No, it is discretionary of the part of the management and therefore the EE is allowed a shorter period before his resignation becomes effective. Q: What are the just causes by which the EE may put an end to the ER-EE relationship without serving any notice on the ER? A: 1. Serious insult by the ER or his representative on the honor and person of the EE. Accordingly, as the ER has the right to expect and receive from the EE good work, diligence and good behavior so also the EE has the right to receive from his ER a just wage and fair treatment. 2. Inhuman and unbearable treatment accorded by the ER or his representative. The ER may also be liable for damages under Art. 21 of the Civil Code: any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. 3. Commission of a crime or offense by ER or his representatives against the person of the EE or any of the immediate members of his family. The ER is also liable for whatever penalty the Penal Code provides for the crime committed. 4. Other causes analogous to the foergoing.

SECURITY OF TENURE IN SPECIAL CASES Q: What happens to EEs of a company whose assets are purchased by another company? A: A purchaser of the assets of an ER is not a successor ER of the latter’s EEs, unless expressly so assumed. Labor contracts, being in personam, are not enforceable against the transferee of an enterprise. Q: What is the rationale behind such rule? A: It is the right of an ER to select and engage its EEs, which can only be restricted by law through the exercise of police power (like when the transaction is colored with bad faith). Thus, the right of an EE to reinstatement may not be imposed on an innocent transferee of the business from which the EE was dismissed. Yet, the Court suggested that the purchasing company must give preference to the qualified separated EEs of the selling company. Q: What about claims for backwages earned from the former ER, can it be filed against the new owner of the enterprise? A: No. Q: What is the remedy of the EEs to recover their claims against their former ER?

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A: They may institute insolvency proceedings against their former ER, where their claims can be asserted against the latter’s assets. Q: What if the former ER is already dead? A: Then a testate or intestate proceeding may be brought before the proper court wherein all his creditors may file their claims which shall be paid proportionately out of the property left by the deceased. Q: Are all termination cases labor disputes? A: No, where a case involves dismissal but is premised on a different issue, it falls outside the realm of labor law. Example: an executive vice-president or stockholder of a corporation is not a mere EE but an integral part of the corporation. His dismissal by the board is not a simple labor problem but a matter that comes within the area of corporate affairs and management and is in fact a corporate controversy which is under the jurisdiction of the SEC, not the LA.

TITLE II RETIREMENT FROM THE SERVICE ARTICLE 287. Retirement. - Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided, however, That an employees retirement benefits under any collective bargaining and other agreements shall not be less than those provided therein. In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year.

COMPETITIVE EMPLOYMENT BAN Q: What is involved in competitive employment ban? A: It is a formal agreement with the ER whereby bars the EE from entering into competitive employment for a period of one to five years. Q: Is such an agreement valid? A: The validity of the said agreement depends on its reasonableness in relation to the parties concerned, as well as to public policy. Accordingly, the following factors must be considered: a. Whether the covenant protects a legitimate business intent of the ER; b. Whether it creates an undue burden on the EE; c. Whether it is injurious to public welfare; d. Whether time and territorial limitations are reasonable; e. Whether the restraint is reasonable from the standpoint of public policy.

Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. Retail, service and agricultural establishments or operations employing not more than ten (10) employees or workers are exempted from the coverage of this provision. Violation of this provision is hereby declared unlawful and subject to the penal provisions under Article 288 of this Code. RETIREMENT Q: What law governs the retirement of EEs? A: Retirement is governed by the LC, as amended by R.A 7641. The law also recognized retirement provided by a CBA or other applicable employment contract prior to the said amendment.

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Accordingly, the Retirement Law has provided for retirement pay to qualified private sector EEs even in the absence of any retirement plan in the establishment. Hence, the amendatory law treats retirement as:

A: The basis for computing their half-month salary shall be their average daily salary for the last 12 months reckoned from the date of their retirement, divided by the number of actual working days in that particular period.

a. Retirement under a CBA or contract b. Retirement in the absence of a retirement plan, which may be optional or compulsory.

Q: What is the coverage of the Retirement law?

Also, the law provides that the EE’s retirement benefits under a plan shall not be less than those provided by law, and if such benefits are less, the ER shall pay the difference. Q: What is the rule regarding contributory plans? A: In such case, the ER’s total contribution shall not be less than the total benefits due the EE has there been no such retirement fund. If the ER’s contribution is less, he shall pay the deficiency. Q: In retirements without a plan, what is the rule? A: a. In case of optional retirement: where an EE may retire upon reaching the age of 60 years or more if he has served for at least 5 years in said establishment; and b. In case of compulsory retirement, upon reaching the age of 65 years. NOTE: Nonetheless, his services may be continued or extended on a case to case basis. Q: What are the benefits of a retiree without a plan? A: The retirement plan shall be equivalent to at least ½ month salary for every year of service, a fraction of at least 6 months considered as 1 whole year; the cash equivalent of not more than 5 days of service incentive leave; one-twelfth of the 13th month pay due the EE, and all other benefits that the ER and EE may agree to be included.

Q: What about those workers who are paid by results?

A: All EEs in the private sector, regardless of their position, designation, or status, and irrespective of the method by which their wages are paid. EXC: 1. EEs covered by the Civil Service Law; 2. Domestic helpers and persons in the personal service of another; 3. EEs in retail, service and agricultural establishments or operations regularly employing not more than 10 EEs. Q: Does the Retirement law have a retroactive effect? A: The retirement law was approved on Dec.9, 1992 and took effect on Jan. 7, 1993. This does not mean however that the right to retirement and to its benefits started from this effectivity date. Hence, the law has a retroactive effect being curative in nature. Also, the Retirement law is a social legislation that can apply to labor contracts still existing at the time the statute has taken effect and that its benefits can be reckoned not only from the date of the law’s enactment but retroactively to the time said EE contracts have started. Q: What are the conditions before the law can be given retroactive effect? A: a. The claimant for retirement benefits was still the EE of the ER at the time the statute took effect; b. The claimant was in compliance with the requirements for eligibility under such statute.

SUMMARY OF TERMINATION BENEFITS

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a. If the employment has been terminated without just cause, the EE is entitled either to reinstatement with full backwages and without loss of seniority rights plus damages if warranted, or to a separation pay for one month salary for every year of service in case reinstatement is no longer possible because the company has closed or ceased operations or his former position no longer exists at the time of reinstatement for reasons not attributable to the Er. b. If employment has been terminated for serious misconduct or willful disobedience of lawful orders gross habitual neglect of duties, fraud or willful breach of trust, commission of a crime or offense against the person of the Er, his immediate family member or duly authorized representative and other analogous cases, the Ee is not entitled to payment of any benefits, although in exceptional cases like first offense after long years of service, financial assistance may be given. If the termination is for just cause but is done without due process, damages may also be awarded. c. If termination of employment is due to installation of labor-saving devices, redundancy, retrenchment to prevent losses, closing or cessation of operations, contraction of a highly-communicable disease, the Ee is entitled to termination pay equivalent to at least ½ month salary for every year of service. d. If employment has been terminated because the Ee has reached the retirement age established in the CBA or other applicable employment contract, the Ee shall be entitled to such retirement benefits under existing exiting laws (SSS) and under any CBA or other agreement. In the absence of any retirement provisions in any employment agreement, or if such agreements or voluntary retirement plans provide benefits less than those prescribed under the Retirement Law (R.A. 7641), then the benefits provided by this law will apply.

Security of tenure clause is NOT confined to cases of termination of Er-Ee relationship alone. It is also intended to shield workers from unwarranted and unconsented DEMOTION and TRANSFER. REINSTATEMENT Q: What is the effect of the reversal of LA’s decision to the reinstated employee? A: If the decision of the LA is later reversed on appeal upon the finding that the ground for dismissal is valid, then the employer has the right to require the dismissed employee who has been reinstated on payroll to refund the salaries he received while the case was pending appeal, or it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from his employer under existing laws, CBA provisions, and company practices. However, of the employee was reinstated to work during the pendency of the appeal, then, the employee is entitled to the compensation received or actual services rendered without need of refund Q: May a court order the reinstatement of a dismissed employee even if the prayer of the complaint did not include such relief? A: Yes. So long as there is finding that the employee was illegally dismissed, the court can order the reinstatement of an employee even if the complaint does not include a prayer for reinstatement, unless, of course, the employee has waived the right to reinstatement. By law, an employee who is illegally dismissed is entitled to reinstatement. Technicalities of law are frowned upon in labor proceedings. Q: What happens if there is an order of reinstatement but the position is no longer available? A: The employee should be given a substantially equivalent position. If no position is available, reinstatement should not be ordered because that would in effect compel the employer to do the impossible. In such a situation, the employee should merely be given a separation pay consisting of one month salary for every year of service.

NOTE:

DOCTRINE OF STRAINED RELATIONS

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Q: What is the “Doctrine of Strained Relations”? A: When the Er can no longer trust the Ee and viceversa, or there were imputations of bad faith to each other, reinstatement could not effectively serve as a remedy. The doctrine applies only to positions which require trust and confidence. In these instances, when all hopes of reconciliation are nil after reinstatement, it would be more beneficial to accord the Ee backwages and separation pay. Q: In what instances there will be separation pay in lieu of reinstatement? A: 1. Reinstatement cannot be affected in view of the long passage of time or because of the realities in the situation 2. That would be inimical to the Er’s interest 3. Reinstatement may no longer be feasible 4. It will not serve the best interest of the parties involved 5. Company will be prejudiced by the reinstatement 6. It will not serve a prudent purpose 7. That there is a resultant strained relations SEPARATION PAY Q: What are the 4 ways jurisprudence and our laws view separation pay? A: 1. In lieu of reinstatement in illegal dismissal cases, where the Ee is ordered reinstatement but such is impossible 2. As Er’s statutory obligation in cases of legal termination due to authorized causes under Art. 283 and Art. 284. 3. As financial assistance, as an act of social justice and even in case of legal dismissal under Art. 282. 4. As employment benefit granted in CBA or company policy

BACKWAGES

The failure to claim backwages in the complaint is a mere procedural lapse which cannot defeat a right granted under substantive law. Q: How is it computed? A: From the time of illegal dismissal up to the time of actual reinstatement. NOTE: The backwages to be awarded should not be diminished or reduced by earnings elsewhere during the period of his illegal dismissal. The reason is that the Ee while litigating the illegality of his dismissal must still earn a living to support himself and his family. Q: What should be included in the computation of backwages? A: 1. Transportation and emergency allowances 2. Vacation or service incentive leave and sick leave 3. 13th month pay Facilities such as uniform, shoes, helmets and ponchos should not be included in the computation of backwages. These items are given for free, to be used only during official tour of duty not for private or personal use. NOTE: The award is computed on the basis of a 30th-day month. Q: Which should be preferred, employer’s management prerogatives or employee’s right to security of tenure? A: The Ee’s security of tenure. This is a constitutional right. He may only terminate based on just or authorized causes.

KINDS OF EMPLOYMENT

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PROBATIONARY EMPLOYMENT Q: What are the characteristics of probationary employment? A: 1. It is an employment for a trial period 2. It is a temporary employment status prior to regular employment 3. It arises through a contract with the ff. elements: a. The Ee must learn and work at a particular type of work b. Such work calls for a certain qualifications c. Probation is fixed d. The employer reserves the power to terminate during or at the end of the trial period e. If the employee has learned the job to the satisfaction of the Er, he becomes a regular Ee.

Q: Is “double” or “successive probation” allowed? A: No. This is discouraged because it is a scheme employers from using the system of double probation to circumvent the mandate of the law on regularization and make it easier for them to dismiss their employees.

RETRENCHMENT v. REDUNDANCY Probationary employees are also covered with security of tenure. They are also entitled to Procedural Due Process prior to dismissal from the service. Q: How may probationary Ees be terminated? A: 1. Just cause 2. Failure to meet the standards for qualifications for a regular employment

Q: What is the period of probationary employment? A: It should not exceed six (6) months from the date the Ee started working.

TERMINATION BY EMPLOYER

Q: What are the exceptions to this rule?

Q: What are the guidelines to determine the validity of termination?

A:

A: 1. When it is covered by an apprenticeship agreement stipulating a longer period 2. When the parties to an employment contract agrees otherwise 3. When the same is established by company policy 4. When the same is required by the nature of the work performed by the Ee.

1. 2. 3. 4. 5.

Gravity of the offense Position occupied by the Ee Degree of damage to the Er Previous infractions of the same offense Length of service TOTALITY OF INFRACTIONS DOCTRINE

Q: What is the “Totality of Infractions Doctrine”? Ex: Probationary period for professors- 3 consecutive years of satisfactory service pursuant to DOLE Manual of Regulations for Private Schools.

A: It is the totality, not the compartmentalization of company infractions that the Ee had consistently committed which justifies the penalty of dismissal.

Q: May the 6-month period be extended? DOCTRINE OF INCOMPATIBILITY A: Yes. By voluntarily agreeing to such an extension, the employee waived any benefit attaching to the completion of the period if he still failed to make the grade during the period of extension.

DOUBLE OR SUCCESSIVE PROBATION

Q: What is the “Doctrine of Incompatibility” A: Where the Ee has done something that is contrary or incompatible with the faithful performance of his duties, his Er has a just cause for something his employment. AUTHORIZED CAUSES

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Q: What are the authorized causes of termination by the Er? A: 1. Automation or Robotics or installation of laborsaving devices 2. Redundancy a. Reorganization b. Retrenchment or down-sizing RETRENCHMENT Employer reduces the number of its personnel in order to prevent further losses in his business operations

REDUNDANCY When for purposes of economy, a company decides to reorganize its departments by imposing on Ees of one department the duties performed by the Ees of the other department, thus rendering unnecessary the job of the latter, the services of the Ees whose functions are now being performed by the former, may be validly terminated on the ground of redundancy

LAST IN, FIRST-OUT RULE Q: What is the so-called “Last-In, First-Out Rule” (LIFO)? A: What is contemplated in the LIFO rule is that when there are 2 or more employees occupying the same position in the company affected by the retrenchment program, the last one employed will necessarily be the first to go.

Miguel Corporation, [G. R. No. 156658, March 10, 2004], where the employees, even if given the option to retire, be retrenched or dismissed, were made to understand that they had no choice but to leave the company. More bluntly stated, they were forced to swallow the bitter pill of dismissal but afforded a chance to sweeten their separation from employment. They either had to voluntarily retire, be retrenched with benefits or be dismissed without receiving any benefit at all. All that the employees were offered was a choice on the means or method of terminating their services but never as to the status of their employment. In short, they were never asked if they wanted to work for petitioner-company. Q: What is the meaning of the phrase “retrenchment to prevent losses”? A: Article 283 uses the phrase “retrenchment to prevent losses.” In its ordinary connotation, this phrase means that retrenchment must be undertaken by the employer before losses are actually sustained. The Supreme Court, however, has interpreted the law to mean that the employer need not keep all his employees until after his losses shall have materialized. Otherwise, the law could be vulnerable to attack as undue taking of property for the benefit of another. (Asian Alcohol Corporation vs. NLRC, G. R. No. 131108, March 25, 1999, 305 SCRA 416). NOTE: Best evidence of losses - audited financial statements. The Supreme Court has consistently ruled that financial statements audited by independent external auditors constitute the normal method of proof of the profit and loss performance of a company. (F. F. Marine Corporation vs. The Hon. Second Division NLRC). Unless duly audited by independent auditors, the financial statements can be assailed as self-serving documents. (Danzas Intercontinental, Inc. vs. Daguman, G. R. No. 154368, April 15, 2005)

HOBSON’S CHOICE Q: What is “Hobson’s choice”? A: Hobson’s choice means no choice at all; a choice between accepting what is offered or having nothing at all. It refers to the practice of Tobias Hobson, an English stable-owner in the 17th century, of offering only the horse nearest the stable door. This principle was applied in the 2004 case of Asufrin, Jr. vs. San

NOTE: The requirement of a medical certificate under Art. 284 cannot be dispensed with. Otherwise, it would sanction the unilateral and arbitrary determination by the Er of the gravity or extent of the Ee’s illness and thus defeat the public policy in the protection of labor. Termination of work on the sole basis of actual, perceived or suspected HIV status is deemed unlawful.

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OTHER AUTHORIZED CAUSES: a. b. c. d. e. f. g. h. i. j.

Total and permanent disability of employee Valid application of union security clause Expiration of period in term of employment Completion of project in project employment Failure in probation Relocation of business to a distant place Defiance of return-to-work order Commission of illegal acts in a strike Violation of contractual commitment Retirement TERMINATION OF EMPLOYMENT BY EMPLOYEE (RESIGNATION)

Q: What are the requisites for termination of employment by employee without just cause? A: In case of termination without just cause, the following requisites must be complied with by the employee: 1. written (not verbal or oral) notice of the termination (commonly known as resignation letter); and 2. service of such notice to the employer at least one (1) month in advance.

The acceptance of the withdrawal of resignation is the employer’s sole prerogative. The employee who resigned cannot unilaterally withdraw his resignation. Once accepted, the employee no longer has any right to the job. If the employee later changes his mind, he must ask for approval of the withdrawal of his resignation from his employer, as if he were re-applying for the job. It will then be up to the employer to determine whether or not his services would be continued. If the employer accepts said withdrawal, the employee retains the job. If the employer does not, the employee cannot claim illegal dismissal for the employer has the right to determine who his employees will be. To say that the employee who has resigned is illegally dismissed is to encroach upon the right of the employers to hire persons who will be of service to them. (Intertrod Maritime, Inc. vs. NLRC, G. R. No. 81087, June 19, 1991, 198 SCRA 318). ASSUMPTION OF NEW JOB BY EMPLOYEE PRIOR TO EMPLOYER’S ACCEPTANCE OF RESIGNATION, EFFECT The assumption of a new job by an employee prior to receiving his employer’s acceptance of his resignation is clearly inconsistent with any desire to remain in employment. His resignation is, therefore, deemed effective.

ACCEPTANCE OF RESIGNATION, NECESSARY Acceptance of the resignation tendered by an employee is necessary to make the resignation effective. However, the acceptance of a resignation does not require the conformity of the resigning employee. Such conformity only indicates that the employee was forced to resign for which reason her “conformity” was obtained to make it appear as voluntary or legal. Once resignation is accepted, the employee no longer has any right to the job. It goes without saying, therefore, that resignation terminates the employer-employee relationship. WITHDRAWAL OF RESIGNATION; EFFECT OF ACCEPTANCE THEREOFA resignation tendered by an employee, irrespective of whether it was made revocable or irrevocable, may still be withdrawn anytime before its acceptance by the employer. Once accepted, however, withdrawal thereof can no longer be made by the resigning employee, except with the consent or agreement of the employer.

RE-EMPLOYMENT AFTER ACCEPTANCE OF RESIGNATION A resigned employee who desires to take his job back has to reapply therefor, and he shall have the status of a stranger who cannot unilaterally demand an appointment. He cannot arrogate unto himself the same position which he earlier decided to leave. To allow him to do so would be to deprive the employer of his basic right to choose whom to employ. It has been held that an employer is free to regulate, according to his own discretion and judgment, all aspects of employment including hiring. The law, in protecting the rights of the laborer, impels neither the oppression nor self-destruction of the employer. (Philippines Today, Inc. vs. NLRC, supra). Q: What are the just causes for termination of employment by employee with just cause? A: An employee may put an end to the relationship without serving any notice on the employer for any of the following just causes:

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1. serious insult by the employer or his representative on the honor and person of the employee; 2. inhumane and unbearable treatment accorded the employee by the employer or his representative; 3. 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 4. other causes analogous to any of the foregoing— constructive dismissal and forced resignation Q: What are the distinctions between constructive dismissal and forced resignation? Both forced resignation and constructive dismissal consist in the act of quitting because continued employment is rendered impossible, unreasonable or unlikely as in the case of an offer involving a demotion in rank and a diminution in pay. However, in forced resignation, as distinguished from constructive dismissal, the employee is made to do or perform an involuntary act - submission or tender of resignation - meant to validate the action of management in inveigling, luring or influencing or practically forcing the employee to effectuate the termination of employment, instead of doing the termination himself. WHEN EMPLOYMENT NOT DEEMEED TERMINATED Q: What are the situations contemplated under Article 286 of the Labor Code when employment not deemed terminated? A: Based on the provisions of Article 286, the following situations are contemplated therein: 1. bona-fide suspension by the employer of the operation of his business or undertaking for a period not exceeding six (6) months; 2. fulfillment by the employee of a military duty; or 3. fulfillment by the employee of a civic duty.

TEMPORARY “OFF-DETAIL” OR “FLOATING STATUS” OF SECURITY GUARDS

Temporary “off-detail” or “floating status,” as applied to security guards, refer to the period of time they are made to wait until they are transferred or assigned to a new post or client. It does not constitute constructive dismissal as their assignments primarily depend on the contracts entered into by the security agency with third parties. This ruling is based on Article 286 of the Labor Code.

In a 2005 case, the Supreme Court said that when a security guard is placed on “off detail” or “floating status,” in security agency parlance, it means “waiting to be posted.” Consequently, a relief and transfer order in itself does not sever employment relationship between a security guard and her agency. And the mere fact that the transfer would be inconvenient for her does not by itself make her transfer illegal. “Off-detailing” is not equivalent to dismissal, so long as such status does not continue beyond a reasonable time. “Floating status,” therefore, is lawful. However, such “floating status” should last only for a reasonable time. When the “floating status” or “reserve status” lasts for more than six (6) months, the employee may be considered to have been constructively dismissed from his employment. APPLICABILITY OF “FLOATING STATUS” RULE TO EMPLOYEES OTHER THAN SECURITY GUARDS Although the application of this principle on temporary “off detail” or “floating status” is thus far confined to security guards, it is opined that it may also be made applicable to employees of contractors/subcontractors under a valid independent contracting/ subcontracting arrangement under Article 106 of the Labor Code. The same form of dislocation and displacement also affects their employees everytime contracts of service are terminated by their clients (principals). In the meantime that the dislocated employees are waiting for their next assignment, they may be placed on “off detail” or “floating status” following the same concept applicable to security guards. For instance, in the earlier cited case of JPL Marketing Promotions vs. CA, [G. R. No. 151966, July 8, 2005], this principle was applied to merchandisers hired by

Facultad de Derecho Civil 154 IVERSITY OF SANTO TOMAS

NOTES ON LABOR RELATIONS

Kenneth & King Hizon (2A)- UST Faculty of Civil Law

petitioner which is engaged in the business of recruitment and placement of workers. After they were notified of the cancellation of the contract of petitioner with a client where they were assigned and pending their re-assignment to other clients, the merchandisers are deemed to have been placed under “floating status” for a period of not exceeding six (6) months under Article 286. Such notice, according to the Court, should not be treated as a notice of termination, but a mere note informing them of the termination of the client’s contract and their re-assignment to other clients. The thirty (30)-day notice rule under Article 283 does not, therefore, apply thereto.

NOTES

Facultad de Derecho Civil 155 IVERSITY OF SANTO TOMAS