UP_LAW_BOC_LABOR_2016_2.pdf

October 19, 2017 | Author: johnisfly | Category: United States Labor Law, Employment, Labour Law, Trade Union, Arbitration
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2016

University of the Philippines College of Law Bar Reviewer

Dean Dean Danilo L. Concepcion

Overall Head Evert Callueng

Associate Dean Prof. Concepcion L. Jardeleza

Subject Heads Sarah Elaiza Buyco Erika Diane Wijangco

Academics Committee Heads Evert Callueng Paulo Faustino Carlos Hernandez Audrey Ng Desiree Sokoken

1ST WEEK

LABOR LAW

UP Law Bar Operations Commission 2016

UP Law Bar Operations Commission 2016

UP LAW BAR OPS 2016

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TABLE OF CONTENTS

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Table of Contents LABOR STANDARDS

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F.3. Paternity Leave 55 F.4. Parental Leave 56140 F.5. Leaves For Victims of Violence Against Women 57 F.6. Special Leave Benefits (SLB) For Women 59 G. Service Charges 61 H. Thirteenth (13th) Month Pay and Other Bonuses 62 I. Separation Pay 65 J. Retirement Pay 67 J.1. Eligibility 67 J.2. Amount of Retirement Pay 68 J.3. Retirement Benefits of Workers Who Are Paid By Results 68 J.4. Retirement Benefit of Part-Time Workers 68 J.5. Taxability 69 K. Women Workers 70 K.1. Provisions Against Discrimination 70 K.2. Stipulation Against Marriage 70 K.3. Prohibited Acts 70 K.4. Anti-Sexual Harassment 72 L. Minor Workers 73 M. Employment Of Househelpers 76 N. Employment Of Homeworkers 79 O. Apprentices And Learners 80 O.1. Apprentices 80 O.2. Learners 83 P. Handicapped Workers – Differently-Abled Workers 85 IV. Termination of Employment 90 A. Employer-employee relationship 90 A.1. Four-fold test 91 A.2. KINDS OF EMPLOYMENT 92 A.3. Job contracting 99 B. DISMISSAL FROM EMPLOYMENT 104 B.1. Just Causes 107 B.2. Authorized Causes 113 B.3 Other Causes 118 B.4 Due Process 120 C. Reliefs for Illegal Dismissal 123 C.1. Reinstatement 123 C.2. Backwages 125 D. Preventive Suspension 126 D.1.Duration 126 D.2. Preventive Suspension As a Protective Measure v. Suspension As Penalty 127 E. Constructive Dismissal 127 V. Management Prerogative 127 A. Discipline 127

I. Fundamental Principle and Policies 2 A. Constitutional Provisions 2 B. Civil Code 6 C. Labor Code 8 II. Recruitment and Placement 12 A. Recruitment of Local and Migrant Workers 12 A.1. Illegal Recruitment 13 III. Labor Standards 26 A. Coverage 26 A.1. Government Employees 26 A.2. Managerial Employees 27 A.3. Field Personnel 28 A.4. Dependent Family Members 28 A.5. Domestic helpers 28 A.6. Persons in Personal Service of Another 28 A.7. Workers Paid by Result 29 B. Hours Of Work 29 B.1. Coverage/Exclusions 29 B.2. Normal Hours of Work 29 B.3. Meal Break 34 B.4. Waiting Time 35 B.5. Overtime Work, Overtime Pay 35 B.6. Night Work, Night Shift Differential 37 B.7. Part-Time Work 39 B.8. Contract for Piece of Work 39 C. Wages 40 C.1. Wage vs. Salary 40 C.2. Minimum Wage 41 C.3. Minimum Wage of Workers Paid By Results 42 C.4. Commissions 43 C.5. Deductions From Wages 43 C.6. Non-Diminution Of Benefits 44 C.7. Facilities vs Supplements 44 C.8. Wage Distortion/Rectification 45 C.9. Divisor to Determine Daily Rate 46 D. Rest Days 47 D.1. Weekly Rest Day 47 D.2. Emergency Rest Day Work 47 E. Holiday Pay/Premium Pay 47 E.1. Coverage 48 E.2. Teachers, Piece Workers, Seafarers, Seasonal Workers, Etc. 51 F. Leaves 53 F.1. Service Incentive Leave Pay 53 F.2. Maternity Leave 54 1

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B. Transfer Of Employees C. Productivity Standard D. Grant of Bonus E. Change of Working Hours F. Rules on Marriage Between Employees of Competitor-Employers G. Post-Employment Ban VI. Social Welfare Legislation A. SSS Law [RA 8282] A.1. Coverage A.2. Exclusions from Coverage A.3. Benefits A.4. Beneficiaries B. GSIS Law [RA 8291] B.1. Coverage B.2. Exclusions From Coverage B.3. Benefits C. Limited Portability Law [RA 7699] C.1 Coverage C.2. Process D. Employee’s Compensation – Coverage and When Compensable

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128 128 129 129

B.5.D. Check-Off, Union Dues, Agency Fees B.6 Unfair Labor Practice in collective bargaining B.6.A. Failure Or Refusal to Bargain B.6.B. Evading the Mandatory Subjects of Bargaining B.6.C. Bargaining in Bad Faith B.6.D. Gross Violations of the CBA B.7 Unfair Labor Practice (ULP) B.7.A. Nature of ULP B.7.B. ULP of Employers B.7.C. ULP of Labor Organizations C. Right to Peaceful Concerted Activities C.1. Forms of concerted activities C.2 Who may declare a strike or lockout? C.3 Requisites for a valid strike C.4 Requisites for a valid lockout C.5 Requisites for lawful picketing C.6 Assumption of jurisdiction by the DOLE Secretary or Certification of the labor dispute to the NLRC for compulsory arbitration C.7 Nature of assumption order or certification order C.8 Effect of defiance of assumption or certification orders C.9 Illegal strike i. Liability of union officers ii. Liability of ordinary workers iii. Liability of employer iv. Waiver of illegality of strike C.10 Injunctions i. Requisites for labor injunctions ii. “Innocent bystander rule” VIII. Procedure and Jurisdiction A. Labor Arbiter A.1 Jurisdiction A.2 Procedure A.3. Nature of the proceeding A.4 Requirements to perfect appeal to NLRC A.5 Reinstatement pending appeal B. National Labor Relations Commission (NLRC) B.1 Jurisdiction B.2 Effect of NLRC reversal of Labor Arbiter’s order of reinstatement B.3 Remedies B.4 Certified cases

129 129 130 130 130 130 131 133 134 134 134 134 140 140 140 140

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VII. Labor Relations A. Right to Self-Organization A.1. Who may Unionize for Purposes of Collective Bargaining? A.2. Bargaining unit A.2.A. Test to determine the constituency of an appropriate bargaining unit A.2.B. SEBA certification A.2.C. Consent election A.2.D. Run-off election A.2.E. Certification election A.2.F. Re-run election A.2.G. Special assessments A.2.H. Agency fees A.2.I. Union chartering/ affiliation B. Right to Collective Bargaining B.1 General Concepts B.2 Duty to Bargain Collectively B.3 Bargaining Procedure B.4 CBA B.5. Union Security B.5.A. Union Security Clauses B.5.B. Types Of Union Security Clause B.5.C. Enforcement Of Union Security Clause

142 142

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143 147 148 150 151 152 152 165 168 169 169 172 172 173 174 176 183 183 184 185 ii

186 186 187 187 188 188 188 189 189 191 192 192 194 195 197 199

200 200 201 201 203 204 204 204 204 205 205 206 206 206 207 208 208 208 208 208 209 209 209

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C. Bureau of Labor Relations – Med-Arbiters D. National Conciliation and Mediation Board D.1 Nature of proceedings D.2 Conciliation vs. Mediation D.3 Preventive mediation E. DOLE Regional Directors F. DOLE Secretary F.1 Visitorial and enforcement powers F.2 Power to suspend/effects of termination F.3 Assumption of jurisdiction F.4 Appellate jurisdiction F.5 Voluntary arbitration powers G. Grievance Machinery and Voluntary Arbitration G.1 Subject matter of grievance G.2 Voluntary Arbitrator H. Court of Appeals I. Supreme Court J. Prescription of Actions Procedure for Union Registration Summary of Union Registration Labor Dispute Case Flow

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211 211 211 211 212 212 213 213 213 213 213 214 214 214 214 215 216 216 219 220 222

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I. Fundamental Principle and Policies

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shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs. Section 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men.

A. CONSTITUTIONAL PROVISIONS A.1 ARTICLE II. SECS 9,10,11,13,14,18,20 Section 9.The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all. Section 10. The State shall promote social justice in all phases of national development. General Definition of Social Justice Social justice is neither communism, nor despotism, nor atomism, nor anarchy, but the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. [Calalang vs. Williams, G.R. No. 47800 (1940)] W elfare State The welfare state concept is found in the constitutional clause on the promotion of social justice to ensure the well-being and economic security of all the people, and in the pledge of protection to labor with specific authority to regulate the relations between landowners and tenants and between labor and capital. [Alalayan vs. National Power Corporation, G.R. No. L-24396 (1968)] Section 11. The State values the dignity of every human person and guarantees full respect for human rights. Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It PAGE 2 OF 222

Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. Section 20. The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments. Limits of Social Justice Social justice should be used only to correct an injustice. It must be founded on the recognition of the necessity of interdependence among diverse units of a society, and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life. As partners in nation-building, labor and management need each other to foster productivity and economic growth; hence, the need to weigh and balance the rights and welfare of both the employee and employer. [Agabon vs. NLRC, G.R. No. 158693 (2004)] The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be a refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character. [Tirazona vs. Philippine EDS Techno-Service Inc., G.R. No. 169712 (2009)]

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Laissez Faire

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A.2 Article III, Secs 1, 4, 7, 8, 10, 16, 18(2)

The Constitution is primarily a document of social justice, and although it has recognized the importance of the private sector, it has not embraced fully the concept of laissezfaire or relied on pure market forces to govern the economy. [Employees Confederation of the Philippines vs. NWPC, G.R. No. 96169 (1991)]

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. Due Process Under the Labor Code, as amended, the requirements for the lawful dismissal of an employee by his employer are two-fold: the substantive and the procedural. Not only must the dismissal be for a valid or authorized cause as provided by law, but the rudimentary requirements of due process, basic to which are that an opportunity to be heard and to defend oneself must be observed before an employee may be dismissed [Metro Eye Security v. Salsona, G.R. No. 167367 (2007)]

Balancing of Interests It is high time that employer and employee cease to view each other as adversaries and instead recognize that theirs is a symbiotic relationship, wherein they must rely on each other to ensure the success of the business. When they consider only their own selfinterests, and when they act only with their own benefit in mind, both parties suffer from short-sightedness, failing to realize that they both have a stake in the business. The employer wants the business to succeed, considering the investment that has been made. The employee in turn, also wants the business to succeed, as continued employment means a living, and the chance to better one’s lot in life. It is clear then that they both have the same goal, even if the benefit that results may be greater for one party than the other. If this becomes a source of conflict, there are various, more amicable means of settling disputes and of balancing interests that do not add fuel to the fire, and instead open avenues for understanding and cooperation between the employer and the employee. [Toyota Motor Phils. Corp Workers Association (TMPCWA) v. NLRC, G.R. No. 158786 (2007)]

To constitute valid dismissal from employment, two requisites must concur: (1) the dismissal must be for a just or authorized cause; and (2) the employee must be afforded an opportunity to be heard and to defend himself. [Jeffrey Nacague vs. Sulpicio Lines, Inc., G.R. No. 172589 (2010)] Labor as Property Right

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One’s employment is a property right, and the wrongful interference therewith is an actionable wrong. The right is considered to be property within the protection of the constitutional guarantee of due process of law. [Texon Manufacturing v. Millena, G.R. No. 141380 (2004)]

While labor laws should be construed liberally in favor of labor, we must be able to balance this with the equally important right of the [employer] to due process [Gagui v. Dejero, G.R. No. 196036 (2013)

Section 4. No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances. The Right to Assemble The right of peaceable assembly is a right cognate to those of free speech and free press and is equally fundamental. [de Jonge vs. Oregon (1937)] PAGE 3 OF 222

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Wearing armbands and putting up placards to express one’s views without violating the rights of third parties, are legal per se and even constitutionally protected. [Bascon v CA, G.R. No. 144899 (2004)] Section 7. The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law. Section 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged. The Right to Form Associations The right to form associations shall not be impaired except through a valid exercise of police power. [Bernas, The 1987 Philippine Constitution: a Comprehensive Reviewer] Section 10. No law impairing the obligation of contracts shall be passed. Non-impairment of Contracts A law which changes the terms of a legal contract between parties, either in the time or mode or performance, or imposes new conditions, or dispenses with those expressed, or authorizes for its satisfaction something different from that provided in its terms, is a law which impairs the obligation of a contract and is null and void. [Clemens vs. Nolting (1922)] Vis-à-vis the freedom of contract The prohibition to impair the obligation of contracts is not absolute and unqualified. In spite of the constitutional prohibition and the fact that both parties are of full age and competent to contract, it does not necessarily deprive the State of the power to interfere where the parties do not stand upon an equality, or where the public health

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demands that one party to the contract shall be protected against himself. [Leyte Land Transportation Co. vs. Leyte Farmers & Workers Union, G.R. No. L-1377 (1948)] Section 16. All persons shall have the right to a speedy disposition of their cases before all judicial, quasi-judicial, or administrative bodies. Section 18 (2). No involuntary servitude in any form shall exist except as a punishment for a crime whereof the party shall have been duly convicted. A.3 Article XIII, Secs 1, 2, 3, 13, 14 Section 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments. Section 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance. 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 self-organization, 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,

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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. Participation Process

in

Decision-Making

Verily, a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of the employees. In treating the latter, management should see to it that its employees are at least properly informed of its decisions or modes action. Indeed, industrial peace cannot be achieved if the employees are denied their just participation in the discussion of matters affecting their rights. [Phil. Airlines Inc. vs. NLRC, G.R. No. 85985 (1993)] Managem ent and the Constitution: Managem ent Function/Prerogative The law in protecting the rights of the employees authorizes neither oppression nor self-destruction of the employer. It should be made clear that when the law tilts the scale of justice in favor of labor, it is but a recognition of the inherent economic inequality between labor and management. Never should the scale be so tilted if the result is an injustice to the employer. [Panuncillo v CAP, G.R. No. 161305 (2007)] This Court held that the employer’s right to conduct the affairs of his business according to its own discretion and judgment, is wellrecognized. An employer has a free reign and enjoys wide latitude of discretion to regulate all aspects of employment. This is a management prerogative, where the free will of management to conduct its own affairs to achieve its purpose takes form. [Torreda vs. Toshiba, G.R. No. 165960 (2007)] Under the doctrine of management prerogative, every employer has the inherent right to regulate, according to his own

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discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, the time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees. The only limitations to the exercise of this prerogative are those imposed by labor laws and the principles of equity and substantial justice. [Peckson v Robinson’s Supermarket Corporation, G.R. No. 198534, (2013)] The exercise of management prerogative is valid provided it is not performed in a malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite. [Magdadaro v. PNB, G.R. No. 166198 (2009)] Limits to Management Prerogative (1) Good faith - So long as a company’s management prerogatives are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them…Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. [Ernesto G. Ymbong vs. ABS-CBN Broadcasting Corp., G.R. No. 184885 (2012)] (2) W ithout grave abuse of discretion - But, like other rights, there are limits thereto. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which the right is exercised. [Tinio vs. CA, G.R. No. 171764 (2007)] (3) Law – In one case, a pharmaceutical company defended its termination of rank and file employees during a bargaining deadlock, as an exercise of management prerogative. This was after the Labor Secretary had assumed jurisdiction over the dispute and enjoined the parties from “any acts which might exacerbate the situation.”

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The Court disagreed with the company’s defense, stating that the privilege is not absolute but subject to limitations imposed by law. In this case, it is limited by Sec. 236(g), which gives the Secretary the power to assume jurisdiction and resolve labor disputes involving industries indispensable to national interest. The company’s management prerogatives are not being unjustly curtailed but duly tempered by the limitations set by law, taking into account its special character and the particular circumstances in the case at bench. [Metrolab Industries, Inc. v. Roldan-Confesor, G.R. No. 108855 (2013)] (4) Collective Bargaining – The CBA provisions agreed upon by the Company and the Union delimit the free exercise of management prerogative. The parties in a CBA may establish such stipulations, clauses, terms and conditions as they may deem convenient provided these are not contrary to law, morals, good customs, public order or public policy. Where the CBA is clear and unambiguous, it becomes the law between the parties and compliance therewith is mandated by the express policy of the law. [Goya v. Goya, Inc., Employees Union-FFW, G.R. No. 170054 (2013)] (5) Equity and/or Substantial Justice – The Court recognized the inherent right of the employer to discipline its employees but it should still ensure that the employer exercises the prerogative to discipline humanely and considerately, and that the sanction imposed is commensurate to the offense involved and to the degree of the infraction. The discipline exacted by the employer should further consider the employee’s length of service and the number of infractions during his employment. [Dongon v. Rapid Movers and Forwarders Co., Inc., G.R. No. 163431 (2013)] Assum ption of jurisdiction Secretary of Labor

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privilege is not absolute, but subject to exceptions. One of these exceptions is when the Secretary of Labor assumes jurisdiction over labor disputes involving industries indispensable to the national interest under Article 263(g) of the Labor Code. [University of Immaculate Concepcion Inc. vs. Sec. of Labor, G.R. No. 151379 (2005)] Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs. Section 14. The State shall protect working women by providing safe and healthful working conditions, taking into account their maternal functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation. B. Civil Code B.1 Article 19 Article 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. B.2 Article 1700 Article 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.

the

This Court declared that it recognizes the exercise of management prerogatives and it often declines to interfere with the legitimate business decisions of the employer… However, as expressed in PAL vs. NLRC, the

B.3. Article 1702 Article 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.

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Philippines Corporation v. Farrales, G.R. No. 211497 (2015)]

Contracts Under the Civil Code, contracts of labor are explicitly subject to the police power of the state because they are not ordinary contracts but are impressed with public interest. Inasmuch as in this particular instance the contract in question would have been deemed in violation of pertinent labor laws, the provisions of said laws would prevail over the terms of the contract, and private respondent would still be entitled to overtime pay. [PAL Employees Savings and Loan Assn., Inc. vs. NLRC, G.R. No. 105963 (1996)]

Of labor contracts While the terms and conditions of a CBA constitute the law between the parties, it is not however, an ordinary contract to which is applied the principles of law governing ordinary contracts. A CBA, as a labor contract within the contemplation of Article 1700 of the Civil Code of the Philippines which governs the relations between labor and capital, is not merely contractual in nature but impressed with public interest, thus, it must yield to the common good. As such, it must be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve. [Cirtek Employees Labor Union-FFW v Cirtek Electronics, G.R. No. 190515 (2010)]

Indeed, a contract of employment is impressed with public interest. For this reason, provisions of applicable statutes are deemed written into the contract. Hence, the parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other. Moreover, in case of doubt, the terms of a contract should be construed in favor of labor. [Innodata Philippines, Inc. vs. Quejada-Lopez, G.R. No. 162839 (2006)]

In general When there is doubt between the evidence submitted by the employer and that submitted by the employee, the scales of justice must be tilted in favor of the employee. This is consistent with the rule that an employer’s cause could only succeed on the strength of its own evidence and not on the weakness of the employee’s evidence. [Misamis Oriental II Electric Service Cooperative vs. Virgilio Cagalawan, G.R. No. 175170 (2012)]

Liberal Construction Of the laws Article 4 of the Labor Code mandates that all doubts in the implementation and interpretation of the provisions thereof shall be resolved in favor of labor. Consistent with the State’s avowed policy to afford protection to labor, as Article 3 of the Labor Code and Section 3, Article XIII of the 1987 Constitution have enunciated, particularly in relation to the worker’s security of tenure, the Court held that “[t]o be lawful, the cause for termination must be a serious and grave malfeasance to justify the deprivation of a means of livelihood. This is merely in keeping with the spirit of our Constitution and laws which lean over backwards in favor of the working class, and mandate that every doubt must be resolved in their favor.” Moreover, the penalty imposed on the erring employee ought to be proportionate to the offense, taking into account its nature and surrounding circumstances. [Hocheng

Fair treatm ent The right of an employer to dismiss an employee differs from and should not be confused with the manner in which such right is exercised. It must not be oppressive and abusive since it affects one's person and property. [FASAP v. PAL, G.R. No. 178083 (2008)] Mutual obligation The employer's obligation to give his workers just compensation and treatment carries with PAGE 7 OF 222

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it the corollary right to expect from the workers adequate work, diligence and good conduct. [Judy Philippines, Inc. v NLRC, G.R. No. 111934, (1998)]

doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor

Compliance with law

Liberality in Application of Rules

It is also important to emphasize that the return-to-work order not so much confers a right as it imposes a duty; and while as a right it may be waived, it must be discharged as a duty even against the worker's will. [Sarmiento v. Tuico, G.R. No. 75271 (1988)]

Article 227 (previously Article 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 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. xxx

Employee's compliance and obedience to employer's orders The lack of a written or formal designation should not be an excuse to disclaim any responsibility for any damage suffered by the employer due to his negligence. The measure of the responsibility of an employee is that if he performed his assigned task efficiently and according to the usual standards, then he may not be held personally liable for any damage arising therefrom. Failing in this, the employee must suffer the consequences of his negligence if not lack of due care in the performance of his duties. [PCIB v. Jacinto, G.R. No. 92742 (1991)] C. Labor Code (Books I, II, III, V, VI, and VII are covered in this reviewer. This section discusses the policy and miscellaneous provisions) C.1 Article 3 Article 3. Declaration of basic policy. The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work. C.2 Article 4

We stress at this point that it is the spirit and intention of labor legislation that the NLRC and the labor arbiters shall use every reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, provided due process is duly observed. The application of technical rules of procedure in labor cases may be relaxed to serve the demands of substantial justice. [Manila Electric Co. vs. Gala, G.R. No. 191288 (2012)] It is settled that subsequent and substantial compliance may call for the relaxation of the rules of procedure…The Court has time and again relaxed the rigid application of the rules to offer full opportunity for parties to ventilate their causes and defenses in order to promote rather than frustrate the ends of justice. [Ma. Ligaya Santos vs. Litton Mills, G.R. No. 170646 (2011)] C.3 Article 172 (Previously Article 166) Article 166. Policy. - The State shall promote and develop a tax-exempt employees’ compensation program whereby employees and their dependents, in the event of workconnected disability or death, may promptly secure adequate income benefit and medical related benefits.

Article 4. Construction in favor of labor. All PAGE 8 OF 222

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W orkm en’s Com pensation Program

otherwise provided under this Code.

This is the general and comprehensive term applied to those laws providing for compensation for loss resulting from the injury, disablement, or death of workmen through industrial accident, casualty, or disease. [Azucena, The Labor Code with Comments and Cases] C.4 Article 218 (Previously Article 211) Article 218. 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)

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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

C.5 Article 219 (Previously Article 212) Article 219.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

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organization whose formation, function or administration has been assisted by any act defined as unfair labor practice by this Code.

(o) “Strike” means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute.

(j) “Bargaining representative” means a legitimate labor organization whether or not employed by the employer.

(p) “Lockout” means any temporary refusal of an employer to furnish work as a result of an industrial or labor dispute.

(k) “Unfair labor practice” means any unfair labor practice as expressly defined by the Code.

(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.

(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.

(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 selforganization 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. C.6 Article 267 (Previously Article 255) Article 267. 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

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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 labor-management councils shall be elected by at least the majority of all employees in said establishment. C.7 Article 292 (Previously Article 277) Article 292.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. (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

LABOR LAW

serious labor dispute or is in implementation of a mass lay-off. (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. (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. (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. The amount of subsidy in appropriate cases shall be determined by the Board in accordance with established guidelines issued by it upon the recommendation of the Council. The Fund shall also be utilized for the operation of the Council, the training and education of Voluntary Arbitrators, and the

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Voluntary Arbitration Program. (g) The Ministry shall help promote and gradually develop, with the agreement of labor organizations and employers, labormanagement cooperation programs at appropriate levels of the enterprise based on the shared responsibility and mutual respect in order to ensure industrial peace and improvement in productivity, working conditions and the quality of working life. (h) In establishments where no legitimate labor organization exists, labor-management committees may be formed voluntarily by workers and employers for the purpose of promoting industrial peace. The Department of Labor and Employment shall endeavor to enlighten and educate the workers and employers on their rights and responsibilities through labor education with emphasis on the policy thrusts of this Code. (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.

LABOR LAW

II. Recruitment and Placement Worker – refers to any member of the labor force, whether employed or unemployed [Art.13 (a), LC] Overseas Filipino W orker – is a person who is to be engaged, is engaged or has been engaged in a remunerated activity in a state of which he or she is not a citizen or on board a vessel navigating the foreign seas other than a government ship used for military or non-commercial purposes or on an installation located offshore or on the high seas; to be used interchangeably with migrant worker.” [Sec. 2 (a), RA 8042, as amended] Private Employment Agency – means any person or entity engaged in recruitment and placement of workers for a fee which is charged, directly or indirectly, from the workers or employers or both [Sec 13 (c), LC] Private Recruitment Entity – means any person or association engaged in the recruitment and placement of workers, locally or overseas, without charging, directly or indirectly, any fee from the workers or employees [Sec 13 (e), LC] Policy of Regulation

Close

Government

RA 9422 or the Act to Strengthen the Regulatory Functions of the Philippine Overseas Employment Administration of 2007 expressly repealed Sections 29 and 30 of RA 8042 which provided for the deregulation of recruitment activities.

A. RECRUITMENT OF LOCAL AND MIGRANT WORKERS Policy of Selective Deployment The State shall allow the deployment of overseas Filipino workers only in countries where the rights of Filipino migrant workers are protected. The government recognizes any of the following as a guarantee on the part of the receiving country for the

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protection of the rights of overseas Filipino workers:

Private employment agency (PEA) v. Private recruitment entity (PRE)

(a) It has existing labor and social laws protecting the rights of workers, including migrant workers;

Private Employment Agency

Private Recruitment Entity

Definition

Any person or entity engaged in recruitment and placement of workers for a fee which is charged, directly or indirectly, from the workers or employers or both

Any person or association engaged in the recruitment and placement of workers, locally or overseas, without charging, directly or indirectly, any fee

Requirement

License

Authority

(b) It is a signatory to and/or a ratifier of multilateral conventions, declarations or resolutions relating to the protection of workers, including migrant workers; and (c) It has concluded a bilateral agreement or arrangement with the government on the protection of the rights of overseas Filipino Workers: Provided, That the receiving country is taking positive, concrete measures to protect the rights of migrant workers in furtherance of any of the guarantees under subparagraphs (a), (b) and (c) hereof. [Sec. 3, RA 8042, as amended] A.1. ILLEGAL RECRUITMENT [Sec. 5, R.A. No. 10022]

Entities disqualified issued a license

i. License and Authority License – is a document issued by the Department of Labor and Employment (DOLE) authorizing a person or entity to operate a private employment agency, while an authority is a document issued by the DOLE authorizing a person or association to engage in recruitment and placement activities as a private recruitment agency. [Art. 13(d) and (f), LC] License

Authority

Authorize an entity to operate as a private employment agency

Authorize an entity to operate as a private recruitment entity

When a license is given, one is also authorized to collect fees

Does not entitle a private recruitment entity to collect fees.

from

being

(1) Travel agencies and sales agencies of airline companies. [Art. 26] (2) Officers or members of the Board of any corporation or members in partnership engaged in the business of a travel agency. (3) Corporations and partnerships, when any of its officers, members of the board or partners, is also an officer, member of the board of partner of a corporation or partnership engaged in the business of a travel agency. (4) Persons, partnerships or corporations which have derogatory records. (5) Any official or employee of the DOLE, POEA, OWWA, DFA and other government agencies directly involved in the implementation of R.A. 8042 as amended and/or any of his/her relatives within the 4th civil degree of consanguinity and affinity. [POEA Rules of 2002]

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Non-transferability authority

LABOR STANDARDS

of

license

LABOR LAW

or

Based on POEA Rules the following are the substantial capital requirements:

(1) No license or authority shall be used directly or indirectly by any person other than the one in whose favor it was issued or at any place other than that stated in the license or authority,

(1) Single proprietorships or partnerships with minimum capitalization of P2,000,000.

(2) Nor may such license or authority be transferred, conveyed, or assigned to any other person or entity. Any transfer of business address, appointment or designation of any agent or representative including the establishment of additional offices anywhere shall be subject to the prior approval of the Department of Labor. [Art. 29, LC]

(2) Corporations with minimum capital of P2,000,000.

paid-up

ii. Essential Recruitment

Illegal

Elements

of

“Recruitment and placement" refers to any act of: (a) Canvassing, (b) Enlisting, (c) Contracting,

See: POEA Rules Part II, Rule II, Sec. 7, 8, 9

(d) Transporting, Enforceability of the license

(e) Utilizing, or

Licensed agencies are prohibited from conducting any recruitment activities of any form outside of the address stated in the license, acknowledged branch or extension office, without securing prior authority from the POEA. [People vs. Buli-e, G.R. No. 123146 (2003)]

(f) Hiring procuring workers, And also includes (a) Referrals, (b) Contract services, (c) Promising, or (d) Advertising for employment, locally or abroad, whether for profit or not

Duration of Validity

Provided, That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement. [Art. 13 (b), LC]

4 years [POEA Rules of 2002] Citizenship requirement (1) Only Filipino citizens or (2) Corporations, partnerships or entities at least seventy-five percent (75%) of the authorized and voting capital stock of which is owned and controlled by Filipino citizens shall be permitted to participate in the recruitment and placement of workers, locally or overseas. [Art. 27, LC]

Any of the acts mentioned above constitutes recruitment and placement. The proviso provides for a presumption that a person or entity so described engages in recruitment and placement [People v. Panis, G.R. No. 58674 (1988)] W hat constitutes recruitment?

See: POEA Rules, Part II, Rule I, Sec. 1(a) Capitalization requirement All applicants for authority to hire or renewal of license to recruit are required to have such substantial capitalization as determined by the Secretary of Labor. [Art. 28, LC]

The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. Any of the acts mentioned in Article 13(b) will constitute recruitment and placement even if only one prospective worker is involved. The proviso merely lays down a rule of evidence that

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where a fee is collected in consideration of a promise or offer of employment to two or more prospective workers, the individual or entity dealing with them shall be presumed to be engaged in the act of recruitment and placement. [People v. Panis] Acts of referral The act of referral, which is included in recruitment, is "the act of passing along or forwarding of an applicant for employment after an initial interview of a selected applicant for employment to a selected employer, placement officer or bureau." [Rodolfo vs. People, G.R. No. 146964 (2006)] Promising employment Promising employment as factory workers and receiving money allegedly for processing papers without authorization or license is engaging into unlawful recruitment and placement activities. The absence of the necessary license or authority renders all of accused-appellant’s recruitment activities criminal. [People vs. Saulo, G.R. No. 125903 (2000)] iii. Simple Illegal Recruitment ILLEGAL RECRUITMENT FOR LOCAL W ORKERS [Governed by the Labor Code] Simple Illegal Recruitment (local) Elements: (1) The person charged with the crime must have undertaken recruitment activities defined under Art. 13 (b) or prohibited activities defined under Art. 34; and (2) The said person does not have a license or authority to do so. [Art. 38, LC] Profit or lack thereof is immaterial The act of recruitment may be "for profit or not." Notably, it is the lack of the necessary license or authority, not the fact of payment that renders the recruitment activity of LCL unlawful. [C.F. Sharp vs. Espanol, G.R. No. 155903 (2007)]

LABOR LAW

Accused m ust give the im pression of ability to send complainant abroad It is well-settled that to prove illegal recruitment, it must be shown that [the accused] gave complainants the distinct impression that she had the power or ability to send complainants abroad for work such that the latter were convinced to part with their money in order to be employed. [People v. Ochoa, G.R. No. 173792 (2011)] Prohibited practices It shall be unlawful for any individual, entity, licensee, or holder of authority: (a) To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than that actually received by him as a loan or advance; (b) To furnish or publish any false notice or information or document in relation to recruitment or employment; (c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under this Code. (d) To induce or attempt to induce a worker already employed to quit his employment in order to offer him to another unless the transfer is designed to liberate the worker from oppressive terms and conditions of employment; (e) To influence or to attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency; (f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines; (g) To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives; (h) To fail to file reports on the status of employment, placement vacancies, remittance of foreign exchange earnings,

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separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor. (i) To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of the Secretary of Labor; (j) To become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel agency; and (k) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under this Code and its implementing rules and regulations. [Art. 34, LC, PERT/CPM Manpower Exponent Co. v. Vinuya, G.R. No. 197528 (2012)] Contract Substitution Illegal Recruitm ent

amounts

to

The reduced salaries and employment period in the new employment contract contradicted the POEA-approved employment contract. By this act of contract substitution, respondents committed a prohibited practice and engaged in illegal recruitment as defined in Art. 34(i), LC. [PERT/CPM Manpower Exponent Co. v. Vinuya, G.R. No. 197528 (2012)] ILLEGAL RECRUITMENT FOR MIGRANT WORKERS [GOVERNED BY R.A. 8042, AS AMENDED BY, R.A. 10022] Simple Illegal Recruitment First type: (1) Person charged undertakes any recruitment activity as defined in Art.13 (b) of the Labor Code; and (2) Said person does not have a license or authority to do so.

LABOR LAW

Second type: (1) Person charged commits any of the enumerated acts under Sec. 6 of R.A. 8042, as amended by, R.A. 10022. (2) It is immaterial whether he is a holder or not of any license or authority Illegal recruitm ent shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether for profit or not, when undertaken by non-licensee or nonholder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines; Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged. [Sec. 6, RA 8042 as amended] Other prohibited acts It shall likewise include the following acts, whether committed by any person, whether a non-licensee, non-holder, licensee or holder of authority: (a) To charge or accept directly or indirectly any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay or acknowledge any amount greater than that actually received by him as a loan or advance; (b) To furnish or publish any false notice or information or document in relation to recruitment or employment; (c) To give any false notice, testim ony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under the Labor Code, or for the purpose of documenting hired workers with the POEA, which include the act of reprocessing workers through a job order that pertains to nonexistent work,

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work different from the actual overseas work, or work with a different employer whether registered or not with the POEA; (d) To induce or attem pt to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions of employment; (e) To influence or attem pt to influence any person or entity not to employ any worker who has not applied for employment through his agency or who has formed, joined or supported, or has contacted or is supported by any union or workers' organization; (f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines; (g) To fail to submit reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor and Employment; (h) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment; (i) For an officer or agent of a recruitment or placement agency to become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of travel agency; (j) To withhold or deny travel docum ents from applicant workers before departure for monetary or financial considerations, or for any other reasons, other than those

LABOR LAW

authorized under the Labor Code and its implementing rules and regulations; (k) Failure to actually deploy a contracted worker without valid reason as determined by the Department of Labor and Employment; (l) Failure to reim burse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker's fault. Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage; and (m) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency. In addition to the acts enumerated above, it shall also be unlawful for any person or entity to commit the following prohibited acts: (1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) per annum, which will be used for payment of legal and allowable placement fees and make the migrant worker issue, either personally or through a guarantor or accommodation party, postdated checks in relation to the said loan; (2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to avail of a loan only from specifically designated institutions, entities or persons; (3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the latter's employment contract has been prematurely terminated through no fault of his or her own; (4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo health examinations only from specifically designated medical clinics, institutions, entities or persons, except in the case of a seafarer whose medical

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examination cost is shouldered by the principal/shipowner;

LABOR LAW

his or her salary the payment of the cost of insurance fees, premium or other insurance related charges, as provided under the compulsory worker's insurance coverage. [Sec. 6, RA 8042 as amended]

(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo training, seminar, instruction or schooling of any kind only from specifically designated institutions, entities or persons, except for recommendatory trainings mandated by principals/shipowners where the latter shoulder the cost of such trainings;

Migrant W orkers’ Act (MW A) expands the definition of illegal recruitment The amendments to the Labor Code introduced by Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, broadened the concept of illegal recruitment and provided stiffer penalties, especially for those that constitute economic sabotage. [People v. Ocden, G.R. No. 173198 (2011)]

(6) For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the processing of pending workers' applications; and (7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas Filipino worker or deduct from Law Labor Code RA 8042 as amended by RA 10022

Applicability

Acts Punishable

Local Workers Migrant Workers

Who can be punished

Art. 13(b)

Non-licensee

Art. 34

Non-licensee

Art. 13(b) Labor Code

Non-licensee

Enumerated prohibited acts in Section 6

Licensee/ Non-licensee

iv. Illegal recruitment in large scale

Illegal recruitment in large scale

Illegal recruitm ent by a syndicate

The acts committed by the accused constituted illegal recruitment in large scale, whose essential elements are the following:

(1) The offender undertakes either any activity within the meaning of "recruitment and placement" defined under Article 13(b), or any of the prohibited practices enumerated under Art. 34 of the Labor Code; (2) He has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers; AND (3) The illegal recruitment is committed by a group of three (3) or more persons conspiring or confederating with one another. [People v. Gallo, G.R. No. 187730 (2010)]

(1) The accused engages in acts of recruitment and placement of workers defined under Article 13(b) of the Labor Code or in any prohibited activities under Article 43 of the Labor Code; (2) The accused has not complied with the guidelines issued by the Secretary of Labor and Employment, particularly with respect to the securing of license or an authority to recruit and deploy workers, either locally or overseas; and (3) The accused commits the unlawful acts against three or more persons individually or as a group.

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Three or more complainants must be in a single case When the Labor Code speaks of illegal recruitment "committed against three (3) or more persons individually or as a group," it must be understood as referring to the number of complainants in each case who are complainants therein, otherwise, prosecutions for single crimes of illegal recruitment can be cumulated to make out a case of large scale illegal recruitment. In other words, a conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three or more persons whether individually or as a group. [People vs. Reyes, G.R. No. 105204 (1995)]

LABOR LAW

intent of the accused is not necessary for conviction, while estafa is malum in se where the criminal intent of the accused is crucial for conviction. Conviction for offenses under the Labor Code does not bar conviction for offenses punishable by other laws. Conversely, conviction for estafa under par. 2(a) of Art. 315 of the Revised Penal Code does not bar a conviction for illegal recruitment under the Labor Code. It follows that one's acquittal of the crime of estafa will not necessarily result in his acquittal of the crime of illegal recruitment in large scale, and vice versa.” [People v. Ochoa (2011); People v. Ocden (2011)] vii. Liabilities a. Local Recruitment Agency

v. Illegal recruitment as economic sabotage

Illegal recruitm ent workers [Art. 39, LC]

Offense involving Econom ic Sabotage (Large-Scale or by a Syndicate)

Act Licensee or holder of authority violating or causing another to violate Title I, Book I, LC

Illegal recruitment is considered economic sabotage when the commission thereof is attended by the ff. qualifying circumstances: (1) By a syndicate - if carried out by a group of 3 or more persons conspiring and confederating with one another; (2) In large scale - if committed against 3 or more persons individually or as a group. [Art. 38(b), LC] See iv. Illegal recruitment in large scale for requisites and discussion vi. Illegal recruitment vs. estafa One convicted for illegal recruitm ent may still be convicted of estafa In People v. Cortez the Court explained that: “In this jurisdiction, it is settled that a person who commits illegal recruitment may be charged and convicted separately of illegal recruitment under the Labor Code and estafa under par. 2(a) of Art. 315 of the Revised Penal Code. The offense of illegal recruitment is malum prohibitum where the criminal

Violating or causing another to violate Title I, Book I, LC Illegal recruitment constituting economic sabotage

involving

local

Penalty Imprisonment: 2 - 5 yrs. OR Fine: P10k – P50k OR Both Imprisonment: 4 - 8 yrs. OR Fine: P20k – P100k OR Both Life imprisonment AND Fine: P100k

If the offender is a corporation, partnership, association or entity, the penalty shall be imposed upon the officer or officers of the corporation, partnership, association or entity responsible for violation. If such officer is an alien, he shall, in addition to the penalties herein prescribed, be deported without further proceedings. In every case, conviction shall cause and carry the automatic revocation of the license or authority and all the perm its and privileges granted to such person or entity under this Title, and the forfeiture of the

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cash and surety bonds in favor of the Overseas Employment Development Board or the National Seamen Board, as the case may be, both of which are authorized to use the same exclusively to promote their objectives. Illegal recruitm ent involving m igrant workers [SEC. 7, RA 8042 AS AMENDED BY RA 10022] Act Prohibited Act/s Illegal recruitment Illegal recruitment constituting economic sabotage

Penalty Imprisonment: 6 yrs. and 1 day – 12 yrs. AND Fine: P500k – P1M Imprisonment: 12 yrs. and 1 day – 20 yrs. AND Fine: P1M – P2M Life imprisonment AND Fine: P2M – P5M

LABOR LAW

(2) Private employment agencies are held jointly and severally liable with the foreign-based employer for any violation of the recruitment agreement or contract of employment. This joint and solidary liability imposed by law against recruitment agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him [Becmen Service Exporter vs. Sps. Cuaresma, G.R. 182978-79, (2009] (3) If the recruitm ent/placem ent agency is a juridical being, the corporate officers and directors and partners as the case m ay be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. [Becmen Service Exporter vs. Sps. Cuaresma, G.R. 182978-79, (2009]

Maxim um penalty if: 1. Illegally recruited person below 18 years old OR 2. Offense committed without license/authority

(4) Foreign em ployer shall assum e joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the contract, including but not limited to payment of wages, death and disability compensation and repatriation

If the offender is an alien, he or she shall, in addition to the penalties herein prescribed, be deported without further proceedings.

Common Rules on Illegal Recruitment (Local or Overseas)

In every case, conviction shall cause and carry the automatic revocation of the license or registration of the recruitment/ manning agency, lending institutions, training school or medical clinic.

A criminal action arising from illegal recruitment shall be filed with the RTC of the province or city:

Common Rules on Liability (1) Employees of a company or corporation engaged in illegal recruitment may be held liable as principal, together with his employer, if it is shown that he actively and consciously participated in illegal recruitment. [People vs. Sagayaga, G.R. 143726 (2004)]

a. Venue

(1) where the offense was committed or (2) where the offended party actually resides at the time of the commission of the offense. [Sec. 9, R.A. 8042 (this part was not amended by R.A. 10022)]. Prescriptive Periods (1) Simple Illegal Recruitment – 5 years (2) Illegal Recruitment involving Economic Sabotage – 20 years [Sec. 12, R.A. 8042

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(this part was not amended by R.A, 10022)]. b. Foreign Employer Foreign em ployer shall assum e joint and solidary liability with the em ployer for all claims and liabilities which may arise in connection with the implementation of the contract, including but not limited to payment of wages, death and disability compensation and repatriation Theory of imputed knowledge This is a doctrine in agency which states that the principal is chargeable with and bound by the knowledge of or notice to his agent received while the agent was acting as such. Simply put, notice to the agent is notice to the principal. Since the local employment agency is considered the agent of the foreign employer, the principal, knowledge of the former of existing labor and social legislation in the Philippines is binding on the latter. Consequently, notice to the former of any violation thereof is notice to the latter. However, notice to the principal is not notice to the agent. The SC held in Sunace International Management Services, Inc. vs. NLRC [G.R. 161757 (2006)] that “the theory of imputed knowledge ascribes the knowledge of the agent to the principal, not the other way around. The knowledge of the principal-foreign employer cannot, therefore, be imputed to its agent.” c. Solidary Liability Solidary Principal

Liability

of

Agent

and

The written application for a license to operate a private employment or manning agency shall be submitted with, among others, a verified undertaking stating that the applicant: (1) Shall assume full responsibility for:

and

LABOR LAW

§

all claims and liabilities which may arise in connection with the use of license;

§

all acts of its officials, employees and representatives done in connection with recruitment and placement;

(2) Shall assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the contract, including but not limited to payment of wages, death and disability compensation and repatriation; (3) Shall guarantee compliance with the existing labor and social legislations of the Philippines and of the country of employment of recruited workers [POEA Rules, Book II, Rule II, Sec. 1 (f) (2-5)] Purpose of Solidary Liability The fact that the manning agency and its principal have already terminated their agency agreement does not relieve the former of its liability. The agency agreement with the principal even if ended as between them, still extends up to and until the expiration of, the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. Otherwise, this will render nugatory the very purpose for which the law governing the employment of workers for foreign jobs abroad was enacted, that is, to assure aggrieved workers of im mediate and sufficient payment of what is due them. [OSM Shipping Phil, Inc. v. NLRC (2003)] viii. Pre-termination of contract of migrant worker In case of employment,

complete

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termination

of

overseas

§

without just, valid or authorized cause as defined by law or contract, or

§

any unauthorized deductions from the migrant worker's salary

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...shall entitle the reimbursement of:

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worker

to

full

(1) his placement fee and the deductions made with interest at twelve percent (12%) per annum, and; (2) his salaries for the unexpired portion of his employment contract [or for three (3) months for every year of the unexpired term, whichever is less*] [Sec. 10, R.A. 8042, as amended by R.A. 10022]

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provision of law is null because it is inconsistent with the Constitution, the nullity cannot be cured by reincorporation or reenactment of the same or a similar law or provision. A law or provision of law that was already declared unconstitutional remains as such unless circumstances have so changed as to warrant a reverse conclusion.” Hence, the case of Serrano holds as binding precedent, even after the passage of RA 10022. A.2. Direct Hiring

Rule before Serrano (1995-2009): 3month salary rule applied The employment contract involved in the instant case covers a two-year period but the overseas contract worker actually worked for only 26 days prior to his illegal dismissal. Thus, the three months’ salary rule applies [Flourish Maritime Shipping v. Almanzor, G.R. No. 177948 (2008)] Rule after Serrano: invalidated the 3month salary cap clause The SC there held that “said clause is unconstitutional for being an invalid classification, in violation of the equal protection clause”. [Serrano v. Gallant Maritime Services, Inc., G.R. No. 167614 (2009)] In the case of Yap vs. Thenamaris Ship’s Management and Intermare Maritime Agencies, Inc. [G.R. No. 179532 (May 30, 2011)], the SC affirmed the Serrano ruling, but did not apply the Operative Fact doctrine: “As an exception to the general rule, the doctrine applies only as a matter of equity and fair play.” NB: In 2010, a year after Serrano, RA 10022, in amending RA 8042, reincorporated the nullified 3-month salary cap clause. However, the SC did not allow this and again struck the revived clause as unconstitutional in the 2014 case of Sameer Overseas Placement Agency vs. Cabiles [G.R. No. 170139, (August 05, 2014)]. There, the SC said that: “when a law or a

General Rule: No employer may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor. [Art. 18, LC] Exceptions: (1) Members of the diplomatic corps; (2) International organizations; (3) Such other employees as may be allowed by the Sec. of Labor; (4) Name hirees – those individuals who are able to secure contracts for overseas employment on their own efforts and representation without the assistance or participation of any agency. Their hiring, nonetheless, has to be processed through the POEA. [Part III, Rule III of the POEA Rules Governing Overseas Employment as amended in 2002] B. Regulations and enforcement B.1. Suspension or Cancellation of License or Authority The Secretary of Labor shall have the power to suspend or cancel any license or authority to recruit employees for overseas employment for:

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§ violation of rules and regulations issued by the Department of Labor, the Overseas Employment Development Board, and the National Seamen Board

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§ violation of the provisions of this and other applicable laws, General Orders and Letters of Instructions. [Art. 35, LC] Acts prohibited under Article 34 are grounds for suspension or cancellation of license. Note that these acts likewise constitute illegal recruitment under R.A. 8042 as amended by R.A. 10022.

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B.3. Remittance of Foreign Exchange Earnings It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign earnings to their families, dependents, and/or beneficiaries in the country. [Art. 22, LC] Am ount required to be rem itted

W ho can license?

suspend

or

cancel

the

[Executive Order No. 857] The amount of one’s salary required to be remitted depends on the type or nature of work perform ed by the employee.

(1) DOLE Secretary (2) POEA Administrator The power to suspend or cancel any license or authority to recruit employees for overseas employment is concurrently vested with the POEA and the Secretary of Labor. [People v. Diaz, G.R. 112175 (1996)]

The following are the percentages of foreign exchange remittance required from various kinds of migrant workers: (1) Seaman or mariner – 80% of basic salary (2) Workers for Filipino contractors and construction companies – 70%

B.2. Regulatory and Visitorial powers of the DOLE secretary

(3) Doctors, engineers, teachers, nurses and other professional workers whose contract provide for free board and lodging – 70%

Regulatory & rule-making powers [Art. 36, LC] The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage of this Title and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this Title.

(4) All other professional workers whose employment contracts do not provide for free board and lodging facilities – 50% (5) Domestic and other service workers – 50% (6) All other workers not falling under the aforementioned categories – 50%

Visitorial powers [Art. 37, LC]

(7) Performing artists – 50%

The Secretary of Labor or his duly authorized representatives may, at any time, inspect the premises, books of accounts and records of any person or entity covered by this Title, require it to submit reports regularly on prescribed forms, and act on violations of any provisions of this Title.

Individuals exempted from the mandatory remittance requirement:

Note: In the old case of Salazar vs. Achacoso [G.R. No. 81510 (1990)], it was declared that Art. 38 of the LC is unconstitutional and that the Secretary of Labor and Employment cannot issue a warrant of arrest.

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(1) The immediate family members, dependents or beneficiaries of migrant workers residing with the latter abroad; (2) Filipino servicemen working within US military installations; (3) Immigrants and Filipino professionals working with the United Nations and its agencies or other specialized bodies.

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B.4. Prohibited Activities

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the same without the approval of the Secretary of Labor;

Prohibited practices It shall be unlawful for any individual, entity, licensee, or holder of authority: (a) To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than that actually received by him as a loan or advance; (b) To furnish or publish any false notice or information or document in relation to recruitment or employment; (c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under this Code. (d) To induce or attempt to induce a worker already employed to quit his employment in order to offer him to another unless the transfer is designed to liberate the worker from oppressive terms and conditions of employment; (e) To influence or to attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency; (f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines; (g) To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives; (h) To fail to file reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor. (i) To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the periods of expiration of

(j) To become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel agency; and (k) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under this Code and its implementing rules and regulations. (Art. 34, LC) Other prohibited acts It shall likewise include the following acts, whether committed by any person, whether a non-licensee, non-holder, licensee or holder of authority: (a) To charge or accept directly or indirectly any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay or acknowledge any amount greater than that actually received by him as a loan or advance; (b) To furnish or publish any false notice or information or document in relation to recruitment or employment; (c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under the Labor Code, or for the purpose of documenting hired workers with the POEA, which include the act of reprocessing workers through a job order that pertains to nonexistent work, work different from the actual overseas work, or work with a different employer whether registered or not with the POEA; (d) To include or attempt to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions of employment;

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(e) To influence or attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency or who has formed, joined or supported, or has contacted or is supported by any union or workers' organization; (f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines; (g) To fail to submit reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor and Employment; (h) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment; (i) For an officer or agent of a recruitment or placement agency to become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of travel agency; (j) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations, or for any other reasons, other than those authorized under the Labor Code and its implementing rules and regulations; (k) Failure to actually deploy a contracted worker without valid reason as determined by the Department of Labor and Employment; (l) Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker's fault. Illegal recruitment when committed by a

LABOR LAW

syndicate or in large scale shall be considered an offense involving economic sabotage; and (m) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency. In addition to the acts enumerated above, it shall also be unlawful for any person or entity to commit the following prohibited acts: (1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) per annum, which will be used for payment of legal and allowable placement fees and make the migrant worker issue, either personally or through a guarantor or accommodation party, postdated checks in relation to the said loan; (2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to avail of a loan only from specifically designated institutions, entities or persons; (3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the latter's employment contract has been prematurely terminated through no fault of his or her own; (4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo health examinations only from specifically designated medical clinics, institutions, entities or persons, except in the case of a seafarer whose medical examination cost is shouldered by the principal/shipowner; (5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo training, seminar, instruction or schooling of any kind only from specifically designated institutions, entities or persons, except for recommendatory trainings mandated by principals/shipowners where the latter shoulder the cost of such trainings;

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(6) For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the processing of pending workers' applications; and (7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas Filipino worker or deduct from his or her salary the payment of the cost of insurance fees, premium or other insurance related charges, as provided under the compulsory worker's insurance coverage. (Sec. 6, RA 8042 as amended)

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III. Labor Standards A. COVERAGE [Art. 82, Labor Code] General rule: Shall apply to employees in all establishments and undertakings whether for profit or not. [Art. 82, LC] Exceptions (those NOT covered by Art. 82): (1) Government employees [Art. 82; Art. 76] (2) Managerial Employees including members of the managerial staff [Art. 82] (3) Field Personnel [Art. 82] (4) Members of the family of the employer who are dependent on him for support [Art. 82]; (5) Domestic helpers and persons in personal service of another [Art. 141, RA 10361] (6) Workers who are paid by result as determined by DOLE regulation [Art. 82] A.1. GOVERNMENT EMPLOYEES The terms and conditions of employment of all government employees, including employees of GOCCs, are governed by the Civil Service rules and regulations, not by the Labor Code (Art. 282). However, not all GOCCs are governed by the Civil Service Rules; only those created by original charter are governed by the Civil Service rules: “Following Sec. 2(i) Art. IX-B of 1987 Phil. Constitution, the test in determining whether a government owned corporation is subject to the Labor Code or the Civil Service law is finding out what created it – if its created by a special charter, then, Civil Service Law applies, if it is created by the General Corporation Law, then the Labor Code applies.” [PNOC Energy Development Corp. v. NLRC (1991)]

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A.2. MANAGERIAL EMPLOYEES

(2) They customarily and regularly direct the work of two or more employees therein.

Two definitions of “managerial employees” in the Labor Code:

(3) They have the authority to hire or fire employees of lower rank; or their suggestions and recommendations as to hiring and firing and as to the promotion or any other change of status of other employees, are given particular weight.

[Art. 82, LC] Those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof and to other officers or members of the managerial staff. [Art. 212 (m), LC] 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.

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Managerial Staff also included as they are considered managerial employees as well [Book 3, Rule 1, Sec. 2(c), IRR] Officers or members of a managerial staff are also exempted if they perform the following duties and responsibilities:

The definition in Art. 82 covers more people than that in Article 212 (m) as Article 82 also includes managerial staff. In effect, managerial employees in Article 82 includes supervisors, but Article 212(m) does not. It follows that under Book V, supervisors are allowed to form, join or assist a labor union. Supervisors are not, however, entitled to the benefits under Book III Articles 83 through 96, being part of the exemption of managerial employees as defined in Article 82. [Azucena]

(1) Their primary duty consists of the performance of work directly related to management policies of their employer; (2) Customarily and regularly exercise discretion and independent judgment; (3) (a) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; OR (b) Execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; OR

managerial

(c) Execute, under general supervision, special assignments and tasks;

Managerial employees are exempted from the coverage of Book III Articles 83 through 96 if they meet all of the following conditions:

(4) Who do not devote more than 20% of their hours worked in a work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2) and (3) above.

Characteristics employees

of

[Book 3, Rule 1, Sec. 2(b), IRR]

(1) Their primary duty consists of the management of the establishment in which they are employed or of a department or sub-division thereof.

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A.3. FIELD PERSONNEL

family drivers.

Non-agricultural employees:

Note: The Kasambahay Law (RA 10361) has redefined “domestic worker” or “kasambahay”:

(1) Who regularly perform their duties away from the principal place of business or branch office of the employer, AND; (2) Whose actual hours of work in the field cannot be determined with reasonable certainty. [Art. 82, LC] Legal Test: Control & Supervision of employer Although the fishermen perform nonagricultural work away from petitioner’s business offices, the fact remains that throughout the duration of their work they are under the effective control and supervision of petitioner through the vessel’s patron or master. Hence, the fishermen are not “field personnel”. [Mercidar Fishing Corporation v. NLRC (1998)] In order to determine whether an employee is a field employee, it is also necessary to ascertain if actual hours of work in the field can be determined with reasonable certainty by the employer. In so doing, an inquiry must be made as to whether or not the employee’s time and performance are constantly supervised by the employer. [Far East Agricultural Supply v. Lebatique (2007)] A.4. DEPENDENT FAMILY MEMBERS Workers who are family members of the employer, and who are dependent on him for their support, are outside the coverage of this Title on working conditions and rest periods. A.5. DOMESTIC HELPERS [Art. 141, LC.] "Domestic or household service" shall mean service in the employer’s home which is usually necessary or desirable for the maintenance and enjoyment thereof and includes ministering to the personal comfort and convenience of the members of the employer’s household including services of

[RA 10361 Art. 1, Sec. 4 (d).] Domestic worker or “Kasambahay” refers to any person engaged in domestic work within an employment relationship such as but not limited to the following: general househelp, nursemaid or “yaya”, cook, gardener or laundry person but shall exclude any person who performs domestic work only occasionally or sporadically and not on an occupational basis. Exclusivity of function required Note that the definition contemplates a domestic helper who is employed in the employer’s home to minister exclusively to the personal comfort and enjoyment of the employer’s family. [Azucena] Thus, it has been held that the following personnel are not domestic employees: (1) House personnel hired by a ranking company official but paid by the company itself to maintain a staff house provided for the official. [Cadiz v. Philippine Sinter Corp, NLRC Case No. 7-1729, cited by Azucena] (2) A family cook, who is later assigned to work as a watcher and cleaner of the employer’s business establishment, becomes an industrial worker entitled to receive the wages and benefits flowing from such status. [Villa v. Zaragosa and Associates, OP Decision No. 0183, cited by Azucena] A.6. PERSONS IN PERSONAL SERVICE OF ANOTHER [Book 3, Rule 1, Sec. 2 (d), IRR] Domestic servants and persons in the personal service of another if they perform such services in the employer’s home which are usually necessary or desirable for the

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maintenance and enjoyment thereof or minister to the personal comfort convenience or safety of the employer as well as the members of his employer’s household.

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less than eight hours [Legend Hotel v. Realuyo, G.R. 153511 (2012)] EXCEPTIONS to 8-Hour Law: Work Hours of Health Personnel Health personnel in:

A.7. WORKERS PAID BY RESULT

(1) Cities and municipalities with a population of at least one million (1,000,000) OR

[Book 3, Rule 1, Sec. 2 (e), IRR.] Workers who are paid by results, including those who are paid on piece work, “takay,” “pakiao” or task basis, and other nontime work if their output rates are in accordance with the standards prescribed under Section 8, Rule VII, Book Three of these regulations, or where such rates have been fixed by the Secretary of Labor and Employment in accordance with the aforesaid Section. Workers under piece-rate employment have no fixed salaries and their compensation is computed on the basis of accomplished tasks. That their work output might have been affected by the change in their specific work assignments does not necessarily imply that any resulting reduction in pay is tantamount to constructive dismissal. It is the prerogative of the management to change their assignments or to transfer them. [Best Wear Garments v. De Lemos and Ocubillo (2012)]

(2) Hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day. For purposes of this Article, "health personnel" shall include resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel. [Art. 83, LC] Medical secretaries are also considered clinic personnel. [Azucena]

B. HOURS OF WORK B.1. COVERAGE/EXCLUSIONS See previous section (A. Coverage) which deals with the general rules of coverage and exclusions for the applicability of the Conditions of Employment provisions in Book III of the Labor Code.

Compensable Hours of W ork (Art. 84, LC) Hours worked shall include: (1) All time during which an employee is required to be on duty or to be at a prescribed workplace; AND (2) All time during which an employee is suffered or permitted to work.

B.2. NORMAL HOURS OF WORK General Rule: 8-Hour Labor Law The normal hours of work of any employee shall not exceed eight (8) hours a day. [Art. 83, LC]

General principles in determining if time is considered as hours worked [Book III, Rule 1, Sec. 4, IRR]

Note: Article 83 of the Labor Code only set a maximum of number of hours as "normal hours of work" but did not prohibit work of

(1) All hours are hours worked which the employee is required to give his employer, regardless of whether or not such hours

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are spent in productive labor or involve physical or mental exertion.

On call Compensable work time, if employee is:

(2) An employee need not leave the premises of the work place in order that his rest period shall not be counted, it being enough that he stops working, may rest completely and may leave his work place to go elsewhere, whether within or outside the premises of his work place. (3) If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor. (4) The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working time either: (a)

If the imminence of the resumption of work requires the employee’s presence at the place of work, or

(b)

If the interval is too brief to be utilized effectively and gainfully in the employee’s own interest.

Rest period – “coffee break”

short

duration

or

Rest periods of short duration during working hours shall be counted as hours worked. [Art. 84, par. 2, LC] Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time. [Book III, Rule 1, Sec. 7, par. 2, IRR]

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(1) Required to remain on call in the employer’s premises or so close thereto (2) That he cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call. Book III, Rule 1, Sec. 5(b), IRR. An employee who is not required to leave word at his home or with company officials where he may be reached is NOT working while on call. Inactive due to work interruptions The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working time either: (1) If the imminence of the resumption of work requires the employee's presence at the place of work OR (2) If the interval is too brief to be utilized effectively and gainfully in the employee's own interest. [Book III, Rule 1, Sec. 4(d), IRR] W ork interruption due to brownouts Brownouts of short duration, but not exceeding 20 minutes, shall be treated as hours worked, whether used productively by the employees or not. If they last more than 20 minutes, the time may not be treated as hours worked if: a) the employees can leave their workplace or go elsewhere whether within or without the work premises;

[Book 3, Rule 1, Sec. 4 (b), IRR.]

OR

An employee need not leave the premises of the work place in order that his rest period shall not be counted it being enough that he stops working may rest completely and may leave his work place to go elsewhere whether within or outside the premises of his work place.

b) the employees can use the time effectively for their own interest. In this case, the employer may extend the working hours beyond the regular schedule on that day to compensate for the loss of productive man-hours without being liable

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for overtime pay. [Policy Instruction No. 36, May 22, 1978] Note: The time during which an employee is inactive by reason of work interruptions beyond his control is considered working time, either if the imminence of the resumption of work requires the employee’s presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employee’s own interest. [Book III, Rule 1 Sec. 4 (d), IRR] Necessary W ork After Normal Hours If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all the time spent for such work shall be considered as hours worked if the work was with the knowledge of his employer or immediate supervisor. [Book III, Rule 1, Sec. 4(c), IRR] Lectures, meetings, trainings Attendance at lectures, meetings, training programs, and other similar activities shall not be counted as working time if ALL of the following conditions are met: (1) Attendance is outside of the employee’s regular working hours; (2) Attendance is in fact voluntary; and (3) The employee does not perform any productive work during such attendance. [IRR, Book III, Rule 1, Sec. 6]

(3) Attendance in hearings in cases filed by the employee is NOT compensable hours worked. (4) Participation in strikes compensable working time.

is

NOT

Idle tim e The idle time that an employee may spend for resting and dining which he may leave the spot or place of work though not the premises of his employer, is not counted as working time only where the work is broken or is not continuous. [National Development Co. v. CIR (1962)] A laborer need not leave the premises of the factory, shop or boat in order that his period of rest shall not be counted, it being enough that he "cease to work", may rest completely and leave or may leave at his will the spot where he actually stays while working, to go somewhere else, whether within or outside the premises of said factory, shop or boat. If these requisites are complied with, the period of such rest shall not be counted. [Luzon Stevedoring Co. v. Luzon Marine Department Union (1957)] Travel time [Department of Labor Manual] (1) Travel from home to work – An employee who travels from home before his regular workday and returns to his home at the end of the workday is engaged in ordinary home-to-work travel which is NOT considered hours worked, EXCEPT: (a) When called emergency;

to

travel

during

(b) When travel is done through a conveyance furnished by the employer;

Note: (1) Attendance in lectures, meetings, and training periods sanctioned or required by the employer are considered hours worked. (2) Attendance in CBA negotiations or grievance meeting is compensable hours worked.

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(c) Travel is done under vexing and dangerous circumstances; (d) Travel is done under the supervision and control of the employer. (2) Travel that is all in the day’s work – Time spent by an employee in travel from jobsite to jobsite during the workday, must be counted as hours worked. Where

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an employee is required to report at a meeting place to receive instructions or to perform other work there, the travel from the designated place to the workplace is part of the day’s work. (3) Travel away from home Travel that keeps an employee away from home overnight is travel away from home. Travel away from home is worktime when it cuts across the employee’s workday. The time is hours worked not only on regular working hours but also during the corresponding hours on non-working days. Semestral Break of Private School Teachers Regular full-time teachers are entitled to salary during semestral breaks. These semestral breaks are in the nature of work interruptions beyond the employees’ control. As such, these breaks cannot be considered as absences within the meaning of the law for which deductions may be made from monthly allowances. [University of the Pangasinan Faculty Union v. University of Pangasinan (1984)] W ork Hours of Seamen Citing the 1957 ruling of Luzon Stevedoring Co., Inc. vs Luzon Marine Department Union, et al [G.R. 9265(1957)], the SC reiterated in the more recent case of Cagampan, et al. vs NLRC [G.R. 85122-24 (March 22, 1991)], that “seamen are required to stay on board of their vessels by the very nature of their duties, and it is for this reason that, in addition to their regular compensation, they are given free living quarters to be on board. It could not have been the purpose of the law to require their employers to pay them overtime pay even when they are not actually working. The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore, whether they are on board and cannot leave ship beyond the regular eight working number of hours, but whether they actually rendered service in excess of said number of hours.”

LABOR LAW

Proof of Hours worked Entitlement to overtime pay must first be established by proof that said overtime work was actually performed, before an employee may avail of said benefit. [Lagatic v. NLRC, G.R. 121004 (1998)] Burden of Proof: When an employer alleges that his employee works less than the normal hours of employment as provided for in the law, he bears the burden of proving his allegation with clear and satisfactory evidence. [Prangan v. NLRC, et. al., G.R. No. 126529, (1998)] FLEXIBLE W ORK ARRANGEMENTS [DOLE Advisory No. 02, Series of 2004] These are alternative arrangements or schedules other than the standard work hours, workdays, and workweek. Their effectivity and implementation shall be temporary in nature. Prior to implementation, the employer shall notify the Department through the Regional Office which has jurisdiction over the workplace, of the adoption of any of the flexible work arrangements. Under the following work arrangements, the employers and employees are encouraged to explore alternative schemes under any agreement and company policy or practice to cushion and mitigate the effect of the loss of income of the employees. Reduction of W orkdays The normal workdays per week are reduced but this arrangement should not last for more than 6 months. Rotation of W orkers The employees are rotated or alternately provided work within the workweek

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Forced Leave

practitioner from the firm’s safety committee that work beyond eight hours is within threshold limits or tolerable levels of exposure, as set in the OSHS.

Employees are required to go on leave for several days or weeks utilizing their leave credits of there are any. Broken-time Schedule The works schedule is not continuous but the work hours within the day or week remain. Flexi-holidays The employees agree to avail the holidays at some other days provided there is no diminution of existing benefits as a result of such arrangement. Compressed W ork W eek (CW W ) [DOLE Advisory No. 02, Series of 2004] Under the CWW scheme, the normal workday goes beyond eight hours without the corresponding overtime premium. The total hours of work, however, shall not exceed 12 hours a day or 48 hours a week, or the employer is obliged to pay the worker the overtime premium in excess of said work hours. Conditions for CW W (1) The CWW scheme is undertaken as a result of an express and voluntary agreement of majority of the covered employees or their duly authorized representatives. This agreement may be expressed through collective bargaining or other legitimate workplace mechanisms of participation such as labor management councils, employee assemblies or referenda. (2) In firms using substances, chemicals and processes or operating under conditions where there are airborne contaminants, human carcinogens or noise prolonged exposure to which may pose hazards to employees’ health and safety, there must be a certification from an accredited health and safety organization or

LABOR LAW

(3) The employer shall notify DOLE, through the Regional Office having jurisdiction over the workplace, of the adoption of the CWW scheme. The notice shall be in DOLE CWW Report Form attached to this Advisory. [DOLE Advisory No. 02-04] Effects of CW W (1) Unless there is a more favorable practice existing in the firm, work beyond eight hours will not be compensable by overtime premium provided the total number of hours worked per day shall not exceed twelve (12) hours. In any case, any work performed beyond 12 hours a day or 48 hours a week shall be subject to overtime premium. (2) Consistent with Art. 85 of the LC, employees under a CWW scheme are entitled to meal periods of not less than 60 minutes. There shall be no impairment of the right of the employees to rest days as well as to holiday pay, rest day pay or leaves in accordance with law or applicable collective bargaining agreement or company practice. (3) Adoption of the CWW scheme shall in no case result in diminution of existing benefits. Reversion to the normal eighthour workday shall not constitute a diminution of benefits. Rationale Although the right to overtime pay cannot be waived as per Cruz v. Yee Sing (1959), D.O. No. 21 sanctions the waiver of overtime pay in consideration of the benefits that the employees will derive from the adoption of a compressed workweek scheme, thus: The compressed workweek scheme was originally conceived for establishments wishing to save on energy costs, promote greater work efficiency and lower the rate of employee absenteeism, among others. Workers favor the scheme considering that it would mean savings on the increasing cost of

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transportation fares for at least one (1) day a week; savings on meal and snack expenses; longer weekends, or an additional 52 off-days a year, that can be devoted to rest, leisure, family responsibilities, studies and other personal matters, and that it will spare them for at least another day in a week from certain inconveniences that are the normal incidents of employment, such as commuting to and from the workplace, travel time spent, exposure to dust and motor vehicle fumes, dressing up for work, etc. Thus, under this scheme, the generally observed workweek of six (6) days is shortened to five (5) days but prolonging the working hours from Monday to Friday without the employer being obliged for pay overtime premium compensation for work performed in excess of eight (8) hours on weekdays, in exchange for the benefits above cited that will accrue to the employees. [Bisig Manggagawa sa Tryco v. NLRC, et al. (2008)] B.3. MEAL BREAK General Rule: Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals (Art. 85, LC) Exceptions: Employees may be given a meal period of not less than twenty (20) minutes provided that such shorter meal period is credited as compensable hours worked of the employee: (1) Where the work is non-manual work in nature or does not involve strenuous physical exertion; (2) Where the establishment regularly operates not less than sixteen (16) hours a day; (3) In case of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; OR

LABOR LAW

(4) Where the work is necessary to prevent serious loss of perishable goods [Book 3, Rule 1, Sec. 7 par 1, IRR] Employees are not prohibited from going out of the premises as long as they return to their posts on time. Nowhere in the law may it be inferred that employees must take their meals within the company premises. [Philippine Airlines v. NLRC (1999)] SYNTHESIS OF THE RULES General Rule: Meal periods are NOT compensable. Exception: It becomes compensable: (1) Where the lunch period or meal time is predominantly spent for the employer’s benefit. [Azucena citing 31 Am. Jur. 881; Duka, Labor Laws and Social Legislation] (2) Meal periods of 1 hour are deemed compensable when the employee is on continuous shift. [National Development Co. v. CIR, G.R. No. L-15422, (1962)] (3) Shortened meal period of less than 1 hour (say, 30 minutes) must be compensable. (Sec. 7, Rule I, Book III, IRR) Note: To shorten meal time to less than 20 minutes is not allowed. If the so-called meal time is less than 20 minutes, it becomes only a REST PERIOD and is considered working time. Exception to the Exception: Shortened meal breaks upon the employees’ request – NOT compensable. The employees themselves may request that the meal period be shortened so that they can leave work earlier than the previously established schedule. [Drilon: Letter to Kodak Philippines, Nov. 27, 1989; also Cilindro: BWCWHSD Opinion No. 197, s. 1998] Conditions for shortened m eal breaks upon em ployee’s request. (1) The employees voluntarily agree in writing to a shortened meal period of 30 minutes and are willing to waive the

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overtime pay for such shortened meal period; (2) There will be no diminution whatsoever in the salary and other fringe benefits of the employees existing before the effectivity of the shortened meal period; (3) The work of the employees does not involve strenuous physical exertion and they are provided with adequate “coffee breaks” in the morning and afternoon. (4) The value of the benefits derived by the employees from the proposed work arrangement is equal to or commensurate with the compensation due them for the shortened meal period as well as the overtime pay for 30 minutes as determined by the employees concerned; (5) The overtime pay of the employees will become due and demandable if ever they are permitted or made beyond 4:30pm; and (6) The effectivity of the proposed working time arrangement shall be of temporary duration as determined by the Secretary of Labor. B.4. WAITING TIME

LABOR LAW

controlling factor is whether waiting time spent in idleness is so spent predominantly for the employer’s benefit or for the employee’s. [Azucena, citing Armour v. Wantock] B.5. OVERTIME WORK, OVERTIME PAY Overtime compensation is additional pay for service or work rendered or performed in excess of eight hours a day by employees or laborers covered by the Eight-hour Labor Law. [National Shipyard and Steel Corp. v. CIR (1961)] Rationale There can be no other reason than that he is made to work longer than what is commensurate with his agreed compensation for the statutorily fixed or voluntary agreed hours of labor he is supposed to do. [PNB v. PEMA (1982)] Overtim e on ordinary working day Art. 87, LC. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty five percent (25%) thereof.

[Book III, Rule I Sec. 5(a), IRR] Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his work or the employee is required or engaged by the employer to wait. [Book 3, Rule 1, Sec. 5(b), IRR] An employee who is required to remain on call in the employer’s premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call. Legal test: Whether waiting time constitutes working time depends upon the circumstances of each particular case. The facts may show that the employer was engaged or was waiting to be engaged. The

Overtim e work on holiday or rest day Art. 87, LC. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof. Computation compensation

of

additional

Art. 90, LC. For purposes of computing overtime and other additional remuneration as required by this Chapter the "regular wage" of an employee shall include the cash wage only without deduction on account of facilities provided by the employer.

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Base of Computation: Regular wage – means regular base pay; it excludes money received in different concepts such as Christmas bonus and other fringe benefits. [Bisig ng Manggagawa ng Philippine Refining Co. v. Philippine Refining Co , G.R. L-27761 (1981)] BUT when the overtime work was performed on the employee’s rest day or on special days or regular holidays (Art. 93 and 94), the premium pay, must be included in the computation of the overtime pay.

LABOR LAW

When the tour of duty of a laborer falls at nighttime [between 10:00pm and 6:00am], the receipt of overtime pay will not preclude the right to night differential pay. The latter is payment for work done during the night while the other is payment for the excess of the regular eight-hour work. [Naric v. Naric Workers Union (1959)] SYNTHESIS OF RULES

[See: p. 19 of Handbook on Workers’ Statutory Monetary Benefits, issued by the Bureau of Working Conditions, 2006] Emergency overtime [Art. 89, LC] Any employee may be required by the employer to perform overtime work in any of the following cases: (1) When the country is at war or when any other national or local emergency has been declared by the National Assembly or the Chief Executive; (2) When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity; (3) When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature; (4) When the work is necessary to prevent loss or damage to perishable goods; and (5) Where the completion or continuation of the work started before the eighth hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer. Overtim e pay does not preclude night differential pay

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(1) An employer cannot compel an employee to work overtime Exception: Emergency work as provided for in Art. 89

overtime

(2) Additional compensation is demandable only if the employer had knowledge and consented to the overtime work rendered by the employee. Exception: Express approval by a superior NOT a requisite to make overtime compensable: (a) If the work performed is necessary, or that it benefited the company; or (b) That the employee could not abandon his work at the end of his eight-hour work because there was no substitute ready to take his place. [Manila Railroad Co. v. CIR, G.R. L-4614 (1952)] Note: However, the Court has also ruled that a claim for overtime pay is NOT justified in the absence of a written authority to render overtime after office hours during Sundays and holidays. [Global Incorporated v. Atienza, G.R. L-51612-13 (1986)] (3) Compensation for work rendered in excess of the 8 normal working hours in a day. (a) For ordinary days, additional 25% of the basic hourly rate. (b) For rest day/special day/holiday, additional 30% of the basic hourly rate. (4) A given day is considered an ordinary day, unless it is a rest day.

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(5) Undertim e does NOT offset overtim e. Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall NOT exempt the employer from paying the additional compensation required in this Chapter. [Art. 88, LC] No W aiver of Overtime Pay The right to overtime pay cannot be waived. The Labor Code (Art. 87) requires that an employee be paid all overtime compensation notwithstanding any agreement to work for a lesser wage. Consequently, such an agreement or "waiver" will not prevent an employee from recovering the difference between the wages paid the employee and the overtime compensation he or she is entitled to receive. [Cruz v. Yee Sing, G.R. L12046 (1959)] Exception: When the waiver of overtime pay is in consideration of benefits and privileges which may be more than what will accrue to them in overtime pay, the waiver MAY be permitted. [Meralco Workers Union v. MERALCO, G.R. L-11876 (1959)] Composite or Package Pay NOT per se illegal Composite or “package pay” or “all-inclusive salary” is an arrangement where the employee’s salary includes the overtime pay. In other words, the overtime pay is “built-in”. Two conditions arrangement:

for

validity

of

such

(1) There is a clear written agreement knowingly and freely entered by the employee; and (2) The mathematical result shows that the agreed legal wage rate and the overtime pay, computed separately, are equal to or higher than the separate amounts legally due. [Damasco v. NLRC, G.R. 115755 (2000)]

B.6. NIGHT WORK, DIFFERENTIAL

LABOR LAW

NIGHT

SHIFT

Night worker Any employed person whose work requires performance of a substantial number of hours of night work which exceed a specified limit. This limit shall be fixed by the Sec of Labor after consulting the workers’ representatives/labor organizations and employers. [Art. 154, LC as amended by RA 10151] Any employed person whose work covers the period from 10 o’clock in the evening to 6 o’clock the following morning, provided that the worker performs no less than 7 consecutive hours of work. [Book III, Rule XV, Sec. 2, IRR, through DO 119-12] Health Assessm ent At the worker’s request, they shall have the right to undergo a health assessment without charge and to receive advice on how to reduce or avoid health problems associated with their work: (a) Before taking up an assignment as a night worker; (b) At regular intervals during such an assignment; (c) If they experience health problems during such an assignment; With the exception of a finding of unfitness for night work, the findings of such assessments shall be confidential and shall NOT be used to their detriment, subject, however, to applicable company policies. [Art. 155, LC as amended by RA 10151; Book III, Rule XV, Sec. 3, IRR, through DO 119-12] Mandatory Facilities Mandatory facilities shall be made available for workers performing night work, which include the following: (a) Suitable first-aid and emergency facilities (b) Lactation station in required companies pursuant to RA 10028

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(c) Separate toilet facilities for men & women

dismissal or notice of dismissal as other workers who are prevented from working for health reasons. [Art. 157, LC as amended by RA 10151; Book III, Rule XV, Sec. 5, IRR, through DO 119-12]

(d) Facility for eating w/ potable drinking water; AND (e) Facilities for transportation and/or properly ventilated temporary sleeping or resting quarters, separate for male and female workers, shall be provided except where any of the ff. circumstances is present: i.

There is an existing company guideline, practice or policy, CBA, or any similar agreement providing for an equivalent or superior benefit; or

ii.

Start or end of the night work does NOT fall within 12 mn - 5 am; or

iii.

Workplace is located in an area that is accessible 24 hours to public transportation; or

iv.

Number of employees does NOT exceed a specified number as may be provided for by the SOLE in subsequent issuances [Art. 156, LC as amended by RA 10151; Book III, Rule XV, Sec. 4, IRR, through DO 119-12]

W omen Night W orkers Employers shall ensure that measures shall be taken to ensure that an alternative to night work for pregnant and nursing employees who would otherwise be called upon to perform such work. Such measures may include: (1) Transfer to day work – As far as practicable, pregnant or nursing employees shall be assigned to day work, before and after childbirth, for a period of at least sixteen (16) weeks, which shall be divided between the time before and after childbirth; Medical certificate issued by competent physician (OB/Gyne/Pedia) is necessary for the grant of: (a) additional periods of assignment to day work during pregnancy or after childbirth, provided that such shall not be more than 4 weeks or for a longer period as may be agreed upon by employer and worker;

Transfer If night worker is unfit for night work due to health reasons as certified by competent physician, s/he shall be: (1) Transferred in good faith to a job for which they are fit to work whenever practicable, which must be similar and equivalent position; (2) If transfer is not practicable, or workers are unable to render night work for a continuous period of not less than 6 months upon certification of a competent public health authority, they shall be granted the same benefits as other workers who are unable to work due to illness.

LABOR LAW

(b) extension of maternity leave; and (c) clearance to render night work. (2) Provision of social security benefits - in accordance with provisions of Act No 8282 (Social Security Act of 1997) and other existing company policy or collective bargaining agreement. (3) Extension of maternity leave – where transfer to day work is not possible, but requires recommendation by competent physician; without pay or using earned leave credits, if any [Art. 158, LC, as amended by RA 10151; Book III, Rule XV, Sec. 6, IRR, through DO 119-12]

(3) If workers are certified as temporarily unfit to render night work for a period of less than 6 months, they shall be given the same protection against PAGE 38 OF 222

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Protection against dismissal and loss of benefits attached to em ploym ent status, seniority, and access to promotion Where no alternative work can be provided to a woman employee who is not in a position to render night work, she shall be allowed to go on leave or on extended maternity leave, using her earned leave credits. A woman employee shall NOT be dismissed for reasons of pregnancy, childbirth and childcare responsibilities as defined under this Rule. She shall NOT lose the benefits regarding her employment status, seniority, and access to promotion which may attach to her regular night work position. [Book III, Rule XV, Sec. 8, IRR, through DO 119-12]

LABOR LAW

Rest days (night-off) Night shift employees are entitled to a weekly night-off (usually Saturday evening) or a weekly rest period of 24 hours beginning at the start of the night shift. W ork on special days Night shift employees are also entitled to the premium pay on special days and holidays. These days are reckoned as calendar days which start at midnight and end at the following midnight. The premium pay for the night shift also starts or ends at midnight. However, the employment contract, company policy or CBA may provide that in the case of night shift workers, days—including special days and regular holidays—shall begin on the night before a calendar day.

Night shift differential [Art. 86, LC] The additional compensation of 10% of an employee’s regular wage for each hour of work performed between 10pm and 6am. Coverage [Book 3, Rule 2, Sec. 1, IRR] All employees, except: (1) Those of the government and any of its political subdivisions, including government-owned and/or controlled corporations; (2) Those of retail and service establishments regularly employing not more than five (5) workers; (3) Domestic helpers and persons in the personal service of another; (4) Managerial employees as defined in Book Three of this Code; (5) Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof.

B.7. PART-TIME WORK A single, regular or voluntary form of employment with hours of work substantially shorter than those considered as normal in the establishment. (International Labor Organization) This excludes those forms of employment which, although referred to as part-time work, are in particular, irregular, temporary or intermittent employment, or in cases where hours of work have been temporarily reduced for economic, technical or structural reasons. The wage and benefits of part-time worker are in proportion to the number of hours worked. B.8. CONTRACT FOR PIECE OF WORK [Art. 1467, CC.] A contract for the delivery at a certain price of an article which the vendor in the ordinary course of his business manufactures or procures for the general market, whether the same is on hand at the time or not, is a contract of sale BUT if the goods are to be manufactured specially for the customer and upon his special order, and not for the general market, it is a contract for a piece of work.

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C. WAGES

LABOR LAW

Coverage/Exclusions

(a) It is the remuneration or earnings, however designated, capable of being expressed in terms of money,

Wage includes the fair and reasonable value of facilities furnished by the employer to the employee [Art. 97(f)] while allowances are excluded from the basic salary or wage computation. [Cebu Institute of Technology v Ople (1987)]

(b) Whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same,

Applicability

Definition

(c) Which is payable by an employer to an employee (d) Under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and

The Labor Code Title on wages shall not apply to the following [Art. 98 and Book 3, Rule VII, Sec 3, IRR]: (1) Farm tenancy or leasehold; (2) Household or domestic helpers, including family drivers and other persons in the personal service of another;

(e) Includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of board, lodging, or other facilities customarily furnished by the employer to the employee

(3) Homeworkers engaged in needlework; (4) Workers in registered cottage industries who actually work at home;

Fair and reasonable value - shall not include any profit to the employer, or to any person affiliated with the employer. [Art. 97(f), LC]

(5) Workers in registered cooperatives when so recommended by the Bureau of Cooperative Development upon approval of the Secretary of Labor;

“No work no pay” Principle General Rule: the age old rule governing the relation between labor and capital or management and employee is that a "fair day's wage for a fair day's labor." [Sugue v. Triumph International (2009)] Exception: When the laborer was able, willing and ready to work but was illegally locked out, suspended or dismissed, or otherwise illegally prevented from working. [Sugue v Triumph International, supra]

Note: Workers in registered barangay micro business enterprise are only exempted from the Minimum Wage Law, not from the Title on Wages [RA 9178]. C.1. WAGE VS. SALARY Wages and salary are in essence synonymous. [Songco v. NLRC (1990)] There are slight differences: Wage

“Equal W ork for Equal Pay” Principle Employees working in the Philippines, if they are performing similar functions and responsibilities under similar working conditions should be paid equally. If an employer accords employees the same position and rank, the presumption is that these employees perform equal work. [International School Alliance of Educators v. Hon. Quisumbing (2000)]

Salary

Paid for skilled or unskilled manual labor

Paid to white collar workers and denote a higher grade of employment

Not subject to execution, garnishment or attachment except for debts related to

Not exempt from execution, garnishment or attachment [Gaa vs. CA, 1985]

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(3) Establishments adversely affected by natural calamities. [Sec. 8, Wage Order No. 19, 2014]

necessities [Art. 1708] C.2. MINIMUM WAGE See also: DOLE Bureau of Working Condition’s Handbook on Worker’s Statutory Monetary Benefits and Wage Order No. NCR20. Definition Statutory minimum wage is the lowest wage rate fixed by law that an ER can pay his workers. [IRR, RA 6727, (o)] Coverage General Rule: The wage increases prescribed under Wage Orders apply to all private sector workers and employees receiving the daily minimum wage rates or those receiving up to a certain daily wage ceiling, where applicable, regardless of their position, designation, or status, and irrespective of the method by which their wages are paid. Exceptions: (1) Domestic 10361]

Helpers/kasambahay

LABOR LAW

[RA

(2) Workers of registered barangay micro business enterprise with Certificates of Authority issued by the Office of the Municipal or City Treasurer. [RA 9178] (3) Learners [RA 602]

Basis The basis of the minimum wage rates prescribed by law shall be the normal working hours, which shall not exceed 8 hours a day. [Sec 7, IRR of RA 6727] Freedom to bargain Despite the minimum wage order, employees are not prevented from bargaining for higher wages with their employers. Note: Daily minimum wage in NCR applicable from June 2, 2016 is now P491 [Wage Order No. NCR-19] Factors/Criteria in determ ining regional minimum wages: (1) Demand for living wages; (2) Wage adjustment index;

the consumer price

(3) Cost of living and changes or increases therein; (4) The needs of workers and their families; (5) The need to induce industries to invest in the countryside; (6) Improvements in standards of living;

(4) Apprentices [RA 602]

(7) Prevailing wage levels; (8) Fair return of the capital invested and capacity to pay of employers;

Exemptions upon Approval Upon application with and as determined by the Regional Tripartite Wages and Productivity Board, based on documentation and other requirements in accordance with applicable rules and regulations issued by the NWPC, the following may be exempted from the applicability of this Order:

(9) Effects in employment generation and family income; and (10) Equitable distribution of income and wealth along the imperatives of economic and social development. [Art. 124, LC]

(1) Distressed establishments; (2) Retail/Service establishments regularly employing not more than 10 workers;

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Procedure for W age Fixing Regional Board (Art. 123, LC)

LABOR STANDARDS

LABOR LAW

by

(1)

Preferably through time and motion studies.

(1) Investigate and study pertinent facts, based on criteria set in Art. 124

(2)

Consultation with representatives of ERs’ and workers’ organizations in a tripartite conference called by the DOLE Sec.

(2) Conduct public hearings or consultations with notice to employer and employee groups, provinces, city, municipal officials and other interested parties (3) Decide to ISSUE or NOT TO ISSUE a wage order §

Frequency: Wage orders issued may not be disturbed for 12 months from effective date; this serves as a bar for petitions for wage hikes as well

§

Except: when Congress passes a new law affecting wages or other supervening circumstances

§

Effectivity: If it decides to ISSUE a wage order, the wage order takes effect after 15 days from complete publication in at least 1 newspaper of general circulation in the region

(4) Appeal wage order to Commission within 10 calendar days; mandatory for the Commission to decide within 60 calendar days from filing Note: Filing of an appeal does not stay order unless appellant files an undertaking with a surety, to guarantee payment of employees if the wage order is affirmed (as amended by RA 6727) C.3. MINIMUM WAGE OF WORKERS PAID BY RESULTS

Request for the conduct of time and motion studies, to determine whether the non-time employees in an enterprise are being paid fair and reasonable wage rates, may be filed with the proper Regional Office. Where the output rates established by the employer do not conform to the standards set under the foregoing methods for establishing output rates, the employee shall be entitled to the difference between the amount he/she is entitled to receive and the amount paid by the employer. C.3.II MINIMUM W AGE APPRENTICES AND LEARNERS

OF

Wages of apprentices and learners shall in no case be less than 75% of the applicable minimum wage rates. [Art. 61 & 75, LC] Note: Learners employed in piece or incentive-rate jobs during the training period shall be paid in full for the work done. [Art. 76, LC] The Secretary of Labor and Employment may authorize the hiring of apprentices without compensation whose training on the job is required by the school or training program curriculum or as requisite for graduation or board examination. [Art. 72, LC] C.3.III. MINIMUM W AGE OF PERSONS W ITH DISABILITY

C.3.I. W ORKERS PAID BY RESULTS All workers paid by result, including those who are paid on piece-work, takay, pakyaw or task basis, shall receive not less than the prescribed wage rates per eight (8) hours of work a day, or a proportion thereof for working less than eight (8) hours. [Art. 124, LC] The wage rates of workers who are paid by results shall continue to be established in accordance with Art. 101 of the LC, as amended, and its IRR. This will be done:

A qualified disabled employee shall be subject to the same terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits or allowances as a qualified able-bodied persons. [Sec 5, RA 7277, The Magna Carta for Disabled Persons]

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C.4. COMMISSIONS Commissions have been defined as the recompense, compensation or reward of an agent, salesman, executor, trustee, receiver, factor, broker or bailee, when the same is calculated as a percentage on the amount of his transactions or on the profit to the principal. [Philippine Duplicator’s, Inc. v. NLRC (1993)] Commissions wage

as

part

of

(3) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment (Art. 113, LC), such as: (a) Employee debt to employer is due and demandable (Art. 1706, CC); (b) Attachment or execution in cases of debts incurred for necessities: food, shelter, clothing, medical attendance (Art. 1708, CC);

minimum

(c) Withholding tax; (d) Deductions of a legally established cooperative;

The Court held that the definition of “wage” under Art. 97 (f) of the LC explicitly includes commissions as part of wages. While commissions are, indeed, incentives or forms of encouragement to inspire employees to put a little more industry on the jobs particularly assigned to them, still these commissions are direct remunerations for services rendered. Likewise, there is no law mandating that commissions be paid only after the minimum wage has been paid to the employee. Verily, the establishment of a minimum wage only sets a floor below which an employee’s remuneration cannot fall, not that commissions are excluded from wages in determining compliance with the minimum wage law. [Iran v. NLRC (1998)] C.5. DEDUCTIONS FROM WAGES General Rule: No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees. (Art. 113, LC) Exceptions: (1) In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance; (2) For union dues, in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned; and

LABOR LAW

(e) Payment to 3rd parties upon written authority by employee; (f)

Deductions for loss or damage;

(g) SSS, PhilHealth, premiums;

Pag-IBIG

(h) Deduction for value meals and other facilities. It shall be unlawful to make any deduction from the wages of any employee for the benefit of the employer as consideration of a promise of employment or retention in employment. [Art. 117, LC] or to retaliate against the employee who filed a complaint. [Art. 118, LC] With Employee’s consent in Writing

Without Employee’s consent

(1) SSS Payments (1) (2) PHILHEALTH payments (3) Contributions to PAG-IBIG Fund (2) (4) Value of meals and other facilities (5) Payments to third persons with employee’s consent (3) (6) Deduction of absences (7) Union dues, where check-off is not provided in the CBA.

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Worker’s insurance acquired by the employer Union dues, where the right to check-off is recognized by the employer (provided in the CBA) Debts of the employee to the employer that have become due and demandable

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LABOR STANDARDS

Prohibition seeks to protect the employee against unwarranted practices that would diminish his compensation without his knowledge and consent. [Radio Communication of the Phil., Inc. v. Sec. of Labor (1989)] Note: Persons earning minimum wage are exempted from income tax

LABOR LAW

(1)

Mistake in the application of the law [Globe Mackay Cable v. NLRC, June 29, 1988]

(2)

Negotiated benefits [Azucena]

(3)

Reclassification of Positions – e.g. loss of some benefits by promotion.

(4)

Contingent or Conditional Benefits – the rule does not apply to a benefit whose grant depends on the existence of certain conditions, so that the benefit is not demandable if those preconditions are absent.

“That minimum wage earners as defined in Section 22(HH) of this Code shall be exempt from the payment of income tax on their taxable income: Provided, further, That the holiday pay, overtime pay, night shift differential pay and hazard pay received by such minimum wage earners shall likewise be exempt from income tax.” [RA 9504, Sec. 2 redefining sec. 24(A) of RA 8424]

Benefits initiated through negotiation between Employee and Employer, e.g. CBA, can only be eliminated or diminished bilaterally.

C.6. NON-DIMINUTION OF BENEFITS

C.7. FACILITIES VS SUPPLEMENTS

General Rule: There is a prohibition against elimination or diminution of benefits [Art. 100]

The distinction between facilities and supplement is relevant because the former is wage-deductible while the latter is not. Simply put, a wage includes facilities. [Art. 97, LC)

No wage order issued by any regional board shall provide for wage rates lower than the statutory minimum wage rates prescribed by Congress. [Art. 127, as amended by Republic Act No. 6727, June 9, 1989] Requisites If the following are met, then the employer cannot remove or reduce benefits [Vergara Jr. v Coca-Cola Bottlers Phils]: (1)

Ripened company policy: Benefit is founded on a policy which has ripened into a practice over a long period

(2)

Practice is consistent and deliberate and

(3)

Not due to error in the construction or application of a doubtful or difficult question of law. [Globe Mackay Cable vs. NLRC, 1988]

(4)

The diminution or discontinuance is done unilaterally by the employer.

The IRR definition [IRR Book III Rule 7-A Sec. 5] has 2 components: (1) Facilities are articles or services for the benefit of the employee or his family. This 1st part defines facilities. (2) Facilities shall not include tools of the trade or articles or service primarily for the benefit of the employer or necessary to the conduct of the employer’s business. This 2nd part is essentially defines what a supplement is. Criterion: In determining whether a privilege is a facility, the criterion is not so much its kind but it’s PURPOSE [Millares v NLRC & PICOP, 1999] Facilities are items of expense necessary for the laborer’s and his family’s existence and subsistence. [States Marine Corp. v. Cebu Seamen's Assoc., Inc., 1963]

W hen not applicable: At least one of the requisites is absent.

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Comparison between Facilities and Supplements

Facilities

Supplements

distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation [Art. 124, LC] 4 Elements of wage distortion

What it is Articles or services/items of expense

Extra remuneration or special benefits / articles or services / tools of the trade

(a)

Existing hierarchy of positions with corresponding salary rates;

(b)

A significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one;

(c)

The elimination of the distinction between the two levels; and

(d)

The existence of the distortion in the same region of the country. [Prubankers Assn. v. Prudential Bank and Co. (1999)]

Who Benefits For the benefit of the employee and his family; for their existence and subsistence

For the benefit or convenience of the employer

Deductible from Wage YES - Part of wage so NO - Independent of it is deductible the Wage so not deductible

How to Resolve [LC Art. 124] Organized Establishm ent

Requirements for deducting value of facilities Mere availment is not sufficient to allow deductions from employees’ wages. Before the value of facilities can be deducted from the employees’ wages, the following requisites must all be attendant: (1) Proof must be shown that such facilities are customarily furnished by the trade; (2) The provision of deductible facilities must be voluntarily accepted in writing by the employee; and (3) Facilities must be reasonable value.

charged

LABOR LAW

(1)

Employer and the union shall negotiate to correct the distortions.

(2)

Disputes shall be resolved through the grievance procedure.

(3)

If still unresolved, voluntary arbitration.

Grievance Procedure (under the CBA) à if unresolved, VOLUNTARY arbitration Unorganized Establishment (1)

ERs and Employees shall endeavor to correct such distortions.

(2)

Disputes shall be settled through the National Conciliation and Mediation Board.

(3)

If still unresolved after 10 calendar days of conciliation, it shall be referred to the appropriate branch of the NLRC – compulsory arbitration

at

[SLL International Cable Specialists v. NLRC, 2011] C.8. WAGE DISTORTION/RECTIFICATION A situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the

§ Both the employer and employee cannot use economic weapons. (4)

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Employer cannot declare a lock-out; Employee cannot declare a strike because the law has provided for a procedure for settling

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(5)

LABOR STANDARDS

The salary or wage differential does not need to be maintained. [National Federation of Labor v. NLRC, 1994]

National Conciliation and Mediation Board à if unresolved, COMPULSORY arbitration by the NLRC CBA vis-à-vis W age Orders – CBA creditability In determining an employee’s regular wage, the pertinent stipulations in the CBA are controlling, provided the result is not less than the statutory requirement (Philippine National Bank vs. PEMA, 1982) Note: The manner of resolving wage distortion is largely based on the applicable wage order. The current one for NCR, WO 20, refers to the procedure in Art. 124 of the Labor Code

the employer has no right to deduct the proportionate amount corresponding to the days when no work was done. The monthly compensation is evidently intended precisely to avoid computations and adjustments resulting from the contingencies just mentioned which are routinely made in the case of workers paid on daily basis. (Wellington Investment Inc. v. Trajano, 1995) For daily-paid EEs Daily-paid employees are those who are paid on the days actually worked and on unworked regular holidays. (1) For those who are required to work every day including Sundays or rest days, special days and regular holidays: 394.1 days/year 296 days

ordinary working

20 days

10 regular holidays x 200%

C.9. DIVISOR TO DETERMINE DAILY RATE

52 rest days x 130 %

Suggested formula for computing the Estimated Equivalent Monthly Rate (EEMR) EEMR = (Applicable Daily Rate (ADR) x days/year) ÷ 12

Monthly-paid employees are those who are paid every day of the month, including unworked rest days, special days, and regular holidays. 365 days/year ordinary working days

52 days

rest days

10 days

regular holidays

7 days

special days

67.60 days

7 special days x 130%

9.1 days (2) For those who do not work and are not considered paid on Sundays or rest days:

For m onthly-paid EEs

296 days

LABOR LAW

313 days/year 296 days

ordinary working

12 days

regular holidays

5 days

special days (if considered paid; if actually worked, this is equivalent to 6.5 days)

(3) For those who do not work and are not considered paid on Saturdays and Sundays or rest days: 278 days/year

Note: This monthly salary shall serve as compensation "for all days in the month whether worked or not," and "irrespective of the number of working days therein." In the event of the declaration of any special holiday, or any fortuitous cause precluding work on any particular day or days the employee is entitled to the salary for the entire month and

261 days

ordinary working days

10 days

regular holidays

7 days

special days (if considered paid; if actually worked, this is equivalent to 6.5 days)

[Sec. 6, Rules Implementing RA 6727, 1989]

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D. REST DAYS

(6) Under other circumstances analogous or similar to the foregoing as determined by the Secretary of Labor and Employment. [Art. 92, LC]

D.1. WEEKLY REST DAY It shall be the duty of every employer, whether operating for profit or not, to provide each of his employees a rest period of not less than twenty-four (24) consecutive hours after every six (6) consecutive normal work days. [Art. 91 (a)]

Synthesis of the Rules (1)

The employer shall determine and schedule the weekly rest day of his employees subject to collective bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may provide. However, the employer shall respect the preference of employees as to their weekly rest day when such preference is based on religious grounds. [Art. 94 (b)]

(2) No work, no pay principle applies

(4) Premium pay is additional 30% of the basic pay. (5) Employer selects the rest day of his employees (6) However, employer must consider the religious reasons for the choice of a rest day. (7)

D.2. EMERGENCY REST DAY WORK

The employer may require his employees to work on any day: (1) In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and property, or imminent danger to public safety; (2) In cases of urgent work to be performed on the machinery, equipment, or installation, to avoid serious loss which the employer would otherwise suffer; (3) In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures; or

Rest day of not less than 24 consecutive hours after 6 consecutive days of work.

(3) If an employee works on his designated rest day, he is entitled to a premium pay.

Preference of the employee

(4) To prevent loss perishable goods;

LABOR LAW

damage

to

When the choice of the employee as to his rest day based on religious grounds will inevitably result in serious prejudice or obstruction to the operations and the employer cannot normally be expected to resort to other measures, the employer may so schedule the weekly rest day of his choice for at least two days in a month. [IRR, Book Three, Rule III, Sec. 4]

E. HOLIDAY PAY/PREMIUM PAY Holiday pay is a one-day pay given by law to an employee even if he does not work on a regular holiday. This gift of a day’s pay is limited to each of the 12 regular holidays. Note: Art. 94 (c), LC was superseded by E.O. 203, which was subsequently amended by RA 9177, 9256, 9492, and Proclamation No. 459. The current state of the law is discussed below.

(5) Where the nature of the work requires continuous operations and the stoppage of work may result in irreparable injury or loss to the employer; and

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LABOR LAW

E.1. COVERAGE

Regular holidays

General Rule: All employees

Proclamation No. 1105 signed by President Aquino on August 20, 2015, provides for the observance of the regular holidays and special (non-working) days for the year 2016 on the following dates:

Exceptions: (1)

(2)

Those of the government and any of the political subdivision, including government-owned and controlled corporation;

(1) New year’s Day – Jan. 1 (2) Maundy Thursday – Mar. 24

Those of retail and service establishments regularly employing less than 10 workers;

(3) Good Friday – Mar. 25 (4) Araw ng Kagitingan – Apr. 9

(3)

Domestic helpers and persons in the personal service of another;

(5) Labor Day – May 1

(4)

Managerial employees and officers or members of the managerial staff as defined in Book III

(7) National Heroes Day – Aug. 31

(5)

Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. [Sec. 1, Rule IV of the IRR]

(6) Independence Day – June 12 (8) Bonifacio Day – Nov. 30 (9) Christmas Day – Dec. 25 (10) Rizal Day – Dec. 30 (11) Id-ul-Fitr – 1st day of 10th lunar month of Shawwal (12) Id-ul Adha – 10th day of the 12th lunar month of Dhu’l-Hijja Special (Non-W orking Days)

Retail Establishment is one principally engaged in the sale of goods to end-users for personal or household use; Service Establishment is one principally engaged in the sale of service to individuals for their own or household use and is generally recognized as such. [RA 6727/The Wage Rationalization Act, IRR]

(1) Chinese New Year – Feb. 8 (2) EDSA Revolution Anniv – Feb. 25 (3) Black Saturday – Mar. 26 (4) National and Local Elections – May 9 (5) Ninoy Aquino Day – Aug. 21 (6) All Saints Day – Nov. 1 (7) Additional special (Non-working) days (a) Jan. 2 (b) Oct. 31 (c) Dec. 24 (d) Dec. 31

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P.D. 1083 (Code of Muslim Personal Laws) SEE: Arts. 169-173 Specifically for the Muslim Areas, P.D. 1083, in its Book V, Title, recognizes five (5) Muslim Holidays, namely: (1) Amun Jadid (New Year) which falls on the first (1st) day of the lunar month of Muharram; (2) Mauli-un-Nabi (Birthday of the Prophet Muhammad) which falls on the twelfth (12th) day of the third (3rd) lunar month of Rabi-ul-Awwal; (3) Lailatul Isra Wal Mi Rai (Nocturnal Journey and Ascencion of the Prophet Muhammand) which falls on the twentyseventh (27th) day of the seventh (7th) lunar month of Rajab; (4) Id-ul-Fitr (Hari Raja Pausa) which falls on the first (1st) day of the tenth (10th) lunar month of Shawwal commemorating the end of the fasting season; and (5) Id-ul-Adha (Hari Raha Haji) which falls on the tenth (10th) day of the twelfth (12th) lunar month of Dhu’l-Hijja. Note: Id-ul-Fitr (Eid’l Fitr) and Id-ul-Adha (Eid’l Adha) have been added to the list of national legal holidays. Note: There should be no distinction between Muslims & non-Muslims as regards to the payment of benefits for Muslim holidays. Wages & other emoluments granted bylaw to the workingman are determined on the basis of the criteria laid down by laws & not on worker’s faith. Art. 3(3), PD 1083 states that nothing herein shall be construed to operate to the prejudice of a non-Muslim. [San Miguel Corp vs. CA (2002)] Holiday pay com putation (Art. 94 Labor Code, Book III, Rule IV of IRR, RA 9424 and DOLE Memorandum Circular 1 Series of 2004)

LABOR LAW

General Rule: An employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate. [Art. 94(b)] According to the LC, IRR and Memo: Work on any regular holiday, not exceeding 8 hours

Computation

Work on any regular 200% of regular daily holiday, if it exceeds 8 wage (for the 1st 8 hours/overtime hours) + 30% of hourly rate on said day Work on any regular 200% of regular daily holiday which falls on wage + 30% of such the scheduled rest amount day, not exceeding 8 hours Work on any regular holiday which falls on scheduled rest day, if it exceeds 8 hours/overtime

Regular holiday-onrest day rate (200% of regular daily wage plus 30% of such amount) + 30% of hourly rate on said day.

Work on special Regular daily wage + holiday not exceeding 30% thereof 8 hours Work on special holiday

Regular daily wage + 50% thereof

According to DOLE Mem o Circular 104, a “special holiday”/”special day” includes the National Special Days, and declared special days such as Special Nonworking Holiday, Special Public Holiday and Special National Holiday. Such days are entitled to the rates prescribed above. These days are not the same as a special working holiday. A special working holiday is considered an ordinary working day, so there is no premium pay.

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LABOR LAW

Double holiday pay

(c) 10 days – regular holidays

According to “DOLE Explanatory Bulletin on Worker’s Entitlement to Holiday Pay on 9 April 1993,” if two holidays fall on the same day:

(d) 7 days – special holidays

(1)

If unworked, 200% of basic wage.

(2)

If worked, 300% of basic wage. [Azucena]

Note: For 2016, there are 12 regular holidays and 10 special holidays. (See previous enumeration of holidays ) (2) As a general rule, for a company with a 6-day working schedule, the divisor 313 already means that the legal holidays are included in the monthly pay of the employee. The divisor is arrived at by subtracting all Sundays from the total number of calendar days in a year.

Double Holiday Rule for Monthly-paid employees For covered employees whose monthly salaries are computed based on 365 days and for those other employees who are paid using factor 314, or 262, or any other factor which already considers the payment for the 11 regular holidays, NO additional payment is due them. [BWC-WHSD Opinion No. 053, s. 1998]

(3) As a general rule for a company with a 5-day working schedule, the divisor 287 means that the holiday pay is already included in the monthly salary of the employee.

Divisors

Where the employer had a standing practice of using 286 days as a divisor and following the correct computation and taking into account that one of the holidays always falls on a Sunday, therefore increasing the divisor to “287”, but increase would in some instances prejudice the employees, in violation of the proscription against nondiminution of benefits under Sec. 100 of the labor code, the “287” divisor should only be used for computations which would be advantageous to the employer (i.e. deduction for absences) and not for computations which would diminish the existing benefits of the employees (i.e., overtime pay, holiday pay and leave conversions).[Trans Asia Phils. v. NLRC (1999)]

The divisor assumes an important role in determining whether or not holiday pay is already computed.

Sundays

Successive holiday pay According to IRR, Rule IV, Sec. 10, an employee is entitled to holiday pay for both days, IF: (1) He is present on day immediately preceding first holiday; or (2) He works on first holiday, which entitles him to pay on second holiday.

(1) Monthly paid employees are not entitled to the holiday pay if their total annual income is divided by 365 days resulting in a wage which is beyond the minimum wage per day because they are considered paid everyday of the year including holidays, rest days, and other non-working days. The 365 days are as follows: (a) 296 days – ordinary days

(1) When a holiday falls on a Sunday, the following Monday will not be considered a holiday unless a proclamation says so. (2) Furthermore as stated in the Wellington case (see below), a legal holiday falling on a Sunday does not create a legal obligation to pay extra, aside from the usual holiday pay, to monthly-paid employees. [Azucena citing Letter of Instruction No. 1087]

(b) 52 days – rest days

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No provision of law requires any employer to make adjustments in the monthly salary rate set by him to take account of legal holidays falling on Sundays in a given year, otherwise to reckon a year at more than 365 days. [Wellington Investment and Manufacturing Corporation vs. Trajano (1995)] Non-working/scheduled rest day Where the day immediately preceding the holiday is a non-working day in the establishment or the scheduled rest day of the employee, he shall not be deemed to be on leave of absence on that day, in which case he shall be entitled to the holiday pay if he worked on the day immediately preceding the non-working day or rest day. [Book III, Rule IV, Sec 6 (c), IRR] Example: If a holiday falls on Monday, and Sunday is a non-working day in the establishment or is the scheduled rest day of the employee, the employee shall be entitled to holiday pay if he worked on Saturday (which is the day immediately preceding Sunday, the nonworking day or rest day). Right to absences

holiday

pay

in

case

of

All covered employees shall be entitled to the benefit provided herein when they are on leave of absence with pay. Employees who are on leave of absence without pay on the day immediately preceding a regular holiday may not be paid the required holiday pay if he has not worked on such regular holiday. [Book III, Rule IV, Sec 6(a), IRR] Note: (1) If an employee is on leave of absence with pay on the day immediately preceding a regular holiday, he is entitled to holiday pay. (2) If an employee is on leave of absence without pay on the day immediately preceding a regular holiday, he is not

LABOR LAW

entitled to holiday pay unless he works on such regular holiday. In case of tem porary cessation of work (1) In cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair or cleaning of machineries and equipment is undertaken, the regular holidays falling within the periods shall be compensated in accordance with this Rule. (2) The regular holiday during the cessation of operation of an enterprise due to business reverses as authorized by the Secretary of Labor may not be paid by the employer. [Book III, Rule IV, Sec 7, IRR] An employee is entitled to holiday pay for the regular holidays falling within the period in cases of temporary shutdowns or cessation of work, when: (1) An annual inventory; or (2) Repair or cleaning of machineries and equipment is undertaken. The employer may not pay his employees for the regular holidays during the suspension of work if: the cessation of operation is due to business reverses, and is authorized by the Secretary of Labor. E.2. TEACHERS, PIECE WORKERS, SEAFARERS, SEASONAL WORKERS, ETC. (1) Private school teachers, including faculty members of colleges and universities, may not be paid for the regular holidays during semestral vacations. They shall, however, be paid for the regular holidays during Christmas vacation; (2) Where a covered employee, is paid by results or output, such as payment on piece work, his holiday pay shall not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday; Provided, However, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate.

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(3) Seasonal workers may not be paid the required holiday pay during off-season when they are not at work (4) Workers who have no regular working days shall be entitled to the benefits provided in this Rule. [Book III, Rule IV, Sec. 8, IRR]

holidays are known to both the school and faculty members as “no class day”; certainly the latter do not expect payment for said unworked holidays. (2)

Holiday Pay of Hourly-Paid Faculty Mem bers (1) (3) (4)

They are not entitled to payment of holiday pay because they are paid only for work actually done. Since regular the extended days. Similarly, when classes are called off or shortened on account of typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whether or not extensions are ordered. [Jose Rizal College v. NLRC, (1987)]

They are entitled to their hourly rate on days declared as special holidays. When a special public holiday is declared, the faculty member paid by the hour is deprived of expected income, and it does not matter that the school calendar is extended in view of the days or hours lost, for their income that could be earned from other sources is lost during

Premium Pay Premium pay refers to the additional compensation for work performed within 8 hours on non-work days, such as rest days and special days. Coverage [Book 3, Rule 3, Sec. 7, IRR]

Piece workers Philosophy underlying the exclusion of piece workers from the 8-hour law is that said workers are paid depending upon the work they do irrespective of the amount of time employed in doing said work. [Red v. Coconut Products Ltd., v. CIR (1966)]

General Rule: All employees Exceptions: (1) Those of the government and any of the political subdivision, including government-owned and controlled corporations; (2) Managerial employees as defined in Book III;

Seafarers Any hours of work or duty including hours of watch-keeping performed by the seafarer on designated rest days and holidays shall be paid rest day or holiday pay. (Section 11.C, Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels) Seasonal workers Seasonal workers who do not work during offseason are not entitled to pay for the regular holidays occurring during their off-season. Workers assigned to “skeleton crews” that work during the off-season have the right to be paid on regular holidays falling in that duration. PAGE 52 OF 222

(3) Househelpers and persons in the personal service of another; (4) Workers who are paid by results, including those who are paid on piece rate, takay, pakyaw, or task basis, and other noontime work, if their output rates are in accordance with the standards prescribed in the regulations, or where such rates have been fixed by the Secretary of Labor and Employment; (5) Field personnel, if they regularly perform their duties away from the principal or branch office or place of business of the ER and whose actual hours of work in the filed cannot be determined with reasonable certainty.

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Premium pay rates [DOLE Memorandum Circular 1, Series of 2004]

LABOR LAW

F. LEAVES F.1. SERVICE INCENTIVE LEAVE PAY

When Work Performed On scheduled rest day

Premium Pay Coverage

30% of regular wage

On Sunday ONLY IF this is 30% of regular the ESTABLISHED rest wage day

Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. [Art. 95(a), LC.]

On Sunday and holidays, 30% of regular when no regular work and wage rest days

Service Incentive Leave DOES NOT apply to the following employees:

On any special holiday/special day

30% of regular wage

On any special holiday /special day falling on scheduled rest day

50% of regular wage

On a regular holiday falling on a rest day

230% of regular wage

(1) Those of the government and any of its political subdivisions, including GOCCs; (2) Domestic helpers and persons in the personal service of another; (3) Managerial employees as defined in Book 3 of this Code;

Rate Adjustments Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a higher premium pay than that prescribed under this Article, the employer shall pay such higher rate. [Art. 93 (d), LC.] The employer and his employees or their representatives are not prevented from entering into any agreement with terms more favorable to the employees. [Book III, Rule II, Sec. 9, IRR.] The laws and regulations should not be used to diminish any benefit granted to the employees under existing laws agreements and voluntary employer practices. [Ibid] Nothing in this rule shall justify an employer in reducing the compensation of his employees for the unworked Sundays, holidays, or other rest days which are considered paid off days or holidays by agreement or practice subsisting upon the effectivity of the Code. [Book III, Rule III, Sec. 8, IRR].

(4) Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof; (5) Those who are already enjoying the benefit herein provided; (6) Those enjoying vacation leave with pay of at least 5 days; (7) Those employed in establishments regularly employing less than 10 employees. [Book 3, Rule 5, Sec. 1, IRR] Piece-rate employees are entitled to service incentive leave pay. The Court looked at several factors which led them to conclude that petitioners, although compensated on a per piece basis, were regular employees of. [Labor Congress of the Phils., v. NLRC (1998)] Teachers of private school on contract basis are entitled to service incentive leave. [Cebu Institute of Technology v. Ople (1987)] The law grants annual SIL of five days to domestic workers but their SIL shall not be

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converted to cash or carried over to succeeding years. [R.A. No. 10361, Sec. 5]

LABOR LAW

F.2. MATERNITY LEAVE [Sec. 14-A of RA 1161 (Social Security Law) as amended by RA 7322 and RA 8282]

Meaning of “1 year of service” "At least one year service" shall mean service for not less than 12 months, whether continuous or broken, reckoned from the date the employee started working, including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contract is less than 12 months, in which case said period shall be considered as one year. [Book III, Rule V, Sec. 3, IRR.] Arbitration or Adm inistrative Action The grant of benefit IN EXCESS of that provided herein shall not be made a subject of arbitration or any court or administrative action. [Art. 95 (c), LC] The cause of action of an entitled employee to claim his service incentive leave pay accrues from the moment the employer refuses to remunerate its monetary equivalent if the employee did not make use of said leave credits but instead chose to avail of its commutation (into money). Accordingly, if the employee wishes to accumulate his leave credits and opts for its commutation upon his resignation or separation from employment, his cause of action to claim the whole amount of his accumulated service incentive leave shall arise when the employer fails to pay such amount at the time of his resignation or separation from employment. [Auto Bus Transport vs. NLRC (2005)] Commutable nature of benefit The service incentive leave shall be commutable to its money equivalent if not used or exhausted at the end of the year. [Book 3, Rule 5, Sec. 5]

Coverage Every pregnant woman in the private sector, whether married or unmarried, is entitled to the maternity leave benefits. This is applicable to both childbirth and miscarriage. Requisites (1) Employment: A female employee employed at the time of delivery, miscarriage or abortion (2) Contribution: who has paid at least 3 monthly contributions in the 12-month period immediately preceding the semester of her childbirth, or miscarriage. (3) Notice: employee notified employer of her pregnancy and the probable date of her childbirth, which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide. Benefit received A daily maternity benefit equivalent to 100% of her average daily salary credit for: (1) 60 days for normal delivery (2) 78 days for caesarean delivery Note: This benefit shall NOT be included in the computation of 13th month pay as it is granted to an employee in lieu of wages which is the basis for computing 13th month. Only 4 m aternity leaves available The maternity benefits provided under the Social Security Law shall be paid only for the first four (4) deliveries or miscarriages

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SSS pays for the maternity leave

Benefit

The employer advances the benefit to the employee but the SSS shall immediately reimburse the employer of one hundred percent (100%) of the amount upon receipt of satisfactory proof of such payment and legality thereof

It shall be for 7 calendar days, with full pay, consisting of basic salary and mandatory allowances fixed by the Regional Wage Board, if any, provided that his pay shall not be less than the mandated minimum wage. [Sec. 2, RA 8187]

Other conditions (1) Employer shall advance the payment subject to reimbursement by the SSS within 30 days from filing of leave application. (2) Availment shall be a bar to the recovery of sickness benefits provided by this Act for the same period for which daily maternity benefits have been received. (3) Employee may only avail of benefit for the first four (4) deliveries or miscarriages. (4) Sanction: That if an employee should give birth or suffer miscarriage (a) Without the required contributions having been remitted for her by her ER to the SSS, or (b) Without the latter having been previously notified by the ER of time of the pregnancy, then the employer shall pay to the SSS damages equivalent to the benefits which said employee member would otherwise have been entitled to.

It shall apply to the first 4 deliveries of the employee’s lawful wife with whom he is cohabiting. Cohabiting means the obligation of the husband and wife to live together. [Sec. 1, IRR, RA 8187] If the spouses are not physically living together because of the workstation or occupation, the male employee is still entitled to the paternity leave benefit. Usage of the benefit Usage of the leave shall be after the delivery, without prejudice to an employer’s policy of allowing the employee to avail of the benefit before or during the delivery, provided that the total number of days shall not be more than 7 days for each covered delivery. [Sec. 5, IRR, RA 8187] Conditions for entitlement [Sec. 3, IRR, RA 8187] (1) He is married; (2) He is an employee at the time of the delivery of his child; (3) He is cohabiting with his spouse at the time that she gives birth or suffers a miscarriage;

F.3. PATERNITY LEAVE [RA 8187 (Paternity Leave Act of 1996)]

Coverage and Purpose Paternity leave is granted to all married male employees in the private and public sectors, regardless of their employment status (e.g. probationary, regular, contractual, project basis). The purpose of this benefit is to allow the husband to lend support to his wife during her period of recovery and/or in nursing her newborn child. [Sec. 3, RA 8187]

(4) He has applied for paternity leave with his ER within a reasonable period of time from the expected date of delivery by his pregnant spouse, or within such period as may be provided by company rules and regulations, or by CBA; and, (5) His wife has given birth or suffered a miscarriage. Application for paternity leave See number 4 under conditions for entitlement.

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In case of miscarriage, prior application for paternity leave shall not be required. [Sec. 4, IRR, RA 8187] Non-conversion to cash In the event that the paternity leave is not availed of, it shall not be convertible to cash and shall not be cumulative. [Sec. 7, IRR, RA 8187] Crediting of existing benefits (1) If the existing paternity leave benefit under the CBA, contract, or company policy is greater than 7 calendar days as provided for in RA 8187, the greater benefit shall prevail. (2) If the existing paternity leave benefit is less than that provided in RA 8187, the ER shall adjust the existing benefit to cover the difference. [Sec. 9, IRR, RA 8187] Where a company policy, contract, or CBA provides for an emergency or contingency leave without specific provisions on paternity leave, the ER shall grant to the employee 7 calendar days of paternity leave. [Sec. 9, IRR, RA 8187] F.4. PARENTAL LEAVE

LABOR LAW

(3) Spouse is detained or is serving sentence for a criminal conviction for at least one (1) year; (4) Physical and/or mental incapacity of spouse as certified by a public medical practitioner; (5) Legal separation or de facto separation from spouse for at least one (1) year: Provided, that he/she is entrusted with the custody of the children; (6) Declaration of nullity or annulment of marriage as decreed by a court or by a church: Provided, that he/she is entrusted with the custody of the children; (7) Abandonment of spouse for at least one (1) year; (8) Unmarried father/mother who has preferred to keep and rear his/her child/children, instead of having others care for them or give them up to a welfare institution; (9) Any other person who solely provides parental care and support to a child or children: Provided, that he/she is duly licensed as a foster parent by the Department of Social Welfare and Development (DSWD) or duly appointed legal guardian by the court; and

Leave benefits granted to a solo parent to enable him/her to perform parental duties and responsibilities where physical presence is required. [Sec. 3 (d), RA 8972]

(10) Any family member who assumes the responsibility of head of family as a result of the death, abandonment, disappearance, or prolonged absence of the parents or solo parent for at least one (1) year. [Sec. 3 (a), RA 8972]

Coverage

Conditions for Entitlement

Any solo parent or individual who is left alone with the responsibility of parenthood due to:

A solo parent employee shall be entitled to the parental leave under the following conditions:

[RA 8972 (Solo Parents’ Welfare Act of 2000)]

(1) Giving birth as a result of rape or and other crimes against chastity even without a final conviction of the offender: Provided, That the mother keeps and raises the child; (2) Death of spouse;

(1) He/she has rendered at least one (1) year of service, whether continuous or broken; (2) He/she has notified his/her employer that he/she will avail himself/herself of it, within a reasonable period of time; and (3) He/she has presented to his/her employer a Solo Parent Identification

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Card, which may be obtained from the DSWD office of the city or municipality where he/she resides. [Sec 19, Art. V, IRR, RA 8972] Availm ent

F.5. LEAVES FOR VICTIMS OF VIOLENCE AGAINST WOMEN [RA 9262 (Anti-Violence against Women and Their Children Act of 2004)] Coverage and Purpose

The parental leave is in addition to leave privileges under existing laws with full pay, consisting of basic salary and mandatory allowances. It shall not be more than seven (7) working days every year. [Sec. 8, RA 8972] Grant of Flexible W ork Schedule

against

VAWC leave is granted to women employees who are victims of violence, as defined in RA 9262. The leave benefit covers the days that the women employee has to attend to medical or legal concerns. Definition of Terms

The employer shall provide for a flexible working schedule for solo parents: Provided, That the same shall not affect individual and company productivity: Provided, further, That any employer may request exemption from the above requirements from the DOLE on certain meritorious grounds. [Sec. 6, RA 8972] Protection Discrimination

LABOR LAW

W ork

No employer shall discriminate against any solo parent employee with respect to terms and conditions of employment on account of his/her status. [Sec. 7, RA 8972]

Violence against wom en and their children – refers to any act or a series of acts committed by any person against a woman who is his wife, former wife, or against a woman with whom the person has or had a sexual or dating relationship, or with whom he has a common child, or against her child whether legitimate or illegitimate, within or without the family abode, which result in or is likely to result in physical, sexual, psychological harm or suffering, or economic abuse including threats of such acts, battery, assault, coercion, harassment or arbitrary deprivation of liberty. VAWC includes, but is not limited to, the following acts:

Termination of the Benefit A change in the status or circumstance of the parent claiming the benefit under the law, such that he/she is no longer left alone with the responsibility of parenthood, shall terminate his/her eligibility for these benefits. [Sec. 3 (a), RA 8972]

(1) “Physical Violence" refers to acts that include bodily or physical harm; (2) "Sexual violence" refers to an act which is sexual in nature, committed against a woman or her child. It includes, but is not limited to: (a) Rape, sexual harassment, acts of lasciviousness, treating a woman or her child as a sex object, making demeaning and sexually suggestive remarks, physically attacking the sexual parts of the victim's body, forcing her/him to watch obscene publications and indecent shows or forcing the woman or her child to do indecent acts and/or make films thereof, forcing the wife and

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mistress/lover to live in the conjugal home or sleep together in the same room with the abuser; (b) Acts causing or attempting to cause the victim to engage in any sexual activity by force, threat of force, physical or other harm or threat of physical or other harm or coercion;

LABOR LAW

Benefit In addition to other paid leaves under existing labor laws, company policies, and/or CBA, the qualified victim-employee shall be entitled to a leave of up to 10 days with full pay, consisting of basic salary and mandatory allowances fixed by the Regional Wage Board, if any. [Sec. 45, RA 9262]

(c) Prostituting the woman or child. (3) "Psychological violence" refers to acts or omissions causing or likely to cause mental or emotional suffering of the victim such as but not limited to intimidation, harassment, stalking, damage to property, public ridicule or humiliation, repeated verbal abuse and mental infidelity. It includes causing or allowing the victim to witness the physical, sexual or psychological abuse of a member of the family to which the victim belongs, or to witness pornography in any form or to witness abusive injury to pets or to unlawful or unwanted deprivation of the right to custody and/or visitation of common children. (4) "Economic abuse" refers to acts that make or attempt to make a woman financially dependent which includes, but is not limited to the following: (a) Withdrawal of financial support or preventing the victim from engaging in any legitimate profession, occupation, business or activity, except in cases wherein the other spouse/partner objects on valid, serious and moral grounds as defined in Article 73 of the Family Code; (b) Deprivation or threat of deprivation of financial resources and the right to the use and enjoyment of the conjugal, community or property owned in common; (c) Destroying household property; (d) Controlling the victims' own money or properties or solely controlling the conjugal money or properties. [Sec.3, RA 9262]

Requirement To be entitled to the leave benefit, the only requirement is for the victim-employee to present to her employer a certification from the barangay chairman or barangay councilor or prosecutor or the Clerk of Court, as the case may be, that an action relative to the matter is pending. Usage of the Benefit The usage of the 10-day leave shall be at the option of the woman employee. In the event that the leave benefit is not availed of, it shall not be convertible into cash and shall not be cumulative. A victim of VAWC who is employed shall be entitled to a paid leave of up to ten (10) days in addition to other paid leaves under the Labor Code and Civil Service Rules and Regulations and other existing laws and company policies: (1) At any time during the application of any protection order, investigation, prosecution and/or trial of the criminal case, extendible when the necessity arises as specified in the protection order. (2) Upon the issuance of the Punong Barangay/kagawad or prosecutor or the Clerk of Court, as the case may be, of a certification (at no cost) to the woman that such an action is pending, and this is all that is required for the employer to comply with the 10- day paid leave. (3) For government employees, in addition to the aforementioned certification, the employee concerned must file an application for leave citing as basis R.A. 9262. [Sec. 42, IRR, RA 8972]

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F.6. SPECIAL LEAVE BENEFITS (SLB) FOR WOMEN [RA 9710 (The Magna Carta of Women), DOLE DO No. 112, Series of 2011 as amended by DO No. 112-A Series of 2012] Special Leave Benefit for W omen A female employee’s leave entitlement of two (2) months with full pay from her employer based on her gross monthly compensation following surgery caused by gynecological disorders, provided that she has rendered continuous aggregate employment service of at least six (6) months for the last 12 months. Gynecological Disorders Disorders that would require surgical procedures such as, but not limited to, dilatation and curettage and those involving female reproductive organs such as the vagina, cervix, uterus, fallopian tubes, ovaries, breast, adnexa and pelvic floor, as certified by a competent physician. It shall also include hysterectomy, ovariectomy, and mastectomy. Gross Monthly Compensation The monthly basic pay plus mandatory allowances fixed by the regional wage boards. [Sec. 7, Rule II, IRR, RA 9710] Basic Requirement The woman employee should have been with the company for 12 months prior to surgery. An aggregate service of at least six (6) months within the said 12-month period is sufficient to entitle her to avail of the special leave benefit. Employment service includes absences with pay such as use of other mandated leaves, company-granted leaves and maternity leaves Competent Physician A medical doctor preferably specializing in gynecological disorders or is in the position to

LABOR LAW

determine the period of recuperation of the woman employee. [Sec. 1, DO 112, as amended] Conditions for Entitlement Any female employee, regardless of age and civil status, shall be entitled to a special leave benefit, provided she has complied with the following conditions: (1) She has rendered at least 6 months continuous aggregate employment service for the last 12 months prior to surgery; (2) She has filed an application for special leave (3) She has undergone surgery due to gynecological disorders as certified by a competent physician. [Sec. 2, DO 112] Application for Special Leave Application before surgery The employee shall file her application for leave with her employer within a reasonable period of time from the expected date of surgery, or within such period as may be provided by company rules and regulations or by CBA. Application after surgery Prior application for leave shall not be necessary in cases requiring emergency surgical procedure, provided that the employer shall be notified verbally or in written form within a reasonable period of time and provided further that after the surgery or appropriate recuperating period, the female employee shall immediately file her application using the prescribed form. [Sec. 3, DO 112] Period of Entitlement The 2 months special leave is the maximum period of leave with pay that a woman employee may avail of under RA 9710.

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For purposes of determining the period of leave with pay that will be allowed to a female employee, the certification of a competent physician as to the required period of recuperation shall be controlling. [Sec. 4, DO 112, as amended]

LABOR LAW

Special Leave Benefit Maternity Leave Benefit

vis-à-vis

Where the woman employee had undergone surgery due to gynecological disorder during her maternity leave, she is entitled only to the difference between the SLB and maternity leave benefit. [Sec. 9, DO 112, as amended]

Availm ent The special leave shall be granted to the qualified employee after she has undergone surgery. [Sec. 5, DO 112, as amended] A woman employee can avail of the SLB for every instance of surgery due to gynecological disorder for a maximum total period of 2 months per year. [Sec. 6, DO 112, as amended] Special Leave Benefit vis-à-vis SSS Sickness Benefit The SLB is different from the SSS sickness benefit. The former is granted by the employer in accordance with RA 9710. It is granted to a woman employee who has undergone surgery due to gynecological disorder. The SSS sickness benefit, on the other hand, is administered and given by the SSS in accordance with RA 1161 as amended by RA 8282. [Sec. 7, DO 112, as amended] Special Leave Benefit Existing Statutory Leaves

vis-à-vis

The SLB cannot be taken from existing statutory leaves (i.e. 5-day SIL, leave for victims of VAWC, Parental leave for solo parents). The grant of SLB under the law is in recognition of the fact that patients with gynecological disorder needing surgery require a longer period of recovery. The benefit is considered an addition to the leave benefits granted under existing laws and should be added on top of said statutory leave entitlements.

Crediting Benefits

of

Existing

or

Similar

If there are existing or similar benefits under a company policy, practice or CBA providing similar or equal benefits to what is mandated by law, the same shall be considered as compliance, unless the company policy, practice or CBA provides otherwise. In the event the company policy, practice or CBA provides lesser benefits, the company shall grant the difference. More liberal existing or similar benefits cannot be withdrawn or reduced by reason of this law. The term “similar or equal benefits” refers to leave benefits which are of the same nature and purpose as that of the SLB. [Sec. 10, DO 112, as amended] Mode of Paym ent The SLB is a leave privilege. The woman employee shall not report for work for the duration of the leave but she will still receive her salary covering said period. The employer, in its discretion, may allow said employee to receive her pay for the period covered by the approved leave before or during the surgery. The computation of her “pay” shall be based on her prevailing salary at the time of the surgery. [Sec. 11, DO 112, as amended] Non-Commutation of the Benefit The SLB shall be non-cumulative and nonconvertible to cash unless otherwise provided by a CBA. [Sec. 12, DO 112, as amended]

If the SLB has already been exhausted, the company leave and other mandated leave benefits may be availed of by the woman employee. [Sec. 8, DO 112, as amended]

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G. SERVICE CHARGES

LABOR LAW

month at intervals not exceeding 16 days. [Sec 4, Rule VI, Book 3, IRR]

Coverage Employers [Sec 1, Rule VI, Book 3, IRR]

Notes:

This rule shall apply only to establishments which collect service charges such as:

• The P2,000.00 salary entitlement thereto is applicable.

(1) Hotels, restaurants, lodging houses, night clubs, cocktail lounge, massage clinics, bars, casinos and gambling houses; (2) Similar enterprises including those entities operating primarily as private subsidiaries of the Government Employees [Sec 2, Rule VI, Book 3, IRR] Shall apply to ALL em ployees of covered employers (1) Regardless of their positions, designations, or employment status, and (2) Irrespective of the method by which their wages are paid. Exceptions Managerial em ployees – one who is vested with powers or prerogatives to lay down and execute managerial policies and/or hire, transfer, suspend, layoff, recall, discharge, assign or discipline employees or to effectively recommend such managerial actions. [Sec 2, Rule VI, Book 3, IRR] Distribution Service charges are distributed in accordance with the following percentage of sharing: •

Eighty-five percent (85%) for the employees to be distributed equally among them;



Fifteen percent (15%) for the disposition of management to answer for losses and breakages and, at the discretion of the management for distribution to managerial employees. [Sec 3, Rule VI, Book 3, IRR]

ceiling for no longer

• [The employees’] right to their shares in the service charges collected by [the employer] is distinct and separate from their right to ECOLA; gratification by the [employer] of one does not result in the satisfaction of the other. [Philippine Hoteliers, Inc., Dusit Hotel-Nikko v. NUWHRAIN-APL-IUF-Dusit Hotel Nikko Chapter, G.R. No. 181972 (2009)] Integration In case service charge is abolished, the shares of covered employees shall be considered integrated in their wages. [Art 96, LC] The basis of the amount to be integrated shall be the average monthly share of each employee for the past twelve (12) months immediately preceding the abolition of withdrawal of the charges. [Sec. 5, Rule VI, Book 3, IRR] In Relation to Collective Bargaining Agreem ents and Em ployer-Employee Agreem ents • Nothing in the Rules shall prevent the employer and employee from entering into any agreement with terms more favorable to the employees than those granted therein, or be used to diminish any benefit granted to the employees under existing laws, agreement AND voluntary employer practice. [Sec. 6, Rule VI, Book 3, IRR] • The rule is without prejudice to existing, future collective bargaining agreements. [Sec. 7, Rule VI, Book 3, IRR]

The shares shall be distributed to employees not less than once every 2 weeks or twice a

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Synthesis of the Rules

LABOR LAW

worked for at least one (1) month during a calendar year.



Service charges must be pooled;



Where a restaurant or similar establishment does not collect service charges but has a practice or policy of monitoring and pooling tips given voluntarily by its customers to its employees, the pooled tips should be monitored, accounted for and distributed in the same manner as the services charges. [DOLE Handbook on Workers’ Statutory Monetary Benefits, 2014ed.]



The amount collected is divided between the company (15%) and employees (85%);



It shall be given twice a month with intervals of not more than 16 days;



If discontinued, removed, or stopped, the average share of the employees of their service charge or tips shall be integrated with their basic wage.

Exempted Employers: (1) Government, its political subdivisions, including GOCCs except those operating essentially as private subsidiaries of the Government; (2) Employers already paying their employees a 13th month pay or more in a calendar year or its equivalent at the time of this issuance; and (3) Employers of those who are paid on purely commission, boundary or task basis and those who are paid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof (except those workers who are paid on piece-rate basis, in which case their employer shall grant them 13th month pay). Notes:

H. THIRTEENTH (13TH) MONTH PAY AND OTHER BONUSES

“Equivalent” includes:

[PD 851 (The 13th-Month Pay Law) and the Revised Guidelines on the Implementation of the 13th Month Pay Law]

(1)

Christmas bonus, mid-year bonus, cash bonuses

(2)

and other payments amounting to not less than 1/12 of the basic salary

Rationale

(3) but shall NOT INCLUDE cash and stock dividends, cost of living allowances and all other allowances regularly enjoyed by the employee as well a non-monetary benefits.



To further protect the level of real wages from the ravage of world-wide inflation;



There had been no increase in the legal minimum wage rates since 1970;



The Christmas season is an opportune time for society to show its concern for the plight of the working masses so they may properly celebrate Christmas and New Year.

Coverage

W orkers paid on a piece-rate basis paid a standard amount for every piece or unit of work produced that is more or less regularly replicated, without regard to the time spent in producing the same. Minim um Am ount

General Rule: ALL EMPLOYERS are hereby required to pay all their rank and file employees a 13th month pay not later than Dec 24 of every year, Provided that they have

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1/12 of the total basic salary earned by an employee within a calendar year

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BASE AMOUNT,

Exception: ER may give to his employees half (½) of the required 13th Month Pay before the opening of the regular school year and the other half on or before the 24th of December every year.

General Rule: basic salary shall include: (1) Cost of living allowances (COLA) integrated into the basic salary of a covered employee pursuant to EO 178.

The frequency of payment of this monetary benefit may be the subject of agreement between the employer and the recognized CBA of the employees.

(2) All remunerations or earnings paid by this employer for services rendered. (3) But not the allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash equivalent of: (a) Unused vacation and sick leave credits, (b) Overtime, (c) Premium, (d) Night differential, (e) Holiday pay and, and (f) Cost-of-living allowances. Exception: From 1975 to 1981, [the employer] had freely, voluntarily and continuously included in the computation of its employees' thirteenth month pay, the payments for sick, vacation and maternity leaves, premiums for work done on rest days and special holidays, and pay for regular holidays. The considerable length of time the questioned items had been included by [the employer] indicates a unilateral and voluntary act on its part, sufficient in itself to negate any claim of mistake. A company practice favorable to the employees had indeed been established and the payments made pursuant thereto, ripened into benefits enjoyed by them. And any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer. [Davao Fruits Corp. v. ALU, G.R. No. 85073 (1993)]

LABOR LAW

13th Month Pay in Special Cases (1) Paid by Results: Employees who are paid on piece work basis are, by law, entitled to the 13th Month Pay. (Revised Guidelines on the Implementation of the 13th Month Pay Law) (2) Fixed or Guaranteed W age: Employees who are paid a fixed or guaranteed wage plus commission are entitled to 13th month pay (not purely commission); the basis for computation shall be both their fixed or guaranteed wage and commission. (Revised Guidelines) (3) Those with Multiple Employers: Government Employees working part time in a private enterprise, including private educational institutions, as well as Employees working in two or more private firms, whether on full or part time bases, are entitled to the required 13th Month Pay from all their private Employers regardless of their total earnings from each or all their employers. (Revised Guidelines) (4) Private School Teachers: Private school teachers, including faculty members of universities and colleges, are entitled to the required 13th month pay, regardless of the number of months they teach or are paid within a year, if they have rendered service for at least one (1) month within a year. (Revised Guidelines)

Time of payment General Rule: paid not later than Dec 24 of each year.

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Overload pay is NOT included in the computation for 13th month pay; overload is not overtime as it is additional work done within the normal shift [Letran Calamba Faculty vs NLRC, G.R. No. 156225 (2008)]

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(5) Resigned or Separated Employee: An Employee who has resigned or whose services were terminated at any time before the time for payment of the 13th month pay is entitled to this monetary benefit in proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year up to the time of his resignation or termination from service. [Revised Guidelines]

(5) Non-inclusion in regular wage: The mandated 13th month pay need not be credited as part of regular wage of employees for purposes of determining overtime and premium pays, fringe benefits insurance fund, Social Security, Medicare and private retirement plans. [Revised Rules]

(6) Terminated Employees: The payment of the 13th month pay may be demanded by the employee upon the cessation of employer-employee relationship. [Archilles Manufacturing Corp. vs NLRC, 1995]

The Rule on Productivity Bonuses. The so-called commissions “paid to or received by medical representatives of Boie-Takada Chemicals or by the rank-and-file employees of Philippine Fuji Xerox Co., were excluded from the term “basic salary” because these were paid to the medical representatives and rank-and-file employees as “productivity bonuses.” These have no clear direct or necessary relation to the amount of work actually done by each individual employee. More generally, a bonus is an amount granted and paid ex gratia to an employee. If an employer cannot be compelled to pay a productivity bonus to its employees, it should follow that such productivity bonus, when given, should not be deemed to fall within the “basic salary” of employees when the time comes to compute their 13th month pay [Boie-Takeda vs de la Serna, G.R. No. 92174 and G.R. No. L-102552, (1993)]

Additional Rules: (1) Commissions: If the commissions may be properly considered part of the basic salary, then they should be INCLUDED. If they are not an integral part of the basic salary, then they should be EXCLUDED. [Phil. Duplicators Inc. vs NLRC, G.R. No. 110068 (1995)] (2) Substitute Payment not allowed: Benefits in the form of food or free electricity, assuming they were given, were not a proper substitute for the 13th month pay required by law. Neither may year-end rewards for loyalty and service be considered in lieu of 13th month pay. [Framanlis Farms, Inc. vs MOLE, G.R. No. 72616-17 (1989)] (3) W age Difference: The difference between the minimum wage and the actual salary received by the Employee cannot be deemed as his 13th month pay as such difference is not equivalent to or of the same import as the said benefit contemplated by law. [JPL Marketing Promotions vs CA, 2005] (4) 14 th Month Pay is not m andated: Employers already paying their employees a 13th month pay or its equivalent are not covered by this Decree.[Kamaya Point Hotel vs NLRC, G.R. No. 75289 (1989)]

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Commissions vis-à-vis 13 th month pay

The decision in Boie-Takeda and the doctrine enunciated in this case in fact co-exist with the other. The two cases present quite different factual situations (although the same word “commissions” was used or invoked) the legal characterizations of which must accordingly differ. In the instant case, there is no question that the sales commission earned by the salesmen who make or close a sale of duplicating machines constitute part of the compensation or remuneration paid to salesmen for serving as salesmen, and hence as part of the “wage” or salary of petitioner’s salesmen. It appears that petitioner pays its salesmen a small fixed or guaranteed wage; the greater part of the salesmen’s wages or salaries being composed of the sales or incentive commissions earned on actual sales closed by them. The sales

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commissions were an integral part of the basic salary structure. They are not overtime payments, or profit sharing payments or any other fringe benefit. [Phil. Duplicators vs NLRC (1995)] CBA vis-à-vis 13 th month pay The Presidential Decree is specific and mandatory. However, if the employers actually grant such for the 13th month pay in the monetary benefits provided for in the CBA, they could be exempted from the operation of the decree. To be exempted, there must be actual payment. [Marcopper Mining Corp. vs. Ople (1981)] Effect of Deficiency in 13

th

LABOR LAW

imposed on the employer who is already paying his employees a 13th month pay or its equivalent. [Iran v. NLRC, G.R. No. 121927 (1998)] An employer who pays less than 1/12th of the employees basic salary as their 13th month pay is only required to pay the difference. [Revised Rules]

I. SEPARATION PAY [(Art. 289 & 290, LC, DOLE Handbook on Worker’s Statutory Monetary Benefits, 2014)

month pay

The intent of P.D. No. 851 is the granting of additional income in the form of 13th month pay to employees not as yet receiving the same and not that a double burden should be

Separation pay is defined as the amount that an employee receives at the time of his severance from the service and is designed to provide the employee with the wherewithal during the period that he is looking for another employment. [A’ Prime Security Services vs NLRC (1993)

Coverage General Rule: Cause for Termination Entitlement Art. 288 Termination by Employer None (a) Serious misconduct or willful disobedience of lawful orders (b) Gross and habitual neglect of duties (c) Fraud or willful breach of trust (d) Commission of a crime against employer or immediate member of his family or representative (e) Analogous causes Art. 289 Installation of labor saving devices or Equivalent to at least 1 month pay or 1 month pay redundancy for every year of service, whichever is higher Art. 289 Retrenchment to prevent losses or Equivalent to at least 1 month pay or 1/2 month closure or cessations of operations of pay for every year of service*, whichever is higher establishments or undertaking not due to serious business losses or financial reverses Art. 290 Disease when continued employment is Equivalent to at least 1 month pay or 1/2 month prohibited by law or is prejudicial to his health or pay for every year of service*, whichever is higher health of co-employees Art. 291 Termination by employee whether with or None without just cause *A fraction of at least 6 months shall be considered 1 whole year

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Exceptions: Considerations of equity as in the cases of Filipro, Inc. v. NLRC, Metro Drug Corp. v. NLRC, Engineering Equipment, Inc. v. NLRC, San Miguel Corp v. NLRC. [PLDT vs NLRC (1988)] An employee who voluntarily resigns is not entitled to separation pay unless stipulated in the employment contract, or the collective bargaining agreement, or is sanctioned by established practice or policy of the employer. [Phimco Industries vs NLRC (1997); Hinatuan Mining Corp vs NLRC (1997) cited in JPL Marketing Promotions v. CA (2005)] Am ount One-Half (1/2) Month Pay per Year of Service An employee is entitled to receive separation pay equivalent to ½ month pay for every year of service, a fraction of at least six (6) months being considered as one whole year, if his/her separation from the service is due to any of the following authorized causes:

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if his/her separation from service is due to any of the following: (1) Installation by employer of labor-saving devices; (2) Redundancy, as when the position of the employee has been found to be excessive or unnecessary in the operation of the enterprise; (3) Impossible reinstatement of the employee to his/her former position or to a substantially equivalent position for reasons not attributable to the fault of the employer, as when the reinstatement ordered by a competent authority cannot be implemented due to closure of cessation of operations of the establishment/employer, or the position to which he/she is to be reinstated no longer exists and there is no substantially equivalent position in the establishment to which he/she can be assigned. [Gaco vs NLRC (1994)]

(1) Retrenchment to prevent losses (i.e. reduction of personnel effected by management to prevent losses); (2) Closure or cessation of operation of an establishment not due to serious losses or financial reverses; and, (3) When the EE is suffering from a disease not curable within a period of six (6) months and his/her continued employment is prejudicial to his/her health or to the health of his/her coemployees In no case will an employee get less than one (1) month separation pay if the separation is due to the above stated causes and he/she has served for at least six (6) months. (DOLE Handbook on Workers’ Statutory Monetary Benefits, 2014 ed.) One-Month Pay per Year of Service An employee is entitled to separation pay equivalent to his/her one-month pay for every year of service, a fraction of at least 6 months being considered as one whole year, PAGE 66 OF 222

Notice of Termination The employer may terminate the employment of any employee due to the above-mentioned authorized causes by serving a written notice on the employee and the DOLE through its regional office having jurisdiction over the place of business at least 1 month before the intended date thereof. Basis of Separation Pay The computation of separation pay of an employee shall be based on his/her latest salary rate. [DOLE Handbook on Workers’ Statutory Monetary Benefits, 2014 ed.] Inclusion of Regular Allowance in the Computation In the computation of separation pay, it would be error not to integrate the allowance with the basic salary. The salary base properly used in computing the separation pay should include not just the basic salary but also the regular allowances that an employee has been receiving. [Planters’ Products, Inc. vs NLRC (1989)]

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J. RETIREMENT PAY

Exclusions from coverage

[RA 7641 - The Retirement Pay Law]

R.A. No. 7641, otherwise known as "The Retirement Pay Law," only applies in a situation where:

Definition Retirement - the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter, after reaching a certain age agrees to sever his or her employment with the former ... an employer is free to impose a retirement age less than 65 for as long as it has the employees’ consent… having terminated petitioner solely on the basis of a provision of a retirement plan which was not freely assented to by her, respondent was guilty of illegal dismissal [Jaculbe vs Silliman University, G.R. No. 156934 (2007)] Retroactive Effect The Court imposed two (2) essential requisites in order that R.A. 7641 may be given retroactive effect: (1) the claimant for retirement benefits was still in the employ of the employer at the time the statute took effect; and (2) the claimant had complied with the requirements for eligibility for such retirement benefits under the statute. [Universal Robina Sugar Milling Corp. vs Caballeda, G.R. No. 156644 (2008)] J.1. ELIGIBILITY General Rule: All employees in the private sector, regardless of their position, designation, or status, and irrespective of the method by which their wages are paid [Sec. 1, IRR, RA 7641] Exceptions: (1) Employees covered by the Civil Service Law; (2) Domestic helpers and persons in the personal service of another, and (3) Employees in retail, service and agricultural establishments or operations regularly employing not more than ten employees [Sec. 2, IRR, RA 7641]

(1) there is no collective bargaining agreement or other applicable employment contract providing for retirement benefits for an employee; OR (2) there is a collective bargaining agreement or other applicable employment contract providing for retirement benefits for an employee, but it is below the requirements set for by law. The reason for the first situation is to prevent the absurd situation where an employee, who is otherwise deserving, is denied retirement benefits by the nefarious scheme of employers in not providing for retirement benefits for their employees. The reason for the second situation is expressed in the Latin maxim pacta private juri public derogare non possunt. Private contracts cannot derogate from the public law. [Oxales vs Unilab, G.R. No. 152991 2008] Age of retirem ent 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 (and have served the establishment for at least 5 years). [Sec. 1, IRR, RA 7641] Optional retirem ent – in the absence of a retirement plan or other applicable agreement providing for retirement benefits of EEs in an establishment, an EE may retire upon reaching the age of 60 or more if he has served for at least 5 years in said establishment. Compulsory retirement – in the absence of a retirement plan or other applicable agreement providing for retirement benefits of EEs in an establishment, an EE shall be retired at the age of 65 years. [Sec. 4, IRR, RA 7641] Note: For surface mine workers, the optional retirement age is 50, while the

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mandatory retirement age is now 60. [Sec. 2, RA 10757] J.2. AMOUNT OF RETIREMENT PAY The minimum retirement pay shall be equivalent to 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. For the purpose of computing retirement pay, “one-half month salary” shall include all of the following: (1) Fifteen (15) days salary based on the latest salary rate; (2) Cash equivalent of five (5) days of service incentive leave; (3) One-twelfth (1/12) of the 13th month pay. (1/12 x 365/12 = .083 x 30.41 = 2.52) Thus, “one-half month salary” is equivalent to 22.5 days. [Capitol Wireless, Inc. vs Sec. Confessor, 1996; Reyes v NLRC, 2007] Other benefits may be included in the computation of the retirement pay upon agreement of the ER and the EE or if provided in the CBA. Retirement pay under RA 7641 vis-àvis retirement benefits under SSS and GSIS laws RA 7641 mandates payment of retirement benefits. All private sector employees regardless of their position, designation or status and irrespective of the method by which their wages are paid are entitled to retirement benefits upon compulsory retirement at the age of sixty-five (65) or upon optional retirement at sixty (60) or more but not 65. The minimum retirement pay due covered employees shall be equivalent to one-half month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. The benefits under this law are other than those granted by the SSS or the GSIS.

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Retirement Benefits under a CBA or Applicable Contract Any EE may retire or be retired by his/her ER upon reaching the age established in the CBA or other applicable agreement/contract and shall receive the retirement benefits granted therein; provided, however, that such retirement benefits shall not be less than the retirement pay required under RA 7641, and provided further that if such retirement benefits under the agreement are less, the ER shall pay the difference. Where both the ER and the EE contribute to a retirement fund pursuant to the applicable agreement, the ER’s total contributions and the accrued interest thereof should not be less than the total retirement benefits to which the EE would have been entitled had there been no such retirement benefits’ fund. If such total portion from the ER is less, the ER shall pay the deficiency. J.3. RETIREMENT BENEFITS OF WORKERS WHO ARE PAID BY RESULTS For covered workers who are paid by result and do not have a fixed monthly salary rate, the basis for the determination of the salary for 15 days shall be their average daily salary (ADS). The ADS is derived by dividing the total salary or earning for the last 12 months reckoned from the date of retirement by the number of actual working days in that particular period, provided that the determination of rates of payment by results are in accordance with established regulations. J.4. RETIREMENT BENEFIT OF PART-TIME WORKERS Part-time workers are also entitled to retirement pay of “one-month salary” for every year of service under RA 7641 after satisfying the following conditions precedent for optional retirement: (a) There’s no retirement plan between the ER and the EE; and, (b) The EE should have reached the age of 60 years, and should have rendered at least 5 years of service with the ER.

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Applying the foregoing principle, the components of retirement benefit of parttime workers may likewise be computed at least in proportion to the salary and related benefits due them. [DOLE Handbook on Workers’ Statutory Monetary Benefits, 2014 ed.] J.5. TAXABILITY Any provision of law to the contrary notwithstanding, the retirement benefits received by officials and employees of private firms, whether individual or corporate , in accordance with a reasonable private benefit plan maintained by the employer shall be exempt from all taxes and shall not be liable to attachment, garnishment, levy or seizure by or under any legal or equitable process whatsoever except to pay a debt of the official or employee concerned to the private benefit plan or that arising from liability imposed in a criminal action: Provided, That the retiring official or employee has been in the service for at least ten (10) years and is not less than fifty years of age at the time of his retirement: Provided, further, That the benefits granted under this Act shall be availed of by an official or employee only once; Provided, finally, That in case of separation of an official or employee from the service of the employer due to death, sickness, or other physical disability or for any cause beyond the control of the said official or employee, any amount received by him or by his heirs from the employer as a consequence of such separation shall likewise be exempt as hereinabove provided. As used in this Act, the term "reasonable private benefit plan" means a pension, gratuity, stock bonus or profit sharing plan maintained by an employer for the benefit of some or all of his officials and employees, wherein contributions are made by such employer or officials and employees, or both, for the purpose of distributing to such officials and employees the earnings and principal of the fund thus accumulated, and wherein it is provided in said plan that at no time shall any part of the corpus or income of the fund be used for, or be diverted to, any purpose other than for the exclusive benefit of the said officials and employees.[Sec. 1, RA

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4917] Any provision of law to the contrary notwithstanding, the retirement benefits received by officials and employees of private firms, whether individual or corporate, in accordance with a reasonable private benefit plan maintained by the employer (1) shall be exempt from all taxes and (2) shall not be liable to attachment, garnishment, levy or seizure by or under any legal or equitable process whatsoever [Intercontinental Broadcasting Corp. v Amorilla, 2006] Exception Except to pay a debt of the official or employee concerned to the private benefit plan or that arising from liability imposed in a criminal action: Additional conditions (a) That the retiring official or employee has been in the service of the same employer for at least ten (10) years and is not less than fifty years of age at the time of his retirement; (b) That the retirement benefits shall be availed of by an official or employee only once; and, (c) That in case of separation of an official or employee from the service of the employer due to death, sickness or other physical disability or for any cause beyond the control of the said official or employee, any amount received by him or by his heirs from the employer as a consequence of such separation shall likewise be exempt as hereinabove provided. Reasonable private benefit plan means a pension, gratuity, stock bonus or profit sharing plan maintained by an employer for the benefit of some or all of his officials and employees, wherein contributions are made by such employer or officials and employees, or both, for the purpose of distributing to such officials and employees the earnings and principal of the

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fund thus accumulated, and wherein it is provided in said plan that at no time shall any part of the corpus or income of the fund be used for, or be diverted to, any purpose other than for the exclusive benefit of the said officials and employees.

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training opportunities, study and scholarship grants solely on account of their sexes. [Art.133, Labor Code] K.2. STIPULATION AGAINST MARRIAGE It shall be unlawful for an employer to:

K. WOMEN WORKERS 1987 Constitution Art. II, Sec. 14.The State recognizes the role of women in nationbuilding, and shall ensure the fundamental equality before the law of women and men. 1987 Constitution. Art. XIII, Sec. 14. The State shall protect working women by providing safe and healthful working conditions, taking into account their maternal functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation. Omnibus Rules Bk III Rule XII Sec 1. General Statement on Coverage. – This Rule shall apply to all employers, whether operating for profit or not, including educational, religious and charitable institutions, except to the Government and to government-owned or controlled corporations and to employers of household helpers and persons in their personal service insofar as such workers are concerned. K.1. PROVISIONS DISCRIMINATION

AGAINST

It shall be unlawful for any employer to discriminate against any woman employee with respect to terms and conditions of employment solely on account of her sex.

(1) require as a condition of employment or continuation of employment that a woman employee shall not get married, or (2) stipulate expressly or tacitly that upon getting married a woman employee shall be deemed resigned or separated or (3) actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage. [Art. 134, Labor Code] [Duncan Assoc of Detailman – PTGWO v Glaxo Wellcome, 2004] Bona fide occupational qualification exception When the employer can prove that the reasonable demands of the business require a distinction based on marital status and there is no better available or acceptable policy which would better accomplish the business purpose, an ER may discriminate against an EE based in the identity of the EE’s spouse. [Star Paper Corp. vs. Simbol, 2006] The Court sustained the validity of employer policy prohibiting an employee from having a personal or marital relationship with an employee of a competitor. The prohibition was reasonable under the circumstances because relationships of such nature might compromise the interests of the company. [Duncan Association of Detailmen vs. Glaxo Wellcome, 2004]

The following are acts of discrimination:

K.3. PROHIBITED ACTS

(1) Payment of a lesser compensation, including wage, salary or other form of remuneration and fringe benefits, to a female employees as against a male employee, for work of equal value; and

[Art. 135 (previously Article 137)]

(2) Favoring a male employee over a female employee with respect to promotion,

Note: Nightwork/ Exception (Art 130131) – No more nightwork prohibition under R.A. 10151 (An Act Allowing the Employment of Night Workers, thereby Repealing Articles 130 and 131 of PD 442, as amended,

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otherwise known as the Labor Code of the Philippines) Art. 154. RA 10151. Coverage. - This chapter shall apply to all persons, who shall be employed or permitted or suffered to work at night, except those employed in agriculture, stock raising, fishing, maritime transport and inland navigation, during a period of not less than seven (7) consecutive hours, including the interval from midnight to five o'clock in the morning, to be determined by the Secretary of Labor and Employment, after consulting the workers' representatives/labor organizations and employers. Night worker means any employed person whose work requires performance of a substantial number of hours of night work which exceeds a specified limit. This limit shall be fixed by the Secretary of Labor after consulting the workers' representatives/labor organizations and employers. W omen Night W orkers. - Measures shall be taken to ensure that an alternative to night work is available to women workers who would otherwise be called upon to perform such work:

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authorized causes provided for in this Code that are not connected with pregnancy, childbirth and childcare responsibilities. (ii) A woman worker shall not lose the benefits regarding her status, seniority, and access to promotion which may attach to her regular night work position. Pregnant women and nursing mothers may be allowed to work at night only if a competent physician, other than the company physician, shall certify their fitness to render night work, and specify, in the case of pregnant employees, the period of the pregnancy that they can safely work. The measures referred to in this article may include transfer to day work where this is possible, the provision of social security benefits or an extension of maternity leave. The measures referred to in this article may include transfer to day work where this is possible, the provision of social security benefits or an extension of maternity leave. The provisions of this article shall not leave the effect of reducing the protection and benefits connected with maternity leave under existing laws.[Article 158, RA 10151]

(a) Before and after childbirth, for a period of at least sixteen (16) weeks, which shall be divided between the time before and after childbirth;

Discrimination [Art 133, RA 9710]

(b) For additional periods, in respect of winch a medical certificate IS produced stating that said additional periods are necessary for the health of the mother or child:

Stipulation against marriage [Art 134]

(1) During pregnancy; (2) During a specified time beyond the period, after childbirth is fixed pursuant to subparagraph (a) above, the length of which shall be determined by the DOLE after consulting the labor organizations and employers.

See previous section

See previous section Discharge to prevent enjoym ent of benefits To deny any woman employee the benefits provided for in this Chapter or to discharge any woman employed by him for the purpose of preventing her from enjoying any of the benefits provided under this Code. [Art. 135 (1)]

During the periods referred to in this article: (i) A woman worker shall not be dismissed or given notice of dismissal, except for just or

Discharge on account of pregnancy

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To discharge such woman on account of her pregnancy, while on leave or in confinement due to her pregnancy. [Art. 135 (2)]

(b) The above acts would either: (i) impair the employee’s rights or privileges under existing labor laws; or

Discharge on account of testim ony

(ii) result in an intimidating, hostile, or offensive environment for the employee.

To discharge or refuse the admission of such woman upon returning to her work for fear that she may again be pregnant. [Art. 137 (3)] It shall be unlawful for any employer: …to discharge any woman or child or any other employee for having filed a complaint or having testified or being about to testify under the Code [Book III, Rule XII, Sec 13(d), IRR] Expulsion of W omen faculty/ female student due to pregnancy outside of marriage Expulsion and non-readmission of women faculty due to pregnancy outside of marriage shall be outlawed. No school shall turn out or refuse admission to a female student solely on the account of her having contracted pregnancy outside of marriage during her term in school. [Sec. 13(c), RA 9710] K.4. ANTI-SEXUAL HARASSMENT

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

[RA 7877 - Anti-Sexual Harassment Act of 1995] Form s of Sexual Harassm ent (1) Em ployment or Work Related (a) The sexual favor is made as a condition (i) in the hiring or in the employment, re-employment or continued employment of said individual or (ii)

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in granting said individual favorable compensation, terms, conditions, promotions, or privileges, or

(iii) in the refusal to grant the sexual favor results in limiting, segregating or classifying the EE which in any way would discriminate, deprive or diminish employment opportunities or otherwise adversely affect said employee;

(1) Any employer, employee, manager, supervisor, agent of the employer, teacher, instructor, professor, coach, trainer or any other person, regardless of whether the demand, request for requirement for submission is accepted by the object of said act having authority, influence or moral ascendancy over another in a work or training or education environment, who demands, requests or otherwise requires any sexual favor from another, (2) Any person who directs or induces another to commit any act of sexual harassment as herein defined. OR (3) Any person who cooperates in the commission by another without which it would NOT have been committed, shall also be held liable under this Act [Sec. 3, RA 7877]

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Role of the employer or Head of Office Sec. 4, RA 7877. The Employer or Head of Office shall have the duty: (1) to prevent the commission of such acts and (2) to lay down the procedure for the resolution, settlement or prosecution of committed acts. Sec. 5, RA 7877. He shall be solidarily liable for damages: (1) if he is informed of such acts by the offended party and

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depending upon the needs, circumstances, and more importantly, the emotional threshold of the employee. Not many women are made of the stuff that can endure the agony and trauma of a public, even corporate, scandal. If petitionercorporation had not issued the third memorandum that terminated the services of private respondent, we could only speculate how much longer she would keep her silence. Perhaps, to private respondent's mind, for as long as she could outwit her employer's ploys she would continue on her job and consider them as mere occupational hazards. [Phil. Aelous Automotive United Corp. vs NLRC, 2000]

(2) no immediate action is taken thereon.

L. MINOR WORKERS Independent Action for Dam ages Sec. 6, RA 7877. The victim of work, education or training-related sexual harassment can institute a separate and independent action for damages and other affirmative relief.

Relevant Laws: RA 7610 (Special Protection of Children Against Abuse, Exploitation and Discrimination Act), RA 9231 (Special Protection of Children Against Child Abuse, Exploitation and Discrimination Act), Art. 137(a)

Sanctions Criminal: imprisonment of 1 month to mos. Or fine of P10k to P20k or both Prescription of such action is in 3 years. Termination As a managerial employee, petitioner is bound by more exacting work ethics. When such moral perversity is perpetuated against his subordinate, he provides a justifiable ground for his dismissal for lack of trust and confidence. It is the right, nay the duty of every employer to protect its employees from oversexed superiors. [Sec. 7, RA 7877] [Libres vs NLRC, 1999] The gravamen of the offense in sexual harassment is not the violation of the employee's sexuality but the abuse of power by the employer. Any employee, male or female, may rightfully cry "foul" provided the claim is well substantiated. Strictly speaking, there is no time period within which he or she is expected to complain through the proper channels. The time to do so may vary

Constitutional basis The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs. [Art II, Sec. 13 of the 1987 Constitution] General Rule: Children below 15 shall NOT be employed Employment of Children Children below fifteen (15) years of age shall not be employed except: (1) When a child works directly under the sole responsibility of his/her parents or legal guardian and where only members of his/her family are employed: Provided, however, That his/her employment neither endangers his/her life, safety, health, and morals, nor impairs his/her normal development: Provided, further, That the parent or legal guardian shall

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provide the said child with the prescribed primary and/or secondary education; or (2)

Where a child's employment or participation in public entertainment or information through cinema, theater, radio, television or other forms of media is essential: Provided, That the employment contract is concluded by the child's parents or legal guardian, with the express agreement of the child concerned, if possible, and the approval of the Department of Labor and Employment: Provided, further, That the following requirements in all instances are strictly complied with: (a) The employer shall ensure the protection, health, safety, morals and normal development of the child; (b) The employer shall institute measures to prevent the child's exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time; and (c) The employer shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skills acquisition of the child.

him/her to any form of exploitation or is harmful to his/her health and safety or physical, mental or psychosocial development. Working child - refers to any child engaged as follows: (1) when the child is below eighteen (18) years of age, in work or economic activity that is not child labor as defined in the immediately preceding subparagraph; and (2) when the child is below fifteen (15) years of age, in work where he/she is directly under the responsibility of his/her parents or legal guardian and where only members of the child‘s family are employed; or in public entertainment or information. [Sec. 3, DO 65-04] Exceptions (1) Child works directly under the sole responsibility of his parents or legal guardian and where only members of the employer’s family are employed, provided: (a) his employment does NOT endanger his life, safety, health and morals, (b) nor impairs his normal development, and

In the above-exceptional cases where any such child may be employed, the employer shall first secure, before engaging such child, a work permit from the Department of Labor and Employment which shall ensure observance of the above requirements. For purposes of this Article, the term "child" shall apply to all persons under eighteen (18) years of age.[Sec 2, RA 9231]

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(c) the parent or legal guardian shall provide the said minor child with the prescribed primary and/or secondary education; [Sec. 12 of RA 7610 as amended by RA 7658] (2) child’s employment or participation in public entertainment or information through cinema, theater, radio or television is essential, provided that [Sec. 12 of RA 7610 as amended by RA 7658]:

Children - refers to any person under 18 years of age or those over but are unable to fully take care of themselves or protect themselves from abuse, neglect, cruelty, exploitation or discrimination because of a physical or mental disability or condition. [Sec. 2, RA 7610] Child labor - refers to any work or economic activity performed by a child that subjects PAGE 74 OF 222

(a) employment does NOT involve ads or commercials promoting alcohol, tobacco and its by-products or violence [Sec. 14, RA 7610] (b) the employment contract is concluded by the child’s parents or guardian, and approved by DOLE (c) The ER shall ensure the protection, health, safety and morals of the child

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(d) The ER shall institute measures to prevent the child’s exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time (e) The ER shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skills acquisition of the child. [Sec. 12 of RA 7610 as amended by RA 7658] Employment of Children from 15 to 18 Employment is allowed even without permit but restricted to non-hazardous work. Non-hazardous work shall mean any work or activity in which the EE is not exposed to any risk which constitutes an imminent danger to his safety and health. [Sec. 3, Rule XII, Book III, IRR of LC]

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W orst Forms of Child Labor (1) All forms of slavery, as defined under the "Anti-trafficking in Persons Act of 2003", or practices similar to slavery such as sale and trafficking of children, debt bondage and serfdom and forced or compulsory labor, including recruitment of children for use in armed conflict; or (2) The use, procuring, offering or exposing of a child for prostitution, for the production of pornography or for pornographic performances; or (3) The use, procuring or offering of a child for illegal or illicit activities, including the production and trafficking of dangerous drugs and volatile substances prohibited under existing laws; or (4) Work which, by its nature or the circumstances in which it is carried out, is hazardous or likely to be harmful to the health, safety or morals of children, such that it:

The Secretary of Labor shall from time to time publish a list of hazardous work and activities in which persons 18 years of age and below cannot be employed [Sec. 3, Rule XII, Book III, IRR of LC] The following are HAZARDOUS workplaces: (1) Nature of the work exposes the workers to dangerous environmental elements, contaminants or working conditions; (2) construction work, logging, fire-fighting, mining, quarrying, blasting, stevedoring, dock work, deep sea fishing, and mechanized farming; (3) manufacture or handling of explosives and other pyrotechnic products; (4) exposure to or use of heavy power-driven machinery or equipment; (5) exposure to or use of power-driven tools

(a) Debases, degrades or demeans the intrinsic worth and dignity of a child as a human being; or (b) Exposes the child to physical, emotional or sexual abuse, or is found to be highly stressful psychologically or may prejudice morals; or (c) Is performed underground, underwater or at dangerous heights; or (d) Involves the use of dangerous machinery, equipment and tools such as power-driven or explosive poweractuated tools; or (e) Exposes the child to physical danger such as, but not limited to the dangerous feats of balancing, physical strength or contortion, or which requires the manual transport of heavy loads; or (f) Is performed in an unhealthy environment exposing the child to hazardous working conditions, elements, substances, co-agents or processes involving ionizing, radiation, fire, flammable substances, noxious components and the like, or

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to extreme temperatures, levels, or vibrations; or (g) Is performed under difficult conditions; or

noise

Rights and Privileges (a) Minim um wage

particularly

The minimum wage of domestic workers shall not be less than the following:

(h) Exposes the child to biological agents such as bacteria, fungi, viruses, protozoans, nematodes and other parasites; or

i. P2,500 a month for those employed in NCR ii. P2,000 a month for those employed in chartered cities and first class municipalities

(i) Involves the manufacture or handling of explosives and other pyrotechnic products.

Quantity Daily Max 4 hrs 8hrs.

Weekly Max 20 hrs 40 hrs

SECTION 1. Subparagraphs (1), (2) and (3), Article 143 of Presidential Decree No. 442, as amended, otherwise known as the "Labor Code of the Philippines" are hereby amended to read as follows:

Night work prohibition Age Bracket Below 15 y 15 to below 18

iii. P1,500 a month for those employed in other municipalities Within one year from the effectivity of the Act, and periodically thereafter, the Regional Tripartite and Productivity Wage Boards shall review, and if proper, determine and adjust the minimum wage rates of domestic workers. [Sec. 24, RA 10361]

W orking Hours of a Child Age Bracket Below 15 y 15 to below 18

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Prohibited Hours 8 pm to 6 am (10 hrs.) 10 pm to 6 am (8 hrs.)

ART. 143. Minimum wage. — (a) Househelpers shall be paid the following minimum wage rates;

M. EMPLOYMENT OF HOUSEHELPERS

(1) Eight hundred pesos (P800.00) a month for househelpers in Manila, Quezon, Pasay and Caloocan cities and municipalities of Makati, San Juan, Mandaluyong, Muntinlupa, Navotas, Malabon, Parañaque, Las Piñas, Pasig, Marikina, Valenzuela, Taguig and Pateros in Metro Manila and in highly urbanized cities;

Relevant Law: RA 10361 (Batas Kasambahay or Domestic Worker’s Act) Note: RA 10361 has expressly repealed Chapter III, “Employment of Househelpers”, Title III of Book III of the Labor Code Domestic work - This refers to work performed in or for a household or households. [Sec 4(C). RA 10361]

(6) Six hundred fifty pesos (P650.00) a month for those in other chartered cities and first class municipalities; and (7) Five hundred fifty pesos (P550.00) a month for those in other municipalities; Provided, that the employees shall review the employment contracts of their househelpers every three (3) years with the end in view of improving the terms and conditions thereof. Provided, further, that those househelpers who are receiving at least One thousand pesos (P1,000.00) shall be covered by the Social Security System (SSS) and be entitled to all the benefits provided thereunder."

Domestic worker or “Kasam bahay” Refers to any person engaged in domestic work within an employment relationship such as, but not limited to, the following: general househelp, nursemaid or “yaya”, cook, gardener, or laundry person. [Sec 4(D). RA 10361] The term domestic worker or “kasambahay” excludes any person who performs domestic work only occasionally or sporadically and not on an occupational basis. [Sec.4(D), RA 10361]

(b) Standard of Treatment

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The employer or any member of the household shall not subject a domestic worker or “kasambahay” to any kind of abuse nor inflict any form of physical violence or harassment or any act tending to degrade the dignity of a domestic worker. [Sec. 5, RA 10361]

(h) Leave Benefits

(c) Board, Lodging and Medical Attendance

Pre-Employment Requirement

The employer shall provide for the basic necessities of the domestic worker to include at least three (3) adequate meals a day and humane sleeping arrangements that ensure safety and shall provide appropriate rest and assistance to the domestic worker in case of illnesses and injuries sustained during service without loss of benefits. [Sec. 6, RA 10361] (d) Privacy Respect for the privacy of the domestic worker shall be guaranteed at all times and shall extend to all forms of communication and personal effects [Sec. 7, RA 10361] (e) Access to Outside Com m unication The employer shall grant the domestic worker access to outside communication during free time: Provided, That in case of emergency, access to communication shall be granted even during work time. [Sec. 8, RA 10361] (f)

Education and Training

The employer shall afford the domestic worker the opportunity to finish basic education and may allow access to alternative learning systems and, as far as practicable, higher education or technical and vocational training. [Sec. 9, RA 10361] (g) Social and Other Benefits A domestic worker who has rendered at least one (1) month of service shall be covered by the Social Security System (SSS), the Philippine Health Insurance Corporation (PhilHealth), and the Home Development Mutual Fund or Pag-IBIG, and shall be entitled to all the benefits in accordance with the pertinent provisions provided by law.

A domestic worker who has rendered at least one (1) year of service shall be entitled to an annual service incentive leave of five (5) days with pay [Sec. 29, RA 10361]

Prior to the execution of the employment contract, the employer may require the following from the domestic worker: (1) Medical certificate or a health certificate issued by a local government health officer; (2) Barangay and police clearance; (3) National Bureau of Investigation (NBI) clearance; and (4) Duly authenticated birth certificate or if not available, any other document showing the age of the domestic worker such as voter’s identification card, baptismal record or passport. However, Section 12(a), (b), (c) and (d) shall be standard requirements when the employment of the domestic worker is facilitated through the PEA. The cost of the foregoing shall be borne by the prospective employer or agency, as the case may be. [Sec. 12, RA 10361] Time and Manner of Payment: Payment of wages shall be made on time directly to the domestic worker in cash at least once a month and unless allowed by the domestic worker through a written consent, employer shall make no deductions from the wages other than that which is mandated by law. [Sec. 25, RA 10361] Right against assignment to nonhousehold work at a wage rate lower than that mandated for agricultural or nonagricultural enterprises depending on the case. [Sec. 22, RA 10361]

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Employment Age of Domestic W orkers: Unlawful to employ any person below fifteen (15) years of age as a domestic worker [Sec. 16, RA 10361]

(a) Misconduct or willful disobedience by the domestic worker of the lawful order of the employer in connection with the former’s work;

Persons between 15-18 years old should only be employed in non-hazardous work. [DO 499 Sec. 4]

(b) Gross or habitual neglect or inefficiency by the domestic worker in the performance of duties;

Daily Rest Period: Aggregate of eight (8) hours per day. [Sec. 20, RA 10361]

(c) Fraud or willful breach of the trust reposed by the employer on the domestic worker; (d) Commission of a crime or offense by the domestic worker against the person of the employer or any immediate member of the employer’s family;

Employment Certification: ER shall give the househelper a written statement of the nature and duration of the service and his or her work performance as househelper upon severance. [Sec. 35, RA 10361]

(e) Violation by the domestic worker of the terms and conditions of the employment contract and other standards set forth under this law;

Termination (1) Initiated by the dom estic worker

(f) Any disease prejudicial to the health of the domestic worker, the employer, or member/s of the household; and

The domestic worker may terminate the employment relationship at any time before the expiration of the employment contract for any of the following causes: (a) Verbal or emotional abuse of the domestic worker by the employer or any member of the household; (b) Inhuman treatment including physical abuse of the domestic worker by the employer or any member of the household; (c) Commission of a crime or offense against the domestic worker by the employer or any member of the household; (d) Violation by the employer of the terms and conditions of the employment contract and other standards set forth under this law; (e) Any disease prejudicial to the health of the domestic worker, the employer, or member/s of the household; and (f) Other causes analogous to foregoing. [Sec. 33, RA 10361]

the

(2) Initiated by the employer An employer may terminate the services of the domestic worker at any time before the expiration of the contract, for any of the following causes:

(g) Other causes analogous to foregoing. [Sec. 34, RA 10361]

the

Unjust dismissal Neither the domestic worker nor the employer may terminate the contract before the expiration of the term except for grounds provided in Sec. 33 and 34 of RA 10361. If the domestic the domestic compensation equivalent of indemnity.

worker is unjustly dismissed, worker shall be paid the already earned plus the 15 days work by way of

Leaving without justifiable reason by the domestic worker (a) any unpaid salary due not exceeding the equivalent 15 days work shall be forfeited AND (b) the employer may recover from the domestic worker the costs incurred related to the deployment expenses, if any: Provided, that the service has been terminated within 6 months from the domestic worker’s employment.

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Notice to end the working relationship If the duration of the domestic service is determined either in stipulation or by nature of the service, the employer or domestic worker may give notice to end working relationship five (5) days before intended termination of the service.

not the the the the

The domestic worker and the employer may mutually agree upon written notice to preterminate the contract of employment to end the employment relationship. [Sec. 32, RA 10361]

N. EMPLOYMENT OF HOMEWORKERS Note: DO 5, DOLE (February 4, 1992), is now Rule XIV, Book III of the IRR.

Rights and homeworkers

LABOR LAW

benefits

accorded

(1) Right to form, join or assist organizations [Sec 3, Rule XIV, Book III, IRR] (2) Right to acquire legal personality and the rights and privileges granted by law to legitimate labor organizations upon issuance of the certification of registration [Sec 4, Rule XIV, Book III, IRR] (3) Immediate payment upon employer’s receipt of finished goods or articles [Sec 6, Rule XIV, Book III, IRR] (4) SSS, MEDICARE and ECC premium contributions shall be deducted from their pay and shall be remitted by ER/contractor/subcontractor to the SSS [Sec 6, Rule XIV, Book III, IRR]

Industrial hom ework (1) Is a system of production under which work for an employer or contractor is carried out by a homeworker at his/her home. Materials may or may not be furnished by the employer or contractor. (2) Decentralized form of production, where there is ordinarily very little supervision or regulation of methods of work. [Sec. 2(a), Rule XIV, Book III, IRR] Industrial Hom eworker - a worker who is engaged in industrial homework Employer means any natural or artificial person who (1) Acts as a contractor or subcontractor – delivers or causes to be delivered any goods, articles, or materials to be processed or fabricated in or about a home and thereafter to be returned or to be disposed of or distributed in accordance with employer’s direction; OR (2) Sells any goods, articles, or materials to be processed or fabricated in or about a home and then rebuys them after. [Art. 153, LC]

Liability of Employer (1) Employer may require homeworker to redo work improperly executed without additional pay [Sec 9a, Rule XIV, Book III, IRR] (2) Employer need not pay homeworker for any work done on goods or articles not returned due to homeworker’s fault [Sec 9b, Rule XIV, Book III, IRR] (3) If subcontractor/contractor fails to pay homeworker, employer is jointly and severally liable with the former to the homeworker for his/her wage [Sec 11, Rule XIV, Book III, IRR] (4) Employer shall assist the homeworkers in the maintenance of basic safe and healthful working conditions at the homeworkers’ place of work. [Sec 11, Rule XIV, Book III, IRR of LC] Regional Office shall provide technical assistance to registered homeworkers’ organizations [Sec 14, Rule XIV, Book III, IRR of LC]

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Prohibited Homework

occupation.

(1) explosives, fireworks and articles of like character; (2) drugs and poisons; and (3) other articles, the processing of which requires exposure to toxic substances. [Sec 13, Rule XIV, Book III, IRR] Deductions No deduction from the homeworker’s earnings for the value of materials lost, destroyed or damaged unless: (1) Homeworker is clearly shown to be responsible for loss or damage (2) Reasonable opportunity to be heard (3) Amount of deduction is fair and reasonable, and does not exceed actual loss or damage (4) Deduction does not exceed 20% of homeworker’s weekly earnings [Sec. 8, Rule XIV, Book III, IRR]

O. APPRENTICES AND LEARNERS Relevant Law: RA 7796 (Technical Education and Skills Development Act of 1994 or TESDA Act of 1994) Statement of objectives. - This Title aims: (1) To help meet the demand of the economy for trained manpower; (2) To establish a national apprenticeship program through the participation of employers, workers and government and non-government agencies; and (3) To establish apprenticeship standards for the protection of apprentices. [Art 57, RA 7796] O.1. APPRENTICES Note: Art. 58 has been superseded by Section 4 (j), (k), (l), (m) of RA 7796 quoted below: (j)

LABOR LAW

"Apprenticeship" training within employment with compulsory related theoretical instruction involving a contract between an apprentice and an employer on an approved apprenticeable

(k) “Apprentice" is a person undergoing training for an approved apprenticeable occupation during an apprenticeship agreement. [Art 58(b) Labor Code; Sec 4 (k), RA 7796] (l) "Apprenticeship Agreement" is a contract wherein a prospective employer binds himself to train the apprentice who in turn accepts the terms of training for a recognized apprenticeable occupation emphasizing the rights, duties and responsibilities of each party. (m) “Apprenticeable Occupation” is an occupation officially endorsed by a tripartite body and approved to be apprenticeable by the authority. [Sec. 4, RA 7796] The act of filing the proposed apprenticeship program with the DOLE is a preliminary step towards its final approval, and does not instantaneously give rise to an employerapprentice relationship. It must be duly approved by the Minister of Labor and Employment. Hence, since the apprenticeship agreement between petitioner and respondent has no force and effect, respondent's assertion that he was hired not as an apprentice but as a delivery boy deserves credence. [Nitto Enterprises vs. NLRC, G.R. No. 114337, (1995)] Conditions under which below 15 may be employed

children

Children below fifteen (15) years of age shall not be employed except: (1) When a child works directly under the sole responsibility of his parents or legal guardian and where only members of the employer's family are employed: Provided, however, That his employment neither endangers his life, safety, health and morals, nor impairs his normal development: Provided, further, That the parent or legal guardian shall provide the said minor child with the prescribed primary and/or secondary education; or (2) Where a child's employment or participation in public entertainment or information through cinema, theater,

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radio or television is essential: Provided, The employment contract is concluded by the child's parents or legal guardian, with the express agreement of the child concerned, if possible, and approval of the Department of Labor and Employment: and Provided, That the following requirements in all instances are strictly complied with: (a) The employer shall ensure the protection, health, safety, morals and normal development of the child; (b) The employer institute measures to prevent the child's exploitation or discrimination taking into account the system and level of remuneration and the duration and arrangement of working time; and (c) The employer shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skills acquisition of the child. In the above exceptional cases where any such child may be employed, the employer shall first secure, before engaging child, a work permit from the Department of Labor and Employment which shall ensure observance of the above requirements. The Department of Labor and Employment shall promulgate rules and regulations necessary for the effective implementation of this Section. [RA 7160, Sec. 12 as amended by RA 7658, Sec. 1] Qualifications of apprentice (a) Be at least 14 years of age; (b) Possess vocational aptitude and capacity for appropriate tests; and (c) Possess the ability to comprehend and follow oral and written instructions. Trade and industry associations may recommend to the Secretary of Labor appropriate educational requirements for different occupations. [Art. 59, LC]

LABOR LAW

Integrating both the abovementioned provisions then the qualifications of an apprentice are as follows: (1) At least 15 years of age [as amended by R.A. 7610], provided that if he is below 18 years, he shall not be eligible for hazardous occupation; (2) Possess vocational aptitude and capacity for appropriate tests; (3) Possess the ability to comprehend and follow oral and written instructions. [Art. 59 of the LC, as amended by R.A. 7610] (4) Physically fit for occupation Allowed em ploym ent Apprenticeable Occupation – is an occupation officially endorsed by a tripartite body and approved to be apprenticeable by the authority. [Sec. 4, RA 7796] Employment of Apprentices W hen applicable: (1) Only employers in highly technical industries may employ apprentices; and (2) Only in apprenticeable occupations approved by the Secretary of Labor. [Art. 60, Labor Code] Terms and conditions Apprenticeship agreements, including the wage rates of apprentices, shall conform to the rules issued by the Secretary of Labor and Employment. The period of apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no case shall start below 75 percent of the applicable minimum wage, may be entered into only in accordance with apprenticeship programs duly approved by the Secretary of Labor and Employment. [Art. 61, Labor Code as amended by E.O. 111-1986] The Secretary of Labor and Employment may authorize the hiring of apprentices without compensation whose training on the job is

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required by the school or training program curriculum or as requisite for graduation or board examination. [Art. 72, Labor Code] The wages of apprentices and learners shall in no case be less than seventy-five percent (75%) of the applicable minimum wage rates. [Sec. 7, Wage Order No. NCR-19]

LABOR LAW

pay his apprentices the minimum wage. [Art. 71, LC] Requisites of the deduction: a. Apprenticeship program must be duly approved by the DOLE; b. Deduction shall NOT exceed 10% of direct labor wage;

Enforcement Investigation of violation of apprenticeship agreement. - Upon complaint of any interested person or upon its own initiative, the appropriate agency of the Department of Labor and Employment or its authorized representative shall investigate any violation of an apprenticeship agreement pursuant to such rules and regulations as may be prescribed by the Secretary of Labor and Employment. [Art. 65, LC] Appeal to the Secretary of Labor and Employment. - The decision of the authorized agency of the Department of Labor and Employment may be appealed by any aggrieved person to the Secretary of Labor and Employment within five (5) days from receipt of the decision. The decision of the Secretary of Labor and Employment shall be final and executory. [Art.66, LC] Exhaustion of administrative remedies. No person shall institute any action for the enforcement of any apprenticeship agreement or damages for breach of any such agreement, unless he has exhausted all available administrative remedies. [Art. 67, LC] Incentives for em ployers An additional deduction from taxable income of one-half (1/2) of the value of labor training expenses incurred for developing the productivity and efficiency of apprentices shall be granted to the person or enterprise organizing an apprenticeship program: Provided, That such program is duly recognized by the Department of Labor and Employment: Provided, further, That such deduction shall not exceed ten (10%) percent of direct labor wage: and Provided, finally, That the person or enterprise who wishes to avail himself or itself of this incentive should

c. Employer must pay his apprentices the minimum wage. Summary of Rules: (1) The apprentice must be paid not less than 75% of the prescribed minimum salary [Art. 61, LC]; HOWEVER, the employer MAY NOT pay any wage if the apprenticeship training is: a. part of the school curriculum, b. a requirement for graduation, or c. a requirement for board examination [Art. 72] (2) The apprenticeship agreement must be approved by the DOLE Secretary (without such one shall be deemed a regular employee) [Nitto Enterprises v. NLRC, Sept. 29, 1995]; (3) The employer is not compelled to continue one’s employment upon termination of apprenticeship; (4) One-half (1/2) of the value of labor training expenses incurred for developing the productivity and efficiency of apprentices of the training cost is deducted from the employer’s income tax but it shall not exceed 10% of direct labor wage [Art. 71] W orking scholars – there is no employeremployee relationship between students on one hand, and schools, colleges or universities on the other, where there is written agreement between them under which the former agree to work for the latter in exchange for the privilege to study free of charge, provided, the students are given real opportunities, including such facilities as may

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be reasonable and necessary to finish their chosen courses under such agreement. [Sec. 14, Rule X, IRR] O.2. LEARNERS Learners - persons hired as trainees in semiskilled and other industrial occupations which are non-apprenticeable and which may be learned through practical training on the job in a relatively short period of time which shall not exceed three (3) months [Art 73, Labor Code, Sec 4(n), RA 7796]

LABOR LAW

(4) A commitment to employ the learners if they so desire, as regular employees upon completion of the learnership. All learners who have been allowed or suffered to work during the first two (2) months shall be deemed regular employees if training is terminated by the employer before the end of the stipulated period through no fault of the learners. The learnership agreement shall be subject to inspection by the Secretary of Labor and Employment or his duly authorized representative. [Art. 75, LC] Learners employed in piece or incentive-rate jobs during the training period shall be paid in full for the work done. [Art. 76, LC]

W hen may learners be hired (1) No experienced workers are available; (2) The employment of learners being necessary to prevent the curtailment of employment opportunities; and (3) The employment will neither create unfair competition in terms of labor costs nor impair working standards. [Art. 74, Labor Code] Terms and conditions of employment Any employer desiring to employ learners shall enter into a learnership agreement with

Summary of Rules (1) The duration of learnership shall not exceed 3 months [Art. 73, LC]; (2) If the learnership of 3 months is completed, the employer may be compelled to continue with the services of the learner as a regular employee; There is a commitment from the employer to employ the learners if they so desire, as regular employees upon completion of the learnership;

(2) The duration of the learnership period, which shall not exceed three (3) months;

(3) If the learner is dismissed from service without just and valid cause and without due process after 2 months of service, he will be deemed as regular employee; [Art. 75(d)] and

(3) The wages or salary rates of the learners which shall begin at not less than seventy-five percent (75%) of the applicable minimum wage; and

(4) The wages or salary rates of the learners which shall begin at not less than 75% of the applicable minimum wage. [Art. 75(c)]

them, which agreement shall include: (1) The names and addresses of the learners;

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Distinctions between Learnership and Apprenticeship Apprenticeship

Learnership

Highly technical industries

Semi-skilled industrial occupations

Practical training supplemented by related theoretical instruction

Practical training whether or not such practical training is supplemented by theoretical instructions

Apprenticeable occupations approved by the SOLE

Non-apprenticeable occupations

Written apprentice agreement appropriate committees

ratified

by

the

Learnership agreement

More than 3 months, shall not exceed 6 months

Shall not exceed 3 months

1. The person is at least 15 years of age, provided those who are at least 15 years of age but less than 18 may be eligible for apprenticeship only in non-hazardous occupation;

1. When no experienced workers are available;

2. The person is physically fit for the occupation in which he desires to be trained; 3. The person possesses vocational aptitude and capacity for the particular occupation as established through appropriate tests; and

2. The employment of learners is necessary to prevent curtailment of employment opportunities; and 3. The employment does not create unfair competition in terms of labor costs or impair or lower working standards.

4. The person is able to comprehend and follow oral and written instructions. Wage rate shall begin at not less than 75% of the minimum wage

Wage rate shall begin at not less than 75% of the minimum wage

No compensation if SOLE authorizes, as OJT is required by the school

Learners in piecework shall be paid in full for the work done A commitment to employ the learners if they so desire, as regular employees upon completion of the learnership. All learners who have been allowed or suffered to work during the first 2 months shall be deemed regular employees if training is terminated by the employer before the end of the stipulated period through no fault of the learners.

Deductibility of ½ of training costs incurred, provided: • Program is duly recognized by DOLE • Deduction shall not exceed 10% of direct labor wage • Payment of minimum wage to apprenticeship

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P. HANDICAPPED WORKERS DIFFERENTLY-ABLED WORKERS

LABOR STANDARDS



[RA 7277 - Magna Carta for Disabled Persons, as amended by RA 9442] Disabled Persons are those suffering from restriction or different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being [Sec. 4 (a), RA 7277] Im pairment is any loss, diminution or aberration of psychological, physiological, or anatomical structure or function [Sec. 4(b), RA 7277] Disability shall mean: (a) physical or mental impairment that substantially limits one or more psychological, physiological or anatomical function of an individual or activities of such individual; OR (b) a record of such an impairment; OR (c) being regarded as having such an impairment [Sec 4(c), RA 7277] Handicap refers to a disadvantage for a given individual, resulting from an impairment or a disability that limits or prevents the function, or activity that is considered normal given the age and sex of the individual. [Sec 4(d), RA 7277] Declaration of Policy. The grant of the rights and privileges for disabled persons shall be guided by the following principles: (a) Disabled persons are part of the Philippine society, thus the Senate shall give full support to the improvement of the total well-being of disabled persons and their integration into the mainstream of society. Toward this end, the State shall adopt policies ensuring the rehabilitation, self-development and selfreliance of disabled persons. It shall develop their skills and potentials to enable them to compete favorably for available opportunities.

LABOR LAW

(b) Disabled persons have the same rights as other people to take their proper place in society. They should be able to live freely and as independently as possible. This must be the concern of everyone the family, community and all government and non-government organizations. Disabled person’s rights must never be perceived as welfare services by the Government. (c) The rehabilitation of the disabled persons shall be the concern of the Government in order to foster their capability to attain a more meaningful, productive and satisfying life. To reach out to a greater number of disabled persons, the rehabilitation services and benefits shall be expanded beyond the traditional urban-based centers to community based programs, that will ensure full participation of different sectors as supported by national and local government agencies (d) The State also recognizes the role of the private sector in promoting the welfare of disabled persons and shall encourage partnership in programs that address their needs and concerns (e) To facilitate integration of disabled persons into the mainstream of society, the State shall advocate for and encourage respect for disabled persons. The State shall exert all efforts to remove all social, cultural, economic, environmental and attitudinal barriers that are prejudicial to disabled persons. [Sec 2, RA 7277] Coverage. This Act shall covers all disabled persons and, to the extend herein provided, departments, offices and agencies of the National Government or non-government organization involved in the attainment of the objectives of this Act. [Sec 2, RA 7277]

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Rights of disabled workers

7, RA 7277] [Bernardo v NLRC & FEBTC, 1999]

(1) Equal opportunity for employment

(4) Full m inim um wage

No disabled person shall be denied access to opportunities for suitable employment. A qualified disabled EE shall be subject to the same terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able-bodied person. [Sec. 5 (par. 1), RA 7277]

All qualified handicapped workers shall receive the full amount of the minimum wage rate prescribed herein. [Sec 7, Wage Order No. NCR-19]

(2) Reserved contractual positions 5% of all casual, emergency and contractual positions in the DSWD; DOH, DepEd; and other government agencies, offices or corporations engaged in social development shall be reserved for disabled persons. [Sec 5 (par. 2), RA 7277]

In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled EE should be given the same terms and conditions of employment as a qualified ablebodied person. Since the Magna Carta accords them the rights of qualified ablebodied persons, they are thus covered by Article 280 of the Labor Code. In the present case, the handicap of petitioners (deafmutes) is NOT a hindrance to their work. The eloquent proof of this statement is the repeated renewal of their employment contracts. [Bernardo v. NLRC, G.R. No. 122917 (1999)]

(3) Sheltered employment Sheltered Employment refers to the provision of productive work for disabled persons through workshop providing special facilities, income producing projects or homework schemes with a view to given them the opportunity to earn a living thus enabling them to acquire a working capacity required in open industry. [Sec 4(i), RA 7277]

Discounts and other privileges Persons with disability shall be entitled to the following:

If suitable employment for disabled persons cannot be found through open employment, the State shall endeavor to provide it by means of sheltered employment. In the placement of disabled persons in sheltered employment, it shall accord due regard to the individual qualities, vocational goals and inclinations to ensure a good working atmosphere and efficient production. [Sec 6, RA 7277] Apprenticeship Opportunities. Disabled persons shall be eligible as apprentices or learners: Provided, that their handicap is NOT as much as to effectively impede the performance of job operations in the particular occupation for which they are hired; provided, further, That after the lapse of the period of apprenticeship, if found satisfactory in the job performance, they shall be eligible for employment. [Art. 81 LC; Sec. PAGE 86 OF 222

(a) At least 20% discount from all establishments relative to the utilization of all services in hotels and similar lodging establishments; restaurants and recreation centers for the exclusive use or enjoyment of persons with disability; (b) A minimum of 20% discount on admission fees charged by theaters, cinema houses, concert halls, circuses, carnivals and other places of culture, leisure and amusement for the exclusive use or enjoyment of persons with disability; (c) At least 20% discount for the purchase of medicines in all drugstores for the exclusive use or enjoyment of persons with disability; (d) At least 20% discount on medical and dental services including diagnostic and laboratory fees such as, but not limited to, x-rays, computerized tomography scans and blood tests, in all government facilities, subject to guidelines to be

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issued by the DOH in coordination with the PHILHEALTH. (e) At least 20% discount on medical and dental services including diagnostic and laboratory fees and professional fees of attending doctors in all private hospitals and medical facilities, in accordance with the rules and regulations to be issued by the DOH, in coordination with PHILHEALTH;

Conditions for entitlement (1) Persons with disability who are Filipino citizens upon submission of any of the following as proof of his/her entitlement thereto: (a) An identification card issued by the city or municipal mayor or the barangay captain of the place where the persons with disability reside; (b) The passport of the persons with disability concerned; or

(f) At least 20% discount on fare for domestic air and sea travel for the exclusive use or enjoyment of persons with disability; (g) At least 20% discount in public railways, skyways, and bus fare for the exclusive use and enjoyment of persons with disability. (h) Educational assistance to persons with disability, for them to pursue primary, secondary, tertiary, post tertiary, as well as vocational or technical education, in both public and private schools, through the provision of scholarships, grants, financial aids, subsidies and other incentives to qualified persons with disability, including support for books, learning materials and uniform allowance to the extent feasible; Provided, That persons with disability shall meet minimum admission requirements; (i) To the extent practicable and feasible, the continuance of the same benefits and privileges given by the GSIS, SSS, and PAG-IBIG, as the case may be, as are enjoyed by those in actual service;

LABOR LAW

(c) Transportation discount fare ID issued by the National Council for the Welfare of Disabled Persons (NCWDP). (2) The privileges may not be claimed if the persons with disability claim a higher discount as may be granted by the commercial establishment and/or under other existing laws or in combination with other discount program/s. [Sec 32, RA 7277, as amended by RA 9442] Other Provisions Discrimination

Against

(1) Discrimination of Em ploym ent No entity, whether public or private shall discriminate against a qualified disabled person by reason of disability in regard to job application procedures, the hiring, promotion, or discharge of employees compensation, job training and other terms, conditions and privileges of employment. The following constitute acts of discrimination:

(j) To the extent possible, the government may grant special discounts in special programs for persons with disability on purchase of basic commodities, subject to guidelines to be issued for the purpose by the DTI and the DA; and (k) Provision of express lanes for persons with disability in all commercial and government establishments; in the absence thereof, priority shall be given to them. [Sec 32, RA 7277, as amended by RA 9442]

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(a) Limiting, segregating or classifying a disabled job applicant in such a manner that adversely affects his work opportunities (b) Using qualification standards, employment tests or other selection criteria that screen out or tend to screen out a disabled person unless such standards, tests or other selection criteria are shown to be related for the position in question and are consistent with business necessity; (c) Utilizing standards, criteria, methods of administration that:

or

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(i) have the effect of discrimination on the basis of disability; or

(a) all entering employees are subjected to such an examination regardless of disability;

(ii) perpetuate the discrimination of others who are the subject to common administrative control.

(b) Information obtained during the medical condition or history of the applicant is collected and maintained on separate forms and in separate medical files and is treated as a confidential medical record; Provided, however, That:

(d) Providing less compensation, such as salary, wage or other forms of remuneration and fringe benefits, to qualified disabled employee, by reason of his disability, than the amount to which a non-disabled person performing the same work is entitled;

(i) supervisors and managers may be informed regarding necessary restrictions on the work or duties of the employees and necessary accommodations:

(e) Favoring a non-disabled employee over a qualified disabled employee with respect to promotion, training opportunities, study and scholarship grants, solely on account of the latter's disability;

(ii) first aid and safety personnel may be informed, when appropriate, if the disability might require emergency treatment;

(f) Re-assigning or transferring a disabled employee to a job or position he cannot perform by reason of his disability; (g) Dismissing or terminating the services of a disabled employee by reason of his disability unless the employer can prove that he impairs the satisfactory performance of the work involved to the prejudice of the business entity; Provided, however, That the employer first sought to provide reasonable accommodations for the disabled persons;

(iii) government officials investigating compliance with this Act shall be provided relevant information on request; and (iv) the results of such examination are used only in accordance with this Act. [Sec. 35, RA 7277 as amended by RA 9442] (3) Prohibition on Verbal, Non-Verbal Ridicule and Vilification Against Persons with Disability

(h) Failing to select or administer in the most effective manner employment tests which accurately reflect the skills, aptitude or other factor of the disabled applicant or employee that such test purports to measure, rather than the impaired sensory, manual or speaking skills of such applicant or employee, if any; and

(a) No individual, group or community shall execute any of these acts of ridicule against persons with disability in any time and place which could intimidate or result in loss of selfesteem of the latter. [Sec. 40, RA 7277, as amended by RA 9442] (c) Any individual, group or community is hereby prohibited from vilifying any person with disability which could result into loss of self-esteem of the latter. [Sec. 42, RA 7277, as amended by RA 9442]

(i) Excluding disabled persons from membership in labor unions or similar organizations. [Sec. 32, RA 7277 as amended by RA 9442] (2) Employment Entrance Examination Upon an offer of employment, a disabled applicant may be subjected to medical examinations, on the following occasions:

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Public Ridicule - The act of making fun of or contemptuous imitating or making mockery of persons with disability whether in writing, or in words, or in action due to their

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impairments. [Sec. 33, RA 7277, as amended by RA 9442]

(d) The total amount of the claimed tax deduction net of VAT if applicable, shall be included in their gross sales receipts for tax purposes and shall be subject to proper documentation and to the provisions of the National Internal Revenue Code, as amended. [Sec. 32, RA 7277, as amended by RA 9442]

Vilification includes: (1) The utterance of slanderous and abusive statements against a person with disability; and/or, (2) An activity in public which incites hatred towards, serious contempt for, or severe ridicule of persons with disability. [Sec. 41, RA 7277, as amended by RA 9442] Tax Incentives Establishments

for

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Enforcement Enforcement by the Secretary of Justice

Employers/

(1) For em ploym ent of disabled persons - additional deduction, from their gross income, equivalent to 25% of the total amount paid as salaries and wages to disabled persons

(a) Denial of Right Duty to Investigate. The Secretary of Justice shall investigate alleged violations of this Act, and shall undertake periodic reviews of compliance of covered entities under this Act. (b) Potential Violations

(b) Employ disabled persons either as regular EEs, apprentice or learner

The Secretary of Justice may commence a legal action in any appropriate court if the Secretary has reasonable cause to believe that

(c) Provided such entities present proof as certified by the DOLE and the DOH [Sec. 8[b], RA 7277]

(1) any person or group of persons is engaged in a pattern of practice of discrimination under this Act; or

(2) For construction of disabledfriendly facilities additional deduction from their net taxable income, equivalent to 50% of the direct costs of the improvements or modifications

(2) any person or group of persons has been discriminated against under this Act and such discrimination raises and issue of general public importance. [Sec 44, RA 7277]

(a) Private entities

(a) Private entities (b) That improve or modify their physical facilities in order to provide reasonable accommodation for disabled persons

Authority of Court. The court may grant any equitable relief that such court considers to be appropriate, including, to the extent required by this Act:

(c) Does NOT apply to improvements or modifications or facilities required under BP 344. [Sec. 8 (c), RA 7277] (3) For establishm ents giving discounts – may claim such discounts as tax deductions based on the net cost of the goods sold or services rendered (a) The cost of the discount shall be allowed as deduction from gross income for the same taxable year that the discount is granted PAGE 89 OF 222

(a) granting temporary, preliminary or permanent relief; (b) providing an auxiliary aid or service, modification of policy, practice or procedure, or alternative method; and (c) making facilities readily accessible to and usable by individuals with disabilities. [Sec 45, RA 7277]

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Penal Clause (a) Any person who violates any provision of this Act shall suffer the following penalties: (i) for the first violation, a fine of not less than Fifty thousand pesos (P 50,000.00) but not exceeding One hundred thousand pesos (P100,000.00) or imprisonment of not less than six (6) months but not more than two (2) years, or both at the discretion of the court; and (ii) for any subsequent violation, a fine of not less than One hundred thousand pesos (P100,000.00) but not exceeding Two hundred thousand pesos (P 200,000.00) or imprisonment for less than two (2) years but not more than six (6) years, or both at the discretion of the court. (b) Any person who abuses the privileges granted herein shall be punished with imprisonment of not less than six (6) months or a fine of not less than Five thousand pesos (P 5,000.00) but not more than Fifty thousand pesos (P 50,000.00), or both, at the discretion of the court. (c) If the violator is a corporation, organization or any similar entity, the officials thereof directly involved shall be liable therefor. (d). If the violator is an alien or a foreigner, he shall be deported immediately after service of sentence without further deportation proceedings. [Sec 46, RA 7277]

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IV. Termination of Employment A. EMPLOYER-EMPLOYEE RELATIONSHIP Art. 97, LC: As used in this Title: (a) "Person" means an individual, partnership, association, corporation, business trust, legal representatives, or any organized group of persons. (b) "Employer" includes any person acting directly or indirectly in the interest of an employer in relation to an employee and shall include the government and all its branches, subdivisions and instrumentalities, all government-owned or controlled corporations and institutions, as well as nonprofit private institutions, or organizations. (c) "Employee" includes employed by an employer.

any

individual

Art. 173, LC. As used in this Title, unless the context indicates otherwise: (f) "Employer" means any person, natural or juridical, employing the services of the employee. (g) "Employee" means any person compulsorily covered by the GSIS under Commonwealth Act Numbered One hundred eighty-six, as amended, including the members of the Armed Forces of the Philippines, and any person employed as casual, emergency, temporary, substitute or contractual, or any person compulsorily covered by the SSS under Republic Act Numbered Eleven hundred sixty-one, as amended. (h) "Person" means any individual, partnership, firm, association, trust, corporation or legal representative thereof. Art. 219, LC: Definitions. (e) "Employer" includes any person acting in

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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. The existence or absence of ER-EE relationship is a question of law and a question of fact, each in its defined sense. The existence of an employer-employee relation is a question of law and being such, it cannot be made the subject of agreement [Tabas et.al. v. California Manufacturing Co., et. al., G.R. No. 80680, (1989)]. The characterization of the law prevails over that in the contract. In this sense, the existence of an EE-ER relationship is a matter of law. The existence of an employer-employee relationship is ultimately a question of fact [SSS v. CA and Ayalde, G.R. No. 100388, (2000)]. The conclusion that an EE-ER relationship depends upon the facts of each case. In this sense, it is a question of fact.

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The most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it. [Lirio v. Genovia, G.R. No. 169757, (2011)]. The control test calls merely for the “existence” of the right to control and not the “actual exercise” of the right. [Zanotte Shoes v. NLRC, G.R. No. 100665, (1995)]. Not every form of control will have the effect of establishing ER-EE relationship. The line should be drawn between: (1) Rules that merely serve as guidelines towards the achievement of mutually desired results without dictating the means or methods to be employed in attaining it. These aim only to promote the result. In such case, NO EE-ER relationship exists. (2) Rules that control or fix the methodology and bind or restrict the party hired to the use of such means. These address both the result and the means used to achieve it and hence, EE-ER relationship exists. [Insular Life Assurance Co, LTD v. NLRC, G.R. No. 84484, (1989)]. Economic Dependence Test Two-tiered approach. (1) First Tier: Control Test (refer to the FourFold Test) (2) Second Tier: The underlying economic realities of the activity or relationship. [Sevilla v. Court of Appeals, G.R. Nos. L41182-3, (1988)].

A.1. FOUR-FOLD TEST TEST OF EMPLOYER-EMPLOYEE RELATIONSHIP (a) Selection and engagement of the employee;

The economic realities prevailing within the activity or between the parties are examined, taking into consideration the totality of circumstances surrounding the true nature of the relationship between the parties.

(b) Payment of wages; (c) Power of dismissal; and (d) Employer’s power to control the employee’s conduct with respect to the means and methods by which the work is to be accomplished [Brotherhood Labor Unity Movement of the Philippines et. al. v. Zamora, G.R. No. 48645, (1987)]

The benchmark of economic reality in analyzing possible employment relationships for purposes of applying the Labor Code ought to be the economic dependence of the worker on his employer. The standard of “economic dependence” is whether the worker is dependent on the alleged employer for his continued

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employment in that line of business. [Orozco v. CA, G.R. No. 155207, (2008)].

employee at the time of engagement, he shall be deemed a regular employee.

Evidence of employee status

Definition

No particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted. For, if only documentary evidence would be required to show that relationship, no scheming employer would ever be brought before the bar of justice, as no employer would wish to come out with any trace of the illegality he has authored considering that it should take much weightier proof to invalidate a written instrument. [Tenazas, et al., v. R. Villegas Taxi Transport, G.R. No. 192998, (2014)].

A probationary employee is one who is made to go on a trial period by an employer during which the employer determines whether or not he is qualified for permanent employment, based on reasonable standards made known to him at the time of engagement. [Robinson’s Galleria et al. v. Ranchez, G.R. No. 177937, (2011)]

The onus probandi rests on the employer to prove that its dismissal was for a valid cause. However, before a case for illegal dismissal can prosper, an employer-employee relationship must first be established. It is incumbent upon the employee to prove the employer-employee relationship by substantial evidence. [Javier v. Fly Ace Corporation, G.R. No. 192558, (2012)]. A.2. KINDS OF EMPLOYMENT i. Probationary Art. 296 [281], LC: Probationary employment shall not exceed 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. Book VI, Rule 1, Sec. 6(d), IRR: In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as regular employee at the time of his engagement. Where no standards are made known to the

Duration [Art. 296(281)] General Rule: Probationary employment shall not exceed six (6) months from the date the employee started working. Exceptions: (1) When it is covered by an apprenticeship agreement stipulating a longer period (Art. 296[281], LC); (2) When the parties to the employment contract agree otherwise, such as when established by company policy or required by the nature of the work performed by the employee [San Miguel Corp, v. del Rosario, G.R. Nos. 168194 & 168603, (2005), citing Buiser v. Leogardo, G.R. No. L-63316, (1984)]; or (3) When it involves the 3 year probationary period of teachers [Mercado v. AMA Computer College, G.R. No. 183572, (2010)] Purposes (1) Observance Period – for employer to determine if employee is qualified and for employee to demonstrate to the ER his skills (2) Restrictive - As long as the termination was made before the expiration of the sixmonth probationary period, the employer has a right to sever the employeremployee relationship Indeed, the employer has the right or is at liberty to choose as to who will be hired and who will be declined. It is within the exercise

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of this right to select his employees that the employer may set or fix a probationary period within which the latter may test and observe the conduct of the former before hiring him permanently. [Grand Motor Parts Corp. v. MOLE, G.R. No. L-58958, (1984)] Standards to qualify as a regular employee

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Regular status after probation When the bank renewed the contract after the lapse of the six-month probationary period, the employees thereby became regular employees. No employer is allowed to determine indefinitely the fitness of its employees. [Bernardo v. NLRC, G.R. No. 122917, (1999)]

Requirements:

Double probation

(a) The employer must communicate the regularization standards to the probationary employee; and

There is no basis for subjecting an employee to a new probationary or temporary employment where he had already become a regular employee when he was absorbed by a sister company. [A Prime Security Services, Inc. v. NLRC, G.R. No. 107023, (2000)]

(b) The employer must make such communication at the time of the probationary employee’s engagement. If the employer fails to comply with either, the employee is deemed as a regular and not a probationary employee. An employer is deemed to have made known the standards that would qualify a probationary employee to be a regular employee when it has exerted reasonable efforts to apprise the employee of what he is expected to do or accomplish during the trial period of probation. This goes without saying that the employee is sufficiently made aware of his probationary status as well as the length of time of the probation. The exception to the foregoing is when the job is self-descriptive in nature, for instance, in the case of maids, cooks, drivers, or messengers. [Abbott Laboratories Phil. et al. v. Alcaraz, G.R. No. 192571, (2013)] In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee. Conversely, an employer is deemed to substantially comply with the rule on notification of standards if he apprises the employee that he will be subjected to a performance evaluation on a particular date after his hiring. [Alcira v. NLRC, G.R. No. 149859, (2004)]

Absorbed em ployees not probationary The private respondents could not be considered probationary employees because they were already well-trained in their respective functions. As stressed by the Solicitor General, while private respondents were still with the CCAS they were already clerks. Respondent Gelig had been a clerk for CCAS for more than ten (10) years, while respondent Quijano had slightly less than ten (10) years of service. They were, therefore, not novices in their jobs but experienced workers. [Cebu Stevedoring Co., Inc. v. Regional Director, G.R. No. L-54285, (1988)] Private school teachers Questions respecting a private school teacher’s entitlement to security of tenure are governed by the Manual of Regulations for Private Schools and not the Labor Code. [Aklan College v. Guarino, G.R. No. 152949, (2007)] The legal requisites, therefore, for acquisition by a teacher of permanent employment, of security of tenure are: (a) A full time teacher; (b) Must have rendered three consecutive years of service; and (c) Service must have been satisfactory. [La Salette of Santiago v. NLRC, G.R. No. 82918, (1991)]

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Mere completion of the three-year probation, even with an above-average performance, does not guarantee that the employee will automatically acquire a permanent employment status. The probationer can only qualify upon fulfillment of the reasonable standards set for permanent employment as a member of the teaching personnel. [Herrera-Manaois v. St. Scholastica’s College, G.R. No. 188914,(2013)] These standards should be made known to the teachers on probationary status at the start of their probationary period, or at the very least under the circumstances of the present case, at the start of the semester or the trimester during which the probationary standards are to be applied. Of critical importance in invoking a failure to meet the probationary standards, is that the school should show – as a matter of due process – how these standards have been applied. [Colegio del Santisimo Rosario v. Rojo, G.R. No. 170388, (2013)] Termination A probationary employee enjoys only a temporary employment status. This means that he is terminable at any time, permanent employment not having been attained in the meantime. The employer could well decide he no longer needed the probationary employee’s services or his performance fell short of expectations, etc. As long as the termination was made before the termination of the six-month probationary period, the employer was well within his rights to sever the employer-employee relationship. A contrary interpretation would defect the clear meaning of the term “probationary.” [De la Cruz, Jr. v. NLRC, G.R. No. 145417. (2003)] A probationary employee can only be terminated for: (1) Just causes; (2) Authorized causes; or (3) Failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of engagement.

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[Robinson’s Galleria et al. v Ranchez, G.R. No. 177937, Jan. 19, (2011)] The probationary employee is entitled to substantial and procedural due process before termination. Limits to termination (1) It must be exercised in accordance with the specific requirements of the contract (2) If a particular time is prescribed, the termination must be within such time and if formal notice is required, then that form must be used; (3) The employer’s dissatisfaction must be real and in good faith, not feigned so as to circumvent the contract or the law; (4) There must be no unlawful discrimination in the dismissal. [Manila Hotel Corporation v. NLRC, G.R. No. 53453, (1986)] In order to invoke “failure to meet the probationary standards” as a justification for dismissal, the employer must show how these standards have been applied to the subject employee. [Univac Development, Inc. v. Soriano, G.R. No. 182072, (2013)]. ii. Regular Art. 295 (previously Art 280), LC: 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

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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. Art. 296 [281], Last sentence, LC: An employee who is allowed to work after a probationary period shall be considered a regular employee. Regular employment is not synonymous with permanent employment, because there is no such thing as a permanent employment. Any employee may be terminated for just cause. A regular employee is one who is engaged to perform activities which are necessary and desirable in the usual business or trade of the employer as against those which are undertaken for a specific project or are seasonal. Art 295 provides two kinds of regular employees: (1) Those engaged to perform activities which are necessary or desirable in the usual business or trade of the employer; and (2) casual employees who have rendered at least 1 year of service, whether continuous or broken, with respect to the activity in which they are employed. [Romares v. NLRC, G.R. No. 122327. (1998)] Primary standard to regular employment: connection rule

determine reasonable

The primary standard to determine a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. If the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for

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its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business of the employer. Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. [Forever Richons Trading Corp. v. Molina, G.R. No. 206061, (2013)] W hen applicable Art. 295 is not the yardstick for determining the existence of an employment relationship because it merely distinguishes between two kinds of employees, i.e., regular employees and casual employees, for purposes of determining the right of an employee to certain benefits, to join or form a union, or to security of tenure; it does not apply where the existence of an employment relationship is in dispute. [Atok Big Wedge Co., Inc. v. Gison, G.R. No. 169510, (2011)] Hiring for an extended period Where the employment of project employees is extended long after the supposed project has been finished, the employees are removed from the scope of project employees and considered regular employees. [Audion Electric Co., Inc. v. NLRC, G.R. No. 106648, (1999)] While length of time may not be a controlling test for project employment, it can be a strong factor in determining whether the employee was hired for a specific undertaking or in fact tasked to perform functions which are vital, necessary and indispensable to the usual business or trade of the employer. [Tomas Lao Const. v. NLRC, G.R. No. 116781. (1997)] Repeated renewal of contract While the Court has recognized the validity of contractual stipulations as to the duration of employment, this cannot apply where the contract-to-contract arrangement was but an artifice to prevent her from acquiring security of tenure and to frustrate constitutional decrees. [Beta Electric Corp. v. NLRC, G.R. No. 86408, (1990)]

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Length of tim e involved

Rationale for project employment

Length of time is not controlling, merely serves as a badge of regular employment. [Maraguinot v. NLRC, G.R. No. 120969. (1998)]

If a project has already been completed, it would be unjust to require the employer to maintain them in the payroll while they are doing absolutely nothing except waiting until another project is begun, if at all. In effect, these stand-by workers would be enjoying the status of privileged retainers, collecting payment for work not done, to be disbursed by the employer from profits not earned. [De Ocampo, Jr. v. NLRC, G.R. No. 81077, (1990)]

iii. Project employment Art. 295 (previously Art 280), 1st par, LC: 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. A project employee is one who is hired for carrying out a separate job, distinct from the other undertakings of the company, the scope and duration of which has been determined and made known to the employees at the time of employment. [Hanjin Heavy Industries & Const. Co. v. Ibañez, G.R. No. 170181, (2008)] Whether or not the project has a direct relation to the business of the employer is not important, BUT: (1) Employee must be informed of the nature and duration of project (2) Project and principal business of ER are two separate things (3) No attempt to deny security of tenure to the worker

Two Kinds of Project Employee (1) For a particular job or undertaking that is WITHIN the regular or usual business of the employer company, but which is distinct and separate, and identifiable as such, from the other undertakings of the company (i.e. construction) (2) For a particular job or undertaking that is NOT within the regular business of the corporation. Such a job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer [Villa v. NLRC, G.R. No. 117043, (1988)] Test of project employment The litmus test to determine whether an individual is a project employee lies in setting a fixed period of employment involving a specific undertaking the completion or termination of which has been determined at the time of the particular employee's engagement. The decisive factor in the term employment is the day certain agreed upon by the parties for the commencement and termination of their employment relationship, a day certain being understood to be that which must necessarily come, although it may not be known when. [Caasi v. Kanlungan Centre Foundation, Inc., G.R. No. 199769, (2013)] The repeated and successive rehiring of project employees do not qualify them as regular employees, as length of service is not the controlling determinant of the employment tenure of a project employee, but whether the employment has been fixed

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for a specific project or undertaking, its completion has been determined at the time of the engagement of the employee. [William Uy Construction Corp. v. Trinidad, G.R. No. 183250, (2010)]

(1) The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable; (2) Such duration, as well as the specific work/service to be performed, is defined in an employment; (3) agreement and is made clear to the employee at the time of the hiring; (4) The work/service to be performed by the employee is in connection with the particular project/undertaking for which he is engaged; (5) The employee, while not employed and awaiting engagement, is free to offer his services to any other employer; (6) The termination of his employment in the particular project/undertaking is reported to the DOLE Regional Office having jurisdiction over the workplace following the date of his separation from work, using the prescribed form on employees’ terminations /dismissals/suspensions; (7) An undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most construction companies. [Samson v. NLRC, G.R. No. 11366, (1996)]. applicable

course. [William Uy Construction Corp. v. Trinidad, G.R. No. 183250, (2010)] See also: Policy Instructions No. 20 of 1997 and D.O. 19 of 1993 W ork pool employee

Indicators of project em ployment

Length of time not construction industry

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in

Generally, length of service provides a fair yardstick for determining when an employee initially hired on a temporary basis becomes a permanent one, entitled to the security and benefits of regularization. But this standard will not be fair, if applied to the construction industry, simply because construction firms cannot guarantee work and funding for its payrolls beyond the life of each project. And getting projects is not a matter of

A project employee or a member of a work pool may acquire the status of a regular employee when the following concur: (1) There is a continuous rehiring of project employees even after cessation of a project; and (2) The tasks performed by the alleged “project employee” are vital, necessary, and indispensable to the usual business or trade of the employer. However, the length of time during which the employee was continuously rehired is not controlling, but merely serves as a badge of regular employment. A work pool may exist although the workers in the pool do not receive salaries and are free to seek other employment during temporary breaks in the business, provided, that the worker shall be available when called to report for a project. Although primarily applicable to regular seasonal workers, this set-up can likewise be applied to project workers insofar as the effect of temporary cessation of work is concerned. [Maraguinot v. NLRC, G.R. No. 120969. (1998)] Members of a work pool from which a construction company draws its project employees, if considered employees of the construction company while in the work pool, are non-project employees or employees for an indefinite period. If they are employed in a particular project, the completion of the project or any phase thereof will not mean severance of the employer-employee relationship. [J. & D.O. Aguilar Corp. v. NLRC, G.R. No. 116352, (1997)] Rule on reportorial requirement A report of termination to the nearest public employment office every time their employment was terminated due to completion of each construction

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project. Failure of the employer to file termination reports after every project completion proves that the employees are not project employees. [Pasos v. Philippine National Construction Corp., G.R. No. 192394, (2013)] Repeated renewal of contract When an employer renews a contract of employment after the lapse of the six-month probationary period, the employee thereby becomes a regular employee. No employer is allowed to determine indefinitely the fitness of its employees. [Malicdem v. Marulas Industrial Corp., G.R. No. 204406, (2014)] iv. Seasonal Seasonal employees are those whose work or services to be performed are seasonal in nature, employment is for the duration of the season. There is no continuing need for the worker.

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to the activity in which he is employed and his employment shall continue while such activity exists. Book VI, Rule 1, Sec. 5 (b), IRR: Casual employment. There is casual employment where an employee is engaged to perform a job, work or service which is merely incidental to the business of the employer, and such job, work or service is for a definite period made known to the employee at the time of engagement: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or not, 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. A casual employee is engaged to perform a job, work or service which is merely incidental to the business of the employer, and such job, work or service is for a definite period made known to the employee at the time of engagement.

“Regular Seasonal” Employees After One Season

Someone who is not a regular, project or seasonal employee.

Seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not separated from service in said period, but are merely considered on leave until reemployed

Requirements employee:

The nature of their relationship . . . is such that during off season they are temporarily laid off but during summer season they are re-employed, or when their services may be needed. They are not strictly speaking separated from the service but are merely considered as on leave of absence without pay until they are re-employed. [Philippine Tobacco Flue-Curing &Redrying Corp. v. NLRC, G.R. No. 127395, (1998)] v. Casual Art. 295 [previously Art 280], 2nd par. LC: 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

become

regular

(1) One (1) year service, continuous or broken with respect to activity employed (2) Employment shall continue while such activity exists Nature of work What determines regularity or casualness is not the employment contract, written or otherwise, but the nature of the job. If the job is usually necessary or desirable to the main business of the employer, then employment is regular. [A. M. Oreta and Co., Inc. v. NLRC, G.R. No. 74004, (1989)] One-year service As held in Philippine Bank of Communications v. NLRC, a temporary or casual employee, under Article 281 of the Labor Code, becomes

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regular after service of one year, unless he has been contracted for a specific project. [Tabas v. California Marketing Co., Inc., G.R. No. L-80680, (1989)]. vi. Fixed-Term Art. 295 [280] has no application to instances where a fixed period of employment was agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. [Brent School v. Zamora, G.R. No. L-48494, (1990)] Conditions for the validity of fixed contract agreement between employer and employee (1) Fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure or any other circumstances vitiating his consent; or (2) The employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter. Project employment and Fixed-term employment distinguished A project employee is assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employee is engaged for the project The duration of a fixed-term employment agreed upon by the parties may be any day certain, which is understood to be "that which must necessarily come although it may not be known when." The decisive determinant in fixed-term employment is not the activity that the employee is called upon to perform but the day certain agreed upon by the parties for the commencement and termination of the

LABOR LAW

employment relationship. [GMA Network, Inc. v. Pabriga, G.R. No. 176419, (2013)] No implied renewal of employment contract It is a settled rule that seafarers are considered contractual employees. Their employment is governed by the contracts they sign everytime they are rehired and their employment is terminated when the contract expires. Their employment is contractually fixed for a certain period of time. Thus, when a contract ends, the employment is deemed automatically terminated, there being no mutually-agreed renewal or extension of the expired contract. [Unica v. Anscor Swire Ship Management Corp., G.R. No. 184318, (2014)] As long as the Brent School v. Zamora guidelines are satisfied, the court will recognize the validity of the fixed-term contract, especially if they were informed of that their engagement was for a specific period. The Brent doctrine is only applicable in a few special cases wherein the employer and employee are on more or less in equal footing in entering into the contract [Fuji Television Network Inc v. Espiritu, G.R. No. 204944-45, (2014)]. A.3. JOB CONTRACTING I. Articles 106 – 109 Art. 106, LC: Contractor or subcontractor. Whenever an employer enters into a contract with another person for the performance of the former’s work, the employees of the contractor and of the latter’s subcontractor, if any, shall be paid in accordance with the provisions of this Code. In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him. The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit

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the contracting-out of labor to protect the rights of workers established under this Code. In so prohibiting or restricting, he may make appropriate distinctions between labor-only contracting and job contracting as well as differentiations within these types of contracting and determine who among the parties involved shall be considered the employer for purposes of this Code, to prevent any violation or circumvention of any provision of this Code.

II. D.O. No. 18-A-11: Rules Im plem enting Articles 106 to 109 of the LC, as amended

There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.

(2) cooperatives engaging in contracting or subcontracting arrangements

Art. 107, LC: Indirect employer. The provisions of the immediately preceding article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project. Art. 108, LC: Posting of bond. An employer or indirect employer may require the contractor or subcontractor to furnish a bond equal to the cost of labor under contract, on condition that the bond will answer for the wages due the employees should the contractor or subcontractor, as the case may be, fail to pay the same. Art. 109, LC: Solidary liability. The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers.

Coverage This shall apply to: (1) all parties of contracting and subcontracting arrangements where EREE relationships exist

Contractors and subcontractors referred to in these rules are prohibited from engaging in recruitment and placement activities as defined in Art. 13(b) of the LC whether for local or overseas employment. Contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out with a contractor the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal. Service agreement refers to the contract between the principal and contractor containing the terms and conditions governing the performance or completion of a specific job, work or service being farmed out for a definite or predetermined period. Cabo refers to a person or group of persons or a labor groups which, in the guise of a labor organization, cooperative or any entity, supplies workers to an employer, with or without any monetary or other consideration, whether in the capacity of an agent of the employer or as an ostensible independent contractor.

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Legitimate subcontracting

contracting

or

Contracting or subcontracting shall be legitimate if all the following circumstances occur: (1) The contractor must be registered in accordance with these rules and carries a distinct and independent business (2) The contractor undertakes to perform the job, work or service on its own responsibility, according to its own manner and method, and free from control and direction of the principal in all matters connected with the performance of the work except as to the results thereof; (3) The contractor has substantial capital and/or investment; and (4) The Service Agreement ensures compliance with all the rights and benefits under Labor laws. Rights of contractor’s employees All contractor’s employees, whether deployed or assigned as reliever, seasonal, week-ender, temporary, or promo jobbers, shall be entitled to all the rights and privileges as provided for in the LC, as amended. Security of employees

tenure

of

contractor’s

It is understood that all contractor’s employees enjoy security of tenure regardless of whether the contract of employment is coterminus with the service agreement, or for a specific job, work, or service, or phase thereof.

LABOR LAW

Effect of termination of employment [Sec. 13, D.O. 18-A-11] Cause

Effect

Prior to the Governed by Art. 284 – expiration of the 292 of LC Service Agreement Prior to expiration of the Service Agreement and not due to authorized causes

The right of the contractor employee to unpaid wages and other unpaid benefits including unremitted legal mandatory contributions, e.g., SSS, PhilHealth, Pagibig, ECC, shall be borne by the party at fault, without prejudice to the solidary liability of the parties to the Service Agreement.

Due to expiration of Service Agreement, or from the completion of the phase of the job, work or service for which the employee is engaged

Employee may opt for payment of separation benefits as may be provided by law or the Service Agreement, without prejudice to his/her entitlement to the completion bonuses or other emoluments, including retirement benefits whenever applicable

Prohibition contracting

against

labor-only

Labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal. [Polyfoam-RGC International Corp. v. Concepcion, G.R. No. 172349, (2012)] ELEMENTS OF CONTRACTING:

LABOR-ONLY

(a) (1) The contractor does not have substantial capital or investments in the form of tools, equipment, machineries, work premises, among others, and PAGE 101 OF 222

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(2) The employees recruited and places are performing activities which are usually necessary or desirable to the operation of the company, or directly related to the main business of the principal within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal; or (b) The contractor does not exercise the right to control the performance of the work of the employee. Substantial capital – refers to paid-up capital stocks/shares of at least P3,000,000 in the case of corporations, partnerships and cooperatives; in case of single proprietorship, a net worth of at least P3,000,000. Other prohibitions (1) Contracting out of jobs, works or services when not done in good faith and not justified by the exigencies of the business such as the following: (a) Contracting out of jobs, works or services when the same results in the termination or reduction of regular EEs and reduction of work hours or reduction or splitting of the bargaining unit. (b) Contracting out of work with a Cabo (c) Taking undue advantage of the economic situation or lack of bargaining strength of the contractor’s EEs, or undermining their security of tenure or basic rights, or circumventing the provisions of regular employment in any of the following instances: (i) Requiring them to perform functions which are currently being performed by the regular employees of the principal; and (ii) requiring them to sign, as a precondition to employment or continued employment, an antedated resignation letter; a blank payroll; a waiver of labor standards including minimum PAGE 102 OF 222

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wages and social or welfare benefits; or a quitclaim releasing the principal, contractor or from any liability as to payment of future claims. (d) Contracting out of a job, work or service through an in-house agency. (e) Contracting out of a job, work or service that is necessary or desirable or directly related to the business or operation of the principal by reason of a strike or lockout whether actual or imminent. (f) Contracting out of a job, work or service being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to selforganization as provided in Art. 248(c) of the LC, as amended. (g) Repeated hiring of EEs under an employment contract of short duration or under a Service Agreement of short duration with the same or different contractors, which circumvents the LC provisions on Security of Tenure. (h) Requiring EEs under a subcontracting arrangement to sign a contract fixing the period of employment to a term shorter than the term of the Service Agreement, unless the contract is divisible into phases for which substantially different skills are required and this is made known to the EE at the time of the engagements. (i) Refusal to provide a copy of the Service Agreement and the employment contracts between the contractor and the EEs deployed to work in the bargaining unit of the principal’s certified bargaining agent to the sole and exclusive bargaining agents. (j) Engaging or maintaining principal of subcontracted excess of those provided applicable CBA or as set Industry Tripartite Council.

by the EEs in in the by the

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(2) Contracting out of jobs, works, or services analogous to the above when not done in good faith and not justified by the exigencies of the business. [Sec. 7, D.O. 18-A-11] Mandatory registration It shall be mandatory for all persons or entities, including cooperative, acting as contractors, to register with the Regional Office of the DOLE where it principally operates. Failure to register shall give rise to the presumption that the contractor is engaged in labor-only contracting. Accordingly, the registration system governing contracting arrangements and implemented by the Regional Offices of the DOLE is hereby established, with the Bureau of Working Conditions (BWC) as the central registry. [Sec. 14, D.O. 18-A-11] Solidary Liability of Indirect/Direct Employer There exists a solidary liability on the part of the principal and the contractor for purposes of enforcing the provisions of the LC and other social legislation to the extent of the work performed under employment contract. The principal shall be deemed a direct employer of the contractor’s employee in cases where there is a finding by a competent authority of labor-only contracting, or commission of prohibited activities provided in Section 7 or a violation of either Sections 8 or 9.

LABOR LAW

DO 18-A contemplates generic or focused singular activity in one contract between the principal and the contractor (for example, janitorial, security, merchandising, specific production work) and does not contemplate information technology-enabled services involving an entire process (for example, BPO, KPO, legal process outsourcing, hardware and/or software support, medical transcription, animation services, back office operations/support). These companies engaged in BPOs may hire employees in accordance with applicable laws, and maintain these EEs based on business requirements, which may or may not be for different clients of the BPOs at different periods of the EE’s employment. Applicability of D.O. 18-A-11 to the Construction Industry Licensing and the exercise of regulatory powers over the construction industry is lodged with PCAB which is under the Construction Industry Authority of the Philippines and not with the DOLE or any of its regional offices. Thus, the DOLE, through its regional offices shall not require contractors licensed by PCAB in the Construction Industry to register under DO 18-A. Moreover, findings of violation/s on labor standards and occupational health and safety standards shall be coordinated with PCAB for its appropriate action, including the possible cancellation/suspension of the contractor’s license. iv. Effects of labor-only contracting Employees become regular employees

iii. Department Circular No. 01-12 Applicability of D.O. 18-A-11 to BPO DO 18-A speaks of a trilateral relationship that characterizes the covered contracting/sub-contracting arrangement. Thus, vendor-vendee relationship for entire business processes covered by the applicable provisions of the Civil Code on Contracts is excluded.

Where an entity is declared to be a labor-only contractor, the employees supplied by said contractor to the principal employer become regular employees of the latter. Having gained regular status, the employees are entitled to security of tenure and can only be dismissed for just or authorized causes and after they had been afforded due process. [Norkis Trading v. Buenavista, G.R. No. 182018. (2012)]

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Contractor principal

LABOR STANDARDS

solidarily

liable

with

A finding by competent authority of laboronly contracting shall render the principal jointly and severally liable with the contractor to the latter's employees, in the same manner and extent that the principal is liable to employees directly hired by him/her, as provided in Article 106 of the Labor Code, as amended. A finding of commission of any of the prohibited activities in Sec. 7, or violation of either Secs. 8 or 9 hereof shall render the principal the direct employer of the employees of the contractor or subcontractor, pursuant to Article 109 of the Labor Code, as amended. (Sec. 27, D.O 18-A-11) v. Trilateral contracting

relationship

in

job

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(3) Contractor’s employee includes one employed by a contractor to perform or complete a job, work, or service pursuant to a Service Agreement with a principal It shall also refer to regular employees of the contractor whose functions are not dependent on the performance or completion of a specific job, work or service within a definite period of time i.e. administrative staff. Relationships that exist in a legitimate contracting or subcontracting: (1) An employer-employee relationship between the contractor and the employees it engaged to perform the specific job, work or service being contracted; and (2) A contractual relationship between the principal and the contractor as governed by the provisions of the Civil Code. [Sec. 5, par. 1, D.O. 18-A-11] The law recognizes and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer. In fact, the employee who is constructively dismissed may be allowed to keep on coming to work. [McMer Corp., Inc. v. NLRC, G.R. No. 193421, (2014)]

Principal

B. DISMISSAL FROM EMPLOYMENT Contractor

er-ee

Contractor's Employee

Coverage General rule: All establishments [Art. 293, LC] [previously Art 278]

There are three parties involved: (1) Principal refers to any employer, whether a person or entity, including government agencies and GOCCs, who/which puts out or farms out a job, service or work to a contractor. (2) Contractor refers to any person or entity, including a cooperative, engaged in a legitimate contracting or subcontracting arrangement providing either services, skilled worker, temporary workers or a combination of services to a principal under a Service Agreement.

Exception: Government, and its political subdivisions, including GOCCs without original charter. [Book VI, Rule 1, Sec. 1. IRR] Security of Tenure Art. 294 (previously Art 279), LC: Security of Tenure. In case of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Tile. 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

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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. Nature of Right/Rationale It is a constitutionally protected right (Art. XIII Sec. 3, 1987 Constitution); it cannot be blotted out by an employment contract. Termination of employment is not anymore a mere cessation or severance of contractual relationship but an economic phenomenon affecting members of the family. This is the reason why under the broad principles of social justice the dismissal of employees is adequately protected by the laws of the state. [Alhambra Industries, Inc. v. NLRC, G.R. No. 106771 (1994)] Managem ent Prerogatives Security of Tenure

LABOR LAW

under valid agreements. [San Miguel Brewery Sales Force Union v. Ople, G.R. No. 53515 (1989)] Guide in disposition of labor disputes Bare and vague allegations as to the manner of service and the circumstances surrounding the same would not suffice. A mere copy of the notice of termination allegedly sent by respondent to petitioner, without proof of receipt, or in the very least, actual service thereof upon petitioner, does not constitute substantial evidence. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an injustice to the employer. Justitia nemini neganda est (Justice is to be denied to none). [Mansion Printing Center v. Bitara, Jr., GR 168120. (2012)]

and

An employer may not be compelled to continue in its employ a person whose continuance in the service would patently be inimical to its interests. [Baguio Central University v. Gallente, G.R. No. 188267 (2013)] In dismissal cases, the Court must consider a balancing between the employees’ tenurial rights and the employer’s management prerogative. [Imasen Phil. Manufacturing Corp. v. Alcon & Papa, GR 194884 (2014)] Management prerogative must be exercised in good faith and with due regard to the rights of the workers in the spirit of fairness and with justice in mind. [Philbag Industrial Manufacturing Corp. v. Philbag Workers Union-Lakas at Gabay ng Manggagawang Nagkakaisa, G.R. No. 182486 (2012)] Requisites for the validity of management prerogative affecting security of tenure (a) Exercised in good faith for the advancement of the Employer's interest, and

Procedural issues

vis-à-vis

substantive

In labor cases, substantive issues must be addressed more than anything else, and so, the Court may forego the matter of procedural infirmities. [Ang v. San Joaquin, Jr., G.R. No. 185549 (2013)] Employer’s Burden of Proof Art. 292 (b), 3rd sentence: The burden of proving the termination was for a valid or authorized cause shall rest on the employer. It is the employer’s burden to prove that the dismissal was for a just or authorized cause. [Temic Automotive (Phils.), Inc. v. Cantos, G.R. No. 200729 (2014)] Unsubstantiated accusations or baseless conclusions of the employer are insufficient legal justifications to dismiss an employee. The unflinching rule in illegal dismissal cases is that the employer bears the burden of proof. [Garza v. Coca-Cola Bottlers Philippines, Inc., G.R. No. 180972 (2014)]

(b) Not for the purpose of defeating or circumventing the rights of the Employees under special laws or PAGE 105 OF 222

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In illegal dismissal cases, the burden of proof is upon the employer to show that the employee's termination from service is for a just and valid cause. The employer's case succeeds or fails on the strength of its evidence and not the weakness of that adduced by the employee, in keeping with the principle that the scales of justice should be tilted in favor of the latter in case of doubt in the evidence presented by them. [Functional, Inc. v. Granfil, G.R. No. 176377 (2011)]

Termination of Employment by Employee Resignation Art. 300 (previously Art. 285), LC: Termination by Employee. (a) An employee may terminate without just cause the employer-employee 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 requirements:

Employee must first establish the fact of dism issal

1.

Before the employer must bear the burden of proving that the dismissal was legal, the employee must first establish by substantial evidence the fact of his dismissal from service. If there is no dismissal, then there can be no question as to the legality or illegality thereof. [MZR Industries v. Colambot, G.R. No. 179001 (2013)] In an illegal dismissal case, the onus probandi rests on the employer to prove that its dismissal of an employee was for a valid cause. However, before a case for illegal dismissal can prosper, an employeremployee relationship must first be established by the employee [Javier v. Fly Ace Corp., G.R. No. 192558 (2012)] Measure of Penalty Not every case of insubordination or willful disobedience by an employee reasonably deserves the penalty of dismissal. The penalty to be imposed on an erring employee must be commensurate with the gravity of his offense. [Joel Montallana v. La Consolacion College Manila, G.R. No. 208890 (2014)] While an employer enjoys a wide latitude of discretion in the promulgation of policies, rules and regulations on work-related activities of the employees, those directives, however, must always be fair and reasonable, and the corresponding penalties, when prescribed, must be commensurate to the offense involved and to the degree of the infraction. [Moreno v. San Sebastian CollegeRecoletos, G.R. No. 175283 (2008)]

LABOR LAW

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.

General rule: Written notice to resign submitted one (1) month in advance Exception: No notice required for any of the following: (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. Resignation is the voluntary act of an employee who finds himself in a situation where he believes that personal reasons

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cannot be sacrificed in favor of the exigency of the service, such that he has no other choice but to disassociate himself from his employment. [Cervantes v. PAL Maritime Corp., G.R. No. 175209, (2013)]

Performance of Military or Civic Duty Art. 301, LC: 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

To constitute a resignation, it must be unconditional and with the intent to operate as such. There must be an intention to relinquish a portion of the term of office accompanied by an act of relinquishment. [Azcor Manufacturing Inc. v. NLRC, G.R. No. 117963, (1999)] “Well-entrenched is the rule that resignation is inconsistent with the filing of a complaint for illegal dismissal.” [Blue Angel Manpower and Security Services Inc. v Court of Appeals, G.R. No. 161196 (2008)]

Omnibus Rules, Book VI, Rule 1, Sec. 12. Suspension of relationship. — The employeremployee relationship shall be deemed suspended in case of suspension of operation of the business or undertaking of the employer for a period not exceeding six (6) months, unless the suspension is for the purpose of defeating the rights of the employees under the Code, and in case of mandatory fulfillment by the employee of a military or civic duty. The payment of wages of the employee as well as the grant of other benefits and privileges while he is on a military or civic duty shall be subject to special laws and decrees and to the applicable individual or collective bargaining agreement and voluntary employer practice or policy.

The rule requiring an employee to stay or complete the 30-day period prior to the effectivity of his resignation becomes discretionary on the part of management as an employee who intends to resign may be allowed a shorter period before his resignation becomes effective. [Hechanova Bugay Vilchez Lawyers v. Matorre, G.R. No. 198261 (2013)] Forced Resignation Mere allegations of threat or force do not constitute evidence to support a finding of forced resignation. In order for intimidation to vitiate consent, the following requisites must concur: (1) that the intimidation caused the consent to be given; (2) that the threatened act be unjust or unlawful; (3) that the threat be real or serious, there being evident disproportion between the evil and the resistance which all men can offer, leading to the choice of doing the act which is forced on the person to do as the lesser evil; and (4) that it produces a well-grounded fear from the fact that the person from whom it comes has the necessary means or ability to inflict the threatened injury to his person or property. [Ma. Socorro Mandapat v. Add Force Personnel, G.R. No. 180285 (2010)]

LABOR LAW

B.1. JUST CAUSES Art. 297 (Previously Art 282), LC: 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

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his family or his representatives; and

LABOR STANDARDS

duly

authorized

LABOR LAW

Serious Misconduct Elements:

(e) Other causes analogous to the foregoing.

a) There must be misconduct; b) The misconduct must be of such grave and aggravated character;

Basis As a measure of self-protection against acts inimical to its interest, a company has the right to dismiss its erring employees. An employer cannot be compelled to continue employing an employee guilty of acts inimical to the employer's interest, justifying loss of confidence in him. [Yabut v. Meralco, G.R. No. 190436 (2012)] Employer’s right to dismiss vis-à-vis employee’s right to security of tenure The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. In particular, the employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Nowhere in the law providing for the just and authorized causes of termination of employment is there any direct or indirect reference to filing a legitimate complaint for money claims against the employer as a valid ground for termination

c) It must relate to the performance of the employee’s duties; and d) There must be showing that the employee becomes unfit to continue working for the employer. [Sec. 5.2. (a), DO 147-15] Misconduct refers to the improper or wrong conduct that transgresses some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. But misconduct or improper behavior, to be a just cause for termination of employment, must: (a) be serious; (b) relate to the performance of the employee’s duties; and (c) show that the employee has become unfit to continue working for the employer. [Northwest Airlines, Inc, v. Del Rosario, G.R. No. 157633 (2014)] Accusatory and inflammatory language used by an employee to the employer or superior can be a ground for dismissal or termination. [Nissan Motors Phils. Inc. v. Angelo, G.R. No. 164181 (2011)] Willful Disobedience Elements:

The right of employers to shape their own work force is recognize; however, this management prerogative must not curtail the basic right of employees to security of tenure. There must be a valid and lawful reason for terminating the employment of a worker. Otherwise, it is illegal and would be dealt with by the courts accordingly. [Alert Security and Investigation Agency, Inc. v. Pasawilan, G.R. No. 182397 (2011)]

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a) There must be insubordination;

disobedience

or

b) The disobedience or insubordination must be willful or intentional characterized by a wrongful and perverse attitude; c) The order violated must be reasonable, lawful, and made known to the employee [Mirant Philippines Corp v. Sario, G.R. No. 197598 (2012)]; and e) The order must pertain to the duties which he has been engaged to discharge. [Sec. 5.2. (b), DO 147-15]

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For willful disobedience to be a valid cause for dismissal, these two elements must concur: (1) the employee’s assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge. [The Coffee Bean and Tea Leaf Philippines, Inc. and Chu v Arenas, G.R. No. 208908 (2015)] Gross and Habitual Neglect of Duties Elements: (a) There must be neglect of duty; and (b) The negligence must be both gross and habitual in character. [Sec. 5.2. (c), DO 147-15] Gross negligence has been defined as the want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. In order to constitute just cause for an EE’s dismissal due to negligence, it must not only be gross, but also habitual. A single or an isolated act that cannot be categorized as habitual, hence, not a just cause for their dismissal. [National Bookstore v. CA, G.R. No. 146741 (2002)] Gross negligence connotes want of care in the performance of one’s duties, while habitual neglect implies repeated failure to perform one’s duties for a period of time, depending on the circumstances. Estoppel by toleration of management: breach of rules and regulations which are tolerated by management cannot serve basis as termination. The rule only applies when the violation is not tantamount to fraud or commission of illegal activities. One cannot evade liability based on obedience to the corporate chain of command. [PNB v. Padao, G.R. No. 180849, 187143 (2011)] On the principle of respondeat superior or command responsibility alone, a managerial employee may be held liable for negligence in the performance of her managerial duties. [Jumuad v. Hi-Flyer Food, Inc., G.R. No. 187887 (2011)]

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Gross Negligence includes gross inefficiency Article 290 of the Labor Code provides that one of the just causes for terminating an employment is the employee's gross and habitual neglect of his duties. This cause includes gross inefficiency, negligence and carelessness [Century Iron Works, Inc. v. Bañas, G.R. No. 184116 (2013)] Loss of Trust and Confidence The loss of trust and confidence must be based on willful breach of the trust reposed in the employee by his employer. Such breach is willful if it is done intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. And, in order to constitute a just cause for dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to continue working for the employer. In addition, loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence or that the employee concerned is entrusted with confidence with respect to delicate matters, such as handling or case and protection of the property and assets of the employer. The betrayal of this trust is the essence of the offense for which an employee is penalized. [Villanueva, Jr. v. NLRC, G.R. No. 176893 (2012)] The loss of trust and confidence must be based not on ordinary breach by the employee of the trust reposed in him by the employer, but, in the language of Article 282 (c) of the Labor Code, on willful breach. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer's arbitrariness, whims, caprices or suspicion; otherwise, the employee would eternally remain at the mercy of the employer. [Johansen World Group Corp. v. Gonzales III, G.R. No. 198733 (2012)]

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Elements of fraud or willful breach of trust:

Requisites for dismissal on the ground of loss of trust and confidence

(a) There must be an act, omission, or concealment;

(1) The Employee concerned is one holding a position of trust and confidence.

(b) The act, omission or concealment involves a breach of legal duty, trust, or confidence justly reposed;

(2) There must be an act that would justify the loss of trust and confidence.

(c) It must be committed against the employer or his/her representative; and

(3) The loss of trust and confidence must be based on a willful breach of trust and founded on clearly established facts. [Wesleyan Universtity – Philippines vs. Reyes, G.R. No. 208321 (2014)]

(d) It must be in connection with the employees’ work. [Sec. 5.2. (d), DO 14715] Elements of loss of confidence (a) There must be an act, omission or concealment; (b) The act, omission or concealment justifies the loss of trust and confidence of the employer to the employee; (c) The employee concerned must be holding a position of trust and confidence; (d) The loss of trust and confidence should not be simulated; (e) It should not be used as a subterfuge for causes which are improper, illegal or unqualified; and (f) It must be genuine and not a mere afterthought to justify an earlier action taken in bad faith. [Sec. 5.2. (e), DO 14715] Guidelines for the application of the doctrine of loss of confidence (1) Loss of confidence simulated;

should

not

be

(2) It should not be used as a subterfuge for causes which are improper, illegal or unjustified;

Loss of trust and confidence to be a valid cause for dismissal must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary. [Prudential Guarantee and Assurance Employee Labor Union v. NLRC, G.R. No. 185335 (2012)] Positions of trust and confidence (1) Managerial employees - those vested with the powers or prerogatives to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions. (2) Fiduciary Rank and file - those who in the normal and routine exercise of their functions, regularly handle significant amounts of money or property. Examples are cashiers, auditors, property custodians, etc. [Prudential Guarantee and Assurance Employee Labor Union v. NLRC, G.R. No. 185335 (2012)]

(3) It may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and (4) It must be genuine, not a mere afterthought to justify earlier action taken in bad faith [Nokom v. NLRC, G.R. No. 140043 (2000)]

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Betrayal by a long-time employee Managerial

Fiduciary rank-and-file

Mere existence of a basis for the belief of employee’s guilt [Grand Asian Shipping Lines, Inc. v. Galvez, G.R. No. 178184 (2014)]

Proof of involvement in the alleged events in question required; mere uncorroborated assertions and accusations are not enough [Etcuban, Jr. v. Sulpicio Lines, Inc., G.R. No. 148410 (2005)]

Employment for a long time is counted against the employee [Salvador v. Philippine Mining Service Corp., G.R. No. 148766 (2003)]

Length of service is not a bargaining chip that can simply be stacked against the employer. After all, an employer-employee relationship is symbiotic where both parties benefit from mutual loyalty and dedicated service. If an employer had treated his employee well, has accorded him fairness and adequate compensation as determined by law, it is only fair to expect a long-time employee to return such fairness with at least some respect and honesty. Thus, it may be said that betrayal by a long-time employee is more insulting and odious for a fair employer. [Moya v. First Solid Rubber Industries, Inc., G.R. No. 184011 (2013)] Commission of a crime Elements: (e) There must be an act or omission punishable/prohibited by law; and

Managerial Employees: Reason for the Rule The employer has broader discretion in dismissing managerial employees on the ground of loss of trust and confidence than those occupying ordinary ranks. While plain accusations are not sufficient to justify the dismissal of rank and file employees, the mere existence of a basis for believing that managerial employees have breached the trust reposed on them by their employer would suffice to justify their dismissal. [Grand Asian Shipping Lines, Inc. v. Galvez, G.R. No. 178184 (2014)] Acquittal in Criminal Case arising from Misconduct Notwithstanding petitioner’s acquittal in the criminal case for qualified theft, the company had adequately established the basis for the company’s loss of confidence as a just cause to terminate. As opposed to the "proof beyond reasonable doubt" standard of evidence required in criminal cases, labor suits require only substantial evidence to prove the validity of the dismissal [Paulino v. NLRC, G.R. No. 176184 (2012)]

(f) The act or omission was committed by the employee against the person of the employer, any immediate member of his/her family, or his/her duly authorized representative. [Sec. 5.2. (f), DO 147-15] 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 [Art. 297(d), LC] The employer may validly dismiss for loss of trust and confidence an employee who commits an act of fraud prejudicial to the interest of the employer. Neither a criminal prosecution nor a conviction beyond reasonable doubt for the crime is a requisite for the validity of the dismissal. [Concepcion v Minex Import Corporation/Minerama Corporation, G.R. No. 153569 (2012)] Analogous Causes Elements: (a) There must be an act or omission similar to those specified just causes; and (b) The act or omission must be voluntary and/or willful on the part of the employees

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No act or omission shall be considered as analogous cause unless expressly specified in the company rules and regulations or policies. [Sec. 5.2. (g), DO 147-15] One is analogous to another if it is susceptible of comparison with the latter either in general or in some specific detail; or has a close relationship with the latter. Other Causes (1) Abandonment (2) Courtesy Resignation (3) Change of Ownership

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has the burden of proof to show a deliberate and unjustified refusal of the employee to resume his employment without any intention of returning. [Tan Brothers Corp. of Basilan City v. Escudero, G.R. No. 188711 (2013)] Courtesy Resignation Resignation per se means voluntary relinquishment of a position or office. Adding the word "courtesy" did not change the essence of resignation. [Batongbacal v. Associated Bank, G.R. No. 72977 (1988)] Change of Ownership

(4) Habitual Absenteeism/Tardiness

(8) Conviction/Commission of a Crime

A mere change in the equity composition of a corporation is neither a just nor an authorized cause that would legally permit the dismissal of the corporation's employees en masse. [SME Bank, Inc. v. De Guzman, G.R. No. 184517, 186641 (2013)]

Abandonment

Habitual Absenteeism/ Tardiness

Abandonment is a just cause for dismissal under Art. 297(b), LC. It is the deliberate and unjustified refusal of an employee to resume his employment. It is a form of neglect of duty. Two factors should be present: (1) Failure to report for work or absence without valid or justifiable reason, (2) Clear intention to sever ER-EE relationship. The burden to prove whether the employee abandoned his or her work rests on the employer. [Protective Maximum Security, Inc vs. Celso E. Fuentes, G.R. No. 169303 (2015)]

Habitual tardiness is a form of neglect of duty. Lack of initiative, diligence, and discipline to come to work on time everyday exhibit the employee's deportment towards work. Habitual and excessive tardiness is inimical to the general productivity and business of the employer. This is especially true when the tardiness and/or absenteeism occurred frequently and repeatedly within an extensive period of time. [R.B. Michael Press v. Galit, G.R. No. 153510 (2008)]

(5) Past Offenses (6) Habitual Infractions (7) Immorality

Elements: (a) Failure to report for work or absence without valid or justifiable reason, and (b) A clear intention to sever the employer-employee relationship, with the second element as the more determinative factor and being manifested by some overt acts. Absence must be accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work anymore. It has been ruled that the employer

However, there are cases when absenteeism is not sufficient to justify termination. In the case of, Cavite Apparel v Michelle Marquez, GR No. 172044, (2013), the SC held: “Michelle might have been guilty of violating company rules on leaves of absence and employee discipline, still we find the penalty of dismissal imposed on her unjustified under the circumstances. As earlier mentioned, Michelle had been in Cavite Apparel’s employ for six years, with no derogatory record other than the four absences without official leave in question, not to mention that she had already been penalized for the first three absences, the most serious penalty being a

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six-day suspension for her third absence on April 27, 2000.” Past Offenses Previous offense may be used as valid justification for dismissal from work only if the infractions are related to the subsequent offense upon which the basis of termination is decreed. [Century Canning Corporation v. Ramil, G.R. No. 171630 (2010)]

LABOR LAW

grounds for termination of employment and said act raised concerns to the cooperative as the Board received numerous complaints and petitions from the cooperative members themselves asking for the removal of Bandiola because of his immoral conduct, hence, immorality (extramarital affair) justified terminating the employment by the employer [Alilem Credit Cooperative vs. Bandiola, Jr., G.R. No. 173489 (2013)] Pregnancy Out of Wedlock

Habitual Infractions A series of irregularities when put together may constitute serious misconduct, which under Article 297 of the Labor Code, as amended, is a just cause for dismissal [Gustilo v. Wyeth Phil. Inc., G.R. No. 149629 (2004)] Totality of infractions doctrine The totality of infractions or the number of violations committed during the period of employment shall be considered in determining the penalty to be imposed upon an erring employee. Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct and ability separate and independent of each other. While it may be true that petitioner was penalized for his previous infractions, this does not and should not mean that his employment record would be wiped clean of his infractions. After all, the record of an employee is a relevant consideration in determining the penalty that should be meted out since an employee's past misconduct and present behavior must be taken together in determining the proper imposable penalty. [Merin v. NLRC, G.R. No. 171790 (2008)]

Accordingly, when the law speaks of immoral or, necessarily, disgraceful conduct, it pertains to public and secular morality; it refers to those conducts which are proscribed because they are detrimental to conditions upon which depend the existence and progress of human society. To stress, premarital sexual relations between two consenting adults who have no impediment to marry each other, and, consequently, conceiving a child out of wedlock, gauged from a purely public and secular view of morality, does not amount to a disgraceful or immoral conduct under Section 94(e) of the 1992 MRPS. [Cheryl Leus v. St. Scholastica College Westgrove, G.R. No. 187226 (2015)] Conviction/Commission of a Crime The charge of drug abuse within the company’s premises and during work hours constitutes serious misconduct which is one of the just causes for termination. [Bughaw, Jr. v. Treasure Island Industrial, G.R. No. 173151 (2008)] B.2. AUTHORIZED CAUSES [Art. 298, LC] (previously Art. 283), (1) Installation of labor saving device

Immorality

(2) Retrenchment to prevent losses

DECS Order No. 92 provides that disgraceful or immoral conduct can be used as a basis for termination of employment [Santos, Jr. v. NLRC, G.R. No. 115795 (1998)]

(3) Redundancy (4) Closure of Business

The act of engaging in extramarital affairs was specifically provided for by the cooperative’s Personnel Policy as one of the PAGE 113 OF 222

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Due to labor-saving Due to retrenchment, devices or redundancy closure, or suspension of operations 1-month pay, or at least 1 month pay for every year of service, whichever is higher.

1 month pay, or at least ½ month pay for every year of service, whichever is higher.

A fraction of at least six months shall be considered as one year.

Basis Employment is the lifeblood upon which the worker and his family owe their survival. [Flight Attendants and Stewards Ass'n of the Philippines v. PAL, Inc., G.R. No. 178083 (2009)] There are five business-related causes for termination: 1. Installation of labor-saving devices 2. Retrenchment 3. Redundancy 4.Closure of business

LABOR LAW

(d) There is no other option available to the employer than the introduction of machinery, equipment or device and the consequent termination of employment of those affected thereby; and (e) There must be fair and reasonable criteria in selecting employees to be terminated. [Sec. 5.4. (a), DO 147-15] Requirements for termination installation of labor-saving device

due

to

(1) The employer exercises its prerogative to install the labor-saving device in good faith for the advancement of its interest and not to defeat or circumvent the employee’s right to security of tenure; (2) The employer served a written notice both to the employees and to the DOLE at least 30 days prior to the intended date of termination; and (3) The employer pays the employees separation pay equivalent to one-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 months being considered as one whole year (Samson, 2004) Retrenchment

5.Temporary/bona fide suspension of operations

Elements of a valid retrenchment: (1) The retrenchment is reasonably necessary and likely to prevent business

Installation of Labor-Saving Device This refers to the installation of machinery to effect economy and efficiency in the employer’s method of production [Edge Apparel, Inc. v. NLRC, G.R. No. 121314 (1998)] Elements of a valid termination based on installation of labor-saving devices (a) There must be introduction of machinery, equipment or other devices; (b) The introduction must be done in good faith; (c) The purpose for such introduction must be valid such as to save on cost, enhance efficiency and other justifiable economic reasons; PAGE 114 OF 222

(2) The losses, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer; (3) The expected or actual losses must be proved by sufficient and convincing evidence; (4) The retrenchment must be in good faith for the advancement of its interest and not to defeat or circumvent the employees’ right to security of tenure; and (5) There must be fair and reasonable criteria in ascertaining who would be

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dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers. [Sec. 5.2. (c), DO 147-15]

Elements of redundancy: (a) There must be superfluous positions or services of employees; (b) The positions or services are in excess of what is reasonably demanded by the actual requirements of the enterprise to operate in an economical and efficient manner;

(6) That the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment;

(c) There must be good faith abolishing redundant positions;

The Court recognizes two kinds of losses which can justify retrenchment — incurred losses which are substantial, serious, actual and real, and expected losses which are reasonably imminent. [Sanoh Fulton Phils. Inc. v. Bernardo & Tagohoy, G.R. No. 187214 (2013)]

(e) There must be an adequate proof of redundancy such as but not limited to the new staffing patter, feasibility studies/proposal, on the viability of the newly created positions, job description and the approval by the management of the restructuring. [Sec. 5.4. (c), DO 147-15] For the implementation of a redundancy program to be valid, however, the employer must comply with the following requisites: (a) Written notice served on both the employees and the DOLE at least one month prior to the intended date of termination of employment; (b) Payment of separation pay equivalent to at least one month pay for every year of service;

Redundancy Redundancy exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the business enterprise. A position is redundant when it is superfluous, and superfluity of a position or positions could be the result of a number of factors, such as the overhiring of workers, a decrease in the volume of business or the dropping of a particular line or service previously manufactured or undertaken by the enterprise. [Morales v. Metrobank, G.R. No. 182475 (2012)]

in

(d) There must be fair and reasonable criteria in selecting the employees to be terminated; and

(7) That the employer pays the retrenched employees separation pay equivalent to 1 month pay or at least 1⁄2 month pay for every year of service, whichever is higher; The employer bears the burden of proving the existence of the imminence of substantial losses with clear and satisfactory evidence that there are legitimate business reasons justifying a retrenchment. [Mount Carmel College Employees Union (MCCEU), et al vs. Mount Carmel College, Inc. G.R. No. 187621, (2014)]

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(c) Good faith in abolishing redundant positions; and

the

(d) Fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished. [Morales v. Metrobank, G.R. No. 182475 (2012)] To exhibit its good faith and that there was a fair and reasonable criteria in ascertaining redundant positions, a company claiming to be over manned must produce adequate proof of the same. Such proof includes but is not limited to the new staffing pattern, feasibility studies/proposals on the viability of the newly created positions, job description and the approval by the management of the restructuring. [General Milling Corporation v Violeta L. Viajar, G.R. No. 181738 (2013)]

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Closure of Business

employer. [Manila Polo Club Employees' Union v. Manila Polo Club, Inc., G.R. No. 172846 (2013)]

ELEMENTS OF A VALID CLOSURE OR CESSATION OF OPERATION (a) There must be a decision to close or cease operation of the enterprise by the management; (b) The decision was made in good faith; and (c) There is no other option available to the employer except to close or cease operations. [Sec. 5.4. (d), DO 147-15]

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Closure of Department The closure of a department or division of a company constitutes retrenchment by, and not closure of, the company itself. [Waterfront Cebu City Hotel v. Jimenez, G.R. No. 174214, June 13, 2012] Corporate acquisitions

Guidelines in Closure (1) Closure or cessation of operations of establishment or undertaking may either be partial or total (2) Closure or cessation of operations of establishment or undertaking may or may not be due to serious business losses or financial service reverses. However, in both instances, proof must be shown that: (a) it was done in good faith to advance the employer's interest and not for the purpose of defeating or circumventing the rights of employees under the law or a valid agreement; and

Asset Sales

Stock Sales Sale

Corporate entity sells all In stock sales, the or substantially all of its individual or corporate assets to another entity. shareholders sell a controlling block of stock to new or existing shareholders. Obligation of Seller Seller in good faith is authorized to dismiss the affected employees, but is liable for the payment of separation pay under the law.

(b) Written notice on the affected employees and the DOLE is served at least one month before the intended date of termination of employment. (3) The employer can lawfully close shop even if not due to serious business losses or financial reverses but separation pay, which is equivalent to at least one month pay as provided for by Article 289 of the Labor Code, as amended, must be given to all the affected employees. (4) If the closure or cessation of operations of establishment or undertaking is due to serious business losses or financial reverses, the employer must prove such allegation in order to avoid the payment of separation pay. Otherwise, the affected employees are entitled to separation pay. (5) The burden of proving compliance with all the above-stated falls upon the

A shift in the composition of its shareholders will not affect its existence and continuity. Notwithstanding the stock sale, the corporation continues to be the employer of its people and continues to be liable for the payment of their just claims.

Obligation of Buyer The buyer in good faith, on the other hand, is not obliged to absorb the employees affected by the sale, nor is it liable for the payment of their claims. The most that it may do, for reasons of public policy and social justice, is to give preference to the qualified separated personnel of the selling firm.

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The corporation or its new majority shareholders are not entitled to lawfully dismiss corporate employees absent a just or authorized cause. [SME Bank, Inc. v. De Guzman, G.R. No. 184517, 186641, (2013)]

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Procedural steps required

Retrenchment Redundancy

At least 1 month before the intended date of termination, Employer is to serve written notice to: (1) Affected employees; (2) DOLE (Art. 298, LC) Criteria in dismissal:

selecting

employees

for

Fair and reasonable criteria in ascertaining who will be affected:

Employee is entitled to separation pay of 1 month pay or 1/2 month pay per year of service, whichever is higher

(1) Preferred status (e.g. temporary, casual or regular Employees), (2) Efficiency, (3) Physical fitness, (4) Age, (6) Seniority. [Asian Alcohol Corp. v. NLRC, G.R. No. 131108 (1999)]

Reduction of personnel usually due to poor financial returns so as to cut down on costs of operations in terms of salaries and wages

The service of an Employee is in excess of what is required by an enterprise

Resorted to primarily to avoid or minimize business losses

To save production costs

Employee is entitled to separation pay of 1 month pay or 1/2 month pay per year of service, whichever is higher

Closure In case of closure of business not due to serious business losses, the employer pays the employees terminated separation pay of 1 month pay or 1/2 month pay per year of service, whichever is higher

Temporary Closure / Bona fide suspension of Operations

(5) Financial hardship, or

Retrenchment Redundancy

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Art. 301, LC: 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

Closure The reversal of the fortune of the employer whereby there is a complete cessation of business operations and/or actual locking-up of the doors of the establishment, usually due to financial losses Aims to prevent further financial drain upon the Employer

Under Art. 301 of the Labor Code, a bona fide suspension of business operations for not more than six (6) months does not terminate employment. After six (6) months, the employee may be recalled to work or be permanently laid off. In this case, more than six (6) months have elapsed from the time the Club ceased to operate. Hence, respondents' termination became permanent. [SKM Art Craft Corp. v. Bauca, G.R. Nos. 171282, 183484 (2013)] An employer may validly suspend operations for at most 6 months. Not accepting the workers back to work after the 6-month period is equivalent to termination, which

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should be for cause and with proper procedure. [Manila Mining Corp v Amor, GR No 182800 (2015)]

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A floating status requires the dire exigency of the employer’s bona fide suspension of operation, business or undertaking. It takes place when (a) the security agency’s clients decide not to renew their contracts with the agency and (b) also in instances where contracts for security services stipulate that the client may request the agency for the replacement of the guards assigned to it. In the latter case, the employer should prove that there are no posts available to which the employee temporarily out of work can be assigned. [Peak Ventures Corp v. Nestor Villareal, G.R. No. 184618 (2014)]

Section 8, Rule I, Book VI of the Omnibus Rules Implementing the Labor Code Disease as a ground for dismissal. — Where the employee suffers from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his coemployees, the employer shall not terminate his employment unless there is a certification by competent public health authority that the disease is of such nature of at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. If the disease or ailment can be cured within the period, the employee shall not terminate the employee but shall ask the employee to take a leave of absence. The employer shall reinstate such employee to his former position immediately upon the restoration of his normal health.

B.3 OTHER CAUSES

Requisites

(1) Disease incurable in 6 months [Art. 299, LC]

(1) The employee must be suffering from a disease which cannot be cured within six months, even with proper medical treatment;

Floating Status

(2) Enforcement of union security clause in the CBA (3) Dismissal of union officers for the conduct of an illegal strike [Art. 279 (a), LC] (4) Dismissal of union members for participating in the commission of illegal acts [Art. 279 (a), LC]

(2) His continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees; and (3) A certification to that effect must be issued by a competent public health authority. [Crayons Processing, Inc. v. Pula, G.R. No. 167727 (2007), Sec. 5.2. (f), DO 147-15]

(5) Termination in conformity with existing statute/ qualification requirements i. Disease Art. 299, LC: Disease as Ground for Termination: An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year.

The burden falls upon the employer to establish these requisites, and in the absence of such certification, the dismissal must necessarily be declared illegal. It is only where there is a prior certification from a competent public authority that the disease afflicting the employee sought to be dismissed is of such nature or at such stage that it cannot be cured within six (6) months even with proper medical treatment that the latter could be validly terminated from his job [Crayons Processing, Inc. v. Pula, G.R. No. 167727 (2007)]

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ii. Enforcement of Union Security Clause in CBA

to be heard, and not necessarily that an actual hearing was conducted.

Union security is a generic term, which is applied to and comprehends:

(c) After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds have been established to justify the severance of their employment. [Inguillo v. First Phil Scales, G.R. No. 165407 (2009)]

Closed shop – an enterprise in which, by agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part. Union shop – when all new regular employees are required to join the union within a certain period as a condition for their continued employment.

iii. Dismissal of union officers for the conduct of an illegal strike / dismissal of union members for participating in the commission of illegal acts

Law authorizes the enforcement of union security clauses, provided such enforcement is not characterized by arbitrariness, and always with due process. (1) Substantive – whether the termination of employment was based on the provisions of the Labor Code or in accordance with the prevailing jurisprudence; In terminating the employment of an employee by enforcing the Union Security Clause, the employer needs only to determine and prove that: (a) The union security clause is applicable; (b) The union is requesting for the enforcement of the union security provision in the CBA; and (c) There is sufficient evidence to support the union's decision to expel the employee from the union or company. (2) Procedural – the manner in which the dismissal was effected.

Art. 279, a, 3rd par., 2nd sen., LC: 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.

iv. Termination in conformity with existing statute / Qualification requirements While the right of workers to security of tenure is guaranteed by the Constitution, its exercise may be reasonably regulated pursuant to the police power of the State to safeguard health, morals, peace, education, order, safety, and the general welfare of the people. Consequently, persons who desire to engage in the learned professions requiring scientific or technical knowledge may be required to take an examination as a prerequisite to engaging in their chosen careers. [St. Lukes’s Medical Center Employees Ass'n-AFW v. NLRC, G.R. No. 162053 (2007)]

(a) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. (b) The requirement of a hearing is complied with as long as there was an opportunity PAGE 119 OF 222

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B.4 DUE PROCESS

LABOR LAW

due process of law are two of the fundamental rights guaranteed by the 1987 Constitution to any person under investigation, be the proceeding administrative, civil, or criminal. [Salaw v. NLRC, G.R. No. 90786 (1991)]

Art. 292 (b), LC: 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 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.

Burden of Proof In illegal dismissal cases, the onus of proving that the employee was not dismissed or, if dismissed, that the dismissal was not illegal, rests on the employer, failure to discharge which would mean that the dismissal is not justified and, therefore, illegal. [Macasero v. Southern Industrial Gases Philippines, G.R. No. 178524 (2009)] Degree of Proof In labor cases, as in other administrative proceedings, substantial evidence is required and it is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. [Andrada v. Agemar Manning Agency, Inc., G.R. No. 194758 (2012)]

Requisites for Valid Dismissal (1) Substantive due process: The dismissal must be for any of the causes provided for in Article 297 – 299 of the Labor Code; and (2) Procedural due process: The employee must be afforded an opportunity to be heard and defend himself. [Fujitsu Computer Products Corporation of the Phil. v. Court of Appeals, G.R. No. 158232 (2005)] Employer may not substitute the required prior notice & opportunity to be heard with the mere payment of 30 days' salary. [PNB v. Cabansag, G.R. No. 157010 (2005)] Right to Counsel The right to counsel, a very basic requirement of substantive due process, has to be observed. Indeed, the rights to counsel and to

Substantial evidence is necessary for an employer to effectuate any dismissal. Uncorroborated assertions and accusations by the employer do not suffice; otherwise the constitutional guaranty of security of tenure of the employee would be jeopardized. [Kulas Ideas & Creations, et. al. v. Alcoseba & Arao Arao, GR 180123 (2010)] i. Twin-notice requirement The employer has the burden of proving that a dismissed worker has been served two notices: (1) First written notice: served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side. (2) Second written notice: served upon the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.

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(1) Contain the specific causes or grounds for termination against them, and

First Notice

(2) Contain a directive that the employees are given the opportunity to submit their written explanation within a “reasonable period” or every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice (3) Contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. (4) Specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 288 is being charged against the employees. [United Tourist Promotions v. Kemplin, G.R. No. 205453 (2014)] (1) Indicate all circumstances involving the charge against the employees considered; and

Second Notice

(2) Indicate grounds established to justify the severance of their employment [United Tourist Promotions v. Kemplin, G.R. No. 205453 (2014)]

LABOR LAW

ii. Hearing; meaning of opportunity to be heard In employee dismissal cases, the essence of due process is simply an opportunity to be heard; it is the denial of this opportunity that constitutes violation of due process of law. [Technol Eight Philippines Corporation v. NLRC, G.R. No. 187605 (2010)] While a formal hearing or conference is ideal, it is not an absolute, mandatory or exclusive avenue of due process. [Perez v. PT&T, G.R. No. 152048 (2009)] Guiding principles in hearing requirement (1) "Ample opportunity to be heard" means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair, just and reasonable way. (2) A formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it. (3) The "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing or conference" requirement in the implementing rules and regulations. [Perez v. PT&T, G.R. No. 152048 (2009)] Use of Position Paper

An employee may be dismissed only if the grounds mentioned in the pre-dismissal notice were the ones cited for the termination of employment. [Erector Advertising Sign Group, Inc. v. Cloma, G.R. No. 167218, (2010)]

It is the labor arbiter who is authorized to determine whether or not there is a necessity for conducting formal hearings in cases brought before them for adjudication even after the submission of the parties of their position papers or memoranda. A formal trial-type hearing is not at all times and in all instances essential to due process. It is enough that the parties are given a fair and reasonable opportunity to explain their respective sides of the controversy and to present supporting evidence on which a fair decision can be based. [Seastar Marine

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Services Inc. v. Bul-an, Jr., G.R. No. 142609 (2004)]

PROCEDURE TO BE TERMINATION CASES

LABOR LAW

OBSERVED

IN

JUST CAUSE Decision/Award

Notice specifying the grounds for which dismissal is sought

It is a requirement of due process that the parties to a litigation be informed of how it was decided, with an explanation of the factual and legal reasons that led to the conclusions of the court. The court cannot simply say that judgment is rendered in favor of X and against Y and just leave it at that without any justification whatsoever for its action. The losing party is entitled to know why he lost, so he may appeal to a higher court, if permitted, should he believe that the decision should be reversed. A decision that does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark as to how it was reached and is especially prejudicial to the losing party, who is unable to pinpoint the possible errors of the court for review by a higher tribunal. [ABD Overseas Manpower Corporation vs. NLRC, G.R. No. 117056 (1998)]

Hearing or opportunity to be heard Notice of the decision to dismiss

AUTHORIZED CAUSE Notice to: (1) Employee, and (2) DOLE at least 1 month prior to the effectivity of the separation Requisites (1) Notice not needed when Employee consented to the retrenchment or voluntarily applied for one. [International Hardware, Inc. v. NLRC, G.R. No. 80770, (1989)] (2) Notice must be individual, not collective [Shoppers Gain Supermart v. NLRC, G.R. No. 110731 (1996)] (3) Voluntary arbitration satisfies notice requirement for authorized causes [Revidad v. NLRC, G.R. No. 111105 (1995

CONSEQUENCES FOR NON-COMPLIANCE OF PROCEDURAL DUE PROCESS Situation

Validity Dismissal

of

Liability of ER

Just or Authorized Cause + Due Process

Valid

No liability. Separation pay only in authorized cause

No Just or Authorized Cause + Due Process

Invalid

Reinstatement or separation pay. If reinstatement not possible, + full backwages

No Just or Authorized Cause + No Due Process

Invalid

Reinstatement or separation pay. If reinstatement not possible, + full backwages

Just or Authorized Cause + No Due Process

Valid

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C. RELIEFS FOR ILLEGAL DISMISSAL Art. 294, LC: Security of Tenure. In case 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.

Systems, Inc. v. Dailig, G.R. No. 204761 (2014)] Prescription Period An action for reinstatement by reason of illegal dismissal is one based on an injury, which may be brought within 4 years from the time of dismissal. [Art. 1146, CC] i. Reinstatement pending appeal Art. 229, par. 3 LC: 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, 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.

C.1. REINSTATEMENT Reinstatement means restoration to a state or condition from which one had been removed or separated. The person reinstated assumes the position he had occupied prior to his dismissal. [Asian Terminals, Inc. v. Villanueva, G.R. No. 143219 (2006)] General Rule: Reinstatement and backwages Exceptions:

LABOR LAW

Two options given to employers: 1)

(1) Separation pay (2) Closure of business [Retuya v. Hon. Dumarpa, G.R. No. 148848 (2003)]

Actually reinstate the dismissed employees or,

2) Constructively reinstate them in the payroll.

(3) Economic business conditions [Union of Supervisors v. Secretary of Labor, G.R. No. L-39889 (1981)]

Either way, this must be done immediately upon the filing of their appeal, without need of any executory writ.

(4) Employee’s unsuitability [Divine Word High School v. NLRC, G.R. No. 72207 (1986)]

If the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. The Labor Arbiter's order of reinstatement is immediately executory and the employer has to either re-admit them to work under the same terms and conditions prevailing prior to their dismissal, or to reinstate them in the payroll, and that failing to exercise the options in the alternative, employer must pay the employee's salaries [Magana v. Medicard Philippines, Inc., G.R. No. 174833 (2010)]

(5) Employee’s retirement/ overage [New Philippine Skylanders, Inc. v. Dakila, G.R. No. 199547 (2012)] (6) Antipathy and antagonism [Wensha Spa Center v. Yung, G.R. No. 185122 (2010)] (7) Job with a totally different nature [DUP Sound Phils. v. CA, G.R. No. 168317 (2011)] (8) Long passage of time (9) Inimical to the employer's interest (10) When supervening facts have transpired which make execution on that score unjust or inequitable or, to an increasing extent [Emeritus Security & Maintenance

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No refund doctrine An employee cannot be compelled to reimburse the salaries and wages he received during the pendency of his appeal, notwithstanding the reversal by the NLRC of the LA's order of reinstatement. [College of the Immaculate Conception v. NLRC, G.R. No. 167563 (2010)] Note, however: Rule XI, Sec. 14 of the 2011 NLRC Rules of Procedure provide for restitution of amounts paid pursuant to execution of awards during pendency of the appeal. However, it expressly disallows restitution of wages paid due to reinstatement pending appeal. Section 14. Effect of Reversal of Executed Judgment. Where the executed judgment is totally or partially reversed or annulled by the Court of Appeals or the Supreme Court, the Labor Arbiter shall, on motion, issue such orders of restitution of the executed award, except wages paid during reinstatement pending appeal.

ii. Separation pay in lieu of reinstatement Kinds of separation pay (SP) (1) SP as a statutory requirement for authorized causes (2) SP as financial assistance found in the next section (3) SP in lieu of reinstatement where reinstatement is not feasible; and (4) SP as a benefit in the CBA or company policy Instances when the award of separation pay, in lieu of reinstatement to an illegally dismissed employee, is proper: (1) When reinstatement is no longer possible, in cases where the dismissed employee's position is no longer available; (2) The continued relationship between the employer and the employee is no longer viable due to the strained relations between them; and

LABOR LAW

(3) When the dismissed employee opted not to be reinstated, or the payment of separation benefits would be for the best interest of the parties involved. [Book VI, Rule 1, Section 4 (b), Rule I, IRR] Separation Pay and Exclusive Remedies

Reinstatement,

The payment of separation pay and reinstatement are exclusive remedies. The payment of separation pay replaces the legal consequences of reinstatement to an employee who was illegally dismissed. [Bani Rural Bank, Inc. v. De Guzman, G.R. No. 170904 (2013)] Doctrine of Strained Relations Where reinstatement is not feasible, expedient or practical, as where reinstatement would only exacerbate the tension and strained relations between the parties or where the relationship between the employer and employee has been unduly strained by reason of their irreconcilable differences, particularly where the illegally dismissed employee held a managerial or key position in the company, it would be more prudent to order payment of separation pay instead of reinstatement. [Quijano v. Mercury Drug Corp., G.R. No. 126561 (1998)] Computation SP as a statutory requirement is computed by integrating the basic salary with regular allowances employee has been receiving [Planters Products, Inc. v. NLRC, G.R. No. 78524, 78739 (1989)]; allowances include transportation and emergency living allowances [Santos v. NLRC, G.R. No. 76721 (1987)] Inasmuch as the words "wages", "pay" and "salary" have the same meaning, and commission is included in the definition of "wage", the logical conclusion, therefore, is, in the computation of the separation pay of petitioners, their salary base should include also their earned sales commissions. [Songco v. NLRC, G.R. Nos. 50999-51000 (1990)]

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LABOR LAW

A dismissed employee who has accepted separation pay is not necessarily estopped from challenging the validity of his or her dismissal. Neither does it relieve the employer of legal obligations. [Anino v. NLRC, G.R. No. 123226 (1998)]

The period of delay in instituting this ULP charge with claim for reinstatement and

C.2. BACKWAGES

The salary base properly used should be the basic salary rate at the time of dismissal plus the regular allowances; allowances include:

Backwages are earnings lost by a worker due to his illegal dismissal; a form of relief that restores the income lost by reason of such unlawful dismissal; it is not private compensation or damages; nor is it a redress of a private right but, rather, in the nature of a command to the employer to make a public reparation for illegally dismissing an employee. [St. Theresa's School of Novaliches Foundation v. NLRC, G.R. No. 122955 (1998)] Backwages and reinstatement are two reliefs that should be given to an illegally dismissed employee. They are separate and distinct from each other. An illegally dismissed employee is entitled to (1) either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and (2) backwages. Payment of backwages is specifically designed to restore an employee's income that was lost because of his unjust dismissal. [Aurora Land Projects Corp. v. NLRC, G.R. No. 114733 (1997)] Effect of failure to order backwages A “plain error” which may be rectified, even if employee did not bring an appeal regarding the matter [Aurora Land Projects Corp. v. NLRC, supra]

backwages, although within the prescriptive period, should be deducted from the liability of the employer to him for back wages. [Mercury Drug Co. Inc. v. CIR, G.R. No. L-23357 (1974)]

Emergency cost of living allowances (ECOLA), transportation allowances, 13th month pay. [Paramount Vinyl Product Corp. v. NLRC (1990)] Also included are vacation leaves, service incentive leaves, and sick leaves The effects of extraordinary inflation are not to be applied without an official declaration thereof by competent authorities. [Lantion v. NLRC, G.R. No. 82028 (1990)] ii. Limited backwages General rule: An illegally dismissed employee is entitled to full backwages. Exceptions (1) The Court awarded limited backwages where the employee was illegally dismissed but the employer was found to be in good faith. [San Miguel Corporation v. Javate, Jr., G.R. No. L-54244 (1992)] (2) Delay of the EE in filing the case for illegal dismissal [Mercury Drug Co., Inc. v. CIR, supra] Rationale

i. Computation of backwages Full backwages means exactly that, i.e., without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. [Bustamante v. NLRC, G.R. No. 111651 (1996)] Awards including salary differentials are not allowed [Insular Life Assurance Co. v. NLRC, 1987]

Feati University Club vs. Feati University (1974) adopted a consensus policy of pegging the amount of backwages to their total equivalent for three years (depending on the circumstances) without deduction or qualification. The rationale for the policy was stated in the following words: As has been noted, this formula of awarding reasonable net backwages without deduction or qualification relieves the employees from proving or disproving their earnings during their lay-off and the employers from

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submitting counterproofs, and obviates the twin evils of Idleness on the part of the employee who would "with folded arms, remain inactive in the expectation that a windfall would come to him" [Itogon Suyoc Mines, Inc. vs. Sangilo-Itogon Workers Union (1968), as cited in Diwa ng Pagkakaisa vs. Filtex International Corp. (1972)] and attrition and protracted delay in satisfying such award on the part of unscrupulous employers who have seized upon the further proceedings to determine the actual earnings of the wrongfully dismissed or laid-off employees to hold unduly extended hearings for each and every employee awarded backwages and thereby render practically nugatory such award and compel the employees to agree to

LABOR LAW

unconscionable settlements of their backwages award in order to satisfy their dire need. [See La Campana Food Products, Inc. vs. CIR, (1969) and Kaisahan ng Mga Manggagawa vs. La Campana Food Products, Inc., (1970)]. Note that according to Nacar v Gallery Frames, when the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest …. shall be 6% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit. [Nacar v Gallery Frames, G.R. No. 189871, (2013)]

Indemnity of Employer Period

Doctrine in effect

Validity of Dismissal

Liability of ER

Prior 1989

Pre-Wenphil

Illegal

Reinstatement + Backwages

Feb. 1989 – 1999

Wenphil

Valid

Dismiss now, indemnity pay later

Jan. 2000 – Oct. 2004

Serrano

Ineffectual

Full backwages up to reinstatement/finality of decision

Nov. 2004 – present

Agabon

Valid

Nominal damages

D. PREVENTIVE SUSPENSION Preventive suspension is a disciplinary measure for the protection of the company's property pending investigation of any alleged malfeasance or misfeasance committed by the employee. The employer may place the worker concerned under preventive suspension if his continued employment poses a serious and imminent threat to the life or property of the employer or of his coworkers. However, when it is determined that there is no sufficient basis to justify an employee's preventive suspension, the latter is entitled to the payment of salaries during the time of preventive suspension. [Gatbonton v. NLRC, G.R. No. 146779 (2006)] Preventive suspension is justified where the employee's continued employment poses a

serious and imminent threat to the life or property of the employer or of the employee's co-workers. Without this kind of threat, preventive suspension is not proper. [Artificio v. NLRC, G.R. No. 172988 (2010)] D.1.DURATION No preventive suspension shall last longer than thirty (30) days. Upon the expiry of such period, the employer shall thereafter (1) reinstate the worker in his former or in a substantially equivalent position or (2) the employer may extend the period of suspension provided that during the period of extension, he pays the wages

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LABOR LAW

V. Management Prerogative

and other benefits due to the worker. [Sec. 9, Rule XXIII, Book V, IRR] D.2. PREVENTIVE SUSPENSION AS A PROTECTIVE MEASURE V. SUSPENSION AS PENALTY Preventive suspension is not a penalty in itself. It is merely a measure of precaution so that the employee who is charged may be separated, for obvious reasons, from the scene of his alleged misfeasance while the same is being investigated. While [preventive suspension] may be imposed on a respondent during the investigation of the charges against him, [suspension] is the penalty which may only be meted upon him at the termination of the investigation or the final disposition of the case. [PAL v. NLRC, G.R. No. 114307 (1998)

E. CONSTRUCTIVE DISMISSAL Constructive dismissal is cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee. The test of constructive dismissal is whether a reasonable person in the employee’s position would have felt compelled to give up his position under the circumstances. t is an act amounting to dismissal but made to appear as if it were not. Constructive dismissal is, therefore, a dismissal in disguise. As such, the law recognizes and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer. In fact, the employee who is constructively dismissed may be allowed to keep on coming to work. [McMer Corp., Inc. v. NLRC, G.R. No. 193421 (2014)]

The employer’s right to conduct the affairs of his business, according to its own discretion and judgment, is well-recognized. An employer has a free reign and enjoys wide latitude of discretion to regulate all aspects of employment. This is a management prerogative, where the free will of management to conduct its own affairs to achieve its purpose takes form. [Torreda vs. Toshiba, G.R. No. 165960 (2007)] So long as a company’s management prerogatives are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them… Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. [Ernesto G. Ymbong vs. ABS-CBN Broadcasting Corp., G.R. No. 184885 (2012)]

A. DISCIPLINE Management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations. [Jose P. Artificio vs. NLRC, G.R. No. 172988 (2010)] The employer’s right to conduct the affairs of his business, according to its own discretion and judgment, includes the prerogative to instill discipline in its employees and to impose penalties, including dismissal, upon erring employees. The only criterion to guide the exercise of its management prerogative is that the policies, rules and regulations on work-related activities of the employees must always be fair and reasonable and the corresponding penalties, when prescribed, commensurate to the offense involved and to

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the degree of the infraction. [Consolidated Food Corporation vs. NRLC, G.R. No. 118647 (1999)] [St. Michael’s Institute vs. Santos, G.R. No. 145280 (2001)] Right to dismiss or otherwise impose disciplinary sanctions upon an employee for just and valid cause, pertains in the first place to the employer, as well as the authority to determine the existence of said cause in accordance with the norms of due process. [Makati Haberdashery, Inc. vs. NLRC, G.R. Nos. 83380-81 (1989)] Although the right of employers to shape their own work force,is recognized, this management prerogative must not curtail the basic right of employees to security of tenure. [Alert Security & Investigation Agency, Inc. vs. Saidali Pasawilan, et. al., G.R. No. 182397 (2011)]

B. TRANSFER OF EMPLOYEES An employee’s right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. The Employer has the right to transfer or assign Employees from one area of operation to another, or one office to another or in pursuit of its legitimate business interest, Provided there is no demotion in rank or diminution of salary, benefits and other privileges and not motivated by discrimination or made in bad faith, or effected as a form of punishment or demotion without sufficient cause. [Westin Phil. Plaza Hotel vs. NLRC, G.R. No. 121621 (1999)] When the transfer is not unreasonable, or inconvenient, or prejudicial to the employee, and it does not involve a demotion in rank or diminution of salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal. [Bisig ng Manggagawa sa TRYCO v. NLRC, G.R. No. 151309 (2008)] It is management prerogative for employers to transfer employees on just and valid grounds such as genuine business necessity.

LABOR LAW

[William Barroga vs. Data Center College of the Philippines, G.R. No. 174158 (2011)] Re-assignments made by management pending investigation of irregularities allegedly committed by an employee fall within the ambit of management prerogative. The purpose of reassignments is no different from that of preventive suspension which management could validly impose as a disciplinary measure for the protection of the company's property pending investigation of any alleged malfeasance or misfeasance committed by the employee. [Ruiz s.v Wendel Osaka Realty Corp., G.R. No. 189082 (2012)] In cases of a transfer of an employee, the rule is settled that the employer is charged with the burden of proving that its conduct and action are for valid and legitimate grounds such as genuine business necessity and that the transfer is not unreasonable, inconvenient or prejudicial to the employee. If the employer cannot overcome this burden of proof, the employee’s transfer shall be tantamount to unlawful constructive dismissal. [Jonathan Morales v. Harbor Centre Port Terminal Inc., G.R. No. 174208 (2012)]

C. PRODUCTIVITY STANDARD The employer has the right to demote and transfer an employee who has failed to observe proper diligence in his work and incurred habitual tardiness and absences and indolence in his assigned work. [Petrophil Corporation vs. NLRC, G.R. No. L-64048 (1986)] In the consolidated cases of Leonardo vs. NLRC [G. R. No. 125303 (2000)] and Fuerte vs. Aquino [G. R. No. 126937 (2000)], the employer claimed that the employee was demoted pursuant to a company policy intended to foster competition among its employees. Under this scheme, its employees are required to comply with a monthly sales quota. Should a supervisor such as the employee fail to meet his quota for several consecutive months, he will be demoted, whereupon his supervisor’s allowance will be withdrawn and be given to the individual who takes his place. When the employee concerned succeeds in meeting the quota

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again, he is re-appointed supervisor and his allowance is restored. The Supreme Court held that this arrangement is an allowable exercise of company rights since an employer is entitled to impose productivity standards for its workers. In fact, non-compliance may be visited with a penalty even more severe than demotion.

D. GRANT OF BONUS A bonus is "a gratuity or act of liberality of the giver which the recipient has no right to demand as a matter of right" [Aragon vs. Cebu Portland Cement Co., 61 O.G. 4597]. "It is something given in addition to what is ordinarily received by or strictly due the recipient." The granting of a bonus is basically a management prerogative which cannot be forced upon the employer "who may not be obliged to assume the onerous burden of granting bonuses or other benefits aside from the employee's basic salaries or wages" xxx [Kamaya Point Hotel vs. National Labor Relations Commission, Federation of Free Workers and Nemia Quiambao, G.R. No. 75289, (1989)]. [Traders Royal Bank vs. NLRC, G.R. No. 120592 (1990)] The matter of giving a bonus over and above the worker’s lawful salaries and allowances is entirely dependent on the financial capability of the employer to give it. [Kimberly-Clark Philippines, Inc. vs. Dimayuga, G.R. No. 177705 (2009)]

E. CHANGE OF WORKING HOURS Management retains the prerogative, whenever exigencies of the service so require, to change the working hours of its employees. So long as such prerogative is exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold such exercise. [Sime Darby Pilipinas Inc. v. NLRC, G.R. No. 119205 (1998)]

LABOR LAW

F. RULES ON MARRIAGE BETWEEN EMPLOYEES OF COMPETITOREMPLOYERS In the recent case of Duncan Association of Detailman-PTGWO and Pedro Tecson v. Glaxo Wellcome Philippines, Inc., we passed on the validity of the policy of a pharmaceutical company prohibiting its employees from marrying employees of any competitor company. We held that Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from competitors. We considered the prohibition against personal or marital relationships with employees of competitor companies upon Glaxo’s employees reasonable under the circumstances because relationships of that nature might compromise the interests of Glaxo. In laying down the assailed company policy, we recognized that Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures. [Star Paper Corp. vs. Simbol, G.R. No. 164774 (2006)]

G. POST-EMPLOYMENT BAN In cases where an employee assails a contract containing a provision prohibiting him or her from accepting competitive employment as against public policy, the employer has to adduce evidence to prove that the restriction is reasonable and not greater than necessary to protect the employer’s legitimate business interests. The restraint may not be unduly harsh or oppressive in curtailing the employee’s legitimate efforts to earn a livelihood and must be reasonable in light of sound public policy. [Rivera vs. Solidbank, G.R. No. 163269 (2006)]

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VI. Social Welfare Legislation

LABOR LAW

ii. Voluntary [Sec. 9] (1) Spouses who devote full time to managing household and family affairs, unless they are also engaged in other vocation or employment [which is subject of compulsory coverage];

A. SSS LAW [RA 8282]

(2) OFWs recruited employers;

A.1. COVERAGE [1997, 2000, 2008, 2009 Bar Question] i. Compulsory [Sec. 9 [a]; Sec. 9-A] (1) Employees not over 60 years including domestic helpers with at least P1,000 monthly pay; and (2) Self-employed as may be determined by the Commission, but not limited to: a) Self-employed professionals b) Partners and single proprietors of businesses c) Actors and actresses, directors, scriptwriters, and news correspondents who do not fall within the definition of the term “employee” under Section 8 [d] d) Professional athletes, coaches, trainers and jockeys e) Individual farmers and fishermen A domestic worker who has rendered at least one [1] month of service shall be covered by the Social Security System [SSS], the Philippine Health Insurance Corporation [PhilHealth], and the Home Development Mutual Fund or Pag-IBIG, and shall be entitled to all the benefits in accordance with the pertinent provisions provided by law. Premium payments or contributions shall be shouldered by the employer. However, if the domestic worker is receiving a wage of Five thousand pesos [P5,000.00] and above per month, the domestic worker shall pay the proportionate share in the premium payments or contributions, as provided by law. The domestic worker shall be entitled to all other benefits under existing laws. [Sec. 30, Kasambahay Law [RA 10361]]

by

foreign-based

(3) Employees [previously under compulsory coverage] already separated from employment or those self-employed [also under compulsory coverage] with no realized income for a given month, who chose to continue with contributions to maintain right to full benefit. Note: Foreign governments, international organizations or their wholly owned instrumentality employing workers in the Philippines may enter into an agreement with the Philippine government to include their employees in the SSS except those already covered by their civil service retirement system. A.2. EXCLUSIONS FROM COVERAGE [SEC. 8 [J]] (1) Employment purely casual and not for the purpose of occupation or business of the employer. (2) Service performed on or in connection with an alien vessel by an employee if he is employed when such vessel is outside the Philippines; (3) Service performed in the employ of the Philippine Government or instrumentality or agency thereof; (4) Service performed in the employ of a foreign government or international organization, or their wholly-owned instrumentalities; and (5) Services performed by temporary and other employees which may be excluded by SSS regulation. Employees of bona fide independent contractors shall not be deemed employees of the employer engaging the services of said contractors.

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A.3. BENEFITS

Benefit – entitlement to monthly pension from retirement until death.

i. Monthly pension [Sec.12] Computation of monthly pension The monthly pension shall be the highest of the following amounts: (1) P300 + [20% x [average monthly credit]] + [2% x [average monthly credit] x [# of cash credited years of service in excess of 10 years]]; (2) 40% x [average monthly credit]; (3) P1,000; provided, that the monthly pension shall in no case be paid for an aggregate amount of less than 60 months. Note: Notwithstanding the abovementioned, minimum pension is P1,200 for members with at least 10 years credit service, P2,400 for those with 20 years. ii. Dependents’ pension [Sec. 12-A] death,

II.

retiring, or

III.

permanent total disability;

The monthly pension shall be suspended upon the reemployment or resumption of self-employment of a retired member who is less than sixty-five [65] years old. In Case of Death of Member (1) His/her primary beneficiaries as of the date of his/her retirement shall be entitled to receive the monthly pension; or (2) If he/she has no primary beneficiaries AND he/she dies within sixty [60] months from the start of his/her monthly pension, his/her secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the fiveyear guaranteed period, excluding the dependents’ pension. Lump Sum Alternative

(1) Paid on account of members’ I.

LABOR LAW

Member may opt to receive his first 18 monthly pensions in lump sum but such is discounted at a preferential rate of interest.

(2) Paid to each child conceived on or prior to contingency, but not exceeding 5, beginning with the youngest and preferring the legitimate;

Lump Sum Eligibility

(3) Amount is either P250 or 10% of the monthly pension as computed above, whichever is higher.

A 60 year old member with less than 120 monthly contributions who is no longer employed or self-employed, and who is not continuing contributions independently, he is entitled to a lump sum equal to his total contributions paid.

iii. Retirement benefits [Sec. 12-B]

iv. Permanent disability benefits [Sec. 13-A]

Eligibility requirements

Eligibility requirement

(1) 120 monthly contributions;

(1) 36 monthly contributions prior to the semester of disability; same as death benefit; the only difference is that the pension is paid directly to the member.

(2) Age I.

65 years old; or

II.

a member who has reached 60 years may also avail if he is already separated from employment or has ceased to be self-employed.

(2) In case the permanently disabled member dies, it would be given the same treatment as a retiree dying. (3) For permanent partial disability, the pension is not lifetime. [e.g. loss of thumb PAGE 131 OF 222

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entitles member to only 10 months of pension, while loss of arm 50 months]. It shall be paid in lump sum if the period is less than 12 months. (4) For multiple partial disabilities, they shall be additive when related or deteriorating – the percentage shall be equal to the number of months the partial disability is entitled to, divided by 75 months. [e.g. loss of sight in one eye à 25/75; loss of arm à 50/75; if both occur due to same cause, then 25/75 + 50/75 = 100% so treated as if it were permanent total disability]

LABOR LAW

v. Death benefits [Sec. 13] Eligibility requirement 36 monthly contributions prior to the semester of death. Benefit – monthly pension to primary or a lump sum benefit equivalent to thirty-six [36] times the monthly pension secondary beneficiaries. To those ineligible – lump sum benefit which shall be the higher between the two: •

[monthly pension] x 12; or



[monthly pension] x [# of monthly contributions]

Lump Sum Alternative A member is entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or twelve [12] times the monthly pension, whichever is higher.

vi. Funeral benefits [13-B] P12,000 in cash or in kind, upon death of member vii. Loan

Lump Sum Eligibility A member who has not paid at least 36 monthly contributions Note: A member who [1] has received a lump sum benefit; and [2] is reemployed or has resumed self-employment not earlier than one [1] year from the date of his disability shall again be subject to compulsory coverage and shall be considered a new member.

Social Security Commission Resolution No. 669. Moreover, several SSS-issued circulars such as Circular No. 21-P and No. 52 pertain to the treatment of salary loans, sometimes providing for more flexible payment terms or condonation for delinquent payers; Santiago v. CA and SSS, GR # L-39949 [1984] resolved an issue involving the treatment of salary loan repayments; SSS website also shows loans viii. Sickness benefits [Sec. 14]

In Case of Death of Member (1) His primary beneficiaries as of the date of disability shall be entitled to receive the monthly pension; OR (2) If he has no primary beneficiaries and he dies within sixty [60] months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the five-year guaranteed period excluding the dependents’ pension.

Eligibility conditions

requirements

and

other

(1) Inability to work due to sickness or injury (2) Confined for at least 4 days either in a hospital or elsewhere with SSS approval; (3) At least 3 months of contributions in the 12 month period immediately before the semester of sickness or injury has been paid; (4) All company sick leaves with pay for the current year have been used up; (5) Maximum of 120 days per 1 calendar year [i.e maximum permissible for the same

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sickness and confinement is 240 days for 2 consecutive years]; (6) The employer has been notified, or, if a separated, voluntary or self-employed member, the SSS directly notified within 5 days of confinement; (7) Notice to employer or SSS not needed when confinement is in a hospital; notice to employer not required as well when Employee became sick or injured while working or within premises of the employer. Benefit: daily cash allowance paid for the number of days a member is unable to work due to sickness or injury equivalent to 90% x [average daily salary credit] Note: One hundred percent [100%] of the daily benefits provided in the preceding paragraph shall be reimbursed by the SSS to said employer upon receipt of satisfactory proof of such payment and legality thereof if the following conditions are met: (1) The employer notified the SSS of the confinement within five calendar days after receipt of the notification from the employee member (2) If the notification to the SSS is made by the employer beyond five calendar days after receipt of the notification from the employee member, he shall be reimbursed only for each day of confinement starting from the tenth calendar day immediately preceding the date of notification to the SSS. (3) SSS shall reimburse the employer or pay the unemployed member only for confinement within the one-year period immediately preceding the date the claim for benefit or reimbursement is received by the SSS, except confinement in a hospital in which case the claim for benefit or reimbursement must be filed within one [1] year from the last day of confinement.

LABOR LAW

ix. Maternity leave benefits [Sec. 14-A] Eligibility Requirements [2000, 2005, 2007, 2010 Bar Question] (1) A female member (2) Paid at least three [3] monthly contributions in the twelve-month period immediately preceding the semester of her childbirth or miscarriage (3) She shall have notified her employer of her pregnancy and the probable date of her childbirth, which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide; Process The full payment shall be advanced by the employer within thirty [30] days from the filing of the maternity leave application; Coverage The maternity benefits provided under this section shall be paid only for the first four [4] deliveries or miscarriages; Employer’s Reimbursement That the SSS shall immediately reimburse the employer of one hundred percent [100%] of the amount of maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment and legality thereof. Note: All of these benefits are tax-exempt. A.4. BENEFICIARIES 1. PRIMARY (1) Dependent spouse – until remarriage [see above]; (2) Dependent children [legitimate, legitimated, legally adopted, and illegitimate] [see above]; illegitimate children are entitled only to 50% of the share of legitimate children unless there are no legitimate children, in which case, they get 100%.

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2. SECONDARY Shall only receive when beneficiaries are absent •

the

primary

under this Act or other laws shall be excluded in the computation of service Note: The GSIS may prescribe rules for the inclusion of part time and other services with compensation.

Dependent parents

3. OTHERS – shall only receive when the primary and secondary beneficiaries are absent •

LABOR LAW

Any other person designated by member as his/her secondary beneficiary.

B.3.1. MONTHLY PENSION [SEC. 9] The amount shall be: (a) 37.5% x [revalued compensation]

ave.

monthly

(b) Plus 2.5 x [revalued ave. monthly compensation] x [years in service in excess of 15 years].

B. GSIS [RA 8291] B.1. COVERAGE



All public sector employees below the compulsory retirement age of 65, irrespective of employment status. [Sec. 3]

Provided, the monthly pension shall not exceed 90% of the average monthly compensation.



It shall not be less than P2,400 for those with 20 years of service and not less than P1,300 for everyone else.

B.2. EXCLUSIONS FROM COVERAGE [SEC. 3] (1) AFP and PNP; (2) Members of the Judiciary and Constitutional Commissions who are covered ONLY by life insurance as they have separate retirement schemes; (3) Contractual employees with no employeremployee relationship with the agency they serve. B.3. BENEFITS Computation of Service [Sec. 10] From date of original appointment/election, including periods of service at different times under one or more employers, those performed overseas under the authority of the Republic of the Philippines, and those that may be prescribed by the GSIS in coordination with the Civil Service Commission. In case of reinstatement in the service of an employer and subsequent retirement or separation which is compensable under this Act, all service credited for retirement, resignation or separation for which corresponding benefits have been awarded

B.3.2. RETIREMENT BENEFITS [SEC. 13] Eligibility requirements [Sec. 13-A] (1) At least 15 years of service; (2) At least 60 years of age; and (3) Not receiving pension benefit permanent total disability.

from

Note: Retirement is compulsory for employees 65 years of age who have rendered at least 15 years of service; if employee has less than 15 years of service, he may be allowed to continue in accordance with civil service laws. [Sec. 13] Benefit [Sec. 13]: Choice between (a) 60 x [basic monthly pension] lump sum payment [Sec. 2] at the time of retirement plus basic monthly pension payable monthly for life after expiry of the 5-year guaranteed period which is already covered by the lump sum; or (b) Cash payment equivalent to 18 x [basic monthly pension] plus monthly pension for life immediately but with no 5-year guarantee

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Note: Subject to periodic adjustment [Sec. 14]

disability or has paid a total of at least 180 monthly contributions prior to disability; and

B.3.3. PERMANENT DISABILITY BENEFITS

(c) Member is not enjoying old-age retirement benefit. [Sec. 16]

Disabilities Deemed Total and Permanent [Sec. 16] (a) Complete loss of sight of both eyes; (b) Loss of 2 limbs at or above the ankle or wrist

Benefit for Permanent Total Disability •

Monthly income benefit for life equal to basic monthly pension – This is effective from date of disability;



If member is in service at the time of disability and he has paid at least 180 monthly contributions, in addition to the monthly income benefit, he shall receive an additional cash payment of 18 times basic monthly pension.

(c) Permanent complete paralysis of 2 limbs (d) Brain injury resulting imbecility or insanity

in

incurable

(e) Such other cases as may be determined by the GSIS Disabilities Deemed Partial and Permanent [Sec. 17] (a) Complete and permanent loss of the use of: (i)

Any finger

(ii)

Any toe

(iii) One arm

LABOR LAW

To the ineligible If member has rendered at least 3 years of service, then he shall receive cash payment equal to 100% of ave. monthly compensation for each year of service [essentially total amount of contributions made] or P12,000 whichever is higher. [Sec. 16]

(iv) One hand (v)

One foot

Partial Disability

(vi) One leg (vii) One or both ears (viii) Hearing of one or both ears (ix) Sight of one eye (b) Such other cases as may be determined by the GSIS

Paid according to GSIS prescribed schedule (this is similar to the scheme used by SSS); member availing of permanent partial disability must satisfy condition regarding the disability not being due to his own fault and either regarding employment status and services rendered. (See Eligibility requirements for Permanent Total Disability)

Eligibility Requirements for Permanent Total Disability

B.3.4. DEATH BENEFITS [SEC. 21]

(1) Disability not due to employee’s own grave misconduct, notorious negligence, habitual intoxication, or willful intention to kill himself or another; [Sec. 15]

(1) Survivorship pension

When member dies, the primary beneficiaries are entitled to only one of the following:

(2) Employee is: (a) in service at the time of disability; or (b) even if separated, he has paid at least 36 monthly contributions within the 5-year period immediately prior to PAGE 135 OF 222

(a) If he was in the service when he died; or (b) Even if separated from the service, he has at least 3 years of service and has paid 36 monthly contributions within the 5 years immediately preceding death; or

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(c) Even if separated from the service, he has paid 180 monthly contributions prior to death.

Eligibility conditions:

(a) With 3 years of service; and (b) He has failed to qualify in the prior 2 schemes.

and

other

(a) in service at the time of disability; or (b) if separated, he has rendered at least 3 years of service and paid at least 6 monthly contributions in the 12 month period immediately prior to disability;

(a) If he was in the service when he died; and (3) Cash payment equivalent to 100% ave. monthly compensation for each year of service he paid contributions or P12,000 whichever is higher

requirements

(1) Employee must be:

(2) Survivorship pension plus cash payment of 100% ave. monthly compensation for every year of service (pension plus total contributions made)

(b) With 3 years of service.

LABOR LAW

(2) All sick leave credits including CBA sick leaves for the current year has been used up; and (3) Maximum of 120 days per 1 calendar year (so maximum permissible for the same sickness and confinement is 240 days for 2 consecutive years). Benefit

B.3.5. FUNERAL BENEFITS [SEC. 23] The amount shall be fixed by GSIS rules and regulations

75% of the current daily compensation for every day or fraction thereof of disability or P70 whichever is higher.

Who are entitled: B.3.8. SEPARATION BENEFITS [SEC. 11]

(1) Active member; (2) Member separated from service but still entitled to funeral benefit; (3) Pensioner; (4) Retiree who at the time of retirement was of pensionable age but opted to retire under RA 1616.

Eligibility requirements (1) 60 years of age, or separation from service with at least 3 years but not over 15 years served (2) Below 60 years of age, but at least 15 years of service rendered. Benefit

B.3.6. LOAN GSIS website provides for this. The following are the loans provided online: (1) Consolidated Loan (2) Policy Loan (3) Emergency Loan (4) Pension Loan B.3.7. TEMPORARY DISABILITY BENEFITS [SEC. 18]

(1) For 60 years of age or separated from service with 3 to 15 years of service: cash payment of 100% of ave. monthly compensation for each year of service (total amount of all contributions paid) or P12,000 whichever is higher. (2) Below 60 years of age and at least 15 years of service: cash payment equivalent to 18 x [monthly pension] at the time of resignation or separation plus an old-age pension benefit equal to basic monthly pension.

Similar to sickness.

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B.3.9. UNEMPLOYMENT BENEFITS [SEC. 12]

B.3.11. LIFE INSURANCE BENEFITS [SEC. 24]

Eligibility requirements

Note: Judiciary and Constitutional Commissions are entitled to life insurance only.

(1) Employee separated from service due to abolition of his office or position; and (2) Employee has been paying integrated contributions for at least 1 year prior to separation. Benefit

B.4. Beneficiaries B.4.1. Primary (1) Dependent spouse – until remarriage;

Monthly cash payments of 50% of average monthly compensation for a duration which is proportional to years rendered, ranging from 2 months to 6 months.

(2) Dependent children (legitimate, legitimated, legally adopted, and illegitimate) – but RA 8291 does not distinguish share of legitimate and illegitimate children.

B.3.10. SURVIVORSHIP BENEFITS [SEC. 20]

B.4.2. SECONDARY

Beneficiaries are entitled to the following:

Shall only receive when beneficiaries are absent:

(1) Basic survivorship pension which is 50% of basic monthly pension; (see Death Benefits) and (2) Dependent children’s pension not exceeding 50% of the basic monthly pension.

Enabling law

Definition of Terms

primary

(1) Dependent parents (2) Legitimate descendants, subject to the restrictions on dependent children.

SSS RA 1161 as amended by RA 8282: Social Security Act of 1997 Employer – any person, natural or juridical, domestic or foreign, who carries on in the Philippines any trade business, industry, undertaking, and uses the services of another person who is under his orders as regards the employment, except those considered as em ployer under the GSIS. A selfemployed person shall be both employer and employee at the same time. Employee – any person who performs services for an employer in which either or both mental and physical efforts are used and who receives compensation for such services, where there is an employer—employee relationship; also, a self-employed person who is both employee and employer at the same time

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the

GSIS RA 8291 amending PD 1146 Employer – National government, its political subdivisions, branches, agencies or instrumentalities, including government-owned or controlled corporations and financial institutions with original charters [GOCCs]; constitutional commissions; and judiciary Employee – any person receiving compensation while in service of an employer whether by election or appointment, irrespective of status of appointment; baranggay officials; and sangguniang officials

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Coverage

LABOR STANDARDS

SSS Self-employed – any person whose income is not derived from employment, including, but not limited to: • self-employed professionals; • partners and single proprietors of businesses; • actors, directors, scriptwriters, news correspondents not considered as employees under the above definition; • athletes, coaches, trainers, jockeys; and • individual farmers and fishers. Dependents: • Legal spouse entitled by law to receive support; • Child – unmarried, not gainfully employed, and below 21 or • Child over 21 if he or she became permanently incapacitated and incapable of self-support, physically or mentally,; child may be legitimate, legitimated, legally adopted, or illegitimate; • Parent who is receiving regular support. Beneficiaries Primary • Dependent spouse – until remarriage [see above]; • Dependent children [see above]; illegitimate children are entitled only to 50% of the share of legitimate children unless there are no legitimate children, in which case, they get 100%. Secondary • Shall only receive when the primary beneficiaries are absent: Dependent parents Other • Any other person designated by the member as his/her secondary beneficiary. Compensation – all actual remuneration for employment, including living allowance, as well as the cash value of any remuneration paid in any medium other than cash except that portion already above the max salary credit under Sec. 18 of the Act. Compulsory • Employers as defined above; • Employees not over 60 years including household helpers with at least P1,000 monthly pay; and • Self-employed. PAGE 138 OF 222

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GSIS Note: No counterpart for selfemployed.

Same, except that a child here is below 18

Same except that RA 8291 does not distinguish share of legitimate and illegitimate children

Compensation – basic pay received excluding per diems, bonuses, overtime, honoraria, allowances and other emoluments not integrated into the basic pay under existing laws. Public sector employees below the compulsory retirement age of 65. Exceptions: (1) AFP and PNP; (2) Members of the Judiciary and

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SSS

Effective Date of Coverage

Summary of Benefits

Effects of separation from employment

Dispute Settlement Prescriptive Period

Voluntary • Spouses who devote full time to managing household and family affairs; • OFWs recruited by foreign-based employers; • Employees already separated from employment or those self-employed with no realized income for a given month, who chose to continue with contributions to maintain right to full benefit. Note: Foreign governments, international organizations or their wholly owned instrumentality employing workers in the Philippines may enter into an agreement with the Philippine government to include their employees in the SSS except those already covered by their civil service retirement system. Employer: 1st day of operation Employee: 1st day at work Self-employed: upon registration with SSS (1) Monthly pension (2) Dependents’ pension (3) Retirement benefits (4) Permanent disability benefits (5) Death benefits (6) Funeral benefits (7) Loan – Social Security Commission Resolution No. 669. Moreover, several SSS-issued circulars such as Circular No. 21-P and No. 52 pertain to the treatment of salary loans, sometimes providing for more flexible payment terms or condonation for delinquent payers; Santiago v. CA and SSS, GR # L-39949 [1984] resolved an issue involving the treatment of salary loan repayments; SSS website also shows loans (8) Sickness benefits (9) Maternity leave benefits (1) Employer’s contribution, and (2) Employee’s obligation to pay contribution both cease at the end of the month of separation; (3) Employee shall be credited with all contributions paid on his behalf and entitled to all benefits set forth by law. Social Security Commission àCA [Rule 43; questions of law and fact] à SC [Rule 45; questions of law only] 20 years PAGE 139 OF 222

LABOR LAW

GSIS Constitutional Commissions who are covered only by life insurance as they have separate retirement schemes; (3) Contractual employees with no employee-employer relationship with the agency they serve.

(1) (2) (3) (4) (5) (6)

Monthly pension Retirement benefits Permanent disability benefits Death Benefits Funeral benefits Loan – GSIS website provides for this (7) Temporary disability benefits [similar to sickness] (8) Separation benefits (9) Unemployment benefits – Sec 11 (10) Survivorship benefits (11) Life insurance benefits Note: Judiciary and Constitutional Commissions are entitled to life insurance only. Continued membership for the unemployed member; and entitlement to whatever benefits he has qualified to in the event of any compensable contingency. GSIS à CA [Rule 43]à SC [Rule 45]; appeal does not stay execution. 4 years

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C. LIMITED PORTABILITY LAW [RA 7699] C.1 COVERAGE [SEC. 3] (1) Workers who transfer employment from one sector to another; or

LABOR LAW

(3) An employee over sixty (60) years of age shall be covered if he had been paying contributions to the System prior to age sixty (60) and has not been compulsorily retired. (4) An employee who is coverable by both the GSIS and SSS shall be compulsorily covered by both Systems.

(2) Those employed in both sectors (public and private). C.2. PROCESS The covered worker shall have his credible services or contributions in both Systems credited to his service or contribution record in each of the Systems and shall be totalized for purposes of old-age, disability, survivorship and other benefits in case the covered member does not qualify for such benefits in either or both systems without totalization: Provided, however, That overlapping periods of membership shall be credited only once for purposes of totalization [Sec. 3] “Totalization” shall refer to the process of adding up the periods of creditable services or contributions under each of the Systems, for purposes of eligibility and computation of benefits [Sec. 2(e)].

(5) Filipinos working abroad in the service of an employer as defined in Section 3 hereof shall be covered by the System, and entitled to the same benefits as are provided for employees working in the Philippines. [Sec. 5, Rule I] D.2. EFFECTIVITY [SEC. 6, RULE I] Coverage of employees shall take effect on the first day of employment. D.3. WHEN COMPENSABLE Grounds [Sec. 1, Rule III] (1) For the injury and the resulting disability or death to be compensable, the injury must be the result of accident arising out of and in the course of the employment.

Overlapping periods of membership in case of those employed in both sectors at once are to be counted only ONCE for purposes of totalization to be able to satisfy eligibility requirements of benefits provided for by either SSS or GSIS. [Sec. 3]

(2) For the sickness and the resulting disability or death to be compensable, the sickness must be the result of an occupational disease listed under Annex “A” of these Rules with the conditions set therein satisfied, otherwise, proof must be shown that the risk of contracting the disease is increased by the working conditions.

D. EMPLOYEE’S COMPENSATION – COVERAGE AND WHEN COMPENSABLE

Limitation [Sec. 1, Rule IV]

This refers to the Amended Rules on Employees’ Compensation, implementing Title II, Book IV of the Labor Code.

No compensation shall be allowed to the employee or his dependents when the injury, sickness, disability, or death was occasioned by any of the following: (1) his intoxication;

D.1 COVERAGE [SEC. 2, RULE I]

(2) his willful intention to injure or kill himself or another; or

(1) Every employer shall be covered. (2) Every employee not over sixty (60) years of age shall be covered.

(3) his notorious negligence

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VII. Labor Relations

LABOR LAW

Right to Self-Organization: Fundam ental Right

A. RIGHT TO SELF-ORGANIZATION Basis of Right (1) 1987 Constitution Sec. 8, Art. III. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged. Sec.3, Art. XIII. The state shall afford full protection to labor, local and overseas, organized and unorganized, and promote full 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. [...] (2) Labor Code Art. 253. 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. Art. 254. Employees of government corporations established under the corporation code shall have the right to organize and to bargain collectively with their respective employers.

A

Self-organization is a fundamental right guaranteed by the Philippine Constitution and the Labor Code. Employees have the right to form, join or assist labor organizations for the purpose of collective bargaining or for their mutual aid and protection. [UST Faculty Union v. Bitonio, G.R. No. 131235 (1999)] Infringem ent of the 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 (Art. 257) Scope of right to self-organization (1) Right to form, join and assist labor organizations of their own choosing for the purpose of collective bargaining through representatives (Art. 257); (2) Right to engage in lawful concerted activities for the same purpose or for their mutual aid and protection (Art. 257) (3) Subsumed in the right to join, affiliate with, or assist any union is the right NOT to join, affiliate with, or assist any union; or to leave a union and join another one. [Heritage Hotel Manila v. PIGLASHeritage, G.R. No. 177024 (2009)] (4) The right to form or join a labor organization necessarily includes the right to refuse or refrain from exercising said right. It is self-evident that just as no one should be denied the exercise of a right granted by law, so also, no one should be compelled to exercise such a conferred right. The fact that a person has opted to acquire membership in a labor union does not preclude his subsequently opting to renounce such membership. [Reyes v. Trajano, G.R. No. 84433 (1992)] (5) The right of the employees to selforganization is a compelling reason why their withdrawal from the cooperative

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must be allowed. As pointed out by the union, the resignation of the memberemployees is an expression of their preference for union membership over that of membership in the cooperative. [Central Negros Electric Cooperative v. SOLE, G.R. No. 94045 (1991)] (6) Their freedom to organize would be rendered nugatory if they could not choose their own leaders to speak on their behalf and to bargain for them. [Pan-American World Airways, Inc v. PanAmerican Employees Association, G.R. No. L-25094 (1969)] (7) Recognition of the tenets of the sect ... should not infringe on the basic right of self-organization granted by the constitution to workers, regardless of religious affiliation. [Kapatiran sa Meat and Canning Division v. Calleja, G.R. No. 82914 (1988)] A.1. WHO MAY UNIONIZE FOR PURPOSES OF COLLECTIVE BARGAINING? (1) All employees (2) Government employees of corporations created under the Corporation Code (3) Supervisory Employees

LABOR LAW

first day of service, be considered as an employee for purposes of membership in any labor union. [Art. 292(c)] Employee includes […] 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. [Book V, Rule I, Sec. 1(f)] Employees of non-profit organizations are now permitted to form, organize or join labor unions of their choice for purposes of collective [FEU-Dr. Nicanor Reyes Medical Foundation Inc. v. Trajano, G.R. No. 76273 (1992)] (2) Em ployees of Corporations Created Corporation Code

Governm ent under the

The right to self-organization shall not be denied to government employees. [Sec. 2(5), Art. IX-B, Constitution] Employees of government corporations established under the Corporation Code shall have the right to organize and to bargain collectively with their respective employers All other employees in the civil service shall have the right to form associations for purposes not contrary to law. [Art. 254]

(4) Aliens with valid working permits (5) Security personnel (1) All Employees 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. (Presumes an employer-employee relationship)

All government employees can form, join, or assist employees’ organizations of their own choosing for the furtherance and protection of their interests. They can also form, in conjunction with appropriate government authorities, labor-management committees, work councils and other forms of workers’ participation schemes to achieve the same objectives. [EO 180 §2 (1987)] (3) Supervisory Employees

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. [Art. 253]

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. [Art. 219 (m)]

Any employee, whether employed for a definite period or not, shall, beginning on his

Supervisory Employee refers to an employee who, in the interest of the employer,

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effectively recommends managerial actions and the exercise of such authority is not routinary or clerical but requires the use of independent judgment. [Book V, Rule I, Section 1[xx]) Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. [Art. 255]

a. As certified by DFA; OR b. Ratified either ILO Convention No. 8 and ILO Convention No. 98 [Book V, Rule II, Sec. 2] (5) Security Guards The security guards and other personnel employed by the security service contractor shall have the right:

Rationale

(1) To form, join, or assist in the formation of a labor organization of their own choosing for purposes of collective bargaining and

Supervisory employees, while in the performance of supervisory functions, become the alter ego of the management in the making and the implementing of key decisions. It would be difficult to find unity or mutuality of interests in a bargaining unit consisting of a mixture of rank-and-file and supervisory employees. [Toyota Motor Phil. Corp. v. Toyota Motor Phil. Corp. Labor Union, G.R. No. 121084 (1997)] Effect of Mixed Commingling

Membership

Note: The rank and file union and the supervisors’ union operating within the same establishment may join the same federation or national union. [Art. 255] (4) Aliens General rule: All aliens, natural or juridical, […] are strictly prohibited from engaging directly or indirectly in all forms of trade union activities. [Art. 284] Exception: Aliens may exercise the right to self-organization and join or assist labor unions for purposes of collective bargaining, provided the following requisites are fulfilled: 1.

(2) To engage in concerned activities which are not contrary to law including the right to strike. [D.O. No. 14 Series of 2001 Guidelines Governing the Employment and Working Conditions of Security Guards and Similar Personnel in the Private Security Industry)

or

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. (Art. 256)

With valid working permits issued by the DOLE; and

2. They are nationals of a country which grants the same or similar rights to Filipino workers.

LABOR LAW

On Dec. 1986, President C. Aquino issued EO No. 111 which eliminated the provision which made security guards ineligible to join any labor organizations. In 1989, Congress passed RA 6715 which also did not impose limitations on the ability of security guards to join labor organizations. Thus, security guards “may now freely join a labor organization with the rank-and-file or the supervisory union, depending on their rank.” [Manila Electric Co. v. SOLE, G.R. No. 91902 (1991)] I. W HO CANNOT FORM, JOIN OR ASSIST LABOR ORGANIZATIONS (1) Managerial employees (2) Confidential employees (3) Non-employees (4) Member-employee of a cooperative (5) Employees of international organizations (6) High-level government employees (7) Members of the AFP, police officers, policemen, firemen and jail guards

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(1) Managerial Employees A 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. [Art. 219 (m)] Managerial Employee is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge, assign or discipline employees. [Book V, Rule I, Sec. 1(xx)] Managerial employees are not eligible to join, assist or form any labor organization. […] [Art. 255] Managerial functions refer to powers such as to: (1) Effectively actions;

recommend

managerial

(2) Formulate or execute management policies or decisions; or (3) Hire, transfer suspend, lay-off, recall, dismiss, assign or discipline employees. (San Miguel Supervisors and Exempt Union v Laguesma, 1997) (2) Confidential employees Nature of Access Test A confidential employee is one who, by the nature of his functions, assists or acts in a confidential capacity, and who formulates, determines and effectuates management policies in the field of labor relations. Requisites: The employee must: (1) Assist or act in a confidential capacity, AND (2) To persons who formulate, determine, and effectuate management policies in the field of labor relations Stated differently

LABOR LAW

[San Miguel Supervisors and Exempt Union v. Laguesma, G.R. No. 110399, (1997)] Rationale of Exclusion of Confidential Employees By the very nature of their functions, they assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. (Thus there is a fiduciary and confidential relationship between manager and employer.) It is not far-fetched that in the course of Collective Bargaining, they might jeopardize that interest which they are duty bound to protect. [Metrolab Industries Inc. v. Roldan-Confessor, G.R. No. 108855 (1996)] Employees should not be placed in a position involving a potential conflict of interests. Management should not be required to handle labor relations matters through employees who are represented by the union with which the company is required to deal and who in the normal performance of their duties may obtain advance information of the company’s position with regard to contract negotiations, the disposition of grievances, or other labor relations matters. [San Miguel Supervisors and Exempt Union v. Laguesma, G.R. No. 110399, (1997)] The disqualification of managerial and confidential employees from joining a bargaining unit for rank and file employees is already well-entrenched in jurisprudence. While Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly confidential records. [Standard Chartered Bank Employees Union v SCB, G.R. No. 161933 (2008)]

(1) the confidential relationship must exist between the employees and his supervisor, and (2) the supervisor must handle the prescribed responsibilities relating to labor relations. PAGE 145 OF 222

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Function Test: Nom enclature is not controlling The mere fact that an employee is designated “manager” does not ipso facto make him one. Designation should be reconciled with the actual job description of the employee. [Paper Industries Corp. of the Philippines. v. Laguesma, G. R. No.101738, 2000] Confidential information: Must relate to labor relations and not from a business standpoint An employee must assist or act in a confidential capacity and obtain confidential information relating to labor relations policies. Exposure to internal business operations of the company is not per se a ground for the exclusion in the bargaining unit. [Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, G.R. No. 162025, 2010] (3) Non-Employees Persons who are not employees of a company are not entitled to the constitutional right to join or form a labor organization for purposes of collective bargaining. The question of whether employer-employee relationship exists is a primordial consideration before extending labor benefits under the workmen's compensation, social security, Medicare, termination pay and labor relations law.[…] [Singer Sewing Machine Co. v. Drilon, G.R. No. 91307, 1991] But they can still form labor union provided that they are employees of the contractor. A labor union can be established in the business of the contractor but not the principal employer. [Professor Battad] (4) Employee-Mem ber of Cooperative General Rule: Employees who at the same time are members of an electric cooperative are not entitled to form or join unions for purposes of collective bargaining agreement, for certainly an owner cannot bargain with himself or his co-owners. [Batangas-I Electric Cooperative Labor Union v. Romeo A. Young, G.R. No. 62386, (1988)]

LABOR LAW

Members of cooperatives are not eligible […] even though they do not participate in the actual management of the cooperative. Irrespective of their degree of participation, they are still co-owners [Benguet Electric Cooperative v. Ferrer-Calleja, G.R. No. 79025 (1989)] Exception: Employees who withdrew their membership from the cooperative are entitled to form or join a labor union for the negotiations of a Collective Bargaining Agreement. [CENECO v. DOLE, G.R. No. 94045 (1991)] (5) Employees Organizations

of

International

International organizations are endowed with some degree of international legal personality. They are granted jurisdictional immunity. Immunity […] is granted to avoid interference by the host country in their internal workings. The determination [by the executive branch] has been held to be a political question conclusive upon the Courts in order not to embarrass a political department of Government. [Hence], a certification election cannot be conducted in an international organization to which the Philippine Government has granted immunity from local jurisdiction. [International Catholic Migration Commission v. Calleja, G.R. No. 85750 (1990)] (6) High-level / Government Employees

Managerial

High-level employees of the government whose functions are normally considered as policy-making or managerial or whose duties are of a highly confidential nature shall not be eligible to join the organization of rankand-file government employees. [Sec. 3, E.O. 180] (7) Members of the AFP, Policemen, Police Officers, Firemen and Jailguards Members of the AFP, Policemen, Police Officers, Firemen and Jailguards are expressly excluded by EO 180 §4 from the

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coverage of the law which provides guidelines for the exercise of the right to organize of government employees.

A.2. BARGAINING UNIT Definition “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. [Sec. 1(d), Rule I, Book V] It is “a group of employees of a given employer comprised of all or less than all of the entire body of employees, which the collective interests of all the employees indicate to be best suited to serve reciprocal rights and duties of the parties consistent with equity to the employer. [Belyca Corp. v. Calleja, G.R. No. 77395 (1988) citing Rothenberg] Functions of Bargaining Unit

an

Appropriate

(1) An ELECTORAL DISTRICT. – It marks the boundaries of those who may participate in a certification election. (2) An ECONOMIC UNIT. – They are a group of employees with community of interests. (3) A SOVEREIGN BODY. – It selects the sole and exclusive bargaining agent. Role of a bargaining unit 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 of such unit for the purpose of collective bargaining. [Art. 267] Right of individual or group employees to present grievances

of

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

LABOR LAW

shall have the right, to participate in the 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 labor-management councils shall be elected by at least the majority of all employees in said establishment. [Art. 267] CBA Coverage When there has been a factual determination by the Labor Arbiter that the petitioners were regular employees, said employees shall fall within the coverage of the bargaining unit and are therefore entitled to CBA benefits as a matter of law and contract. [Farley Fulache, et al. v. ABS-CBN, G.R. No. 183810, 2010] Effect of Prior Agreement [A prior agreement] as to the exclusion [of workers] from the bargaining […] can never bind subsequent federations and unions as [employees were not privy to that agreement]. And even if [they were privy], it can never bind subsequent federations and unions because it is a curtailment of the right to self­organization guaranteed by the labor laws [General Rubber & Footwear Corp. v. BLR, G.R. No. 74262, (1987)] Rationale It is a curtailment of the right to selforganization. During the freedom period, the parties may not only renew the existing collective bargaining agreement but may also propose and discuss modifications or amendments thereto. [DLSU v. DLSUEA, G.R. No. 109002, (2000)] Effect of Inclusion of Employees Outside the Bargaining Unit or Commingling General Rule: It shall not be a ground for the cancellation of the registration of the union. Said employees are automatically

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deemed removed from the list of membership of said union. [Art. 256] Exception: Unless such mingling was brought about by misrepresentation, false statement or fraud under Article 247 (Grounds for cancellation of Union Registration) of the Labor Code. [SMCC-Super v. Charter Chemical and Coating Corporation, G.R. No. 169717 (2011)] Corporate Entities

General Rule: Two companies having separate juridical personalities shall NOT be treated as a single bargaining unit. [Diatagon Labor Federation Local v. Ople, G.R. No. L44493-94 (1980)] Exception: Pervasive Unitary Aspect of Managem ent Doctrine The cross-linking of the agencies command, control, and communication systems indicate their unitary corporate personality. Accordingly, the veil of corporate fiction should be lifted for the purpose of allowing the employees of the three agencies to form a single labor union. [Philippine Scouts Veterans v. Torres, G.R. No. 92357 (1993)]

LABOR LAW

facilities are in the same compound are NOT sufficient to justify piercing the corporate veil. (Indophil Textile Mills Workers Union v. Calica, 1992; Diatagon Labor Federation v. Ople, 1980) Spun-off corporations The transformation of companies is a management prerogative and business judgment which the courts cannot look into unless it is contrary to law, public policy or morals. If, considering the spin-offs, the companies would consequently have their respective and distinctive concerns in terms of nature of work, wages, hours of work and other conditions of employment. The nature of their products and scales of business may require different skills, volumes of work, and working conditions which must necessarily be commensurate by different compensation packages. (San Miguel Union v Confesor, 1996)

A.2.A. TEST TO DETERMINE THE CONSTITUENCY OF AN APPROPRIATE BARGAINING UNIT 4 Factors: (1) Will of the Employees (Globe Doctrine)

Principles in determining whether to establish separate bargaining units

(2) Affinity and unity of employees’ interest (Substantial Mutual Interests Rule)

(1) The existence of a bona fide business relationship between the 2 companies is not proof of being a single corporate entity, especially when the services provided by the other company are merely auxiliary. (2) The fact that there are as many bargaining units as there are companies in a conglomeration of companies is a positive proof that a corporation is endowed with a legal personality DISTINCTLY ITS OWN, independent and separate from other corporations.

(3) Prior collective bargaining history (4) Employment status [Democratic Labor Association v. Cebu Stevedoring Co. Inc, G.R. No. L-10321, (1958)] [UP v FerrerCalleja, (1992)] Note: Of these 4 factors, the court has identified that it is the 2nd factor which has emerged as the standard in determining the proper constituency of a collective bargaining unit. Other factors:

(3) Separate legitimate purposes militate against treating one corporation as an adjunct or alter ego of the other. (4) The fact that the businesses are related, that some of the employees are the same persons working in the other company and the physical plants, offices and PAGE 148 OF 222

(5) Geography and Location (6) Policy of avoiding fragmentation of the bargaining unit

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LABOR LAW

(1) Globe Doctrine

(4) Employment status

A practice designated as the "Globe doctrine," sanctions the holding of a series of elections, not for the purpose of allowing the group receiving an overall majority of votes to represent all employees, but for the specific purpose of permitting the employees in each of the several categories to select the group which each chooses as a bargaining unit. [Kapisanan ng mga Manggagawa sa Manila Road Co. v. Yard Crew Union, G.R. Nos. L16292-94 (1960)]

Among the factors to be considered is the employment status of the employees to be affected—[regular, casual, seasonal, probationary etc] that is the positions and categories of work to which they belong, and the unity of employees' interest such as substantial similarity of work and duties. [Belyca Corp. v. Calleja, G.R. No. 77395 (1988)]

Rationale

Geography and significant role if:

Highly skilled or specialized technical workers may choose to form their own bargaining unit because they may be in better position to bargain with the employer considering the market value of their skills.

(5) Geography and Location location

only

play

a

(1) The separation between the camps and the different kinds of work in each all militate in favor of the system of separate bargaining units; (2) When the problems and interests of the workers are peculiar in each camp or department;

(2) Community or Mutuality of Interests

The basic test of an asserted bargaining unit’s ACCEPTABILITY is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights… It considers the desires of the employees as one of the factors. [P v. Ferrer-Calleja, G.R. No. 96189, (1992)] Rationale There are greater chances of success for the collective bargaining process. The bargaining unit is designed to maintain the mutuality of interest among the employees in such unit. When the interest between groups has changed over time, there is reason to dissolve, change or expand a certain bargaining unit. (3) Prior Collective Bargaining History

The existence of a prior collective bargaining history is neither decisive nor conclusive in the determination of what constitutes an appropriate bargaining unit. [National Association of Free Trade Unions v. Mainit Lumber Development Company Workers Union, G.R. No. 79526, (1990)]

(3) The system of having one collective bargaining unit in each camp has operated satisfactorily in the past. [Benguet Consolidated Inc. and Balatok Mining Co. v. Bobok Lumberjack Association, G.R. No. L-11029 (1958)] (6) Policy of avoiding fragm entation of the bargaining unit It bears noting that the goal of the DOLE is geared towards "a single employer wide unit which is more to the broader and greater benefit of the employees working force." The philosophy is to avoid fragmentation of the bargaining unit so as to strengthen the employees’ bargaining power with the management. To veer away from such goal would be contrary, inimical and repugnant to the objectives of a strong and dynamic unionism. [Phil. Diamond Hotel and Resort Inc v Manila Diamond Hotel and Employees Union, GR No. 158075 (2006)] Confidential employees lumped with management Since the confidential employees are very few and are, by practice and tradition, identified with management [… NLRC] has allowed

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their inclusion in the bargaining unit of supervisors who are likewise identified with management. Creating fragmentary units would not serve the interest of industrial peace. […] The Court is aware of the ineffectiveness of a small union with a scanty members as bargaining unit. The breaking up of bargaining units into tiny units will greatly impair their organizational value. [Filoil Refinery Corp. v. Filoil Supervisory and Confidential Employees Union, G.R. No. L26736 (1972)] UNION REPRESENTATION Methods of Establishing Status

LABOR LAW

Certificate of

Duly certified by

Registration

President of requesting union

Creation of chartered local

President of the federation of the local

Both certificates should be attached to the request

(3) Regional Director shall act on the request Majority



When: Within one (1) day from submission of request

Sole and Exclusive Bargaining Agent (SEBA) Certification 2. Consent Election 3. Run-Off Election 4. Certification Election Note: D.O. 40-I-15 replaced Voluntary Recognition with SEBA certification, as of September 7, 2015.



Action:

1.



A.2.B. SEBA CERTIFICATION Procedure [Rule VII, Book V] (1) File Request of SEBA Certification •

Who: Any organization

legitimate

labor



File where: Regional Office which issued its certificate of registration or certificate of creation of chartered local

(2) Indicate in the request: (a) Names and requesting organization;

addresses legitimate

of

the labor

sought

to

Determine whether request is compliant with the preceding section and if bargaining unit sought to be represented is organized or not; and

o

Request a copy of the payroll

If Regional Director finds it deficient, he/she shall advise the requesting union or local to comply within ten (10) days from notice. Failure to comply within the prescribed period shall be deemed withdrawal of the request.

IF: UNORGANIZED ESTABLISHMENT (A) W ith only 1 organization

legitimate

labor

Regional Director shall call a conference within five (5) working days for the SUBMISSION of:

(b) Name and address of the company where it operates; (c) Bargaining unit represented;

o

be

(d) Approximate number of employees in the bargaining unit; and (e) Statement of the existence or nonexistence of other labor organization/CBA. PAGE 150 OF 222

(a) Names of employees in the covered bargaining unit who signify support for certification; and these employees comprise at least majority of the number of employees in the covered bargaining unit; and (b) Certification under oath by president that all documents submitted are true and correct based on personal knowledge

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(B) W ith more than 1 legitimate labor organization Regional Director shall refer it to the election officer for conduct of certificate election. IF: ORGANIZED ESTABLISHMENT Regional Director shall refer it to the mediator-arbitrator for determination and propriety of conducting a certification election. (4) Regional Director shall act on the submission Incomplete requirements

The request shall be referred to election officer for the conduct of election pursuant to Rule IX.

Complete requirements

Regional Director shall issue a certification as SEBA

LABOR LAW

Substantive Requirements (1) Unorganized establishment; (2) Only one union asking for recognition; (3) The members of the bargaining unit did not object to the projected recognition of the union. (Book V, Rule VII, Sec. 2) Procedural Requirements The notice of voluntary recognition shall be accompanied by the original copy and two (2) duplicate copies of the following documents: (1) A joint statement under oath of voluntary recognition attesting to the fact of voluntary recognition (2) Certificate of posting of the joint statement of voluntary recognition for fifteen (15) consecutive days in at least two (2) conspicuous places in the establishment or bargaining unit where the union seeks to operate;



Period: Fifteen (15) consecutive days

(3) The approximate number of employees in the bargaining unit, accompanied by the names of those who support the voluntary recognition comprising at least a majority of the members of the bargaining unit; and



Where: At least two (2) conspicuous places in the establishment or covered bargaining unit.

(4) A statement that the labor union is the only legitimate labor organization operating within the bargaining unit.

(5) Regional Director shall post the SEBA Certification

Effect of SEBA Certification The certified union or local shall enjoy all the rights and privileges of an exclusive bargaining agent of all the employees in the covered bargaining unit SEE: VOLUNTARY RECOGNITION Note: D.O. 40-I-15 replaced Voluntary Recognition with SEBA certification. This section is for comparison with SEBA certification. Voluntary Recognition refers to the process by which a legitimate labor union is recognized by the employer as the exclusive bargaining representative or agent in a bargaining unit, reported with the Regional office in accordance to Rule VII, Sec 2 of these Rules. (Book V, Rule I, Sec. 1 [bbb]) Requirements

All accompanying documents of the notice for voluntary recognition shall be certified under oath by the employer representative and president of the recognized labor union. The employer may voluntarily recognize the representation status of a union in unorganized establishments. However, in cases where an establishment is already organized, as when a petition for certification election has already been filed by a union, if the company voluntarily recognizes a different union during such time, then the company’s voluntary recognition is void. (SLECC v Sec. of Labor, 2009)

A.2.C. CONSENT ELECTION "Consent Election" means the election voluntarily agreed upon by the parties with or without the intervention by DOLE (Book V, Rule I, Sec. 1(h))

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Procedure 1.

The parties may either a. Voluntarily agree to hold an election; or b. A petition for certification election had first been filed but due to intercession of Med-Arbiter, the contending unions agree to hold a consent election

2. Mediator-Arbiter shall call for the consent election, reflecting the parties’ agreement and the call in the minutes of the conference. (Book V, Rule VIII, Sec. 10) 3. Regional Director or authorized representation will determine the election officer by raffle in the presence of representatives of the contending unions if they so desire 4. First pre-election conference is scheduled within ten (10) days from the date of the agreement. Subsequent conferences may be called to expedite and facilitate the holding of the consent election.

LABOR LAW

the 80 valid votes and the contending unions obtained 60 votes (which exceeds½ of the total), a run-off election is proper. The run-off will be between the labor unions receiving “the two highest number of votes.” The runoff is NOT between two unions but between “two highest votes”. Thus, the run-off will be among Union “A”, “B” and “C.” (Azucena) Procedure for Run-Off Election Election officer shall motu proprio conduct a run-off election within ten (10) days from the close of the election proceedings between the labor unions receiving the two highest number of votes. Same voters’ list used in the certification election shall be used in the run-off election. The labor union receiving the HIGHER number of VALID VOTES cast shall be certified as the winner. Note: Please note the difference between valid votes cast versus votes cast – valid votes excludes spoiled votes.

A.2.E. CERTIFICATION ELECTION A.2.D. RUN-OFF ELECTION

Definition

A "Run-Off election" refers to an election between the labor unions receiving the two (2) highest number of votes in a certification election when the following requisites have been complied with:

“Certification Election" is the process of determining, through secret ballot, the sole and exclusive representative of the employees in an appropriate bargaining unit, for purposes of collective bargaining or negotiation. [Sec. 1(h), Rule I, Book V]

1.

Valid election;

2. The election provides for three (3) or more choices (“No Union” is considered one choice – Professor Battad); 3. None of the contending UNIONS received a majority of the VALID VOTES cast; 4. No objections or challenges which if sustained can materially alter the results; and 5. The total number of votes for all contending UNIONS is at least fifty (50%) of the number of VOTES cast. Illustration The CBU has 100 members and 80 of which voted. Union “A”= 30; Union “B”= 15; Union “C”=15 and No Union= 20. There were no invalid votes. Since none got the majority of

Purpose The purpose of a certification election is precisely the ascertainment of the wishes of the majority of the employees in the appropriate bargaining unit: to be or not to be represented by a labor organization, and in the affirmative case, by which particular labor organization. [Reyes v. Trajano, G.R. No. 84433 (1992)] Nature of proceeding It is the most effective and the most democratic way of determining which labor organization can truly represent the working force in the appropriate bargaining unit of a company [Samangang Manggawa sa PERMEX v SOLE, G.R. No. 107792 (1998)]

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It is a fundamental postulate that the will of the majority given expression in an honest election with freedom on the part of the voters to make their choice, is controlling. [PLUM Federation of Industrial and Agrarian Workers v. Noriel, G.R. No. L-48007 (1978)] It is not litigation, but a mere investigation of a non-adversary. The determination of the proceeding does not entail the entry of remedial orders or redress of rights, but culmination solely in an official designation of bargaining units and an affirmation of the employees expressed choice of bargaining agent. [Young Men Labor Union Stevedores v. CIR, G.R. No. L-20307 (1965)] Technical rules and objections should not hamper the correct ascertainment of the labor union that has the support or confidence of the majority of the workers and is thus entitled to represent them in their dealings with management. [Port Workers Union v. Laguesma, G.R. Nos. 94929-30, (1992)] Certification Election

To elect union officers

All members of the appropriate bargaining unit may vote.

Only union members may vote.

(4) Employer (when requested to bargain collectively and no existing CBA) (1) Legitim ate Labor Organization "Legitimate labor organization" means any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof. [Art. 219 (h)] (2) Local/Chapter A duly registered federation or national union may directly create a local chapter by issuing a charter certificate indicating the establishment of the local chapter. The chapter shall acquire legal personality only for purposes of filing a petition for certification election from the date it was issued a charter certificate. [Art. 241] (3) National Union/Federation A group of legitimate labor unions in a private establishment organized for collective bargaining or for dealing with employers concerning terms and conditions of employment for their member union or for participating in the formulation of social and employment policies, standards and programs, registered with the BLR in accordance with Rule III Sec. 2-B of the IRR. [Book V Rule 1 Sec. 1 (kk)]

Union Election

To determine the Exclusive Bargaining Agent

LABOR LAW

W ho may vote All employees whether union members or not, as long as they belong to the appropriate bargaining unit can vote. W ho may file a petition for certification election [Sec. 1, Rule VIII, Book V]

The national union/federation shall not be required to disclose the names of the local chapter’s officers and members. [Sec. 1, Rule VIII, Book V] (4) Employer Requisites: 1.

(1) Legitimate labor organization

Employer is requested collectively; AND

to

bargain

(2) Local/chapter that has been issued a charter certificate

2. No existing registered CBA in the unit (Art. 270)

(3) National union or federation in behalf of its local/chapter (has issued a charter certificate to its local/chapter)

Bystander rule The employer shall not be considered a party in the petition with a concomitant right to oppose a petition for certification election.

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The employer’s participation shall be limited to: (1) being notified or informed of petitions of such nature (2) submitting the list of employees during the pre-election conference should the Med-arbiter act favorably on the petition [Art. 271] The principle of bystander shall be strictly observed throughout the conduct of certification election. The employer shall not harass, intimidate, threat, or coerce employees before, during and after elections. [Sec. 1, Rule IX, Book V] However, manifestation of facts that would aid the mediator-arbiter in expeditiously resolving the petition such as existence of bar rule may be considered. [Sec. 1, Rule VIII, Book V] The employer is not a party to a certification election, which is the sole or exclusive concern of the workers. The only instance when the employer may be involved in that process is when it is obliged to file a petition for certification election on its workers’ request to bargain collectively pursuant to Art. 258. [Hercules Industries, Inc. v Sec. of Labor, G.R. No. 96255 (1992)] The employer is a total stranger in the process of certification election. The employer has no standing to file a motion to dismiss. [PT&T v Laguesma, G.R. No. 101730 (1993)] A company’s interference in the Certification Election creates a suspicion that it intends to establish a company union. [Oriental Tin Can Labor Union v. Secretary of Labor, G.R. No. 116751 (1998)]

LABOR LAW

Two or more petitions involving same bargaining unit Filed in one Regional Office

Automatically consolidated with Med-Arbiter who first acquired jurisdiction

Filed in different Regional Offices

Regional Office in which the petition was first filed shall exclude all others; Latter shall indorse the petition to the former for consolidation

CERTIFICATION ELECTION IN UNORGANIZED ESTABLISHMENT

AN

Unorganized Establishment It is an establishment where there is no certified bargaining agent. [Art. 269] Procedure [Art. 269] (1) File a petition for certification election. (2) Upon filing of the petition, the MedArbiter shall automatically conduct a certification election. Filing of petition is by a legitim ate labor organization It cannot be an unregistered labor organization. This is best read in relation to Art. 242 which enumerates the rights granted to a legitimate labor organization and one of those rights is the right to be chosen as the exclusive bargaining representative. This is one way the law encourages union registration. CERTIFICATION ELECTION IN ORGANIZED ESTABLISHMENT

AN

Organized Establishm ent Venue for filing the petition File with the Regional office which issued the petitioning union’s certificate of registration or creation of chartered local. At petitioner’s option, it may file the petition with the supporting documents online. [Sec. 2, Rule VIII, Book V]

Refers to an enterprise where there exists a recognized or certified sole and exclusive bargaining agent. [Sec. 1(ll), Rule I, Book V] Procedure [Art. 268] (1) File a verified petition questioning the majority. (2) It must be filed within the 60-day period before expiration of CBA (freedom period)

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(3) Supported by written consent of at least 25% of ALL employees in the bargaining unit (substantial support) (4) Med-Arbiter shall automatically order an election. W HEN PETITION MUST BE FILED Freedom Period This refers to the last 60 days in a Collective Bargaining Agreement (CBA) when rival union representation can be entertained during the existence of a CBA. It is during this particular period when the majority status of the incumbent bargaining agent can be challenged. [Tanduay Distillery Labor Union v. NLRC, G.R. No. 75037(1987)] Rationale of prohibition outside the freedom period

of

filing

be conducted. [Scout Albano Memorial College v. Noriel, G.R. No. L-48347 (1978)] Inapplicable Intervention

Signing of authorization is merely preparatory What is prohibited is the filing of the petition for certification election outside the 60-day freedom period. The signing of the authorization to file was merely preparatory to the filing of the Petition for Certification Election, or an exercise of the right to selforganization. [PICOP Resources Inc. v. Ricardo Dequita, G.R. No. 172666 (2011)] 25% Substantial Support Rule In organized establishments, the incumbent sole bargaining agent should not be easily replaced for that would disturb industrial peace. To justify the disturbance, it must appear that at least a substantial number (25% requirement) seeks to have a new exclusive bargaining unit. Discretionary rule If the petition does not comply with the substantial support requirement, the BLR may exercise its discretion in determining whether or not a certification election must

to

Motions

for

The requisite written consent of at least 20% (now 25%) of the workers in the bargaining unit applies to certification election only, and not to motions for intervention. Nowhere in the legal provisions does it appear that a motion for intervention in a certification election must be accompanied by a similar written consent. Not even in the Implementing Rules of the Labor Code [PAFLU v. Calleja, G.R. No. 79347 (1989)] Intervenors 1.

To ensure industrial peace between the employer and its employees during the existence of the CBA. [Republic Planters Bank Union v. Laguesma, G.R. No. 119675 (1996)]

LABOR LAW

Incumbent bargaining agent as forced intervenor;

2. Legitimate labor union other than the incumbent bargaining agent (1) Forced Intervenor: bargaining agent

Incum bent

The incumbent bargaining agent shall automatically be one of the choices in the certification election as forced intervenor. [Sec. 7, Rule VIII, Book V] (2) Legitimate intervenor

labor

union

as

an

Any legitimate labor union other than the incumbent bargaining agent operating within the bargaining unit may file motion for intervention with the Med-Arbiter. [Sec. 8, Rule VIII, Book V] W hen motion for intervention is filed [Sec. 8, Rule VIII, Book V] Unorganized Establishment

Any time prior to the decision of the Med-Arbiter

Organized establishment

During the freedom period

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Effect of withdrawal of signatures

LABOR LAW



The employees’ withdrawal from a labor union made •

Before the filing of the petition for certification election is presumed voluntary,

After the filing of such petition is considered to be involuntary and does not affect the petition. [S.S. Ventures International vs. S.S. Ventures Labor Union, G.R. No. 161690 (2008)

Organized vs. Unorganized Establishm ent Art. 268: Organized Sole and exclusive Bargaining agent Petition filed

Freedom Period

Art. 269: Unorganized

Existing, has one

None

Has to be a VERIFIED petition

No need to be verified

No petition for Certification election EXCEPT within 60 days before the expiration of the collective bargaining agreement (See Art. 264 & 265)

Not applicable. No freedom period. Can file petition anytime.

Take note how SC interpreted the term “WITHIN”. What is the rationale of freedom period in Organized establishments, why is there none in unorganized establishments? It has something to do with industrial peace Must be duly supported by 25% of ALL THE MEMBERS OF THE APPROPRIATE BARGAINING UNIT.

Substantial support rule

Rationale Law wants to know the intention of the employees – If they really want a Certification election, since they already have a bargaining agent.

PROCEDURE PETITION 1.

AFTER

FILING

OF

NO substantial support rule. Rationale Intention of law is to bring in the union, to implement policy behind Art. 218a.

8. Pre-Election Conference 9. Conduct of election

Raffling of case to mediator-arbiter

2. Preliminary Conference and hearing

10. Challenging of votes and on the spot questions

3. Conduct of hearings

11. Protesting

4. Determine if petition should be dismissed on grounds stated in Section 14

12. Canvassing of votes

5. Order/Decision on the petition 6. Appealing the order/decision on the petition

13. Nullification of Election Results 14. Proclamation and Certification of the result of the election 15. Appeal from Certification Election Orders

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(1) Raffle of case to mediator-arbiter Regional Director or his/her duly authorized representative shall immediately assign it to a mediator-arbiter by raffle. If the petitioner desires, the raffle shall be done in its presence. [Sec. 5, Rule VIII, Book V]

LABOR LAW

(4) Determ ine if petition should be dismissed based on grounds stated in Section 14. The grounds to dismiss the petition are: (a) Petitioning union union/federation is:

or

national

(i) Not listed in DOLE’s registry of legitimate labor unions; or

(2) Preliminary Conference Med-Arbiter shall conduct a preliminary conference and hearing within ten (10) days from receipt of the petition to determine the following: (a) The bargaining unity to be represented; (b) Contending labor unions

(ii) Registration certificate cancelled with finality

has

been

(b) Failure of a local/chapter or national union/federation to submit a duly issued charter certificate upon filing of the petition for certification election (c) Contract Bar rule

(c) Possibility of a consent election (d) Existence of any of the bars to certification election under Section 3; and (e) Such other matters as may be relevant for the final disposition of the case [Sec. 9, Rule VIII, Book V] Note: If contending unions agree to holding of consent election, in which case it shall be called a consent election. [Sec. 10, Rule VIII, Book V] (3) Med-Arbiter to conduct hearings If contending unions fail to agree to a consent election during preliminary conference, the Med-Arbiter may conduct as many hearings as he/she may deem necessary, but in no case shall the conduct exceed fifteen (15) days from date of scheduled preliminary conference/hearing, after which the petition shall be considered submitted for decision. 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. Extensions of time shall not be entertained. [Sec. 11, Rule VIII, Book V]

(d) One-Year Bar rule (e) Negotiation and Deadlock Bar Rule (f) In an organized establishment, the failure to submit the 25% signature requirement to support the filing of the petition. (g) Non-appearance of the petitioner for two (2) consecutive scheduled conferences before the mediator-arbiter despite due notice; and (h) Absence of employer-employee relationship between all the members of the petitioning unit and the establishment where the proposed bargaining unit is sought to be represented. NOTE: See page 164 for the 4 Bars to Certification Election (One-year bar rule, Negotiation bar rule, Deadlock bar rule, Contract bar rule) Commingling is not a ground Inclusion as union members of employees outside the bargaining unit is not a ground for cancellation of the registration of the union. Said employees are automatically deemed removed from the list of membership. [Sec. 15, Rule VIII, Book V]

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Posting of notice Certificate Election

LABOR RELATIONS

of

Petition

for

This is the responsibility of the regional direction and his/her authorized representatives. [Sec. 7, Rule VIII, Book V]

(f) Directive to the employer and the contending unions to submit within ten (10) days from receipt of order: (i) The certified list of employees in the bargaining unit, or (ii) Payrolls covering the members of the bargaining unit for the last three (3) months prior to the issuance of the order, where necessary

(5) Order or decision on the petition Mediator-Arbiter shall issue a ruling granting or denying the petition W hen •

General rule: Within ten (10) days from last hearing



Exception: In organized establishments, grant of petition only after lapse of the freedom period

LABOR LAW

(6) Appealing the order granting or denying the conduct of certification election [Sec. 19-20, Rule VIII, Book V] Organized

How •

Personally to the parties



Copy furnished to the employer

Unorganized

The ruling for the conduct of a certification election shall state the following: (a) Name of employer or establishment;

Dismissed or denied Granted Dismissed or denied Granted

Appeal to Office of Secretary Unappealable

W hen filed Within ten (10) days from receipt. W here filed Regional Office where the petition originated

(b) Description of the bargaining unit; (c) Statement that none of the grounds for dismissal; stated in Section 14 exists;

Form of appeal •

Verified under oath

(d) Names of the contending labor unions which shall appear in the following order:



(i) Petitioner unions in the order of the date of filing of their respective petitions

With memorandum of appeal specifically stating the grounds relied upon by appellant



With the supporting arguments and evidence

(ii) The forced intervenor

Effect of appeal

(iii) “No union” (e) If the local/chapter is one the contending unions, a directive to personally submit to the election officer its certificate of creation at least five (5) working days before the actual conduct of the certification election. This is to afford an individual employee-voter an informed choice. Non-submission of this requirement as certified by election officer shall disqualify the local/ chapter from participating in the certification election

filing

memorandum

of

Stays the holding of any certification election. [Sec. 23, Rule VIII, Book V] Reply to Appeal Reply by any party to the petition shall be filed within ten (10) days from receipt and filed directly with the office of the Secretary. [Sec. 22, Rule VIII, Book V] W hen no appeal is filed The decision shall be final and executory if no appeal is filed within the ten (10) day period. [Sec. 21, Rule VIII, Book V]

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Decision of the Secretary Period to decide: Fifteen (15) days from receipt of entire records of petition to decide the appeal. Secretary’s decision shall be final and executory within ten (10) days from receipt by parties. [Sec. 23, Rule VIII, Book V] Note: No motion for reconsideration of decision shall be entertained. [Sec. 23, Rule VIII, Book V] Im plem entation of decision General Rule: Shall not be stayed Exception: Restrained by appropriate court

LABOR LAW

(b) Payrolls covering the members of the bargaining unit at the time of the filing of petition (where necessary) Failure of party to appear during preelection conference despite notice [Sec. 4, Rule IX, Book V] This shall be considered a waiver of right to: (a) To be present; and (b) To question or object to any of the agreements reached in the pre-election conference Shall NOT deprive the non-appearing party of the right to: (a) Be furnished notices; and

[Sec. 24, Rule VIII, Book V] (7) Raffling of the case to an Election Officer Regional Director shall cause the raffle of the case to an Election Officer who shall have control of:

(b) To attend conferences

subsequent

pre-election

Minutes of pre-election [Sec. 5, Rule IX, Book V]

conference

Election officer shall keep the minutes of matters raised and agreed upon. Parties shall acknowledge the completeness and correctness of entries in the minutes by affixing their signatures.

(a) Pre-election conference; and (b) Election proceedings When: Within twenty-four (24) hours from receipt of notice of final judgment granting conduct of certification election [Sec. 2, Rule IX, Book V]

When parties refuse to sign the minutes, the election officer shall note such fact in the minutes, including the reason for refusal to sign the same. In all cases, parties shall be furnished a copy of the minutes.

(8) Pre-Election Conference Notice of Pre-Election Conference The election officer shall cause the issuance of notice of pre-election conference to contending unions When: Within twenty-four (24) hours from Election Officer’s receipt of assignment, Schedule of pre-election conference When: Within ten (10) days from receipt of assignment Employer to submit: [Sec. 3, Rule IX, Book V] (a) Certified list of employees in the bargaining unit; or

QUALIFICATION OF VOTERS Eligible Voter Eligible voter refers to a voter belonging to the appropriate bargaining unit that is the subject of the petition for certification election [Sec. 1(q), Rule VIII, Book V] All employees who are members of the appropriate bargaining unit three (3) months prior to the filing of the petition shall be eligible to vote. [Sec. 6, Rule IX, Book V] All rank and file employees in the appropriate bargaining unit, whether probationary or permanent are entitled to vote. The Code makes no distinction as to their employment status. All they need to be eligible to support the petition is to belong to a bargaining unit.

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[Airtime Specialists, Inc. v Ferrer-Calleja, G.R. No. 80612-16 (1990)]

LABOR LAW

WHO: Election Officer and/or authorized DOLE personnel shall cause the posting WHAT: Notice of election

Rationale for Non-Distinction Policy Collective bargaining covers all aspects of the employment relation and the resultant CBA binds all employees in the bargaining unit. All rank and file employees, probationary or permanent, have a substantial interest in the selection of the bargaining representative. [Airtime Specialists, Inc. v Ferrer-Calleja, G.R. No. 80612-16 (1990)] Dismissed employees [Sec. 6, Rule IX, Book V] General Rule: Dismissed employees who contested legality of dismissal in a forum of appropriate jurisdiction at the time of issuance of order for conduct of a certificate election Exception: The dismissal was declared valid in a final judgment at the time of the conduct of the certification election.

WHERE: 2 conspicuous places in company premises WHEN: At least ten (10) days before actual election Contents of Notice (1) Date, time and venue/s of election (preferably within the establishment); (2) Names of all contending unions; (3) Description of the bargaining unit (4) List of eligible and challenged Voters. Posting of list of employees comprising the bargaining unit Shall be done by the DOLE personnel W hat cannot be waived by contending unions or employer (1) Posting of the notice of election

Disagreement over voters’ list over eligibility of voters [Sec. 6, Rule IX, Book V]

(2) Information required to be included therein

All contested voters shall be allowed to vote but their votes shall be segregated and sealed in individual envelopes.

The election shall be set on a regular business day. [IRR, Book V Rule IX Sec. 2]

Voting List and Voters

The basis of determining voters may be agreed upon by the parties (i.e. the use of payroll). [Acoje Workers Union v NAMAWU, G.R. No. L-18848 (1963)] Non-participation in previous election has no effect Failure to take part in previous elections is no bar to the right to participate in future elections. No law, administrative rule or precedent prescribes forfeiture of the right to vote by reason of neglect to exercise the right in past cases. [Reyes v. Trajano, G.R. No. 84433 (1992)] NOTICE REQUIREMENT [Sec. 7, Rule IX, Book V]

(3) Duration of the posting

The parties agreed to conduct the election on a regular business day but a strike was held on that day. The alleged strike and/or picketing of some employees at the company’s premises which coincided with the actual conduct of certification election might, perhaps have affected the actual performance of works by some employees, but did not necessarily make said date an irregular business day of the company. [Asian Design and Manufacturing Corp. vs. Ferrer­Calleja, G.R. No. L-77415 (1989)] (9) Conduct of Election Inspection to ensure secrecy and sanctity of ballot [Sec. 8, Rule IX, Book V] Who:

Posting of Notice PAGE 160 OF 222



Election Officer;



Union’s authorized representative; and

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Employer's authorized representative; and

LABOR LAW

(a) Name of union of his choice; or

When: Before start of actual voting

(b) “no Union” if he does not want to be represented by any union

Shall inspect:

Spoiled Ballots



Polling place;



Ballot boxes; and



Polling booths

A ballot that is torn, defaced, or contains marking which can lead another to clearly identify the voter who casts such vote [Sec. 1(ww), Rule I, Book V]

Prohibition on certain devices General Rule: No device that could record or identify the voter or undermine the secrecy and sanctity of ballot shall be allowed within the premises Exception: Devices brought in by the election officer Effect of premises

finding

devices

in

the

Confiscated by election officer and returned to owner after conduct of certificate election. Preparation of Ballots [Sec. 9, Rule IX, Book V]

If a voter inadvertently spoils a ballot, he shall return it to the Election Officer who shall destroy it and give him another ballot. [Sec. 10, Rule IX, Book V] Mem ber unintentionally om itted in master list of voters may either be: (a) May be allowed to vote if both parties agree; OR (b) Allowed to vote but ballot is segregated (10) Challenging of votes and on the spot questions [Sec. 11-12, Rule IX, Book V] Ballot of the voter who has been properly challenged during the pre-election conferences shall be:

Election Officer shall prepare the ballots in: (a) English; and (b) Filipino or local dialect

(a) Placed in an envelope sealed by Election Officer in the presence of:

Number of ballots should correspond to the number of voters in the bargaining unit plus a reasonable number of extra ballots for contingencies

(i) the voter; and (ii) representatives of the contending unions.

All ballots shall be signed at the back by:

(b) Election officer shall indicate on the envelope the:

(a) Election Officer; and (b) An authorized representative each of the contending unions

(i) Voter’s name; (ii) Union challenging the voter; and

Refusal or failure of party to sign ballots

(iii) Ground for the challenge (c) Sealed envelope shall be signed by:

Party waives its right to do so and election officer shall enter the fact of refusal or failure and the reason therefor in the records of the case Casting of Votes [Sec. 10, Rule IX, Book V] Voter must put: (a) Cross (x) (b) Check (✓) Where: Square opposite the

(i) Election Officer; and (ii) Representatives contending unions

of

the

Election Officer shall: (a) Note all challenges in the minutes of the election proceedings; and (b) Have custody of all envelopes containing the challenged votes PAGE 161 OF 222

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Opening of envelopes and question of eligibility Shall be passed upon by the mediator-arbiter only if the number of segregated votes will materially alter the results of the election. On-the-spot Questions What the election officer shall rule on: Any question relating to and raised during the conduct of election What the election officer SHALL NOT rule on: Question of eligibility which shall be decided by the Mediator-Arbiter Failure of any party or em ployer or representatives to appear This is deemed a waiver to be present and to question the conduct.

LABOR LAW

technicalities regarding the period for filing their protest [within the 5-day period] should not be taken against them. Mere technicalities should not be allowed to prevail over the welfare of the workers. What is essential is that they be accorded an opportunity to determine freely and intelligently which labor organization shall act on their behalf. [DHL-URFA-FFW v. BMP, G.R. No. 152094 (2004)] Note: [Sec. 1(p), Rule I, Book V] Election Proceedings refer to the period

Included: (a) Starting from the opening to the closing of the polls (b) Counting, tabulation and consolidation of votes Excluded: (a) Period for the final determination of the challenged votes

(11) Protesting [Sec. 13, Rule IX, Book V] Who may file: Any party-in-interest

(b) Canvass

Ground: On the conduct or mechanics of election How to protest:

(1) Record the protest in the minutes of the election proceedings; AND (2) Formalize and perfect the protest Within five (5) days after the close of the election proceedings, formalize the protest with specific grounds, arguments before the Med-Arbiter.

Canvassing of Votes [Sec. 14, Rule IX, (12) Book V]

Election precincts shall open and close on the date and time agreed upon during the preelection conference. After precincts have closed, the opening and canvass shall immediately proceed. •

Election officer shall count and tabulate the votes in the presence of the representatives of the contending unions.



Upon completion of canvass, the election officer shall give each representative a copy of the minutes of the election proceedings and results of the election.



Ballots and tally sheets shall be sealed in an envelope and signed by the election officer and the representatives of the contending unions and transmitted to the Med-Arbiter together with the minutes and results of the election within twentyfour (24) hours from the completion of the canvass.

Protests deemed dropped

Protests which are: (1) Not recorded in the minutes; AND (2) Formalized within the prescribed period General Reservation to file protest prohibited

Protesting party shall specify the grounds for protest. Failure to formalize within 5- days cannot be taken against the union.

The union misrepresented that they were independent which caused the members to disaffiliate and form a new union and their protest was not filed within the 5-day period. The failure to follow strictly the procedural PAGE 162 OF 222

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Election conducted in more than one region Consolidation of results shall be made within fifteen (15) days from the conduct. Certification of the Collective (13) Bargaining Agent [Sec. 17, Rule IX, Book V] Double Majority Rule

1. There must be a valid election; and Valid Election: At least majority of the number of eligible voters have casted their votes

(2) There are no material challenged votes Effect of Failure of Election [Sec. 19, Rule IX, Book V]

Shall not bar the filing of a motion for the immediate holding of another certification or consent election within six (6) months from date of declaration of failure of election. Motion for another election after failure of election [Sec. 20, Rule IX, Book V]

Within twenty-four (24) hours from receipt, Election Officer shall:

2. The winning union must garner majority of the VALID votes Winning union certifies as SEBA if there is no protest

The winning union shall be certified as the SEBA within five (5) days from date of election, provided that there is no protest recorded in the minutes of the election. When winning choice is local chapter without certificate of creation

It must submit its DOLE issued certificate of creation within five (5) days from the conclusion of election Note: Please note that valid votes differ from mere votes as the former excludes spoiled ballots. Abstention: Refers to a blank or unfilled vote validly cast by an eligible voter. It is not considered as a negative vote. However, it shall be considered a valid vote for purposes of determining a valid election. [Sec. 1(a), Rule I, Book V] Spoiled Ballot: Refers to a ballot that is torn, defaced, or contains markings which can lead another to clearly identify the voter who casts such vote. [Sec. 1(a), Rule I, Book V] Failure of Election [Sec. 17, Rule IX, Book V]

The Election Officer shall declare a failure of election in the minutes of the election proceedings when: (1) Number of votes cast is less than the majority of the number of eligible voters; AND

LABOR LAW



Immediately schedule another election within fifteen (15) days from receipt of motion



Cause posting of notice of election o

At least ten (10) days prior to the schedule date of election

o

In two (2) most conspicuous places in the establishment

Same guidelines and list of voters shall be used. Certification of the Collective (14) Bargaining Agent [Sec. 21, Rule IX, Book V]

The Med-Arbiter shall issue an order proclaiming the results of the election and certifying the union as the sole and exclusive bargaining agent under any of the following conditions: (a) No protests were filed, or if one was filed, it was not perfected within the five-day period (b) No challenge or eligibility issue was raised, or if one was raised the resolution will not materially change the results of the elections. Winning union shall have the rights, privileges, and obligations of a duly certified collective bargaining agent from the time the certification is issued. Majority of valid votes cast results in “no Union” obtaining majority

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Med-Arbiter shall declare such fact in the order (15) Appeal from Certification Election Orders [Art. 272]

LABOR LAW

negotiations in good faith with the employer (3) In accordance with Art. 261 of the Labor Code (Book V, Rule VIII, Sec 3 [b]) (3) Deadlock bar rule

WHO APPEALS: Any party to an election

No certification of election may be filed when:

WHAT IS APPEALED: Order or results of the election

(1) The incumbent or certified bargaining agent is a party;

APPEAL TO: Directly to SOLE

(2) A bargaining deadlock had been:

GROUND: Rules and regulations established by the SOLE for the conduct of election have been violated.

(a) submitted to arbitration or;

General Rule: Anytime Exceptions: (1) One-year bar rule (2) Negotiation bar rule (3) Deadlock bar rule (4) Contract bar rule NOTE: See Page 16 for the Grounds for denying a Petition for Certification Election

or

(b) Had become the subject of a valid notice of strike or lockout (Book V, Rule VIII, Sec. 3 [c])

BARS TO CERTIFICATION ELECTION Petition for certification may be filed:

conciliation

A “deadlock” is defined as the counteraction of things producing entire stoppage; a state of inaction or of neutralization caused by the opposition of persons or of factions (as in government or voting body); standstill. The word is synonymous with the word impasse which presupposes reasonable effort at good faith bargaining which, despite noble intentions, does not conclude in agreement between the parties [Divine World University v. SOLE, G.R. No. 91915 (1992)] (4) Contract Bar Rule

(1) One-year bar rule No certification election may be held within 1 year from the time a valid certification, consent or run-off election has been conducted within the bargaining unit. If the order of the Med-Arbiter certifying the results of the election has been appealed, the running of the one-year period shall be suspended and the reckoning period is the date when the decision becomes final and executory. (Book V, Rule VIII, Sec 3 [a])

General Rule: BLR 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. [Art. 238] Exception: (1) When the petition is filed during the freedom period in Articles 264, 265, and 268. (2) When the CBA is incomplete (3) When the CBA is substandard

(2) Negotiation bar rule

(4) When the CBA is prematurely renewed

No certification of election may be filed when:

(5) When the CBA is unregistered

(1) Within 1 year after the valid certification election

No petition for certification election may be filed after the lapse of the freedom period. The old CBA is extended until a new one is agreed upon by the parties. [Colegio de San

(2) The duly certified COMMENCED AND

union has SUSTAINED

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LABOR LAW

Juan de Letran v. Association of employees, G.R. No. 141471, (2000)]

vs. Rubberworld (Phils.), Inc., G.R. No. 153882 (2007)]

Petition for cancellation of union registration DOES NOT suspend or prevent filing of certification election

Complaint for unfair labor practice may be considered a prejudicial question

A petition for cancellation registration shall not:

When it is charged that one or more labor unions participating in the election are being aided, or are controlled, by the company or employer [company union] [United CMC Textile Worker’s Union v. BLR, (1984)].

of

union

(a) suspend the proceedings for certification election; nor (b) prevent the filing of a petition for certification election. [Art. 246] A certification election can be conducted despite pendency of a petition to cancel the union registration certificate. For the fact is that at the time the union, whose registration certificate is sought to be cancelled, filed its petition for certification, it still had legal personality to perform such act absent an order directing its cancellation. [Association of Court of Appeals Employees vs. Calleja, G.R. No. 94716, (1991)] PREJUDICIAL QUESTION cannot

The certification election may lead to the selection of an employer­dominated or company union as the employees’ bargaining representative, and when the court finds that said union is employer­dominated in the unfair labor practice case, the union selected would be decertified and the whole election proceedings would be rendered useless and nugatory. [B.F. Goodrich Phils. Marikina v. B.F. Goodrich Confidential and Salaried Employees Union, G.R. No. L-34069-70, (1973)]

A.2.F. RE-RUN ELECTION

Prejudicial Question Rule Labor claims independently of:

Rationale:

[Sec. 18, Rule IX, Book V] proceed



A bankruptcy liquidation proceeding; and



SEC suspension order in a rehabilitation case. The law is clear, upon the creation of a management committee or the appointment of a rehabilitation receiver, all claims for actions “shall be suspended accordingly.” No exception in favor of labor claims is mentioned in the law. Since the law makes no distinction or exemptions, neither should this Court

Situation Contemplated A certification, consent, or run-off election results to a tie between two (2) choices. Duty of Election Officer (a) Notify parties of a re-run election (b) Cause posting of notice within five (5) days from said election. W hen will re-run be conducted Within ten (10) days after the posting of the notice

Rationale

Declared as winner and certified

These claims “would spawn needless controversy, delays, and confusion.” [Lingkod Manggagawa sa Rubberworld, Adidas­Anglo

Choice receiving the HIGHEST VOTES CAST.

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Purpose

LABOR RELATIONS Certification election Aimed at determining the sole and exclusive bargaining agent of all employees in an appropriate bargaining unit for the purpose of collective bargaining 1st Level of Choice: Yes Union or No Union 2nd Level of Choice: If “Yes Union” wins, WHICH union. (UST Faculty Union v. Bitonio, 1999) Ordered by the DOLE

Conduct

UNION-MEMBER RELATIONS Nature of Relationship The nature of the relationship between the union and its members is fiduciary in nature which arises from the dependence of the employee on the union, and from the comprehensive power vested in it with respect to the individual. The union is but the agent of its members to secure fair and just wages and good working conditions. [Heirs of Cruz v. CIR, G.R. No. L-23331-32 (1969)] Adm ission and Discipline of Mem bers No arbitrary or excessive initiation fees or fines 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. [Article 250(e)] Prohibition on subversive activities or membership No labor organization shall knowingly admit as members or continue in membership any individual who:

LABOR LAW Consent Election Merely to determine the issue of majority representation of all the workers in the appropriate collective bargaining unit

Voluntarily agreed upon by the parties, with or without intervention from DOLE

whom the union thus refuses to admit to membership, without any reasonable ground therefor. Needless to say, if said unions may be compelled to admit new members, who have the requisite qualifications, with more reason may the law and the courts exercise the coercive power when the employee involved is a long standing union member, who, owing to provocations of union officers, was impelled to tender his resignation, which he forthwith withdrew or revoked. [Salunga v. CIR, No. L­22456 (1967)] Mem bers who seek destruction of union lose right to remain as members Inherent in every labor union, or any organization for that matter, is the right of self­preservation. When members of a labor union, therefore, sow the seeds of dissension and strife within the union; when they seek the disintegration and destruction of the very union to which they belong; they thereby forfeit their rights to remain as members of the union which they seek to destroy. [Villar v. Inciong, No. L­50283­84 (1983)]

(a) belongs to a subversive organization; or

Election of Officers

(b) who is engaged directly or indirectly in any subversive activity;

Manner of election

Unions cannot arbitrarily qualified applicants

exclude

Unions are not entitled to arbitrarily exclude qualified applicants for membership, and a closed­shop provision would not justify the employer in discharging, or a union in insisting upon the discharge of, an employee

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. [Art. 250(c)] Qualifications of officers No requirements other than membership in good standing. [Art. 250(c)]

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LABOR LAW

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. [Art. 250(f)]

Major Policy Matters

Acts done in prior term is not a ground to remove a public officer

General Rule:

The Court should never remove a public officer for acts done prior to his present term of office. To do otherwise would be to deprive the people of their right to elect their officers. When the people have elected a man to office, it must be assumed that they did this with knowledge of his life and character, and that they disregarded or forgave his faults or misconduct, if he had been guilty of any. It is not for the court, by reason of such faults or misconduct to practically overrule the will of the people. [KMP v. Trajano, No. L­62306 (1985)] Submission of names not a requirement to allow members to vote Submission of the employee’s 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; Question of eligibility to vote may be determined through the use of the applicable payroll period and employee’s status. [Tancinco v. Ferrer-Calleja No. L­78131 (1988)] Disqualification does not render those who garner the 2 nd highest number of votes as the winners Disqualification of winning candidates will not automatically result in the assumption of office of those who garnered the second highest number of votes. The mere fact that they obtained the second highest number of votes does not mean that they will thereby be considered as the elected officers if the true winners are disqualified. [Manalad v. Trajano, G.R. Nos. 72772­73 (1989)]

Procedure of determining question of major policy affecting the entire membership of the organization [Art. 250(d)] (1) Members shall determine by secret ballot; AND (2) After due deliberation Exception: Board of directors of the organization may make the decision in behalf of the general membership if: (1) Nature of the organization renders such secret ballot impractical (2) Force majeure renders such secret ballot impractical A retainer’s contract A retainer’s contract of a union counsel is a major policy matter affecting the entire membership. [Halili v. CIR, No. L­24864 (1985)] Union Dues Union dues are payments to meet the union’s general and current obligations. The payment must be regular, periodic, and uniform. [Azucena] 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. [Art. 250 (h)] Attorney’s Fees Payment of Attorney’s fees cannot be imposed in individual member No attorney’s fees, negotiation fees, or similar charges of any kind arising from collective bargaining agreement shall be imposed on the individual member. [Art. 228(b)] Proper charging of attorney’s fees (1) Charges against union funds; AND (2) In an amount agreed upon Any contract, agreement, or arrangement of any sort to the contrary shall be void. [Art. 228(b)]

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Different types of Attorney’s Fees Ordinary Reasonable compensation paid to a lawyer for legal services rendered

LABOR LAW

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. [Art. 250 (o)]

Extraordinary Indemnity for damages ordered by the court to be paid by the losing party to the winning party Awarded by the Court Payable to the client

Agreed upon by the parties Payable to the lawyer Not limited (freedom Limited by Art. 111 to to contract) 10% [Kaisahan at Kapatiran v. Maniwal Water, G.R. No. 174179 (2011)] There are two concepts of attorney's fees. In the ordinary sense, attorney's fees represent the reasonable compensation paid to a lawyer by his client for the legal services rendered to the latter. On the other hand, in its extraordinary concept, attorney's fees may be awarded by the court as indemnity for damages to be paid by the losing party to the prevailing party, such that, in any of the cases provided by law where such award can be made, e.g., those authorized in Article 2208 of the Civil Code, the amount is payable not to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof. [Masmud v NLRC, G.R. No. 183385, (Feb 13, 2009)] In Masmud, the contingency agreement between lawyer and client consisting of 39% of the monetary award was deemed not unconscionable by the SC.

A.2.G. SPECIAL ASSESSMENTS Special assessments are payments for a special purpose, especially if required only for a limited time. [Azucena] 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 of a general membership meeting duly called for the purpose. [Art. 247 (n)] Other than for mandatory activities under the Code, no special assessments, attorney’s fees, negotiation fees or any other

Requisites Assessment

for

a

Valid

Special

(1) Authorization by a written resolution of the majority of ALL the members at the general membership meeting 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 employees concerned which indicates the: a. Amount b. Purpose c. Beneficiary of deduction [Gabriel v. SOLE, G.R. No. 115949 (2000)] Strict compliance assessment

for

special

There must be strict and full compliance with the requisites. Substantial compliance is not enough. [Palacol v. Ferrer-Calleja, G.R. No. 85333 (1990)] Mandatory Activity Definition A judicial process of settling dispute laid down by the law. [Vengco v. Trajano, G.R. No. 74453 (1989)] Placement of re­negotiations for a CBA under compulsory process does not make it a “mandatory activity”. [Galvadores v. Trajano, No. L­70067 (1986)] It dispenses with the requirement of the individual written authorization duly signed by the employee. 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

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individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction. [Art. 250(o)]

A.2.H. AGENCY FEES An amount, equivalent to union dues, which a non-union member pays to the union because he benefits from the CBA negotiated by the union. [Azucena] Rationale for allowing agency fees Avoiding unjust enrichment on the part of non-union members who benefit from the union's efforts without paying any fee therefor, unlike the members of the bargaining agent. [Holy Cross of Davao College, Inc v. Hon. Joaquin, G.R. No. 110007 (1996)] W hen Agency Fee assessed If such non-union member accept the benefits under the collective bargaining agreement. [Art. 259(e)] Measure of fee A reasonable fee equivalent to the dues and other fees paid by members. [Art. 259(e)] Requirements: (1) Non-member of SEBA (2) Member of Collective Bargaining Unit (3) Reasonable fee equivalent to the dues and other fees paid by member (4) Acceptance of CBA benefits

A.2.I. UNION AFFILIATION

CHARTERING/

DEFINITIONS Affiliate It is an independent union affiliated with a federated, national union or a chartered local which was subsequently granted independent registration but did not disaffiliate from its federation, reported to the Regional Office and the Bureau in accordance with Rule III Secs. 6 and 7 of the IRR. [Book V Rule 1 Sec. 1 (a)]

LABOR LAW

Independent Union A labor organization operating at the enterprise level that required legal personality through independent registration under Art.234 of the Labor Code and Rule III Sec. 2-A of the IRR. [Book V Rule 1 Sec. 1 (w)] National Union or Federation A group of legitimate labor unions in a private establishment organized for collective bargaining or for dealing with employers concerning terms and conditions of employment for their member union or for participating in the formulation of social and employment policies, standards and programs, registered with the BLR in accordance with Rule III Sec. 2-B of the IRR. [Book V Rule 1 Sec. 1 (kk)] Local Chapter (Chartered Local) A labor organization in the private sector operating at the enterprise level that acquired legal personality through registration with Regional Office. A duly-registered federation or national union may directly create a chartered local by submitting 2 copies of the following: (a) Charter certificate issued by the federation or national union indicating the creation of the local/chapter (b) Names and addresses of the local/chapter’s officers as well as that of the principal office. (c) The local/chapter’s constitution and bylaws. If same with that of the federation or national union, indicate this fact accordingly. NOTE: Under RA 9481 (2007), which amended Art. 241 (then Art. 234-A), a federation can create a local chapter by simply issuing a charter certificate. A petition for CE may then be filed with no other action done. The other requirements for creating a local chapter are needed only for that chapter to enjoy the other rights of a legitimate labor organization such as being certified as the SEBA, engaging the employer in negotiations, and others.

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The supporting requirements shall be •



Certified under oath by: o

Secretary; or

o

Treasurer

Attested by: Its president [Sec. 1(j), Rule VIII, Book V in relation with Sec. 2-E, Rule III, Book V]

LABOR LAW

Note: D.O No. 9 defines trade union center as 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, and is duly registered with the DOLE in accordance with Rule III, Section 2 of the Implementing Rules

Lesser requirements for Chartered locals When an unregistered union becomes a branch, local or chapter, some of the requirements for registration are no longer necessary or compulsory. Whereas an applicant for registration of an independent union is mandated to submit, among other things, the number of employees and names of all its members comprising at least 20% of the employees in the bargaining unit where it seeks to operate, the same is no longer required of a branch, local or chapter. The intent of the law in imposing less requirements in the case of a branch or local of a registered federation or national union is to encourage the affiliation of a local union with a federation or national union in order to increase the local unions bargaining powers respecting terms and conditions of labor. [SMCEU-PTGWO v. SMPEU-PDMP, G.R. No. 171153 (2007)] Trade Union Centers cannot create locals or chapters D.O No. 9 mentions only federations or national unions. The solemn power and duty of the Court to interpret and apply the law does not include the power to correct by reading into the law what is not written therein.

PURPOSE OF AFFILIATION To foster the free and voluntary organization of a strong and united labor movement [Art. 218] 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. [Philippine Skylanders, Inc. v. NLRC, G.R. No. 127374, (2002)] NATURE OF RELATIONSHIP: AGENCY The mother union, acting for and in behalf of its affiliate, had the status of an agent while the local union remained the basic unit of the association, free to serve the common interest of all its members subject only to the restraints imposed by the constitution and by-laws of the association. The same is true even if the local is not a legitimate labor organization. [Filipino Pipe and Foundry Corp v. NLRC, G.R. No. 115180 (1998)]

National Union or Federation v. Trade Unions National Union or Federation With at least ten (10) locals or chapters or affiliates, each of which must be a duly certified or recognized collective bargaining agent Can directly create local or chapter

Trade Unions Composed of a group of registered national unions or federations

Cannot

EFFECT OF AFFILIATION Inclusion of [the federation] in the registration is merely to stress that they are its affiliates at the time of registration. It does not mean that said local unions cannot stand on their own. Affiliation does not mean they lost their own legal personality. [Adamson v CIR, G.R. No. L-35120 (1984)] Mere affiliation does not divest the local union of its own personality, neither does it give the mother federation the license to act PAGE 170 OF 222

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independently of the local union. It only gives rise to a contract of agency, where the former acts in representation of the latter. Hence, local unions are considered principals while the federation is deemed to be merely their agent. (Insular Hotel Employees Union NFL v Waterfront Insular Hotel, GR No. 174040-41, (Sept 22, 2010)] SUPERVISOR AND RANK AND FILE UNION AFFILIATION Supervisory employees shall not be eligible for membership in the collective bargaining unit of the rank-and-file employees …The rank and file union and the supervisors’ union operating within the same establishment may join the same federation or national union. [Art. 255] General Rule: Supervisory employees and rank and file CAN JOIN the same federation or national union. Before, if the rank-and-file employees are directly under the authority of supervisory employees AND the national federation is actively involved in union activities in the company, both employees CANNOT join the same federation or union. HOWEVER, these conditions have been rendered obsolete by RA 9481, amending Art. 255 (then Art. 245) to include: “The rank and file union and the supervisors' union operating within the same establishment may join the same federation or national union.” DISAFFILIATION

LABOR LAW

creation and existence to the national federation to which they are affiliated but, instead, to the will of their members. [Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc, G.R. No. L-33987(1975)] A local union, being a separate and voluntary association, is free to serve the interests of all its members including the freedom to disaffiliate or declare its autonomy from the federation which it belongs when circumstances warrant, in accordance with the constitutional guarantee of freedom of association. Such disaffiliation cannot be considered disloyalty. In the absence of specific provisions in the federation’s constitution prohibiting disaffiliation or the declaration of autonomy of a local union, a local may dissociate with its parent union. [MSMG-UWP v. Ramos, (2000)] Period of Disaffiliation General rule: Anytime Exception: Constitution allows disaffiliation only during freedom period. Exception to Exception: When there is a shift of allegiance on the part of the majority of the members of the union. [ANGLO v. Samana, G.R. No. 118562 (1996)] Effect of disaffiliation On legal personality A registered independent union retains its legal personality while a chartered local loses its legal personality unless it registers itself. [Volkschel Labor Union v. BLR, No. L­45824 (1985)] No effect on CBA

Nature of Right and Legality Such a phenomenon is nothing new in the Philippine labor movement. Nor is it open to any legal objection. It is implicit in the freedom of association explicitly ordained by the Constitution. There is then the incontrovertible right of any individual to join an organization of his choice. That option belongs to him. A workingman is not to be denied that liberty. [PLAC v. BLR, No. L41288 (1977)] We upheld the right of local unions to separate from their mother federation on the ground that as separate and voluntary associations, local unions do not owe their

A disaffiliation does not disturb the enforceability and administration of a collective agreement; it does not occasion a change of administrators of the contract nor even an amendment of the provisions thereof. [Volkschel Labor Union v. BLR, No. L­45824 (1985)] Obligation to pay union dues is coterminous with membership The obligation of an employee to pay union dues is coterminous with his affiliation or membership. The employees’ check­off authorization, even if declared irrevocable, is good only as long as they remain members of

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the union concerned. A contract between an employer and the parent organization as bargaining agent for the employees is terminated by the disaffiliation of the local of which the employees are members. [Volkschel Labor Union v. BLR, No. L­45824 (1985)] Power to represent principal severed By the disaffiliation, the vinculum that previously bound the two entities was completely severed. The federation was divested of any and all power to act in representation of the union. Thus, any act performed by the federation affecting the interests and affairs of the union is rendered without force and effect. [ANGLO v. Samana, G.R. No. 118562 (1996)] SUBSTITUTIONARY DOCTRINE 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. And it is in the light of this that the phrase “said new agent would have to respect said contract” must be understood. It only means that the employees, thru their new bargaining agent, cannot renege on their collective bargaining contract, except of course to negotiate with management for the shortening thereof. (Benguet Consolidated v. BCI Employees and Workers Union-PAFLU, 1998) Conditions to apply the doctrine (1) change of bargaining agent (through affiliation, disaffiliation, or other means); and (2) existing CBA with the previous bargaining agent [Benguet Consolidated v. BCI Employees and Workers Union-PAFLU, G.R. No. L-24711 (1998)] Effects: (1) new bargaining agent cannot revoke and must respect the existing CBA; and (2) it may negotiate with management to shorten the existing CBA’s lifetime

LABOR LAW

B. RIGHT BARGAINING

TO

COLLECTIVE

B.1 GENERAL CONCEPTS Constitutional Policies (1) [The State] shall guarantee the rights of workers to self-organization, collective bargaining and negotiations. […] [1987 Constitution, Art. XIII, Sec. 3] (2) The State shall promote the principle of shared responsibilities between workers and employers […] and shall enforce their mutual compliance therewith to foster industrial peace. [1987 Constitution, Art. XIII, Sec. 3] Statutory Policies (1) To promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as modes of setting labor or industrial disputes. [Art. 218 (a)] (2) It is the policy of the State to promote and emphasize the primacy of free and responsible exercise of the right to selforganization and collective bargaining, either through single enterprise level negotiations or through the creation of a mechanism by which different employers and recognized certified labor unions in their establishments bargain collectively. [Book V, Rule XVI, §1] (3) 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 [Art. 218 (b)] Definition, Nature, and Purpose ‘Collective bargaining, which is defined as negotiations towards a collective agreement,

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is one of the democratic frameworks under the Labor Code designed to stabilize the relations between labor and management and to create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the Union and is characterized as a legal obligation.” [Kiok Loy v. NLRC, 1986] The institution of collective bargaining is a prime manifestation of industrial democracy at work. The two parties to the relationship, labor and management, make their own rules by coming to terms to govern themselves in matters that really count. [United Employees Union of Gelmart Industries v. Noriel, 1975]

LABOR LAW

(2) Proof of majority representation by the representative labor organization (3) Demand to bargain by organization [Art. 250(a)]

the

labor

The employer is only bound to bargain with the appropriate collective bargaining agent. An employer asked by a labor organization (which is not the SEBA of the establishment) to bargain collectively may file a petition for certification election to ascertain the will of the bargaining unit or it may voluntarily recognize the labor organization in proper circumstances. Meaning of Bargaining in Good Faith

W aiver of Bargain

Right

to

Collectively

The right to free collective bargaining includes the right to suspend it. [Rivera v. Espiritu, 2000]

B.2 DUTY TO BARGAIN COLLECTIVELY I. IN GENERAL Definition The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreement if required by either party but such duty does not compel any party to agree to a proposal or to make any concession. [Art. 263] Jurisdictional Preconditions of Duty to Bargain (1) Possession of the status of majority representation of the employees’ representative in accordance with any of the means of selection or designation provided for by the Code

[T]here is no per se test of good faith in bargaining. Good faith or bad faith is an inference to be drawn from the facts. [Kiok Loy v NLRC, 1986] [T]he failure to reach an agreement after negotiations have continued for a reasonable period does not establish a lack of good faith. The laws invite and contemplate a collective bargaining contract, but they do not compel one. [Tabangao Shell Refinery Employees Association vs. Pilipinas Shell Petroleum Corporation, 2014] Duty to Bargain does not include: (1) Any legal duty on the part of the employer to initiate contract negotiation [Kiok Loy v NLRC, 1986] (2) The obligation to reach an agreement. While the law makes it an obligation for the employer and the employees to bargain collectively with each other, such compulsion does not include the commitment to precipitately accept or agree to the proposals of the other. All it contemplates is that both parties should approach the negotiation with an open mind and make reasonable effort to reach a common ground of agreement. [Union of Filipro Employees v. Nestle, 2008]

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LABOR LAW

II. WHEN THERE IS AN ABSENCE OF A CBA

B.3 BARGAINING PROCEDURE

In the absence of an agreement or other voluntary arrangement providing for a more expeditious manner of collective bargaining, it shall be the duty of employer and the representatives of the employees to bargain collectively in accordance with the provisions of this Code. (Art. 262)

General Rule Private Procedure - The bargaining procedure shall be governed by the parties’ agreement or voluntary arrangement, provided it is a more expeditious manner of collective bargaining. [Art. 262] •

III. WHEN THERE IS A CBA

Rationale - It is the policy of the state to promote the primacy of free collective bargaining [Art. 218 (a)]

General Rule

Exception

The duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. [Art. 264]

Labor Code Procedure – In absence of a private agreement, the collective bargaining procedure under Art. 261 shall be followed. i.

In case a new union becomes the majority union while the CBA is still existing, the said CBA continues to bind the members of the new (or disaffiliated) union up to the CBA’s expiration date.

W ritten notice and statement of proposals. When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals.

ii.

Reply. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice.

iii.

Conference. Should differences arise on the basis of such notice and reply, either party may request for a conference which shall begin not later than ten (10) calendar days from the date of request.

iv.

Board intervention and conciliation. If the dispute is not settled, the NCMB shall intervene upon request of either or both parties or at its own initiative and immediately call the parties to conciliation meetings. The NCMB shall have the power to issue subpoenas requiring the attendance of the parties to such meetings. It shall be the duty of the parties to participate fully and promptly in the conciliation meetings the Board may call;

v.

Voluntary arbitration. The NCMB shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to a voluntary arbitrator.

vi.

Prohibition against disruptive acts. During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may



Substitutionary doctrine - the change of bargaining representative does not terminate the currently existing CBA. The new bargaining agent has to respect such CBA until a new one is duly executed [Elisco-Elirol Labor Union v Noriel, 1977].

Exception At least sixty (60) days prior to the expiration of the collective bargaining agreement, either party can serve a written notice to terminate or modify the agreement. Note: During this 60-day period, a verified petition questioning the majority status of the incumbent bargaining agent may also be filed. Effect on existing CBA It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties. [Art. 264]

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disrupt or impede the early settlement of the disputes. vii.

Deadlock. When the parties have reached an impasse in negotiations, either or both of them may declare a “deadlock” which is a ground to file a petition for preventive mediation or a notice of strike or notice of lockout with the NCMB.

Period to Reply; Bad Faith The period to reply is merely procedural, and non-compliance cannot be automatically deemed to be an Unfair Labor Practice (“ULP”). [National Union of Restaurant Workers vs. CIR, 1964] Failure to Reply as Indicia of Bad Faith [The employer’s] refusal to make a counterproposal is an indication of its bad faith. Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there is a clear evasion of the duty to bargain collectively. It is guilty of ULP. [General Milling Corp. v. CA, 2004]

LABOR LAW

(2) Permissive Issues: a. Unilateral benefits extended by the employer [cf., Union of Filipino Employees-Drug v. Nestle, 2008] A collective bargaining agreement refers to the negotiated contract between a legitimate labor organization and the employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit […]. As in all other contracts, the parties in a CBA may establish such stipulations, clauses, terms and conditions as they may deem convenient provided they are not contrary to law, morals, good customs, public order or public policy. [Manila Fashions v. NLRC, 1996] Test for Mandatory Bargainable Issues The NEXUS Between the Nature of Employment and the Nature of the Dem and: For “other terms and conditions of employment” to become a mandatory bargainable issue, they must have a connection between the proposal and the nature of the work. In order for a matter to be subject to mandatory collective bargaining, it must materially or significantly affect the terms and conditions of employment. Whether the agreement concerns a mandatory subject of bargaining depends not on its form, but on its practical effect. [Azucena]

Bargainable Issues (1) Mandatory Bargainable Issues a. Wages b. Hours of work c. All other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement [Art. 263] Examples: i. Vacations and holidays ii. Bonuses iii. Seniority, Transfer, and Layoffs iv. Employee workloads v. Work rules and regulations vi. Union security arrangements vii. Pension and insurance benefits for active employees

Im portance of Determ ining character of the Bargaining Issue

the

"The question as to what are mandatory and what are merely permissive subjects of collective bargaining is of significance on the right of a party to insist on his position to the point of stalemate. A party may refuse to enter into a collective bargaining contract unless it includes a desired provision as to a matter which is a mandatory subject of collective bargaining. But a refusal to contract unless the agreement covers a matter which is not a mandatory subject is in substance a refusal to bargain about matters which are mandatory subjects of collective bargaining; and it is no answer to the charge of refusal to bargain in good faith that the

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insistence on the disputed clause was not the sole cause of the failure to agree or that agreement was not reached with respect to other disputed clauses.” Such refusal will not be deemed as an unfair labor practice. However, if a party refuses to contract based on an issue which is not a mandatory bargainable issue, the party will be guilty of ULP. [Samahang Manggagawa sa Top Form v. NLRC, 1998] Minutes of Negotiation Where a proposal raised by a contracting party does not find print in the CBA, it is not a part thereof and the proponent has no claim whatsoever to its implementation. The Minutes [only] reflects the proceedings and discussions undertaken in the process of bargaining for worker benefits in the same way that the minutes of court proceedings show what transpired therein. At the negotiations, it is but natural for both management and labor to adopt positions or make demands and offer proposals and counter-proposals. However, nothing is considered final until the parties have reached an agreement. [Samahang Manggagawa sa Top Form v NLRC, 1998] Suspension Negotiations

of

Bargaining

The mere filing of a petition for certification election does not ipso facto justify the suspension of negotiation by the employer. In order to allow the employer to validly suspend the bargaining process there must be a valid petition for certification election raising a legitimate representation issue. [Colegio de San Juan de Letran v. Association of Employees, 2000]

LABOR LAW

impasse which, within the meaning of the American federal labor laws, “presupposes reasonable effort at good faith bargaining which, despite noble intentions, does not conclude in agreement between the parties.” [Divine World Tacloban v Secretary of Labor, 1992] Collective Bargaining Deadlock is defined as the situation between the labor and the management of the company where there is failure in the collective bargaining negotiations resulting in a stalemate. [San Miguel Corp. v NLRC, 1999]. Privileged Communication Conciliation Proceedings

in

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. [Art. 233] Rationale i. a person is entitled to ‘buy his or her peace’ without danger of being prejudiced in case his or her efforts fail ii. offers for compromise are irrelevant because they are not intended as admissions by the parties making them [Pentagon Steel v. CA, 2009]

B.4 COLLECTIVE AGREEMENT (CBA)

BARGAINING

I. GENERAL CONCEPTS Definition

Bargaining Deadlock A “deadlock” is defined as the “counteraction of things producing entire stoppage: a state of inaction or of neutralization caused by the opposition of persons or of factions: a standstill. There is a deadlock when there is a “complete blocking or stoppage resulting from the action of equal and opposed forces.” The word is synonymous with the word

Collective Bargaining Agreement refers to the negotiated contract between a legitimate labor organization and the employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit, including mandatory provisions for grievances and arbitration machineries. [Book V Rule I § 1(j)]

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Nature of the CBA It is a familiar and fundamental doctrine in labor law that the collective bargaining agreement (CBA) constitute the law between the parties and they are obliged to comply with its provisions. [Zuellig Pharma Corporation vs. Alice Sibal, 2013] However, although it is a rule that contract freely entered between the parties should be respected, said rule is not absolute. “The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good.” [Civil Code, Art. 1700]

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and the courts must place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve. [Davao Integrated Port Stevedoring Services vs. Abarquez, 1993] General Rule: [W]here the CBA is clear and unambiguous, it becomes the law between the parties and compliance therewith is mandated by the express policy of the law. [Zuellig Pharma Corporation v Alice Sibal, 2013] Exception: If the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former. [Kimberly Clark Phils. V. Lorredo, 1993]

Beneficiaries of the CBA II. MANDATORY PROVISIONS OF CBA

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. [Art. 267]

(1) Grievance Procedure The parties to a Collective Bargaining Agreement shall include therein: 1)

The CBA benefits all workers in a collective bargaining unit. When a collective bargaining contract is entered into by the union representing the employees and the employer, even the non-member employees are entitled to the benefits of the contract. [New Pacific Timber and Supply v. NLRC, 2000] To accord its benefits only to members of the union without any valid reason would constitute undue discrimination against nonmembers. Contract Interpretation In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. {Art. 1702] [A]s a labor contract within the contemplation of Article 1700 of the Civil Code of the Philippines which governs the relations between labor and capital, [it] is not merely contractual in nature but impressed with public interest, thus it must yield to the common good. As such, it must be construed liberally rather than narrowly and technically,

Provisions that will ensure the mutual observance of its terms and conditions.

2) A machinery for the adjustment and resolution of grievances arising from: a) The interpretation or implementation of their CBA; and b) those arising from the interpretation or enforcement of company personnel policies. All grievances submitted to the grievance machinery which are not settled within 7 calendar days from the date of its submission shall be automatically referred to voluntary arbitration prescribed in the CBA. [Art. 273] It should be remembered that a grievance procedure is part of the continuous process of collective bargaining. It is intended to promote a friendly dialogue between labor and management as a means of maintaining industrial peace. [Master Iron Labor Union v. NLRC, 1993] No particular setup for a grievance machinery is required by law. [Art. 273] of, as incorporated by R.A. 6715, only mandates that the parties to the CBA establish a machinery to settle problems arising from

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"interpretation or implementation of their collective bargaining agreement and those arising from the interpretation or enforcement of company personnel policies. [Caltex Refinery Employees Association v. Brillantes, 1997] (2) Voluntary Arbitration Constitutional Basis 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. [1987 Constitution. Art. XIII Section 3] W ho is a voluntary arbitrator A “voluntary arbitrator” is any person accredited by the National Conciliation and Mediation Board 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 [Art. 219 (n)] Autom atic Referral Machinery Fails

If

Grievance

All grievances submitted to the grievance machinery which are not settled within 7 calendar days from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the CBA. [Art. 273] Provision for Voluntary Arbitration in the CBA (1) Parties to a CBA shall: a. Name and designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, OR b. Include in the agreement a procedure for the selection of such Voluntary Arbitrator or panel of Voluntary

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Arbitrators preferably from the listing of qualified Voluntary Arbitrators duly accredited by the Board. (2) 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 Voluntary Arbitrator or panel of Arbitrators procedure agreed upon in the CBA, which shall act with the same force and effect as if the has been selected by the parties as described above. [Art. 273] Voluntary Arbitration as a Condition Precedent The stipulation to refer all future disputes to an arbitrator or to submit an ongoing dispute to one is valid. Being part of a contract between the parties, it is binding and enforceable in court in case one of them neglects, fails or refuses to arbitrate. Going a step further, in the event that they declare their intention to refer their differences to arbitration first before taking court action, this constitutes a condition precedent, such that where a suit has been instituted prematurely, the court shall suspend the same and the parties shall be directed forthwith to proceed to arbitration. A court action may likewise be proper where the arbitrator has not been selected by the parties. [Chung Fu Industries v. CA, 1992] Arbitrable Issues 1.

interpretation or implementation of the CBA [Art. 274]

2. interpretation or enforcement of company personnel policies [Art. 274] 3. violations of CBA provision which are not gross in character (gross being flagrant/malicious refusal to comply with the economic provisions of the CBA) [Art. 2274] 4. all other labor disputes including ULP and bargaining deadlock, if the parties agree [Art. 275] 5. Wage distortions arising from application of any wage orders in organized establishments [Art. 124]

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6. Unresolved grievances arising from the interpretation and implementation of the productivity incentives program under RA 6971 [Book V, Rule XIX, Sec. 4] In general, the arbitrator [“VA”] is expected to decide those questions expressly stated and limited in the submission agreement. However, since arbitration is the final resort for the adjudication of disputes, the arbitrator can assume that he has the power to make a final settlement. The VA has plenary jurisdiction and authority to interpret the CBA and to determine the scope of his or her own authority. Subject to judicial review, this leeway of authority and adequate prerogative is aimed at accomplishing the rationale of the law on voluntary arbitration – speedy labor justice. [Goya, Inc. vs. Goya, Inc. Employees Union-FFW, 2013] Procedure of Voluntary Arbitration (1) All parties shall be entitled to attend the arbitration proceedings. (2) The hearing may be adjourned for cause or upon agreement by the parties. (3) Unless the parties agree otherwise, it shall be mandatory for voluntary arbitrator or panel of voluntary arbitrators to render an award or decision within twenty (20) calendar days from the date of submission for resolution [Book V, Rule XIX, Sec. 6] Powers of voluntary arbitrators during arbitration proceeding (1) hold hearings (2) receive evidence (3) take whatever action is necessary to resolve the issue or issues subject of dispute, including efforts to effect a voluntary settlement between parties (4) determine attendance of any third parties (5) determine exclusion of any witness (6) issue writ of execution for sheriff of NLRC or regular courts to execute the final decision, order, or award (Art 276) Finality of the final decision, Order, or Award

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[T]he award or decision of Arbitrator […] shall be final after 10 calendar days from copy of the award or decision […] (Art. 276)

the Voluntary and executory receipt of the by the parties.

Motion for Reconsideration The absence of a categorical language in Art. 276 [then Art. 262-A] does not preclude the filing of a motion for reconsideration of the VAs decision within the 10-day period. [Teng v Pahagac, G.R. 169704, (Nov. 17, 2010)] Clearly, before a petition for certiorari under Rule 65 of the Rules of Court may be availed of, the filing of a motion for reconsideration is a condition sine qua non to afford an opportunity for the correction of the error or mistake complained of. So also, considering that a decision of the Secretary of Labor is subject to judicial review only through a special civil action of certiorari and, as a rule, cannot be resorted to without the aggrieved party having exhausted administrative remedies through a motion for reconsideration, the aggrieved party, must be allowed to move for a reconsideration of the same so that he can bring a special civil action for certiorari before the Supreme Court. [PIDLTRANCO Service Enterprises Inc v PWU – AGLO, GR No. 180962, (Feb 26, 2014)] The rule, therefore, is that a Voluntary Arbitrator’s award or decision shall be appealed before the Court of Appeals within 10 days from receipt of the award or decision. Should the aggrieved party choose to file a motion for reconsideration with the Voluntary Arbitrator, the motion must be filed within the same 10-day period since a motion for reconsideration is filed "within the period for taking an appeal." [PHILEC v Court of Appeals, GR No. 168612, (Dec 10, 2014)] Appeal While there is an express mode of appeal from the decision of a labor arbiter, Republic Act No. 6715 is silent with respect to an appeal from the decision of a voluntary arbitrator. Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may not strictly be considered as a quasi-

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judicial agency, board or commission, still both he and the panel are comprehended within the concept of a "quasi-judicial instrumentality." A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of Appeals. [Luzon Development Bank v. Assoc of Luzon Dev’t Employees, 1995] The decisions of the voluntary arbitrator are akin to those of the Regional Trial Court, and therefore should first be appealed to the Court of Appeals before being elevated to [the Supreme Court]. [Centro Escolar University Faculty and Allied Workers Union v. Court of Appeals, 2006] Costs The parties to a Collective Bargaining Agreement shall provide therein a proportionate sharing scheme on the cost of the voluntary arbitration including the Voluntary Arbitrators fee. […] [Art. 277]

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(4) Labor Managem ent Council 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. […] [Art. 267] Selection of Representatives In organized establishments, the workers’ representatives to the council shall be nominated by the exclusive bargaining representative. In establishments where no legitimate labor organization exists, the workers representative shall be elected directly by the employees at large. [Book V, Rule XXI, Sec. 2]

Voluntary Arbitrator's Fee […] The fixing of the fee of the Voluntary Arbitrators, whether shouldered wholly by the parties or subsidized by the special voluntary arbitration fund, shall take into account the following factors:

III. ADMINISTRATION AND ENFORCEMENT OF CBA Substandard CBA

(4) capacity to pay of the parties. [Art. 277]

A CBA that falls below the minimum standards required by law is prohibited. Nonetheless, RA 9481 removed substandard CBAs as a ground for the cancellation of registration of union registration. Note: A substandard CBA cannot bar a petition for certification election under the contract-bar rule.

(3) No Strike-No Lockout Clause

Ratification

A "no strike, no lock-out" provision in the CBA is a valid stipulation although the clause may be invoked by an employer only when the strike is economic in nature or one which is conducted to force wage or other concessions from the employer that are not mandated to be granted by the law itself. It would be inapplicable to prevent a strike which is grounded on unfair labor practice. [Panay Electric Co. v. NLRC, 1995; Malayang Samahan ng mga Manggagawa sa Greenfield v. Ramos, 2000]

The agreement negotiated by the employees’ bargaining agent should be posted in two conspicuous places in the place of work and should be ratified or approved by the majority of all workers in the bargaining unit. [Art. 237; Book V, Rule XVII, Sec. 2 (c)]

(1) nature of the case (2) time consumed in hearing the case (3) professional standing of the voluntary arbitrator

“[T]he posting of copies of the collective bargaining agreement is the responsibility of the employer. […] The purpose of the requirement is precisely to inform the employees in the bargaining unit of the contents of said agreement so that they could intelligently decide whether to accept the

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same or not.” [Associated Labor Unions v Ferrer-Calleja, 1989] Effect of Non-ratification General Rule: The collective bargaining agreement should be ratified by the majority of all the members of the bargaining unit. Non-compliance with this requirement renders the CBA ineffective. [Associated Trade Unions v. Trajano, 1988] Exception: Even if there was no ratification, the CBA will not be invalid or void considering that the employees have enjoyed benefits from it. •

“[The employees] cannot receive benefits under provisions favourable to them and later insist that the CBA is void simply because other provisions turn out not to the liking of certain employees.” [Planters Products Inc. v. National Labor Relations Commission, 1989]

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Requirem ents for Registration The application for CBA registration shall be accompanied by the original and two (2) duplicate copies of the following documents which must be certified under oath by the representative(s) of the employer(s) and labor union(s) concerned: (1) The collective bargaining agreement (2) A statement that the collective bargaining agreement was posted in at least two (2) conspicuous places in the establishment or establishments concerned for at least five (5) days before its ratification (3) A statement that the collective bargaining agreement was ratified by the majority of the employees in the bargaining unit of the employer or employees concerned. [Book V, Rule XVII, Sec. 2]

Note: Ratification of the CBA by the employees in the bargaining unit is not needed when the CBA is a product of an arbitral award as a result of voluntary arbitration under Art. 275 or from the secretary’s assumption of jurisdiction or certification under Art. 278 (g).

Confidentiality of registered CBA or Parts Thereof

To require ratification of the CBA in case of arbitral awards will be inconsistent with the nature of arbitration, which entails submission to the judgment of an impartial third person. The settlement device would be circuitous and the very nature of arbitration would be contradicted if the arbitrator’s decision, would be dependent on the employees’ acceptance.

(2) when it is at issue in any judicial litigation

Registration

General rule: CBA is not confidential Exceptions: (1) confidentiality authorized by Secretary of Labor (3) public interest or requires [Art. 237]

national

security

Effect of Unregistered CBA An unregistered CBA is binding upon the parties but cannot serve as a bar to a petition for certification election under the contractbar 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 […]. [Art. 237]

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IV. EFFECTIVITY AND DURATION OF COLLECTIVE BARGAINING AGREEMENT CBA Effectivity If it is the first ever CBA, the effectivity date is whatever date the parties agree on. If it is renegotiated CBA, the effectivity date depends upon the duration of conclusion. (1) If it is concluded within 6 months from the expiry date, the new CBA will retroact to the date following the expiry date [Illustration: expiry date: December 13; renegotiations concluded on November 30: effectivity date: December 14]. (2) If the renegotiated CBA is concluded beyond 6 months from the expiry date, the matter of retroaction and effectivity is left with the parties. Hold Over Principle [In the absence of a new CBA], [i]t shall be the duty of the parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60 day period and/or until a new agreement is reached by the parties. [Art. 264] The last sentence of Article 264, which provides for automatic renewal [upon expiry], pertains only to the economic provisions of the CBA, and does not include representational aspect of the CBA. A [CBA which continues to take effect beyond its expiration date] cannot constitute a bar to a filing of petition for certification election. When there is a representational issue, the status quo provision insofar as the need to await the creation of a new agreement will not apply. Otherwise, it will create an absurd situation where the union members will be forced to maintain membership by virtue of the union security clause existing under the CBA and, thereafter, support another union when filing a petition for certification election. If we apply it, there will always be an issue of

LABOR LAW

disloyalty whenever the employees exercise their right to self-organization. The holding of a certification election is a statutory policy that should not be circumvented, or compromised. [PICOP Resources, Inc. v. Taneca et al., 2010] Arbitrated CBA In the absence of an agreement between the parties, an arbitrated CBA takes on the nature of any judicial or quasi-judicial award. It operates and may be executed only prospectively unless there are legal justifications for its retroactive application. [Manila Electric Company vs. Quisumbing, 1999] [O]n the other hand, [when the CBA is only] part of an arbitral award [,] […] it may be made retroactive to the date of expiration of the previous agreement. Therefore, in the absence of a specific provision of law prohibiting retroactivity of the effectivity of arbitral awards issued by the Secretary of Labor pursuant to Art. 263(g), the latter is deemed vested with plenary and discretionary powers to determine the effectivity thereof. [Manila Central Line Corp. v. Manila Central Line Free Workers Union, 1998] CBA Duration 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. [Art. 259-A]

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CBA Duration for econom ic provisions

justice, is to give preference to the qualified separated employees in the filling of vacancies in the facilities of the purchaser. [Manlimos v. NLRC, 1995]

3 years. CBA Duration provisions

for

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non-economic

5 years for representational or political issues.

B.5. UNION SECURITY B.5.A. UNION SECURITY CLAUSES

CBA Duration: Freedom Period No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the DOLE outside of the sixty-day period immediately before the date of the expiry of such five year term of the Collective Bargaining Agreement. [Contractbar rule] CBA and 3rd Party Applicability Labor contracts such as employment contracts and CBAs are not enforceable against a transferee of an enterprise, labor contracts being in personam, is binding only between the parties. As a general rule, there is no law requiring a bona fide purchaser of the assets of an on-going concern to absorb in its employ the employees of the latter. However, although the purchaser of the assets or enterprise is not legally bound to absorb in its employ the employees of the seller of such assets or enterprise, the parties are liable to the employees if the transaction between the parties is colored or clothed with bad faith. [Sundowner Dev’t. Corp. v. Drilon, 1989] General Rule: An innocent transferee of a business establishment has no liability to the employees of the transferor to continue employing them. Nor is the transferee liable for past unfair labor practices of the previous owner. Exception: When the liability therefore is assumed by the new employer under the contract of sale, or when liability arises because of the new owner's participation in thwarting or defeating the rights of the employees. The most that the transferee may do, for reasons of public policy and social

Definition Union security is a generic term which is applied to and comprehends “closed shop,” “union shop,” “maintenance of membership” or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment. [NUWHRAIN v. NLRC, G.R. No. 179402 (2008)] Union security is any form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment. [GMC v. Casio, 2010] [Union security clause] is an indirect restriction on the right of an employee to selforganization. It is a solemn pronouncement of a policy that while an employee is given the right to join a labor organization, such right should only be asserted in a manner that will not spell the destruction of the same organization. [Tanduay Distillery Labor Union v. NLRC, 1987] [Employees], although entitled to disaffiliation from their union to form a new organization of their own, must, however, suffer the consequences of their separation from the union under the security clause of the CBA. [Villar v. Inciong, 1983]. Statutory Basis and Rationale Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement. [Art.

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already in service. [Guijarno v CIR, 1973]

259(e)]

(3) Any employee who at the time the union security clause took effect is a bona fide member of religious organization which prohibits its members from joining labor unions on religious grounds

The law has allowed stipulations for 'union shop' and 'closed shop' as means of encouraging workers to join and support the union of their choice in the protection of their rights and interests vis-a-vis the employer. [Del Monte Philippines v. Salvidar, G.R. No. 158620 (2006)]

(4) Confidential employees who are excluded from the rank-and-file bargaining unit

Purpose

(5) Employees excluded from the union security provisions by express terms of the agreement [BPI v BPI Employees Union-Davao Chapter, 2010]

To safeguard and ensure the existence of the union and thus, promote unionism in general as a state policy. It is the policy of the State to promote unionism to enable the workers to negotiate with the 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. […] For this reason, 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 vis-à-vis the employer. [Liberty Flour Mills Employees v Liberty Flour Mills, 1989] Coverage General Rule: All employees in the bargaining unit covered by the union security clause are subject to its terms Exception: (1) Employees who are already members of another union at the time of the signing of the collective bargaining agreement may not be compelled by any union security clause to join any union. [Art. 254 (e)] (2) Employees already in service at the time the union security clause took effect •

A [union security] provision in a CBA is not to be given a retroactive effect as to preclude its being applied to employees

B.5.B. TYPES OF UNION SECURITY CLAUSE 1) Closed shop Condition for em ploym ent An agreement where only union members may be employed and, for the duration of the agreement, remains a member in good standing of a union. A closed shop may be defined as an enterprise in which, by agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part. [GMC v. Casio, 2010] Only union members can be hired by the company and they must remain as members to retain employment in the company. [Azucena] The closed shop provision is the most prized achievement of unionism. However it can also be a potent weapon wielded by the union against the workers whom the union is supposed to protect in the first place. Hence, any doubt as to the existence of a closed shop provision in the CBA will be resolved in favor of the nonexistence of the closed shop provision. [Azucena]

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5) Agency shop 2) Maintenance of m em bership shop Condition for continued employment An agreement where present and future union members must maintain their membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated There is maintenance of membership shop when employees, who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for [their] continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. [GMC v. Casio, 2010] No employee is compelled to join the union, but all present or future members of the union must, as a condition of employment, remain in good standing in the union. [Azucena] 3) Union shop Condition for continued em ploym ent An agreement where all new regular employees are required to join the union within a certain period as a condition for their continued employment. There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment. [GMC v. Casio, 2010]

It is an arrangement whereby non-members must pay the union agency fees for the benefits they received as a consequence of the bargaining efforts of the union. An agreement whereby employees must either join the union or pay to the union as exclusive bargaining agent a sum equal to that paid by the members. [Azucena] B.5.C. ENFORCEMENT SECURITY CLAUSE

OF

UNION

Termination due to Union Security Provision Termination of employment by virtue of a union security clause embodied in a CBA is recognized and accepted in our jurisdiction. This practice strengthens the union and prevents disunity in the bargaining unit within the duration of the CBA. By preventing member disaffiliation with the threat of expulsion from the union and the consequent termination of employment, the authorized bargaining representative gains more numbers and strengthens its position as against other unions which may want to claim majority representation. [Alabang Country Club v. NLRC, G.R. No. 170287 (2008)] Requisites for the enforcement Union Security Clauses

of

In terminating the employment of an employee by enforcing the union security clause, the employer needs only to determine and prove that:

Non-members may be hired, but to retain employment, they must become union members after a certain period. The requirement applies to present and future employees. [Azucena] 4) Modified union shop Employees who are not union members at the time of signing the contract need not join the union, but all workers hired thereafter must join. [Azucena]

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1)

The union applicable

security

clause

is

2) The union is requesting for the enforcement of the union security provision in the CBA 3) There is sufficient evidence to support the union’s decision to expel the employee from the union. [Alabang Country Club v. NLRC, 2005]

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While company may validly dismiss the employees expelled under the union security upon the recommendation by the union, this dismissal should not be done hastily and summarily thereby eroding the employees' right to due process, self-organization and security of tenure. The enforcement of union security clauses is authorized by law provided such enforcement is not characterized by arbitrariness, and always with due process. Even if there are valid grounds to expel the union officers, due process requires that these union officers be accorded a separate hearing by respondent company. [Malayang Samahan ng Manggagawa sa M. Greenfield v. Ramos, G.R. No. 113907 (2000)]

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B.5.D. CHECK-OFF, UNION DUES, AGENCY FEES Check-off A check-off is a process or device whereby the employer, on agreement with the Union, recognized as the proper bargaining representative, or on prior authorization from the employees, deducts union dues or agency fees from the latter’s wages and remits them directly to the Union. [Marino v Gamilla, 2009] The system of check-off is primarily for the benefit of the Union, and only indirectly, for the benefit of the individual employees. [Marino v Garnilla, 2009] Note: For a check-off to be valid, it must comply with the requirements of a valid special assessment.

Requirement of Due Process The requirements laid down by the law in determining whether or not an employee was validly terminated must still be followed even if it is based on a [union security clause] of a CBA, i.e. the substantive as well as the procedural due process requirements. [Del Monte v. Saldivar, 2007] Obligations and Liabilities Where the employer dismissed his employees in the belief in good faith that such dismissal was required by the [union security provision] of the collective bargaining agreement with the union, he may not be ordered to pay back compensations to such employees although their dismissal is found to be illegal. [Confederated Sons of Labor v. Anakan Lumber Co., 1960] As dictated by fairness, […] the union shall be liable to pay their backwages. This is because management would not have taken the action it did had it not been for the insistence of the labor union seeking to give effect to its interpretation of a closed shop provision. [Guijarno v. CIR, 1973]

Jurisdiction over Check-off Disputes The Bureau of Labor Relations has jurisdiction to hear, decide and to mete out punishment any reported violation under Article 250. Note: Sec of Labor or his duly authorized representative may inquire into financial activities of legitimate labor orgs – UPON filing of complaint under oath and supported by written consent of at least 20% of total membership, Provided, such inquiry shall not be conducted during (60)-day freedom period nor within the thirty (30) days immediately preceding the date of election of union officials. [Art. 289] B.6 UNFAIR LABOR PRACTICE COLLECTIVE BARGAINING

IN

Both employers and labor organizations can commit acts of unfair labor practices in collective bargaining. However, the labor organization must be the representative of the employees before any act it does may be considered as a violation of the duty to bargain collectively. [Art. 259 (g) and Art. 260 (c)]

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Four form s of Unfair Labor Practice in Bargaining (1) Failure or Refusal to meet and convene (2) Evading the bargaining

mandatory

subjects

of

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management, […] SJCI in effect admitted that it wanted to end the bargaining deadlock and eliminate the problem dealing with the demands of the union. [St. John Colleges Inc. v. St. John Academy Faculty and Employees Union, 2006]

(3) Bargaining in bad faith

Im plied refusal

(4) Gross violation of the CBA

The school is guilty of unfair labor practice when it failed to make a timely reply to the proposals of the union more than one month after the same were submitted by the union. In explaining its failure to reply, the school merely offered a feeble excuse that its Board of Trustees had not yet convened to discuss the matter. Clearly, its actuation showed a lack of sincere desire to negotiate. [Colegio de San Juan de Letran v. Association, 2000]

B.6.A. FAILURE OR REFUSAL TO BARGAIN Statutory Basis of Employers To violate the duty to bargain collectively as prescribed by this code. [Art. 254 (g)] Statutory Basis Organizations

of

Labor

(1) To violate the duty, or refuse to bargain collectively with the employer, provided it is the representatives of the employees; [Art. 256 (c)]

Acts not deem ed refusal to bargain

(2) [I]t shall be the duty of employer and the representatives of the employees to bargain collectively in accordance with the provisions of this Code. [Art. 257]

(2) Refusal to bargain over demands for commission of unfair labor practices

(1) Adoption of an adamant bargaining position in good faith, particularly where the company is operating at a loss

(3) Refusal to bargain during period of illegal strike (4) Not initiating the bargaining

Acts deem ed as refusal to bargain Refusal to bargain when there is an unresolved petition for union cancellation “That there is a pending cancellation proceedings against the union is not a bar to set in motion the mechanics of collective bargaining. […] Unless [the union’s] certificate of registration and status as the certified bargaining agent is revoked, [the employer], by express provision of the law, duty bound to collectively bargain with the Union.” [Capitol Medical Center v. Trajano, 2005] Employer’s suspension of operations in order to forestall a demand for collective bargaining By admitting that the closure [of the business] was due to irreconcilable differences between the Union and the school

(5) Refusal to bargain where the union demands for recognition and bargaining within the year following a certification election, and the clear choice is no union and no ad interim significant change has taken place in the unit (6) Refusal to bargain because the other party is making unlawful bargaining demands B.6.B. EVADING THE MANDATORY SUBJECTS OF BARGAINING The refusal to negotiate a mandatory subject of bargaining is an unfair labor practice although either party has every desire to reach agreement and earnestly and in all good faith bargains to that end. […] However, duty to bargain does not obligate the parties to make concessions or yield a position fairly held. [Azucena]

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The duty to bargain is limited to mandatory bargaining subjects; as to other matters, he is free to bargain or not to bargain. Over a mandatory subjects, a party may insist on bargaining, even to the point of deadlock, and his insistence will not be construed as bargaining in bad faith. Over a non-mandatory subject, on the other hand, a party may not insist on bargaining to the point of impasse, otherwise his insistence can be construed as bargaining in bad faith. B.6.C. BARGAINING IN BAD FAITH The crucial question whether a party has met his statutory duty to bargain in good faith typically turns on the facts of the individual case. There is no per se test of good faith in bargaining. Good faith or bad faith is an inference to be drawn from the facts of the case. [Hongkong and Shanghai Banking Corp. Employees Union v. NLRC, 1997] GMC’s refusal to make a counter-proposal to the union’s proposal for CBA negotiation on the excuse that it felt the union no longer represented the workers is an indication of bad faith. […] Failing to comply with the mandatory obligation to submit a reply to the union’s proposals, GMC violated its duty to bargain collectively, making it liable for unfair labor practice. [GMC v. CA, 2004]

by going through the motions of negotiating almost as easily as by bluntly withholding recognition […] As long as there are unions weak enough to be talked to death, there will be employers who are tempted to engage in the forms of collective bargaining without the substance. [K-MART Corporation v NLRB, 1980 626 F.2d 704 Individual Bargaining It is an unfair labor practice for an employer operating under a CBA to negotiate with his employees individually. That constitutes interference because the company is still under obligation to bargain with the union as the bargaining representative. Individual bargaining contemplates a situation where the employer bargains with the union through the employees instead of the employees through the union. [The Insular Life Assurance Co. Ltd., Employees Assn. v. Insular Life Assurance Co. Ltd, 1971] B.6.D. GROSS VIOLATIONS OF THE CBA 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.

Blue-Sky Bargaining Blue-Sky Bargaining is defined as "unrealistic and unreasonable demands in negotiations by either or both labor and management, where neither concedes anything and demands the impossible." It actually is not collective bargaining at all. [Standard Bank Chartered Employees Union v. Confesor, 2004] Surface Bargaining Surface bargaining is defined as "going through the motions of negotiating," without any real intent to reach an agreement. It violates the Act's requirement that parties negotiate in "good faith." It is prohibited because, as one commentator explained: The bargaining status of a union can be destroyed

LABOR LAW

B.7 UNFAIR LABOR PRACTICE (ULP) Unfair labor practice refers to acts that violate the workers’ right to organize. The prohibited acts are related to the workers’ right to self-organization and to the observance of a CBA. Without that element, the acts, no matter how unfair, are not unfair labor practices. The only exception is Art. 259 (f) [i.e. to dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under this Code]. [Philcom Employees Union v. Phil. Global, 2006]

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B.7.A. NATURE OF ULP (1) 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 (2) disrupt industrial peace (3) hinder the promotion of healthy and stable labor-management relations (4) violations of the civil rights of both labor and management but are also criminal offenses [Art. 258]

other. [Standard Chartered Bank Union v. Confesor, 2004] Statutory Construction The Labor Code does not undertake the impossible task of specifying in precise and unmistakable language each incident which constitutes an unfair labor practice. Rather, it leaves to the court the work of applying the law's general prohibitory language in light of infinite combinations of events which may be charged as violative of its terms. [HSBC Employee Union V. NLRC, 1997] B.7.B. ULP OF EMPLOYERS

Purpose of the Policy Against ULPs Protection of right to self-organization and/or collective bargaining: (1) The employee is not only protected from the employer but also from labor organizations. (2) Employer is also protected from ULP committed by a labor organization. The public is also protected because it has an interest in continuing industrial peace. Employer-Employee Required

LABOR LAW

Relationship

General Rule - An unfair labor practice may be committed only within the context of an employer-employee relationship [American President Lines v. Clave, 1982] Exception “Yellow Dog” condition: 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. [Art 259 (b)] Parties Not Estopped from Raising ULP by Eventual Signing of the CBA The eventual signing of the CBA does not operate to estop the parties from raising unfair labor practice charges against each

(1) Interference/ Restraint/ Coercion An act which restrains, coerces, or interferes with employees in the exercise of their right to self-organization is an Unfair Labor Practice. Interrogation General rule: employer may interrogate its employees regarding their union affiliation for legitimate purposes and with the assurance that no reprisals would be taken against the unionists. Exception: when interrogation interferes with or restrains employees' right to selforganization. [Phil. Steam Navigation Co. v. Phil. Marine Officer’s Guild, 1965] Speech The acts of a company which subjects a union to vilification and its participation in soliciting membership for a competing union are also acts constituting a ULP. [Phil. Steam Navigation Co. v. Phil. Marine Officer’s Guild, 1965] An employer may not send letters containing promises or benefits, nor of threats of obtaining replacements to individual workers while the employees are on strike due to a bargaining deadlock. This is tantamount to interference and is not protected by the Constitution as free speech. [Insular Life Assurance Co. Employees Assn. v. Insular Life Assurance Co. Ltd, 1971]

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Espionage Espionage and/or surveillance by the employer of union activities are instances of interference, restraint or coercion of employees in connection with their right to organize, form and join unions as to constitute unfair labor practice. […] The information obtained by means of espionage is invaluable to the employer and can be used in a variety of cases to break a union. [Insular Life Assurance Co. Employees Assn. v. Insular Life Assurance Co. Ltd, 1971] (2) Yellow Dog Contracts Yellow dog contracts 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. Requisites of a Yellow Dog Contract: (1) a representation by the employee that he is not a member of a labor organization (2) a promise by the employee that he will not join a union (3) a promise by the employee that upon joining a labor organization, he will quit his employment

LABOR LAW

The employer commits ULP if it initiates, dominates, or otherwise interferes with the formation or administration of any labor organization. [Article 259] Example: giving out financial aid to any union's supporters or organizers. 5) Discrimination – Discourage Unionism

Encourage/

General rule: it is ULP to discriminate in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. [Art. 259 (e)] Exception [Union Security Clause]: Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment. [Art. 259 (e)] Exception to exception: Those employees who are already members of another union at the time of the signing of the collective bargaining agreement. [Art. 259(e)] 6) Testimony It is an act of ULP by an employer to dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under this Code. [Art. 259 (f)]

3) Contracting Out General rule: contracting out is not a ULP Exception: (1) contracted-out services or functions are performed by union members AND (2) contracting out will interfere with, restrain, or coerce employees in the exercise of their right to selforganization. [Art. 259 (c)] 4) Company Union "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. [Art. 218(i)]

7) Violate duty to bargain collectively Duty to bargain collectively is a continuous process, non-compliance constitutes ULP. Collective bargaining does not end with the execution of an agreement, being a continuous process, the duty to bargain necessarily imposing on the parties the obligation to live up to the terms of such a collective bargaining agreement if entered into, it is undeniable that non-compliance therewith constitutes an unfair labor practice. [Shell Oil Workers Union v Shell Co., 1971]

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negotiation

or

9) To violate a collective bargaining agreem ent and/or

3) Violate duty to bargain or the CBA Please refer to part B.4 for some examples.

Sweetheart contracts are favorable both to the union and the employer at the expense of the employees. The settlement of bargaining issues must be made by fair bargaining in good faith, and not through the payment of negotiation or attorney's fees which will ultimately lead to sweetheart contracts.

Flagrant required

LABOR LAW

m alicious

refusal

Violations of collective bargaining agreements, except flagrant and/or malicious refusal to comply with its economic provisions, shall not be considered unfair labor practice and shall not be strikeable. [IRR] Note: The list in Art. 259 is not exhaustive. Other acts which are analogous to those enumerated can be ULPs. The alleged violation of the CBA, even assuming it was malicious and flagrant, is not a violation of an economic provision, thus not an Unfair Labor Practice. [BPI Employees Union-Davao FUBU v. BPI, 2013]

4) Exaction (Featherbedding) Featherbedding or “make-work” by the union is the practice of the union asking (exacting) for money or other things of value from the employer in return for services which are not performed or are not to be performed. 5) Asking or accepting negotiation and other attorney's fees See counterpart in ULP (sweetheart contracts). 6) Violate agreem ent Flagrant required

a

collective

and/or

by

employers

bargaining

m alicious

refusal

Violations of collective bargaining agreements, except flagrant and/or malicious refusal to comply with its economic provisions, shall not be considered unfair labor practice and shall not be strikeable. [IRR]

B.7.C. ULP OF LABOR ORGANIZATIONS 1) Restraint, or coercion “Interfere” is not included in Art. 260 simply because any act of a labor organization amounts to interference to the right of selforganization. 2) Discrimination: Encourage/ Discourage Unionism [Art. 260 (b)] General rule: it is a ULP for a labor organization to cause an employer to discriminate against an employee. Exception: provisions of a valid union security clause and other company policies applicable to all employees.

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C. RIGHT TO PEACEFUL CONCERTED ACTIVITIES

Limitation: Concerted activities m ust be in accordance with law The strike is a powerful weapon of the working class. Precisely because of this, it must be handled carefully, like a sensitive explosive, lest it blow up in the workers’ own hands. Thus, it must be declared only after the most thoughtful consultation among them, conducted in the only way allowed, that is, peacefully, and in every case conformably to reasonable regulation. Any violation of the legal requirements and strictures will render the strike illegal, to the detriment of the very workers it is supposed to protect. [Batangas Laguna Tayabas Bus Co. v NLRC, 1992]

Basis [The state] shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, peaceful concerted activities, including the right to strike in accordance with law. [Const. Art. XIII §3] 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 intraunion disputes. [Art. 278 (b)]

C.1. FORMS OF CONCERTED ACTIVITIES Concerted Activities by Employees: (a) Strike (b) Picketing Response to Concerted available to Employers:

A concerted activity is one undertaken by two or more employees to improve their terms and conditions of work.

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 selforganization. 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 279 of this Code. (Art. 257)

Activities

(c) Lockout

Definition

Right to self-organization includes the right to engage in lawful concerted activities and may not be abridged.

LABOR LAW

(a) Strike A strike is any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. [Art. 219(o)] 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 or not the disputants stand in the proximate relation of employers and employees. [Solidbank Corp. v EU Gamier, 2010] Strikes not limited to work stoppages The term “strike” shall comprise not only concerted work stoppages, but also slowdowns, mass leaves, sit-downs, attempts to damage, destroy or sabotage plant equipment and facilities, and similar activities.

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[Samahang Manggagawa v. Sulpicio Lines, 2004]

LABOR LAW

Form s of Strikes As to legality

As coercive m easure by em ployees A strike is a coercive measure resorted to by laborers to enforce their demands. The idea behind a strike is that a company engaged in a profitable business cannot afford to have its production or activities interrupted, much less, paralyzed. [Phil. Can Co. v. CIR, 1950] No severance of employer-employee relationship during lawful strike Although during a strike the worker renders no work or service and receives no compensation, […] his relationship as an employee with his employer is not severed or dissolved. [Elizalde Rope Factory, Inc. v. SSS, 1972] Payment strikes

of

wages

during

lawful

General rule: Striking employees are not entitled to the payment of wages for unworked days during the period of the strike pursuant to the “no work-no pay” principle.

(1) Legal strike – one called for a valid purpose and conducted through means allowed by law. (2) Illegal strike – one staged for a purpose not recognized by law, or if for a valid purpose, conducted through means not sanctioned by law. Effect of Illegality / Liability of participating members/officers of the union 1)

2) Participating Union Officer – may be terminated, not only when he actually commits an illegal act during a strike, but also if he knowingly participates in an illegal strike [Phimco Industries, Inc. v PILA, 2010] As to grounds 1)

Reinstatement after a lawful strike When strikers abandon the strike and apply for reinstatement despite the existence of valid grounds but the employer either: (a) refuses to reinstate them or (b) imposes upon their reinstatement new conditions then the employer commits an act of ULP. The strikers who refuse to accept the new conditions and are consequently refused reinstatement are entitled to the losses of pay they may have suffered by reason of the employer’s discriminatory acts from the time they were refused reinstatement. [Philippine Marine Officers’ Guild v. Compania Maritima, 1968]

Ordinary Striking W orker – cannot be terminated for mere participation in an illegal strike; proof must be adduced showing that he or she committed illegal acts during the strike.

Economic strike – one staged by workers to force wage or other economic concessions from the employer which he is not required by law to grant [Consolidated Labor Association of the Phil. v. Marsman and Company, 1964]

2) ULP strike – called against a company's unfair labor practice to force the employer to desist from committing such practices. As to how com m itted I.

Slowdown strike – one by which workers, without a complete stoppage of work, retard production or their performance of duties and functions to compel management to grant their demands. A slowdown is inherently illicit and unjustifiable because while the

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employees continue to work, they, at the same time, select what part of their duties they perform. In essence, they work on their own terms. [Ilaw at Buklod ng Manggagawa v. NLRC, 1991] II.

Wild-cat strike – one declared and staged without filing the required notice of strike and without the majority approval of the recognized bargaining agent.

III.

Sit-down strike – one wherein workers take over possession of the property of such business to cease production and to refuse access to owners.

IV.

Sympathetic strike– one in which the striking workers have no demands of their own, but strike to make common cause with other strikers in other establishments.

V.

Mass leave – one in which workers collectively abandon or boycott regular work causing temporary stoppage of work Conversion strike

from

economic

to

ULP

It is possible for a strike to change its character from an economic to a ULP strike. In the instant case, initially, the strike staged by the Union was meant to compel the Company to grant it certain economic benefits set forth in its proposal for collective bargaining. However, the strike changed its character from the time the Company refused to reinstate complainants because of their union activities after it had offered to admit all the strikers and in fact did readmit the others. It was then converted into an unfair labor practice strike. [Consolidated Labor Assoc. of the Phil. v. Marsman and Company, 1964] Strike cannot be converted to lockout by a return to work offer

LABOR LAW

labor dispute between the union and the employer. [Rizal Cement Workers Union v. CIR, 1962] (b) Picketing 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. [Art. 278 (b)] Peaceful Picketing is the right of workers during strikes consisting of marching to and fro before an establishment involved in a labor dispute generally accompanied by the carrying and display of signs, placards and banners intended to inform the public about the dispute. [Guidelines Governing Labor Relations, October 19, 1987] [NCMB Manual, §1] (c) Lockout Lockout is the temporary refusal of an employer to furnish work as a result of an industrial or labor dispute. [Art. 219 (p)] Illegal strike and illegal lockout/In Pari Delicto Doctrine When the employer engaged in illegal lockout and the employee engaged in illegal strike, both parties are in pari delicto and such situation warrants the restoration of the status quo ante and bringing the parties back to the respective positions before the illegal strike and illegal lockout. [Philippines InterFashion Inc. v NLRC, 1982] C.2 WHO MAY DECLARE A STRIKE OR LOCKOUT? W ho may declare a strike

a

A strike cannot be converted into a pure and simple lockout by the mere expedient filing before the trial court a notice of offer to return to work during the pendency of the PAGE 194 OF 222

1.

The certified or duly recognized bargaining representative

2. Any legitimate labor organization in the absence of #1, but only on grounds of ULP [Book V, Rule XXII, §6]

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LABOR LAW

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. [Art. 279 (d)]

W ho may declare a lockout The employer [Book V, Rule XXII, Sec. 6] C.3 REQUISITES FOR A VALID STRIKE A valid strike must have a lawful ground and must conform with the procedural requirements set by law.

Procedural requirements 1) Effort to bargain 2) Filing and service of notice of strike

Substantial Requirements/Grounds

3) Observance of cooling-off period

A strike or lockout may be declared in cases of:

4) Strike vote

(1) Bargaining deadlocks

6) Observance of the waiting period

(2) ULP [Art. 278 (c)] W hen violations of collective bargaining strikeable as a ULP Only gross violations of the economic provisions of the CBA are treated as ULP. [BPI Employees Union-Davao FUBU v. BPI, 2013] W hen no lawful strike can be declared (1) Ground is an inter-union or intra-union dispute (2) No notice of strike (3) No strike vote obtained and reported to the NCMB (4) After assumption or certification by the Secretary of Labor (5) Wage Distortion (as described previously in Part 1 of the Reviewer)

(1) Effort to bargain No labor organization […] shall declare a strike […] without first having bargained collectively in accordance with Title VII of this Book […] (Art. 279(a)) In case of bargaining deadlocks, the notice shall, as far as practicable, further state the unresolved issues in the bargaining negotiations and be accompanied by the written proposals of the union, the counterproposals of the employer and the proof of a request for conference to settle differences. In cases of unfair labor practices, the notice shall, as far as practicable, state the acts complained of, and efforts taken to resolve the dispute amicably. [Rule XXII, Section 4, Omnibus Rules Implementing the Labor Code] (2) Filing and service of notice of strike Bargaining deadlocks

Prohibited activities in strike 1.

5) Strike vote report

By employer. No employer shall use or employ any strike-breaker, no shall any person be employed as a strike-breaker. [Art. 279 (c)]

2. By public official or police force. No public official or employee, including officers and personnel of the New Armed Forces of the Philippines or the

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[T]he duly certified or recognized bargaining agent may file a notice of strike […] with the Department at least 30 days before the intended date thereof. […] [Art. 278(c)]

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Unfair Labor Practice; Union Busting

LABOR LAW

Action on Notice 1.

[I]n cases of unfair labor practice, the period to file notice of strike 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 union busting (dismissal of duly elected union officers from employment), the cooling period shall not apply and the union may take action immediately. [Art. 278 (c)]

Upon receipt of a valid notice of strike or lockout, the NCMB, through its Conciliator-Mediators, shall call the parties to a conference the soonest possible time in order to actively assist them to explore all possibilities for amicable settlement.

2. The Conciliator-Mediator may suggest/offer proposals as an alternative avenue for the resolution of their disagreement/conflict which may not necessarily bind the parties.

Note: The notice must be served to the employer. Failure to do so will constitute noncompliance with the procedural requirements and will result to an illegal strike. [Filipino Pipe and Foundry Corp v NLRC, 1999]

3. If conciliation/mediation fails, the parties shall be encouraged to submit their dispute for voluntary arbitration.

Rationale: Due process. [IRR]

(3) Observance of cooling-off periods

Contents of Notice of Strike

Cooling off periods

1)

1)

Names and addresses of the employer and the union involved

2) ULP but not union busting – 15 days

2) Nature of the industry to which the employer belongs 3) Number of union members and of workers in the bargaining unit 4) Such other relevant data as may facilitate the settlement of the dispute. [Book V Rule XXII Sec. 8]

3) ULP and union busting – no coolingoff period Purpose of Cooling Off Period 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. [Art. 278 (e)]

Additional Requirem ents In case of Bargaining Deadlocks: 1)

Bargaining deadlock – 30 days

Statement of Unresolved issues in the bargaining negotiations

2) Written Proposals of the union 3) Counterproposals of the employer 4) Proof of a request for conference to settle the differences. [Book V, Rule XXII, Section 4] In cases of ULP: 1)

The purpose of the cooling-off period is to provide an opportunity for mediation and conciliation. [National Federation of Sugar Workers v. Ovejera, 1982]

Statement of Acts complained of

2) Efforts taken to resolve the dispute amicably. [Book V, Rule XXII, Section 4]

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(4) Strike Vote Requirements for a declaration of a strike in a strike vote 1)

approval by a majority of the total union membership in the bargaining nit concerned

2) approval is obtained by secret ballot in a meeting/referendum called for the purpose Duration of the Validity of the StrikeVote [T]he 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. […] [Art. 278 (f)]

LABOR LAW

Compliance with Both Cooling-off and W aiting Periods The observance of both periods must be complied with, although a labor union may take a strike vote and report the same within the statutory cooling-off period. The coolingoff and 7-day strike ban provisions of law constitute a valid exercise of police power of the State. [National Federation of Sugar Workers v. Ovejera, 1982] Strike-vote Reported Cooling-off Period

within

the

When the strike-vote is reported within the cooling-off period, the phrase “at least 7 days before the intended strike or lockout, subject to the cooling-off period herein provided.” in Article 278 (f) admits two interpretations: (1) Mutually exclusive periods (used in the NCMB Manual). The cooling off period and the 7-day period are mutually exclusive. Thus, in the case of Capitol Medical Center v. NLRC, the Court held that when the strike vote is conducted within the cooling-off period, the 7-day requirement shall be counted from the day following the expiration of the cooling off period.

DOLE intervention [T]he Department may, at its own initiative or upon the request of any affected party, supervise the conduct of the secret balloting. […] [Art. 278 (f)] (5) Strike Vote Report [I]n every case, the union or the employer shall furnish the Department the results of the voting at least 7 days before the intended strike 1 or lockout, subject to the cooling-off period herein provided.[Art. 278 (f)] (6) Observance of the 7-day “waiting period”

(2) Coexistent periods. The cooling-off period and the 7-day requirement may coexist. After all, the purpose of the 7-day requirement is to give time for the DOLE to verify if the projected strike is supported by the majority. There is no reason to add it to the cooling-off period.

The waiting period, on the other hand, is intended to provide opportunity for the members of the union or the management to take the appropriate remedy in case the strike or lockout vote report is false or inaccurate. [National Federation of Sugar Workers v. Ovejera, 1982]

C.4 REQUISITES FOR A VALID LOCKOUT

The waiting period is intended to give the DOLE an opportunity to verify whether the projected strike really carries the imprimatur of the majority of the union members. [Lapanday Workers Union v NLRC, 1995]

Similar to a strike, the proper grounds for a lockout are

1

Limitations [N]o employer may declare a lockout on grounds involving inter-union and intraunion disputes. [Art. 278 (b)] Grounds

7-day “Waiting Period”. PAGE 197 OF 222

1)

bargaining deadlock

2) ULP by labor organizations

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Requisites 1. 2. 3. 4. 5. 6.

Additional Requirements

Effort to bargain Filing and service of notice of lockout Observance of cooling-off period Lockout vote Report of lockout vote Observance of the waiting period

(1) Effort to bargain No employer shall declare a […] lockout without first having bargained collectively in accordance with Title VII of this Book. [Art 279 (a)] (2) Filing and service of Notice of Lockout

In cases of bargaining deadlocks 1)

3) Counterproposals of the employer 4) Proof of a request for conference to settle the differences. [Book V, Rule XXII, Section 4] In cases of ULP 1)

[I]n cases of unfair labor practice, the period to file notice of strike 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 union busting (dismissal of duly elected union officers from employment), the cooling period shall not apply and the union may take action immediately. [Art. 278 (c)] Note: The notice must be served to the employees through the representative union.

Statement of acts complained of

2) Efforts taken to resolve the dispute amicably. [Book V, Rule XXII, Section 4] Action on notice 1.

[T]he duly certified or recognized bargaining agent may file […] a notice of lockout with the Department at least 30 days before the intended date thereof. […] [Art. 278(c)] Unfair Labor Practice; Union Busting

Statement of unresolved issues in the bargaining negotiations

2) Written proposals of the union

Bargaining deadlocks

Upon receipt of a valid notice of strike or lockout, the NCMB, through its Conciliator-Mediators, shall call the parties to a conference the soonest possible time in order to actively assist them to explore all possibilities for amicable settlement.

2. The Conciliator-Mediator may suggest/offer proposals as an alternative avenue for the resolution of their disagreement/conflict which may not necessarily bind the parties. 3. If conciliation/mediation fails, the parties shall be encouraged to submit their dispute for voluntary arbitration. [Book V Rule XXII Sec. 9] (3) Observance of Cooling-off Periods Lockout cooling-off periods: •

based on bargaining deadlock – 30 days



based on ULP – 15 days.

Contents of notice 1)

LABOR LAW

Names and addresses of the employer and the union involved

2) Nature of the industry to which the employer belongs 3) Number of union members and of workers in the bargaining unit 4) Such other relevant data as may facilitate the settlement of the dispute.

(4) Lockout Vote 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

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LABOR LAW

3. By person engaged in picketing. 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. [Art. 279 (e)]

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. [Art. 278 (f)] (5) Report of Lockout Vote 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. [Art. 278 (f)]

Picketing as Part Speech/Expression

of

Freedom

of

General rule: picketing enjoys constitutional protection as part of freedom of speech and/or expression.

(6) Observance of W aiting Period (7 days)

Exceptions/limitations:

See notes under strike.

1)

Effect of Illegal Lockout

2) When picketing is achieved through illegal means [Mortera v. CIR]

Any worker whose employment has been terminated as a consequence of any unlawful lockout shall be entitled to reinstatement with full backwages. [Art. 279 (a) par. 3, 1st Sentence]

3) Courts may confine the communication/demonstration to the parties to the labor dispute [PCIB v. Philnabank Employees Association] 4) Innocent bystander rule. Courts may insulate establishments or persons with no industrial connection or having interest totally foreign to the context of the dispute [PCIB v. Philnabank Employees Association]

C.5 REQUISITES FOR LAWFUL PICKETING Prohibited activities in picketing 1.

When picketing is coercive rather than persuasive [Security Bank Employees Union v. Security Bank]

By any person. 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. [Art. 279 (b)]

2. By police force. 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 orders. [Art. 279 (d)]

Picketing and Libel Libel laws are not applied strictly considering that there is emotional tension in the picket lines and expected discourteous and impolite exchanges between the employees and the employer. [PCIB v. Philnabank Employees Association, 1981] Peaceful picketing is legal even in the absence of em ployer-employee relationship Picketing, peacefully carried out, is not illegal even in the absence of employer-employee relationship, for peaceful picketing is a part of the freedom of speech guaranteed by the

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Constitution. [De Leon v. National Labor Union, 1957] C.6 ASSUMPTION OF JURISDICTION BY THE DOLE SECRETARY OR CERTIFICATION OF THE LABOR DISPUTE TO THE NLRC FOR COMPULSORY ARBITRATION W hen Sec. of Jurisdiction:

Labor

can

and assuming jurisdiction over any such labor dispute in order to settle or terminate the same.[Art. 278 (g)] C.7 NATURE OF ASSUMPTION ORDER OR CERTIFICATION ORDER (1) Automatic injunction (2) Return-to-work and admission

Assume

(1) Labor dispute in an industry indispensable to the national interest (2) Such dispute is causing or is likely to cause a strike or lockout Powers of the Secretary of Labor (alternative) 1) Assumption of jurisdiction. The Secretary of Labor will decide the labor dispute himself/herself. 2) Certification for compulsory arbitration. The Secretary of Labor will certify the labor dispute to the NLRC for compulsory arbitration. Powers of the President (Not precluded by the powers of the Secretary of Labor) 1. Determine the industries indispensable to the national interest 2. Assume jurisdiction over any such labor dispute to settle or terminate such dispute W ho determines industries indispensable to the national interest [I]t is in the discretion of the Secretary of Labor to determine which industries are indispensable to the national interest. 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

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(3) Immediately executory (1) Automatic injunction of intended of im pending strike or lockout [S]uch 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. […] [Art.278 (g)] (2) Return-to-work and readmission if strike or lockout has already taken place [I]f one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return-to-work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. […] [Art.278 (g)] Nature of return-to-work order [T]he return-to-work order not so much confers a right as it imposes a duty; and while as a right it may be waived, it must be discharged as a duty even against the worker's will. Returning to work in this situation is not a matter of option or voluntariness but of obligation. The worker must return to his job together with his coworkers so the operations of the company can be resumed and it can continue serving the public and promoting its interest. That is the real reason such return can be compelled. So imperative is the order in fact that it is not even considered violative of the right against involuntary servitude. [Kaisahan ng Mga

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Manggagawa sa Kahoy v. Gotamco Sawmills, 1948] (3) Immediately executory The assumption and certification orders are executory in character and must be strictly complied with by the parties. [Allied Banking v. NLRC, 1996] Strikes and lockouts in clinics and similar institutions

hospitals, medical

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. [Article 278, par. 2] Rationale

certification order becomes a prohibited activity and thus, illegal, pursuant to Article 279 (a) of the Labor Code. [Allied Banking v. NLRC, (1996)] See notes on liabilities of employer, union officers, and ordinary workers under illegal strike. Summary of Liabilities of Participants in an Illegal Strike/Lockout [Art. 279] 1)

Employer in an illegal lockout – workers terminated due to illegal lockout shall be entitled to reinstatement plus full backwages.

2) Union officers who participated in illegal strike – deemed to have lost their employment 3) Union officers who participated in illegal acts during a lawful strike – deemed to have lost their employment. 4) Ordinary workers – deemed to have lost their employment only if they participated in illegal acts. Stricter penalties for non-compliance with orders, prohibitions, and/or injunctions issued by the Secretary of Labor in strikes involving hospitals, clinics, and similar medical institutions

The highest respect is accorded to the right of patients to life and health.

1)

Immediate disciplinary action against both union and employer

2) Dismissal/loss of employment for members of the striking union

C.8 EFFECT OF DEFIANCE OF ASSUMPTION OR CERTIFICATION ORDERS 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. [Art. 279 (a), par. 2]

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3) Payment by employer of backwages, damages, and other affirmative relief 4) Criminal prosecution against either or both the union and employer C.9 ILLEGAL STRIKE Reasons for being illegal (1) Prohibited by law

Strike/lockout becomes illegal A strike undertaken despite the issuance by the Secretary of Labor of an assumption or PAGE 201 OF 222

(2) Improper grounds

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procedural

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(5) Violation of injunction order

A strike which does not strictly comply with the procedural requirements set by law and the rules is an unlawful/illegal strike. [Santa Rosa Coca-Cola Plant Employees v Coca-Cola Bottlers, 2007]

(6) No strike/lockout provisions in the CBA

Good faith strike must still comply with procedural requirements

(4) Unlawful means and methods

(1) Prohibited by law Government employees While the Constitution guarantees the right of government employees to organize, they are otherwise not allowed to strike. (2) Improper grounds A legal strike must be based on a bargaining deadlock and/or a ULP act only. Intra-union and inter-union disputes are not proper grounds to strike. Good faith strike Good faith may be used as a defense if the strike is held on the basis of an act of ULP by the employer even if it turned out that there was no act of ULP. However, the mandatory procedural requirements cannot be dispensed with (notice of strike, cooling-off period, strike vote, strike vote report). [Grand Boulevard Hotel v. GLOWHRAIN, 2003] Good faith strike requires rational basis A mere claim of good faith would not justify the holding of a strike under the aforesaid exception as, in addition thereto, the circumstances must have warranted such belief. It is, therefore, not enough that the union believed that the employer committed acts of ULP when the circumstances clearly negate even a prima facie showing to sustain such belief. [Interwood Employees Assoc. v. Int’l Hardwood, 1956]

Even if the union acted in good faith in the belief that the company was committing an unfair labor practice, if no notice of strike and a strike vote were conducted, the said strike is illegal. [Grand Boulevard Hotel v. GLOWHRAIN, 2003] GR: A strike based on a non-strikeable ground is an illegal strike; a strike grounded on ULP is illegal if no such acts actually exist. Exception: Even if no ULP acts are committed by the employer, if the employees believe in good faith that ULP acts exist so as to constitute a valid ground to strike, then the strike held pursuant to such belief may be legal. [NUWHRAI v NLRC, 1998] (4) Unlawful means and methods Purpose and means test There must be concurrence between the validity of the purpose of the strike and the means of conducting it. A strike is a legitimate weapon in the universal struggle for existence. It is considered as the most effective weapon in protecting the rights of the employees to improve the terms and conditions of their employment. But to be valid, a strike must be pursued within legal bounds. The right to strike as a means for the attainment of social justice is never meant to oppress or destroy the employer. The law provides limits for its exercise. Among such limits are the prohibited activities under Art. 264, particularly paragraph (e), which states that no person engaged in picketing shall:

(3) Noncompliance with procedural requirements See notes under procedural requirements of a valid strike.

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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

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obstruct public thoroughfares. [Association of Independent Unions in the Philippines (AIUP), et. al. v NLRC, 1999]

A legal strike m ay turn into an illegal strike Even if the strike is valid because its objective or purpose is lawful, the strike may still be declared invalid where the means employed are illegal. [Phil. Diamond Hotel and Resort, Inc. v. Manila Diamond Hotel Employees Union, 2006] Examples methods 1)

of

unlawful

means

and

Acts of violence and terrorism

2) Destruction of property Guidelines and Balancing of Interest (1) A strike otherwise valid, if violent in character, may be placed beyond the pale. (2) Care is to be taken especially where an unfair labor practice is involved, to avoid stamping it with illegality just because it is tainted by such acts. To avoid rendering illusory the recognition of the right to strike, responsibility in such a case should be individual and not collective. (3) A different conclusion would be called for if the existence of force while the strike lasts is pervasive and widespread, consistently and deliberately resorted to as a matter of policy. It could be reasonably concluded then that even if justified as to ends, it becomes illegal because of the means employed'. (4) This is not by any means to condone the utilization of force by labor to attain its objectives. It is only to show awareness that in labor conflicts, the tension that fills the air as well as the feeling of frustration and bitterness could break out in sporadic acts of violence.

LABOR LAW

If there be in this case a weighing of interests in the balance, the ban the law imposes on unfair labor practices by management that could provoke a strike and its requirement that it be conducted peaceably, it would be, to repeat, unjustified, considering all the facts disclosed, to stamp the strike with illegality. It is enough that individual liability be incurred by those guilty of such acts of violence that call for loss of employee status. Such an approach is reflected in our recent decisions. [Shell Oil Workers Union v. Shell Co. of the Phils, 1971] The Labor Code regulates the exercise of said right by balancing the interests of labor and management in the light of the overarching public interest. Thus, paragraphs (c) and (f) of Article 278 mandate the following procedural steps to be followed before a strike may be staged: filing of notice of strike, taking of strike vote, and reporting of the strike vote result to the DOLE. It bears stressing that these requirements are mandatory, meaning, non-compliance therewith makes the strike illegal. The evident intention of the law in requiring the strike notice and strike-vote report is to reasonably regulate the right to strike, which is essential to the attainment of legitimate policy objectives embodied in the law. [Stamford Mark Corp. v Julian, 2004] (5) Violation of injunction order An automatic injunction under Article 278 (g) or a valid injunction order under the exceptions to Article 279 must be complied with. Otherwise, the strike becomes illegal. (6) No strike/lockout provisions in the CBA A “no strike, no lock-out” is a valid provision in the CBA. However, it only applies to economic provisions. It cannot prevent a strike which is grounded on unfair labor practice. [Malayang Samahan ng mga Manggagawa sa Greenfield v. Ramos, 2000] I. LIABILITY OF UNION OFFICERS

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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. [Article 279(a)] Note: Mere participation in an illegal strike by a union officer is sufficient ground to terminate his employment. In case of a lawful strike, the union officer must commit illegal acts during a strike for him to be terminated. [Article 279(a)] II. LIABILITY OF ORDINARY WORKERS General rule: Participation by a worker in a lawful strike is not ground for termination of his employment. [Article 279(a)] Exception: When the worker participated in illegal acts during the strike. When the strike is or becomes illegal, the workers who participate in it are not deemed to have lost their employment status by express omission in the second sentence of the third paragraph of Art. 279. Only the union officers are deemed to have lost their employment status. III. LIABILITY OF EMPLOYER Any worker whose employment has been terminated as a consequence of any unlawful lockout shall be entitled to reinstatement with full backwages. [Article 279(a)]

LABOR LAW

W hen defense of illegality of strike is not deemed waived The ruling cited in the Bisaya case that the employer waives his defense of illegality of the strike upon reinstatement of strikers is applicable only to strikers who signified their intention to return to work and were accepted back. […] Truly, it is more logical and reasonable for condonation to apply only to strikers who signified their intention to return and did return to work. The reason is obvious. These strikers took the initiative in normalizing relations with their employer and thus helped promote industrial peace. However, as regards the strikers who decided to pursue with the case, […] the employer could not be deemed to have condoned their strike, because they had not shown any willingness to normalize relations with it. [Philippine Inter-Fashion, Inc. v. NLRC, 1982] However, the mere act of entering into a compromise agreement cannot be deemed to be a waiver of the illegality of the strike, unless it such a waiver is clearly shown in the agreement. The court has emphasized that “[for] a waiver to be valid and effective [it] must be couched in clear and unequivocal terms which leave no doubt as to the intention of a party to give up a right or benefit which legally pertains to him.” [Filcon Manufacturing Corp v. Lakas Manggagawa sa Filcon – Lakas Manggagawa Labor Center] C.10 INJUNCTIONS

IV. WAIVER OF ILLEGALITY OF STRIKE W hen defense of illegality of strike is deemed waived An employer can be deemed to have waived the defense that a strike is illegal. In one case, the Court held that: “Admitting for the sake of argument that the strike was illegal for being premature, this defense was waived by the [Company], when it voluntarily agreed to reinstate the radio operators.” [Bisaya Land Transportation Co., Inc. v. CIR, 1957]

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 225 and 279 of this Code. [Art. 266] General Rule: Injunctions are prohibited. Exceptions: Those provided under Art. 225 (referring to the Powers of the NLRC) in connection with Art. 279 (on Prohibited Activities) under the Labor Code.

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I. REQUISITES FOR LABOR INJUNCTIONS

shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike.

Requisites for injunction to issue (in accordance with the Powers of the NLRC) 1.

actual or threatened commission of a prohibited or unlawful act OR requirement of performance of a particular act in a labor dispute

2. if unrestrained or unperformed, the act will cause substantial and irreparable damage to any party OR render ineffectual any decision in favor of such party 3. complainant has no adequate remedy at law 4. public officers charged with the duty to protect complainant’s property are unable or unwilling to furnish adequate protection [Art. 225 (e)] Prohibited Activities [Art. 279] (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. 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

LABOR LAW

(b) No person shall obstruct, impede, or interfere with, by force, violence, coercion, threats or intimidation, any peaceful picketing by employees during any labor controversy or in the exercise of the right to self-organization or collective bargaining, or shall aid or abet such obstruction or interference. (c) No employer shall use or employ any strike-breaker, nor shall any person be employed as a strike-breaker. (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. (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. II. “INNOCENT BYSTANDER RULE” Test to Determine if a Party is an “Innocent Bystander” An "innocent bystander," who seeks to enjoin a labor strike, must satisfy the court that aside from the grounds specified in Rule 58 of the Rules of Court, it is entirely different from, without any connection whatsoever to, either

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party to the dispute and, its interests are totally foreign to the context thereof. [MSF Tire and Rubber Inc. v. CA, 1999]

VIII. Procedure Jurisdiction

Injunction Available Bystanders

A. LABOR ARBITER

to

Innocent

An innocent by-stander is entitled to injunction if it is affected by the activities of a picketing union. Rationale The right [to picket] may be regulated at the instance of […] `innocent bystanders' if it appears that the inevitable result of its exercise is [1] to create an impression that a labor dispute with which they have no connection or interest exists between them and the picketing union or [2] constitute an invasion of their rights. [Liwayway Publishing v. Permanent Concrete Worker's Union, 1981]

LABOR LAW

and

A.1 JURISDICTION Except as otherwise provided under the Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide: (1) Unfair labor practices 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 Art. 279 of this Code, including questions involving the legality of strikes and lockouts; (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) regardless of whether accompanied with a claim for reinstatement. [Art. 224] (7) Money claims arising out of employeremployee relationship or by virtue of any law or contract, involving claims for actual, moral, exemplary an other forms of damages, as well as employment termination of OFWs; (8) Wage distortion disputes in unorganized establishments not voluntarily settled by the parties. [Art. 124] (9) Enforcement of compromise agreements when there is non-compliance by any of the parties. [Art. 233]

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(10) Other cases as may be provided by law.

(3) The claim exceeds P5,000, whether or not there is a claim for reinstatement.

Requisites of LA’s jurisdiction over Money Claim s (1) Money claims arose from ER-EE relations, and

The Regional Director has jurisdiction if: (1) the money claim is not accompanied by reinstatement AND

(2) Money claims arose from law or contracts other than a CBA •

Employer-employee relationship is a jurisdictional requisite, absent of which, the NLRC has no jurisdiction to hear and decide the case. [Hawaiian-Philippine Company v. Gulmatico]

If m oney claim s do not arise from EREE relations

(2) the claim does not exceed P5,000 [Art. 129] A.2 PROCEDURE W here to File Complaint should be filed with the Regional Arbitration Branch (RAB) having jurisdiction over the workplace of the complainant or petitioner.

Regular courts has jurisdiction If m oney claim s arise relations but by implementation of CBA

from ER-EE virtue of

Voluntary Arbitrator has jurisdiction “Exclusive and Original” Jurisdiction subject to Articles 274 and 275 A case under Art 224 may be lodged instead with a voluntary arbitrator. The policy of the law is to give primacy to voluntary modes of settling dispute. I. VERSUS REGIONAL DIRECTOR Jurisdiction on Money Claims (Labor Arbiter vs. Regional Director) (1) A money claim arising from employer-employee relations, except SSS, ECC/Medicare claims, is within the jurisdiction of a labor arbiter if: (2) The claim, regardless of amount, is accompanied with a claim of reinstatement; or

LABOR LAW



Workplace - place or locality where the employee is regularly assigned at the time the cause of action arose.



In the case of field employees, ambulant or itinerant workers, their workplace is (a) where they are regularly assigned or (b) where they are supposed to regularly receive their salaries and wages or work instructions from, and report the results of their assignment to their employers.

Some Rules on Venue 1. Exclusion. Where 2 or more Regional Arbitration Branches have jurisdiction over the workplace of the complainant, that first which acquired jurisdiction over the case shall exclude others. 2. W aiver. When venue is not objected to before the filing of position papers, such issue shall be deemed waived. 3. Transfer. Venue of an action may be transferred to a different Regional Arbitration Branch upon written agreement of the parties or upon order of the LA in meritorious cases and on motion of the proper party.

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4. OFW Cases. Cases involving overseas Filipino workers may be filed before the RAB having jurisdiction over the place where the complainant resides or where the principal office of any of the respondents is situated. A.3. NATURE OF THE PROCEEDING Proceedings before the LA are non-litigious. The Labor Arbiter is not bound by the technical rules of procedure. The Labor Arbiter shall use all reasonable means to ascertain the facts in each speedily and objectively. [Art. 227] A.4 REQUIREMENTS TO PERFECT APPEAL TO NLRC (1) The appeal should be filed within the reglementary period; (2) The Memorandum of Appeal should be under oath; (3) The appeal fee should be paid; (4) There should be posting of cash or surety bond, if judgment involves monetary award; and (5) There should be proof of service to the adverse party.

B. NATIONAL LABOR COMMISSION (NLRC)

LABOR LAW

RELATIONS

B.1 JURISDICTION NLRC divisions (1) Original Jurisdiction: Over petitions for injunction or temporary restraining order under Art. 225 (e). (2) Exclusive Appellate Jurisdiction: over all cases decided by labor arbiters (Art 224[b]) and the DOLE regional directors under Art 129. Period of Appeal (1) Labor Arbiter to NLRC: Decisions and Resolutions of the LA shall be final and executory unless appealed to the NLRC by any or both parties within 10 calendar days from receipt thereof. [2005 NLRC Rules of Procedure] (2) Regional director to NLRC: Decisions of the Regional director shall be final and executory unless appealed within 5 days from receipt thereof. [Art. 129] Note: If the last day of the reglementary period falls on a Sunday or a holiday, the last day shall be the next working day. Grounds of Appeal 1)

A.5 REINSTATEMENT PENDING APPEAL An order for reinstatement entitles an employee to receive his accrued backwages from the moment the reinstatement order was issued up to the date when the same was reversed by a higher court without fear of refunding what he had received. [Garcia v. Philippine Airlines, Inc., G.R. No.164856, 2009]

If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter or Regional Director;

2) If the decision, resolution or order was secured through fraud or coercion, including graft and corruption; 3) If made purely on questions of law; and/or 4) If serious errors in the findings of fact are raised which, if not corrected, would cause grave or irreparable injury to the appellant It is clear from the NLRC Rules of Procedure that appeals must be verified and certified against forum-shopping by the parties-ininterest themselves. The purpose of verification is to secure an assurance that the

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allegations in the pleading are true and correct and have been filed in good faith. [Antonio B. Salenga, et al. v. CA, 2012] B.2 EFFECT OF NLRC REVERSAL OF LABOR ARBITER’S ORDER OF REINSTATEMENT Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. On the other hand, if the employee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period. [Garcia v. Philippine Airlines, Inc., G.R. No.164856, 2009]

LABOR LAW

shopping; and (d) proof of service upon the other parties. (2) A mere notice of appeal without complying with the other requisites aforestated shall not stop the running of the period for perfecting an appeal. (3) 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 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. (4) 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.

B.3 REMEDIES Requisites for Perfection of Appeal to the Court of Appeals

B.4 CERTIFIED CASES Definition

[Rule 43] (1) The appeal shall be: •

Filed within the reglementary period;



Verified by the appellant himself in accordance with §4, Rule 7 of the Rules of Court;



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;



In three (3) legibly typewritten or printed copies; and



Accompanied by (a) proof of payment of the required appeal fee; (b) posting of a cash or surety bond as provided in Section 6 of the 2005 NLRC Rules, (c) a certificate of non-forum

Certified labor disputes are cases certified to the Commission for compulsory arbitration under Art. 278 (g) of the Labor Code. [§2, The 2011 NLRC Rules and Procedures] 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. [Art. 278] Function of the NLRC When sitting in a compulsory arbitration certified to by the Secretary of Labor, the

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NLRC is not sitting as a judicial court but as an administrative body charged with the duty to implement the order of the Secretary. Its function only is to formulate the terms and conditions of the CBA and cannot go beyond the scope of the order. Moreover, the Commission is further tasked to act within the earliest time possible and with the end in view that its action would not only serve the interests of the parties alone, but would also have favorable implications to the community and to the economy as a whole. This is the clear intention of the legislative body in enacting Art. 278 paragraph (g) of the Labor Code, as amended by Section 27 of R.A. 6175 [Union of Filipino Employees v. NLRC, 1990]

relative or incident to the certified case before it.

Effects of Certification 1.

Upon certification, the intended or impending strike or lockout is automatically enjoined, notwithstanding the filing of any motion for reconsideration of the certification order nor the non-resolution of any such motion which may have been duly submitted to the Office of the Secretary of Labor and Employment.

2. If a work stoppage has already taken place at the time of the certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. 3. All cases between the same parties, except where the certification order specifies otherwise the issues submitted for arbitration which are already filed or may be filed, and are relevant to or are proper incidents of the certified case, shall be considered subsumed or absorbed by the certified case, and shall be decided by the appropriate Division of the Commission. 4. The parties to a certified case, under pain of contempt, shall inform their counsels and the Division concerned of all cases pending with the Regional Arbitration Branches and the Voluntary Arbitrators

LABOR LAW

5. When a certified labor dispute involves a business entity with several workplaces located in different regions, the Division having territorial jurisdiction over the principal office of the company shall acquire jurisdiction to decide such labor dispute; unless the certification order provides otherwise. [Section 3, 2011 NLRC Rules and Procedures] Effects of Defiance Non-compliance with the certification order of the SOLE shall be considered as an illegal act committed in the course of the strike or lockout and shall authorize the Commission to enforce the same under pain of immediate disciplinary action, including dismissal or loss of employment status or payment by the locking-out employer of backwages, damages and/or other affirmative relief, even criminal prosecution against the liable parties. The Commission may also seek the assistance of law enforcement agencies to ensure compliance and enforcement of its orders and resolutions. [Sec. 4, 2011 NLRC Rules and Procedures] Strict Compliance of Assumption and Certification Orders The Secretary's assumption and certification orders being executory in character are to be strictly complied with by the parties even during the pendency of a petition questioning their validity for this extraordinary authority given by law to the Secretary of Labor is "aimed at arriving at a peaceful and speedy solution to labor disputes, without jeopardizing national interests." [Union of Filipro Employees v. NLRC, 1990] Procedure in certified cases (a) When there is no need to conduct a clarificatory hearing, the Commission shall resolve all certified cases within 30 calendar days from receipt by the

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assigned Commissioner of the complete records, which shall include the position papers of the parties and the order of the SOLE denying the motion for reconsideration of the certification order, if any. (b) Where a clarificatory hearing is needed, the Commission shall, within 5 calendar days from receipt of the records, issue a notice to be served on the parties through the fastest means available, requiring them to appear and submit additional evidence, if any. All certified cases shall be resolved by the Commission within 60 calendar days from receipt of the complete records by the assigned Commissioner. (c) No motion for extension or postponement shall be entertained. [Sec. 5, 2011 NLRC Rules and Procedures] Execution of Judgment Upon issuance of the entry of judgment, the Commission motu propio or upon motion by the proper party, may cause the execution of the judgment in the certified case. [Sec. 6, 2011 NLRC Rules and Procedures]

C. BUREAU OF LABOR RELATIONS – MED-ARBITERS C.1 JURISDICTION APPELLATE)

(ORIGINAL

AND

The Bureau of Labor Relations and the Labor Relations Divisions in the regional offices of the Department of Labor and Employment 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 nonagricultural, except those arising from the implementation or interpretation of collective bargaining agreements which shall be the subject of grievance procedure and/or voluntary arbitration.

LABOR LAW

The Bureau shall have fifteen (15) calendar days to act on labor cases before it, subject to extension by agreement of the parties. [Art. 232] Original Jurisdiction Decisions of the BLR through its original jurisdiction are appealable to the Secretary of Labor and Employment. Appellate Jurisdiction BLR has the power to review the decisions of the Regional Director Decisions rendered through its appellate power are final and executory. Hence, the remedy of the aggrieved party is to seasonably avail of the special civil action of certiorari under Rule 65 of the Rules of Court.

D. NATIONAL CONCILIATION MEDIATION BOARD

AND

D.1 NATURE OF PROCEEDINGS Conciliation and mediation is nonlitigious/non-adversarial, less expensive, and expeditious. Under this informal set-up, the parties find it more expedient to fully ventilate their respective positions without running around with legal technicalities and, in the course thereof, afford them wider latitude of possible approaches to the problem. D.2 CONCILIATION VS. MEDIATION Conciliation A mild form of intervention by a neutral third party, the Conciliator-Mediator, relying on his persuasive expertise, takes an active role in assisting parties by trying to keep disputants talking, facilitating other procedural niceties, carrying messages back and forth between the parties, and generally being a good fellow who tries to keep things calm and forwardlooking in a tense situation.

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Mediation A mild intervention by a neutral third party, the Conciliator-Mediator, wherein the CM advises the parties or offers solutions or alternatives to the problems with the end in view of assisting them towards voluntarily reaching their own mutually acceptable settlement of the dispute. Conciliation

Mediation

C-M facilitates disputants to keep things calm, delivers messages back and forth between the parties.

C-M assists parties to voluntarily reach mutually acceptable settlement.

D.3 PREVENTIVE MEDIATION Preventive mediation case — refers to the potential or brewing labor dispute which is the subject of a formal or informal request for conciliation and mediation assistance sought by either or both parties in order to remedy, contain or prevent its degeneration into a full blown dispute through amicable settlement.

E. DOLE REGIONAL DIRECTORS E.1 JURISDICTION Small money claims Recovery of wages, sim ple m oney claims and other benefits. —Upon complaint of any interested party, the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or household service or househelper under this Code, arising from employer-employee relations: Provided, That such complaint does not include a claim for

LABOR LAW

reinstatement: Provided, further, That the aggregate money claims of each employee or househelper do not exceed five thousand pesos (P5,000). The Regional Director or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the filing of the same. Any sum thus recovered on behalf of any employee or househelper pursuant to this Article shall be held in a special deposit account by, and shall be paid, on order of the Secretary of Labor and Employment or the Regional Director directly to the employee or househelper concerned. Any such sum not paid to the employee or househelper, because he cannot be located after diligent and reasonable effort to locate him within a period of three (3) years, shall be held as a special fund of the Department of Labor and Employment to be used exclusively for the amelioration and benefit of workers. The Secretary of Labor and Employment or his duly authorized representative may supervise the payment of unpaid wages and other monetary claims and benefits, including legal interest, found owing to any employee or househelper under this Code. [Art. 129] NOTE: See RA 10361 (Kasambahay Law) on settlement of disputes. Mechanism for Settlement of Disputes. – All labor-related disputes shall be elevated to the DOLE Regional Office having jurisdiction over the workplace without prejudice to the filing of a civil or criminal action in appropriate cases. The DOLE Regional Office shall exhaust all conciliation and mediation efforts before a decision shall be rendered. Ordinary crimes or offenses committed under the Revised Penal Code and other special penal laws by either party shall be filed with the regular courts. [Sec. 37, RA 10361]

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F. DOLE SECRETARY F.1 VISITORIAL POWERS

AND

ENFORCEMENT

The Secretary of Labor and Employment or his duly authorized representatives, including labor regulation officers, shall have access to employer’s records and premises at any time of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of this Code and of any labor law, wage order or rules and regulations issued pursuant thereto. Notwithstanding the provisions of Articles 129 and [224] of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection. [Art. 128] The Secretary of Labor or his duly authorized representatives may, at any time, inspect the premises, books of accounts and records of any person or entity covered by this Title, require it to submit reports regularly on prescribed forms, and act on violation of any provisions of this Title. [Art. 37]

LABOR LAW

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 non-compliance 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. [Art. 289] F.2 POWER TO SUSPEND/EFFECTS OF TERMINATION 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 the implementation of a mass lay-off. [Art. 283 (b)] F.3 ASSUMPTION OF JURISDICTION When in his opinion, there exist a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the SOLE may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration.[Art. 269 (g)] F.4 APPELLATE JURISDICTION a. Orders issued by the duly authorized representative of the SOLE under Art. 128 may be appealed to the latter. b. Denial of application for union registration or cancellation of union registration originally rendered by the

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BLR may be appealed to the SOLE (if originally rendered by the Regional Office, appeal should be made to the BLR)

The VA or panel of VAs shall have original and exclusive jurisdiction to hear and decide all unresolved grievances.

Decisions of the Med-Arbiter in certification election cases are appealable to the SOLE (decisions of med-arbiters in intra-union disputes are appealable to the BLR) [Art. 272]

Violations of a CBA, except those which are gross in character, shall no longer be treated as ULP and shall be resolved as grievances under the CBA.

F.5 VOLUNTARY ARBITRATION POWERS

Note: Gross violations of CBA shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement. [Art. 274]

Before or at any stage of the compulsory arbitration process, the parties may opt to submit their dispute to voluntary arbitration. [Art. 278 (h)] The Secretary of Labor and Employment […] shall decide or resolve the dispute […]. [Art. 278 (i)]

G. GRIEVANCE MACHINERY VOLUNTARY ARBITRATION

AND

The Commission, its Regional Offices and the Regional Directors of the DOLE 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. [Art. 274] Other Labor Disputes

G.1 SUBJECT MATTER OF GRIEVANCE Grievance 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 provisions of the CBA or company personnel policies. It is a complaint or dissatisfaction arising from the interpretation or implementation of the CBA and those arising from interpretation or enforcement of personnel policies. Grievance Machinery It refers to the mechanism for the adjustment and resolution of grievances. It is part of the continuing process of collective bargaining. G.2 VOLUNTARY ARBITRATOR I. JURISDICTION Exclusive and Original Over Grievances

The VA or panel of VAs, upon agreement of the parties, shall also hear and decide all other labor disputes including ULP and bargaining deadlocks. [Art. 275] Even if the specific issue brought before the arbitrators merely mentioned the question of “whether an employee was discharged for just cause,” they could reasonably assume that their powers extended beyond the determination thereof to include the power to reinstate the employee or to grant back wages. In the same vein, if the specific issue brought before the arbitrators referred to the date of regularization of the employee, law and jurisprudence gave them enough leeway as well as adequate prerogative to determine the entitlement of the employees to higher benefits in accordance with the finding of regularization. [Manila Pavilion Hotel, etc. vs. Henry Delada, 2011]

Jurisdiction

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II. PROCEDURE [IRR, Book V, Rule XI] Hearing 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 VA or panel of Vas. Hearing may be adjourned for cause or upon agreement by the parties.

LABOR LAW

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. [Art. 276] III. REMEDIES The decision of a Voluntary Arbitrator or panel of Voluntary Arbitrators is appealable by ordinary appeal under Rule 43 of the Rules of Civil Procedure directly to the Court of Appeals. [Rule 43 §1, Rules of Court]

Days to render an award/decision Unless the parties agree otherwise, it shall be mandatory for the VA or panel of Vas to render an award or decision within 20 calendar days from the date of submission of the dispute to voluntary arbitration.

NOTE: See Page 39 on availability of motion for reconsideration.

H. COURT OF APPEALS H.1 RULE 65, RULES OF COURT

Form of award/decision The award or decision of the VA or panel of VAs must state in clear, concise and definite terms the facts, the law and/contract upon which it is based. Finality It shall be final and executory after 10 calendar days from the receipt of the copy of the award or decision by the parties. NOTE: See Page 39 on availability of motion for reconsideration. Execution of award/decision The VA or panel of VAs, upon agreement of the parties, shall also hear and decide all other labor disputes including ULP and bargaining deadlocks. [Art. 275] 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,

Section 1. Petition for certiorari. — When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require. The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. Section 2.Petition for prohibition. — When the proceedings of any tribunal, corporation, board, officer or person, whether

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exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent to desist from further proceedings in the action or matter specified therein, or otherwise granting such incidental reliefs as law and justice may require. The petition shall likewise be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. Section 3.Petition for m andam us. — When any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent, immediately or at some other time to be specified by the court, to do the act required to be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the respondent.

I. SUPREME COURT

LABOR LAW

Consequently, all such petitions should hence forth be initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief desired. [St. Martin Funeral Home vs. NLRC, 1998] I.1 RULE 45, RULES OF COURT Section 1. Filing of petition with Supreme Court. — A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition shall raise only questions of law which must be distinctly set forth. Appeal from CA to SC should be under Rule 45 (Petition for Review on Certiorari) and not Rule 65 (Special Civil Action for Certiorari). [Sea Power Shipping Enterprises, Inc. vs. CA, 2001] Since the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari. If the aggrieved party fails to do so within the reglementary period, and the decision accordingly becomes final and executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate inaction. [Tirazona v Phil EDS Techno-Service Inc, 2009]

J. PRESCRIPTION OF ACTIONS No claim for compensation shall be given due course unless said claim is filed with the System (SSS or GSIS, as the case may be) within three (3) years from the time the cause of action accrued. [Art. 207, as amended by Section 5, Presidential Decree No. 1921]

[A]ll references in the amended Section 9 of B.P. No. 129 to supposed appeals from the NLRC to the Supreme Court are interpreted and hereby declared to mean and refer to petitions for certiorari under Rule 65. PAGE 216 OF 222

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(1) Money Claims

(2) Illegal dismissal

Money claims. – All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred.

The time of his dismissal within which to institute In illegal dismissal cases, the employee concerned is given a period of four years from a complaint. This is based on Article 1146 of the New Civil Code which states that actions based upon an injury to the rights of the plaintiff must be brought within four years. [Victory Liner, Inc. v Race, 2007]

All money claims accruing prior to the effectivity of this Code shall be filed with the appropriate entities established under this Code within one (1) year from the date of effectivity, and shall be processed or determined in accordance with the implementing rules and regulations of the Code; otherwise, they shall be forever barred. Workmen's compensation claims accruing prior to the effectivity of this Code and during the period from November 1, 1974 up to December 31, 1974, shall be filed with the appropriate regional offices of the Department of Labor not later than March 31, 1975; otherwise, they shall forever be barred. The claims shall be processed and adjudicated in accordance with the law and rules at the time their causes of action accrued. [Art. 306]

Article 1146. The following actions must be instituted within four years: 1)

Upon an injury to the rights of the plaintiff;

2) Upon a quasi-delict; However, when the action arises from or out of any act, activity, or conduct of any public officer involving the exercise of powers or authority arising from Martial Law including the arrest, detention and/or trial of the plaintiff, the same must be brought within one (1) year. [As amended by PD No. 1755, Dec. 24, 1980.] (3) Unfair Labor Practice

The Labor Code has no specific provision on when a monetary claim accrues. Thus, again the general law on prescription applies. Article 1150 of the Civil Code provides that: Article 1150. The time for prescription for all kinds of actions, when there is no special provision which ordains otherwise, shall be counted from the day they may be brought. The day the action may be brought is the day a claim started as a legal possibility. In the present case, the day came when petitioner learned of Asiakonstrukt’s deduction from his salary of the amount of advances he had received but had, by his claim, been settled, the same having been reflected in his payslips, hence, it is assumed that he learned of it at the time he received his monthly paychecks. [Anabe v Asian Const, et al., 2009]

Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall prescribe in three (3) years. All unfair labor practice arising from Book V shall be filed with the appropriate agency within one (1) year from accrual of such unfair labor practice; otherwise, they shall be forever barred. [Art. 305] Concept of unfair labor practice and procedure for prosecution thereof. – […] No criminal prosecution under this Title may be instituted without a final judgment finding that an unfair labor practice was committed, having been first obtained in the preceding paragraph. During the pendency of such administrative proceeding, the running of the period of prescription of the criminal offense herein penalized shall be considered interrupted: Provided, however, that the final judgment in the administrative proceedings shall not be binding in the criminal case nor be considered as evidence of guilt but merely

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as proof of compliance of the requirements therein set forth. [Art. 258, as amended by Batas Pambansa Bilang 70, May 1, 1980 and later further amended by Section 19, Republic Act No. 6715, March 21, 1989] (4) Offenses penalized by the Labor Code and IRR issued pursuant thereto Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall prescribe in three (3) years. [Art. 305] (5) Prescriptive Period Recruitment Cases

of

Illegal

LABOR LAW

(6) Kasambahay Law All existing arrangements between a domestic worker and the employer shall be adjusted to conform to the minimum standards set by this Act within a period of sixty (60) days after the effectivity of this Act: Provided, That adjustments pertaining to wages shall take effect immediately after the determination and issuance of the appropriate wage order by the RTWPBs: Provided, further, That nothing in this Act shall be construed to cause the diminution or substitution of any benefits and privileges currently enjoyed by the domestic worker hired directly or through an agency. [Sec. 41]

Section 7. Prescription. Illegal recruitment cases under this Rule shall prescribe in five (5) years; Provided, however, that illegal recruitment cases involving economic sabotage shall prescribed in twenty (20) years. [RA 8040]

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PROCEDURE FOR UNION REGISTRATION

Filing of application If independent union, chartered local or workers' association

If federation, national union or workers' association operating in more than one region

File with Regional Office

File with BLR

Act within 1 day from receipt

Act within 30 days

Approve application

issue certificate of registration

Completed Issue certificate of registration

Deny application for failure to comply with requirements Within the day, notify applicant of requirements and order completion within 30 days

Not completed Denial without prejudice Appeal within 10 days from receipt of notice to BLR/SOLE BLR/SOLE to decide within 20 days from receipt of records of case

Decision can be appealed to CA via Rule 65

CA decision can be appealed to SC via Rule 45

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SUMMARY OF UNION REGISTRATION Independent Union Requirements for application

(1) Name of labor union 1) and its principal address

National Union or Federation Name of federation and its principal addresses

Name of its officers 2) Name of its officers and their respective and their respective addresses addresses (2) Approximate 3) Minutes of number of organizational employees in the meetings and list of bargaining unit participating where it seeks to employees operate 4) Annual financial (3) Statement that it is reports (if it has been not a chartered local in existence for more of any federation or than one year) or nat’l union statement that no collection has been (4) Minutes of made organizational meetings and list of 5) CBL, minutes of its participating adoption and employees ratification, and list of participating (5) Name of all its employees (list may members comprising be dispensed with if at least 20% of ratification was done employees in BU during (6) Annual financial organizational

Chartered Local

W orker’s Association

(1) Charter certificate issued by national union or federation Other requirements (to be entitled to all other rights and privileges of LLO) (a) Names of local/chapter’s officers and their addresses (b) Principal office local/chapter

of

(c) Chapter’s CBL, or statement that chapter has adopted the CBL of federation or national union (d) Certification under oath by secretary and attestation by President

1)

Name of association and its principal address Name of officers and their respective addresses

2) Minutes of organizational meetings and list of participating members 3) Annual financial reports (if it has been in existence for more than one year) or statement that no collection has been made 4) CBL, minutes its of adoption and ratification, list of participating members, and date of ratification (unless ratification was done during organizational

W orker’s association operating in m ore than one region Same as association

worker’s

+ 7) Resolution of membership of each member association, duly approved by its board of directors

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SUMMARY OF UNION REGISTRATION in existence for more meeting) than 1 year) or 6) Resolution of statement that no affiliation of at least collection has been 10 LLOs made (independent or (7) CBL, minutes of its chartered locals) adoption and which are the SEBA ratification, and list in their BU of participating EEs 7) Names and (which can be addresses of dispensed with if companies where CBL adopted during affiliates operate organizational and list of all meeting) members of affiliates (8) Registration Fee in each company (P50.00) involved (9) Certification under 8) Registration fee oath by secretary or (P50.00) treasurer and 9) Certification under attestation by oath by secretary or President of all the treasurer and requirements attestation by President of all the requirements

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meeting) 5) Registration (P50.00)

fee

6) Certification under oath by Secretary or treasurer and attestation by President

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LABOR LAW

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