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LABOR LAWS

1997 Notes of Atty. Roberto Gana I INTRODUCTION What is labor? It may refer to the activity, in which case it is service or work; the exertion of physical or mental effort, or both to the production of goods and services. It may refer to the working class - the sector which derives its livelihood chiefly from rendition of work or services in exchange for compensation. (PF Fernandez) It may also refer to the labor force. The group or portion of the population which is employed or capable of being employed in productive work. You will therefore include not only those already employed but also the unemployed/under-employed. Labor is further capable of being classified as: a) Organized: Those who are members of a trade union b) Unorganized: Those who are not members of any trade union. and a) Formal: b) Informal: Those with a definite employer, there being an employer-employee relationship Those persons engaging in work producing goods or services without any definite employer. There is no employer-employee relationship. Falling here would be the sidewalk vendors, pedicab tricycle drivers, even scavengers (bote-dyaryo).

- What is the constitutional basis for labor laws? Labor laws are enacted under the police powers of the state. State power to pass laws to promote the general welfare. This may limit existing rights. Likewise, under the social justice provisions, the state shall guarantee its of all workers to self-organization, collective bargaining and negotiation, peaceful conceited activities, and right to strike according to law. They shall be entitled to security of tenure, humane conditions of work and living wage. They shall participate in policy and decision making processes affecting their rights and benefits as may be provided by law. (Art. 13, Sec. 3) It contemplates equitable diffusion of wealth and political power (National Service Corp. v. NLRC, Nov. 29, 1988)

But this does not mean every labor dispute should be decided pro labor. Management also has its own rights. Other constitutional basis for labor laws: Principle of shared responsibility Preferential use of volume modes of settling disputes, inadequate conciliation Right to just share in fruits of production (management/. to reasonable return on investments and to expansion and growth) Right to form unions (Art. 3, Sec. 8) -Right to self-organization for government workers (Art. 9-B, Sec. 215) Promotion of full employment (Art. 2, Sec. 9) Affirmation of labor as a primary social economic force (Art. 2, Sec. 18) No invol. servitude (Art. 3, Sec. 18) Preferential use of Filipino labor (Art. 12, Sec. 12) Full protection to labor/full employment (Art. 13, Sec. 3) Protection of working women (Art. 13, Sec. 14) Family living wage and income-a right (Art. 18, Sec. 3) What kind of economic system do we have, according to SUPREME COURT? -

Not really laissez faire. We do not rely purely on market forces (ECOP v. NWPC, 201 SCRA 759). The welfare state is not alien to our constitution. This is affirmed by the social justice clause. The policy is one tipping the scales in favor of labor. Thus, doubts in law rules and regulation interpreted in favor of labor (Art. 4) Doubts in construction of labor contracts are interpreted in favor of safety and decent living of worker (New Civil Code, Art.1702) . But note, there must be doubt. Where the law, for example, provides that special days, if worked, give worker 130% of regular wage, you cannot grant 100% of regular wage where the employee does not work. There is no doubt about whether or not unworked special days are compensable - the law is silent. They are not compensable. - Likewise, labor laws, particularly those granting rights and benefits are of a mandatory character and cannot be waived by contract. In one case, the union and management agreed in the CBA to condone implementation of a wage order granting 12 pesos wage increases. The SC said that this was void. Firstly, it is only the wage board which could approve an exemption. Secondly, the parties in a CBA may establish clauses they deem convenient provided they are not contrary to law, morals, good customs, public order or public policy. One cannot apply the rule on compromise agreements to such a provision in

the CBA. Compromises are means to end labor disputes and not against public policy. (Manila Fashions vs. NLRC, GR 117878, Nov. 13, 1996) Under the Civil Code, it is stated that labor relations are so impressed with public interest that they are not merely contractual and are subject to special laws on labor (Article 1700). The Civil Code also imposes obligations on labor and management not to treat each other oppressively. As to the public, their obligation is not to inconvenience the same or impair its interest (Article 1701). We will discuss labor laws as follows (more or less) Pre-employment Human Resource Development Employer-employees relationship/Management Prerogative Working conditions OSHS Labor Relations SSS/ECC/GSIS CARL

Labor laws are further divided into:

Labor standards - minimum requirement prescribed by law, rules and regulations on wages, hours of work, cost of living allowance and other monetary and welfare benefits, including OSHS (Maternity Children's Hospital v. Secretary of Labor, 170 SCRA 632) Labor Relations - means by which terms and conditions above the minimum are fixed (e.g. CBA, Arbitration). They deal with rights of labor as a collective in dealing with rights of employees. Social Welfare Legislation - covers benefits for contingencies over and above what the law requires of, employers, which state provides to worker and/or his family. Labor laws/legislation - refers only to employees Social legislation - all members of society

II PRE-EMPLOYMENT The law on pre-employment is Book I (Art. 12-42) of the Labor Code and RA 8042: the Migrant Workers and Overseas Filipino Workers Act of 1995. The SUPREME COURT did not include RA 8042 in the coverage of the exams for one reason or another, but because of its effect on the Labor Code, we cannot overlook it. First of all, in matters of policy Art. 12 lays down 7 general policies on overseas employment:

1) 2) 3) 4) 5) 6) 7)

Promote and maintain state of full employment Protect citizens desiring to work locally or overseas by securing for them best possible terms and conditions Facilitate free choice of available employment Facilitate and regulate movement of workers Regulate employment of aliens (including registration/permit system) Strengthen network of public employment offices and rationalize private sector part'n in recruitment and placement. Insure careful selection of Filipino workers for overseas employment to protect good name of RP

RA 8042 adds: 1) 2) 3) 4) 5) 6) 7) 8) 9) Uphold dignity of citizens, in general, Filipino migrant workers, in particular Full protection to labor State will not promote overseas employment to sustain economic growth but the program shall rest on assurance that dignity and rights of Filipino citizen shall not be compromised or violated. Equality of women and men. Gender sensitive criteria to be applied in formulation of policies Free access to courts and adequate legal assistance. Right of FILIPINO MIGRANT WORKERs to participate in democratic decision-making processes and representation in institutions. relevant to overseas employment. Deployment of only skilled workers NGOs recognized as partners of state in protecting FILIPINO MIGRANT WORKERs. State to cooperate with them. Adm. costs in recruitment/placement - these services shall be rendered free.

What is significant here?

1. State policy is not to encourage overseas employment for entry of foreign exchange. The
program exists to protect rights of FILIPINO MIGRANT WORKERs. The new policy is seen in a number of other provisions: a) Deployment shall be allowed only in countries where the rights of FMWs are protected. How do we know if these rights are protected? These are the cases: i. Existing labor and social laws protecting the rights of migrant workers; ii. It is signatory to multilateral conventions, declarations or resolutions relating to protection of migrant workers; iii. It has concluded a bilateral agreement with the government protecting rights of OFWs; or iv. It is taking positive, concrete measures to protect rights of migrant workers. (This last phrase is the catch-all phrase. There may be no conventions or laws or treaties but if

the DOLE finds that there are concrete positive measures taken, then it may allow deployment). v. Another exception is provided in the next provision - The government, in pursuit of national interest or when public welfare so requires, may terminate or impose a ban on deployment. If it wont fall under the fourth case, it may fall under this. This therefore extends also to imposition of a ban. Even if the first foru cases are met, the government may still prohibit deployment. b) The regulatory functions of the government relative to overseas employment shall be phased out gradually within five years from passage of the act. (meaning, by 2000). 2. 3. 4. Legal assistance is seen as important in protecting FMs Participation of FILIPINO MIGRANT WORKERs in decision-making processes and representation in institutions. Only skilled workers shall be deployed. (as far as practicable) Some examples of how state power has been used to protect OFWs:

a) In Philippine Association of Service Exporters, Inc. vs. Drilon, the SC upheld a


department order banning deployment of Filipinas as domestics. PASEI complained that this violated equal protection. Why single out Filipinas? Why was it not applicable to Filipinos? The SC said this rested on a substantial distinction. Reports from overseas and in the press showed that abuses against Filipina domestics was rampant. There were no such reports regarding male domestics. PASEI then says this violates the right to travel, obligations of contracts and their right to participate in policy and decision-making processes affecting their rights and duties. The SC said the order was in the nature of a police power measure - to protect OFWs from abuses. Those rights are subject to a valid exercise of police power. In JMM Promotion and Management vs. CA, August 15, 1996, the problem concerned a POEA requirement that applicants for jobs as entertainers first had to present proof of academic and artistic skills before their Artist Record Book could be processed. JMM Promotion complained that violated the obligation of their contracts as several of those they had contracted for may not be able to return abroad. The SC said the rule was a valid exercise of police power. We take judicial notice of the fact that most of our women, a large number employed as domestic helpers and entertainers, worked under exploitative conditions marked by physical and personal abuse. Many ended up as prostitutes abroad. The intent was to require that those who wanted to become artists abroad had reasonable artistic and educational skills defore they could be deployed. The welfare of Filipino performing artists, particularly the women, was in mind. This is consistent with the protection to labor clause in the constitution. Protection to labor does not indicate promotion of employment alone. The promotion of full employment cannot take a backseat to the governments constitutional duty to provide mechanisms for protection of our workforce local or overseas. Their assertion of property rights must therefore yield to police power. Under police power, the right to engage in a profession may be subject to reasonable restriction.

What is recruitment and placement?

Any act of contracting, enlisting, canvassing, transporting, utilizing, hiring, procuring. It includes referrals, contract services, promises and advertisements, whether locally or overseas, for profit or not ; provided that any person who, for a fee, promises employment to 2 or more, is deemed engaged in recruitment and placement. People v. Panis. It is not necessary that one promise employment to 2 or more for a fee for there to be recruitment and placement. The proviso is a mere rule of evidence. The law defines recruitment and placement as any act described in the definition. A single act is enough. When you tell other you are recruiting workers for abroad and say you can send them if they give the right amounts, you are engaged in recruitment and placement. It is the settled rule that a person is engaged in recruitment when he gives the impression that he has power to send workers abroad. He manifested that he had ability to send the three complainants abroad. He promised them work for a fee and convinced them to give their money for the purpose of getting an employment overseas. (People vs. Diaz, GR 112175, July 26, 1996) Aquino v. CA. Suppose you advertise while you have a license. The workers are deployed overseas. When the license has expired, then they pay you the fees. Is this collection of fees illegal recruitment, for having been done without a license? No. The concept of recruitment refers to offering of inducements to qualified personnel to enter a job. Payments for overseas employment are necessary consequences of applying for overseas employment, it would be asking too much to require a licensed agency to stop all transactions on the day its license expires. It must still be able to continue winding up of operations. A church social action center asks parishioners for job openings so its unemployed could have jobs. It sends letters to businessmen on behalf of unemployed parishioners, asking them to hire them. Recruitment and Placement - these are referrals. Referral - the act of passing along or forwarding of an applicant for employment for initial interviews (People v. Goce, Aug. 29, 1995) You do not have to perform all acts: Any single act is enough. In connection with this, what is illegal recruitment?

Under the Labor Code, it will have 2 elements: 1) 2) engaging in any act of recruitment and placement or a prohibited act under Art. 34; without a license or authority

However, under RA 8042, it includes the following acts committed by a non-licensee, nonholder, or even a licensee or holder of authority: 1. Charging or accepting (directly or indirectly) amounts greater than that specified in the schedule of allowable fees; or to make worker pay more than that received by him as loan or advance; 2. Furnish or publish any false notice or information or document in relation to recruitment or employment; 3. Give any false notice, testimony or information, or commit misrepresentation to obtain a license or authority (note that paragraphs 2 & 3 refer to different types of false notice or information. Par. 2 refers to acts done while one is engaging in recruitment and placement. For example, you say you have a job waiting in Saudi Arabia when you dont. Par. 3 refers to acts done while one is applying for a license or authority. For example, you state you employ a dummy to stand in as the operator of the agency, when it is actually you, an operator of a travel agency, who is the owner and operator.) 4. Induce or attempt to induce a worker already employed to quit his employment to offer him another (unless to liberate him from oppressive terms and condition) 5. Influence or attempt to influence any person or entity not to employ a worker who has not applied for employment thru his agency; 6. Engage in recruitment and placement of workers in jobs harmful to public health or morality or to dignity of RP; 7. 8. Obstruct or attempt to obstruct inspection by DOLE; Fail to submit reports as required;

9. Substitute or alter, to prejudice of worker; employment contracts approved and verified by DOLE from signing to expiration without approval of DOLE (Note that paragraph 9 adds the phrase to the prejudice of the worker. In the Labor Code, such phrase is absent, though the SC has held it is implied in the purpose of the provision - to ensure the worker is protected and receives the minimum benefits under the law.); 10. For officer or agent of agency to become member of Board of any corporation engaged in travel agency or to be engaged directly or indirectly in management of a travel agency;

11. Withhold or deny travel documents before departure for monetary or financial considerations other than that authorized; 12. Failure to actually deploy without valid reason (What will be a valid reason for nondeployment? War in the host country, or cancellation of all visas to such country. This failure gives rise to another obligation - reimburse all expenses, otherwise, par. 13 will apply.); 13. Failure to reimburse expenses of worker where deployment does not take place without worker's fault. (Sec. 6, RA 8042) IN SHORT, what Art. 34 of the Labor Code provides, plus Nos. 12 & 13 above. - Does this supersede Arts. 34 and 38 of the Labor Code? Note that Sec. 6 of RA 8042 refers to OFWs. Thus it starts "for purposes of this Act." The law refers to overseas employment. The definition of illegal recruitment limits it to recruitment for employment ABROAD. The Labor Code (Art. 13) refers to recruitment for employment LOCALLY OR ABROAD. Therefore, for overseas employment, RA 8042 will be used. For local employment, Art. 38 is still valid. Meaning, a recruiter, even if with license or authority, may be found guilty of illegal recruitment IF he commits the prohibited acts enumerated, in relation to OVERSEAS EMPLOYMENT. This has been noted by the Supreme Court in the recent case of People vs. Diaz that the definition of illegal recruitment has been amended by the new law. If he does it for local employment, that's a violation of the Code, but not illegal recruitment. What evidence may prove illegal recruitment? Receipts, vouchers. What if you don't have these? Testimony of the victims. As long as they can show the accused performed any single act of recruitment and placement - that is sufficient evidence. What are the other types of illegal recruitment?

If they ask, A,B & C recruited X for a job in Japan without a license, what crime was committed? Say, it is illegal recruitment by a syndicate. That means carried out by 3 or more conspiring or confederating with one another.

It is in large scale if committed versus 3 or more individually or as a group. What if you are a mere employee of an agency? Also liable, whether as principal accomplice or accessory. Who can recruit therefore? Only - private (fee-charging) employment agency - license (under RA 8042 it is only an employment agency) private recruitment entity - authority public employment office manning agency (POEA Rules) service contractor (RA 8042 rules) has services abroad and hires for such services.

What is overseas employment? Employment outside Philippines.

What if you are on a Phil. registered vessel going to Australia? Still overseas employment. Look at the POEA Rules:

Employment outside Phil. including employment on board vessels plying international waters, covered by a valid employment contract. What are the requirements before one can obtain a license? a) b) c) Citizens or 75% (of authorized capital stock ) Filipino corporation. Substantial capitalization. registration fees cash and surety bonds: i. P100,000 cash bond ii. P50,000 surety bond iii. P200,000 in escrow

d)

No direct hiring except for diplomatic corps , international organizations and other employers allowed by DOLE. You must pass through the entities and boards authorized by Sec. of Labor 9

What is the purpose of the bonds?

Capricorn v. CA: The nature of the bond is that it is to answer for liabilities of the agency arising from: violations of the conditions of the grant or use of the license and contract of employment/Labor Code, Rules and Regulations and all liabilities POEA may impose. If a travel agency therefore sues a placement agency for tickets it used in deploying its applicants, it cannot go after the bond if it wins the case. The bond's purposes relate to overseas employment contracts. The contract for sale of airline tickets is not one of the liabilities it is answerable for. The bond is there to ensure recourse to the worker. For what claims is the bonding/surety company liable? If the claims arise before the surety bond took effect, it is not liable. As to claims after, in EASCO v. Sec. of Labor, EASCO was notified after 10 days from cancellation of the bond. The contingency occurred during the life of the bond. Since notice was given (by means of summons from DOLE) before the 10 day notice period expired, the SUPREME COURT said, as the bond provides "Notice to principal is notice to surety." Likewise, the contract of compensated surety is construed liberally in favor of beneficiaries. What if the contract for overseas employment has an automatic renewal clause. After renewal, the injury occurred. The agencies says, our recruitment agreement expired. We are not liable for the contingency occurring after the original contract. (Catan v. NLRC) Supreme Court said its responsibility still existed. Obligations in the recruitment agreement are not coterminous with the term of such agreement such that if they end it the regular contract (agency & principal) their responsibilities subsist until the end of the employment contract. Otherwise, the purpose of the law will be rendered nugatory. (Further, since no notice of termination was given to the worker, under Act 1921, NCC, revocation of agency for purposes of contracting with specified persons shall not prejudice them if no notice was given them.) So liable solidarily are the agency and the principal. Judgment against the recruiter should initially be enforced against the bonds (Del Rosario v. NLRC, 187 SCRA 777, 1990) Further, Sec. 10 of RA 8042 says that if the agency is a juridical being, its corporation officers and directors engaged in recruitment and placement are solidarily liable with agency.

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These liabilities continue during the duration of the contract of employment and shall not be affected by substitution, amendment or modification of the contract. In connection with this, note the case of Hydro Resources v. NLRC. Hydro (a construction firm ) assigned its liabilities to employees to JADRO, a joint venture if formed. The workers signed their conformity to this. Is Hydro still liable, nevertheless? YES. Policy Instructions #22 says workers hired by a joint venture are direct employees of the firms making it up. This is designed to protect OCWs - a labor contractor remains the employer despite assignment of contrary. Such assignment is contrary to the protection to labor policy. Can an agency therefore ever be relieved of liability? Yes. 1. Feagle Construction Corporation v. Dorado, 196 SCRA 481, 1991. The worker persuaded the agency to send him abroad even if the agency already refused since his pay and his job were not assured. The Supreme Court said he took a calculated risk by signing the waiver and rendered the agency free from liability.

2. If the agency papers were used to recruit without its consent. (Ilas v. NLRC, Feb. 7, 1991) CONTRACTUAL STIPULATIONS The Labor Code makes it a prohibited act to alter or reduce employment contracts before they terminate without DOLE approval. RA 8042 qualifies this further by making it illegal if it is to the prejudice of the worker. This is only being consistent with the case of Seagull Maritime v. Balatongan. The Supreme Court there said that a supplemental agreement for insurance against accidental death permanent disability is enforceable even if there is no POEA approval. The purpose of requiring POEA approval is to ensure they conform to minimum terms and conditions of employment prescribed by POEA. The law does not prohibit alterations increasing benefits voluntarily. Reason for law: to ensure employee is not placed at a disadvantage and terms of employment are within minimum standards. What about if increases in benefits are brought about not entirely by voluntary act on the part of the employer/shipping company? As for example, by International Transport Federation pressure (threat of interdiction)

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For example, the seamen cable the shipowners - A 50% increase is the only solution to the ITF problem (threat of interdiction when they reach an ITF-controlled port.) That is valid. There was no force or violence used. To say they cannot petition for higher wages runs counter to principles of labor law. It is natural for seamen to employ some means of pressing their demands. There was no strike or threat. (Even if there were a threat, as held in the case of Wallem Shipping Co., it is natural to employ one to press their demands.) (Vir-jen vs. NLRC, 1983) In First Asian Transport & Shipping Agency v. Ople - The ITF boarded the vessel. The crew stopped working when ITF demanded a wage adjustment. When ITF boarded the vessel, it was voluntary - not due to the seamen's request. ITF acted on its own. No threat or coercion came from the crew. Suzara v. Benipayo - ITF boarded vessel. The crew expressed conformity by carrying placards but still did their chores. No threat/violence/coercion was employed. It was in the exercise of free speech. No violent means from ITF - effective pressure was simply used: the threat of interdiction. What is an example of an illegal alteration?

Chavez v. Bonto-Perez (1995) - A side agreement authorizes the employee to deduct the $250 commission of the OCW's manager. This is void as against public policy. Could it possibly have been legal? YES. If there was POEA approval. But POEA would not approve it if it didn't meet Standard Employment Contract standards. Which brings us to the next point. The POEA ensures compliance with minimum standards by means of a Standard Employment Contract (SEC). The overseas employment contract must conform with this. In 1988, DOLE & SSS entered into a MOA requiring SSS coverage for all Filipino seafarers recruited by local manning agencies. The Supreme Court upheld this as valid. It noted that manning agencies, in a series of consultations, agreed to this and it merely gave effect to the constitutional mandate to afford protection to labor local or overseas. (Ben Sta. Rita v. CA, August 21, 1995, GR 119891) In case of Disability/Death Benefits - which law applies? That in the employment contract.

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If the contract states compensation should be under RP law or the law of the country where the vessel is, which ever is greater, then that must be observed. If it is silent, the amount fixed in contract applies (Norse Management Co. v. NSE, Bagong Fil. Overseas Corp. v. NLRC) - There are cases of contracts providing for compensation in case of death. What kind of death is compensable? The Standard employment contract drafted by POEA provides for such benefits but adds: "No compensation shall be payable in respect of any injury, incapacity, disability or death resulting from a (deliberate or) willful act on his own life by the seaman(,) provided, however, that the employer can prove that such injury, incapacity, disability or death is directly attributable to the seaman." So this seaman, while the ship he is working in is en route to Hongkong, gets off in Thailand, wanders around Bangkok for four days and then, attacks a policeman. The policeman shoots and kills him. Even before this, he is said to have caused trouble on the ship and was even threatened by the other crew members. The shipping company says that it is not liable for a willful act of the employee. Further, Article 172 of the Labor Code provides for a limitation on the liability of the State Insurance Fund when the "disability or death was occasioned by the employee's intoxication, willful intention to injure or kill himself or another, notorious negligence . . ." The SC said he was no longer acting sanely when he attacked the Thai policeman. The report of the Philippine Embassy in Thailand dated October 9, 1990 depicting the deceased's strange behavior shortly before he was shot dead, after having wandered around Bangkok for four days, clearly shows that the man was not in full control of his own self. Since Pineda attacked the Thai policeman when he was no longer in complete control of his mental faculties, the aforequoted provision of the Standard Format Contract of Employment exempting the employer from liability should not apply in the instant case. Firstly, the fact that the deceased suffered from mental disorder at the time of his repatriation means that he must have been deprived of the full use of his reason, and that thereby, his will must have been impaired, at the very least. Thus, his attack on the policeman can in no wise characterized as a deliberate, willful or voluntary act on his part. Secondly, and apart from that, we also agree that in light of the deceased's mental condition, petitioners "should have observed some precautionary measures and should not have allowed said seaman to travel home alone", and their failure to do so rendered them liable for the death of Pineda. Indeed, "the obligations and liabilities of the (herein petitioners) do not end upon the expiration of the contracted period as (petitioner are) duty bound to repatriate the seaman to the point of hire to effectively terminate the contract of employment The instant case should be distinguished from the case of Mabuhay, where the deceased, Romulo Sentina, had been in a state of intoxication, then ran amuck and inflicted injury upon another person, so that the latter in his own defense fought back and in the process killed Sentina. Previous to said incident, there was no proof of mental disorder on the part of Sentina. The cause of Sentina's death is categorized as a deliberate and willful act on his own life directly attributable

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to him. But seaman Pineda was not similarly situated. (INTERORIENT MARITIME ENTERPRISES, INC. vs. NLRC, Sept.15, 1996) The contracts are also subject to some extraneous events. In Bautista v. NSB, the manning contracts said they were subject to an agreement between the Norwegian Shipping Federation & Norwegian Seamen's Union which stated that if there is lack of employment opportunities in Norway, then non-Norwegian crewmen could not be hired or the ship given dispensation to hire them. So, they were accordingly bumped off and sent home when they went to Norway. Who are the persons recruited for overseas employment? We generally refer to them as Overseas Contract Workers. RA 8042 refers to them as Overseas Filipino Workers or Filipino Migrant Workers: A person who is to be engaged, is engaged or has been engaged in a remunerable activity in a state of which he is not a legal resident. "Remunerable activity" means he/she has been promised or assured employment and, acting thereon, sustains injury. (The IRR refer also to Documented and Undocumented Migrant Workers. You are documented if : (1) you have a valid passport, visa/permit and contracts of employment processed by POEA, if required ; and (2) registered with the Migrant Workers and Other Overseas Filipino Resource Center of the Embassy). Name hires. These are OFWs who manage to secure work on their own without passing thru any agency. They must still pass through POEA, which will process their papers. The contract must still be POEA approved, otherwise, that would be direct hiring. Dispute Settlement. The principles for local cases apply. Who has jurisdiction? Now, the Labor Arbiter has exclusive and original jurisdiction over: 1) claims arising out of an employer/employee relationship or by virtue of any law of contract involving Filipino workers for overseas employment, including damages (sec. 10, RA 8042) - What about for violation of conditions of the license? POEA has jurisdiction - POEA has exclusive and original jurisdiction over: a) violation of rules & regulations on licensing/ registration of recruitment and placement administrative cases b) discrimination cases & other administrative cases involving employers, principals, contracting partners & FILIPINO MIGRANT WORKERS. (sec. 28, IRR of RA 8042)

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Proof required: For example. the complaint alleges non-payment of proper wages. No other evidence was presented. This was not rebutted. Is this sufficient proof? Yes, considering difficulty faced by OFWs in getting evidence, especially where the employer is overseas and is a military installation with policies of secrecy as to documents. Workers would have of weak access to evidence. Their claims should be received with sympathy (Cuadra v NLRC) In the case of the seaman who wandered around Bangkok we discussed earlier, the shipping company said there was no direct evidence he was crazy. In short, it suggested that he should have obtained proof of his mental capability by subjecting himself to psychiatric examination in Bangkok. The SC said that he could not reasonably be expected to immediately resort to and avail of psychiatric examination, assuming that he was still capable of submitting himself to such examination at that time, not to mention the fact that when he disembarked in Dubai, he was already discharged and without employment his contract having already run its full term and he had already been put on a plane bound for the Philippines. This explains the lack or absence of direct evidence showing his mental state. (INTERORIENT MARITIME ENTERPRISES, INC. vs. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 115497. September 15, 1996.) Note: Repatriation expenses under 8042 are now for the account of the agency/principal. If before, the agency could require the OFW to put up a repatriation bond to answer for his/her repatriation in case of termination for cause, now the bond has been abolished. - Other salient features: Government & OFWs 1) Country - Team Approach: All Philippine government officers/personnel abroad shall act as a country team, under the leadership of the Ambassador. The Ambassador can recommend to DFA their recall for acts inimical to national welfare, such as the failure to provide necessary services. 2) Phase-out of POEA's regulatory activities with (5) five years from June, 1995 - effectivity of RA 8042. 3) POEA & OWWA Boards shall have three (3) three members each from women, sea-based & landbased sectors. 4) OFWs shall have two (2) representatives in Congress (1 representing women migrant workers) 5) Travel Advisory/Information Dissemination - Embassies/consulates, thru the POEA, must issue travel advisories & information dissemination on: a) labor & employment conditions b) migration realities & other facts c) adherence of countries international standards on human & labor rights PURPOSE: prepare workers to make intelligent decisions on overseas employment. 6) Re-placement & Monitoring Center - For returning OFWs to reintegrate, for their re-employment, and to tap their skills for manpower 7) Migrant & OFW Resource Center This shall be provided by embassy. It shall provide the following services: - counseling - legal services

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- welfare assistance - information - registration of undocumented workers 8) Migrant Workers loan guarantee fund 9) Shared Government information system 10) Legal assistance 11) Migrant Workers' Day EMPLOYMENT OF ALIENS - Aliens cannot work here without a permit from DOLE. True or False? FALSE. It depends if you are a resident alien or a non-resident alien. Note the General Milling Corporation v Torres case. Timothy Earl Cone's permit to work as coach was canceled since he failed to show that there was no person in the Philippines able & willing to perform such work and it would redound to the national interest. He argued that that is not in the law. The SUPREME COURT says, it is. Even if the law does not specifically/explicitly require it, it is a valid limitation. One of the objectives of the state is to regulate the employment of aliens. Cole says what about Norman Black? He was not subject to the same requirement. SUPREME COURT says, the law applies only to non-resident aliens. Black was a long time resident. So, if an alien wants to work here, he needs: 1) A DOLE permit, and 2) Determination that a) there is no person in the Phil competent, able & willing to perform the services desired; b) if it is in a preferred area of investment, there must be a recommendation by the appropriate government agency. - Other conditions (as specified in the Rules): a) Designation of at least two (2) understudies (the most ranking regular employees in the section or department) b) Assessment by Bureau Director, it will redound to national interest. c) Admissibility as certified by Bureau of Immigration and Deportation. - If an alien works here with a permit, can he be pirated by another employer? YES, provided there is prior DOLE approval to the aliens hiring by the new employer. Note: under the rules, the following do not need permits: a) Diplomats, foreign officials b) National representatives c) Missionaries here for only missionary work d) Aliens exempt by special law. Note that employment of aliens is prohibited in a nationalized industry (in Anti-Dummy Law CA 108) - retail trade - mass media - advertising Exception: EPZA enterprises, with permission of the EPZ Authority

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II HUMAN RESOURCES DEVELOPMENT - For your information, the National Manpower and Youth Council (NMYC) is now passe. Under RA 7796, it has been supplanted by the TESDA, the Technical Education & Skills Development of 1995. NMYC has been absorbed by TESDA. What else is under TESDA? 1) Bureau of Technical & Vocational Education 2) Personnel Functions relating to training / vocational education in DECS 3) Apprenticeship Function of Bureau of Local Employment. - If the Book on Human Resource Development aimed to develop human power capabilities TESDA focuses on that plus technical and educational skills development. The emphasis is now on technical education. Not only on labor skills. Thus, among the goals of the TESDA are: (1) technical education, (2) encouragement of critical & creative thinking by disseminating scientific & technical knowledge base of manpower dev't programs; (3)inculcate desirable values (i.e. work ethic, self-discipline, self-reliance & nationalism). - Among TESDAs functions are: 1) Formulation of a comprehensive development plan for middle-level manpower 2) Administer the apprenticeship program. 3) Establishment of TESDA Committees 4) Establishment & Adv of National Trade Skills Standards 5) Administration of Training Programs Apprenticeship & Learnership Apprentices - Some rules: They must be the following : An apprenticeable trade and occupation (it must be in a highly technical industry) Related theoretical instruction which supplements the on-the-job training An apprenticeship agreement approved by the TESDA (formerly DOLE) The term of the apprenticeship must not exceed 6 months. If the worker is hired after such term, it must be as a regular employee. He cannot be hired as a probationary employee since the apprenticeship is deemed the probationary period. Learners - Some rules: Learners may be employed only in non-apprenticeable occupations There is also related theoretical instruction supplementing the on-the-job training

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The learnership period shall not exceed 3 months. If the learner is terminated after the second month due to no fault of his own, he shall be hired as regular after the third month. Note that in both cases, the employees may be paid below the minimum wage (not lower than 70%). But only in apprenticeship is there a 10% deduction available for training expenses. This is different from Trainees under the Dual Training System Act of 1994. Under such an arrangement, trainees are not employees. They are simply deemed trainees of both the institution which provides the technical training as well as the company where they may be subjected to onthe-job training. The law does not provide for any set term for their traineeship. It is all up to TESDA to set these standards. Likewise, after the traineeship, there is no obligation to hire them. If hired, they may be hired as probationary employees, not having originally been employees anyway. Handicapped Difference Between Handicapped and Disabled:

Handicapped

Disabled (Differently Abled) different abilities as a result of mental, physical or sensory impairment to perform an activity in the manner or within range considered normal for a human being.

1. Earning capacity is impaired by age, or 1. Refers to all suffering from restriction of


physical or mental deficiency or injury

2. Covers only workers

2. Covers all activities or endeavors. 3. Basis is range of activity which is normal for a human being. of

3. Basis: loss/impairment of earning capacity

4. Loss due to injury or physical or mental defect 4. Restriction due to impairment or AGE mental/physical/ sensory defect 5. If hired, entitled to 75% of minimum wage

5. If qualified, entitled to all terms and conditions as qualified able-bodied person 6. Handicapped worker gets all terms & conditions as qualified able-bodied person

6. Subject to definite periods of employment

7. Employable only when necessary to prevent 7. No restrictions on employment. Must get curtailment of employment opportunity equal opportunity & no unfair competition

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III EMPLOYER-EMPLOYEE RELATIONSHIP 1. Who is the employer? The term includes any person acting in the interest of an employer, directly or indirectly. It shall not include any labor organization or its officers or agents except when acting as employer. Thus, in A.C. Ransom v. NLRC [1988], the officers acting in the interest of the corp the general manager and president was held also to be liable for money claims as he was acting in the employer's interest. Likewise, if a corporation is placed under receivership, the employees of the corporation can go after the receiver for satisfaction of their claims since he is an employer "acting in their interest". 2. Who is an employee? The basic test is the right-to-control test. Meaning who has the right to control the means and methods by which work is to be performed. As distinct from an independent contractor. An employee is defined as "Any person in the employ of an employer. It includes any individual whose work has ceased as a result of a labor or industrial dispute". What is the four-fold test? It is a means of determining who is an employee on the basis of 4 criteria: 1. 2. 3. 4. selection and engagement (hiring) payment of wages (wages) dismissal (firing) right to control - this is the most important

For example, you have a copra plant. Workers carry copra from trucks, store it in the warehouse & deliver it to the bin. They are paid on a pakiao basis, directly by the foreman. Let's try the 4 tests. Hiring? They were selected thru the foreman. The number of workers were limited by the company wages - they were paid pakiao thru the foreman firing - this was not explicitly shown right to control - copra is the basic raw material. The company must have direct control over its handling before being fed into the factory. The company owns the conveyor belt. It determines the load and time of operation. The foreman was told by the company where to store the copra and when to bring it out. There is thus an employer - employee relationship (Philippine Refining Corp. v CA)

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What about a company lawyer? Hiring - He was chosen by Board of Directors Wages - He was paid monthly compensation (retainer's fee) Dismissal - He had a fixed term of three (3) years for appointment but company reserved power to dismiss for cause. Control - His duties as legal were defined by the company. So even professionals may be employees.(Hydro Resources v Pagalilauan, 1989) The most important is right to control. Even if you don't show the first three (3), you can establish an employer-employee relation if you can show the right to control.

Right to control - This means that the person for whom the services are performed reserves the right to control not only the end to be achieved but also the means to be used in reaching such end. It is not the actual exercise of the right, but the mere existence of the right which is enough. As was held in (Dy Keh Beng v ILMUP): the control test calls merely for the existence of the right to control the manner of doing the work, not the actual exercise of the right. Considering the finding by the Hearing Examiner that the establishment of Dy Keh Beng is "engaged in the manufacture of basket known as kaing," it is natural to expect that those working under Dy would have to observe, among others, Dy's requirements of size and quality of the kaing. Some control would necessarily be exercised by Dy's specifications. Parenthetically, since the work on the baskets is done at Dy's establishments, it can be inferred that the proprietor Dy could easily exercise control on the men he employed. - Thus where an employee is made to open and close on a daily basis the water supply system of the different phases of the subdivision in accordance with its water rationing scheme, worked for only a maximum period of three hours a day, and made use of his free time by offering plumbing services to the residents of the subdivision the SC said that since the company (subdivision) had the power to exercise supervision over him if it wanted to, even if it never actually did and his work could be performed by another co-worker, the elements of an employer-employee relationship existed. (MAM Realty Development Corp. vs NLRC, June 2, 1995) Other examples: Tailoring shops. You must follow the customer's specifications to the letter. (Rosario Brothers v Ople) Musicians follow instructions of Musical Directors of movie studio (LVN Pictures vs LVN Musicians Guild) Drivers of Jeepney on the Boundary System - the owner/operator regularly checks if they follow the route & rules of Public Service Commission. He likewise checks the oil and tire pressure of jeeps when they pass his gas station. (Dinglasan v NLU) - Question: Suppose you and I enter into a contract. The contract is for the construction of a waiting shed. I give you the specifications and the plan for the shed which you must follow. Are you my employee? No I am only controlling the result whether or not you stuck to the plan. It would be different if I watched you every step of the way and commented - "O mali yan, mali yan." That's control. If you draw a graph of it:

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- QUESTION: You are a salesman for a cigarette company. One day, the company tells you, why don't we sign this agreement - You sell our cigarettes at a discount. The excess of the profit goes to you. We supply the trucks. You follow a prescribed route. You can hire your own workers and you are responsible for their wages. You post a surety bond. Follow company rules when you sell. Are you an employee? NO. You are an independent contractor. You use your own capital. You are left to your discretion in determining how to sell. The route and the rules are standard in all dealership agreements. (La Suerte Cigar and Cigarette Factory case). By agreeing to the contract, you are bound by it. (But in SSS v CA, issued a few years later, where there was not only a truck provided by the company, but the company dictated the price, the brand, who to sell to; it likewise issued circulars, memos and required regular reports; it even paid an allowance. Quality Tobacco was held to be the employer.) Where so-called collection agents got 6% commission, posted a cash bond, had a one (1) year term, had to make monthly payments, they were deemed independent contractors. There was no control over them. They had no office hours, could determine way of collecting, no need to work only for Singer Sewing Machine. Even if required to use forms and submit them once a week - that is not control over the manner and method of performance. The purpose was to prevent commingling of funds - this was control only over the end result. Even if there was a quota for collection, that was a normal requirement (Singer Sewing Machine vs Drilon)

However, mere issuance of memoranda is not automatically an indicator of control. In


Encyclopedia Brittanica Phil., Inc. vs. NLRC (GR 87098, Nov. 4, 1996) the SC held that just because Brittanica issued memoranda to respondent and other division sales managers did not prove that it had actual control over them. They were merely guidelines on company policies which the sales managers follow and impose on their respective agents. It should be noted that in the business of selling encyclopedias, the marketing of the products was done through dealership arrangements. The sales operations were primarily conducted by independent authorized agents who did not receive regular compensation but only commission. These agents hired their own sales representatives, financed their own office expenses and maintained their own staff. There was thus need for Brittanica to issue memoranda so it would be apprised 21

of company policies and procedures. Nevertheless, respondents and other agents were free to conduct and promote their sales operations. The periodic reports to Brittanica were but necessary to update the company of their performance and business income. While Brittanica fixed the prices of the products, the agents still had free rein on their means and methods. They selected their own personnel and only informed Brittanica of the same for purposes of deducting the employees salaries from the commissions. Likewise, respondent was free to engage in other means of livelihood. An employee could not be employed elsewhere and would be required to work full time for the company. (Encyclopedia Brittanica Phil., Inc. vs. NLRC, GR 87098, Nov. 4, 1996) Likewise in Manila Golf and Country Club vs. NLRC, you had a number of golf caddies who were subject to certain regulations of the golf club - They had list themselves to determine who would be next in line for caddying. They had to observe certain rules, such as wearing of proper uniform and conduct during their work. The golfers payment was made to the golf club and not to them directly. But the SC said this does not show control. These were rules issued to ensure that they conducted their work properly. If you wanted to work in the golf club, you had to follow their rules. The fact that they had to list themselves for the order of caddying was simply to ensure order in their work. The club may have collected their salaries but that does not make them employers. They collected hem for later distribution to the caddies. The fact remains that the caddies determined the means and manner by which they would perform their caddying work. They could leave the place of work anytime and work elsewhere. They had no fixed schedule for reporting for work. This shows absence of control. - In Tiu vs. NLRC (Feb. 21, 1996), you had dispatchers working for DRough Riders - a Cebu bus company. These dispatchers would help in loading and unloading baggage for the passengers of the bus. DRough Riders claims that they are not its employees. They are just a bunch of bad elements in the locality who scare away passengers and create trouble if the bus company did not let them work as dispatchers. It says they let them do as they please and did not control their work. However, it also admitted that it let them work as dispatchers for the buses and gave them a fixed rate (payment of wages). Likewise, a memorandum to the employee states that he was to be dismissed outright (This was an admission of the power to fire). Likewise, one of them was designated as Chief Dispatcher and signed forms of the company as such.. If a chief dispatcher works with the company, uses and signs official documents as is reflected in Exhibit "D," it follows that his employment as such was in consideration of a chief dispatcher's exercise of his duties to supervise and control subordinate dispatchers (control).

In Subic Bay, there was this association of Aetas, CAPANELA, which organized the system of
employment of Aetas. CAPANELA, through its officers, saw to it that its members reported for work, recorded their attendance, and distributed the workers' salaries paid by the Base at the end of a specific pay period, without gaining any amount from such undertakings. Its president was himself only an employee at the Base. That is not control. (That is simply a manner of policing ones own ranks.) The SC noted that an employee, through the intervention of CAPANELA, was cleared of the charge of larceny of U.S. government property. This only goes to show that CAPANELA had in fact no control over the continued employment of its members working in the U.S. naval base - it could only intervene in behalf of its members facing charges through a recommendatory action and could not exonerate them or have them reinstated on its own. 22

At best CAPANELA was like a labor-only contractor (a special type, though) - facilitating the orderly administration of work at the base (scavenging). It recorded attendance of its members and payment of wages was coursed through it. However, control over the means and methods was exercised by the base authorities. CAPANELA was at most, only an administrator of its members at the base. It had no capital or investment. The party liable, therefore, for dismissal of one of its members was the base.(CAPANELA vs. NLRC, February 23, 1995) Related to this therefore, are the concepts of job-contractor and labor - only contractor. - What is Job-contracting? When: a) Contractor carries on an independent business and undertakes contract work on his own account. Under his own responsibility according to his own manner and method, free from control and direction of the principal except as to results; and b) Contractor has substantial capital or investment in form of tools, equipment, machineries, work premises and other materials necessary in the conduct of the business. Take note, however, of Department Order No. 10, s. 1997, issued this May 30, 1997. It defines legitimate contracting or sub-contracting as one where:

a) The contractor or subcontractor carries on a distinct and independent business and


undertakes to perform the job, work or service on its own account and under its own responsibility, according to its own manner and method, and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof (This is actually just a restatement of the first part of the definition of job-contracting.) b) The contractor or subcontractor has substantial capital or investment (This is the same second element. It further says that substantial capital or investment means that you have adequate resources directly and actually used in performance or completion of the service, such as capital stocks, subscribed capital, tools and equipment, safety devices used in doing the job or even operating costs, administrative costs, training and overhead costs. But it will not include capital and investment not actually and directly used in conduct of the business, or any gratuitous assistance from the principal. This clarifies that the contractors capital or investment must be actually and directly used in the business and must be genuine investment. It cannot be a mere donation from the principal so as to legitimize it.); and c) The agreement between the principal and contractor or subcontractor assures the contractual employee entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social and welfare benefits. (This is new. It does not change the definition of job-contracting, but it makes it legitimate only if there is such an agreement assuring compliance with labor laws.)

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Distinguish it from independent- contractorship. It is actually independent- contractorship. Only it relates more to those who carry it on an business. What is labor-only contracting? The person supplying workers to an employer a) does not have substantial capital or investment in the form of tools, equipment, work premises and other materials; and b) the workers recruited and placed are performing activities directly related to the principal business of the employer. Department Order No. 10 redefines it this way: A contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, with the following elements:

a) It does not have substantial capital or investment to actually perform the job, work or
service under its own account and responsibility; and b) The employees it recruits, supplies or places are performing activities directly related to the main business of the principal. For example: X works in a motorshop. He works as auto painter under the name of VM Automotive Repair Service. He supplies only labor into the company and supervision. All tools, equipment, materials come from the motor shop. He has his own "contract workers". The company controls and directs him. He works 6 days per week; 8 hours per day. The company claims he is an independent contractor with his own employees. This is a clear case of labor - only contracting. He has no tools/capital, equipment of his own and the work done is directly related to the business. (Broadway Motors v NLRC) Or take another case, workers load empty bottles to and from trucks of SMC. They work under an OIC who gets orders directly from the company. They are under a contractor called "Guaranteed & Reliable Labor Contractor" which has a small room with a table, cabinet, chair and typewriter in the plant, supplied by the plant. SUPREME COURT said GRLC is a labor only contractor. It has no substantial capital or investments. Its tools and equipment are all supplied by SMC. Fees are paid to GRLC in lump sum. The fees are based on the salaries to be received by each worker. The "contractor" does not receive an amount over this but gets a percentage of the wages. On this score alone, there is an employer-employee relation. The LOC is deemed an agent of the direct employer. - Further, the Supreme Court said, SMC had the right to discipline and recommend their transfers and dismissals thru memos. 24

So, on the control test, there was also an employer-employee relationship. (BLUM v. Zamora) So, a job contractor contracts to provide/do a JOB OR SERVICE. A labor-only contractor contracts to provide manpower or labor. If the contract states therefore, "X will supply 10 janitors" - that is the earmark of labor-only contracting. If the contract says X will supply sanitation services. Then that sounds more like job contracting. - In Philippine Bank of Communications vs. Echiverri, the contract said CESI (an agency) would provide "temporary services of 11 messengers". The SUPREME COURT said that is LOC. The undertaking was not to perform a specific job but to provide a number of messengers. The premises and equipment used was that of PBComm, not CESI. Messengerial work is directly related to the day-to-day operations of the bank. CESI was thus more of a recruitment company than a delivery company. - But then here comes this case of Neri v NLRC. In that case, Building Care Corporation was in charge of housekeeping, security and other special services with various clientele. Neri was a radio/telex operator. BCC had capitalization of P1.5 M. It had no tools, equipment, etc. HELD: It is not necessary that it has tools, equipment, machineries, work premises and other materials as long as it has substantial capital. The conjunction "or" shows alternative requirements. The SUPREME COURT also took judicial notice of the fact that it was a general practice to hire independent contractors to perform special services. While there was a job description for Neri as a radio/telex operator, this sought to control only the results - that her daily incoming and outgoing transfer of funds tally with that of the register. Only BCC had the power to reassign. The SUPREME COURT added, PBComm is different. There the court held the scheme would bar them from permanent status. There, the case was for illegal dismissal - here, it was a case for registration. Here, PBComm is an Independent Contractor. (Note that D.O. # 10 requires that the assets owned be directly and actually used in the business.) In Magnolia Dairy Products Corp. vs. NLRC (Jan. 29, 1996), there was a contractor, Skillpower, which provided to Magnolia, employees who would be in charge of the defective packages. They would have such duties as removing damaged goods, taking bulgings away from terta packs, and disposing of damaged goods. The SC noted that the workers supplied by the two manpower corporations perform usual, regular and necessary services for petitioner's production of goods. The undertaking of respondents Skillpower and/or Lippercon was to provide respondent

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Magnolia with a certain number of persons able to carry out the works in the production line. These workers supplied by Skillpower and/or Lippercon in performing their works utilized the premises, tools, equipments and machineries of respondent Magnolia and not those of the former. The work being performed by complainant, such as, to remove "bulgings" (damaged goods) from dilapidated cartoons, (sic) to replace damaged goods and re-paste the cartoon (sic) thereof, to dispose the damaged goods or returned goods from Magnolia's warehouse to avoid bad odors, to clean leftovers of leaking tetra-pak by mopping or washing the contaminated premises, and others, are of course directly related to the day to day operations of respondent Magnolia. Respondent Magnolia failed to negate this evidence that the undertaking assigned to the complainant is not related or necessary to its business operations. (In this case, Skillpower tried to invoke the Neri ruling by showing it had capital of its own. The SC said, you argued it for the first time on appeal too late!) Whats the meaning, therefore, of the investment necessary to be a job contractor? Philippines Fuji Xerox vs. NLRC (March 5, 1996)

You have a company which manufactures and sells photocopiers. As a promotional scheme, they have a photocopying service in every outlet. They hire copier operators through an agency Skillpower again. The SC said that that was a labor-only contracting arrangement. The work they performed was directly necessary to the business. While it was not needed for sale and manufactire of photocopiers, still, it was adopted for 7 years to build up company good will. It showed the public the quality of work of the xerox machines. It may not generate income for the company but there are activities which a company may find necessary to engage in because they ultimately redound to its benefit. Operating the company's copiers at its branches advertises the quality of their products and promotes the company's reputation and public image. It also advertises the utility and convenience of having a copier machine. It is noteworthy that while not operated for profit the copying service is not intended either to be "promotional," as, indeed, petitioner charged a fee for the copies made. It is now argued by Fuji Xerox that Skillpower had typewriters and service vehicles for the conduct of its business independently.But the SC said, these have no direct relationship to the job contracted. The fact is that Skillpower, Inc. did not have copying machines of its own. What it did was simply to supply manpower to Fuji Xerox. The phrase "substantial capital and investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business," in the Implementing Rules clearly contemplates tools, equipment, etc., which are directly related to the service it is being contracted to render. One who does not have an independent business for undertaking the job contracted for is just an agent of the employer. Fuji Xerox now points to the Neri case. It says that Skillpower had substantial capitalization: assets exceeding P5 million pesos and at least 20 typewriters, office equipment and service vehicles. It had employees of its own and a pool of 25 clerks assigned to clients on a temporary basis. But the SC said, that is different. In the Neri case, that was not all that was looked into. In that case, Building Care Corp. was also performing specific special and technical services (telex operator, janitorial services). BCC exercised control over the employees. In this case, xerox operations are not technical.

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Other similar cases: Ecal v NLRC (1991)

The alleged contractor was only a poor laborer when he began the "contracting" business. He could not even treat his daughter for malnutrition. He had no capital and still continued working at the Kiln. This shows he is a mere LOC. Tabas v. CMC (1989)

The nature of one's business is not determined by self-serving claims one attaches to the contract but by the tests under law and cases. Even if Livi Manpower had a separate line of business, this does not show that the activities (merchandising) were not directly related to the manufacturing business. Promotions is an integral part of the business. If it were instead, a promotions firm, then maybe it could hold itself out as a job-contractor. It was, in essence, a LOC. Under the Labor Code, two elements must exist for a finding of labor-only contracting: (a) the person supplying workers to an employer does not have sufficient tools, equipment, machineries, work premises, among others, and (b) the workers recruited and placed by such persons are performing activities directly related to the principal business of the employer (Neri vs. NLRC, 224 SCRA 717). These 2 elements do not exist in this case. DE LIMA is a going concern with substantial capitalization of P1,600,000, P400,000 of which is actually subscribed. Hence, it cannot be considered as engaged in labor-only contracting, being a highly capitalized venture. Moreover, while janitorial services may be considered directly related to the principal business of FILSYN, which is the manufacture of polyester fiber, they are not necessary in its operation but merely incidental, as opposed to being integral, without which production and company sales will not suffer. We take notice of hiring janitorial services on an independent contractor basis. (FILSYN vs. NLRC, GR 113347, June 14, 1996) The SC has even held that if you allege that an entity is a labor-only contractor, you must prove it. Prove the absence of substantial capital or investment. For example, if he agency has a performance bond in the amount of P100,000.00 to answer for the faithful compliance and performance of its obligation embodied in the contract, this militated against being a labor-only contractor. (RODRIGO BORDEOS vs. NLRC, G.R. Nos. 115314-23. September 26, 1996.) Likewise, the following circumstances were held to show labor-only contracting: 1. the services of the workers were engaged as carpenter and plumber; 2. During the time they were made to appear as employees of the agency, the following circumstances existed: a) they reported directly to PSBA (the employer serviced) b) they received wages directly from PSBA c) They were made to report for work by PSBA on certain days and hours

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d) PSBA remitted to the agency not a lump sum for services but merely a fixed fee or commission; e) the employees were liable to PSBA for losses or damage, PSBA deducting such amounts from their wages; f) PSBA imposed on them disciplinary actions. 3. Further, they were working with PSBA as early as 2 years before coming under the agency. 4. Even if they were allegedly hired under one contractor after another, they were regularly assigned to do carpentry and plumbing work in PSBA under its supervision and control. The fact that none of the contractors had substantial capital or investment and the activities undertaken were necessary and desirable in the business shows that they were merely engaged in labor-only contracting. (PSBA-Manila vs. NLRC, GR 114143, August 28, 1996) D.O. # 10, however, states that the following types of jobs may be subject of a valid subcontracting agreement:

a) works or services occasionally or temporarily needed to meet abnormal increase in b) c) d)


demand (as long as normal workforce cannot meet the demand); works or services occasionally or temporarily needed for undertakings requiring expert or highly technical personnel to improve management or operations; services temporarily needed for introduction or promotion of new products; works or services not directly related or integrated to main business or operation of principal (including causal work, janitorial, security, landscaping, and messengerial services, and work not related to manufacturing processes in manufacturing establishments); public display of products not involving the act of selling or issuing receipts; specialized works involving particular, unusual or peculiar skills or equipment beyond competence of normal workforce; substitute services for absent regular employees.

e) f) g)

Under D.O. 10, the effect of engaging in prohibited subcontracting is that the principal shall be solidarily liable for the obligations due the workers. These are rules, however, and should not be included in the bar. But the effect of these rules is to define what types of jobs may be subject to job-contracting arrangements. It is as if the DOLE said that those services may not be deemed directly related to the principal business, so as not to place them within the type of service performed by a labor-only contractor. Other tests: EXISTING ECONOMIC CONDITIONS inclusion in payroll shows employment relationship

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registration with SSS shows employment relationship payment of SSS contributions shows employment relationship the fact that the alleged employer was a well-known socialite and invested in the business shows she is not an employee. An employee won't do that, but an agent would (Sevilla vs. CA). you sell houses for a realty company as a sideline. You receive commission for every house you sell. You have your own methods of selling and your only obligation to the realty firm is to give them the proceeds at the end of the day, from which you receive a commission. You are not an employee - there is no control. You are a sales agent. (Sandigan Savings and Loan Bank vs. NLRC, February 26, 1996) the fact that an alleged manager posts a bond and pays rentals to the company for right to manage a massage parlors - that is a lease, not employment as a manager (Paradise Sauna vs. NLRC).

Other relations: You use a launch. You pick your crew for fishing. You split 1/3-1/3-1/3 (1/3 going to the owner of the launches). You are free to determine whether or not to go on a fishing trip on each particular day. That is a joint venture. (Pajarillo v SSS) (But it you are on vessel owned by the company and monitored by radio, where you inform the office of your position, the catch and the weather, and the fishermen on the vessels were, in fact, dismissed by refusing to let them board the vessels - there is control. That is an employment relationship.) - What about if you are a worker at a sugar plantation. Is there an employer-employee relation between a sugar central and plantation workers because the law imposes a social amelioration lien on milled sugar to be distributed by the central to central and plantation workers? NO. As a matter of fact, a sugar central has no privity of any kind with plantation laborers. Sugar/farm workers are the direct responsibility of their respective planters and the central did not deal with the planters workers but only with the planter. RA 809, creating an amelioration bonus for sugar workers, did not create an employer-employee relationship between them. As a matter of fact, it affirmed the old practice of the central dealing only with the planter by directly issuing to it the planters share of the unrefined sugar per their milling contracts. (Victorias Milling Co., Inc. vs. NLRC, GR 116236, Oct. 2, 1996) Other employer-employee relations created by law or regulation: 1. Any woman permitted or suffered to work, without or with compensation, in any night club, bar or similar establishment, under the effective control or supervision of the employer for a substantial period of time shall be deemed an employee of such establishment for labor and social legislation. (Art. 138, Labor Code) Homeworkers: Their employer is deemed to be the person, natural or artificial, who, for his account or benefit, or on behalf of any person residing outside the country,

2.

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directly or indirectly or thru any employee, agent, contractor, sub-contractor or any other person. a) delivers, or causes to be delivered, goods, articles or materials to be processed or fabricated in or about a home and thereafter to be returned or disposed of or distributed in accordance with his directions, or sells the goods, articles or materials to be processed or fabricated in or about a home and then rebuys them after such processing or fabrication, himself or thru some other person. (Art. 155, Labor Code)

b)

3.

Employee includes one whose work has ceased as a result of a current labor dispute or due to ULP who has not obtained any other substantially equivalent and regular employment. (Art 212-f, Labor Code) - You work as a janitor. You are dismissed because you are ugly. You feel so bad you go to the province and plant kamote. Is the dismissal valid? NO. Are you still an employee? NO. There is no current labor dispute. You did not file a case. You must have a present and unabandoned right to employment. - Suppose you filed a case. Now, there is a dispute. Then you work as a nursing aide (full time), so you can wear a mask all the time. Are you an employee? NO. You have found substantially equivalent and regular employment. Note that this falls under the rules on labor relations. This therefore becomes relevant when we talk about who can vote in a certification election. Department Order No. 9, s. 1997 states that any dismissed employee with a pending case at the date of election may vote.

Special cases: a) Students and schools - if the students work for the school in exchange for the privilege to study free, they are not employees PROVIDED they are given a real opportunity (including reasonable and necessary facilities) to finish their chosen courses. (IRR, Bk. 3, Rule 10, Sec. 14) Thus, for damages, if the working scholar, while working for the school, injures someone (e.g. vehicular accident), the school can be held liable as employer. But if he acted outside the scope of his duties (example, a janitor drives the school vehicle and runs over a pedestrian), the school is not liable, since he was not acting within the scope of his duties as employee (Filamer Christian University v. IAC, 1992). b. Resident physicians in training - They are employees of the hospital where being trained UNLESS: 1. The is a training agreement between them; and

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2. -

The training program is accredited or approved by the appropriate government agency.

Example: You work as librarian in Ateneo Law school. They pay you minimum wage. You are also able to obtain a scholarship (tuition). Are you an employee? YES. The free education was not in exchange for your services. You were paid minimum wage. Another example: You work as librarian. In exchange, you get to study 6 units free. You are an employee.

IV MANAGERIAL PREROGATIVES The power of an employer to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, time and work assignments, work methods, tools, processes, supervision, work relations, lay-off, discipline, dismissal and recall of workers. The Supreme Court explains the rationale for it this way : An owner of a business enterprise is given considerable leeway in managing his business because it is deemed important to society as a whole that he should succeed. Our law, therefore, recognizes certain rights as inherent in the management of business enterprises. These rights are collectively called management prerogatives or acts by which one directing a business is able to control the variables thereof so as to enhance the chances of making a profit. Together, they may be taken as the freedom to administer the affairs of a business enterprise such that the costs of running it would be below the expected earnings or receipts. In short, the elbow room in the quest for profits. (HOMEOWNERS SAVINGS AND LOAN ASSOCIATION, INC., G.R. No. 97067. September 26, 1996.) - Examples of what are validly within the exercise of managerial prerogatives: - adopt economic policies or make adjustments in the operations to insure profit (e.g. merger or consolidation with another company) The company may thus decide to close down even if it is not losing money. (Catatista vs. NLRC) - scheduling of work BUT not where it is done to make unionization more difficult (as when employees are suddenly transferred from the Tarlac to the Manila factory at the height of activities for the formation of the union, during the schoolyear [the workers being working students] and there was no need for the transfer) - giving of employee benefits BUT NOT where it discriminates without sufficient basis - determining wage rates

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BUT NOT where it goes below minimum standards (in fact, entering into a CBA which exempts the employer from paying minimum wage is contrary to law and public policy) - promoting someone/transferring someone BUT NOT where the transfer will reduce his pay or rank or is equivalent to a promotion - There are thus limits on this. It is not absolute: 1. 2. 3. 4. BENEFITS: Ex: Profit-sharing payments are given to non-union members. The Union says, :"Why is it not given to union members covered by the CBA?" The company says, Let's follow the CBA (which does not provide for such payments to employees it covers), but we can include it if negotiations end before Christmas. In good faith For advancement of the employer's interests Does not defeat or circumvent employee rights under law or agreement Not exercised in a harsh, oppressive, vindictive or wanton manner (out of malice)

Supreme Court said: This was a valid act since those given profit-sharing were not covered by the CBA and not receiving its benefits. There is no discrimination as the 2 groups are not similarly situated. There was also Good Faith - they offered to include it in the CBA if negotiations ended before Christmas. - Neither is it wrong if those of a higher rank get higher benefits. (Wise & Co. v Wise & Co. Employees Union) - Another example: The company adopts a Complimentary Distribution Scheme/System (CDS) where beer is offered directly to wholesalers. The union of salesmen says this will deprive them of commissions. Supreme Court says - it is a valid exercise of managerial prerogative. There is : an offer to compensate the salesmen with back adjustment commission to make up for the loss of commission. The CDS improves efficiency and maximizes profit. It may have disturbed the set-up now, but the change was too insignificant to show interference in union affairs. (San Miguel Brewery vs. DLO) TRANSFER Can the company transfer employees?

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Yes, provided it is: (1) not unreasonable or inconvenient (no grave abuse of discretion); (2) not prejudicial to the employee; or (3) does not involve a demotion or diminution of salaries, benefits or other privileges. Limitations: The transfer cannot contravene law, contract, fair play & justice. It cannot be in bad faith, as when it was used to rid the company of an employee (Pocketbell vs. NLRC, Jan. 26, 1995) - Shell Oil Workers v Shell Corp: Security guards of company fired and agency contracted. Valid? NO. It is against the CBA. The CBA provisions on coverage states that security guards are within the CBAs coverage. So you cannot abolish their posts. - Chu v NLRC: The Head of the Warehousing, Sugar, Shipping & Marine Department transferred to sugar sales. He says this was constructive dismissal. Supreme Court says NO. The employer has the right to move employees around based on their qualifications, aptitudes & competence. Security of tenure does not give one a vested right to a position. Just because you sign a contract to a particular position does not mean the company waives the right to transfer you. The waiver must be so clear as to leave no doubt. The rotation was in good faith. There was no demotion/diminution of benefits. PT & T v Laplana: The Cashier of PT & T in Baguio was transferred to Laoag (due to increase sales in Laoag). Her inconvenience is not sufficient to invalidate it. Philjacc v NLRC: Assistant Secretary/Exports Coordinator was promoted as Executive Secretary of EVP & General Manager. Then, he was transferred as Production Secretary for no reason. This was upheld as valid. No demotion/diminution of benefits. Just a lateral transfer. Abbott Laboratories v NLRC: Professional medical representative (salesman) is transferred to Cagayan from Manila. His acceptance of the position as medical representative is tacit acceptance of his transfer since sales representatives are expected to transfer. Example: You are VP for the Orient Region (for an International. Airline) in Manila. You are transferred to the post of Director of International Sales with an increase in pay. This means you have to transfer to Canada. You have a wife & children. All Filipino. Can you refuse? Yes. That is a mere promotion (advancement to another position with more duties, responsibilities and usually, increase in salary and benefits). Transfer is lateral. A promotion, you can refuse since it is a privilege being bestowed. 33

Further, under the circumstances, it would be unwarranted to require you to transfer, due to the sever prejudice you would experience. (Dosch vs. NLRC) But the Supreme Court clarified - just because you are to receive a salary increase together with the change in assignment doesnt mean that that is a promotion. If, for example, you are moved from one branch to another but still hold the same position of Branch Accountant, even if you will get a wage raise, that is not a promotion. A promotion is "the advancement from one position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in salary." The indispensable element is he "advancement from one position to another" or an upward vertical movement of the employee's rank or position. Any increase in salary should only be considered incidental but never determinative of whether or not a promotion is bestowed upon an employee. (HOMEOWNERS SAVINGS AND LOAN ASSOCIATION, INC. vs. NLRC, G.R. No. 97067. September 26, 1996.) Yuco Chemicals v MOLE: The employees begin forming a union. At the height of union activities, they are transferred from Tarlac to Manila. They have to quit studying since it was made while they were studying. Valid? NO. There is no business urgency. Their work in Manila was the fabrication of aluminum boxes. Anyone else could do it. It was grossly inconvenient for them. They were working students. Ulterior motive is shown by the fact that it was done at the height of union activities. V WORKING CONDITIONS This Book covers 3 titles: 1) Work Conditions & Rest Periods 2) Wages 3) Special Groups of Employees Note: That each title has its own coverage. The coverage is also different from that of labor relations. The title on Work Conditions & Rest Periods govern: > hours of work > weekly rest periods > holidays, SIL, service charges Coverage Who are covered by this title? a) Government employees: You include here national and local governments, goverrnment -owned and controlled corporations b) Managerial Employees

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c) Non-agricultural field personnel d) Members of the Family of employer dependent on him for support e) Domestic helpers f) Persons in the personal service of another g) workers paid by results 1) Government Employees: Malacaang contracts Guaranteed Sanitation Services for janitorial/sanitation work. You are a janitor for GSS. Are you covered? YES. Even if you are assigned to Malacaang, your employer is GSS. Just check if it is an LOC. You work in the Light Rail Transit. Are you covered? YES. That is a government project contracted out to a private firm. What if you work in PAGCOR? NO. It is a GOCC.

2) Managerial Employees - One whose primary duty consists of management of establishment in which they are employed or of a department or subdivision thereof. This includes the managerial staff: Look to the Implementing Rules for a more complete definition: a) Their Primary duty is management of establishment or a department or subdivision thereof; b) They Customarily and regularly direct work of two or more employees therein: c) They have the power to hire or fire or their suggestions/recommendations thereon and as to promotion or change of status is given particular weight. NOTE: Supervisory employees are therefore covered by this - they give effective recommendations. Example: You are Chief Mechanic or In-charge mechanic, but you have no authority to hire or promote or fire. You can recommend, but that is still subject to review and final approval first by the department head and then by the General Manager. Are you covered by the title? YES. You are not managerial. Your power must not only be effective but must also be not routinary or clerical. It must require use of independent judgment. Is it effective? NO. It passes through the Department Head, who goes over it. Then it goes to the General Manager and higher executives for their review and final decision. Despite your title, it is the functions that are controlling. The fact that you are designated "chief" only means you are number one (1) in that category if you exercise no managerial functions (Namerco v CIR).

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What about "supervisors" who assist in planning, organizing, and making decisions? They are all rank and file union members. Are they covered? NO. They are managerial employees. The definition covers managerial work. You are a member of the managerial staff if: a) Your primary duty is performance of work directly related to management policies; b) Customarily and regularly exercise discretion and independent judgment; c) Do one of the ff: i) Regularly and directly assist the proprietor or manager; ii) Execute, under, general supervision, work along specialized or technical lines requiring special training, experience or knowledge; or iii) Execute, under general supervision, special assignments and tasks. d) Do not devote more than 20% of their actual work wide to activities not closely or directly related to 1, 2, & 3. Since the "supervisors" are under direct supervision of department superintendents, are responsible for efficient operation of their departments and assist in planning, organizing, scheduling and implementing company policies, training of subordinates, performance evaluation, coordination with supervisor, supervision of personnel - these qualify them as managerial staff. They are thus exempt. > You should distinguish this from Art 212 (m) under Labor Relations. The provision will then only cover managerial employees and supervisory employees. Managerial staff may be deemed rank-andfile for purposes of labor relations (i.e. they may join the union of rank-and-file). [Note, however, that they might fall under the category of confidential employees who are barred from joining unions]. (NASUREFCO vs. NLRC) 3) Non-Agricultural field workers/personnel You work in a hacienda. You are out in the fields the whole day harvesting sugarcane. Are you covered? Yes. You are an agricultural field personnel. The distinguishing factor is that you are out of the office and there is no way to monitor exactly what your doing or how many hours you spend working. You might watch a movie or go swimming. Who is to tell? Examples: You are a taxi driver. You are given a cab 12 hours a day. While in the cab, you can eat merienda. Go to sleep, or do whatever you want. You are non-agricultural field personnel.

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Salesmen in a company are required to report for roll-call at 7 - 8 am. They have no daily time record. Their sales routes must be completed by 5 pm. Sometimes, they finish earlier and sell some more. They get commissions based on the amount they have sold. They are NOT covered. Salesmen are excluded because: 1) They word individually 2) There are no restrictions on their time of work 3) They do not receive OT pay but just commission 4) They work away from the principal place of work 5) There is no way of checking the number of hours worked (San Miguel Brewery v Democratic Labor Organization) - What if they report at 8:00 a.m. (when they start work) and report back at 4:00 p.m. (after which they go home)? In addition, they receive an incentive bonus. They claim that that bonus based on their sales shows you can determine their hours on the field. NO. The SUPREME COURT says the incentive bonus is there precisely because there is no way to measuring their actual hours of work. You have to read it in conjunction with rules on holiday pay: excluded from its coverage are - field personnel and other employees whose time and performance is unsupervised. (Union of Filipro Employees vs. Vivar) 4) Members of Family - must be dependent for support on the employer. An example would be if you tended the Sari-sari store for your mother in your spare time. You are studying law full time and therefore have no other job. You cannot demand that your mother pay you overtime for the 12 hours that you tend the store. (Art. 82) 5) Domestics - perform services in employer's home which are usually necessary or desirable for maintenance and enjoyment thereof; or minister to the personal comfort, convenience or safety of employer as well as members of his household. Apex Mining case: A laundrywoman works in the guest house of Apex Mining located at the company compound. She washes laundry for guests who come to stay there at different times of the year. Is she covered by the title? YES. She is not a domestic. That term refers to one who performs services in the employers home which are usually necessary or desirable for the maintenance and enjoyment thereof, or minister to the personal comfort, convenience or safety of the employer or his household. She ministered to whoever stayed in the guest house, not to any particular family. She likewise worked in a building located in the company compound. This shows that she was not a domestic, but an industrial worker. - Once the domestic becomes involved in a commercial endeavor, then he or she must be treated as a commercial worker, with the corresponding benefits. Suppose you moved to the States. You therefore left your house and decided to rent it out to dormers. So five people from the province rent the house while they study for the bar exams. You left your housemaid to tend over the house and the needs of the dormers. She is no longer a domestic since she does not perform services in your home, nor does she minister exclusively to your comfort and convenience.

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When we say GOCCs are not covered, we make a distinction.

Is it created under special law - with Charter? If yes, then it is in the public sector and exempt from labor laws. It is, instead, governed by Civil Service Laws. If created under general law - Corporation Code, they are within the private sector. Labor Code applies. Coverage of the Title on Work Conditions.

Workers paid by results: if you are a worker paid by results, you are exempt. Examples: Taxi drivers Jeepney drivers Salesmen Teachers paid on a per unit basis

There is no requirement as to how much time is used up in your work. HOURS OF WORK - What are work hours? 1. 2. The time an employee is required to be on duty or at the workplace or at the premises of the employer; The time he is suffered or permitted to work.

- Your duty hours are 9-5. You are required to be in the office during those hours. Those are your work hours. - Suffered to work: You are required to work from 9 - 5. Suppose there was a rush job. So they required you to work overtime. - You are suffered to work a few extra hours. - Permitted to work: You want to finish your job. It is past 5 p.m. You tell your supervisor you will work until 9. He says "Fill out this form". You fill up the OT form. - You are permitted to work. - What if you just go on working until 9:00 p.m. and no one knows about it? That is not compensable hours worked. There was no permission or consent. Likewise, if there is a one-hour brown-out, you have to hang around the company in the event power resumes - that is working time under the rules. This is inactivity due to interruption in work schedule beyond your control. It shall be deemed work hours if the imminence of the resumption requires your presence at the work site or the interval is too brief to be used effectively and gainfully for your own interest. More so if you were given consent by the supervisor.

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- There is what they call waiting to be engaged and engaged to wait. When you are waiting to be engaged, you are waiting for a job. For example, you are a truck driver. There is a fleet of trucks parked to make deliveries when an order is made. They deliver to all ends of Luzon (from Aparri to Batangas). So you sit and wait near the garage for 4 hours. Then, all of a sudden, the owner of the delivery company says, "We have an order. Deliver this package to Baguio". You take the package and drive the truck. While driving the truck, there is no question you are working. You are suffered to work.

What about while you were waiting for the orders? Should you be paid for those 4 hours you spent waiting? You did not have to wait. The only consequence to you if you did report for work during those 4 hours was you would not get the job order that day. The company would not discipline you for failing to appear that day. You are not working during those 4 hours. You were not suffered to work. Nor were you required to be in the premises. You were WAITING TO BE ENGAGED. Likewise, say you are a chauffeur. You arrive at 8 a.m., bring your boss to his office, and wait in the parking lot. You listen to the radio, make chismis with the other drivers and eat merienda. At 12 noon, your boss comes out. You drive him to lunch and so on and so forth the whole day. While waiting in the parking lot, are you at work? YES, you are required to be there. What will happen if you suddenly left and watched a movie. The supervisor would come down, discover you are gone. He would reprimand you and maybe even suspend you. You are clearly required to be at a prescribed workplace, even if not actually working. Waiting is an integral part of your work. You are ENGAGED TO WAIT. Another example - a janitor. She arrives at 8 a.m.. Sweeps floors until 10 a.m.. After she is over, she sits and watches the world. At 3-5, she sweeps again. While she watches the world, is she legally working? YES. Waiting is an integral part of her business. She is required to be in the school premises. - Take another variation. You work at a bus company, like BLTB or Philtranco. They tell you to stay in the terminal because it is holiday season and you might be needed for emergency trips. You are

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required to be at the workplace or within its proximity. You are working while on call. You do not have freedom of movement, nor can you use it profitably to your own advantage. - This was applied analogously to high school teachers. In University of Pangasinan v. University of Pangasinan Faculty Union, the Supreme Court said, these teachers work during semestral break. They make lesson plans, check papers, etc. They cannot use the time effectively for their own purpose. Further, it is inactivity due to an interruption in work beyond their control. It cannot be gainfully used for their own purpose.* - Other cases: _ RADA v. NLRC (205 SCRA 69): This company driver drives a company van. He is allowed to bring the vehicle home & park it there. It so happens that, on his way to and from work, he passes the areas where several co-workers live. So he is told to pick them up & bring them home as well. On his way to and from work, was that work hours? ____YES. The practice was employed because tardiness of workers caused project delay. The pick-up and drop-off was a practical solution. _____Whenever Rada was absent, another employee replaced him. This shows the task part of his job, indispensable and mandatory. It was thus a task required by him, not an incidental chore. NOTE: The Supreme Court looked into the circumstances to show that the work of picking up and dropping off of workers was part of this functions. - Arica v NLRC: Every morning at the hacienda, the workers gather from 8 - 8:30 and line up in front of team leaders to show they are willing and able to sign up for the work that day. After the team leader lists their names, they go home, do some chores, eat and, at 8:30 a.m., go to the fields for the day's work. ___________________________________________The period 8-8:30 a.m. - is that hours worked? _ NO. It was done primarily for the workers' benefit. During that half-hour, they could do other things; go home, eat, work in the home. (if they did not arrive at 8-8:30, the consequence would be they would not work that day. It was not required of them in the sense that they would not be subject of disciplinary action if they failed to appear.) -_You have a boatsman. He works in the dock area, late at night and early in the day. He waits for the boats to arrive and unload their cargo and helps them dock. When there are no boats, he does other work - removing rust from boats and cleaning them. He does that work a total of 14 hours a day. When there are no boats which arrive at the pier, is he working? ___YES. The cleaning of boats is part of his work. (States Marine Corp. v. Cebu Seaman's Ass.) The work was continuous when there were no boats to unload and to dock. He could not leave and completely rest.

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-_________What about seafarers? They work on a ship out in the open seas. Their duties are 8 hours. Afterwards they rest in the cabin and walk around the ship. Obviously, they can't leave the work premises, at least not while they're on the open seas. Supreme Court says, that off-duty time is NOT hours worked. The criteria to be used would lie not in whether or not they can leave the work site, but whether or not they actually perform work. Otherwise, they would have 16 hours OT work everyday. In short, if they are not actually working or suffered to work, even if they cant leave the boat, then they are not deemed on working hours. (National Shipyards & Steel Corp. v. CIR, 1961)* -___________________________________________________What are the normal hours of work? _____________________________________________________________________8 hours a day. ___________________________________________________________________48 hours a week. _______________This is not in the Code or the Rules, but a DOLE Manual treats a work-day like this:

Your work day starts at 8 a.m. (not mid-night). We do not follow calendar days here. Your work day therefore, being 24 hours, ends 8 a.m. the next day. What's so important about that? It helps determine what will fall under OT. If you are suddenly called at 12 midnight and made to work until 6 am, should that be compensated as regular hours work or OT? OT, since it is within the work day. Rationale: humans need 16 hours of rest. OT therefore, is any work in one workday in excess of the work period.

Undertime on any day is not offset by OT on any other day. Meaning, if I work only 6 hours today instead of the required 8 hours, then I work l0 hours tomorrow, am I still entitled to premium pay for overtime (2 hours)? Of course. You do not subtract/offset the OT with my undertime.

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- Suppose my work schedule is 8 - 5. I arrive at 10 am. So I decide to work until 7 (10 - 7). Am I entitled to OT premium pay? NO. The offsetting rule only applies to separate days. The fact remains that I did not work beyond the required 8 hours.* - In Caltex Regular Employees vs. Caltex (Aug. 15, 1995), the CBA provided that the regular work week would consist of 8 hrs. a day, 7 days a week. During such period, regular rates would be paid and work on the employees one "DAY OF REST" would be a work day. Work in excess of 8 hours a day or 40 hrs a wk would receive OT compensation. (Note the week was made shorter) Everyday, the workers would be allowed to go home half-an-hour earlier so that they would not be caught by the rush hour in coming home. On Saturday, they are only paid regular rates for the first 2 hours. The union claims they should be paid rest day rates for the entire Saturday worked. Even if during Monday to Friday, they work for a total of only 37 hours (7.5 x 5 days), UNDERTIME IS NOT OFFSET BY OVERTIME (OT). So Saturday was all rest day work. Supreme Court said WRONG. Overtime (OT) consists of hours of work on a given day inn excess of the applicable work period (here, 8 hours). To constitute OT, they must be in excess of and in addition to the 8 hours worked during the prescribed daily work period (or, weekly, in excess of the prescribed 40-hr. work period). Just because work is done on a Saturday does not mean it is OT work. Saturday, even under the CBA, is not a rest day. It is only when an employee is required to work beyond the 40 hours in a week shall be deemed on OT. The rule against offset therefore will not apply. Note that normally, Saturday is not a rest day. What they did here was agree to shorten the regular work week from 48 hrs. (6 days) to 40 hours (a total of 5 8-hr days) But, since they did not finish 8 hours in one day, and since they agreed to make the regular hours of work/week 40 hrs, the first 2.5 hours on Saturday were not OT or rest day work. The 1/2 hr. per day was not a gift to them. So what does that make of work in excess of the first 2.5 hrs. on Saturday. Is it OT work or rest day work? I would think simply OT work. (Rest day work has higher premium) Under the CBA, Saturday is not a rest day. Just because the employees were allowed half-hour off earlier everyday does not mean the company waived the hour per day work they should render. The practice was done not to evade contractual stipulations, but for their benefit - so they could avoid heavy traffic. - The general rule is, you cannot be forced to work on overtime and on your rest day.

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When is compulsory OT work allowed? When the country is at war, or when Congress or President declares a national or local

1. emergency.

ex. After the last coup attempt, Cory issued an Executive Order declaring a state of national emergency due to the worsening economic condition. She allowed compulsory OT. 2. When necessary to prevent loss of life or property, or imminent danger to public safety due to actual or impending emergency in locality due to serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamities. ex. You are a nurse and there is an epidemic. You are an electrician and a storm blows down electric wires. This won't apply if there is an earthquake and you are a factory worker. (No connection) 3. Urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer, or other causes of similar nature. ex. You are a part of maintenance and machines have to be stored immediately or else they will be destroyed by storm. 4. Work necessary to prevent loss or damage to perishable goods.

ex. You have an oversupply of fruits/fish for your company. You have to transfer them to a cold storage plant or else they will rot next day. 5. When completion or continuation of work started before 8th hour is necessary to prevent serious obstruction or prejudice to business or operations. Example: You are part of TV crew covering an important news event. You can't just leave in middle. This may apply to a rush job order, provided it is occasional. If it is regular, the solution is to hire more workers, not force OT. 6. When OT work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. Example: Construction crew - making a road. Malapit na ang rainy season, kaya nagmamadali kayo. Film crew - you want to shoot during summer weather. So you maximize crew hours.

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This last provision is of doubtful validity. The law exceptions, but they added it anyway. What about rest days, when can they be compulsory?

does not authorize additional

a) Actual or impending emergency caused by serious fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity, to prevent loss of life or property; and b) Force majeure or imminent danger to public safety. NOTE: Emergencies declared by Congress or President are not included. Urgent work to be performed on machines, installation or equipment to avoid serious loss. Abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures. Example: You have to finish a project which is due on Monday. You have to work over the weekend because it is specially difficult You can ask the other staff to work on Sunday to help you prepare. NOTE: This will not apply in the case of an exporter who has to manufacture on a rush basis every week. This refers only to ABNOR-MAL pressure of work due to EXTRA- ORDINARY circumstances. The exporter can meet the need simply by hiring more workers. 4) To prevent serious loss of perishable goods Work is necessary to avail of favorable weather or environmental conditions where the performance or quality of work is dependent thereon. Example: You are shooting a film. You need a scene where there is clear weather. The rainy season is coming soon. You can ask that the workers work on Sundays. Nature of the work requires continuous work for 7 days or more (ex: crew members of vessel) NOTE: The special rules as to health personnel. If you are in a city or municipality with at least 1 million or in hospitals/clinics with bed capacity of at least 100, your working hours are: 8 hours/day x 5 days/week (40 hours) But where exigencies require, you can be made to work 6 days or 48 hours. But you get 30% premium pay. You are better-off than regular workers who. for the 41st - 48th hours do not get premium pay. For example, there is this arbularyo who has a clinic. If you have a problem, go to his clinic in Quezon City and he will give you pito-pito and a cleansing diet. Suppose a janitor works in this

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clinic. Is he covered by these special rules? Yes. "Health personnel" includes midwives, attendants & all their hospital or clinic personnel. You might ask, is the outfit legally considered a clinic? Well, look to Rule 1-A of Book 3, IRR for that. "Hospitals" and "clinics" are places devoted primarily to the maintenance and operation of facilities for the diagnosis, treatment, disease or injury, or in need of medical/nursing care. I have not been to this clinic but I believe clinics employing natural or traditional medical procedures are covered. HOLIDAYS There are 2 types of holidays: Regular holidays - a.k.a. legal - set by law, regular fall on set days of year Special days - by special proclamation by city/municipal president. ( storm signal #3 - that is not a holiday.) You commemorate something or there is a special event, conducted, such as an election. - Under EO 203, we have 10 regular holidays: January 1 Maundy Thursday Good Friday Araw ng Kagitingan (April 9) Labor Day Independence Day (June 12) National Heroes' Day (last Sunday of August) Bonifacio Day (Nov. 30) Christmas day (Dec. 25) Rizal day (Dec. 30) Special Days, under EO 203 are: All Saints Day (Nov 1) Last Day of the Year (Dec. 31) What about July 4, 1996? It is a special day - there was a special proclamation in this year, 1996. Note that, by virtue of EO 203, this was reduced from its former status as a regular holiday.

or

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What is the difference, therefore, between a special day and a regular holiday? Regular holiday Special day

1) If worked, regular pay 1) If unworked, no pay 2) If worked - 2x regular pay 2) If worked, + 30% premium 3) Set by law 3) Generally set by proclamation Note that, under the Labor Code, workers in establishments regularly employing less than 10 workers are not also covered by this rule on holiday pay. Also, under the rules, while exempted are workers paid a fixed amount for performing work irrespective of the time consumed in performing the same, explicitly entitled to holiday pay are those workers paid by results or output, such as piece-raters. (You will base his holiday pay on the average daily earnings for the last 7 work days before the regular holiday.) These two rules on exemption also will apply to service incentive leave. What about Maundy Thursday and Good Friday? You wanted a longer week-end. So you decided to absent yourself without pay on the day prior to Thursday. You reported for work on Monday (after Easter Sunday). How much do you get for Thursday and Friday? Nothing. Where there are 2 successive regular holidays you must either be at work or on leave with pay on the last day immediately before the first regular holiday to avail of the benefit. What if you absented yourself on Thursday, but entered on Friday? You get no pay for Maundy Thursday but double pay for Good Friday. What if you reported for work on Thursday, but not Friday? You get double regular pay on Thursday and regular pay on Friday. Are teachers paid by the contract hour entitled to holiday pay?

JRC v NLRC. It depends on what kind of holiday. The principle to be followed is: They should be compensated if they lose expected income. Since they do not contract to work on regular holidays, they lose nothing. That is not contemplated in their contract. But what if there is a special day declared on a class day? The Supreme Court said since they expected to be paid for these, they are entitled to holiday pay. Even if they have make-up classes, that still does not change the fact that they lost expected income. What about monthly paid-employees?

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First of all, who are the true monthly-paid employees? They are those who receive a fixed sum per month irrespective of the number of days in the month. So work on February would be compensated the same as work on January. There was a provision in the implementing rules that they were not entitled to holiday pay since they are presumed paid for all days of the year, worked or unworked. But the SC said they still are entitled to holiday pay since they were presumed paid for all days, worked or unworked. Since the law makes no distinction between monthly-paid and daily paid, neither should we. (Chartered Bank v Ople). So you add to their monthly salary if a regular holiday occurs in the month. So how do you compute their holiday pay? The company will generally use a divisor to determine it. It may look like this: monthly rate x 12 (months) divisor month. if the divisor used is 314, we know, since there are 51 Sundays in a year, that they are paid for 6 days in a week. if they use 263 as a divisor, they deducted all Saturdays and Sundays. if the divisor used is 365 days, we know that they are deemed paid everyday of the

Of course, the higher the divisor, the less a daily rate the employee gets. Suppose, to compute OT, Night differential and Leave Credits, the company used a divisor of 251. Can they later use a divisor of 261 in computing holiday pay? The Supreme Court said NO. Madaya iyan. You would be diminishing their benefits. Further, the fact that you used 251 as a divisor shows you deducted all Saturdays, Sundays and legal holidays from 365. Therefor, you did not include holiday pay! So you must pay it! (UFE v Vivar, 1992) In Terminal Facilities & Services v. NLRC (199 SCRA 269), you have a wage order providing for COLA saying that monthly-paid employees shall be paid COLA on the basis of 30 days per month: (COLA x 30) + old monthly wage = total monthly wage. Whenever a monthly-paid employee would be absent in one month, the company would determine how much to deduct from his salary by dividing the total monthly wage (with COLA) by 26 (since he does not work Sundays). Correct?

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NO. In the absence of any provision in the CBA, the presumption that monthly-paid employees are paid on rest days must prevail. The divisor therefore should be 30 instead of 26. In the Wellington case, the company was paying its employees for 314 days (Thats what you get if you deduct from 365 the number of Sundays in a year). This means regular and special holidays were paid as if worked. The Labor Inspection Officer said that they did not account for the regular holidays that fell on a Sunday. He said, when that does happen an extra work day is created. So, Wellington should pay for the 3 holidays which fell on Sundays by paying 351 days wage for those years (not 314). The Supreme Court said the factor of 314 days already accounts for all 365 days. It accounts for all days, excepting only Sundays. If you follow their theory, each year would have an extra 3 days (or 368 days). There would then be no definite way of determining the number of days per year for compensation. Every year, he would have to make a new computation. The law does not require employers to take account of all regular holidays falling on Sundays. All the law requires is that the monthly minimum wage not be less than: Statutory minimum x 365 12 and to pay that salary for all days whether or not worked. That is why we set a fixed salary per month, so you don't have to re-compute all the time, as with daily paid workers. NOTE: This case concerns a company which included the regular holidays in determining monthly pay. They used the figure "314". In the cases of Chartered Bank vs. Ople & UFE v Vivar, the figure used was "251"- they excluded the 10 holidays. So, they had to pay them. Applying that rule, this exception will cover only positions similar to field personnel. Teachers are not field personnel. Service Incentive Leaves - Employees who have worked for at least one year are entitled to five days service incentive leave. The exceptions, aside from the general exceptions under the title on working conditions, are: If they are receiving at least 5 days vacation leave. (What if they are receiving sick leave with pay? That will not qualify to exempt them. ) If the establishment they are employed in regularly employs less than ten people. (What if, you work in a small boutique. Ordinarily, they have 7 workers. During Christmas season, the store hires 5 more workers so that they can meet the demand of greater numbers of buyers. That establishment is not exempt since they do not regularly employ less than ten people.) Who determines when the employee can go on SIL?

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Ultimately, it is the employee. Though the company can require that it first be submitted for approval, especially if the employee performs a vital function. In one case, the company denied Sick Leave because the employee was able to work for the past 2 weeks without signs of sickness. SUPREME COURT said, he should be commended for working despite his physical condition. The choice is his if he wants to work even if he is sick. (Jones v NLRC, Dec. 6, 1995) Maternity Leaves: This is not granted by the Labor Code, but by the SSS law. Maternity leaves shall be 60 days for normal deliveries. 78 days for cesarean. The cost shall be advanced by the employer & reimbursable with SSS. The purpose of maternity leaves, (and any leave in general) whether under law or CBA, are to replace income you lost because you had to absent yourself from work for childbirth (or vacation, or illness, etc...) Can you claim both maternity leaves and hospitalization benefits for the same childbirth? YES. While leaves pay for lost income, hospitalization benefits pay for cost of hospitalization. There is no incongruity. (Singapore Airlines Local v Ople, 156 SCRA 629) What about the father? Doesn't he get anything? This isn't within the stated coverage of the bar but yes - Under RA 8187: The Paternity Leave Act of 1996, all married male employees in the private & public sectors shall have paternity leave of 7 days with full pay for the first 4 deliveries of his legitimate spouse with whom he is cohabiting. Note those two underlined qualifications. The purpose is to enable him to lend support during the period of recovery and/or nursing. (June 11, 1996 approved) Note that the law applies to all married males in the public and private sector. It will therefore also apply to domestics, non-agricultural field personnel and the like. - Night Differential: If you work from 10 pm - 6 am, you receive an additional premium of 10% of regular salary. That is night differential. Among the purposes are: Night is a time for which the body is less conditioned to work (it's easier to get sick) Its dangerous to work at night (you try walking around at those hours in dark - lit neighborhoods) Night is a time best spent with the family. You abandon part of your social duties with night work. - Service charges: This is different from "tip: "Tip" is what you gave the waiter/waitress after eating if you like their service. It is in addition to what is charged you. Service charge is what the restaurant requires you to pay for the benefit of its employees. It is not a voluntary contribution on the part of the customer.

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- It should be shared 85% - 15% in favor of the rank-and-file. If abolished, the charges formerly collected shall be paid by the company to the workers as additional basic pay. - May the company agree to give the entire 100% to the rank and file? Of course. If they don't, the 15% shall answer for losses and breakages or distribution to managerial employees. (IRR) - So let's recapitulate. What are the benefits, aside from wage and 13th month pay guaranteed by law? a) overtime pay regular day - 25% premium non-regular - 30% premium b) rest day pay - 30% premium c) special day pay - 30% premium d) reg. holiday pay - worked: 200% unworked - regular days' pay e) night differential - 10% premium (between 10 p.m. - 6 am) f). Service Incentive Leave - 5 days/year Service Charges - but this is optional on the employer. The Employer need not charge it. Likewise, only establishments such as hotels, inns, night clubs, cocktail lounges, bars, casinos, etc. can collect service charge. VI WAGES - What is "wage"? Any -remuneration or earnings however designated capable of being expressed in terms of money whether fixed or ascertained on a time, task, piece or commission basis, or other method of computing the same payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done; or services rendered or to be rendered and includes the fair and reasonable value of board, lodging & other facilities customarily furnished by the employer to the employee. Wage is actually the same as salary. But note the case of Gaa v CA where it held that a building administrator, because his level is of a higher one than a mere laborer, does not earn wages. He earns salary (from Latin "salarium"). Thus, his earnings are not exempt from garnishment. Art. 1708 of NCC operates in favor of the laboring class whose work is rank-and-file. A building administrator of a hotel is managerial supervisory. Her salary is thus not a wage for purposes of the law on exemption from execution. Salary relates to position of office. Wage is compensation.

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When you get more specific, the case of Gaa v. CA differentiates between work which is more physical or menial in nature and work is more managerial (such as that of a building administrator) for purposes of determining whether or not salary is exempt from execution. The former earns wages. The latter earns salary. That is not exempt.

In Songco v NLRC, The Supreme Court said, they are the same. They both mean reward or recompense for this. So, in deciding whether or not you should include a salesman's commission in determining what his separation pay should be, the Supreme Court said include it. The commission were direct remuneration for the services rendered. Commissions are part of their salary. In fact, some salesmen receive only commissions and no basic salary if commission were not part of salary, then it is as if we said they earned no salary. But note, when we get to the issue of 13th month pay, which deals with basic salary, the issue is different. Likewise, when we talk of backwages, the rule is get full backwages, meaning all pay and benefits you should have received when out of the company. - What is the concept of wage? For example, for determining OT premium pay, what do you use? Note, the law refers to a percentage of the regular wage/rate. In PNB v PEMA, the question was, should you include COLA (equity pay) and longevity pay in computing OT? There was this old case: NAWASA v NAWASA Consolidated Unions. It said, when you compute OT, a regular wage will include ALL payments the parties agreed will be received in the work week. Under NWSA's doctrine, your therefore include: differential pay for nightwork cost of board and lodging furnished the employee incentive bonus profit sharing premium pay rates

But he Supreme Court said the concept of wage is that it is given by virtue of work done or services rendered. It is distinct from supplements such as Sick Leave/Vacation Leave, COLA and other bonuses. - COLA may sometimes be granted. But that is contingent to meet the exigency (e.g. inflation). It was not regular or permanent, like wages. Its purpose - to help worker make ends meet. - Longevity pay is not given for services but due to loyalty and length of service.

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The NWSA doctrine therefore applies only to that particular situation - where the issue was do you include Sunday pay in computing the daily wage. It did not actually refer to extra, temporary and contingent compensation unrelated to work done. NWSA is limited to a case of workers working 7 days a week and who got 25% Sunday differential 3 months prior to RA 1880 (or 40-hr week law). The law reduced government work week from 46 hours - 40 hrs/wk but required on diminution of weekly wage. To ensure non-diminution, it was necessary to include the Sunday differential in computing the daily wage rate. - The 2 principles should thus be applied in determining if you will include some benefits in OT computation: 1. 2. Is it for work done or services rendered? Is it permanent and regular in nature? (Not temporary, contingent or changeable)

- Therefore, you will not also include: a) profit-sharing - that is to give workers a share in profits and as incentive to work harder. It is not tied to particular work done. It is contingent - based on profitability b) premium pay - that is given to work under special circumstance. It is the fact that you worked OT, on Sunday, or at midnight which makes you entitled to it. (SMC v Inciong) It is also contingent. c) Monthly gas ration (Asis v MOL) - this is not for services rendered. Sick Leave (Caltex v CIR, 1986) - this compensates you for your salaries while indisposed. - What other non-wage payments can therefore be made? Gratuity: A gift. Something given voluntarily in return for a favor or services. It is a tip. It is not pay for services rendered. It is like a reward. Emergency Allowance: But receipt of ECOLA is dependent on whether or not you are also entitled to basic if you get no basic pay for that day, you also get no COLA. Representation/Transportation Allowance: This contemplates payment for expenses. Per diem: This is actually allowance for each day that an officer or employee is out of the home. It answers for board, lodging, transportation and other related expenses. - Facilities: These are defined (in the IRR) as articles or services for the benefit of the employee or his family but shall not include tools of the trade or articles or services primarily for the benefit of the employer or necessary to the conduct of the business. Examples are: meal subsidy education

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board and lodging The deduction on account of facilities should be their fair and reasonable value. The company cannot charge you more that the cost of the facilities. It cannot make a profit from them - "Fair and reasonable value" shall not include any profit to the employer or to any person affiliated with the employer (Art. 97-f). Note also that the rules require that the employee must VOLUNTARILY ACCEPT the facilities before you can charge their costs to the worker. You distinguish facilities from supplements. Facilities are necessary for the worker's and his/her family's existence. Supplements are "extra remuneration or privileges or benefits over and above ordinary earnings or wages". If an item furnished for your benefit is part of your basic wage (deducted therefrom), it is a facility. If it is given over and above it, it is a supplement. Ex. 1. Free meals given to seafarers on board an ocean voyage. These are given over and above regular wages. 2. Food allowance given to bus drivers going outside Cebu City (over and above wages). FACILITIES - deducted SUPPLEMENTS - given in addition to what are the existing wages. They are given by way of management practice and are demandable as a contractual obligation. - RULES ON PAYMENT OF WAGES - How shall they be paid? By means of legal tender. Exception: Check or money order a) if customary on date of effectivity of Code b) necessary due to special circumstances c) stipulated in CBA - How often? 1) Once every 2 weeks or 2) 2x per month at intervals not exceeding 16 days Exception: force majeure/circumstances beyond control Where? At or near place of undertaking. Exception: 1) deterioration of peace and order/emergency 2) free transport is provided

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3) NEVER its employees.

analogous cases, provide time to collect is hours worked. at bar, night or day club, drinking place, gambling place except as to

- To whom? To worker, directly Exception: 1) Force majeure (then give it to another person with written authority) or other special circumstances as determined by secretary of labor. 2) Death of worker (give it to the heirs without need of intestate proceedings. Claimants only need to execute an affidavit that they are the only heirs) - Can you deduct from wages? YES. That allowable by law: insurance premiums, with his consent taxes check-off, where authorized SSS, Pag-ibig and other such contributions Examples of illegal deductions: Apodaca v NLRC: Apodaca was employed as General Manager. He was also a stockholder of the company. When he resigned he had unpaid subscription worth P113,000. The he filed a case for unpaid wages. The company said, yes, we owe him P17,000 but we don't have to pay him under the principle of set-off. We set-off his unpaid subscription with his unpaid wages. Supreme Court said that had no basis. First of all, there was no notice or call for the subscription payment. So it was not yet due and demandable. But even if there was a call for payment, you cannot set-off. Deductions from wages are allowed only: 1) 2) 3) Where the worker is insured by employer with his consent - to pay premium Check-off of union dues, where there is individual written authorization Where SEC allows it under its regulations

Commands Security v NLRC (1992): Security guards suffered 25% deduction in salary. That was used to pay the agency's share in getting him a job placement. Supreme Court said that is illegal and iniquitous, it is void ab initio. - Can you deduct from salary for lost/broken items? The law only refers to deposits for loss or damage from which you can deduct. Suppose you have taxi drivers. They are required to make a P15 deposit for deficiencies in their boundary payments every day. Valid? NO. Art. 114 allows deposits only when

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the employer is engaged in such trades, occupations or businesses where the practice is recognized, or necessary or desirable. Under Art. 114, the deposit must be for damage or loss to tools, materials or equipment of the employer. Not to shortages in remittance of the boundary. - What if the taxi company requires the drivers to wash their cabs after their duty. Or, instead, to deposit P20.00 to be paid to one who cleans the unit? That's OK. The practice was to have them clean the cars - restore it to its condition prior to his use. That was part of their duties. The P20.00 was used to pay the cleaner if they did not do it themselves. That is lawful. (Five-J Taxi vs. NLRC) - Problem: I dismiss you from work. I do not give you your wages until you make a report of all your pending jobs. Valid? NO. Art. 116 - It shall be unlawful to withhold any amount from wages of a workers or induce him to give it up by force, stealth, intimidation or other means without his consent. But if he has outstanding loans to the company, you can set it off. - You work in my company. My company has a small store for its employees. Can I offer you discounts if you buy from the company store? YES, provided there is no compulsion. (Art.112) - Can I require you to buy from store at a discount? NO. No employer shall limit or interfere with the freedom to dispose of wages. You cannot be compelled to purchase from the employer or any person or use their services. (Art. 112) - You work beside a casino. (That is the location of your employer). The company is told by your wife that you are gambling your earnings away. So what it does, it pays 50% of your wages to you in cash and gives your wife 50% by means of a check. Valid? NO. 1. 2. Wages must be paid directly to the worker. This constitutes interference in disposal of wages.

We are aware that some companies have the practice of preparing 2 sets of payrolls. One reflects what they actually give the workers. The other reflects what they show the DOLE. That is what Article 119 is there for. It says it is unlawful to knowingly make report or keep false records as to wages.

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Liability for Wages: Labor-only contracting is prohibited by law. Job contracting is not. Note that contracting out of labor is prohibited as ULP if it will interfere with the right to self-organization. At any rate, a labor-only contractor shall be treated as an agent of the direct employer (the one for whom the employee works). The direct employer shall be responsible for such workers as if he directly employed them. In short, they can unionize under him. They can sue him for back benefits. What about the job contractor, or independent contractor. The employees they assign to the company (the indirect employer) are employees of the contractor. For example, the guards of Jaguar Security, which is contracted by Ateneo Law for security services, are employees NOT of Ateneo, but of Jaguar Security. Is Ateneo liable to them? While they cannot unionize under Ateneo, Ateneo is still liable for their wages and benefits. Act 107 says that the provisions of Art. 106 on responsibility to the employees, shall also apply to the indirect employer. In what capacity is Ateneo liable? Art 109 says it shall have solidary liability. Meaning, you can sue either for the entire amount. But if I were counsel for Ateneo, I would suggest, just to make sure in the event that the employee would sue me, to require the security agency to post a bond for non-payment of wages Art 110 - We will get back to this after we have discussed all the other wage benefits, since this concerns satisfaction of claims. The same goes for Article III. Wage Determination

- Who shall primarily fix wages - The Regional Wage Boards, appealable to the National Tripartite Wages and Productivity Commission. - What are the criteria for fixing of wages? You can use the code: W A L D I N 'S F E E 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Prevailing Wage Levels Wage Adjustment vis--vis the consumer price index Cost of Living and changes or increases therein Demand for living wages Need to spur industries to invest in countryside Needs of workers and their families Improvement in Standards of living Fair return on capital invested and capacity to pay of employers Effects on employment generation and family income Equitable distribution of income and wealth

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You can have different wages based on the industry. That is why minimum wages of agricultural labor are different from those of non-agricultural labor. Public hearing should be conducted. A wage order may use two methods in fixing wage rates: The floor-wage method : Fixing a determinate amount to the minimum wage The salary ceiling (cap) method: a wage adjustment to all employee receiving a certain denominated salary ceiling To illustrate, suppose, the present minimum wage in NCR is P185.00 per day. A wage order was granted increasing the minimum wage by P15.00. If your wage rate before the order took effect was P190.00, you would be entitled to receive only an additional P10.00 so that you will meet the new minimum. If you are already receiving the new minimum of P200.00, you get no salary hike (except of course, if there is a wage distortion). This is an example of the floor-wage method - an increase in the minimum wage and nothing else. However, suppose that the wage order states, in addition, that all employee receiving below P210.00 daily will receive an across-the-board wage increase of P20.00. Then, if you are receiving P200.00 per day, you will be entitled to receive such wage hike. Your new salary will therefore be P220.00 per day. On the other hand, if you are receiving P210.00 per day, you are not covered by the wage hike since you fall outside the bracket (P185.00 [minimum wage] until P210.00). This is an example of the salary-ceiling method. In ECOP vs. NWPC, the question was, the Wage Rationalization Act (R.A. 6727) only referred to increases in the minimum wage. Is it therefore valid for the Wage Board to set an increase through the salary-ceiling method? The SC said YES. The reason behind the salary-cap method is to reduce disputes arising from wage distortions. The wage boards can apply this since the law intended to rationalize wages by providing full-time boards to police wages round the clock and by giving them enough powers to achieve this objective. Congress intended that the boards be creative in resolving this issue without having to knock on the door of the legislature every time. If the law limited the boards to setting floorwages, there would be no need for a board. All we would need would be an accountant to keep track of the latest CPI (consumer price index), or maybe Congress would have fixed wages on its own. Congress may delegate powers to fix wages. The standards set are sufficient. Wage orders shall be issued by Regional Wage Boards. Their orders take effect within 15 days from their publication in a newspaper of general circulation. You can initiate a proceeding for a wage hike by filing a petition with the Wage Board. What if you don't? Does that mean the wages won't increase? NO. The Wage Board can act on its own. As Art. 133 says: Whenever conditions in the region so warrant, the Regional Board shall investigate and study all pertinent facts and determine when a wage order should be issued.

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Suppose the Wage Board issues a Wage Order. You are an owner of a factory. Can you appeal? Of course. You do not have to be a federation or what not. "Any aggrieved party" may appeal. You have 10 calendar days to so appeal. You appeal to the NWPC. What happens to the Wage Order pending the appeal? It is not suspended unless you file a bond/surety for payment of employees affected by the order the increase, in the event such order is affirmed. Do you think any employer has attempted to suspend the effects of a wage order in this manner? NO. Imagine if he loses, he will have to pay wage differentials to millions of workers affected. Suppose you apply for exemption and the application is denied, you have to pay 1% interest to the workers. (Imagine that. Kung ibinangko mo ang increase, di kumita ka pa!) So the Wage Order is released. Aside from the wage increase, what may we find there?

Sometimes (actually, always), they have provisions on crediting. What does that mean? It is a provision which states that if, within a stated period prior to effectivity of the Wage Order (usually 60 days), the employer granted a wage increase, then you can credit the wage increase under the wage order. For example, the company gave all workers an across-the-board increase of P10. One month later, a Wage Order was passed allowing for crediting of benefits given by the company within the last 2 months. The Wage order provided for a P15 wage increase to all workers. If you will apply the provision on crediting, the only increase you will get in wages after the Wage Order took effect is P5. ex: Original Wage: P170 + 10 Management Increase: 180 + (15 - 10) Wage Order: 185

Is this type of provision valid? In Apex Mining Corp. v NLRC, the Supreme Court said yes. CBAs can also allow for crediting. These are grounded on an important public policy - to encourage employers to grant wage increases higher than the minimum legal rates. But where rules implementing a wage order prohibit such crediting, they would be invalid. The Supreme Court has said these agreements merely create an equivalence between legal and contractual imperatives, rendering both obligations susceptible of performance by compliance with

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either, subject only to the condition that where the increases given under agreement fall short in amount of those fixed by law, the difference must be made up by the employer. (PT&T vs. NLRC, June 19, 1995, J. Vitug) What would be wrong is if the CBA provided that the company need not pay the minimum wage for a certain period of time. That is invalid for two reasons - it is against law and public policy and only the wage board may grant an exemption from legally-mandated wage increases. What happens if there is no such provision on crediting?

It follows that the employer must give the wage increases under the wage order in addition to that under the CBA. In Meycauayan College v. Drilon (1990), the CBA provided for a salary scale (a salary scale provides for the wage rates due the different positions and ranks in the company). During the term of the CBA, several wage increases were ordered by law. All of these were complied with. The company now claims that a wage raise is different from a salary scale. An agreement on a salary scale should not be considered as an addition to the salary increase under the law. The SC said that that was wrong. The terms of a CBA constitute the law between the parties. Their terms are separate from what the law provides. There being nothing in either the law or contract that benefits from one encompass the other, the increases under the wage orders and the wage scale should be considered separate from each other. In short, employee benefits derived by law are exclusive of benefits arrived at through agreement, unless otherwise provided. Sometimes, the wage order also states that anniversary wage increases are not included in the crediting. To illustrate: You have a CBA which provides wage increases as follows: WAGE RAISEFIRST YEAR (May 1, 1994)P 10.00SECOND YEAR (May 1, 1995)P 15.00THIRD YEAR (May 1, 1996)P 20.00 A wage order was issued on June 1, 1995, providing for crediting age increases granted by voluntary act of the employer or under a CBA within one month prior to the issuance of such order, except for anniversary increases. May the employer therefore credit the second-year wage hike as compliance with the order? NO, because it is an anniversary wage increase. It occurred on the first anniversary of the CBA. The grant took place one year ago. (Apex Mining vs. NLRC) Likewise, if collective bargaining negotiations started on January 1, 1997. On February 1, 1997, the union and the company reached an agreement with respect to wages. On March 1, 1997, a wage order was issued allowing for crediting provided the wage increase was granted by the company within one month prior to the increase. It was only on April 1, 1997, however, that the company and union finally concluded the CBA. May the company credit the wage increase under the CBA with the wage order? NO. The grant occurred when there was a final agreement on the CBA. Even if there was a preliminary agreement on wages on February 1, this could still be modified while there was no final agreement. Crediting will not therefore be allowed. And then there is the matter of wage distortion. This means :

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A situation where: an increase in prescribed wage rates results in elimination or severe contraction of intentional qualitative differences in wage or salary rates between or among employee groups in an establishment as to effectively obliterate the distinction embodied in such wage structure based on skills, length of service or other logical bases of differentiation. For example, A, a rank and file worker receives P185 per day. (This is the prevailing minimum wage.) B, a supervisor, receives P200 per day. A wage order is issued, raising the minimum wage by P15.00. A would thus now receive P200.00, while B would not be entitled to receive anything since he still meets the new minimum rate. B will now complain, since he is receiving the same as a rank-andfile employee, who has lower rank and skills. He would be right, for there would now be a wage distortion. This must be remedied. In Metrobank Employees Union vs. NLRC, the bank gave a P900.00 monthly wage hike to supervisory employees. Because of a P25.00 per day wage hike under R.A. 6727, the P900.00 difference was reduced to P150.00 per month. There were two questions: Was there a wage distortion? If so, how should it be remedied? The NLRC said there was none. While there was a noticeable decrease in the wage gap, it was not so insignificant to obliterate or result in severe contraction of intentional qualitative differences. The SC said that the NLRC was wrong. The law did not require an elimination or total obliteration of salary differences. A severe contraction is enough. In this case, the contraction went up to 85%. How do you remedy this? The Arbiter ordered the company to pay the affected employees the total amount of the P750.00 reduction. One NLRC Commissioner suggested this formula: minimum wage = Percentage x Prescribed = Disturbance actual salary Increase Adjustment

The SC sided with the Commissioner. It said we must approximate an acceptable quantitative difference. The Arbiters formula is not acceptable. Giving them the entire P750.00 will not be conducive to encouraging employers to grant allowance increases above the minimum. It would penalize them for granting more. The Commissioners formula is appropriate and just and equitable. In Metro Transit v NLRC, the ponente of which was Justice Vitug, the company, whenever the rank and file received a statutory wage increase, would also give the supervisory employees a wage increase. Whatever the rank and file got, the supervisory employees also received plus P50.

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A CBA was then entered with the rank and file. The rank and file were given a wage increase of P500/month. The supervisors, this time, got nothing. They now claim there is a wage distortion. Is there? YES. The granting of corresponding increases to supervisory employees was a practice of the company. It was not a bonus. A bonus is given as a reward for industry and loyalty. It is given in addition to what is ordinarily granted. It is therefore not demandable as a matter of right (unless made part of wages). This P550 the supervisors sought was not an incentive or an inducement. Neither was it contingent on anything. It was based on a company practice of granting a salary increase to supervisors when rank and file got an increase. This was designed to correct or minimize wage distortion. NFL v NLRC laid down some important principles of wage distortion:

1. It assumes an existing group of employees which establishes distinctions on some relevant basis. (You have a group of workers. You differentiate groups within them based on some relevant grounds - ex: age, seniority, rank, skill required) 2. They often result from government decreed wage increases. But they may also increase from other causes such as merger. 3. If there is a wage distortion, you do not have to fix it by giving exactly the same amount. It's enough that you re-establish a substantial gap. 4. You can do so by grievance or collective bargaining.

To recapitulate,

1. Wage distortion does not require elimination or obliteration of the wage gap. A severe contraction is enough. 2. A government mandated wage increase may result from a merger or CBA-negotiated increase for one group. 3. Bonuses, which are gratuitous in nature, should not be considered in determining whether or not there is a wage distortion (since it is out of generosity, you cannot claim wage distortion, otherwise, you'd be demanding for a gift, which is makapal ang mukha). How do you remedy a distortion?

If there is a CBA: grievance procedure If not settled, go to voluntary arbitration If there is no union or CBA: negotiations If not settled, NCMB may assist.

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If not settled in 10 days, Labor Arbiter. Note the IBM v NLRC case. You had here workers at San Miguel. Everyday, they would work around 10-12 hours (or 2-4 hours OT). The Supreme Court said they did it because it gave them more income. Then, one day, there was a wage distortion. They decided to boycott OT. The company said, you are violating the no-strike/no-lockout provision. That is illegal. Was it? The Supreme Court said yes. The law provides for a remedy in case of wage distortion (grievance or negotiations and VA). Strike (slowdown) is not allowed. Maybe you are asking, what about OT - is it not a law that you can't force them to work OT? Yes. But the Supreme Court said, in this case, there was a long-standing agreement to render OT work everyday. When they suddenly refused to do so, they therefore conducted a slowdown (a withholding of work which prejudices company operations). 13th Month pay: What is this? It is a bonus required by law. Who are exempt? 1. Government

2. Those paying their employees a 13th month pay or more per calendar year or its equivalent at the time the law was passed. 3. Employees of household helpers and persons in the personal service of another

4. Employers of those paid on PURELY commission, boundary or task basis, those paid a fixed amount for specific work (pakyao) (This refers to those paid by result. But note that PIECERATERS are not excluded from 13th month pay). Piece-raters are those paid a standard amount per unit of work that is more or less regularly replicated, without regard to the time spent on the same. 5. Note also, managerial employees are exempt. Since it refers only to rank and file employees. But note who are covered by the definition of managerial employees under the Revised Guidelines on PD 851 - it does not include the managerial staff. 6. > Another: You worked less than 1 month in a calendar year.

Let's go through the exceptions. Those paying 13th month pay or its equivalent.

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What do you mean by "its equivalent"? X'mas bonus mid-year bonus cash bonus other payments amounting to not less than 1/12 of the basic salary

If Christmas bonus is less than the required 13th month pay, pay the difference. What is the purpose behind this particular exemption? In NFSW v Ovejera, the Supreme Court said it was intended to grant additional income to employees not already receiving it and not to penalize the employer for his generosity. The Revised Guidelines provide that those paid a fixed wage + commission are entitled to 13th month pay based on total earnings for the calendar year (both fixed wage + commission). Thus, bonuses are considered equivalents of 13th month pay. What are not equivalents?

> cash and stock dividends > COLA > other allowances regularly enjoyed by the employee > non-monetary benefits > X'mas gift given in settlement of a dispute(e.g. share in tuition fee increase claim). this is not an equivalent since the aim of PD 851 was to uniformly provide workers additional income because their wages for 12 months was inadequate. So, if the additional income is less than what the law requires, the employer need only pay the deficiency. The rule on exemption of those paying "equivalents" aimed to prevent a double burden on the employer. The X'mas gift is part of the claim for P350. It is not a bonus, incentive or additional income. It is not an act of liberality. It was partial payment of an obligation which the union sued for before the Arbiter. A bonus is an act of liberality. (UST v NLRC) > Transportation allowances > Seniority bonus: its purpose is to reward length of service. PD 851 seeks to give additional income > Representation allowance/transportation allowance/salary Pork meat subsidy/Free light > Free sack of rice (non-monetary benefits) What is the basis for determining the 13th month pay? TOTAL BASIC PAY FOR YEAR 12

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Note, it is not divided by the total number of months worked That is a common mistake The divisor is always 12. - The amount divided is total BASIC salary What is "basic salary"? The rules say it won't include: 1. allowances 2. monetary benefits not considered or integrated in regular or basic wage (i.e. vacation leave/sick leave, cash equivalents of leaves, OTpay, night differential, holiday pay, COLA) UNLESS they are part of basic under an agreement or policy. What about commissions?

If you receive only commissions, the rules say, you get no 13th month pay. (Note our discussion on 13th month pay.) What if you receive both a fixed rate and commissions? The rules say, compute 13th month pay on the basis of both payments. In one month, the Supreme Court came out with 2 opposing decisions on this. In the first case, Phil. Duplicators v NLRC, you had salesmen paid largely by commission. But they also received a fixed salary. The Supreme Court said: Do not confuse basic salary with fixed wage. Basic salary is used to distinguish wage from fringe benefits. The commissions are paid of the wage, not allowances or fringe benefits. In fact, they form the bulk of the salaries. Furthermore, the Revised Guidelines say that if you are paid partly by commission and partly by fixed wage, you are entitled to 13th month pay based on both. And then a few days later came Boie-Takeda v De la Serna. This concerned medical representatives who would receive commissions as a share in the productivity bonuses. This time, the Supreme Court said, basic wage means - rate of pay for a standard work period exclusive of additional payments such as bonus or OT. Commissions are given for extra efforts in consummating sales. They are additional pay not part of basic wage. The fixed wage is the basic salary. Salary means direct remuneration for services rendered. To include commissions would be to unduly expand the concept of basic salary. The IRR cannot add to the law. Par 2 of Sec. 5(a) of the Revised Guidelines is thus null and void. So Phil. Duplicators saw this decision. They filed a motion for reconsideration. So finally, the Supreme Court said: There is no conflict. In the first PDI case, the commission was part of the basic compensation for the job. It was part of the selling price. The fixed wage amounted only to 1530% of total yearly earnings. They were thus part of basic salary. In Boie-Takeda, the commissions were not part of basic. They were paid as productivity bonus. They were thus tied to productivity or capacity for revenue production. they are like profitsharing; they have no clear, direct or necessary relation to the work done by each employee.

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A bonus is given out of generosity. It is not demandable or enforceable as an obligation. Another difference. In PDI, you had salesmen. In Boie-Takeda, you had medical representatives. They are different. They promote the products by visiting doctors and telling them of the virtues of their products. Then they leave brochures and samples. The bonuses are like fringe benefits to them since they do not form part of the selling price. What then is the difference between the two?

Prod. Bonus (BT case) Sales Commission (PDI case)Tied to productivity or profit generation Directly proportional to employees endeavorsNot directly dependent on efforts of the workerPaid on specific results achievedSomething extra for which no specific additional service are rendered.Percentage of sales and operates as integral part of basic wage So PDI says, "but you said par. 2 was void". Supreme Court said, "Yes, but what we meant th was 13 month pay gives relief only to those not actually paid its equivalent. It was not intended to impose a double burden on employers already granting it or its equivalent. Otherwise, it would penalize the employer for his munificence and liberality. It would discourage giving grants. (If you interpreted it so that it would mean that productivity bonuses should be included in computation of 13th month pay, that would be void. Those purely on commission basis

There is no legal basis to include in the term "commission" profit-sharing payments or bonuses. IF you interpret it this way, then it is void! So to recapitulate, if a worker is paid BOTH fixed wage and commission, when should you also include the fixed wage in computing the 13th month pay? If the commission paid is based on the actual work performed (ex. % of price of goods sold), it is therefore salary and should be included. If it is not so based on actual work (ex. profit/incentive sharing on productivity bonus), it is not included. So it is not the title used: "commission". You will look into the nature of the payments. Another more recent case which affirmed this Phil. Duplicators Ruling was the case of PACIWU v NLRC, Aug. 14, 1995. You had here bus conductors and drivers paid by commission. If the total commission for the day was less than minimum wage, they would get the minimum wage. Supreme Court said while the commissions are given as incentive to work harder, they are direct remuneration for services rendered. You can see this from the fact that they were guaranteed a minimum wage.

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When shall 13th month pay be paid?

Generally, on or before December 24. But you may opt to receive it in 2 amounts. (One before school starts, the second before Dec. 24). AND he may get it when separated from service. Whats the reason he may collect it upon dismissal? The SC said this is in line with equity - as the employer can require the employee to clear himself of all liabilities and property accountability, so can the employee demand the payment of all benefits due him upon the termination of the relationship. Also, the benefit of 13th month pay is automatically vested in the employee who has at least worked for one month during the calendar year. This such benefit may not be lost or forfeited even in the event of the employee's subsequent dismissal for cause without violating his property rights. (Archilles Mfg. Vs. NLRC, June, 1995) What else should be given?

(Of course there is also the social amelioration lien under RA 6982. This will not be asked in the bar exams anyway.) PAST PRACTICES What else?

We already mentioned, supplements - extra remuneration or privileges, given over and above wages are fixed benefits. In NASUREFCO v NLRC, the Supreme Court discussed the concept of past practices which have ripened into contractual obligations. To fall under this category it must be a benefit: 1. 2. 3. Given over and above what the law requires Over an extended period of time The employer knowing he is not obliged by law to grant it.

For example, if before, you were classified as rank and file. Due to job reevaluation scheme, your position became supervisory and you received some additional benefits. You are not entitled to the OT pay you used to receive. This was given not over and above what the law required. It was given because, as rank and file, you were entitled to it. There is no diminution of benefits - you actually received more benefits to make up for those you lost. It must be knowingly given. If, for example, the company paid 13th month pay for 2 years even if they already were paying X'mas bonus and they did this because of a mistake, they can still withdraw it. BONUS What about bonuses? We said bonuses are acts of liberality. They cannot be forced on the employer.

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In Trader's Royal Bank v NLRC, the Supreme Court said, TRB can withdraw its bonuses, which were dependent on profits. After 1986, they withdrew it . (TRB being place under sequestration). You cannot say the bonus ripened into a company practice. Because of its fiscal condition, you could not force TRB to distribute bonuses. Likewise, as to 14th month pay, in Kamaya Point Hotel v NLRC, such benefit was withdrawn after the Hotel was converted into a training center for Libyans (scholars). You cannot penalize it for its liberality by requiring it to continue giving bonuses despite losses. Metro Transit Org. v NLRC (July 11, 1995), penned by Justice Vitug, states that a bonus is demandable when it is made part of the wage or salary or compensation. If it is additional compensation the employer promised and gave without any conditions (such as profitability or productivity), then it is part of wage. Otherwise, it cannot be deemed part of wage. For example if it is payable only to employees with good efficiency or productivity rating, it is an enforceable obligation upon meeting the requirements. What if you enter into an employment contract stating, if you have worked for 5 years, you get a bonus, in addition to your salary. Can the company withdraw that, after 4 years? NO. Your service for 5 years is an acceptance of the offer to pay the bonus. Once accepted, it cannot be withdrawn. In short, it is already an agreement between the employer and the employee. (Marcos v NLRC, Sept. 8, 1994) Note, in the Kamaya Point & Traders Royal Bank cases, the Supreme Court allowed the withdrawal of the bonuses due to losses. Since it is essentially gratuitous, you cannot force the company to keep on giving it fit it can no longer do so. But where benefits are given due to agreement (BCA, employment contract, etc....), such as a fixed monthly ELA given under a fixed practice and verbal agreement, that cannot be withdrawn. NON-DIMINUTION OF BENEFITS Note, Art. 100 says: Nothing in this Book shall be construed to eliminate or diminish in any way supplements or other employee benefits being enjoyed at the time of promulgation of this Code". The time referred to is 1978, Nov., that was when the Code was promulgated. Curiously, however, the Supreme Court has applied it to cases of benefits given even after the Code took effect. PRODUCTIVITY IMPROVEMENT PROGRAM This should not be covered by the Bar Exams, but just in case, RA 6971, "The Productivity Incentives Act of 1990" provides for a program called "The Productivity Incentives Program".

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What is it? It's a formal agreement established by a labor-management committee with a process whereby employees will be given salary bonuses proportionate to increases in productivity for the present year as compared to the last 3 years. The intent is to promote employment and increase productivity. The bonuses shall be given at least every 6 months from the start of the program. This agreement shall not supplant any CBA, but only supplement it. If there is still no CBA and, eventually, one is entered into, it shall be integrated into the CBA. PREFERENCE OF WORKER'S CLAIMS. So now we go to Article 110: Preference of Worker's Claims.

Regularly, you have 1 or 2 cases where PNB or DBP goes up to the Supreme Court applying this. And, for the past years, the decisions have always said: > While workers have preference in satisfaction of claims and this is superior to all claims (even those of the government), you cannot read it in isolation of the Civil Code provisions on Concurrence and Preference of credits. > First of all, the article starts: "In the event of bankruptcy or liquidation of an employer's business...." The rules use the terms in event of liquidation or bankruptcy. While the provision "declaration of" has been eliminated, the Supreme Court said, you still need that. Why? How else will you know if workers should enjoy first preference, than by finding out if the assets are insufficient to cover the debts? How do you do this? Proceedings for insolvency or bankruptcy. There will be no need to apply preference if assets are greater than liabilities.) So, you can apply Art 110 only if you have such a declaration. > A preference of credit is all Art. 110 gives. It is not a lien. The Civil Code creates a lien over products of a workers labor, for payment of his wages and claiming for workers in construction specially preferred claims. But Art. 110 is only a preference. There is a difference between the two: preference of credit Applies only to claims Does not attach to specific properties lien Attaches to specific property.

Art. 110 does not create a lien. It is a preference - a means of determining which should first be satisfied out of the assets. A lien is superior to this as it attaches to the property. So Art. 110 falls to a mortgage credit.

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The Supreme Court said also, we ruled on this already so many times. All you could have done was stand on stare decisis. (DBP v NLRC, March 1, 1995) This was reiterated more recently in Phil. Export and Foreign Loan Guarantee Corp. v NLRC, Dec. 12, 1995. Note that the Civil Code creates a worker's lien on the goods manufactured or the work done (Art. 1707). It creates a preference in the following cases: Specific moveables - claims for wages, on goods manufactured; work done Specific immovables - claims of workers in construction/reconstruction/repair of buildings, canals or other works (on such construction) Other property (real or personal) - credits for services within 1 year prior to insolvency proceedings. Pay/indemnity for damages in case of labor accident or illness resulting from employment VII MEDICAL AND DENTAL SERVICES require 2. training of a sufficient number of employees in first-aid treatment Emergency Medical and Dental Facilities What are the minimum medical and dental services the law requires? 1. First-aid treatment - medicine and equipment as the nature and conditions of work

No. of Employees Services RequiredMore than 50 until 200 NON-HAZARDOUS- if no regular nurse available, graduate first-aider- More than 50 - 200 HAZARDOUSfull time registered nurseOver 200 - 300Full time registered nurse Part time physician Part time dentist Emergency clinicOver 300Full time physician Full time dentist Full time nurse Dental clinic Infirmary/Emergency hospital with 1 bed per 100 employees /100 employees IF HAZARDOUS, doctor or dentist must stay in premises for at least 2 hours (if Part-time) 8 hours (if Full-time) IF NON-HAZARDOUS, doctor or dentist may be simply retained

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No emergency hospital/dental clinic is required if there is a hospital or dental clinic accessible from the establishment and there are arrangements for reservation of beds and dental facilities: (In the Implementing Rules, this means, IN URBAN AREAS, it is within 5 km. IN RURAL AREAS, it can be reached by motor vehicle in 25 minutes (provided the employer has such vehicles available) 3. Assistance to ensure adequate and immediate medical and dental attendance and treatment in case of emergency 4. Doctor to implement a comprehensive occupational health program for employees.

Occupational Safety and Health. There are mandatory OSH standards set by the DOLE. The DOLE should conduct studies and research to develop innovative methods to deal with OSH problems; discover latent diseases; develop medical criteria. What else shall DOLE do? Administer and enforce OSH laws/rules and regulations Conduct safety inspections This is one of the least noticed violations. People are more aware of their immediate financial needs rather than their medical needs. VIII ADMINISTRATION AND ENFORCEMENT - If you are not receiving the proper benefits under these provisions of the labor code, what are the remedies? The Labor Code provides for two possible actions: VISITORIAL AND ENFORCEMENT POWER (Art. 128) - This is composed of the : VISITORIAL POWER: The power of the Secretary of Labor (or his representative) to inspect and investigate the employers premises and records to determine violations of the law (or any other matter to aid in enforcement of the Code or labor laws). The Labor Inspection Officers may therefore enter the company premises whenever there is work being undertaken and conduct an inspection. They may interview workers and look at your books, payrolls and other documents. This power of inspection cannot be obstructed by the employer (upon pain of criminal prosecution for a violation of the Labor Code). Nor can a TRO or an injunction may be issued or any case be entertained by any court over the case for non-compliance. ENFORCEMENT POWER: If he or she discovers that there are violations, then the enforcement power will come into play. The Regional Office is empowered to issue a compliance order stating the

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findings and requiring the employer to make good the wage deficiencies, for example or cease and desist from requiring the employees to work overtime for 8 hours everyday. A writ of execution may be issued here. Under this power, an order for stoppage of work may be issued where it is shown that noncompliance with labor laws poses a grave and imminent danger to health and safety of workers in the workplace. A hearing should be conducted within 24 hours to determine if the suspension should be lifted. If the violation was due to the fault of the employer, then it shall be liable for the workers wages during the suspension of operations. This therefore covers inspection of establishments initiated by the DOLE. There is nothing stopping the parties from making a request for an inspection. That would still fall under this power. It would be a different matter if a complaint were filed with the Regional Office complaining of non-payment of minimum wage or other labor standard benefit. Then, what would come into play would be the adjudicatory powers. Note, however, that it is required that there still be an employer-employee relationship before this can be exercised (Art. 128[b]). If the company has closed down, obviously, the establishment cant be inspected. If the company closes down after the inspection, the Regional Office cannot issue a compliance order. The case shall have to be referred to the Labor Arbiter. Likewise, even if the Regional Office has acquired jurisdiction over the case, he may lose it if: The employer contests the findings of the labor enforcement and employment officer; He raises issues thereon supported by documentary proof; Such documentary proofs were not considered in the course of inspection. This provision was amended by R.A. 7730 (June 2, 1994), which changed the requirement that : there is a need to examine evidentiary matters not verifiable in the ordinary course of inspection. Now, the rule has been relaxed somewhat - all that is needed is to support ones contest of the findings with documentary proofs not considered during the inspection. For example, there is a finding that the employer paid less than the minimum wage. You claim that the labor officer did not look at the proper payroll when he made his findings. You present the proper payroll in your contest. This was verifiable in the normal course of inspection and previously should still have been within the Secretarys jurisdiction. But today, it will be removed from the Secretarys jurisdiction because the documents you are now presenting are documentary proofs not considered during the inspection. However, if all you are contesting is the computation of wage differentials, then that does not involve new evidence not covered by the inspection. ADJUDICATORY POWER (Art. 129) - The Regional Director (or a hearing officer) may entertain a complaint for recovery of wages or other monetary claim or benefit. This is different from the enforcement power stated earlier, which arises from an inspection. This is subject to a number of requisites: The complaint does not include a claim for reinstatement.

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The aggregate claim of EACH WORKER (complainant) does not exceed P5,000.00 including legal interest. The claim is presented by an employee or person in domestic or household services. The claim arises from employer-employee relations. For example, there are five workers. The company has not paid them the correct amount of 13th month pay for the past 3 years. So each has separate claims: Differential Due:A P 4,500.00BP 5,000.00CP 3,400.00DP 4,000.00EP 5,500.00Total:P22,400.00 Is this within the jurisdiction of the Regional Director under the adjudicatory power? NO. The aggregate claim of each worker is NOT within the P5,000 limit - E has claims amounting to P5,500.00. This takes the entire case out of the Regional Directors office and into the Labor Arbiters. But what if E did not include his claim? Then the Regional Director would have jurisdiction. The aggregate claim of each worker would not exceed P5,000.00, even if their total claims amounted to over P 5,000.00. The question now is will this P5,000.00 jurisdictional limit also apply in case of the visitorial and enforcement power? The old law was interpreted this way: Considering Art. 128(b) together with Arts. 129 and 217(a)-6 - on the jurisdiction of Labor Arbiters - the same limitation must apply, otherwise, Arts. 129 and 217 would be rendered superfluous. The Arbiter has exclusive jurisdiction over claims above P5,000.00 as affiremd by Article 129. (Servandos Inc. vs. Secretary of Labor, April 26, 1990). However, the law, as amended on June 2, 1994, now intends to take away the limit on jurisdictional amount with respect to the visitorial and enforcement power. This is seen from the inclusion of the phrase: Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary. . . . This means, that irrespective of their jurisdictions, there is now no limit on the amount of the award under the enforcement power. This is beneficial to the workers, as in both cases, all that shall transpire is a summary proceeding. Wherein in the Arbitration Branch of NLRC, a full-dress trial hearing may have to take place. IX SPECIAL WORKERS MINORS For example, you are a child of 10 years old. Your mother manage the family sari-sari store located at the front of your house. When your mother cooks the food for lunch and dinner, she leaves you behind to mind the store. Valid? YES. Your work under the sole responsibility of your parent and only members of your family are employed.

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Supposing your mama hired someone to mind the store. But since it grew, she asks you to help. Valid? No. Others are employed. Suppose you have a family business. You live along the seacoast so your father has a middle-size fishing vessel. You are 12 years old. He makes you come along on fishing voyages, dive down into the water and use muro-ami to scare the fish into the net. Valid? NO. There is danger to your life, health and safety. In the same manner, if your father makes you work in a Disco Pub which the family owns and solely runs, that is illegal since your morals and normal development are put in danger. NOTE. That the parent or guardian must provide you with the prescribed primary or secondary education. So if you work entails you to travel all the time, the question is, is your parent or guardian able to supply this> There is a movie outfit. The company is shooting a movies in which one of the scenes is Vina Morales gives birth to a tiyanak. They need a newly-born baby for this scene. Can they hire your child? Well, it seems his participation is essential in public entertainment. As long as the parents/guardian sign it, and the DOLE approves it, it is all right. Just ensure that the baby's life, health or safety is not endangered. There was an ad for been a few years ago. It was entitle "Hero Worship". A movie star walks into a narrow alley with lots of shady people around. A boy, around 8 years old, follows him around. At the end, we see the star drink beer with the boy looking up to him. Valid? Well, it is possible they needed a child for that ad due to the storyline but, there is an absolute prohibition: IN NO CASE shall he/she be employed in commercials or ads promoting alcoholic beverages, intoxicating drinks, tobacco and its by-products, and violence. Note, this refers only to ads. What about violent movies? Well, it would pose a threat to his morals, especially if he is part of the violent scenes. Suppose you hire, in your shop, a girl of 16 years? Can you say, since you are young, I am helping you out - I am giving you your first job. But since you are young, you cannot perform the work an adult is capable of. I will therefore pay you only P150.00 a day. In NCR, the minimum daily wage now is P185.00. That is void. There is a prohibition of discrimination against a person as to terms and conditions of employment due to age. WOMEN WORKERS

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The Labor Code grant working women some rights and impose prohibitions or measures of protection: a) PROHIBITIONS/ PROTECTIVE MEASURES NIGHTWORK PROHIBITION

Women may not be made to work, even with their consent, in the following: Industrial establishment - between 10 p.m. - 6:00 a.m. Commercial/Non-industrial establishment - between 12 midnight - 6:00 a.m. Agricultural establishment - must be given a rest period of 9 consecutive hours EXCEPTIONS: Emergency, Force Majeure, Imminent danger to public safety Urgent work to be performed on machines, installations and equipment Prevent loss to perishable goods Responsible position of managerial/technical nature Work in health & welfare service Work needs manual skill and dexterity of women which men cannot perform with equal efficiency Family business Analogous cases as determined by Secretary of Labor No discrimination on account of sex Examples: Giving women less pay than men for work of equal value Favoring male as to promotion, training or study opportunity This shall give rise to criminal liability, apart from civil liability. No stipulations against marriage: Also prohibited: considering woman as resigned upon marriage, or dismissing woman due to marriage. No denial of benefits under Labor Code to women: Prohibited acts: Denial of benefits to women; Dismissing the woman to deny her the benefits. Discrimination due to pregnancy Prohibited acts: Discharging due to pregnancy

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Discharging while on leave due to pregnancy Discharging or refuse to readmit woman for fear of her becoming pregnant again. ENTITLEMENTS

a) Facilities: There is a decision of the OP on a rule in PAL that flight attendants must be single if not tanggal sila! It was held by the OP that this is illegal. It cannot be a fair and reasonable standard for their own health, safety, protection and welfare. There is no basis for that. (De Castro v. PAL, 1977) Examples of violations of this would be a company which dismisses women upon marriage due to lack of facilities for pregnant women. That is why the Code requires that rules be issued on such facilities particular to women. Note the law on sexual harassment. If prohibits (1) making sexual favors a condition in employment, re-employment or continued employment; or (2) granting better terms and conditions or refusing to grant the same or (3) segregate or classify the employee such that she/he would be discriminated against, deprived of employment opportunities or if those would be diminished, or (4) otherwise adversely affect the employee. Unfair rights under labor law/result in an intimidating, hostile or off environment.

It connotes the position of dominance by one over the other. This is what they call quid pro quo sexual harassment. It is not subtle as in leers, dirty jokes or sexy pictures openly displayed. HOMEWORKERS What is a homeworker?

The law refers to them as "industrial homeworkers" which, under the law, is defined as a system of production under which work for an employer/contractor is carried out by a homeworker at his/her home. Materials may be furnished them. Unlike factory production, there is little supervision. The law says, "for purposes of this chapter", their employer is the one supplying work. What is the chapter? The chapter on homeworkers. Applying the right to control test, however, there is a clearly no control except as to the result. DOMESTICS Much earlier, we discussed this as having the following definition: anyone performing services in the employers home which is usually necessary and desirable in the maintenance and

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enjoyment thereof. This includes ministering to the personal comfort and convenience of the members of the employers household, including services of family drivers. (Art. 141) What are they entitled to:

Minimum wage - NOTE that the minimum wage was raised since 1993. Now, the new minimum rates are the following: NCR - P800.00 a month Other chartered cities and first-class municipalities - P650.00 a month Other municipalities - P550.00 a month. (NOTE: These are basic cash wage. You cannot deduct from this the cost of lodging, food and medical attendance) SSS coverage IF salary is at least P1,000 a month Free board, lodging and medical attendance (adequate food and medical attendance) Hours of work: No compulsory work over 10 hours a day (Art. 1695 of Civil Code) Leave: Four days vacation leave every month with pay (this is actually the equivalent of one rest day a week). If unused, this is commutable to its cash equivalent. (Art. 1695 of Civil Code) Funeral expenses if worker dies in service of employer. (Art. 1696 of Civil Code). If domestic has no relative with sufficient means in place where the head of the family lives. Rights of domestics:

Limited security of tenure: The Labor Code provides that the original contract shall be for a period of not more than 2 years. It may be renewed after that under whatever terms the parties want. The right varies according to whether or not the term is fixed: If the term of employment is fixed, the domestic may be terminated only for just cause. In case of unjust dismissal, the domestic shall get salaries already earned plus 15 days by way of indemnity (Likewise, if the domestic leaves without cause, he or she shall lose the earned salaries) If the term is not fixed, either party. may end the employment by 5 days notice (for any cause) In one case, you had a domestic who worked as an OFW. The contract was terminated without just cause. The employer said all she is entitled to is 15 days salary, not the unexpired portion of the contract. The SC said that is wrong - that should be in addition to whatever wages are earned. The 15-day salary is awarded in the form of an indemnity due to unjust dismissal. It is in addition to and not a substitute for the household helpers salary for the unexpired portion of the contract. Such salary is, as a settled rule, awarded due to violation of her security of tenure. Labor laws are deemed incorporated into the parties contracts. NOTE that that is the usual indemnity for violation of OFW contracts. I dont think the same rule should apply for domestic employment. (Philippine Integrated Labor Assistance Corp. vs. NLRC, GR 123354, Nov. 19, 1996) Opportunity for education: If the domestic is under 18 years of age, he or she should be given an opportunity for at least an elementary education. The cost of this shall be part of the compensation, unless they agree otherwise.

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Just and humane treatment. No physical violence shall be used upon him or her. Certification of employment.

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IV MANAGERIAL PREROGATIVES The power of an employer to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, time and work assignments, work methods, tools, processes, supervision, work relations, lay-off, discipline, dismissal and recall of workers. The Supreme Court explains the rationale for it this way : An owner of a business enterprise is given considerable leeway in managing his business because it is deemed important to society as a whole that he should succeed. Our law, therefore, recognizes certain rights as inherent in the management of business enterprises. These rights are collectively called management prerogatives or acts by which one directing a business is able to control the variables thereof so as to enhance the chances of making a profit. Together, they may be taken as the freedom to administer the affairs of a business enterprise such that the costs of running it would be below the expected earnings or receipts. In short, the elbow room in the quest for profits. (HOMEOWNERS SAVINGS AND LOAN ASSOCIATION, INC., G.R. No. 97067. September 26, 1996.) - Examples of what are validly within the exercise of managerial prerogatives: - adopt economic policies or make adjustments in the operations to insure profit (e.g. merger or consolidation with another company) The company may thus decide to close down even if it is not losing money. (Catatista vs. NLRC) - scheduling of work BUT not where it is done to make unionization more difficult (as when employees are suddenly transferred from the Tarlac to the Manila factory at the height of activities for the formation of the union, during the schoolyear [the workers being working students] and there was no need for the transfer) - giving of employee benefits BUT NOT where it discriminates without sufficient basis - determining wage rates BUT NOT where it goes below minimum standards (in fact, entering into a CBA which exempts the employer from paying minimum wage is contrary to law and public policy) - promoting someone/transferring someone BUT NOT where the transfer will reduce his pay or rank or is equivalent to a promotion - There are thus limits on this. It is not absolute:

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1. In good faith 2. For advancement of the employer's interests 3. Does not defeat or circumvent employee rights under law or agreement Not exercised in a harsh, oppressive, vindictive or wanton manner (out of malice) BENEFITS: Ex: Profit-sharing payments are given to non-union members. The Union says, :"Why is it not given to union members covered by the CBA?" The company says, Let's follow the CBA (which does not provide for such payments to employees it covers), but we can include it if negotiations end before Christmas. Supreme Court said: This was a valid act since those given profit-sharing were not covered by the CBA and not receiving its benefits. There is no discrimination as the 2 groups are not similarly situated. There was also Good Faith - they offered to include it in the CBA if negotiations ended before Christmas. - Neither is it wrong if those of a higher rank get higher benefits. (Wise & Co. v Wise & Co. Employees Union) - Another example: The company adopts a Complimentary Distribution Scheme/System (CDS) where beer is offered directly to wholesalers. The union of salesmen says this will deprive them of commissions. Supreme Court says - it is a valid exercise of managerial prerogative. There is : an offer to compensate the salesmen with back adjustment commission to make up for the loss of commission. The CDS improves efficiency and maximizes profit. It may have disturbed the set-up now, but the change was too insignificant to show interference in union affairs. (San Miguel Brewery vs. DLO) TRANSFER Can the company transfer employees? Yes, provided it is: not unreasonable or inconvenient (no grave abuse of discretion); not prejudicial to the employee; or does not involve a demotion or diminution of salaries, benefits or other privileges. Limitations: The transfer cannot contravene law, contract, fair play & justice. It cannot be in bad faith, as when it was used to rid the company of an employee (Pocketbell vs. NLRC, Jan. 26, 1995) - Shell Oil Workers v Shell Corp:

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Security guards of company fired and agency contracted. Valid? NO. It is against the CBA. The CBA provisions on coverage states that security guards are within the CBAs coverage. So you cannot abolish their posts. - Chu v NLRC: The Head of the Warehousing, Sugar, Shipping & Marine Department transferred to sugar sales. He says this was constructive dismissal. Supreme Court says NO. The employer has the right to move employees around based on their qualifications, aptitudes & competence. Security of tenure does not give one a vested right to a position. Just because you sign a contract to a particular position does not mean the company waives the right to transfer you. The waiver must be so clear as to leave no doubt. The rotation was in good faith. There was no demotion/diminution of benefits. PT & T v Laplana: The Cashier of PT & T in Baguio was transferred to Laoag (due to increase sales in Laoag). Her inconvenience is not sufficient to invalidate it. Philjacc v NLRC: Assistant Secretary/Exports Coordinator was promoted as Executive Secretary of EVP & General Manager. Then, he was transferred as Production Secretary for no reason. This was upheld as valid. No demotion/diminution of benefits. Just a lateral transfer. Abbott Laboratories v NLRC: Professional medical representative (salesman) is transferred to Cagayan from Manila. His acceptance of the position as medical representative is tacit acceptance of his transfer since sales representatives are expected to transfer. Example: You are VP for the Orient Region (for an International. Airline) in Manila. You are transferred to the post of Director of International Sales with an increase in pay. This means you have to transfer to Canada. You have a wife & children. All Filipino. Can you refuse? Yes. That is a mere promotion (advancement to another position with more duties, responsibilities and usually, increase in salary and benefits). Transfer is lateral. A promotion, you can refuse since it is a privilege being bestowed. Further, under the circumstances, it would be unwarranted to require you to transfer, due to the sever prejudice you would experience. (Dosch vs. NLRC) But the Supreme Court clarified - just because you are to receive a salary increase together with the change in assignment doesnt mean that that is a promotion. If, for example, you are moved from one branch to another but still hold the same position of Branch Accountant, even if you will get a wage raise, that is not a promotion. A promotion is "the advancement from one position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by an

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increase in salary." The indispensable element is he "advancement from one position to another" or an upward vertical movement of the employee's rank or position. Any increase in salary should only be considered incidental but never determinative of whether or not a promotion is bestowed upon an employee. (HOMEOWNERS SAVINGS AND LOAN ASSOCIATION, INC. vs. NLRC, G.R. No. 97067. September 26, 1996.) Yuco Chemicals v MOLE: The employees begin forming a union. At the height of union activities, they are transferred from Tarlac to Manila. They have to quit studying since it was made while they were studying. Valid? NO. There is no business urgency. Their work in Manila was the fabrication of aluminum boxes. Anyone else could do it. It was grossly inconvenient for them. They were working students. Ulterior motive is shown by the fact that it was done at the height of union activities. V WORKING CONDITIONS This Book covers 3 titles: 1) Work Conditions & Rest Periods 2) Wages 3) Special Groups of Employees Note: That each title has its own coverage. The coverage is also different from that of labor relations. The title on Work Conditions & Rest Periods govern: > hours of work > weekly rest periods > holidays, SIL, service charges Coverage Who are covered by this title? Government employees: You include here national and local governments, goverrnment -owned and controlled corporations b) Managerial Employees c) Non-agricultural field personnel d) Members of the Family of employer dependent on him for support e) Domestic helpers f) Persons in the personal service of another g) workers paid by results 1) Government Employees: Malacaang contracts Guaranteed Sanitation Services for janitorial/sanitation work. You are a janitor for GSS. Are you covered?

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YES. Even if you are assigned to Malacaang, your employer is GSS. Just check if it is an LOC. You work in the Light Rail Transit. Are you covered? YES. That is a government project contracted out to a private firm. What if you work in PAGCOR? NO. It is a GOCC.

2) Managerial Employees - One whose primary duty consists of management of establishment in which they are employed or of a department or subdivision thereof. This includes the managerial staff: Look to the Implementing Rules for a more complete definition: a) Their Primary duty is management of establishment or a department or subdivision thereof; They Customarily and regularly direct work of two or more employees therein: c) They have the power to hire or fire or their suggestions/recommendations thereon and as to promotion or change of status is given particular weight. NOTE: Supervisory employees are therefore covered by this - they give effective recommendations. Example: You are Chief Mechanic or In-charge mechanic, but you have no authority to hire or promote or fire. You can recommend, but that is still subject to review and final approval first by the department head and then by the General Manager. Are you covered by the title? YES. You are not managerial. Your power must not only be effective but must also be not routinary or clerical. It must require use of independent judgment. Is it effective? NO. It passes through the Department Head, who goes over it. Then it goes to the General Manager and higher executives for their review and final decision. Despite your title, it is the functions that are controlling. The fact that you are designated "chief" only means you are number one (1) in that category if you exercise no managerial functions (Namerco v CIR). What about "supervisors" who assist in planning, organizing, and making decisions? They are all rank and file union members. Are they covered? NO. They are managerial employees. The definition covers managerial work. You are a member of the managerial staff if: Your primary duty is performance of work directly related to management policies; Customarily and regularly exercise discretion and independent judgment; Do one of the ff:

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Regularly and directly assist the proprietor or manager; ii) Execute, under, general supervision, work along specialized or technical lines requiring special training, experience or knowledge; or Execute, under general supervision, special assignments and tasks. Do not devote more than 20% of their actual work wide to activities not closely or directly related to 1, 2, & 3. Since the "supervisors" are under direct supervision of department superintendents, are responsible for efficient operation of their departments and assist in planning, organizing, scheduling and implementing company policies, training of subordinates, performance evaluation, coordination with supervisor, supervision of personnel - these qualify them as managerial staff. They are thus exempt. > You should distinguish this from Art 212 (m) under Labor Relations. The provision will then only cover managerial employees and supervisory employees. Managerial staff may be deemed rank-andfile for purposes of labor relations (i.e. they may join the union of rank-and-file). [Note, however, that they might fall under the category of confidential employees who are barred from joining unions]. (NASUREFCO vs. NLRC) 3) Non-Agricultural field workers/personnel You work in a hacienda. You are out in the fields the whole day harvesting sugarcane. Are you covered? Yes. You are an agricultural field personnel. The distinguishing factor is that you are out of the office and there is no way to monitor exactly what your doing or how many hours you spend working. You might watch a movie or go swimming. Who is to tell? Examples: You are a taxi driver. You are given a cab 12 hours a day. While in the cab, you can eat merienda. Go to sleep, or do whatever you want. You are non-agricultural field personnel. Salesmen in a company are required to report for roll-call at 7 - 8 am. They have no daily time record. Their sales routes must be completed by 5 pm. Sometimes, they finish earlier and sell some more. They get commissions based on the amount they have sold. They are NOT covered. Salesmen are excluded because: 1) They word individually 2) There are no restrictions on their time of work 3) They do not receive OT pay but just commission 4) They work away from the principal place of work There is no way of checking the number of hours worked (San Miguel Brewery v Democratic Labor Organization)

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- What if they report at 8:00 a.m. (when they start work) and report back at 4:00 p.m. (after which they go home)? In addition, they receive an incentive bonus. They claim that that bonus based on their sales shows you can determine their hours on the field. NO. The SUPREME COURT says the incentive bonus is there precisely because there is no way to measuring their actual hours of work. You have to read it in conjunction with rules on holiday pay: excluded from its coverage are - field personnel and other employees whose time and performance is unsupervised. (Union of Filipro Employees vs. Vivar) 4) Members of Family - must be dependent for support on the employer. An example would be if you tended the Sari-sari store for your mother in your spare time. You are studying law full time and therefore have no other job. You cannot demand that your mother pay you overtime for the 12 hours that you tend the store. (Art. 82) 5) Domestics - perform services in employer's home which are usually necessary or desirable for maintenance and enjoyment thereof; or minister to the personal comfort, convenience or safety of employer as well as members of his household. Apex Mining case: A laundrywoman works in the guest house of Apex Mining located at the company compound. She washes laundry for guests who come to stay there at different times of the year. Is she covered by the title? YES. She is not a domestic. That term refers to one who performs services in the employers home which are usually necessary or desirable for the maintenance and enjoyment thereof, or minister to the personal comfort, convenience or safety of the employer or his household. She ministered to whoever stayed in the guest house, not to any particular family. She likewise worked in a building located in the company compound. This shows that she was not a domestic, but an industrial worker. - Once the domestic becomes involved in a commercial endeavor, then he or she must be treated as a commercial worker, with the corresponding benefits. Suppose you moved to the States. You therefore left your house and decided to rent it out to dormers. So five people from the province rent the house while they study for the bar exams. You left your housemaid to tend of=ver the house and the needs of the dormers. She is no longer a domestic since she does not perform services in your home, nor does she minister exclusively to your comfort and convenience. When we say GOCCs are not covered, we make a distinction.

Is it created under special law - with Charter? If yes, then it is in the public sector and exempt from labor laws. It is, instead, governed by Civil Service Laws. If created under general law - Corporation Code, they are within the private sector. Labor Code applies.

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Coverage of the Title on Work Conditions.

Workers paid by results: if you are a worker paid by results, you are exempt. Examples: Taxi drivers Jeepney drivers Salesmen Teachers paid on a per unit basis

There is no requirement as to how much time is used up in your work. HOURS OF WORK - What are work hours? 1. The time an employee is required to be on duty or at the workplace or at the premises of the employer; 2. The time he is suffered or permitted to work.

- Your duty hours are 9-5. You are required to be in the office during those hours. Those are your work hours. - Suffered to work: You are required to work from 9 - 5. Suppose there was a rush job. So they required you to work overtime. - You are suffered to work a few extra hours. - Permitted to work: You want to finish your job. It is past 5 p.m. You tell your supervisor you will work until 9. He says "Fill out this form". You fill up the OT form. - You are permitted to work. - What if you just go on working until 9:00 p.m. and no one knows about it? That is not compensable hours worked. There was no permission or consent. Likewise, if there is a one-hour brown-out, you have to hang around the company in the event power resumes - that is working time under the rules. This is inactivity due to interruption in work schedule beyond your control. It shall be deemed work hours if the imminence of the resumption requires your presence at the work site or the interval is too brief to be used effectively and gainfully for your own interest. More so if you were given consent by the supervisor. - There is what they call waiting to be engaged and engaged to wait. When you are waiting to be engaged, you are waiting for a job. For example, you are a truck driver. There is a fleet of trucks parked to make deliveries when an order is made. They deliver to all ends of Luzon (from Aparri to Batangas). So you sit and wait near the garage for 4 hours. Then, all of a sudden, the owner of the delivery company says, "We have an order. Deliver this package to Baguio". You take the package and drive the truck.

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While driving the truck, there is no question you are working. You are suffered to work.

What about while you were waiting for the orders? Should you be paid for those 4 hours you spent waiting? You did not have to wait. The only consequence to you if you did report for work during those 4 hours was you would not get the job order that day. The company would not discipline you for failing to appear that day. You are not working during those 4 hours. You were not suffered to work. Nor were you required to be in the premises. You were WAITING TO BE ENGAGED. Likewise, say you are a chauffeur. You arrive at 8 a.m., bring your boss to his office, and wait in the parking lot. You listen to the radio, make chismis with the other drivers and eat merienda. At 12 noon, your boss comes out. You drive him to lunch and so on and so forth the whole day. While waiting in the parking lot, are you at work? YES, you are required to be there. What will happen if you suddenly left and watched a movie. The supervisor would come down, discover you are gone. He would reprimand you and maybe even suspend you. You are clearly required to be at a prescribed workplace, even if not actually working. Waiting is an integral part of your work. You are ENGAGED TO WAIT. Another example - a janitor. She arrives at 8 a.m.. Sweeps floors until 10 a.m.. After she is over, she sits and watches the world. At 3-5, she sweeps again. While she watches the world, is she legally working? YES. Waiting is an integral part of her business. She is required to be in the school premises. - Take another variation. You work at a bus company, like BLTB or Philtranco. They tell you to stay in the terminal because it is holiday season and you might be needed for emergency trips. You are required to be at the workplace or within its proximity. You are working while on call. You do not have freedom of movement, nor can you use it profitably to your own advantage. - This was applied analogously to high school teachers. In University of Pangasinan v. University of Pangasinan Faculty Union, the Supreme Court said, these teachers work during semestral break. They make lesson plans, check papers, etc. They cannot use the time effectively for their own purpose. Further, it is inactivity due to an interruption in work beyond their control. It cannot be gainfully used for their own purpose.*

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- Other cases: RADA v. NLRC (205 SCRA 69): This company driver drives a company van. He is allowed to bring the vehicle home & park it there. It so happens that, on his way to and from work, he passes the areas where several co-workers live. So he is told to pick them up & bring them home as well. On his way to and from work, was that work hours? YES. The practice was employed because tardiness of workers caused project delay. The pick-up and drop-off was a practical solution. Whenever Rada was absent, another employee replaced him. This shows the task part of his job, indispensable and mandatory. It was thus a task required by him, not an incidental chore. NOTE: The Supreme Court looked into the circumstances to show that the work of picking up and dropping off of workers was part of this functions. - Arica v NLRC: Every morning at the hacienda, the workers gather from 8 - 8:30 and line up in front of team leaders to show they are willing and able to sign up for the work that day. After the team leader lists their names, they go home, do some chores, eat and, at 8:30 a.m., go to the fields for the day's work. The period 8-8:30 a.m. - is that hours worked? NO. It was done primarily for the workers' benefit. During that half-hour, they could do other things; go home, eat, work in the home. (if they did not arrive at 8-8:30, the consequence would be they would not work that day. It was not required of them in the sense that they would not be subject of disciplinary action if they failed to appear.) You have a boatsman. He works in the dock area, late at night and early in the day. He waits for the boats to arrive and unload their cargo and helps them dock. When there are no boats, he does other work - removing rust from boats and cleaning them. He does that work a total of 14 hours a day. When there are no boats which arrive at the pier, is he working? YES. The cleaning of boats is part of his work. (States Marine Corp. v. Cebu Seaman's Ass.) The work was continuous when there were no boats to unload and to dock. He could not leave and completely rest. What about seafarers? They work on a ship out in the open seas. Their duties are 8 hours. Afterwards they rest in the cabin and walk around the ship. Obviously, they can't leave the work premises, at least not while they're on the open seas. Supreme Court says, that off-duty time is NOT hours worked. The criteria to be used would lie not in whether or not they can leave the work site, but whether or not they actually perform work. Otherwise, they would have 16 hours OT work everyday. In short, if they are not actually working or suffered to work, even if they cant leave the boat, then they are not deemed on working hours. (National Shipyards & Steel Corp. v. CIR, 1961)* What are the normal hours of work?

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8 hours a day. 48 hours a week. This is not in the Code or the Rules, but a DOLE Manual treats a work-day like this:

Your work day starts at 8 a.m. (not mid-night). We do not follow calendar days here. Your work day therefore, being 24 hours, ends 8 a.m. the next day. What's so important about that? It helps determine what will fall under OT. If you are suddenly called at 12 midnight and made to work until 6 am, should that be compensated as regular hours work or OT? OT, since it is within the work day. Rationale: humans need 16 hours of rest. OT therefore, is any work in one workday in excess of the work period.

Undertime on any day is not offset by OT on any other day. Meaning, if I work only 6 hours today instead of the required 8 hours, then I work l0 hours tomorrow, am I still entitled to premium pay for overtime (2 hours)? Of course. You do not subtract/offset the OT with my undertime. - Suppose my work schedule is 8 - 5. I arrive at 10 am. So I decide to work until 7 (10 - 7). Am I entitled to OT premium pay? NO. The offsetting rule only applies to separate days. The fact remains that I did not work beyond the required 8 hours.* - In Caltex Regular Employees vs. Caltex (Aug. 15, 1995), the CBA provided that the regular work week would consist of 8 hrs. a day, 7 days a week. During such period, regular rates would be paid and work on the employees one "DAY OF REST" would be a work day. Work in excess of 8 hours a day or 40 hrs a wk would receive OT compensation. (Note the week was made shorter)

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Everyday, the workers would be allowed to go home half-an-hour earlier so that they would not be caught by the rush hour in coming home. On Saturday, they are only paid regular rates for the first 2 hours. The union claims they should be paid rest day rates for the entire Saturday worked. Even if during Monday to Friday, they work for a total of only 37 hours (7.5 x 5 days), UNDERTIME IS NOT OFFSET BY OVERTIME (OT). So Saturday was all rest day work. Supreme Court said WRONG. Overtime (OT) consists of hours of work on a given day inn excess of the applicable work period (here, 8 hours). To constitute OT, they must be in excess of and in addition to the 8 hours worked during the prescribed daily work period (or, weekly, in excess of the prescribed 40-hr. work period). Just because work is done on a Saturday does not mean it is OT work. Saturday, even under the CBA, is not a rest day. It is only when an employee is required to work beyond the 40 hours in a week shall be deemed on OT. The rule against offset therefore will not apply. Note that normally, Saturday is not a rest day. What they did here was agree to shorten the regular work week from 48 hrs. (6 days) to 40 hours (a total of 5 8-hr days) But, since they did not finish 8 hours in one day, and since they agreed to make the regular hours of work/week 40 hrs, the first 2.5 hours on Saturday were not OT or rest day work. The 1/2 hr. per day was not a gift to them. So what does that make of work in excess of the first 2.5 hrs. on Saturday. Is it OT work or rest day work? I would think simply OT work. (Rest day work has higher premium) Under the CBA, Saturday is not a rest day. Just because the employees were allowed half-hour off earlier everyday does not mean the company waived the hour per day work they should render. The practice was done not to evade contractual stipulations, but for their benefit - so they could avoid heavy traffic. - The general rule is, you cannot be forced to work on overtime and on your rest day. When is compulsory OT work allowed?

When the country is at war, or when Congress or President declares a national or local emergency. ex. After the last coup attempt, Cory issued an Executive Order declaring a state of national emergency due to the worsening economic condition. She allowed compulsory OT. When necessary to prevent loss of life or property, or imminent danger to public safety due to actual or impending emergency in locality due to serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamities.

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ex. You are a nurse and there is an epidemic. You are an electrician and a storm blows down electric wires. This won't apply if there is an earthquake and you are a factory worker. (No connection)

Urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer, or other causes of similar nature. ex. You are a part of maintenance and machines have to be stored immediately or else they will be destroyed by storm. 4. Work necessary to prevent loss or damage to perishable goods.

ex. You have an oversupply of fruits/fish for your company. You have to transfer them to a cold storage plant or else they will rot next day. When completion or continuation of work started before 8th hour is necessary to prevent serious obstruction or prejudice to business or operations. Example: You are part of TV crew covering an important news event. You can't leave in middle. This may apply to a rush job order, provided it is occasional. If it is regular, the solution is to hire more workers, not force OT. When OT work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. Example: Construction crew - making a road. Malapit na ang rainy season, kaya nagmamadali kayo. Film crew - you want to shoot during summer weather. So This last provision is of doubtful validity. The law exceptions, but they added it anyway. What about rest days, when can they be compulsory? a) Actual or impending emergency caused by serious fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity, to prevent loss of life or property; and b) Force majeure or imminent danger to public safety. NOTE: Emergencies declared by Congress or President are not included. Urgent work to be performed on machines, installation or equipment to avoid serious loss. you maximize crew hours. just

does not authorize additional

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Abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures. Example: You have to finish a project which is due on Monday. You have to work over the weekend because it is specially difficult You can ask the other staff to work on Sunday to help you prepare. NOTE: This will not apply in the case of an exporter who has to manufacture on a rush basis every week. This refers only to ABNOR-MAL pressure of work due to EXTRA- ORDINARY circumstances. The exporter can meet the need simply by hiring more workers. 4) To prevent serious loss of perishable goods Work is necessary to avail of favorable weather or environmental conditions where the performance or quality of work is dependent thereon. Example: You are shooting a film. You need a scene where there is clear weather. The rainy season is coming soon. You can ask that the workers work on Sundays. Nature of the work requires continuous work for 7 days or more (ex: crew members of vessel) NOTE: The special rules as to health personnel. If you are in a city or municipality with at least 1 million or in hospitals/clinics with bed capacity of at least 100, your working hours are: 8 hours/day x 5 days/week (40 hours) But where exigencies require, you can be made to work 6 days or 48 hours. But you get 30% premium pay. You are better-off than regular workers who. for the 41st - 48th hours do not get premium pay. For example, there is this arbularyo who has a clinic. If you have a problem, go to his clinic in Quezon City and he will give you pito-pito and a cleansing diet. Suppose a janitor works in this clinic. Is he covered by these special rules? Yes. "Health personnel" includes midwives, attendants & all their hospital or clinic personnel. You might ask, is the outfit legally considered a clinic? Well, look to Rule 1-A of Book 3, IRR for that. "Hospitals" and "clinics" are places devoted primarily to the maintenance and operation of facilities for the diagnosis, treatment, disease or injury, or in need of medical/nursing care. I have not been to this clinic but I believe clinics employing natural or traditional medical procedures are covered. HOLIDAYS

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There are 2 types of holidays: Regular holidays - a.k.a. legal - set by law, regular fall on set days of year Special days - by special proclamation by city/municipal president. ( storm signal #3 - that is not a holiday.) You commemorate something or there is a special event, conducted, such as an election. - Under EO 203, we have 10 regular holidays: January 1 Maundy Thursday Good Friday Araw ng Kagitingan (April 9) Labor Day Independence Day (June 12) National Heroes' Day (last Sunday of August) Bonifacio Day (Nov. 30) Christmas day (Dec. 25) Rizal day (Dec. 30) Special Days, under EO 203 are: All Saints Day (Nov 1) Last Day of the Year (Dec. 31) What about July 4, 1996? It is a special day - there was a special proclamation in this year, 1996. Note that, by virtue of EO 203, this was reduced from its former status as a regular holiday. What is the difference, therefore, between a special day and a regular holiday? Regular holiday Special day

or

1) If worked, regular pay 1) If unworked, no pay 2) If worked - 2x regular pay 2) If worked, + 30% premium 3) Set by law 3) Generally set by proclamation Note that, under the Labor Code, workers in establishments regularly employing less than 10 workers are not also covered by this rule on holiday pay. Also, under the rules, while exempted are workers paid a fixed amount for performing work irrespective of the time consumed in performing the same, explicitly entitled to holiday pay are those

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workers paid by results or output, such as piece-raters. (You will base his holiday pay on the average daily earnings for the last 7 work days before the regular holiday.) These two rules on exemption also will apply to service incentive leave. What about Maundy Thursday and Good Friday? You wanted a longer week-end. So you decided to absent yourself without pay on the day prior to Thursday. You reported for work on Monday (after Easter Sunday). How much do you get for Thursday and Friday? Nothing. Where there are 2 successive regular holidays you must either be at work or on leave with pay on the last day immediately before the first regular holiday to avail of the benefit. What if you absented yourself on Thursday, but entered on Friday? You get no pay for Maundy Thursday but double pay for Good Friday. What if you reported for work on Thursday, but not Friday? You get double regular pay on Thursday and regular pay on Friday. Are teachers paid by the contract hour entitled to holiday pay?

JRC v NLRC. It depends on what kind of holiday. The principle to be followed is: They should be compensated if they lose expected income. Since they do not contract to work on regular holidays, they lose nothing. That is not contemplated in their contract. But what if there is a special day declared on a class day? The Supreme Court said since they expected to be paid for these, they are entitled to holiday pay. Even if they have make-up classes, that still does not change the fact that they lost expected income. What about monthly paid-employees?

First of all, who are the true monthly-paid employees? They are those who receive a fixed sum per month irrespective of the number of days in the month. So work on February would be compensated the same as work on January. There was a provision in the implementing rules that they were not entitled to holiday pay since they are presumed paid for all days of the year, worked or unworked. But the SC said they still are entitled to holiday pay since they were presumed paid for all days, worked or unworked. Since the law makes no distinction between monthly-paid and daily paid, neither should we. (Chartered Bank v Ople). So you add to their monthly salary if a regular holiday occurs in the month. So how do you compute their holiday pay? The company will generally use a divisor to determine it. It may look like this: monthly rate x 12 (months)

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divisor month. if the divisor used is 314, we know, since there are 51 Sundays in a year, that they are paid for 6 days in a week. if they use 263 as a divisor, they deducted all Saturdays and Sundays. if the divisor used is 365 days, we know that they are deemed paid everyday of the

Of course, the higher the divisor, the less a daily rate the employee gets. Suppose, to compute OT, Night differential and Leave Credits, the company used a divisor of 251. Can they later use a divisor of 261 in computing holiday pay? The Supreme Court said NO. Madaya iyan. You would be diminishing their benefits. Further, the fact that you used 251 as a divisor shows you deducted all Saturdays, Sundays and legal holidays from 365. Therefor, you did not include holiday pay! So you must pay it! (UFE v Vivar, 1992) In Terminal Facilities & Services v. NLRC (199 SCRA 269), you have a wage order providing for COLA saying that monthly-paid employees shall be paid COLA on the basis of 30 days per month: (COLA x 30) + old monthly wage = total monthly wage. Whenever a monthly-paid employee would be absent in one month, the company would determine how much to deduct from his salary by dividing the total monthly wage (with COLA) by 26 (since he does not work Sundays). Correct? NO. In the absence of any provision in the CBA, the presumption that monthly-paid employees are paid on rest days must prevail. The divisor therefore should be 30 instead of 26. In the Wellington case, the company was paying its employees for 314 days (Thats what you get if you deduct from 365 the number of Sundays in a year). This means regular and special holidays were paid as if worked. The Labor Inspection Officer said that they did not account for the regular holidays that fell on a Sunday. He said, when that does happen an extra work day is created. So, Wellington should pay for the 3 holidays which fell on Sundays by paying 351 days wage for those years (not 314). The Supreme Court said the factor of 314 days already accounts for all 365 days. It accounts for all days, excepting only Sundays. If you follow their theory, each year would have an extra 3 days

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(or 368 days). There would then be no definite way of determining the number of days per year for compensation. Every year, he would have to make a new computation. The law does not require employers to take account of all regular holidays falling on Sundays. All the law requires is that the monthly minimum wage not be less than: Statutory minimum x 365 12 and to pay that salary for all days whether or not worked. That is why we set a fixed salary per month, so you don't have to re-compute all the time, as with daily paid workers. NOTE: This case concerns a company which included the regular holidays in determining monthly pay. They used the figure "314". In the cases of Chartered Bank vs. Ople & UFE v Vivar, the figure used was "251"- they excluded the 10 holidays. So, they had to pay them. Applying that rule, this exception will cover only positions similar to field personnel. Teachers are not field personnel. Service Incentive Leaves - Employees who have worked for at least one year are entitled to five days service incentive leave. The exceptions, aside from the general exceptions under the title on working conditions, are: If they are receiving at least 5 days vacation leave. (What if they are receiving sick leave with pay? That will not qualify to exempt them. ) If the establishment they are employed in regularly employs less than ten people. (What if, you work in a small boutique. Ordinarily, they have 7 workers. During Christmas season, the store hires 5 more workers so that they can meet the demand of greater numbers of buyers. That establishment is not exempt since they do not regularly employ less than ten people.) Who determines when the employee can go on SIL?

Ultimately, it is the employee. Though the company can require that it first be submitted for approval, especially if the employee performs a vital function. In one case, the company denied Sick Leave because the employee was able to work for the past 2 weeks without signs of sickness. SUPREME COURT said, he should be commended for working despite his physical condition. The choice is his if he wants to work even if he is sick. (Jones v NLRC, Dec. 6, 1995) Maternity Leaves: This is not granted by the Labor Code, but by the SSS law. Maternity leaves shall be 60 days for normal deliveries. 78 days for cesarean. The cost shall be advanced by the employer & reimbursable with SSS.

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The purpose of maternity leaves, (and any leave in general) whether under law or CBA, are to replace income you lost because you had to absent yourself from work for childbirth (or vacation, or illness, etc...) Can you claim both maternity leaves and hospitalization benefits for the same childbirth? YES. While leaves pay for lost income, hospitalization benefits pay for cost of hospitalization. There is no incongruity. (Singapore Airlines Local v Ople, 156 SCRA 629) What about the father? Doesn't he get anything? This isn't within the stated coverage of the bar but yes - Under RA 8187: The Paternity Leave Act of 1996, all married male employees in the private & public sectors shall have paternity leave of 7 days with full pay for the first 4 deliveries of his legitimate spouse with whom he is cohabiting. Note those two underlined qualifications. The purpose is to enable him to lend support during the period of recovery and/or nursing. (June 11, 1996 approved) Note that the law applies to all married males in the public and private sector. It will therefore also apply to domestics, non-agricultural field personnel and the like. - Night Differential: If you work from 10 pm - 6 am, you receive an additional premium of 10% of regular salary. That is night differential. Among the purposes are: Night is a time for which the body is less conditioned to work (it's easier to get sick) Its dangerous to work at night (you try walking around at those hours in dark - lit neighborhoods) Night is a time best spent with the family. You abandon part of your social duties with night work. - Service charges: This is different from "tip: "Tip" is what you gave the waiter/waitress after eating if you like their service. It is in addition to what is charged you. Service charge is what the restaurant requires you to pay for the benefit of its employees. It is not a voluntary contribution on the part of the customer. - It should be shared 85% - 15% in favor of the rank-and-file. If abolished, the charges formerly collected shall be paid by the company to the workers as additional basic pay. - May the company agree to give the entire 100% to the rank and file? Of course. If they don't, the 15% shall answer for losses and breakages or distribution to managerial employees. (IRR) - So let's recapitulate. What are the benefits, aside from wage and 13th month pay guaranteed by law? a) overtime pay regular day - 25% premium non-regular - 30% premium b) rest day pay - 30% premium c) special day pay - 30% premium

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d) reg. holiday pay - worked: 200% unworked - regular days' pay e) night differential - 10% premium (between 10 p.m. - 6 am) f). Service Incentive Leave - 5 days/year Service Charges - but this is optional on the employer. The Employer need not charge it. Likewise, only establishments such as hotels, inns, night clubs, cocktail lounges, bars, casinos, etc. can collect service charge. VI WAGES - What is "wage"? Any -remuneration or earnings however designated capable of being expressed in terms of money whether fixed or ascertained on a time, task, piece or commission basis, or other method of computing the same payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done; or services rendered or to be rendered and includes the fair and reasonable value of board, lodging & other facilities customarily furnished by the employer to the employee. Wage is actually the same as salary. But note the case of Gaa v CA where it held that a building administrator, because his level is of a higher one than a mere laborer, does not earn wages. He earns salary (from Latin "salarium"). Thus, his earnings are not exempt from garnishment. Art. 1708 of NCC operates in favor of the laboring class whose work is rank-and-file. A building administrator of a hotel is managerial supervisory. Her salary is thus not a wage for purposes of the law on exemption from execution. Salary relates to position of office. Wage is compensation. When you get more specific, the case of Gaa v. CA differentiates between work which is more physical or menial in nature and work is more managerial (such as that of a building administrator) for purposes of determining whether or not salary is exempt from execution. The former earns wages. The latter earns salary. That is not exempt.

In Songco v NLRC, The Supreme Court said, they are the same. They both mean reward or recompense for this. So, in deciding whether or not you should include a salesman's commission in determining what his separation pay should be, the Supreme Court said include it. The commission were direct remuneration for the services rendered. Commissions are part of their salary. In fact, some salesmen

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receive only commissions and no basic salary if commission were not part of salary, then it is as if we said they earned no salary. But note, when we get to the issue of 13th month pay, which deals with basic salary, the issue is different. Likewise, when we talk of backwages, the rule is get full backwages, meaning all pay and benefits you should have received when out of the company. - What is the concept of wage? For example, for determining OT premium pay, what do you use? Note, the law refers to a percentage of the regular wage/rate. In PNB v PEMA, the question was, should you include COLA (equity pay) and longevity pay in computing OT? There was this old case: NAWASA v NAWASA Consolidated Unions. It said, when you compute OT, a regular wage will include ALL payments the parties agreed will be received in the work week. Under NWSA's doctrine, your therefore include: differential pay for nightwork cost of board and lodging furnished the employee incentive bonus profit sharing premium pay rates

But he Supreme Court said the concept of wage is that it is given by virtue of work done or services rendered. It is distinct from supplements such as Sick Leave/Vacation Leave, COLA and other bonuses. - COLA may sometimes be granted. But that is contingent to meet the exigency (e.g. inflation). It was not regular or permanent, like wages. Its purpose - to help worker make ends meet. - Longevity pay is not given for services but due to loyalty and length of service. The NWSA doctrine therefore applies only to that particular situation - where the issue was do you include Sunday pay in computing the daily wage. It did not actually refer to extra, temporary and contingent compensation unrelated to work done. NWSA is limited to a case of workers working 7 days a week and who got 25% Sunday differential 3 months prior to RA 1880 (or 40-hr week law). The law reduced government work week from 46 hours - 40 hrs/wk but required on diminution of weekly wage. To ensure non-diminution, it was necessary to include the Sunday differential in computing the daily wage rate. - The 2 principles should thus be applied in determining if you will include some benefits in OT computation:

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1. 2.

Is it for work done or services rendered? Is it permanent and regular in nature? (Not temporary, contingent or changeable)

- Therefore, you will not also include: a) profit-sharing - that is to give workers a share in profits and as incentive to work harder. It is not tied to particular work done. It is contingent - based on profitability b) premium pay - that is given to work under special circumstance. It is the fact that you worked OT, on Sunday, or at midnight which makes you entitled to it. (SMC v Inciong) It is also contingent. c) Monthly gas ration (Asis v MOL) - this is not for services rendered. Sick Leave (Caltex v CIR, 1986) - this compensates you for your salaries while indisposed. - What other non-wage payments can therefore be made? Gratuity: A gift. Something given voluntarily in return for a favor or services. It is a tip. It is not pay for services rendered. It is like a reward. Emergency Allowance: But receipt of ECOLA is dependent on whether or not you are also entitled to basic if you get no basic pay for that day, you also get no COLA. Representation/Transportation Allowance: This contemplates payment for expenses. Per diem: This is actually allowance for each day that an officer or employee is out of the home. It answers for board, lodging, transportation and other related expenses. - Facilities: These are defined (in the IRR) as articles or services for the benefit of the employee or his family but shall not include tools of the trade or articles or services primarily for the benefit of the employer or necessary to the conduct of the business. Examples are: meal subsidy education board and lodging The deduction on account of facilities should be their fair and reasonable value. The company cannot charge you more that the cost of the facilities. It cannot make a profit from them - "Fair and reasonable value" shall not include any profit to the employer or to any person affiliated with the employer (Art. 97-f). Note also that the rules require that the employee must VOLUNTARILY ACCEPT the facilities before you can charge their costs to the worker. You distinguish facilities from supplements. Facilities are necessary for the worker's and his/her family's existence.

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Supplements are "extra remuneration or privileges or benefits over and above ordinary earnings or wages". If an item furnished for your benefit is part of your basic wage (deducted therefrom), it is a facility. If it is given over and above it, it is a supplement. Ex. 1. Free meals given to seafarers on board an ocean voyage. These are given over and above regular wages. 2. Food allowance given to bus drivers going outside Cebu City (over and above wages). FACILITIES - deducted SUPPLEMENTS - given in addition to what are the existing wages. They are given by way of management practice and are demandable as a contractual obligation. - RULES ON PAYMENT OF WAGES - How shall they be paid? By means of legal tender. Exception: Check or money order a) if customary on date of effectivity of Code b) necessary due to special circumstances c) stipulated in CBA - How often? 1) Once every 2 weeks or 2) 2x per month at intervals not exceeding 16 days Exception: force majeure/circumstances beyond control Where? At or near place of undertaking. Exception: 1) deterioration of peace and order/emergency 2) free transport is provided 3) analogous cases, provide time to collect is hours worked. NEVER its employees. - To whom? To worker, directly Exception: 1) Force majeure (then give it to another person with written authority) or other special circumstances as determined by secretary of labor. 2) Death of worker (give it to the heirs without need of intestate proceedings. Claimants only need to execute an affidavit that they are the only heirs) at bar, night or day club, drinking place, gambling place except as to

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- Can you deduct from wages? YES. That allowable by law: insurance premiums, with his consent taxes check-off, where authorized SSS, Pag-ibig and other such contributions Examples of illegal deductions: Apodaca v NLRC: Apodaca was employed as General Manager. He was also a stockholder of the company. When he resigned he had unpaid subscription worth P113,000. The he filed a case for unpaid wages. The company said, yes, we owe him P17,000 but we don't have to pay him under the principle of set-off. We set-off his unpaid subscription with his unpaid wages. Supreme Court said that had no basis. First of all, there was no notice or call for the subscription payment. So it was not yet due and demandable. But even if there was a call for payment, you cannot set-off. Deductions from wages are allowed only: 1) 2) 3) Where the worker is insured by employer with his consent - to pay premium Check-off of union dues, where there is individual written authorization Where SEC allows it under its regulations

Commands Security v NLRC (1992): Security guards suffered 25% deduction in salary. That was used to pay the agency's share in getting him a job placement. Supreme Court said that is illegal and iniquitous, it is void ab initio. - Can you deduct from salary for lost/broken items? The law only refers to deposits for loss or damage from which you can deduct. Suppose you have taxi drivers. They are required to make a P15 deposit for deficiencies in their boundary payments every day. Valid? NO. Art. 114 allows deposits only when the employer is engaged in such trades, occupations or businesses where the practice is recognized, or necessary or desirable. Under Art. 114, the deposit must be for damage or loss to tools, materials or equipment of the employer. Not to shortages in remittance of the boundary. - What if the taxi company requires the drivers to wash their cabs after their duty. Or, instead, to deposit P20.00 to be paid to one who cleans the unit? That's OK. The practice was to have them clean the cars - restore it to its condition prior to his use. That was part of their duties. The P20.00 was used to pay the cleaner if they did not do it themselves. That is lawful. (Five-J Taxi vs. NLRC)

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- Problem: I dismiss you from work. I do not give you your wages until you make a report of all your pending jobs. Valid? NO. Art. 116 - It shall be unlawful to withhold any amount from wages of a workers or induce him to give it up by force, stealth, intimidation or other means without his consent. But if he has outstanding loans to the company, you can set it off. - You work in my company. My company has a small store for its employees. Can I offer you discounts if you buy from the company store? YES, provided there is no compulsion. (Art.112) - Can I require you to buy from store at a discount? NO. No employer shall limit or interfere with the freedom to dispose of wages. You cannot be compelled to purchase from the employer or any person or use their services. (Art. 112) - You work beside a casino. (That is the location of your employer). The company is told by your wife that you are gambling your earnings away. So what it does, it pays 50% of your wages to you in cash and gives your wife 50% by means of a check. Valid? NO. 1. 2. Wages must be paid directly to the worker. This constitutes interference in disposal of wages.

We are aware that some companies have the practice of preparing 2 sets of payrolls. One reflects what they actually give the workers. The other reflects what they show the DOLE. That is what Article 119 is there for. It says it is unlawful to knowingly make report or keep false records as to wages. Liability for Wages: Labor-only contracting is prohibited by law. Job contracting is not. Note that contracting out of labor is prohibited as ULP if it will interfere with the right to self-organization. At any rate, a labor-only contractor shall be treated as an agent of the direct employer (the one for whom the employee works). The direct employer shall be responsible for such workers as if he directly employed them. In short, they can unionize under him. They can sue him for back benefits. What about the job contractor, or independent contractor. The employees they assign to the company (the indirect employer) are employees of the contractor. For example, the guards of Jaguar Security, which is contracted by Ateneo Law for security services, are employees NOT of Ateneo, but of Jaguar Security. Is Ateneo liable to them?

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While they cannot unionize under Ateneo, Ateneo is still liable for their wages and benefits. Act 107 says that the provisions of Art. 106 on responsibility to the employees, shall also apply to the indirect employer. In what capacity is Ateneo liable? Art 109 says it shall have solidary liability. Meaning, you can sue either for the entire amount. But if I were counsel for Ateneo, I would suggest, just to make sure in the event that the employee would sue me, to require the security agency to post a bond for non-payment of wages Art 110 - We will get back to this after we have discussed all the other wage benefits, since this concerns satisfaction of claims. The same goes for Article III. Wage Determination

- Who shall primarily fix wages - The Regional Wage Boards, appealable to the National Tripartite Wages and Productivity Commission. - What are the criteria for fixing of wages? You can use the code: W A L D I N 'S F E E 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Prevailing Wage Levels Wage Adjustment vis--vis the consumer price index Cost of Living and changes or increases therein Demand for living wages Need to spur industries to invest in countryside Needs of workers and their families Improvement in Standards of living Fair return on capital invested and capacity to pay of employers Effects on employment generation and family income Equitable distribution of income and wealth

You can have different wages based on the industry. That is why minimum wages of agricultural labor are different from those of non-agricultural labor. Public hearing should be conducted. A wage order may use two methods in fixing wage rates: The floor-wage method : Fixing a determinate amount to the minimum wage The salary ceiling (cap) method: a wage adjustment to all employee receiving a certain denominated salary ceiling To illustrate, suppose, the present minimum wage in NCR is P185.00 per day. A wage order was granted increasing the minimum wage by P15.00. If your wage rate before the order took effect was P190.00, you would be entitled to receive only an additional P10.00 so that you will meet the new minimum. If you are already receiving the new minimum of P200.00, you get no salary hike (except

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of course, if there is a wage distortion). This is an example of the floor-wage method - an increase in the minimum wage and nothing else. However, suppose that the wage order states, in addition, that all employee receiving below P210.00 daily will receive an across-the-board wage increase of P20.00. Then, if you are receiving P200.00 per day, you will be entitled to receive such wage hike. Your new salary will therefore be P220.00 per day. On the other hand, if you are receiving P210.00 per day, you are not covered by the wage hike since you fall outside the bracket (P185.00 [minimum wage] until P210.00). This is an example of the salary-ceiling method. In ECOP vs. NWPC, the question was, the Wage Rationalization Act (R.A. 6727) only referred to increases in the minimum wage. Is it therefore valid for the Wage Board to set an increase through the salary-ceiling method? The SC said YES. The reason behind the salary-cap method is to reduce disputes arising from wage distortions. The wage boards can apply this since the law intended to rationalize wages by providing full-time boards to police wages round the clock and by giving them enough powers to achieve this objective. Congress intended that the boards be creative in resolving this issue without having to knock on the door of the legislature every time. If the law limited the boards to setting floorwages, there would be no need for a board. All we would need would be an accountant to keep track of the latest CPI (consumer price index), or maybe Congress would have fixed wages on its own. Congress may delegate powers to fix wages. The standards set are sufficient. Wage orders shall be issued by Regional Wage Boards. Their orders take effect within 15 days from their publication in a newspaper of general circulation. You can initiate a proceeding for a wage hike by filing a petition with the Wage Board. What if you don't? Does that mean the wages won't increase? NO. The Wage Board can act on its own. As Art. 133 says: Whenever conditions in the region so warrant, the Regional Board shall investigate and study all pertinent facts and determine when a wage order should be issued. Suppose the Wage Board issues a Wage Order. You are an owner of a factory. Can you appeal? Of course. You do not have to be a federation or what not. "Any aggrieved party" may appeal. You have 10 calendar days to so appeal. You appeal to the NWPC. What happens to the Wage Order pending the appeal? It is not suspended unless you file a bond/surety for payment of employees affected by the order the increase, in the event such order is affirmed.

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Do you think any employer has attempted to suspend the effects of a wage order in this manner? NO. Imagine if he loses, he will have to pay wage differentials to millions of workers affected. Suppose you apply for exemption and the application is denied, you have to pay 1% interest to the workers. (Imagine that. Kung ibinangko mo ang increase, di kumita ka pa!) So the Wage Order is released. Aside from the wage increase, what may we find there?

Sometimes (actually, always), they have provisions on crediting. What does that mean? It is a provision which states that if, within a stated period prior to effectivity of the Wage Order (usually 60 days), the employer granted a wage increase, then you can credit the wage increase under the wage order. For example, the company gave all workers an across-the-board increase of P10. One month later, a Wage Order was passed allowing for crediting of benefits given by the company within the last 2 months. The Wage order provided for a P15 wage increase to all workers. If you will apply the provision on crediting, the only increase you will get in wages after the Wage Order took effect is P5. ex: Original Wage: P170 + 10 Management Increase: 180 + (15 - 10) Wage Order: 185

Is this type of provision valid? In Apex Mining Corp. v NLRC, the Supreme Court said yes. CBAs can also allow for crediting. These are grounded on an important public policy - to encourage employers to grant wage increases higher than the minimum legal rates. But where rules implementing a wage order prohibit such crediting, they would be invalid. The Supreme Court has said these agreements merely create an equivalence between legal and contractual imperatives, rendering both obligations susceptible of performance by compliance with either, subject only to the condition that where the increases given under agreement fall short in amount of those fixed by law, the difference must be made up by the employer. (PT&T vs. NLRC, June 19, 1995, J. Vitug) What would be wrong is if the CBA provided that the company need not pay the minimum wage for a certain period of time. That is invalid for two reasons - it is against law and public policy and only the wage board may grant an exemption from legally-mandated wage increases. What happens if there is no such provision on crediting?

It follows that the employer must give the wage increases under the wage order in addition to that under the CBA. In Meycauayan College v. Drilon (1990), the CBA provided for a salary scale (a

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salary scale provides for the wage rates due the different positions and ranks in the company). During the term of the CBA, several wage increases were ordered by law. All of these were complied with. The company now claims that a wage raise is different from a salary scale. An agreement on a salary scale should not be considered as an addition to the salary increase under the law. The SC said that that was wrong. The terms of a CBA constitute the law between the parties. Their terms are separate from what the law provides. There being nothing in either the law or contract that benefits from one encompass the other, the increases under the wage orders and the wage scale should be considered separate from each other. In short, employee benefits derived by law are exclusive of benefits arrived at through agreement, unless otherwise provided. Sometimes, the wage order also states that anniversary wage increases are not included in the crediting. To illustrate: You have a CBA which provides wage increases as follows: WAGE RAISEFIRST YEAR (May 1, 1994)P 10.00SECOND YEAR (May 1, 1995)P 15.00THIRD YEAR (May 1, 1996)P 20.00 A wage order was issued on June 1, 1995, providing for crediting age increases granted by voluntary act of the employer or under a CBA within one month prior to the issuance of such order, except for anniversary increases. May the employer therefore credit the second-year wage hike as compliance with the order? NO, because it is an anniversary wage increase. It occurred on the first anniversary of the CBA. The grant took place one year ago. (Apex Mining vs. NLRC) Likewise, if collective bargaining negotiations started on January 1, 1997. On February 1, 1997, the union and the company reached an agreement with respect to wages. On March 1, 1997, a wage order was issued allowing for crediting provided the wage increase was granted by the company within one month prior to the increase. It was only on April 1, 1997, however, that the company and union finally concluded the CBA. May the company credit the wage increase under the CBA with the wage order? NO. The grant occurred when there was a final agreement on the CBA. Even if there was a preliminary agreement on wages on February 1, this could still be modified while there was no final agreement. Crediting will not therefore be allowed. And then there is the matter of wage distortion. This means :

A situation where: an increase in prescribed wage rates results in elimination or severe contraction of intentional qualitative differences in wage or salary rates between or among employee groups in an establishment as to effectively obliterate the distinction embodied in such wage structure based on skills, length of service or other logical bases of differentiation. For example, A, a rank and file worker receives P185 per day. (This is the prevailing minimum wage.) B, a supervisor, receives P200 per day. A wage order is issued, raising the minimum wage by P15.00.

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A would thus now receive P200.00, while B would not be entitled to receive anything since he still meets the new minimum rate. B will now complain, since he is receiving the same as a rank-andfile employee, who has lower rank and skills. He would be right, for there would now be a wage distortion. This must be remedied. In Metrobank Employees Union vs. NLRC, the bank gave a P900.00 monthly wage hike to supervisory employees. Because of a P25.00 per day wage hike under R.A. 6727, the P900.00 difference was reduced to P150.00 per month. There were two questions: Was there a wage distortion? If so, how should it be remedied? The NLRC said there was none. While there was a noticeable decrease in the wage gap, it was not so insignificant to obliterate or result in severe contraction of intentional qualitative differences. The SC said that the NLRC was wrong. The law did not require an elimination or total obliteration of salary differences. A severe contraction is enough. In this case, the contraction went up to 85%. How do you remedy this? The Arbiter ordered the company to pay the affected employees the total amount of the P750.00 reduction. One NLRC Commissioner suggested this formula: minimum wage = Percentage x Prescribed = Disturbance actual salary Increase Adjustment

The SC sided with the Commissioner. It said we must approximate an acceptable quantitative difference. The Arbiters formula is not acceptable. Giving them the entire P750.00 will not be conducive to encouraging employers to grant allowance increases above the minimum. It would penalize them for granting more. The Commissioners formula is appropriate and just and equitable. In Metro Transit v NLRC, the ponente of which was Justice Vitug, the company, whenever the rank and file received a statutory wage increase, would also give the supervisory employees a wage increase. Whatever the rank and file got, the supervisory employees also received plus P50. A CBA was then entered with the rank and file. The rank and file were given a wage increase of P500/month. The supervisors, this time, got nothing. They now claim there is a wage distortion. Is there? YES. The granting of corresponding increases to supervisory employees was a practice of the company. It was not a bonus. A bonus is given as a reward for industry and loyalty. It is given in addition to what is ordinarily granted. It is therefore not demandable as a matter of right (unless made part of wages). This P550 the supervisors sought was not an incentive or an inducement. Neither was it contingent on anything. It was based on a company practice of granting a salary increase to supervisors when rank and file got an increase. This was designed to correct or minimize wage distortion.

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NFL v NLRC laid down some important principles of wage distortion:

1. It assumes an existing group of employees which establishes distinctions on some relevant basis. (You have a group of workers. You differentiate groups within them based on some relevant grounds - ex: age, seniority, rank, skill required) 2. They often result from government decreed wage increases. But they may also increase from other causes such as merger. 3. If there is a wage distortion, you do not have to fix it by giving exactly the same amount. It's enough that you re-establish a substantial gap. 4. You can do so by grievance or collective bargaining.

To recapitulate,

1. Wage distortion does not require elimination or obliteration of the wage gap. A severe contraction is enough. 2. A government mandated wage increase may result from a merger or CBA-negotiated increase for one group. 3. Bonuses, which are gratuitous in nature, should not be considered in determining whether or not there is a wage distortion (since it is out of generosity, you cannot claim wage distortion, otherwise, you'd be demanding for a gift, which is makapal ang mukha). How do you remedy a distortion?

If there is a CBA: grievance procedure If not settled, go to voluntary arbitration If there is no union or CBA: negotiations If not settled, NCMB may assist. If not settled in 10 days, Labor Arbiter. Note the IBM v NLRC case. You had here workers at San Miguel. Everyday, they would work around 10-12 hours (or 2-4 hours OT). The Supreme Court said they did it because it gave them more income. Then, one day, there was a wage distortion. They decided to boycott OT. The company said, you are violating the no-strike/no-lockout provision. That is illegal. Was it? The Supreme Court said yes. The law provides for a remedy in case of wage distortion (grievance or negotiations and VA). Strike (slowdown) is not allowed. Maybe you are asking, what about OT - is it not a law that you can't force them to work OT? Yes. But the Supreme Court said, in this case, there was a long-standing agreement to render OT

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work everyday. When they suddenly refused to do so, they therefore conducted a slowdown (a withholding of work which prejudices company operations). 13th Month pay: What is this? It is a bonus required by law. Who are exempt? 1. Government

2. Those paying their employees a 13th month pay or more per calendar year or its equivalent at the time the law was passed. 3. Employees of household helpers and persons in the personal service of another

4. Employers of those paid on PURELY commission, boundary or task basis, those paid a fixed amount for specific work (pakyao) (This refers to those paid by result. But note that PIECERATERS are not excluded from 13th month pay). Piece-raters are those paid a standard amount per unit of work that is more or less regularly replicated, without regard to the time spent on the same. 5. Note also, managerial employees are exempt. Since it refers only to rank and file employees. But note who are covered by the definition of managerial employees under the Revised Guidelines on PD 851 - it does not include the managerial staff. 6. > Another: You worked less than 1 month in a calendar year.

Let's go through the exceptions. Those paying 13th month pay or its equivalent. What do you mean by "its equivalent"? X'mas bonus mid-year bonus cash bonus other payments amounting to not less than 1/12 of the basic salary

If Christmas bonus is less than the required 13th month pay, pay the difference. What is the purpose behind this particular exemption? In NFSW v Ovejera, the Supreme Court said it was intended to grant additional income to employees not already receiving it and not to penalize the employer for his generosity. The Revised Guidelines provide that those paid a fixed wage + commission are entitled to 13th month pay based on total earnings for the calendar year (both fixed wage + commission).

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Thus, bonuses are considered equivalents of 13th month pay. What are not equivalents?

> cash and stock dividends > COLA > other allowances regularly enjoyed by the employee > non-monetary benefits > X'mas gift given in settlement of a dispute(e.g. share in tuition fee increase claim). this is not an equivalent since the aim of PD 851 was to uniformly provide workers additional income because their wages for 12 months was inadequate. So, if the additional income is less than what the law requires, the employer need only pay the deficiency. The rule on exemption of those paying "equivalents" aimed to prevent a double burden on the employer. The X'mas gift is part of the claim for P350. It is not a bonus, incentive or additional income. It is not an act of liberality. It was partial payment of an obligation which the union sued for before the Arbiter. A bonus is an act of liberality. (UST v NLRC) > Transportation allowances > Seniority bonus: its purpose is to reward length of service. PD 851 seeks to give additional income > Representation allowance/transportation allowance/salary Pork meat subsidy/Free light > Free sack of rice (non-monetary benefits) What is the basis for determining the 13th month pay? TOTAL BASIC PAY FOR YEAR 12 Note, it is not divided by the total number of months worked That is a common mistake The divisor is always 12. - The amount divided is total BASIC salary What is "basic salary"? The rules say it won't include: 1. allowances 2. monetary benefits not considered or integrated in regular or basic wage (i.e. vacation leave/sick leave, cash equivalents of leaves, OTpay, night differential, holiday pay, COLA) UNLESS they are part of basic under an agreement or policy. What about commissions?

If you receive only commissions, the rules say, you get no 13th month pay. (Note our discussion on 13th month pay.)

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What if you receive both a fixed rate and commissions? The rules say, compute 13th month pay on the basis of both payments.

In one month, the Supreme Court came out with 2 opposing decisions on this. In the first case, Phil. Duplicators v NLRC, you had salesmen paid largely by commission. But they also received a fixed salary. The Supreme Court said: Do not confuse basic salary with fixed wage. Basic salary is used to distinguish wage from fringe benefits. The commissions are paid of the wage, not allowances or fringe benefits. In fact, they form the bulk of the salaries. Furthermore, the Revised Guidelines say that if you are paid partly by commission and partly by fixed wage, you are entitled to 13th month pay based on both. And then a few days later came Boie-Takeda v De la Serna. This concerned medical representatives who would receive commissions as a share in the productivity bonuses. This time, the Supreme Court said, basic wage means - rate of pay for a standard work period exclusive of additional payments such as bonus or OT. Commissions are given for extra efforts in consummating sales. They are additional pay not part of basic wage. The fixed wage is the basic salary. Salary means direct remuneration for services rendered. To include commissions would be to unduly expand the concept of basic salary. The IRR cannot add to the law. Par 2 of Sec. 5(a) of the Revised Guidelines is thus null and void. So Phil. Duplicators saw this decision. They filed a motion for reconsideration. So finally, the Supreme Court said: There is no conflict. In the first PDI case, the commission was part of the basic compensation for the job. It was part of the selling price. The fixed wage amounted only to 1530% of total yearly earnings. They were thus part of basic salary. In Boie-Takeda, the commissions were not part of basic. They were paid as productivity bonus. They were thus tied to productivity or capacity for revenue production. they are like profitsharing; they have no clear, direct or necessary relation to the work done by each employee. A bonus is given out of generosity. It is not demandable or enforceable as an obligation. Another difference. In PDI, you had salesmen. In Boie-Takeda, you had medical representatives. They are different. They promote the products by visiting doctors and telling them of the virtues of their products. Then they leave brochures and samples. The bonuses are like fringe benefits to them since they do not form part of the selling price. What then is the difference between the two?

Prod. Bonus (BT case) Sales Commission (PDI case)Tied to productivity or profit generation Directly proportional to employees endeavorsNot directly dependent on efforts of the workerPaid on specific results achievedSomething extra for which no specific additional service are rendered.Percentage of sales and operates as integral part of basic wage

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So PDI says, "but you said par. 2 was void". Supreme Court said, "Yes, but what we meant th was 13 month pay gives relief only to those not actually paid its equivalent. It was not intended to impose a double burden on employers already granting it or its equivalent. Otherwise, it would penalize the employer for his munificence and liberality. It would discourage giving grants. (If you interpreted it so that it would mean that productivity bonuses should be included in computation of 13th month pay, that would be void. Those purely on commission basis

There is no legal basis to include in the term "commission" profit-sharing payments or bonuses. IF you interpret it this way, then it is void! So to recapitulate, if a worker is paid BOTH fixed wage and commission, when should you also include the fixed wage in computing the 13th month pay? If the commission paid is based on the actual work performed (ex. % of price of goods sold), it is therefore salary and should be included. If it is not so based on actual work (ex. profit/incentive sharing on productivity bonus), it is not included. So it is not the title used: "commission". You will look into the nature of the payments. Another more recent case which affirmed this Phil. Duplicators Ruling was the case of PACIWU v NLRC, Aug. 14, 1995. You had here bus conductors and drivers paid by commission. If the total commission for the day was less than minimum wage, they would get the minimum wage. Supreme Court said while the commissions are given as incentive to work harder, they are direct remuneration for services rendered. You can see this from the fact that they were guaranteed a minimum wage. When shall 13th month pay be paid?

Generally, on or before December 24. But you may opt to receive it in 2 amounts. (One before school starts, the second before Dec. 24). AND he may get it when separated from service. Whats the reason he may collect it upon dismissal? The SC said this is in line with equity - as the employer can require the employee to clear himself of all liabilities and property accountability, so can the employee demand the payment of all benefits due him upon the termination of the relationship. Also, the benefit of 13th month pay is automatically vested in the employee who has at least worked for one month during the calendar year. This such benefit may not be lost or forfeited even in the event of the employee's subsequent dismissal for cause without violating his property rights. (Archilles Mfg. Vs. NLRC, June, 1995) What else should be given?

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(Of course there is also the social amelioration lien under RA 6982. This will not be asked in the bar exams anyway.) PAST PRACTICES What else?

We already mentioned, supplements - extra remuneration or privileges, given over and above wages are fixed benefits. In NASUREFCO v NLRC, the Supreme Court discussed the concept of past practices which have ripened into contractual obligations. To fall under this category it must be a benefit: 1. 2. 3. Given over and above what the law requires Over an extended period of time The employer knowing he is not obliged by law to grant it.

For example, if before, you were classified as rank and file. Due to job reevaluation scheme, your position became supervisory and you received some additional benefits. You are not entitled to the OT pay you used to receive. This was given not over and above what the law required. It was given because, as rank and file, you were entitled to it. There is no diminution of benefits - you actually received more benefits to make up for those you lost. It must be knowingly given. If, for example, the company paid 13th month pay for 2 years even if they already were paying X'mas bonus and they did this because of a mistake, they can still withdraw it. BONUS What about bonuses? We said bonuses are acts of liberality. They cannot be forced on the employer. In Trader's Royal Bank v NLRC, the Supreme Court said, TRB can withdraw its bonuses, which were dependent on profits. After 1986, they withdrew it . (TRB being place under sequestration). You cannot say the bonus ripened into a company practice. Because of its fiscal condition, you could not force TRB to distribute bonuses. Likewise, as to 14th month pay, in Kamaya Point Hotel v NLRC, such benefit was withdrawn after the Hotel was converted into a training center for Libyans (scholars). You cannot penalize it for its liberality by requiring it to continue giving bonuses despite losses. Metro Transit Org. v NLRC (July 11, 1995), penned by Justice Vitug, states that a bonus is demandable when it is made part of the wage or salary or compensation. If it is additional compensation the employer promised and gave without any conditions (such as profitability or productivity), then it is part of wage.

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Otherwise, it cannot be deemed part of wage. For example if it is payable only to employees with good efficiency or productivity rating, it is an enforceable obligation upon meeting the requirements. What if you enter into an employment contract stating, if you have worked for 5 years, you get a bonus, in addition to your salary. Can the company withdraw that, after 4 years? NO. Your service for 5 years is an acceptance of the offer to pay the bonus. Once accepted, it cannot be withdrawn. In short, it is already an agreement between the employer and the employee. (Marcos v NLRC, Sept. 8, 1994) Note, in the Kamaya Point & Traders Royal Bank cases, the Supreme Court allowed the withdrawal of the bonuses due to losses. Since it is essentially gratuitous, you cannot force the company to keep on giving it fit it can no longer do so. But where benefits are given due to agreement (BCA, employment contract, etc....), such as a fixed monthly ELA given under a fixed practice and verbal agreement, that cannot be withdrawn. NON-DIMINUTION OF BENEFITS Note, Art. 100 says: Nothing in this Book shall be construed to eliminate or diminish in any way supplements or other employee benefits being enjoyed at the time of promulgation of this Code". The time referred to is 1978, Nov., that was when the Code was promulgated. Curiously, however, the Supreme Court has applied it to cases of benefits given even after the Code took effect. PRODUCTIVITY IMPROVEMENT PROGRAM This should not be covered by the Bar Exams, but just in case, RA 6971, "The Productivity Incentives Act of 1990" provides for a program called "The Productivity Incentives Program". What is it? It's a formal agreement established by a labor-management committee with a process whereby employees will be given salary bonuses proportionate to increases in productivity for the present year as compared to the last 3 years. The intent is to promote employment and increase productivity. The bonuses shall be given at least every 6 months from the start of the program. This agreement shall not supplant any CBA, but only supplement it. If there is still no CBA and, eventually, one is entered into, it shall be integrated into the CBA. PREFERENCE OF WORKER'S CLAIMS.

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So now we go to Article 110: Preference of Worker's Claims.

Regularly, you have 1 or 2 cases where PNB or DBP goes up to the Supreme Court applying this. And, for the past years, the decisions have always said: > While workers have preference in satisfaction of claims and this is superior to all claims (even those of the government), you cannot read it in isolation of the Civil Code provisions on Concurrence and Preference of credits. > First of all, the article starts: "In the event of bankruptcy or liquidation of an employer's business...." The rules use the terms in event of liquidation or bankruptcy. While the provision "declaration of" has been eliminated, the Supreme Court said, you still need that. Why? How else will you know if workers should enjoy first preference, than by finding out if the assets are insufficient to cover the debts? How do you do this? Proceedings for insolvency or bankruptcy. There will be no need to apply preference if assets are greater than liabilities.) So, you can apply Art 110 only if you have such a declaration. > A preference of credit is all Art. 110 gives. It is not a lien. The Civil Code creates a lien over products of a workers labor, for payment of his wages and claiming for workers in construction specially preferred claims. But Art. 110 is only a preference. There is a difference between the two: preference of credit Applies only to claims Does not attach to specific properties lien Attaches to specific property.

Art. 110 does not create a lien. It is a preference - a means of determining which should first be satisfied out of the assets. A lien is superior to this as it attaches to the property. So Art. 110 falls to a mortgage credit. The Supreme Court said also, we ruled on this already so many times. All you could have done was stand on stare decisis. (DBP v NLRC, March 1, 1995) This was reiterated more recently in Phil. Export and Foreign Loan Guarantee Corp. v NLRC, Dec. 12, 1995. Note that the Civil Code creates a worker's lien on the goods manufactured or the work done (Art. 1707). It creates a preference in the following cases: Specific movables - claims for wages, on goods manufactured; work done Specific immovables - claims of workers in construction/reconstruction/repair of buildings, canals or other works (on such construction) Other property (real or personal) - credits for services within 1 year prior to insolvency proceedings. Pay/indemnity for damages in case of labor accident or illness resulting from employment

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VII MEDICAL AND DENTAL SERVICES require 2. training of a sufficient number of employees in first-aid treatment Emergency Medical and Dental Facilities What are the minimum medical and dental services the law requires? 1. First-aid treatment - medicine and equipment as the nature and conditions of work

No. of Employees Services RequiredMore than 50 until 200 NON-HAZARDOUS- if no regular nurse available, graduate first-aider- More than 50 - 200 HAZARDOUSfull time registered nurseOver 200 - 300Full time registered nurse Part time physician Part time dentist Emergency clinicOver 300Full time physician Full time dentist Full time nurse Dental clinic Infirmary/Emergency hospital with 1 bed per 100 employees /100 employees IF HAZARDOUS, doctor or dentist must stay in premises for at least 2 hours (if Part-time) 8 hours (if Full-time) IF NON-HAZARDOUS, doctor or dentist may be simply retained No emergency hospital/dental clinic is required if there is a hospital or dental clinic accessible from the establishment and there are arrangements for reservation of beds and dental facilities: (In the Implementing Rules, this means, IN URBAN AREAS, it is within 5 km. IN RURAL AREAS, it can be reached by motor vehicle in 25 minutes (provided the employer has such vehicles available) 3. Assistance to ensure adequate and immediate medical and dental attendance and treatment in case of emergency 4. Doctor to implement a comprehensive occupational health program for employees.

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Occupational Safety and Health. There are mandatory OSH standards set by the DOLE. The DOLE should conduct studies and research to develop innovative methods to deal with OSH problems; discover latent diseases; develop medical criteria. What else shall DOLE do? Administer and enforce OSH laws/rules and regulations Conduct safety inspections This is one of the least noticed violations. People are more aware of their immediate financial needs rather than their medical needs. VIII ADMINISTRATION AND ENFORCEMENT - If you are not receiving the proper benefits under these provisions of the labor code, what are the remedies? The Labor Code provides for two possible actions: VISITORIAL AND ENFORCEMENT POWER (Art. 128) - This is composed of the : VISITORIAL POWER: The power of the Secretary of Labor (or his representative) to inspect and investigate the employers premises and records to determine violations of the law (or any other matter to aid in enforcement of the Code or labor laws). The Labor Inspection Officers may therefore enter the company premises whenever there is work being undertaken and conduct an inspection. They may interview workers and look at your books, payrolls and other documents. This power of inspection cannot be obstructed by the employer (upon pain of criminal prosecution for a violation of the Labor Code). Nor can a TRO or an injunction may be issued or any case be entertained by any court over the case for non-compliance. ENFORCEMENT POWER: If he or she discovers that there are violations, then the enforcement power will come into play. The Regional Office is empowered to issue a compliance order stating the findings and requiring the employer to make good the wage deficiencies, for example or cease and desist from requiring the employees to work overtime for 8 hours everyday. A writ of execution may be issued here. Under this power, an order for stoppage of work may be issued where it is shown that noncompliance with labor laws poses a grave and imminent danger to health and safety of workers in the workplace. A hearing should be conducted within 24 hours to determine if the suspension should be lifted. If the violation was due to the fault of the employer, then it shall be liable for the workers wages during the suspension of operations. This therefore covers inspection of establishments initiated by the DOLE. There is nothing stopping the parties from making a request for an inspection. That would still fall under this power. It would be a different matter if a complaint were filed with the Regional Office complaining of non-payment

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of minimum wage or other labor standard benefit. Then, what would come into play would be the adjudicatory powers. Note, however, that it is required that there still be an employer-employee relationship before this can be exercised (Art. 128[b]). If the company has closed down, obviously, the establishment cant be inspected. If the company closes down after the inspection, the Regional Office cannot issue a compliance order. The case shall have to be referred to the Labor Arbiter. Likewise, even if the Regional Office has acquired jurisdiction over the case, he may lose it if: The employer contests the findings of the labor enforcement and employment officer; He raises issues thereon supported by documentary proof; Such documentary proofs were not considered in the course of inspection. This provision was amended by R.A. 7730 (June 2, 1994), which changed the requirement that : there is a need to examine evidentiary matters not verifiable in the ordinary course of inspection. Now, the rule has been relaxed somewhat - all that is needed is to support ones contest of the findings with documentary proofs not considered during the inspection. For example, there is a finding that the employer paid less than the minimum wage. You claim that the labor officer did not look at the proper payroll when he made his findings. You present the proper payroll in your contest. This was verifiable in the normal course of inspection and previously should still have been within the Secretarys jurisdiction. But today, it will be removed from the Secretarys jurisdiction because the documents you are now presenting are documentary proofs not considered during the inspection. However, if all you are contesting is the computation of wage differentials, then that does not involve new evidence not covered by the inspection. ADJUDICATORY POWER (Art. 129) - The Regional Director (or a hearing officer) may entertain a complaint for recovery of wages or other monetary claim or benefit. This is different from the enforcement power stated earlier, which arises from an inspection. This is subject to a number of requisites: The complaint does not include a claim for reinstatement. The aggregate claim of EACH WORKER (complainant) does not exceed P5,000.00 including legal interest. The claim is presented by an employee or person in domestic or household services. The claim arises from employer-employee relations. For example, there are five workers. The company has not paid them the correct amount of 13th month pay for the past 3 years. So each has separate claims: Differential Due:A P 4,500.00BP 5,000.00CP 3,400.00DP 4,000.00EP 5,500.00Total:P22,400.00 Is this within the jurisdiction of the Regional Director under the adjudicatory power? NO. The aggregate claim of each worker is NOT within the P5,000 limit - E has claims amounting to

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P5,500.00. This takes the entire case out of the Regional Directors office and into the Labor Arbiters. But what if E did not include his claim? Then the Regional Director would have jurisdiction. The aggregate claim of each worker would not exceed P5,000.00, even if their total claims amounted to over P 5,000.00. The question now is will this P5,000.00 jurisdictional limit also apply in case of the visitorial and enforcement power? The old law was interpreted this way: Considering Art. 128(b) together with Arts. 129 and 217(a)-6 - on the jurisdiction of Labor Arbiters - the same limitation must apply, otherwise, Arts. 129 and 217 would be rendered superfluous. The Arbiter has exclusive jurisdiction over claims above P5,000.00 as affiremd by Article 129. (Servandos Inc. vs. Secretary of Labor, April 26, 1990). However, the law, as amended on June 2, 1994, now intends to take away the limit on jurisdictional amount with respect to the visitorial and enforcement power. This is seen from the inclusion of the phrase: Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary. . . . This means, that irrespective of their jurisdictions, there is now no limit on the amount of the award under the enforcement power. This is beneficial to the workers, as in both cases, all that shall transpire is a summary proceeding. Wherein in the Arbitration Branch of NLRC, a full-dress trial hearing may have to take place. IX SPECIAL WORKERS MINORS For example, you are a child of 10 years old. Your mother manage the family sari-sari store located at the front of your house. When your mother cooks the food for lunch and dinner, she leaves you behind to mind the store. Valid? YES. Your work under the sole responsibility of your parent and only members of your family are employed. Supposing your mama hired someone to mind the store. But since it grew, she asks you to help. Valid? No. Others are employed. Suppose you have a family business. You live along the seacoast so your father has a middle-size fishing vessel. You are 12 years old. He makes you come along on fishing voyages, dive down into the water and use muro-ami to scare the fish into the net. Valid? NO. There is danger to your life, health and safety. In the same manner, if your father makes you work in a Disco Pub which the family owns and solely runs, that is illegal since your morals and normal development are put in danger.

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NOTE. That the parent or guardian must provide you with the prescribed primary or secondary education. So if you work entails you to travel all the time, the question is, is your parent or guardian able to supply this> There is a movie outfit. The company is shooting a movies in which one of the scenes is Vina Morales gives birth to a tiyanak. They need a newly-born baby for this scene. Can they hire your child? Well, it seems his participation is essential in public entertainment. As long as the parents/guardian sign it, and the DOLE approves it, it is all right. Just ensure that the baby's life, health or safety is not endangered. There was an ad for been a few years ago. It was entitle "Hero Worship". A movie star walks into a narrow alley with lots of shady people around. A boy, around 8 years old, follows him around. At the end, we see the star drink beer with the boy looking up to him. Valid? Well, it is possible they needed a child for that ad due to the storyline but, there is an absolute prohibition: IN NO CASE shall he/she be employed in commercials or ads promoting alcoholic beverages, intoxicating drinks, tobacco and its by-products, and violence. Note, this refers only to ads. What about violent movies? Well, it would pose a threat to his morals, especially if he is part of the violent scenes. Suppose you hire, in your shop, a girl of 16 years? Can you say, since you are young, I am helping you out - I am giving you your first job. But since you are young, you cannot perform the work an adult is capable of. I will therefore pay you only P150.00 a day. In NCR, the minimum daily wage now is P185.00. That is void. There is a prohibition of discrimination against a person as to terms and conditions of employment due to age. WOMEN WORKERS The Labor Code grant working women some rights and impose prohibitions or measures of protection: a) PROHIBITIONS/ PROTECTIVE MEASURES NIGHTWORK PROHIBITION

Women may not be made to work, even with their consent, in the following: Industrial establishment - between 10 p.m. - 6:00 a.m. Commercial/Non-industrial establishment - between 12 midnight - 6:00 a.m. Agricultural establishment - must be given a rest period of 9 consecutive hours EXCEPTIONS:

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Emergency, Force Majeure, Imminent danger to public safety Urgent work to be performed on machines, installations and equipment Prevent loss to perishable goods Responsible position of managerial/technical nature Work in health & welfare service Work needs manual skill and dexterity of women which men cannot perform with equal efficiency Family business Analogous cases as determined by Secretary of Labor No discrimination on account of sex Examples: Giving women less pay than men for work of equal value Favoring male as to promotion, training or study opportunity This shall give rise to criminal liability, apart from civil liability. No stipulations against marriage: Also prohibited: considering woman as resigned upon marriage, or dismissing woman due to marriage. No denial of benefits under Labor Code to women: Prohibited acts: Denial of benefits to women; Dismissing the woman to deny her the benefits. Discrimination due to pregnancy Prohibited acts: Discharging due to pregnancy Discharging while on leave due to pregnancy Discharging or refuse to readmit woman for fear of her becoming pregnant again. ENTITLEMENTS

a) Facilities: There is a decision of the OP on a rule in PAL that flight attendants must be single if not tanggal sila! It was held by the OP that this is illegal. It cannot be a fair and reasonable standard for their own health, safety, protection and welfare. There is no basis for that. (De Castro v. PAL, 1977) Examples of violations of this would be a company which dismisses women upon marriage due to lack of facilities for pregnant women. That is why the Code requires that rules be issued on such facilities particular to women.

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Note the law on sexual harassment. If prohibits (1) making sexual favors a condition in employment, re-employment or continued employment; or (2) granting better terms and conditions or refusing to grant the same or (3) segregate or classify the employee such that she/he would be discriminated against, deprived of employment opportunities or if those would be diminished, or (4) otherwise adversely affect the employee. Unfair rights under labor law/result in an intimidating, hostile or off environment.

It connotes the position of dominance by one over the other. This is what they call quid pro quo sexual harassment. It is not subtle as in leers, dirty jokes or sexy pictures openly displayed. HOMEWORKERS What is a homeworker?

The law refers to them as "industrial homeworkers" which, under the law, is defined as a system of production under which work for an employer/contractor is carried out by a homeworker at his/her home. Materials may be furnished them. Unlike factory production, there is little supervision. The law says, "for purposes of this chapter", their employer is the one supplying work. What is the chapter? The chapter on homeworkers. Applying the right to control test, however, there is a clearly no control except as to the result. DOMESTICS Much earlier, we discussed this as having the following definition: anyone performing services in the employers home which is usually necessary and desirable in the maintenance and enjoyment thereof. This includes ministering to the personal comfort and convenience of the members of the employers household, including services of family drivers. (Art. 141) What are they entitled to:

Minimum wage - NOTE that the minimum wage was raised since 1993. Now, the new minimum rates are the following: NCR - P800.00 a month Other chartered cities and first-class municipalities - P650.00 a month Other municipalities - P550.00 a month. (NOTE: These are basic cash wage. You cannot deduct from this the cost of lodging, food and medical attendance) SSS coverage IF salary is at least P1,000 a month

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Free board, lodging and medical attendance (adequate food and medical attendance) Hours of work: No compulsory work over 10 hours a day (Art. 1695 of Civil Code) Leave: Four days vacation leave every month with pay (this is actually the equivalent of one rest day a week). If unused, this is commutable to its cash equivalent. (Art. 1695 of Civil Code) Funeral expenses if worker dies in service of employer. (Art. 1696 of Civil Code). If domestic has no relative with sufficient means in place where the head of the family lives. Rights of domestics:

Limited security of tenure: The Labor Code provides that the original contract shall be for a period of not more than 2 years. It may be renewed after that under whatever terms the parties want. The right varies according to whether or not the term is fixed: If the term of employment is fixed, the domestic may be terminated only for just cause. In case of unjust dismissal, the domestic shall get salaries already earned plus 15 days by way of indemnity (Likewise, if the domestic leaves without cause, he or she shall lose the earned salaries) If the term is not fixed, either party. may end the employment by 5 days notice (for any cause) In one case, you had a domestic who worked as an OFW. The contract was terminated without just cause. The employer said all she is entitled to is 15 days salary, not the unexpired portion of the contract. The SC said that is wrong - that should be in addition to whatever wages are earned. The 15-day salary is awarded in the form of an indemnity due to unjust dismissal. It is in addition to and not a substitute for the household helpers salary for the unexpired portion of the contract. Such salary is, as a settled rule, awarded due to violation of her security of tenure. Labor laws are deemed incorporated into the parties contracts. NOTE that that is the usual indemnity for violation of OFW contracts. I dont think the same rule should apply for domestic employment. (Philippine Integrated Labor Assistance Corp. vs. NLRC, GR 123354, Nov. 19, 1996) Opportunity for education: If the domestic is under 18 years of age, he or she should be given an opportunity for at least an elementary education. The cost of this shall be part of the compensation, unless they agree otherwise. Just and humane treatment. No physical violence shall be used upon him or her. Certification of employment.

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LABOR RELATIONS LAW X ADMINISTRATIVE MACHINERY The guiding rule in administrative machinery on labor is tripartism. That is declared a state policy. What does it mean? 1. It means that labor and management shall be represented in policy and decisionmaking bodies and processes of the government. (Tri means 3 parties government/labor/employer) 2. Aside from representation in government bodies, national, regional or industrial tripartite conferences may be called by the DOLE wherein the 3 parties shall be represented to consider and adopt voluntary codes of principles designed to promote individual peace based on social justice, or to align labor movement relations with established priorities in economic and social development. The Secretary of Labor can consult with accredited representatives of workers and employers in calling these conferences. Where can we see this policy put into effect? a. Governmental bodies NLRC: 5 members from workers' organizations' nominees 5 from employers' groups 5 from the public sector

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TESDA - its Board shall have 2 reps from employer sector 3 reps from labor ECC - shall have 2 appointive members 1 rep for workers; 1 rep for employers

National Wages and Productivity Commission/regional Wage Board Tripartite Voluntary Arbitration Advisory Commission SSC/GSIS/NHIC/Philippine Medicare Commission

What shall be the governments intervention in discussions as to wages and terms and conditions of employment? The general rule is, to encourage a truly democratic method of regulating these relations through collective bargaining, NO COURT OR ADMINISTRATIVE AGENCY or OFFICIAL shall set or fix wages, rates of pay, hours of work, or other terms and conditions of employment. EXCEPTION: 1. 2. 3. NWPC VA/NCMB Assumption of Jurisdiction

What are these agencies under the DOLE which have functions relating to labor relations?

National Labor Relations Commission: It's structure shall be composed of: The NLRC shall have 5 divisions. Each division shall have 3 members. The NLRC shall have, primarily, adjudicatory powers - it decides all labor cases falling within its jurisdiction.

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You need 2 commissioners to render a judgment. If they can't reach the required void due to lack of commissioners, the Chairman shall designate other commissioners from other divisions to complete the division.- The 5 divisions will handle cases as follows: 1st - 3rd:NCR/Luzon (now have concurrent jurisdiction) 4th:Visayas 5th:Mindanao Each has jurisdiction over its territory. The 1st, 2nd, and 3rd have concurrent jurisdiction over NCR/Luzon cases. But if necessary, the NLRC, en banc, may allow cases falling under one division to be heard by another IF their docket will allow and there will be no unnecessary additional expense. The Chair shall come from the public sector. The Presiding Commissioners of all divisions shall also come from the public sector. Note that they must all be lawyers, with 15 years practice of law and 5 years in labor management relations. Previously, RA 6715 required the NLRC member's appointments to be confirmed by the Commission on Appointments. This was declared unconstitutional (Calderon vs. Carale, April 23, 1992) Bureau of Labor Relations

The BLR's authority coversThe BLR likewise keeps a1. Registration of Labor organizationsrecord of the labor organizations,2. Cancellation of registration CBAs and other agreements3. CBA registration4. Rep. Issues (Certification Election)5. Inter-union and intra-union conflicts Conciliation of disputes has been placed under the NCMB. What is the state policy as to Labor Relations?

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1. To promote and emphasize the primacy of free collective bargaining and negotiations, including, VA, mediation and conciliation, as modes of settling labor or industrial disputes (vol. modes settlement); 2. To promote free trade unionism as an instrument for the enhancement and democracy and the promotion of social justice and development; 3. To foster the free and vol. organization of a strong and united labor force 4. To promote the enlightenment of workers concerning their rights and obligations as union members and as employees. To provide an adequate administrative machinery for expeditious settlement of labor or individual peace 6. To ensure a stable but dynamic and just individual peace, and 7. To ensure participation of workers in decision and policy-making processes affecting their rights, duties and welfare. These define the sections of the law on Labor Relations: Labor Organizations Collective Bargaining - Representation Issue/Bargaining/Adm. of CBA Strikes/Concerted Dispute Settlement XI THE RIGHT TO SELF-ORGANIZATION This means the right to form, join or assist labor organizations for the purpose of collective bargaining or through representatives of their own choosing and to engage in lawful concerted activities for the same purpose or for their mutual aid and protection. This right includes the right to engage in peaceful protest in defense of one's rights. It includes a petition of the employees against a bank official for nepotism, unwarranted loans to relatives, and the like. Even if there is no union, that is for the worker's mutual aid and protection. Corollary to this right is the right not to join, affiliate with or assist any union and to disaffiliate therefrom. Who can unionize?

1. In general, all those in commercial, industrial and agricultural enterprises and in religious, charitable, medical or educational institutions, whether operating for profit or not. (Generally, those employed) 2. Ambulant, intermittent and itinerant workers, self-employed, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection. (This covers the informal labor sector.)

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Note that in the first class, the purpose is collective bargaining and mutual aid and protection in the second class, it is mutual aid and protection. Can domestics form a union?

Note they are not employed in an enterprise among those mentioned but there is no reason why you should not extend to them coverage of this constitutional right. The constitution does not exclude them. Who can join unions in a company? Any employee, on the first day of service, whether or not employed permanently. XII LABOR ORGANIZATIONS What is a labor organization?

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. You have a group of pedicab drivers who own their pedicab units. They form an association of pedicab drivers and operators. Is that a labor organization? Under that definition, no. They can't bargain. They're self-employed. But look at Art. 243! It says 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. So the labor code seems to cover organizations for mutual aid and protection of workers as well as in the term. You are a group of musicians. You play for several movie companies. You transfer from studio to studio depending on whatever contracts you can get. In one year alone, you get as many as 5 contracts. Can you constitute a labor organizations if you organize yourselves? YES. Who said it has to be in relation to only one employer? (But for purposes of bargaining, you cannot compel the different studios to jointly bargain with you.) You are a group of employees at Makati City Jail (government penitentiary). You like Jalosjos so much you have banded together to petition you employer to give him the best possible treatment. Are you a labor organization? NO. You did not organize for purposes of dealing with employers as to terms and conditions of employment.

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Finally, you are a group of workers from IBM - a union in San Miguel. You banded together to petition Congress not to raise beer taxes. Are you a labor organization? NO. Your purposes does not deal with the employers. There are several terms used to describe various types of labor organizations. Legitimate Labor Org. - one registered with the DOLE, and its branches locals and affiliates Local Union - one organized at the enterprise/establishment level. National Union - any labor org. with at least 10 locals or chapters, each of which is a duly recognized collective bargaining agent. Federation - it means the same thing (actually, national union is a term used more in connection with federations organized along one industry) Notably in the new rules implementing the Labor Relations law, there are some new terms: Workers Association - any association of workers organized for the mutual aid and protection of its members or for any legitimate purpose other than collective bargaining (In short, it is a labor organization of informal labor sector members) Industry Union - any group of legitimate labor organizations operating in an identified industry, organized for the purpose of collective bargaining or for dealing with employers concerning terms and conditions of employment within an industry or for participating in the formulation of social and employment policies, standards and programs in the industry. It must also be registered with the DOLE. Trade Union Center - any group of 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 formulation of social and employment policies, standards and programs. (This is actually an old concept. It just obtained legal sanction now.) ACQUISITION OF LEGAL PERSONALITY So we defined a legitimate labor organization as one registered with the DOLE, and its branches and affiliates. Meaning, if you have a local union, if it is registered, it is a legally recognized labor organization. Why should you want to obtain legal personality? Well, you get the following rights: 1. Right to bargain collectively for its members.

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Certification. as exclusive rep. of employees in a collective bargaining for purposes of bargaining. To be furnished by employer within 30 days from written request, with annual audited financial statement, including balance sheet and profit and loss statement. Note that the following conditions must be met:provided: - union is recognized by employer - it is bargaining agent - request is made within freedom period - during bargaining negotiations. Note, you must make a written request! Do not assume that because you were given a recognition, you are automatically entitled to it. Own property, for the benefit of the labor organization and its members 5. Sue and be sued in corporation name 6. Undertake all other activities for benefit of organization and its members, including cooperative, housing welfare and other projects. ADDED BENEFIT: Income, including grants and gifts (1) they may receive from fraternal and similar organizations (local or foreign) (2) actually, directly and exclusively used for their lawful purposes. Union income (provided it is a legitimate labor organization) shall be free from taxes and other assessments. Only a special law may withdraw these grants. If you have a federation and it is registered, it is a labor organization. Likewise, all of its locals are legitimate labor organizations. Therefore, there are 2 ways to obtain legal personality if you are a local union: 1. 2. Register directly with the DOLE Affiliate with a federation.

Is it not contrary to freedom of association to require registration before you can acquire legal personality? NO. It is a privilege. If you don't register, you can still form associations. You just won't be able to enjoy these rights. Let's talk first about registering directly with the DOLE (independent registration).

A labor organization requires legal personality upon issuance of the certificate of registration. You file the application for registration at the BLR or the Regional Office where the union's principal office is located.

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Under the law, there are 5 requirements to registration: Registration fee of P50.00 Names of offices, addresses, principal address of labor organization, minutes of organizational meeting, list of workers participating in meeting Names of all its members comprising at least 20% of all employees in bargaining unit If applicant union has been in existence for one and more years, copies of its annual financial reports. 4 copies of CBL/minutes of its adoption or ratification and list of members who participated in it. For federations, the law also requires:

Proof of affiliation of at least 10 locals or chapters, each of which is a recognized collective bargaining agent, supporting the registration. Names and addresses of companies where locals or chapters operate and the list of all members in each company. If a local union affiliates with it, the federation must

Issue a charter certificate indicating the creation of a local or chapter 2. Submit a copy to the BLR within 30 days from issuance. NOTE that the law formerly required that federations organized after the Code took effect would be allowed to organized only along industry lines (one-union - one industry). That has since been repealed in 1986 under Executive Order 111. NOTE also, the old rules on labor relations said that: "The local or chapter shall have and maintain a CBL, set of officers and books of accounts. For reporting purposes, the procedure governing the reporting of independently registered unions, federations or national unions shall be observed." That is the tricky provision. Progressive Development Corp. vs. Sec. of Labor

In this case, the SC said, it is not enough that the local union submit a charter certificate to BLR. Aside from that, they also have to submit: 1. 2. 3. CBL set of officers books of accounts

All of these should be certified under oath by the Secretary or Treasurer and attested to by the President. The basis for this is Rule 2, Sec. 3(e), Book V of the IRR - for reporting purposes, follow the procedure governing reporting of independently registered unions. What procedure are they referring to?

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The certification and attestation requirements . What's the purpose behind this?

a. To assure the employer it is dealing with a bonafide org. (If the statements are false, this is a ground for cancellation of reg. and case for false statement under oath) b. To guard against fraud of the employees (vs. fly-by-night unions) Since, with federations several requirements of reg. are absent, there is a great possibility of fraud. What is the effect of non-compliance? The local does not obtain legal personality. The Supreme Court noted: Everything happened so fast. The federation met with several employees. Then they formed the Comelec and elected the officers. 2 days later a charter certification was issued. Next day, a petition for certification election was filed. (The SC, in later minute resolutions, clarified this. It's not as hard as it may seem. It's not as if you need these immediately. If at the time you file the PCE, the documents are not certified under oath, the remedy would be to certify them under oath during the pendency of the petition.) (However, under present rules (D.O.# 9, s. 1997), the applications must be verified under oath by the Secretary or Treasurer, as the case may be and attested to by the President. This therefore incorporates the Progressive Development Corporation ruling into the rules. Notably, however, the 1997 labor relations rules also deleted the provision: for reporting purposes, the procedure governing the reporting of independently registered unions, federations or national unions shall be observed. This last phrase was the basis for the Progressive Development ruling. So, while this legal basis has been removed, the rules have been amended to incorporate the requirement.) What if the petition is dismissed since the documents are not under oath? Simple file the proper documents and re-file it. Walang res judicata - there is a new set of facts. (The problem will be if there is a CBA and the freedom period has already expired. Then it will be too late.) Later in 1995, the SC made life even a bit more difficult for federations. Protection Technology, Inc. vs. Secretary, DOLE (242 SCRA 99). This concerned a local union which was newly formed. It was a direct affiliate of ANGLO. They filed a PCE. For financial records, all they submitted was one sheet of paper saying: cash on hand: P590.00

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Is that OK? (Anyway, it has not been in existence for at least 1 year) NO, it is not! It is not enough that you submit a financial statement. The rules require that you submit the charter cert., CBL, set of officers, BOOKS OF ACCOUNTS, all of which are certified under oath by Secretary, Treasurer and attested to by the President. When the rules refer to Books of Accounts, they don't mean financial statements. An accountant will tell you that this means: ledgers, journals, and other accounting books containing a record of individual transactions where money is disbursed and received and entries made on a dayto-day basis. Statements of accounts or financial statements merely summarize these individual transactions. They are usually prepared at the end of an accounting period. So what is the union had been registered for less than a year? So what if it was not yet able to collect fees and dues? You don't have to have detailed entries in those books. The point is, you have to show BLR that you have in place a system for accounting for members' contributions before you receive them. The intent is to minimize risk of fraud and diversion. (Importantly, in this case, the CE had already been conducted before the SC issued such decision. So the SC said, we won't set that aside. But before the union can obtain legal personality, submit its books of accounts.) KILUSAN, in the Progressive Development Corp. case, said, the law requires only that the petitioner in a PCE be a legitimate labor org. We filed the PCE in our name. We are a legitimate labor organization and the petition is therefore proper. WRONG. The SC said, the relationship between a federation and its local is one of agency. Kilusan is the agent of its local union. Under agency, an agent cannot do what the principal has no capacity to perform. Since the local had no personality to file a Petition for Certification Election (PCE), neither could the federation. In another case, a federation, KAMAPI was stated in the CBA as the signatory. Another union claimed that the CBA could not serve as a bar to a certification election since KAMAPI could not, as agent, sign the CBA. But the SC noted that the CBA was signed in the name of KAMAPI, but by the national president as well as all the local union officers. Thus the fact that KAMAPI was particularly mentioned as the bargaining party without specifying the local union cannot strip it of its authority to participate in the bargaining process. The local union maintains its separate personality despite affiliation with a larger national federation. The doctrine laid down in Progressive Development Corporation is a mere clarification of the principle enunciated in Liberty

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Cotton Mills Workers Union v. Liberty Cotton Mills, Inc. Both cases have provided that "the mother union acting for and in behalf of its affiliate ha(s) 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. (Pambansang Kapatiran Ng Mga Anak Pawis Sa Formey Plastic National Workers Brotherhood vs. Secretary of Labor, February 1, 1996) (BUT under the 1997 Labor Relations rules, there are a few changes: This requirement that each local or chapter have and maintain a CBL is removed. Likewise, as we pointed out earlier, that provision on following reporting requirements of independent unions has also been removed. So it seems that the legal basis for this Protection Technology ruling has been done away with. There is no need to submit a financial statement if no amount has yet been collected from the members. There is no need to submit a list of members where the CBL was ratified during the organizational meeting. A local union acquires legal personality upon filing of: a charter certificate names of local officers, their addresses and that of the principal office local CBL all these must be certified under oath by the Secretary or Treasurer and attested by the President. A local shall be deemed an affiliate upon the filing of : verified resolution of affiliation, ratified by majority of the members, and resolution of acceptance by the federation.) So once registered, what is the effect? It has all the rights of a legitimate labor organization we mentioned earlier.. What happens if Union B files a petition to cancel the registration of Union A? They win before the Med-Arbiter. Union A appeals to BLR. Before the BLR decides, may Union A file a PCE? YES. While there is yet no final order canceling Union A's registration, it is vested with legal personality. Registration with DOLE is different from registration with other government agencies. Suppose you are a group of workers. You were so eager to organize that you registered with DOLE. You were not satisfied. You registered also as an association under SEC and as a cooperative with the BCD. The officers and members were all the same. As time went by all the cooperative earned a lot of money. Then, one day the union officers were all expelled since they had done nothing but scratch their bellies all the time. But they say, "Ha-ha-ha! We still control the cooperative anyway!"

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Are they correct? YES. These are separate juridical entities. They each have their own legal personalities. That's why in Cebu Seaman's Ass. vs. Ferrer-Calleja, August 4, 1992, the SC said, where the workers formed both a union and a corporation, a change in officership in the corporation won't affect the union. The 2 are separate. Of course, you can try to initiate new election in the cooperative. So let us say you have filed your application for registration. It can still denied on grounds of non-compliance with the requirements. So that is independent registration of a local union and affiliation with a registered federation. What is now the relationship between a federation and its local union? We said, in Progressive Development, it is one of agency. When the local union affiliates with the federation, they enter into a contract - an affiliation agreement. What are your obligations? You have to pay, as a union, regular dues to the federation. You are likewise bound to comply with all internal arrangements in the federation. What, in turn, do you get? You get the privilege and distinction of being member of such an august body of workers! You also can avail of their services - legal, education, cooperative or whatever. You get their support and friendship, which you may need especially during a strike. The problem now is, what if they do nothing?

What if you realize that the federation has never called for a meeting in 2 years. They only appear during CBA negotiations, and that is when it is time for signing the CBA (because that is when management pays off the negotiators.) You therefore want to disaffiliate! Can you? In Volkschel vs. BLR, the SC said a local union is a separate and voluntary association, free to serve the interests of all its members. This means they can serve that interest also by disaffiliating, if needed. The federation in that case said, "But we have a CBA! and in that CBA, the federation reps. also signed. You also signed as representatives of a local chapter of our federation ! Can this bar the disaffiliation? NO. First of all, the affiliation does not at all affect the CBA. It does not cause a change of administrators or an amendment of the CBA. (The party which actually entered into the CBA remains to be the local union - it is the principal.) After disaffiliation, the local's ties with the fed, ceases. It loses whatever privileges it had. It also is free of its obligations to remit dues to the federation. While the local remains an affiliate, therefore, the federation is entitled to the dues. Thereafter, no more.

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So note, this is a case of a disaffiliation effected during the term of a CBA. In AWU-PTGWO vs. NLRC, the SC said a local can disaffiliate only when:

1. It is the freedom period; or Even before freedom period, if majority of the members of the bargaining unit consent (such as when there is a substantial shift in allegiance) But the CBA is still binding (since the parties were authorized when it was entered into). However, where only 11 out of 4,000 agree to disaffiliate, that is hardly ground for the same. Note that you, at the very least, need a majority vote of all members, it being a question of major policy affecting them all. Of course, this is also subject to any agreements you may have with the federation. But how much weight does the SC place on these agreements? Either in the CBL or affiliation agreement or other resolutions of the federation, there are rules on the process and requirements for disaffiliation. For example, in one case, the CBL said that affiliation can push through provided no 10 members oppose it. Therefore, in that case, only 6 opposed it. You could now disaffiliate. But I would think that restrictions in a CBL which are unreasonable, or which render impossible the right to disaffiliate are contrary to the right to self-organization, which includes the right to affiliate and disaffiliate. In Tropical Hut Employees' Union vs. Tropical Hut (181 SCRA 174), the SC held that since a local union is a separate and vol. association, free to serve the interests of all its members, it has the right to disaffiliate when circumstances warrant. A local owes its creation to its members, not the federation. When the local withdraw to join a new federation, it was simply exercising its rights to organize. Since nothing in the CBL prevents disaffiliation, a local may sever its relations with its parent. So, even if the CBL required 3 months' prior notice and the local did not follow it, the SC said that's a mere technicality. It cannot rise above the fundamental right to organize. Secondly, NATU is not even registered. Just because the local union registered as THEU-NATU, that does not mean you can't live without NATU. All that means is that you were an affiliate of NATU at the time you registered. NATU did not lose its personality as bargaining agent. PD 1391 provided that: no petition for certification election, intervention and disaffiliation shall be entertained except within the freedom period. ANGLO therefore said that the disaffiliation of one of its chapters was invalid since it violated PD 1391 and its CBL - not having followed the

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procedure for disaffiliation. But the SC said: We have always adopted the liberal approach in interpreting labor laws. The argument of non-compliance with the procedure for disaffiliation is premised on purely technical grounds. It cannot rise above the fundamental right of selforganization. No doubt was ever raised on support of the majority of the union members on the decision to disaffiliate. Settled is the rule that a local union has the right to disaffiliate from its mother union when circumstances warrant. Generally a labor union may disaffiliate to form a local or independent union only during the freedom period. However, before the said period, notwithstanding PD 1391, it may be carried out when there is a shift of allegiance on the part of the majority of the members of the union. (ANGLO-KMU vs. Samahan ng mga Manggagawang Nagkakaisa sa Manila Bay Spinning Mills at J.P. Coats, July 5, 1996) So all you need is a majority resolution by the union members notwithstanding any CBL provisions. Disaffiliation is not a violation of the union security clause. You are not joining another local union, only changing federation. Thus in the same case, ANGLO contended that when the local union disaffiliated from the federation, its local officers ceased to act as such. So what ANGLO did was to appoint replacements for them. The SC said this was wrong. The ouster was void. A local labor union is a separate and distinct unit owing its creation to the will of its members. The mere act of disaffiliation does not divest the local union of its own personality, neither does it give the mother federation the license to act independently of the local union. It only gives rise to a contract of agency where the federation acts in representation of the local union By the locals disaffiliation, the vinculum that previously bound the two entities was completely severed. ANGLO was divested of all power to act in representation of the local. Note that Art. 232 says the BLR shall not entertain a PCE or any action which may disturb the administration of a duly registered CBA except under Acts 253, and 256 on PCE. This takes the place of PD 1391. But there is one practical problem. There is direct affiliation (you have no independent registration) and there is affiliation by a registered local union. What if you directly affiliated? Note that you have legal personality only due to your affiliation. What if you disaffiliate? You will lose such personality! That means you can't represent your members for collective bargaining purposes, which includes grievance. You have 2 options - affiliate with another federation - register independently. OR you can register even while affiliated. So that is disaffiliation. What about affiliation? If there is no CBA, no problem. You can affiliate with a federation anytime. What is there is a CBA? Litton Mills was a curious case. The President affiliated the union with the federation GATCORD. Only he knew about it. The members and other officers did not. Then he started saying bad things about the union lawyer. So the members questioned the affiliation. The SC said it

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was invalid. There was a CBA which was still unexpired. The application was made 14 months too early. It converted the status of the union as independent to that of a local chapter. This change in status not only affects the identity of the union. It also affects its powers, duties and privileges. Now it will always have to contend with and consult the federation. This is a major modification in status. It violates the rule that no modification of a CBA can be made during its existence. So it seems that while you can disaffiliate during a CBA (subject to the limitations we stated earlier) you cannot affiliate during its lifetime. So that is registration and acquisition of legal personality. What about cancellation of registration on what grounds can it be done? 1. Misrepresentation, false statement or fraud in the adoption of CBL or amendments thereto, minutes, list of participants, etc.... 2. Failure to submit documents relating to CBL adoption/amendment within 30 days from adoption/ratification. Misrepresentation, false statement or fraud as to election of officers, minutes, list of voters Failure to submit these documents (as to elector) list of new officers within 30 days Failure to submit financial report within 30 days from close of fiscal year or misrepresentation in financial statement. Acting as labor contractor, engaging in cabo system or otherwise engaging in any activity prohibited by law. Entering into CBAs which provide for terms and conditions of employment below minimum legal standards. Asking for or accepting attorney's fees or negotiation fees from employers Other than for mandatory activities, checking off special assessments without signed individual written authorizations. 9. 10. Failure to submit list of members 1 years or when required. Failure to maintain registration requirements 11. Failure to observe rights and conditions of membership.

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It seems long but its not that difficult: Adoption or Ratification of CBL - - - - - - - - Election of Officers Submission of Financial Reports - - - - - - - - - Misrepresentation, false statement or fraud

Failure to submit required documents within 30 days List of members - - - - - - - - - - - - - - - - - - - - Failure to submit yearly Maintain regular requirements Non-observance of rights and conditions of membership And the rest: Special assessments checked-off without individual written authorization. Labor-contracting Asking for accepting attorney's or negotiation fees from employer CBAs below minimum standards Suppose you have a CBA which says, "The workers agree to waive minimum wages for a period of 3 years while the company. recovers from its economic crisis." That is a ground for cancellation of registration. Entering into CBAs providing terms and conditions of employment below the minimum. Suppose for CBA negotiations, the management gave union officers a per diem? That is an equivalent of negotiation fees. Suppose they gave them a free cake afterwards?

Maybe not a fee anymore. It is not payment but a gift (it may, however, appear to be interference with right to self-organization) Suppose they credited them with their wages while on negotiation? Valid. That should be treated as part of work. What is a cabo? That is a person or group of persons who, in the guise of a labor organization, supplies workers to an employer with or without monetary or other consideration, whether as agent of the employer or an ostensible independent contractor.

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(ex: At the pier, only members of this union are allowed to get jobs. The union of cargadores at the pier therefore would select who could work as a stevedore and collect corresponding fees from them. The cargadores would end up receiving less than what they should.) It is a situation where the union looks for workers. It is actually operating as a recruitment agency. In the past, this led to abused. The cabos would charge a large % off the salaries. This system allowed labor-only contracting in the guise of unionism. The Code says, "engaging in cabo system, labor-contracting or other prohibited acts, if the union engages in an illegal strike, is that ground for cancellation of reg'n. NO. Ejusdem genesis - acts like labor contracting. Not any illegal act. (Tablante-Tungol v. Noriel) When is cancellation of registration automatic? Failure to submit fin. statements yearly. But note that the IRR says that the BLR process. Meaning, a hearing should first be held. But I would think effects of cancellation will retroact to when the financial statement. should have been submitted. Under EO 180, all government. employees, including those of GOCC's with original charters have the right to organize. They can form, join or assist employees' organizations of their own choosing for the furtherance and protection of their interests. How are government employees' organizations formed? You should register with both the CSC & DOLE. File the application with BLR, (or Reg. Office, which shall forward it to BLR) BLR shall process it in accordance with labor code provisions. When your application is approved, a registration certificate shall be issued. The certificate of registration shall be signed jointly by the CSC & DOLE Chairmen/Secretary. The SC has supervision over all of its employees. So where should an association of court employees register? Still with BLR. BLR is the body which has expertise on these procedures leave it up to them. But as to wages, benefits and other issues, go to SC. We mentioned among the rights of legitimate labor organizations the right to sue.

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In Itogon-Suyoc Mines v. Sangilo-Hagon Workers' Union, the union sued the co. for ULP and illegal dismissal. The CIR ruled in favor of the Union. However, it seems the union reg. had been canceled which cancellation was on appeal. Did this affect their personality to use? NO. When they filed the petition, they had legal personality the cancellation not being final. As status therefore had not yet changed. It still had the rights of a leg. labor organization. Even if it became final, the union could still continue without having to substitute the members in its place. The case was filed ultimately for its members. To dismiss it would be to give way to a mere formality. But what if the decision canceling registration becomes final? Before, the union would lose legal personality immediately and have none of the rights of a legitimate labor organization. It would thus have no right to bargain collectively, go on strike for CBA violations, or the like. Happily, the new rules on labor relations provide that in case the registration is cancelled, the union is given some reasonable time within which to register again. If it does not, then, too bad - it loses personality. But if there is a CBA, its legal personality shall subsist until the expiration of the CBA. Even if not registered,. can the union sue?

Yes any association of persons can sue. Registration is not a prerequisite (Cebu Portland v. CIR, 94 Phil. 509) A Union can therefore file on behalf of its members a collective action such as money claims or ULP. It is understood it is filed on their behalf. Thus, when you have 2 ULP cases filed by the union vs. the co., one concerning dismissal of 2 union officers, the other concerning dismissal of 2 other officers, there is no res judicata there being no identity of parties (or subject matter). But in compromising or withdrawing a case, since it sues on behalf of each individual member, it cannot withdraw without their consent, even if majority agree or the officers agree. Those claims being individual (ULP/money claims), each union member must consent to the compromise personally or by special power of attorney. For example, in Lakas Manggagawa sa Jag and Haggar v. NLRC, the union went on strike. The union was sued for illegal srike. The Arbiter found the strike illegal and ordered dismissal of all officers and some members. A new set of officers was therefore elected. To settle the strike, the union agreed that the officers and members dismissed who were appealing the Arbiters decision, would simply be paid separation pay & financial benefits and the appeal would be dropped. The strikers did not agree. They continued the appeal all the way to the Supreme Court which said, the union could not compromise the case without their consent. Each had his/her own interest in the case. So, in the end, the officers were still ordered dismissed for illegal strike without any separation pay. But the other members were ordered reinstated.

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In short, filing may be done by the union in representation of the workers but withdrawal is their personal right. (Note that even if claims may be different depending on the workers affected, the rules of procedure may be relaxed for purposes of substantial justice. The stricter criteria for class actions - all arising from same cause of action - won't apply). RIGHTS AND CONDITIONS OF MEMBERS When you talk of relations between a union and its members, there are generally laws and rules that shall govern this: 1. Constitution & By-Laws (CBL) 2. Labor Code/ Implementing Rules and Regulations 3. CBA The CBL is the governing law. All disputes should be resolved by referring to the CBL. However, the Labor Code/IRR serve as general rules as to what should be followed. The CBL cannot contradict this. In one case, there was a schism within a federation. There were 2 factions - Oca & Dinglasan. Dinglasan was then President of PTGWO. When the Executive Board was meeting to discuss the mechanics of the next national convention (where there would be an election) nobody could agree on the date. So the meeting was adjourned. Some board members left the conference hall. But there were 19 members who remained. The President was asked to reconvene the meeting. So he did and set the date of the national convention - April. 18. When Oca discovered this, he convened his own group and scheduled another convention earlier - April 4. Dinglasan's group found out about this and rescheduled their convention to April. 4. So on April 4, there were 2 conventions which elected their own set of officers. Dinglasan filed a petition to have Oca's convention declared illegal. The BLR was very solomonic about it and because it saw there was no way to bridge the rift, ordered both groups to secure their own registration - PTGWO -Oca / PTGWO-Dinglasan. The SC said that is wrong. You should look at the CBL first and foremost to determine if the elections were valid. And looking at the CBL, it was violated since.: It requires the President to call the convention - Oca (VP) could not call it on his own. It requires a call 60 days before the election. Neither side waited for 60 days. 3) Neither meeting had a quorum. There is no provision which allows for separate registration. The interim officers must therefore remain until their successors are qualified. (Oca v Trajano) In another case, the union CBL provided that a member suspended or terminated without reasonable cause shall be given financial aid. The funds were derived from monthly deductions from

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wages. So there was a union member dismissed for concealment in his application form (of the fact he had a relative in the company.) He asked for financial assistance the union refused to give it to him because it said he is entitled to aid only if the termination was without just cause. He sued in the BLR. The BLR ordered the union to pay him. The union says you can't do that - it is tantamount to compelling us to disburse the funds without authority of the general membership and to collect from members without individual check-off authorization. The Supreme Court said the CBL is executory. Since the contributions are compulsory, individual authorizations are not necessary. Second, the CBL governs the relations between and among the members. If the terms are clear and leave no doubt, its literal meanings prevail. The union can therefore be ordered to pay. (Johnson & Johnson v Director of Labor Relations, 170 SCRA 469) What are the rights and conditions of membership? You can group into the following what the labor code lists: a) basic rights - fees, fines forfeitures - election of officers - reports of finances - determination of major policy b) obligations of union - admission/membership of subversives - officership of those convicted of crimes involving moral turpitude - labor education c) financial matters - reports of financial transactions collection of fees/funds payment of fees/funds application of union funds officers compensation financial records accounting inspection of books of account levy of special assessment/extraordinary fees) deductions (check-off)special assessment/extraordinary fees BASIC RIGHTS FEES, FINES AND FORFEITURES: No arbitrary or excessive initiation fees shall be required of members. No arbitrary, excessive or oppressive fines & forfeitures shall be imposed. When you talk of initiation fees, you refer to membership fees. When you talk of fines & forfeitures, you refer to penalties. If union officers or members are to be removed or disciplined, the basic rules are: Follow the procedure in the Constitution and by-laws (CBL)

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b) Give him/her a proper hearing (Due Process) In Litton Mills v Ferrer-Calleja, the President of the union, without knowledge of the entire union, affiliated his union with GATCORD. Well, everyone was so angry at him that they decided to impeach him. They signed a document authorizing the VP to impeach him if he continued the affiliation. He continued the affiliation anyway. So the VP sent him a letter accusing of disloyalty and telling him he should appear at the company canteen at a stated date and time to refuse this. He did not. So they continued with the meeting, and he was impeached. The Supreme Court said that was too hasty. They should have given him due opportunity to defend himself. He may have had valid reasons for not going to the meeting at the canteen. At least a 2nd chance should have been given. In Ferrer v NLRC, the union officers expelled (for sowing disunity) a number of union members who tried to expel them. The expelled members learned about it suddenly without any hearing. The Supreme Court said that is wrong. That violated due process. The CBL itself requires due process a hearing. They did not even investigate it. (At any rate, there was no sowing of disunity. They tried to unseat the officers due to inattention to their demands. After they were expelled, only then did they approach another federation) They just acted in self-preservation. In Rance v NLRC, a union member was charged with disloyalty. The Chairman of the Board of Directors filed the charge. It then created a panel composed of the chair and 2 Board members which ordered his expulsion. The Supreme Court said the Board acted as prosecutor, investigator and judge at the same time. Since there was no full-blown investigation by an impartial body, the charges have no basis. This shows they were too hasty in dismissing him - BAD FAITH. There was connivance with the company. 2. ELECTION OF OFFICERS

Suppose the CBL provides for a term of office of 3 years. After the 3rd year, can you file a petition for local election? The law has fixed a 5-year period and the CBL is subject to the law. The purpose of setting it at a 5-year term is apparently to coincide with the 5-year term in CBA. The rationale seems to be 3 years (the previous term) was too short. During the 1st and 3rd years, they were too busy with the local elections.

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In one union, for example, they had a local election. They gathered all the union members in the cafeteria, asked for nominations for the different positions. Then they voted by raising of hands and proclaimed the winners. Valid? NO. The local election must be by secret ballot. Suppose you had a federation. They invited the officers of each local chapter and conducted an election of national officers. Valid? The law requires direct election - all members have the right to elect their officers. That means you should have elections conducted in all companies where there are locals. What if the union COMELEC says, "only members of the federation who have been members for 10-years can run for national office"? NOT VALID. No qualification other than membership in good standing can be imposed. Tancinco v Ferrer-Calleja: In one local election, a number of employees were allowed to vote. (These were office staff, INK members, non-time card employees and company drivers). However, the national secretary of the federation segregated their votes. The Med-Arbiter said they are not qualified since their names do not appear on the list of members of the union submitted to the BLR. The SC said the non-appearance in that list does not mean you cannot vote in a local election. Over double of those listed voted. If the list is the basis, 175 votes should also have been excluded. So how do we know who can vote? We will base it on the: Payroll Employee's status in the case of those excluded, the fact that they were qualified for membership AND voted during the election, that shows their intent to join. They are therefore, ipso facto, members. Under election law, you have what they call failure of election if it is attended by massive fraud and terrorism. In Rodriguez v BLR, the local elections were held at the wrong date, they were held in violation of the ground rules, it was conducted hastily without safeguards to ensure integrity in voting and no notice of dates of balloting. The Supreme Court said the elections were void. Free and honest elections are indispensable if workers are to enjoy the right to vote. NOTE that after the elections, the Secretary of the union must furnish the Secretary of Labor a list of those elected within 30 calendar days. 3. REPORTS OF FINANCES: All members are entitled to full and detailed report of all financial transactions. If you think the officers are squandering union money, you can invoke it. For example, you heard the Union President is going on a vacation to U.S. You realize he is just a

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minimum wage earner. What is one way of investigating without raising a big fuss? Very innocently, you ask if you can see the financial reports. If they refuse to show the reports to you, you can file a complaint for violation of rights. 4. DECISIONS ON MAJOR POLICY MATTERS:

How are decisions made in unions? Generally by the union officers. For example, they decide to schedule the Union socials next week. Or they decide to invest union funds in the stock market. Suppose they decide to hire a retained lawyer. Can the officers alone make that decision?

NO. The SC, in Halili v. CIR, said that is a question of major policy affecting the entire membership. Why is it of major policy? He will be handling all your legal concerns. You will pay a substantial sum every year. Why does it affect the entire membership? Of course, if you have a case, he is the lawyer your union will provide. So the retainership of a lawyer and deciding who it will be are questions of major policy affecting the entire membership. In such a case, can the officers have the members sign a resolution agreeing to retain the lawyer? NO. The members must decide by means of secret balloting at a general membership assembly called for the purpose. They must hold the vote after the members have had due deliberation. What about affiliation with a federation? It is a question of major policy affecting entire membership (Litton Mills v. Ferrer-Calleja). Exceptions: When the nature of the organization or force majeure renders such ballot impractical. In such case, the Board of Directors may make the decision. Example: The company temporarily shuts down and you need a decision on an urgent matter, such as hiring a lawyer for a big ULP case. Or suppose your union is spread out all over the Philippines. It would be impractical to expect that you immediately convene them for a general assembly. It is too costly. OBLIGATIONS OF THE UNION

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1. Labor Education- It must provide labor education for its members on the CBL, the CBA and the labor code. So note, if the union does not provide for such education, that is a ground for cancellation of registration or expulsion. (So what other unions do, since the DOLE has a fund for this, they make a proposal, get the funds, have an excursion in some beach and there - they have a seminar. How about the DOLE? They probably will invite someone to lecture one or two hours.) 2. Officership: No one convicted of a crime involving moral turpitude shall be elected or appointed as union officer. Can someone convicted a violation of B.P. 22 be union officer?

That is not a necessarily a crime involving moral turpitude. It refers to mere issuance of a bouncing check.. It does not necessarily involve moral depravity. Can Jalosjos, if he is released on bail and works in a company, be elected Public Relations Officer of the union? YES. He has not yet been convicted. What if he were convicted? And lets say he was released on parole (for some reason or another). May he become a member? Become a member - YES. Become an officer - NO. Membership is open even to convicts. But it is closed to subversives. The prohibition is only against becoming an officer. In short, we don't trust him - he should not b e allowed to lead. 3. Membership: No union shall knowingly admit as member anyone engaged in subversive activities or one belonging to a subversive organization (one which seeks to overthrow government by violent means). What is the effect of the repeal of the anti-subversion law on this? Nothing, it seems it is not subject to criminal prosecution but the ban on unionization remains. Note the law says "Knowingly admit as member". So if you only discovered about it later, can you say. "There's nothing I can do, I did not know of it"! But the law also prohibits knowingly allowing him to continue in membership. FINANCIAL MATTERS: WHO MAY COLLECT?WHAT MAY BE COLLECTED?HOW MAY IT BE COLLECTED?

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CollectionsOfficer, agent or member authorized pursuant to CBLspecial assess-ments, extra-ordinary fees authorized by majority resolution fees, dues and contributionsFor special assessments and extra-ordinary fees, if you want to check- off, you need: an individual written authori-zation signed by the employee stating the amount, purpose and beneficiary (This is not needed for mandatory activities such as labor education seminars) Payment: Officer gives receipt, signs it and enters the same into the records Recording: It must have a record showing the source Expendit-ures and Disburse-mentsOfficer, agent or member authorized pursuant to CBLpurpose: those expressly pro-vided by the CBL or by a majority resolution For compen-sation of officers, that allowed in the CBL or by a majority resolutionGet receipt from payee State the date, name, place and purpose This forms part of the financial records Special assessments are payments collected from union members other than regular impositions, such as union dues. example : union defense fund collection for termination benefits collection for union socials

It needs a (1) written resolution by a (2) majority of all members (3) arrived at a general membership assembly duly called for the purpose. In that meeting the secretary shall record the minutes. He or she shall include the list of members, votes cast and purpose, as well as recipient of the fees. The president shall attest to that record. That is the requirement for imposing a special assessment. What about if I want to collect it. Can I check it off? No special assessments, attorney's fees, negotiation. fees or other extraordinary fees may be checked off without signed individual authorizations - these must state the amount, purpose and beneficiary. (You think this is irrelevant and tedious to memorize? Wait till you see what happens to the union if all of these are not followed.) Note - a written resolution is needed to impose special assessment. - an individual written authorization is needed to check-off - Financial Reports must be made by officer in charge of funds: 1) once a year within 30 days from close of calendar year 2) other times as required by majority resolution

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3) upon vacating office It is detailed - it must state : moneys paid and received balance remaining properties under his custody/control These must be audited, verified and submitted to the Secretary of Labor. - Rights of members vis--vis the records 1) Full and detailed report of all financial transactions 2) Inspect books of accounts or financial records during office hours. 3) File action involving union funds: This is what they call a petition for audit of union funds. It prescribes 3 years from submission of the Financial Report to DOLE or when it was due whichever is earlier. Note the limitations on this petition for audit: It must be: a) Supported by 20% of total membership (they must sign it) b) It can't. be conducted during freedom period c) Can't be conducted 30 days prior to local election The purpose is to guard against harassment of union officers. That is Art. 274 on the Visitorial Power of the Secretary over union finances. - Suppose someone in the union dies. A generous member goes around collecting money to give the member. That collection not authorized by the CBL. Valid? Of course. It is not on behalf of the union. - Suppose at a meeting, the Executive Committee of the union all agree to give themselves per diems. Valid? NO. No additional compensation is allowed which is not authorized by the CBL or majority resolution. Suppose the union checks-off seminar fees for seminars for its members on the labor code. Can the members complain if they did not give any individual check-off authorization? NO. That is a mandatory activity. If you do not do it, you can be impeached or the union registration canceled. The SC, in applying this to impositions of the union on members, has been very strict. You have to comply with that to the letter. For example, the law says the special assessments can only be those stated in a resolution adopted by majority at a general membership assembly.

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Suppose they conducted 3 local meetings instead of one general membership assembly? Not valid. The law says A general membership meeting. (It is in the singular.) Suppose the minutes of the meeting where the assessment was made was simply a piece of paper prepared by the union secretary. Invalid assessment. It must be certified to by the secretary and attested to by the President. (Palacol vs. Ferrer-Calleja) The SC has been very strict in upholding the validity of special assessments.

But in RCPI v. Secretary of Labor it was different. In that case, a federation, FUR, helped a local union win in opposing a petition for exemption from minimum wage. Then, the local disaffiliated and joined NFL. NFL entered into a compromise agreement with RCPI. Now here comes FUR and it asks for its 10% attorney's fees. NFL says, you can't get that! There was no individual authorization. All we had was a compromise agreement signed collectively (not individually) providing for payment of the attorneys fees by way of deduction from the award. Did the SC agree with NFL? No. It was lax in this case. They said the purpose is to protect workers from unwarranted practices that diminish their compensation without their knowledge and consent. That was met when the employees gave their consent through the compromise agreement. So why did the SC say that substantial compliance is enough here, when in Palacol v. FerrerCalleja, they said it is not enough? Palacol involved impositions of a union on its members. It could collect funds by means other than special assessments. The assessments in that case were so controversial that majority withdrew whatever authorization they had given in the meeting (when they signed the minutes). In RCPI v. Sec. of Labor, it was a "lawyer" or counsel seeking payment. If the assessment was not upheld, there was no way it could collect except by suing the union. Secondly, there was not doubt about the agreement by all to pay the 10%. You should also look at the circumstances. Check-offs: This is a method of deducting from an employee's pay at a prescribed period, the amounts due the union for fees, fines and assessments. Imagine how difficult for a union it would be without this. They would have to individually approach each and every member to collect their dues. Does the employee have to consent to this? In AL Ammen v. Bicol Trans. Employees Mutual Association, 1952, the SC said no. It's enough the employees give authority in writing.

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The law is very particular Suppose the authorization was like this: "We authorize check off of an amount to be decided by the union. Valid? No. It must state the amount, purpose and beneficiary.

Suppose it is attached to a list of signatory members? Wrong. It must be an individual authorization to ensure you get their knowledge and consent.

SANCTIONS What happens if these are violated? > Cancellation of registration or expulsion from office, whichever is appropriate.

Note the Litton Mills case, the SC said the union President should have been given ample opportunity to refute the charges, Instead, they expelled him after giving only one chance. Likewise, the CBA governs as to the procedure for impeachment. At the very least, they should have shown substantial compliance with it by giving him more than one opportunity. Before going to the BLR to complain about this, you have to exhaust intra-union remedies. That means if the CBL provides for a venue, go through that. But the rule of exhaustion of intraunion remedies will not apply if it would be futile. For example, the CBL says if you have a protest over results of local union elections, file it with the Union Board of Inquiry. There was a local election. You protested. But you did not know where to file it since the Board of Directors refused to approve the Board of Inquiry. They were afraid they would be the first to be investigated. Since the Board of Inquiry was unable to function, you did not have to wait for it and could go directly to BLR. (Villar v. Trajano) Art. 241 says you can file a petition/complaint with the BLR. At least 30% of all members or any members specially concerned may report the violation. Suppose you were expelled from the union. They expelled you because they all hated you. You kept asking such stupid questions during meetings. You have no friend to support your complaint. Can you go ahead and file it anyway? Yes. You are a member specially concerned (you were the one expelled). What if you are not specially concerned? There is a CBL violation (for example, there has been no local election in 7 years). But you can only get 20% of the union members to sign. Everyone is afraid. Can it prosper? Yes! The lack of 30% support will not stop BLR from giving it due course if there is a clear violation of the rights and conditions of membership. The 30% requirement is not mandatory. Art 242

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says: A report of violations MAY be made by at least 30% of all members or any member specially concerned. The word 'MAY" means the 30% is not mandatory. Further, Art. 226 gives BLR power to act on inter & intra-union conflicts a) UPON request of either or both parties, or b) AT ITS OWN INITIATIVE. It therefore has the discretion to determine whether or not to entertain it IF it is supported by less than 30%. So, the BLR has no discretion and HAS TO ENTERTAIN IT IF: 1) It is supported by 30%, OR The complainant is a member specially concerned by the violation (Rodriguez vs. BLR). WHO CAN JOIN UNIONS? First, you must be an employee if your want to join a union for purposes of collective bargaining or dealing with the employer concerning terms and conditions of employment. Who is an employee? We all know the tests. If you are an employee, on the 1st day of employment, you can join the union. a) Let's talk about the different types of employees we discussed before. Managerial Employees - They are prohibited due to conflict of interest. A managerial employee is one vested with powers to: 1. 2. employees. For example, a branch manager of a bank. Is he managerial? In NATU-RPB v DOLE, the SC said the manager's duties are to discharge his functions and authority guided by prudence and sound judgment IN ACCORDANCE with policies of the Board and implemented by management. He therefore does not participate in policy-determination but is given established policies to execute and standard practices to observe. He has little discretion. The fact that memos were issued to them on specific rules and guidelines to implement shows they do not formulate and implement plans. Nor do they have power to hire and fire. It is not the title, but the functions, that control. b) Supervisory Employees - they can join unions but not of the rank-and-file. A supervisory employee is one who, in the interest of the employer, effectively recommends such managerial actions if the exercise of such authority is not merely routinary or clerical but requires of independent judgment. lay down or execute management policies, or hire, transfer, suspend, lay-off, recall, discharge, assign or discipline

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All others are rank-and-file. As we discussed earlier, if your recommendations are still subject to review and approval by higher authority, then that is not effective recommendation. You are only rank and file. Atlas Lithographic Services v Laguesma: Can a supervisory union in Atlas Lithographic join the same federation which the rank and file union in the company has joined? The old case there is Adamson and Adamson which said there is no prohibition. They exist as separate and independent unions. But in the Atlas Lithographic case. The SC said they cannot since the law says they cannot join the same labor organization as the rank and file federation included. Why? There is a conflict of interest. Supervisors cannot join the same union as rank-and-file since they have recommendatory functions more identified with the employer's interests. These run against the rank-and-file interests. There can therefore be problems in discipline, collective bargaining and strikes if we let them join the union. They may refuse to discipline rank-and-file employees. They have different interests in collective bargaining. In case of strike, they might engage in a sympathy strike. This was odd. Notably, Adamson and Adamson was written by the same ponente. The Supreme Courts explanation was: There is a substantial difference between the two cases. In Adamson and Adamson, the rank-and-file there were NOT under the supervision of the supervisors. The federation also did not actively represent the workers. There was thus no danger of a conflict of interest. So supervisors can't affiliate with the same federation where the rank-and-file are affiliated provided: 1. The rank-and-file come from the same company; and 2. The rank-and-file are under their supervision. c) Confidential Employees Who are these? They are employees entrusted with confidence on delicate matters, or with the custody, handling or care and protection of the employer's property. Examples - Cashiers, controllers, Secretary of CEO, Gen. Management Staff, Accountants, Vault-keeper, Personnel Staff, Telex operators, Service Engineers. They have access to confidential information which would be dangerous in the wrong hands. Can they unionize?

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In NATU-RPB v Torres, the SC said NO. Art. 245 only singles out managerial employees when it bans unionization. But under the doctrine of necessary implication, confidentials are also disqualified. (What is implied in a law is as much a part thereof as that which is expressed) What's the rationale? If they join a union, management is not assured of their loyalty. They will be beholden to 2 masters. There is a conflict of interest. During collective bargaining, they have access to confidential information. They could sabotage company operations. Secondly, they might dominate the union, being of higher educational attainment. Since they are management representatives, the union can become company-dominated. Before, the SC would flip-flop on this issue. But this has been more recently affirmed. Pier 8 Arrastre & Stevedoring v Confesor (Feb. 13, 1995) affirmed the NATU-RPB ruling in holding that legal secretaries who type legal documents, memoranda and correspondence, keep records and files and give and receive notices, are confidential employees. They can act as spies for the union. d) Security guards: They can unionize. EO 111 allowed them to do so. Book V, Rule 2, Sec. 1 of the old IRR had a provision prohibiting them from joining the rank-and-file union. But the SC said since EO 111 eliminated the prohibition against them and RA 6715, when it reenacted Art 245, did not exclude them from membership in a rank-and-file union, the IRR, in excluding them, are not germane to the object of the law and therefore null and void. The SC said, you may be afraid that they will have divided loyalties, esp. in case of a strike. But you'll have to wait for an amendment there. (This ruling has been incorporated in the new rules.) For example, Ateneo contracts with Jaguar Security. The agency assigns 10 security guards to Ateneo. Can the guards join the union of rank-and-file? NO. They have a different employer. BUT if, they were Ateneo employees, they could. e) Iglesia Ni Kristo members: In the Victoriano v Elizalde Rope Worker's Union case, the SC said you cannot use the union security clause to compel them to become union members. Otherwise, you would be violating free exercise of religion. INK members cannot join unions for religious reasons (the doctrine seems to be you cannot have divided loyalties. Your loyalty is to the INK). So some employers have taken it to hire all INK members. Malas nila, in some cases, nagunyon tuloy sila. (I think the doctrine also says if you are all INK members, you can form a union. In that case, there will be no problem as to division of loyalties since you are all INK members) Are they prohibited from forming the union? NO. While they are protected against compulsory unionization by free exercise of religion. They are also protected by the right to self-organization.

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f) Members of cooperatives: Can they join a union in the cooperative in which they are a member? NO. The right to collective bargaining is not available to an employee of a cooperative who is at the same time, a member and co-owner. The reason is you cannot bargain with yourself, or your co-owners. But you know how it goes with electric coops. If you live in a certain area, to avail of its services, you must be a member. But actually, you have no effective participation in its affairs. In Benguet Electric Coop. v. Ferrer-Calleja, the union of cooperative employee-members said that "Our membership is only nominal. We do not participate in management!" The SC said that does not matter. The reason behind the prohibition is ownership - you can't bargain with yourself - not management. (NOTE: The Supreme Court said you cant apply this ruling to a corporation. It is different in a cooperative, the members have privileges different from stockholders of a corporation: 1) 2) 3) Members run the business irrespective of number of shares (1 vote/member) Share capital earns limited interest Preferential right to supply products to state agencies.)

What can the members do therefore, if they want to unionize? In CENECO v Sec. of Labor, they thought, we have no participation in management, we get minimal benefits, so let's all resign! CENECO said you can't form a union that way! That's an indirect violation of the rule. The Supreme Court said "of course not!" That is their right - whether or not they will remain members. g) Government Employees The constitution explicitly grants them the right to self-organization. What is the rationale behind this? 1. The government is the biggest employer in the country There has been unfairness in treatment (public employees get no wage increases while private sector employees do) 3. The union can best serve their interests in the following manner: forum for professional and self-development watchdog vs graft and corruption (Tupas v NHC) Further, not all government employees can unionize. The following are prohibited: members of AFP police officers jail guards

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firemen

In addition, high-level employees whose functions are normally considered (1) policy-making or managerial or (2) whose duties are of a highly confidential nature cannot join the organization of rank and file employees. When you talk of government employees in government owned or controlled corporation (GOCCs) you have to distinguish.. Executive Order No. 180 limits itself to GOCCs with original charters, meaning a special law was passed in order to create the GOCC. If the GOCC was created under the corporation code, meaning it has no charter, it is the labor code that will apply. When you talk about a general law, what do you mean by that? Davao City Water District v Civil Service Commission: P.D. 198, or the Provincial Water Utilities Act of 1973, authorized each local sanggunian to create their own water districts through a resolution which would comply with guidelines under the law. The question was, if a union was formed under these water districts, would they be under EO 180 or the labor code? The Supreme Court said the water districts are government-owned or controlled corporations with original charter. PD 198 is a special law - it applies only to water districts. It pertains only to a particular purpose. Just because it applies to all water districts does not change the fact that it is a special law. In short, when Executive Order 180 refers to GOCCs created under general law, the general law referred to is the Corporation Code. As a matter of fact, the law prescribes all the terms which the ordinances creating the water district must contain: numbers and qualifications of the Board manner of their appointment and qualification manner of filling up vacancies compensation and personal liabilities

These are the provisions we will find in corporation charters. PD 198 is, in fact, the charter of the different districts! Government employees have other options aside from forming employees' organizations labor-management committees work councils other forms of workers' participation schemes

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But not all employees of government can unionize, even assuming that you are not within the excluded occupations/positions. High-level employees are not allowed to join the union of rank and file employees, the law says. What is a high-level employee?

One whose function is normally considered policy-determining, managerial, or one whose duties are highly confidential. He will be deemed exercising managerial functions if he: 1. 2. 3. formulates and executes management policies and decisions hires, transfers, suspends, lays-off, discharges, assigns, disciplines employees, or effectively recommends such actions

In short, the same restrictions as to managerial and confidential employees in the private sector applies. UP v Ferrer-Calleja: There were professors, associate professors and assistant professors in UP. The question was could they join an employees organization? UP said no, since they performed supervisory functions - they could effectively recommend termination or appointment . As part of the University council, they could initiate policies and rules as to faculty tenure and promotion. The Supreme Court said they are not supervisory: While they do sit in the council, their council functions were purely recommendatory - subject to review and evaluation by the Academic Personnel Board. They were therefore not effective nor an exercise of independent judgment. The recommendations of the APC should also conform to the general guidelines drawn up by the UP APC. Therefore, they were given ready policies to execute and standard practices to observe - little freedom of action (little discretion). This is an earmark of non-supervisory status. Whatever power of discipline the councils had was subject to limits of the Board of Regent's Rules of Discipline. They are subject to review, evaluation and final action by the Board of Regents and to the limits in the Rules of Discipline. It was therefore NOT effective. It is true they had some policy-determining functions. But also, more importantly, the Supreme Court said, even if the professors had policydetermining functions through the council, these policy-determining functions referred to academic matters (between UP and the students, not UP and its staff). They would not be the policy-determining matters contemplated by Executive Order 180. Since that law deals with public sector unionism, "policy-determining" can only mean matters that may be subject of negotiation between public sector management (UP Administration) and labor. The reason is it is a test to ensure that those who lay down policies in areas which are negotiable do not themselves become employees who will seek to change them for their collective welfare. There should be conflict of interest. So therefore, what would be examples of policy-determining matters?

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One who has the power to assign employees, or supervise them, or determine leave schedules, or benefits. Note that the law does not refer to their associations as labor organizations. It uses the term "employees' organizations " for furtherance and protection of their interests. Is there any difference? Actually, no, a labor organization is one formed for purposes of collective bargaining or dealing with the employer concerning terms and conditions of employment. That is actually what government unions do, but to a limited extent. They have some substantial differences from unions in the private sector: 1. 2. Registration - registered with both CSC and DOLE. Benefits negotiable - they can bargain only as to terms and conditions that are not fixed by law Therefore, they cannot bargain as to: to: scheduling of leaves work assignment of pregnant women commission systems personnel growth facilities for disabled (which law required) measures for protection and safety salary increases facilities requiring capital outlays travel expense reimbursement retirement benefits

All of these entail a disbursement of public funds which needs a law. But they can bargain as

3. Rights to strike - this is governed by the Civil Service Law, which now, prohibits strikes in the government service. 4. Settlement of Disputes - either go to CSC or the Public Service Labor Management Council, which is charged with implementing and administering Executive Order 180. Note also that there are similar protective measures vs. management interference with the right to unionize: No discrimination due to membership in the employees' organization No yellow-dog contract: They cannot make a condition to their employment, their resignation from the union. No interference which is designed to place the union under the control of government authority.

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One final note, under Policy Instructions No. 20 on workers in the construction industry , construction workers were prohibited to join unions. Instead, they were encouraged to form unions along industry lines. This prohibition, of course, was contrary to law and the constitution which did not provide for any such prohibition. At any rate, under DOLE Department Order No. 19, s. 1993, this prohibition is no longer stated, but the exhortation to form unions along industry lines is still present. In practice, however, except for firm-based construction workers (those in a large construction company, such as F. F. Cruz, PNCC, etc) it is difficult to form unions among construction workers since one project may have several contractors and sub-contractors. The entire project will thus be split up into small units which are impractical to unionize.

XIV UNFAIR LABOR PRACTICES Essentially, ULP is a measure to protect the right to self-organization. In concept, it is sought to be prevented because: 1. It violates security of tenure 2. It is inimical to labor and management's interests, including the right to bargain collectively and deal with each other in ann atmosphere of freedom and mutual respect 3. It disrupts industrial peace 4. It hinders the promotion of healthy and stable labor-management relations That is why it is both an administrative/civil and criminal act.

You can file a criminal case based on ULP provided you first get a final judgment in a labor case declaring ULP to have been committed. You can ask for injunctive relief and damages in the labor court. If you win the criminal case, you can hold liable the officers or agents of the company or the union which participated in it, or authorized or ratified the ULP.

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For example, the company hires a lawyer. It tells the lawyer a union has been formed inside it. It says do something! So the lawyer contracts a fly-by-night federation which organizes a union and opposes the union. Is that ULP? Of course, - company unionism. Who can you charge criminally? The company officers and the lawyers. Both officers and AGENTS may be held liable. We said that ULP is violative of the right to security of tenure. In line with that, what acts of ULP deal directly with security of tenure? ICRID (I Cannot Read In the Dark) 1) Interfere with, restrain or coerce employees inn the exercise of the right to selforganization. This is the catch-all clause. If it's not in the others, you can find it here. Some general manifestations: a) carrot approach - I soften your resolve to form a union or to oppose employee practices by offering you benefits or favorable terms and conditions. ex.file union. I promote all union officers to supervisory position so they cannot join the rank and

When I discover a union has been formed, I raise wages and give bonuses to all so they will not unionize anymore. b) Stick approach - I scare you out of your idea to form a union; or I beat you up so you will not be able to unionize. This is more common. ex.c) sisters. and abandon it. Restraint therefore, may be economic, physical or phsycological. (It's OK if the motive is sincere without intent to prevent unionization) I promote the formation of another union I delay your petition for certification election so you will get tired of waiting I dismiss all officers. I hire goons to beat you all up, or destroy the union office. I close down the department where the union is strongest. I deprive you of certain benefits which I used to give you. I call a meeting and curse all of you.

Psy-war - I confuse you. Divide and rule. ex.I conduct prayer sessions so you won't fight me since se are all brothers and

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There is a general rule, in determining whether or not ULP has been committed. In the case of Insular Life Assurance Company Employees Association vs. Insular Life, they employed the "Totality of Conduct Doctrine". What does that mean? While some acts by management may be innocent when taken on their own, in an isolated sense, you should apply and evaluate them against the collateral circumstances. For example, a mere expression of an opinion ("Many union leaders are only out for union dues") may sound innocent. But if we look at the: 1) 2) 3) circumstances under which they were made; history of labor relations (e.g. there is an anti-union bias); or their connection with an established or collateral plan of coercion or interference, these may become culpable. For example, in the insular life case, the company offered Xmas bonuses to loyal employees. That was ULP - that was done after the union made a request to bargain. Likewise, wage increases were given. That was ULP - it was done after the company had refused to bargain. In Philippine Steam Navigation Co. v Philippine Marine Officers Guild, the company supervisors said on separate occasions that union leaders were "money-asking" and that the other union being formed was a good union. Since these statements were made after the union had been organized and had demanded collective bargaining, there was an obvious intent to interfere with the unionization. They may seem like harmless expressions of opinion but, under the circumstances, it amounted to support of the other union's membership campaign. In another case, there was this union organized. The officers got into a fight with 2 newlyhired workers and they were therefore dismissed. But when the Supreme Court looked at all the circumstances, they said, how suspicious: union He also warned the union officers, if they did not withdraw from this federation they were affiliating with, he would take steps to dismiss them. These 2 employees they fought with were hired only that week! The 2 officers had never violated the CRR No investigation was conducted by the company The manager said they dismissed one officer since he was a hard-headed leader of the

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Under those circumstance, it is clear they were dismissed because of their being union officers. This is interference, restraint and coercion against the right to self organization and discrimination as to tenure. (Visayan Bicycle Mfg. Co. v NLU) Another example:

You are a manager of a company. You invite an employee over for some coffee. You start discussing about life and all its problems. They you ask, eventually, mag-uunyon daw kayo?" That, in itself is innocent. But if it is repeated with others and there is a clear plan to spy on the union, that is interference in the right to self-organization. In short, under the totality of conduct doctrine, you will read the act together with the attendant circumstances and see if it tends to interfere with free exercise of the right to selforganization. 2. To contract out services or functions being performed by union members when this would interfere with, restrain or coerce employees in the exercise of their rights to selforganization. For example, the union membership is concentrated in one department of the company. Let us say the maintenance department. During collective bargaining negotiations, when the parties are nearing a deadlock, the company contracts out maintenance work to an agency. 3. To require, as a condition of employment, that a person or employee shall not join a labor organization or withdraw from one to which he belongs. This is what you call a yellow-dog contract. That contract is void.

4. To initiate, dominate or assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to its, its organizations, or supporters. This is company-unionism. A company-union (or company-dominated union) is one whose formation or administration was initiated, dominated or assisted by the employer. Ex. - You are organizing a union in a company. The company therefore contracts another federation to organize in the company or it helps form another union. Another example - All employees are forced to join a union in a particular company. The election of officers is attended by management. When employees were retrenched, no members of such union were dismissed but those of a rival union were. (Oceanic Air Products vs CIR, 61 OG 7684) The company gives gifts left and right to the company officers. So the officers do not want to oppose it anymore. For example, you are forming a union. Before the union can be organized and

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registered, I terminate you. You charge me with ULP. Can I claim - how can there be ULP? There was still no union to speak of? NO. That is ULP - Interference/restraint with right to self-organization. Initiate, dominate or otherwise interfere with formation or administration of any labor organization. An example of this would be if I terminated you due to your organizing activities. Connected to this is what they call a "sweetheart contract". That is a CBA where the employer does not give benefits above what the law requires. Kunwari, nag-CBA pa sila. Halos wala ring nakuha. "Sweetheart" since management and union are actually united in interest. Note the support may be financial or other. Moral support is included.

5. To discriminate with regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. Ex. - I have newly-hired employees fight with you (an officer of the union) inside company premises so I can make it appear you did violent acts inside the company. Then I dismiss you. I would be discriminating against you with respect to tenurial matters. Another example, Manila Hotel gave Xmas bonus and salary adjustments to all its employees. I had 3 units: Manila Hotel, Pines Hotel and Taal Vista Lodge. The company gave profit sharing in the following ratio: Manila Hotel - 50%, Pines Hotel - 25%, Taal Vista - 25%

The Supreme Court said this is discriminatory. The effect of that is the Pines Hotel employees, who were the most numerous, received the lowest bonus. This was odd, since there was a union in Pines Hotel and none in Manila Hotel and Taal Vista. Secondly, the employees in Manila Hotel received the most despite being only around 1 year in employment and Manila Hotel was not operated, but only leased out by the corporation. Second, the wage adjustment was not given to all. No one in Pines hotel received an adjustment. It was making money. On the other hand, the workers in Taal Vista Lodge received bonuses even if it was losing money. Another example: If you remember the Wise and Co. case, this concerned profit-sharing payments given to supervisory employees. The rank and file union said that was discriminatory. The Supreme Court said no, since there was a substantial distinction - they were not covered by the CBA and did not receive its benefits. That was covered by management prerogative.

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Let's try some questions:

- The employer hears that a union is being organized. So it calls each worker one by one and asks, "mag-uunyon ba kayo? Bakit? Hindi ba kayo masaya sa kumpanya? Is that ULP? Yes. The fact that he calls them one by one shows an intent to discourage unionism. The General manager, during one drinking session with employees, says, "My experience with unions is that they always ask for too much!" That, in itself, is not ULP. It is a mere expression of opinion. If it was coupled with other antiunion acts, it could be treated as ULP. After a strike, the company forms a committee to screen workers to be readmitted. They deny readmission only to those active in the strike and the committee, it turns out, is manned by the supervisors and managers who figured in a fight with the striking workers. Obviously, there is ULP - discrimination in readmission vs. strike participation (Insular Life Assurance Co. Employees Union v Insular Life). In the same manner, if a union, after having gone on strike, decides to abandon the strike without any conditions, then, the employer refuses to readmit them unless they agree to reapply and submit requirements such as police clearances, that is ULP. They are discriminated against due to their participation in the strike. (Cromwell Commercial Employees and Laborers Union vs. CIR, Sept. 30, 1964) Other examples of ULP:

Dismissal of employees after a petition for direct certification had been filed. A notice of closure was filed but the company never actually closed. Its export division continued to operate even if the workers were laid off. (UFW vs. NLRC, March 23, 1992) During the lifetime of a CBA, a family corporation shuts down and the stockholders form two new corporations in the same line of business. They then absorb in the new companies all employees who were not members of the union. (Aronson & Co. vs. ALU, July 9, 1971) Where the president of the Supervisors Union of a bank sits in the Board of Directors, due to his union position, then, during one board meeting, questions entrusting the management of the banks provident fund (partly derived from union funds) to the bank managers. He questions the scruples of the managers, during such meeting (. . . for the bank to appoint a man as trustee when his records shows that his salary was under garnishment, definitely, the intention of the bank is to appoint unscrupulous people. Because of this, he was dimissed. The SC said when he spoke before the board, that was a privileged communication. Even more, since he sat on the board as union president, his protests could even be treated as union activity. The provident fund arose due to a CBA provision. His acts were an exercise of the right to self-organization and to dismiss him for protecting these interests. (Union of Supervisors (R.B. NATU vs. Secretary of Labor, Nov. 12, 1981)

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It is not discrimination, however, to impose a union security clause. What was that? That is a provision in a CBA requiring membership in the collective bargaining agent as a condition of continued employment. It is a measure to protect the workers collectively. It is best if they be unified during the term of the CBA so that they can best protect their interests, instead of letting the employer use divide and rule tactics. It redounds to the benefit of the employees as it builds group solidarity. What are the more common examples of union security clauses? CLOSED SHOP Immediate membership is required if you want to remain employed

UNION SHOP All workers are gives some time to join. But by the end of that period, if they still have not joined, they can be dismissed. There are several types of unions shop: MODIFIED UNION SHOP - All new employees do not have to join immediately but are given a period of time to join. Existing employees are not required to join. PERCENTAGE UNION SHOP - The employer agrees that a percentage of the bargaining unit shall be required to join the union. Once that is met, the provision is complied with. MAINTENANCE OF MEMBERSHIP - If you are a member, you must remain a member during the term of the CBA In contrast to these is the OPEN SHOP - The employer gives preference to members of the bargaining agent in filling up of vacancies, retention, non-dismissal in case of lay-off. AGENCY SHOP the CBA benefits The non-members are assessed a fee equivalent to union dues if they avail of

Suppose you have a closed-shop provision in your CBA. Your CBA took effect today.

X is an employee of the company. He was hired over a year ago and joined another union. Can you use the closed shop to force him to join your union? NO. The union security clause cannot apply to those who were already members of another union before the CBA was executed. Otherwise, it would go against their right to self-organization. It would also make impossible a CE, since no one could form a new union. (Santos-Juat vs. CIR, 15 SCRA 391; Freeman Shirt Manufacturing Co. vs. CIR, 1 SCRA 383) - But for those members of the bargaining unit who are not yet members of any union, you can force them. (Santos-Juat v CIR). The reckoning point is when was the CBA executed, not when was it to be made effective. Note that CBAs may be retroactive. For example, we sign today, but want the effects to have started 2 months ago. That means since we are entitled to whatever wage increase are provided in the CBA two months ago, we can demand for a lump-sum payment of these back wage increases.

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Suppose the CBA also has a union security clause - a closed shop agreement. You were hired 2 months ago. One month ago, you joined Union X. Can I force you to join my union since, when the CBA took effect, you were not yet a union member? NO. The point is when the CBA was agreed upon, there is no way you could be sure of that clause when you joined. It cannot prejudice you by retroactive application. What if X is laid-off? He is paid separation pay. A few months later, the company reopens his position and he is rehired. Can you force him to join your union? YES. Now he stands on equal footing with any newly-hired worker. (ICAWO v Bautista, 1963). How should you interpret ambiguities in a union security clause?

Strictly against employee termination. As much as possible, we don't want to dismiss anyone. So strong is the effect of this type of provision on employee's rights to security of tenure that we just can't treat it lightly. For example, the CBA says: "All members of the union shall remain members for the duration of this agreement." You resigned from the union during the term of the CBA. Can I ask for your dismissal? NO. Nowhere does it say maintenance of membership is a condition of continuous employment. Likewise, suppose the CBA provided that: The Company shall have in its employ and continue to employ members in good standing of the union. If you resign during the life of the CBA, can you be dismissed? NO. It did not say you must retain membership in good standing. (Rizal labor Union vs. Rizal Cement Co. , July 30, 1966) The stipulation, to be effective, must be so clear as to leave no room for doubt. The effect is so harsh it must be strictly construed. Due to a closed-shop provision, the admission and disciplinary policies of a union become affected with public interest. So the government will inquire into such actions. (Salunga v CIR). Can I enforce the union security clause during the freedom period (60 days before expiration of the CBA)? NO. That's why it's called the freedom period. The parties are free to join other unions. Otherwise, we will have a perpetual bargaining agent. But suppose, the freedom period expires, and no PCE has been filed, can I enforce it?

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YES. Since the purpose of such a provision is to build/promote group solidarity for better administration of the CBA and since the CBA is deemed automatically renewed. Who is liable, in case a union member is expelled without just cause and the company dismisses him? Who must pay the damages? Obviously, the bargaining agent. What about the employer?

NOT if he takes measures to ensure that a proper investigation was made and due process was observed. For example, in Salunga v CIR, a union member resigned. He was disgusted with the officers and raised several grievances during union meetigs but he was not taken seriously. Management warned him that there was a union security clause and he could be dismissed. So Salunga said, "I withdraw my resignation". The union refused to readmit him. Eventually, he was terminated. The dismissal was illegal, as we will see, since the grounds for his readmission were not the same as those for other employees. This was ULP. But the question is, was the company also liable? NO. The company exerted efforts to warn him of the consequences of his action. The company will, however, be liable if it connives with the union to dismiss a worker. For example, union members are expelled for unsuccessfully seeking the expulsion of the union officers. The company, immediately upon demand by the union, dismisses them. For its haste and failure to ensure the due process was observed in the dismissal, the company was held solidarily liable with the union. (Ferrer vs. NLRC) Suppose a union expels you. It recommends your dismissal. The company then gives you a letter telling you NATU has made that recommendation. It gives you 48 hours to comment. When you don't comment, the company dismisses you immediately. The Supreme Court said this is not in fulfillment of due process. This was not a sufficient formal investigation. An employer may be held liable for ULP for dismissals under a closed-shop provision without proper hearing. (Tropical Hut Employees Uinion - CGW v Tropical Hut). In Cario v CIR, when the company was told of the expulsion, the very next day, it issued a termination letter. The Supreme Court said, you should have given him a chance to present his side. You should have satisfied yourself that the union did not act arbitrarily and capriciously.

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Likewise, if for example, you have a vague union security clause - it does not say maintenance of membership is a condition of continued employment - then someone resigns from the union. Upon recommendation of the union, you , the employer, dismiss him. Are you liable? YES. Even if you simply followed the CBA, you still have an obligation to ensure due process and cause was observed. If the provision was vague, you should have referred the question to the DOLE - File a Petition for Permission to Dismiss. In short, it is the duty of the employer, when a demand is made to terminate in accordance with the union security clause, to do the following: Investigate whether or not there was due process; IF there was due process, terminate the employee. Who are therefore liable in those cases? The company and union solidarily. ULP which is inimical to the right to bargain collectively:

1) Violate the duty to bargain collectively. 2) Pay negotiation or Attorney's fees to the union, its officers or agents, as part of the settlement of any issue in collective bargaining or any dispute 3) Violation of CBA VIOLATE DUTY TO BARGAIN COLLECTIVELY: You can understand this better by looking at what is the duty to bargain collectively. It is the performance of the 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 other terms and conditions of employment including: proposals for adjustment of grievances or questions arising under the CBA and executing a contract incorporating such agreements if requested by either party. It does not compel any party to agree to a proposal or make any concession. If there is NO CBA or voluntary arrangement providing for a more expeditious manner of collective bargaining, it shall be the duty of the employer and union to bargain collectively as provided by the labor code. (In short, they must negotiate and bargain). If there is a CBA, it means also that neither party shall terminate or modify it during its lifetime. They must maintain the status quo and continue the application of the CBA during the freedom period until a new CBA is agreed upon. For example, you present a CBA proposal to management. A conference is scheduled. During the initial conference, management says, we will agree only to your proposal on who is the

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recognized bargaining agent. The rest - your wage increase, bonuses, leaves, union security, we reject. We cant afford it. Is that violation of the duty to bargain collectively? NO. It does not mean a party is compelled to agree to a proposal or make any concession. Maybe there will be a deadlock, but that is not refusal to bargain. What are some examples of refusal to bargain?

When you talk of the duty to bargain, while the law cannot open a mans mind, it is required that at least he conduct himself as if he were trying to persuade and is willing to be persuaded. If the company did not even bother to submit an answer to the proposals, that is a violation of this duty. You cannot say, Its useless to talk, we cannot give you anything, anyway. (The Bradman Co. vs. CIR, July 21, 1977) For example, your union wins as certified bargaining agent. Then, someone writes to management, telling it that over a majority of your union's members have resigned and formed a new union. They want this new union to represent them. So management refuses to deal with you. It says prove you still are authorized - then we will negotiate! Supreme Court says that is ULP. Your union was certified as exclusive bargaining agent. Since it sent a proposal, the duty to bargain collectively requires you negotiate. You cannot claim good faith since you have no right to question the group's authority. (Balmar Farms v NLRC). Likewise, where the employer never made serious efforts to respond to the proposals, that shows bargaining in bad faith. (Divine Word University of Tacloban vs. Secretary of Labor, Sept. 11, 1992) But where a union (not yet certified) approaches management with a proposal, management starts negotiating and then so many other unions start appearing and claiming they should be the representative, management is not guilty of ULP if the company suggests that they file a petition for certification election. Management has the right to demand proof of representation and may refuse to negotiate in the absence of this proof. (Lakas ng Manggagawang Makabayan v Marcelo Enterprises) As a matter of fact, it is ULP for a union to compel management to recognize it when there is a doubt as to representation. You are causing or attempting to cause it to negotiate with you to the prejudice of the other employees' rights to select their bargaining representative. Note that the law requires that:

1) They meet promptly and expeditiously. Under the law, after proposals are submitted, the company has 10 days to reply. Suppose they take 2 weeks (14 days)? That's OK. The 10-day period is merely directory. But 2 months - that's too much.

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If they keep delaying negotiations, then that would also be a violation of the duty to bargain.

2) In good faith. Bargaining in bad faith means that they are bargaining but with an intent to delay or no intent to reach an agreement.. For example, they may engage in surface bargaining. They meet with the union and negotiate everyday. But all the while they're planning on closing down and opening a run-away shop. Or, while you are negotiating, they conduct a black propaganda campaign to confuse your members. They make tsismis that you have all been paid-off, or are secretly planning a strike, even if the company is being very liberal. Other examples: You have a bargaining agent. Because of a deadlock, you go on strike. During the strike, the company offers free food, lodging and movies to loyal employees. It sends letters to individual union members and even visits them at their houses. That is ULP. The company company when it dealt with the workers individually instead of through the bargaining agent, interfered with the right of collective bargaining. The letters are not protected by free speech. That won't apply where the expression of opinion has a threat or a bribe. As a matter of fact, the bribes constituted strike-breaking and union-busting (ULP). It is strike-breaking to offer reinstatement to workers individually when they are represented by a union since they won't be able to determine the consequences of returning to work. - PAY NEGOTIATION OR ATTORNEY'S FEES: This must be as part of the settlement of an issue in collective bargaining or in any dispute. Note that if the union officers accept the fees from management, even if it was not in consideration of the settlement of any issue, that is a ground for cancellation of registration. - VIOLATION OF CBA: Note that under Article 261, not every CBA violation is an act of ULP. It must be a gross violation. It is gross if it is a flagrant and/or malicious refusal to comply with the economic provisions of the CBA. For example, the CBA provides for regular holiday pay for all regular holidays listed in Article 94 (c) of the Labor Code. Unfortunately for the company, this had already been repealed by Executive Order 203 but Article 94 (c) states that "holidays" include general election days. This was an old CBA provision which was renewed yearly without thinking. Suppose the company refused to pay holiday pay on Barangay election day. Can the union go on strike for violation of CBA? NO. The violation must constitute a flagrant or malicious violation. Mistake on an ambiguous or difficult question of law (or of a trivial matter) is not enough.

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(Incidentally, the SC held that they are bound to pay holiday pay since: 1. 2. the CBA is clear and barangay elections are general elections (held everywhere).

Suppose the company refuses to abide by the union security clause? Can you claim ULP?

NO. That is not an economic provision. Economic provisions would be those requiring a disbursement of income or assets by the company. What would be examples of this? Wage increase, bonuses, leaves. Suppose the CBA says, the CBA shall cover all workers in the Sewing and Knitting Department. The company does not give the CBA-mandated wage increases to employees in the sewing department. That is a provision on CBA coverage. Is that ULP? YES. That entails disbursements of funds. The broader the coverage, the more employees get its benefits. The more employees get its benefits, the more the company pays. In Alhambra Industries v CIR, the union complained that the company did not give CBA benefits to the salesmen and propagandists. The company said, they are not our employees! The Supreme Court said, you have control over them. Further, your failure to pay them CBA benefits is ULP. While they are not union members, there is ULP because you failed to comply with your duty under the CBA by depriving employees of its benefits. Failure to live up in good faith to the terms of the CBA is a violation of the duty to bargain collectively. (When you enter into a CBA without intent to faithfully comply with it, that is bargaining in bad faith.) Examples of other economic provisions would be:

Wages, leaves, union office, 14th month pay, longevity pay, fringe benefits. Non-economic provisions deal more with employee rights, individually or collectively. Union security, security of tenure, management prerogatives, no strike - no lockout. Generally, your remedy here would be grievance. Discrimination due to testimony in a case arising under Code.

The Supreme Court has held that the pressure is greater if it is done to your relatives than if done to you personally. If dismissal of an employee due to his filing of an action for ULP is undue restraint, dismissal of his brother because the charges have not been withdrawn is an even more effective restraint and thus, ULP (Philippine American Cigar and Cigarette Factory Workers Independent Union vs. Philippine American Cigar and Cigarette Factory Co., Feb. 28, 1963)

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Note that the testimony must be in a case that arises under the Code. If it were a case for estafa, that would be another matter. ULP COMMITTED BY LABOR ORGANIZATIONS IN RELATION TO SELF-ORGANIZATION Restraint or Coercion of Employees in the exercise of their right to self organization Cause or attempt to cause an employer to discriminate against an employee, including: a) discrimination vs. employee to whom membership in the union was denied; b) termination of employee on any ground other than the usual terms and conditions under which membership or continuation of membership is made available to other members. Question: We discover that non union members are being checked-off agency fees. We demand that CBA benefits therefore be withheld from them. Valid? NO. That is discrimination. You may ask management, however, to check-off agency fees from them. Question: Union A pickets against the company because the company refuses to deal with it. It is then not certified as the collective bargaining agent. Subsequently, a CE is held. Union A loses to Union B. But it still continues to conduct a picket. Is the picket valid? At the start, yes. That was in exercise of the right to peaceful concerted actions. Later, after they lost, no. Union A could no longer demand collective bargaining since it became the minority union. the picket then had no longer any legitimate purpose. Otherwise, we would be flaunting the will of the majority. If they continued to picket, it would be tantamount to coercing the employees to change their choice - restrain in their right to collective bargaining. (United Restauror's Employees and Labor Union v Torres) Question: X resigns from the union as a sign of protest over the officer's shabby treatment of his complaints. When he realizes the CBA has a maintenance of membership clause, he withdraws his resignation. The union refuses to accept him and asks the company to dismiss him. Valid? ULP. That is causing the employer to discriminate against an employee including discrimination against those with respect to whom membership has been denied or terminating him on grounds other than those available to other employees. He was being terminated ultimately for his questioning of the officer's acts - an act protected by the right to free expression. (Salunga vs. CIR, Sept. 27, 1967)

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Question: We discover that some of the members of our union are forming another union. We expel them for disloyalty and then recommended to management their dismissal. Valid? YES. A labor organization shall have the right to prescribe its own rules as to acquisition and retention of membership. (assuming due process was observed). Question: We discover that another member is approaching FFW ( a rival federation). He goes to their office weekly for advice. We expel him for disloyalty and recommend his dismissal. Valid? NO. Disloyalty means the joining or formation of another union while you remain member of one. His acts of approaching FFW are not acts of disloyalty. He was simply approaching them for help. He was not joining them. If he approached them for help, it was probably because the union did not give him enough assistance. Question: Union A is affiliated with Federation X. Federation X discovers that Pusoy, an officer of Union A has secretly been meeting with representatives of Federation Y, arranging for their transfer. Federation X expels Pusoy for disloyalty and asks for his termination. Valid? NO. That is not disloyalty which will warrant dismissal under the union security clause. The local union remains a separate and independent unit and is still the collective bargaining agent. Federation X is only its agent. The disaffiliation from Federation X may be disloyalty to the federation but not to the bargaining agent, which is the union the security clause refers to. That is coercion of employees in the exercise of self-organization. Question. During the campaign for an upcoming Certification Election, Union A maligns Union B and its officers. They even call the officers bad names. Is that ULP? NO. To constitute ULP, they must restrain or coerce employees in exercise of the right to self-organization and cause or attempt to cause the employer to discriminate against them. There is no coercion/restraint/or discrimination here. Mud-slinging may be unsavory but it is not ULP. Question: Union A refuses to accept you as member because you have bad breath. ULP? NO. It is not restraint or coercion (though you may have a case to compel it to accept you). It is not discrimination which the union causes the employer to commit. IN RELATION TO COLLECTIVE BARGAINING ULP of labor organizations in relation to collective bargaining (the same as with employers): 1.

Violate the duty to bargain collectively Refuse to bargain collectively (provided it is the employees' representatives) - can you think of a union which will refuse to bargain? 2. Violate a CBA

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Cause or attempt to cause the employer to pay or deliver or agree to pay or deliver money or things of value in the nature of an ex action, for services which are not performed or not to be performed, including the demand for union negotiation fee (FEATHER-BEDDING). - Violate duty to bargain collectively: For example, a union engages in bargaining, all the while, they are dead-set on going to strike. It seems they have allied unions in all other companies owned by President of this particular company and want to engage in a simultaneous strike. That is bargaining in bad faith. They have no intent to reach an agreement. They were deadset on going on strike in the first place. Another example: During collective bargaining, a union keeps asking for things they know the company cannot give - such as END WB-IMF DICTATION!!!. Then they declare a deadlock on those grounds. Of course, they may be using the opportunity to make a political statement. But that is bargaining without good faith intent to reach an agreement. Violate a CBA: Again, note the definition of CBA violations which will constitute ULP. It must be gross, meaning, a flagrant or malicious refusal to comply with economic provisions of the CBA. Therefore, if the union violates the no-strike clause, would that be ULP? No. But that would be an illegal strike, anyhow. Featherbedding: That means asking for payment for services not rendered or performed.

For example: The company installs new high-powered machines. Because of this, they terminate some employees on the grounds of installation of labor-saving devices. The union demands they be retained in their old positions. That is feather-bedding. You are insisting that the company maintain a position that is useless or no longer needed. Another example, a union officer has trouble getting along with his co-workers and superiors in his department. He is always fighting with them. The company wants to dismiss him but the union threatens to strike if it does. Instead it says, make him a timekeeper, where he will not deal with anyone else. The company answers, But we already have a timekeeper!" So the union says, "Make him Assistant timekeeper!". They are forcing the company to create a position especially for the officer. Unions will be committing ULP if they demand negotiation fees from management. Obviously, that is to prevent collusion and company domination of unions. Surprisingly, that is still a very common practice today. XV REPRESENTATION FOR PURPOSES OF COLLECTIVE BARGAINING

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COLLECTIVE BARGAINING We have already defined the duty to bargain collectively as the performance of the mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement as to wages, hours of work and other terms and conditions of employment. You will include provisions on settling grievances and reducing the agreement to writing, when requested by either party. But that is not all collective bargaining entails. Generally, it is the end/purpose of a union's creation. It covers: selection of a bargaining representative negotiations administration of the CBA, including resolution of disputes under the CBA

COLLECTIVE BARGAINING UNIT Before we can discuss the process for a PCE, we have to discuss, where shall it be held - what is the bargaining unit? That is the group/class of employees reckoned for purposes of collective bargaining. They are the ones who should be covered under one CBA. An appropriate bargaining unit is defined as that group of employees whose collective interest are best suited to serve the reciprocal rights and duties of the parties under the CBA. You can also define it as: a group of employees of a given employer, comprised of all or less than all of the employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties with respect to collective bargaining. The new Labor Relations rules define it as a group of employees sharing mutual interests within a given employer unit, comprised of all or less than all the entire body of employees in the employer unit or any specific occupational or geographical grouping within such employer unit. In short, who should we lump together under one CBA? There are several tests which have been concocted. The most prevalently used is:

1) Community/Mutuality of Interest Test - We determine a bargaining unit by looking at the employees whose interests are similar to each other so that their interests can best be served if we treat them collectively under one CBA. Or when you talk about wages, hours of work and other work conditions, and other subjects of collective bargaining, which group has substantial, mutual interests? We determine whether or not a unit is acceptable based on whether or not it is the combination of workers which will best ensure to all employees the exercise of their collective bargaining rights.

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For example: University of the Philippines has both teaching and non-teaching staff. The teaching staff are subject to contract hours. They are contracted every month based on the number of units they will handle. They are paid on a monthly basis and are all at professional level. On the other hand, you have the non-teaching staff. They are paid on a daily basis. They work on a fixed tour of duty (ex: 9 - 5 daily). To monitor their work, they must time in and time out everyday in a bundy clock. The positions covered here would be janitors, maintenance, electrician, carpenter, typists, clerks, receptionists, etc. Should you group the academic and non-academic personnel together? The SC said Yes. The 2 groups have little in common. They have different responsibilities, functions, conditions of work, compensation, skills, even social life and interests as well as intellectual pursuits. Because they are so different, we should separate them. (How can we discuss wages increases, for example, in collective bargaining, when they are paid differently? Leaves for nonacademic staff are also looked at differently. (UP v Ferrer-Calleja) Another example. You have an agricultural corporation. One group of workers is monthly-paid. They perform administrative and clerical work. The other group is daily-paid. They work mainly planting bananas in the fields. Should you join them together? No. They have different duties and obligations, work conditions, salary rates and skills. (Golden Farms vs. Secretary of Labor, July 26, 1994) Or you have administrative, sales and dispensary personnel. These should be treated differently from those in production and maintenance, who do package and manufacturing work. Each has nothing to do with the other. (Beleyca Corp v. Calleja, Nov. 29, 1988) Or in a film company - musicians have different interests from the production crew (Beleyca v Calleja). For example again, you have a company with 2 divisions - one is a Sawmill Division, the other is a Logging Division. One group operates the machines in processing lumber, the other in felling timber. Is that sufficient reason to separate them? No. As a matter of fact, their functions mesh with other another. While they may have different individual assignments, the distinctions are not enough to warrant separate bargaining units. 2) Bargaining History - For example, traditionally, since the earliest CBA way back in 1920, the different departments in the company were unified. That may justify maintaining that setup. But bargaining history often has proven weak as a basis for determining the bargaining unit, especially when it is set-off against the mutuality of interest test. For example, in the case of the

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sawmill and logging division I mentioned, the SC said even if they have had separate CBAs before, that does not give enough reason to keep them separated. In San Miguel Corporation v Laguesma (Sept. 21, 1994), the SC said prior bargaining history is neither decisive nor conclusive in determining the appropriate bargaining unit. The question is - do they have substantial mutual interests in employment and work conditions? Therefore, sales personnel in Luzon of SMC, who wanted to be separated into different bargaining units for every branch office could not be split up. They were so few (less than 50) that it was best to keep them in one bargaining unit. 3) Globe Doctrine - This means that the determining factor shall be the will of the employees. This is derived from the US case in re : Globe Machine & Stamping Co. There initially were 3 separate bargaining units in 3 separate departments. The workers in all 3 filed separate petitions for CE. The US SC said, looking at the history of the plant, the units were separate at first. Then, later, a plant-wide CBA was negotiated. Furthermore, while work in the different units was separate, production was highly integrated. So the SC said, the reasons for keeping them separate and apart are evenly balanced. Let's just hold separate elections in each unit and let the workers decide for themselves. We had an early decision applying this - Mechanical Department Labor Union sa PNR vs CIR. There were 2 shops in the mechanical division of PNR - the Caloocan Shop - where major repairs were made; and the Manila Shop - where minor repairs were made. Two CBAs were negotiated covering both shops (one union represented both). Then, one day, a petition for CE was filed only for the Caloocan Shop. Mech. Dept. Labor Union opposed. It said the Caloocan shop is not separate from the Manila shop. But the SC found that originally, there was one bargaining unit. Little by little, this was broken up in several plebiscites. The SC said considering the workers require different skills - one for heavy equipment, another for minor equipment, you cannot say they should automatically be together in one unit. So they tossed the question to the workers. In a Globe election, before you conduct the actual certification election, you will conduct a plebiscite to determine whether or not they should be unified or separated. Other criteria:

4) Geographical location: For example, you have a mining company. The company has 5 separate mining camps. Each camp has different types of work. The SC said, the prime element to consider is will it, without inequity to the employer, best serve the employees in exercising their rights.

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Considering that the camps are geographically separate and in work, they make for different interests, it's best that they be separated. (So this case was a combination of the Mutuality of Interests test and the geographical factor) 5) Employment status. For example, you have one group composed of regular employees - performing work in the factory. You have another group composed of project employees who are all busy constructing a new factory. 6) History, extent and type of labor organizations in other plants of the same employer or of the same industry: What is the standard for unions in this industry? Are the bargaining units kept separate? That may serve as a precedent (sometimes, even administration or management is a factor). Management In Elizalde and Co. v CAR, the SC separated sacadas from regular workers in a hacienda saying each hacienda had its own administrator. Therefore, labor conflicts will not necessarily involve the others. So there are many tests for determination of the appropriate bargaining unit. But the predominant test is still the mutuality / commonality of interest test. If you note the previous cases, it was always a factor considered. Sometimes, as in the geographical location test, it was also used in determining the appropriate bargaining unit. But there is a policy followed by the DOLE in determining which should be the appropriate bargaining unit - one union - one employer (the employer unit). This means that, as much as possible, we should not break up the bargaining unit. The purpose is to ensure a stronger, more united work force, for purposes of collective bargaining. Unless there are good reasons to depart from the policy of employer unit, the bargaining unit will be one. This is not necessarily contradictory to the mutuality of interests tests. We see that the SC has justified uniting a labor force due to mutual interests - interests - bargaining history, notwithstanding. But in some cases, for example, there was a vast different in work conditions, the SC ordered separation of bargaining units. That would be one example of compelling reasons. What about if you have separate corporations?

The SC has said, just because you have 2 companies which are sister companies, they produce the same product and are located in the same compound, that will not per se justify piercing the corporate veil to treat them as one corporation for purposes of collective bargaining. The doctrine of piercing the corporation veil of fiction will apply only where such veil is used to perpetrate fraud or evade an obligation. You have to prove that. But in Philippine Scout Veterans Security and Investigative Agency (PSVSIA) v Sec. of Labor, the SC consolidated the security guards in 4 separate agencies. It said there are several factors which show they are united:

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1. Joint management by one Corporation 2. Interlocking incorporators & officers 3. Single system of retirement Transferability of guards from one agency to another simply by filling up a request for transfer 5. Their awards ceremony every year was held jointly During emergencies, the detachment of PSVSIA was ordered assigned to the other agencies. They therefore don't exist and operate separately. There is a cross-linking of command, control and communication. Allow the employees to form one union - lift the veil of corporation fiction. So note, the evidence was overwhelming that they were actually one corporation. There was no reason to break them differently. However, in another case also involving a security agency, you had a sole proprietorship agency which closed down and which was taken over by a corporation composed partly, of the former owner/proprietor and his children. The SC said, that doesn't mean there is continuity. The sole proprietorship was owned only by one person. It closed down since he was old and could not manage it on his own. Just because he was part owner of the corporation does not mean it is the same agency. CERTIFICATION ELECTION How do you select the bargaining agent? The law says the exclusive bargaining representative shall be the labor organization designated or selected by a majority of the employees in the appropriate bargaining unit through the process specified. There have been 3 processes by means of which bargaining agents were selected: Voluntary/Direct Recognition - without passing through DOLE, the employer agrees to recognize the union Direct certification - The union files a petition with DOLE. It shows it has clear majority support. The Med-Arbiter (of the Regional Office) then declares it as the certified bargaining agent without need of any election. The Med-Arbiter can no longer order a direct certification. Why? The law is now clear when a petition with all the proper requirements is filed, the Labor Code says, the Med-Arbiter shall AUTOMATICALLY ORDER an election by secret ballot. This means, the only option for him is the ordering of an election. He has no longer any discretion as to whether or not to call for a CE or simply directly certify the petitioning union. The most expeditious and democratic means of determining the bargaining agent is by certification election. (NAFTU vs. BLR) May an employer extend voluntary recognition?

YES. There's nothing illegal about it. However, it in itself will not bar a certification election. For example, Union A is registered. The company says, "OK let's negotiate. We don't want to have to pay a lawyer for the CE ." So they negotiate. Then Union B comes along and files a Petition for

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Certification Election (PCE). Will it prosper? YES. PCE is still the most democratic and expeditious means of determining who should be the exclusive bargaining agent. The volume recognition will not act as a bar. (NOTE however, the new rules on labor relations state that voluntary recognition may act as a bar to a certification election if it is recorded in the DOLE. What must be done? A joint statement by the employer representative and the union president shall be submitted to the Regional Office attesting to this fact. The recognition must be posted in 2 conspicuous places in the company for 15 days and must be supported by at least majority of the members of the bargaining unit. Also importantly, there must be no other legitimate labor organization in the bargaining unit. This is dangerous. It sidesteps the NAFTU vs. BLR ruling. The difference is that this procedure does not call for the Med-Arbiters exercise of discretion since it is merely recorded. It, however, has the same effect as a direct certification. Even worse, there is no proceeding whereby a legitimate union may contest it. I believ this is of questionable legality.) 3. CERTIFICATION ELECTION - That is the process of determining, through secret ballot, the sole and exclusive bargaining agent of the employee in an appropriate bargaining unit. Who can file the petition? a) A legitimate labor organization; or b) The employer. When can the employer file the petition? When there is a request for bargaining.

For example, a union is organized. It asks for voluntary recognition as bargaining agent. Can the employer file a PCE? Note, it is not requesting for bargaining, only asking for recognition! YES. In effect, you are asking the employer to certify you as bargaining agent. It is not within the employer's authority to give this since it is the employees who have the prerogative to determine if they want a union to represent them. (IBM vs. Ferrer-Calleja) (The new rules, however, state that voluntary recognition may be made!) When can a legitimate labor organization file a PCE? 1. For an unorganized establishment, anytime. 2. For an organized establishment, it depends. a) If there is a CBA which is duly registered, then, during the freedom period. Before and after that, it is not timely. b) If there is no registered CBA, anytime, provided the finality of the certification of the incumbent collective bargaining agent has taken place over 1 year ago (or, the certification - year has lapsed). (The new rules add, provided one year from recording of voluntary recognition, if one has been made, has lapsed.) Why is it important to make a distinction with respect to organized establishments and establishments with a CBA?

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Because the term "organized establishment" does not mean there is a CBA. As defined in the rules, it means a firm or company where there is a recognized or certified exclusive bargaining agent. So it is the existence of a bargaining agent which determines whether or not it is organized. In PT & T v Laguesma, there were supervisory employees who formed a union. They filed a PCE. PT & T says, "You can't do that because the rank and file have a CBA with us and it is still not the freedom period." They added that PT & T is an organized establishment since there was a bargaining agent in the company. The SC said just because the rank and file are represented does not make PT & T organized vis-a-vis the supervisory employees. Since supervisors cannot joint the rank and file union, they had no certified bargaining agent. In short, the term "organized" is in reference to the bargaining unit. Is there a bargaining agent in the unit? Do not be misled by the term organized or unorganized "establishment". For an unorganized establishment, what are the requirements? 1) A petition is filed 2) By a legitimate labor organization There is NO consent requirement. It can be filed anytime. If organized, what are the requirements? 1. A petition is filed 2. By a legitimate labor organization time - 3. Within the freedom period support- 4. With the written consent of 25% of all the employees in the bargaining unit. Once the requirements are met, it is mandatory on the Med-Arbiter to call a CE. Note the words "shall immediately call". It is a command. Even if the company is losing money, or there is a strike, or it is the holidays, or the company has suspended operations, that is no excuse. The requirement is mandatory, the Med-Arbiter "shall order..." Suppose there is a CBA and the freedom period begins today. The incumbent bargaining agent gives its bargaining proposal to the company. Can the company now file a PCE? No. The law says, if there is no existing certified collective bargaining agent, the Bureau shall order a CE. Therefore, it appears that it is only when there is no CBA and no bargaining agent that the employer may file a PCE. It is bound to negotiate with the incumbent bargaining agent. Let us go to the consent requirement.

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Suppose I file my petition for CE today. There is a CBA. It is the freedom period. After 10 days, I attach the supporting signatures. Should the petition be dismissed? No. The SC said the law does not require that the signatures be filed at the same time the petition is filed (within a reasonable time would be sufficient). As the SC said in Port Workers Union vs Laguesma, the policy is to call for a CE - it being the most democratic and expeditions method by which the workers freely determine the union which will act as their representative. The policy of the labor code is partial to the holding of a CE. In line with this, the rule of simultaneous submission of supporting signatures upon the filing of a PLE should not be strictly applied. The requirement is not in the law. So, at best, it should be given directory effect. It's enough that the signatures are filed within a reasonable period. (However, in the new rules, they made it a requirement upon filing of the petition.) Suppose the 25% support requirement was not met, may the CE still be called?

YES. The Med-Arbiter has the discretion. Again, the policy is to favor CE - the best means to find out who the workers want. In case of doubt, a CE shall be called. Suppose it is filed with 25% support requirement. Later, the employer submits a statement by half of those who signed, repudiating the signatures. What is the effect? SC has said, if the withdrawal comes after the PCE has been filed, it is presumed the result of duress. It will not be given credence. (If the withdrawal comes before, then, the Med-Arbiter should look into its veracity). In line with this, we have what we call an intervention. If you are a union which also wants to participate in the CE , you will file a motion to intervene, so that if a CE is ordered, you will be among the unions the workers can choose. So, for example, you have an organized establishment. There is a CBA. Union A is the bargaining agent. It is now the freedom period. Union B files a PCE. In that PCE, Union A will be a forced or compulsory intervenor. The incumbent bargaining agent is always a party in the CE. Suppose Union C is organized, it wants to participate. It will then file a Motion in Intervention. In an organized establishment, the incumbent bargaining agent is always a comulsory intervenor. This means it automatically is included in the proceedings. How many signatures does it need to support that Motion?

None. It is enough that the PCE is viable sufficient in form and substance. That will set in motion the machinery for the CE - Sasakay na lang ang mga intervenor.

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What if the Med-Arbiter denies the motion and the original petitioner does not appeal? Can the Intervenor appeal? YES. The nature of CE is not a litigation. It is a mere investigation of a non-adversary character where rules of procedure are not strictly applied. (Again, the doubt is resolved in favor of CE) (Port Workers Union of the Philippines v Laguesma) When may a Motion in Intervention be filed?

Anytime after the petition has been filed, before the election itself. Even if you file it on the day of the election, the SC has said that is valid, provided the elections have not yet begun (that will cause some problems only, with respect to the ballot). (The new rules on Labor Relations, however, say that if there is a CBA, it must be filed only within the freedom period. Thats a bit difficult, especially if the petition itself is filed two days before the CBA is set to expire. Likewise, thje new rules address the concern of this case - they say if the Petition is withdrawn, the motion shall also be withdrawn unless it has the supporting signatures of 25% of the bargaining unit. If there is no CBA, the rules say it may be filed before final judgment.) In line with this, since we are discussing certification election, there is this thing we call a consent election . In the Warren Manufacturing Company case, the SC said there is a different between a consent election and a CE. In that case, there was a schism within the union. A Notice of Strike (NOS) was filed. To resolve the notice of strike, the parties agreed to hold a consent election, to determine who would administer the CBA. The consent election was held. When the freedom period arrived, the losing faction filed a PCE. The winning group says, "You can't do that. The certification-year rule prohibits CES within 1 year after certification." But the SC said that only applies to certification elections. This is not a CE but a consent election - one held to determine who would administer the CBA. Since it is not a CE - one held to determine the bargaining agent (who will negotiate), the certification-year rule will not apply. So the CE was held. (But that is not a consent election as is commonly understood. - The rules define consent election - one voluntarily agreed upon by the parties, with or without intervention of the DOLE, to determine the issue of majority representation. Note, however, the SC said in the Warren Manufacturing case, that a consent election agreed upon to determine the issue of who will administer the CBA for its remaining term [there being a schism in the union] will not operate to bar another petition for certification election within the freedom period [even if the PCE is filed within one year from such election]. But a consent election in the Warren Mfg. sense does not.) What are the obstacles to a certification election? Aside from complying with the other requirements, these are:

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1. CERTIFICATION-YEAR RULE: There shall be no certification election conducted within one year from a final certification election result. Neither may a representation question be entertained if, before the filing of the PCE, a bargaining deadlock to which the bargaining agent is a party was submitted to conciliation or arbitration or subject of a valid strike or lock-out. This will not apply to a consent election in the Warren Mfg. sense. Neither will it apply if there is a CBA. If there is a CBA, it is the contract-bar rule which will apply. In short, under the certification-year rule, the certified bargaining agent has one year to negotiate and conclude a CBA. Otherwise, at the lapse of the one-year period, the protection/security vanishes. Note that the one-year starts from final CE result. Under the old rules, it was silent as to when a CE would become final. Apparently, it became final after lapse of the reglementary period without appeal. Under the new rules, certification shall be made after tallying the votes IF there is a winner and no protest or material challenge. The certification year will then start from this time on.) 2. DEADLOCK-BAR RULE: There shall be no CE, if, before filing of the PCE, a bargaining deadlock was submitted to conciliation or arbitration or subject of a valid strike or lock-out. For example you are certified as bargaining agent. You start negotiations. On the 8th month, you file a Notice of Strike. Even if conciliation exceed the 1-year period (after final certification result), you are protected by the deadlock bar rule. But note, the deadlock must be: > SUBMITTED to conciliation or arbitration or > SUBJECT of a valid strike or lock-out. For example, you declare a deadlock. The next day, you go on strike. That is obviously an illegal strike. (No NOS, strike vote, cooling-off period , strike ban). Are you entitled to the protection of the deadlock bar rule? NO. It is not a valid strike. What if the employer engages in lock-out, but they don't follow the requirements?

What is required is that the deadlock be submitted for conciliation or arbitration OR subject of a valid strike or lock-out. If you submit the deadlock for conciliation by NCMB, then the rule will apply. In ______________, it was held that if a deadlock will serve as a bar to a petition for certification election, what more refusal to bargain. This is therefore, another bar to a PCE.

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3. CONTRACT-BAR RULE: If a CBA has been duly registered, a PCE can be entertained only within the freedom period. The purpose of this rule is to ensure industrial peace -- stability in labor-management relations by preventing frequent modifications of a CBA. But a CBA will not operate to bar a CE if it will not foster stable labor-management relations or if it may only cause further unrest. For example, if the CBA is hastily-concluded: The company learns of the existence of one union. So it immediately recognizes and bargains with a union it perceives as friendlier. They do not even know if it enjoys majority support (ALU v Ferrer-Calleja) Or if the CBA was not properly posted and notice thereof not given to the bargaining unit. The law requires two weeks posting in a conspicuous place. If the CBA was only discussed at a general assembly of the union, that is not enough. The purpose of posting is so all members of the bargaining unit may be informed of the contents and decide whether or not they will accept it. Or, if it was prematurely executed. They conclude it while there is a pending PCE. (Vassar v Estrella). For example, the CBA's term is extended by one year. So when the freedom period arrives, the incumbent bargaining agent says, "The CBA has still another year. Your PCE is premature". WRONG. That contract will not serve to promote stability (Firestone case) Question: So the CBA will not bar a PCE. Suppose another union files a PCE, can I ask that the CBA be implemented? Yes, it is still a valid contract, but subject to its being supplanted by another CBA should the one which bargained for it not be chosen. What happens if a new union is chosen? It can bargain for a new CBA.

Bur the union should beware! In one case (TUPAS v Inciong), there was a CBA which was ratified by the members of the bargaining unit AND all affirmed membership in the union which negotiated it. This rendered moot and academic any PCE file (even if the CBA was premature). NOTE - According to the SC, the two requirements must be present. CBA ratification and affirmation of membership without the second one, there is no contract bar - the CBA will not foster industrial stability. NOTE also that, as provided by the rules, it is a DULY REGISTERED CBA which will act as a contract bar. If not registered, no contract-bar. But suppose the CBA was eventually registered, but not within the 30 days required?

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In one case, the Supreme Court said, well, considering there was an inter-union conflict which prevented immediate registration, that sufficiently explains the delay (TUPAS v. Laguesma, Sept. 21, 1994). So let's summarize these first 3 rules:

1) If you have no CBA, and a union is certified as bargaining agent, then that union has one year from finality to negotiate a CBA. If within that one year period, they negotiate a CBA and it is registered, then the contract-bar rule steps in. If there is still no CBA after one year, they lose their protection UNLESS there is a deadlock and they submit this to arbitration or it is subject of a valid strike or lock-out. 2) If there is a CBA, the PCE can be filed only within the freedom period.

Suppose a PCE is filed within the freedom period. A new union is elected. it takes over a year to negotiate. Can another union file a PCE? NO. The contract-bar rule applies. The old CBA is automatically renewed and effective until a new one is executed. Under the new rules, in the following cases, the CBA will not serve as a bar to a petition for certification election: Its provisions are lower than the standards set by law; or The documents supporting its registration are falsified, fraudulent or tainted with misrepresentation. PREJUDICIAL QUESTION For example, Union A files a petition for certification election. The company then forms Union B. Union B intervenes in the representation proceedings. Union A files a complaint for ULP against both the company and Union B for company unionism. May Union A move to suspend the proceedings in the petition for certification election? In the United CMC case, the Supreme Court held that such issue of ULP is a prejudicial question. If the elections were to push thorugh, and the complaint is found to be meritorious and Union B held to be a company-dominated union. The SC held that the election results would be rendered nugatory. Likewise, the elections may not be free since the voters would be subject to undue influence on the part of the employer. Any results would be suspect. It is therefore necessary that the ULP issue be determined first. The representation proceedings may thus be suspended. But suppose it is Union B which intervened and filed a motion to suspend proceedings, should this be granted? The SC said NO, since it is the union that stands to be prejudiced that may file the motion to suspend.

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In Progressive Development Corporation vs. Secretary of Labor (April, 1997), another prejudicial question which may bar a petition for certification election would be the pendency of a petition for cancellation of registration. It should be noted, however, that that case concerned a patently irregularly issued certificate of registration. In Samahan ng Manggagawa sa Pacific Plastic vs. Laguesma (Jan. 31, 1997) and Association of Court of Appeals Employees vs. Calleja (203 SCRA 596, 1991), the SC held that the proceedings for cancellation of the petitioning unions registration was NOT a prejudicial question since at the time the petition was filed, it still had legal personality to file the same, absent an order directing its cancellation. RES JUDICATA In every petition for certification election, NO UNION is always a choice. What if there is yet no CBA, and NO UNION wins? Then this choice should be respected for one year. If there were a CBA, then there will be no bargaining representative during its term. The new rules on Labor Relations add:

Recording of voluntary recognition - There is a bar to a petition for certification election for one year after recording of the voluntary recognition. This again presupposes that there is yet no CBA, otherwise, voluntary recognition would not be available since there would already be another union existent in the company. Commencement of negotiations - Once the certified or recognized bargaining agent has commenced negotiations, this shall serve as a bar. For how long? The rules do not state. All that is necessary is that negotiations are on-going. The protection appears to be indefinite. This seems to encourage the formation of company unions. REPRESENTATION PROCEEDINGS Who can participate in the certification election?

All the workers, whether casual or regular. To adhere to the concept of industrial democracy, all should be allowed to vote. (Airtime Specialists v. Ferrer-Calleja; Eastland Mfg. Co. vs. Noriel) The reason for this is all have a substantial interest in the selection of the bargaining representative. The Code makes no distinction as to employment status as the basis for eligibility in supporting the PCE. The law says "all" employees. But note that the old IRR stated that the decision calling for the conduct of a CE shall order that the list of eligible voters be based on the payroll 3 months prior to filing of the PCE. (BUT NOTE further, that the new rules on Labor Relations state that the payroll to be presented shall be that 3 months prior to the final judgment. It also says that all employees who are members of the bargaining unit at the time of the election shall be allowed to vote. The payroll,

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therefore, is not the definitive list of voters. The representation officer may allow more to vote based on whether or not they are within the bargaining unit on election day.) 1. After the PCE has been filed, the parties shall be called to a conference. Either they agree to a consent election, or an order for CE is issued. After this order is issued, they have 10 days to appeal. The appeal is to the Secretary of Labor. The Secretary of Labor will issue his ruling (to dismiss the appeal or the petition). They can file a Motion for Reconsideration. After another ruling is issued - that's it. The only recourse of any aggrieved party is to go to the SC by special civil action of certiorari (Rule 65). The decision of the Secretary of Labor shall be final and executory. This means that even if such a petition is filed, the elections must go on, UNLESS a Temporary Restraining Order or injunction is issued by the Supreme Court. Only a TRO/Injunction from the SC will stay an election. Even if you file a Motion to Suspend, that will not bar the CE from pushing through. 2. Otherwise, we go to the next stage: the pre-election conference. At the pre-election conference, the employer will be required to submit the payroll. Suppose they refuse to submit it? For example, after 3 hearings, if there is still no payroll submitted, then the unions can draw up their own list of employees. This shall serve as the basis for the inclusion/exclusion proceedings - all unions may now add to or subtract from the list based on whether or not those individual employees have the right to vote. What may be some grounds for excluding employees? You may state that: they do not belong to the bargaining unit they are not employed What about employees dismissed? Note the definition of employees in Art. 212 - if terminated on account of a labor dispute and you have not found substantially equivalent employment. The SC has said you can still vote if you have a present unabandoned right to employment. Thus, if the dismissal is under question, they can still vote (Phil. Fruits and Vegetables v. Torres). (The new rules incorporate this by saying those who were dismissed but have pending cases for illegal dismissal at the time of the elections may vote.) Aside from the list of employees, in the pre-election conference, they will also discuss when and where the election shall be held, the number of representatives per union, and other ground rules. They will then release sample ballots and post notices of the election 5 days before the election. 3. Then comes election day. The workers cast their ballots. There are 3 possible actions one can take to contest what is happening:

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Challenge - contest a vote (usually based on the voter's right to vote) You must assert it anytime before the ballot is deposited in the ballot box. If a vote is challenged, the representation officer must segregate it and seal it in an envelope. They shall not count the vote unless: it is first determined that it may make a difference in the results (For example: the difference in votes between the two unions is 15. The number of votes challenged on the grounds that the positions of the voters questioned are managerial are 20); and it is determined that they have the right to vote (that is why they will also mark on the ballot - who made the challenge, whose vote it is, and the ground for the challenge) 2. Protest - conduct of elections (ex: fraud, intimidation, disenfranchisement of voters)

The procedure for raising a protest is like this: a.

Raise it on the spot. The representation officer will then make an on-the-spot ruling b. File it before the close of the proceedings for the day - raise it orally and make sure it is entered in the minutes. Formalize it (reduce it to writing) within 5 days after the closure of elections. In one case, the union entered its 3 protests in the minutes. Then, when it formalized its protest 5 days later, it did not include all 3. It only stated one. The SC said it waived its other grounds. The rules are clear - they require that a protest be formalized within 5 days. Without such formalization, it is deemed waived. (Jisscor Independent Union vs. Torres, 1993; Phil. Fruits and Vegetables Ind. v. Torres, 1992) Suppose what happened was, the elections were conducted today. An oral protest was made. It took some time before there was a final ruling as to certification since there were challenged votes. And finally, they formalized the protest. Was that formalized within the proper period? NO! The term "close of election proceedings", within 5 days of which you must formalize the protest refers to that period from closing of polls until counting and tabulation. It does not refer to final determination of the challenged votes, otherwise, there would be undue delay (Phil. Fruits and Vegetables) (Thus, the new rules refer to election proceedings as the period starting from the opening to the closing of the polls, including the counting and tabulation of votes. But it excludes the period for final determination of the challenged votes and the canvass. This incorporates the Jisscor ruling.) Suppose the parties waived the posting of the notice of election. That is valid. Then, later, they protest since there was no posting. That's wrong. They are estopped. Furthermore, the fact that 99 out of 104 voters voted belies the contention that they were misinformed due to the non-posting. Substantial participation of voters negates the contention of absence of posting. (Jisscor Ind. Union vs. Torres)

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If the protest is based on the grounds that the rules of the election were not observed (ex: campaign paraphernalia is worn - caps, visors, pins). This is not enough. You also have to show that this influenced, vitiated or affected the choice of the bargaining agent. 3. Appeal. After receipt of the order of the Med-Arbiter (declaring a union as certified bargaining agent or calling for a run-off election or declaring the election as invalid), you have 10 days to appeal. During the counting, what is the rule? Make a check () or cross (#) once only before your choice:  Union A  Union B  Union C If you make 2 checks, that is a marked ballot.

Algire v. De Mesa concerns an election to determine who would represent the workers for administration of the CBA. The parties agreed to follow those rules of appreciation of ballots. Algire and De Mesa were tied at 133 each. Then Algire said - look at one ballot which was declared spoiled - it bears 2 checks before my name. That shows that he really intended to vote for me. It is therefore valid, not spoiled. So the Med-Arbiter declared it valid and Algire won. However, on appeal, the Office of the Secretary of Labor reversed the order and called for a new election. The SC said this is not a certification election but a CONSENT ELECTION - of the Warren Mfg. type. It has nothing to do with a CE and is merely to determine the issue of majority representation. Therefore, when the Office of the Secretary ruled that the ballot was spoiled, that is not based on any provision of law. It was simply following what the parties agreed upon in the ballot instructions. The purpose of that rule is to prevent unauthorized markings in order to preserve the sanctity of the ballot. Since the rule was valid, no one won and a new election should be conducted. When shall an election be valid? When majority of all eligible voters shall have cast their votes.

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Ex.

No. of eligible voters : 100 UNION A - 30 UNION B - 20 NO UNION- 0 SPOILED - 3 -----53 Was there a valid election?

You might say that there is none, since, by excluding the spoiled ballots, you have no majority. However, note that the law only says it is valid if a majority have CAST their votes, it is valid. (This seems to favor validity of a certification election and is in line with the letter of the law). No. of eligible voters: 100 UNION A - 20 UNION B - 0 NO UNION- 31 ----51 Valid? Yes. It is not required that the workers vote for a union.

What is the effect of an invalid election (failure of election)?

The law does not provide for that. You are justified in calling for another election until it is clear there is a valid election. What if it is always invalid? Di, huwag mo nang pagurin yung sarili mo. Ihinto ang eleksiyon! (The new rules clarify this by providing that if there is failure of election, then you can file a petition for the immediate conduct of a new certification election. This does not require the 25% supporting signatures anew. It is a simple petition to call a new election because the last one resulted in no majority having cast their votes.) When shall a union be certified? When it receives majority of the valid votes cast. Ex.: No. of eligible voters: 100 UNION A -20The Med-Arbiter should certifyUNION B - 30Union B as the exclusiveNO UNION1bargaining agent. It receivedSPOILED- 0majority of the valid votes cast.----51 valid votes. NOTE: In determining the validity of a CE, the law simply refers to a majority of all eligible voters having cast their votes. In determining whether or not a choice should be certified, it refers to VALID votes cast. No. of eligible voters: 100

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UNION A - 10 UNION B - 30 NO UNION- 42 ----82 No. of eligible voters: 10 UNION A - 20 UNION B - 30 NO UNION- 31 _____ 81

NO UNION should be declared as the choice. It received majority of the VALID votes cast.

Since no one received majority of the valid votes cast, but there is a valid election, you will call for a run-off election.

The rule is, a run-off election shall be called if: there is a valid election, between 3 or more choices and no choice received a majority of the valid votes cast; and the total number of votes for all the unions is at least 50% of the votes cast (NOT VALID VOTES). In the above example, the run-off election shall be conducted between Unions A & B. No Union will not be a choice. Why not? The Code says, the election shall be between the LABOR UNIONS receiving the 2 highest number of votes. That was purposely amended by R.A. 6715. Before, the law said the run-off election would be between the CHOICES receiving the 2 highest number of votes. The amendment obviously shows preference to worker representation by a union. The presumption seems to be that the workers want a union to represent them but don't know which one. No. of eligible voters: 100 UNION A - 15 UNION B - 25 NO UNION- 40 ------80 No. of eligible voters: 100 A run-off election shall still be called even if the votes for the unions reaches only 50%. The law says "at least 50%", not majority.

UNION A -21You have a valid election (majority voted).UNION B - 21Do you have a certified choice? NO. No oneUNION C -28received majority of the valid votes cast.NO UNION- 5Shall you then call a run-off election? ButSPOILED - 5you don't know between whom, since unions----A & B are tied for 2nd place. You will 82 therefore order for the conduct of what they call a "re-run election". You will have an election between Unions A,B & C to determine who will run in the run-off election.

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So let's summarize:

VALID ELECTION: Majority of qualified voters must have CAST their votes CERTIFIED WINNER: Majority of valid votes were obtained by one choice. RUN-OFF: If there are 3 or more choices, a valid election, no one receives majority of valid votes case, and at least 50% of votes cast were in favor of the unions. And based on the results, the Med-Arbiter shall issue his certification order. The union certified as the sole and exclusive bargaining agent may now commence the process of negotiating a CBA. XVI COLLECTIVE BARGAINING NEGOTIATIONS We have already defined what the duty to bargain collectively is. When there is no CBA it means you must bargain collectively. When there is a CBA, it means neither party shall terminate or modify the CBA during its lifetime. If there is an existing CBA, you may submit a proposal to amend it only within 60 days prior to its expiration (the freedom period). This is a magical period, therefore. What can you do inside it? a. b. c. d. e. make a proposal for a new CBA file a petition for CE resign/disaffiliate from a union register an independent union request for financial statement from management

(But you cannot pursue a Petition for Audit of Union funds - remember that!) If no CBA has yet been executed, then the parties must keep the status quo and continue in full force and effect the old CBA. For example, the CBA provides for bonuses. Upon expiration of the CBA, if no new CBA has taken effect, the workers will continue to receive bonuses. If the CBA provided for a wage increase like this: 1st year - P5.00/day 2nd year - P10.00/day 3rd year - P15.00/day. Will the workers also be entitled to an additional P5.00/day on the first year after expiration? NO. That wage increase refers to the first year of the ORIGINAL CBA! In short, you will not receive any new benefits. You will only continue to receive the benefits under the old CBA without deduction.

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This is how the negotiation process goes: 1. Written notice to negotiate with a statement or proposals.

Note the case of Kiok Loy v. NLRC: Before a union has the right to bargain collectively, the following elements must be present. It possesses the status of majority representative as provided by the Labor Code (it wins in a CE or is subject of voluntary recognition, under the 1997 labor relations rules) It presents proof of majority representation (certification order) iii. It makes a demand to bargain The law requires the notice to be in writing. Suppose the union president goes up to the company president and says, O, freedom period na! Mag-negosasyon tayo! Is the company obliged to negotiate? NO. It is an oral notice. Reply by the employer within 10 calendar days from receipt - this is directory and merely procedural 3. In case of differences, request for a conference 4. Conference held within 10 calendar days from request If there is a deadlock, NCMB shall conciliate. (During this conciliation, may the employer refuse to appear? Both parties are prohibited from doing any act which may disrupt or impede early settlement of the dispute) What is the duty of the NCMB?

To exert all efforts to settle the dispute amicably and encourage the parties to submit their case to a voluntary arbitrator. 6. 7. If the deadlock is not settled, the possibilities are: Preventive Mediation Notice Of Strike Voluntary Arbitration Assumption of jurisdiction/Compulsory Arbitration Agreement

Drafting and signing of CBA 9. Registration of CBA

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1
Written notice from union with proposals 10 days

2
Reply of management

3
Request for conference

4
Negotiation conferences

5
Deadlock not settled

NCMB to assist through conciliation-mediation

Deadlock

Notice of Strike

Deadlock settled

Assumption of Jurisdiction/Voluntary Arbitration

Strike

7
Agreement

Decision

Decisionto be incorporated intoCBA

8
Drafting and signing of CBA

9
Registration

Examples of violation of the duty to bargain collectively: undue delay directly dealing with union members surface bargaining "take-it or leave it" position by management together with information campaign to sell the managements offer to workers strike while there is no true deadlock - After signing, how long shall be the term of the CBA?

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5 years as to the representation aspect. All other provisions shall be renegotiated not later than 3 years after their execution. The representation aspect refers to identification and majority status of the union which negotiated the CBA. All other provisions refer to the rest of the CBA (economic and non-economic provisions). As to the representation aspect, the term is clearly five years. For example, the security of tenure provisions - are they subject to renegotiation?

YES. All except those relating to representation are subject to renegotiation. It is not only economic provisions which are so subject. May you renegotiate after 2 years? YES! The law says "not later than". What's the purpose of a 5 year CBA term?

To ensure at least 3 years of stability. During the first year, they are busy with the transfer of power. On the last year, they're preparing for a CE. If it were only a 3-year term, there would effectively be only 1 year wherein we have some assurance of security of a union. Why the 3-year period?

CBAs originally had 3-year terms. The 3 year period seems to be just right before you increase the benefits again. What happens after the 3rd year? For what term shall the non-representation provisions be?

In San Miguel Corporation Employees Union-PTGWO vs. Confesor (G.R. No. 111262, September 19, 1996), the SC said, looking at the Congressional deliberations, it appears that the framers of the law wanted to maintain industrial peace and stability by having both management and labor work harmoniously together without any disturbance. Thus, no outside union can enter the establishment within five (5) years and challenge the status of the incumbent union as the exclusive bargaining agent. What about the other provisions, what is the term? Was it proper, in that case, for the Secretary of Labor to fix another 3-year term for the non-representation provisions? The union said it was not, since the authority of the bargaining agent is only for five years. However, the SC looked into the Congressional Committee deliberations. It noted that Senator Herrera, one of the laws princiapl authors, repeatedly stated that the term for such other provisions was not more than three years: Ang three years, duon sa terms and conditions. Not later than 3 years. . . . on the fifth year, ang representation status can now be questioned, so baka puwedeng magkaroon ng CE. If the incumbent union loses, then the new union administers the contract for

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one year to give him time to know his counterpart - the employer, before he can negotiate for a new term. The inclination was thus for a 3-year period. (NOTE the phrasing not later than 3 years. This means it can be renegotiated in a period shorter than 3 years.) We can thus infer from their discussions that it was left to the parties to fix the period. It is clear that the parties intended a 3year term for the non-representation provisions, stating that they would be effective until after 3 years from their execution. SC further noted a DOLE memorandum stating the policy that the parties are encouraged to enter into a renegotiated CBA with a term which would coincide with the five (5) year term of the bargaining representative. In the event however, that the parties, by mutual agreement, enter into a renegotiated contract with a term of three (3) years or one which does not coincide with the said 5year term, and said agreement is ratified by majority of the members in the bargaining unit, the subject contract is valid and legal and therefore, binds the contracting parties (this answers the unions contention as to the term of the agency being only 5 years). The same will however not adversely affect the right of another union to challenge the majority status of the incumbent bargaining agent within sixty (60) days before the lapse of the original five (5) year term of the CBA. Meaning to say, if a new bargaining agent is elected and the 3-year non-representation provisions have not yet expired, it will administer the CBA for the remainder, after which, it may negotiate for new provisions. If you don't finish negotiations within 6 months, the parties must agree on the retroactivity date for there to be any retroactivity. For example, after the 3rd year, you start negotiations. You reach a deadlock. The DOLE assumes jurisdiction over your deadlock on the 4th month. The DOLE issues its decision resolving the deadlock after the 6 months from expiry of those provisions. Is there automatic retroactivity? NO. You effectively had no agreement on retroactivity. If you reach an agreement after 6 months, it is up to the parties to decide on retroactivity. Since the parties did not decide on retroactivity and the DOLE decision was silent on that matter, there will be no retroactivity. The law states that if any such agreement is entered with beyond 6 months, the parties shall agree on the duration or retroactivity thereof. So they don't have to agree on retroactivity. Suppose during the renegotiation phase, you reach a deadlock. Can you go on strike?

There is an ambiguous provision stating: "In case of a deadlock in the renegotiation of the CBA, the parties may exercise their rights under this Code." But note that CBAs commonly include no-strike and no-lock-out provisions. So how can you strike? That addition seems to have been addressed to that concern. It apparently paves the way for strikes during the CBA on grounds of deadlock.

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Does the automatic retroactivity apply to negotiations after the 5 year representation period? The SC seems to imply so. The purpose is to promote industrial peace through speedy conclusion of collective bargaining negotiations. 9. workplace. 10. After this, what follows? - posting of the CBA in 2 consecutive places in the Ratification by majority of the bargaining unit.

Note that there must be posting. Simply discussing it at a general membership assembly of a union is inadequate. There must be notice to the entire bargaining unit and adequate time for deliberation. What is the effect if it is not ratified?

It is not binding on the bargaining unit. The union may thus negotiate anew. Of course, if the employer refuses to change any of its provisions, the union can declare a deadlock. 11. include: Submission to the BLR or Regional Office within 30 days from execution. You must

5 copies of the CBA, duly signed proof of posting (sworn statement) proof of ratification (sworn statement) registration fee of P1,000.00 12. After this, the certificate of registration shall be issued.

In case of renegotiation, must you also register this? YES.

What is the effect of failure to register?

The CBA is still effective, but you cannot enforce it for purposes of contract-bar. It is still a valid agreement but since it was not brought to BLR's attention, they won't recognize it. Previously, they had a requirement that a CBA be certified. That was like asking DOLE to approve it for being correct in form and substance. Under EO 111, this was reduced to mere submission and, under RA 6715, to registration. Registration seems to have the same effect as certification. The DOLE, before registering it, has the job of seeing to it that it has all the necessary provisions, such as grievance, coverage, etc. When registration merely ministerial

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Suppose a union enters into a CBA with management. The CBA has a union security clause. The CBA is submitted for registration. It is complete with all the necessary papers. However, it takes so long before the BLR registers it. In the meanwhile, some union members decide to form their own union. The union expels them for loyalty. It asks management to enforce the union security clause. The expelled workers say, "You can't do that! The CBA is not yet registered!" Are they correct? NO. In Liberty Flour Mills Employees Organization v. Liberty Flour Mills, the SC said : (1) since the CBA was complete, it was certified (it was still certification, and not registration, which was required then) for having complied with all the requirements of certification. (2) Secondly, CBA certification is not needed to put a stamp of validity to such a contract. Once it is duly entered into and signed, it becomes effective regardless of whether or not it was certified. XVII ADMINISTRATION OF AGREEMENT What happens if a CBA is violated? It is a grievance or an act of ULP. CBA applicable to all in unit A CBA's benefits extend to all workers in the bargaining unit. You cannot deprive anyone of its benefits as that would be discrimination. As bargaining agent, you act for all employees in the unit, even non-members. Thus, for example, if the CBA provides that the company shall give profit-sharing and the workers may collect their share through the bargaining agent, the bargaining agent cannot request the company to stop giving benefits to some non-union members simply because they refuse to go to their office to collect. The CBA is the law between the parties. It would be discrimination if I ask the company not to give CBA benefits to one party. (Mactan Workers Union v. Aboitiz). Substitutionary Doctrine You have also the doctrine of substitution. That means that if, during the term of a CBA, there is a change in bargaining agent, the new agent would have to have to respect the CBA. But it may shorten its term or refuse to renew it. But, in the Benguet Consolidated case, the SC said that was never doctrinal in the Philippines. In the case of General Marine Stevedore Union v. South Sea Shipping Lines, that was a mere obiter

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dictum. The issue there was whether a CBA which had run for 5 years was a bar to a CE. The SC said it was not. The issue of the effect of the CE on the CBA was never considered. The justification for such doctrine is since the employees are the true parties-in-interest, any interest claimed by the agent is defeasible at the will of the principal. The employees cannot revoke the CBA simply by changing their bargaining agent. The new agent must respect the CBA. BUT, even if we accept it here, it cannot be invoked to say that the new agent assumes all the personal undertakings of the old union. What are examples of personal undertakings? The NoStrike clause. The bargaining agent undertook this in its capacity as agent (it is the union which declares a strike, not the bargaining unit). Thus, the bargaining unit is not bound by a personal undertaking, such as a no-strike clause. And neither is the new bargaining agent. CBA is law between the parties Like any contract, the CBA is the law between the parties. In case of doubt, follow the rule of construction in the Civil Code, interpret in favor of the safety and decent living of the worker. Of course, a CBA cannot violate the law. The law forms part of every CBA. Therefore, provisions of a Minimum Wage Order allowing crediting of CBA wage increases to the mandated wage increase may also be applied to wage increases under a CBA. It is binding on all in the bargaining unit. XVIII GRIEVANCE MACHINERY AND VOLUNTARY ARBITRATION The grievance machinery is that used for resolution of grievances arising from: a. b. Interpretation or implementation of CBA Interpretation or implementation of personnel policies

Examples of interpretation or implementation of CBA. The company argues that wage increases for year 1 will not be carried over to the next year.

Examples of company personnel policy: promotions procedure disciplinary actions

It thus concerns anything dealing with staff movement, discipline or compensation and benefits due to personnel. Refusal to entertain grievance A grievance must be settled within 7 days from the date its submitted to the grievance machinery. (Under the rules, the seven days starts from submission to the final stage of the grievance

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machinery.) That is to ensure speedy resolution. If the employer dilly-dallies and fails to act after 7 days, it shall be automatically referred to voluntary arbitration. Compulsory arbitration is defined as: A system whereby the parties to a dispute are compelled by the government to forego their right to strike and are compelled to accept the resolution of their dispute through arbitration by a third party. The essence of arbitration is still there since you refer a dispute to a disinterested third party for resolution. But in compulsory arbitration, the third party is normally appointed by government. In Vol. Arbitration, you refer the case pursuant to a vol. arbitration clause of the CBA, to an impartial 3rd party for resolution. (Luzon Dev't. Bank v. Luzon Development Bank Employees Ass., Oct. 6, 1995) Is it really voluntary?

Well, it is not in the sense that you are compelled to appear before it. It is a mandatory CBA provision. But the reason it is called voluntary is because you (both parties) either decide to submit it to the arbitrator) or determine who will decide it (or at least agree on a manner of selecting him/her). In contrast, in compulsory arbitration, either one or both parties do not choose to submit the case to arbitration or have no hand in the selection of the arbitrator. Selection of Voluntary Arbitrator Who shall be the VA selected? Either: 1. 2. He/she is named in advance in the CBA; or The manner of their selection is provided in the CBA.

Jurisdiction of VA The VA has original and exclusive jurisdiction to hear grievances. So, for example, you have a CBA violation. It is not gross, as it is defined in the Code. Where do you go? To the Grievance Machinery, then, on appeal to the VA. You can no longer treat it as ULP. Suppose it is gross?

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You have the option. Treat it as ULP and therefore file the corresponding case or NOS, or treat it as a simple grievance. Note that the VA, if the parties agree, may also hear ULP and deadlock cases. For example, Union A is the exclusive bargaining agent. You are expelled from Union A for disloyalty. Where will you file your complaint for illegal dismissal? With the Grievance Committee, since it involves implementation of a CBA provision - the union security clause; or With the Labor Arbiter, since it is a termination dispute (covered by Art. 217) In Sanyo Phil. Workers Union v. Canizares, the SC said, the nature of a grievance is that it arises between the parties to a CBA: union and management. So only disputes involving the union and management should be referred to the grievance machinery. How can there therefore be a grievance if union and management agreed to dismiss the workers? Since this dispute is between the union-company and the individual non-union members, you should settle it before an impartial body. How can the grievance committee be impartial when the ones composing it are the ones asking for their termination? So, you file this case with the Labor Arbiter. It is a termination dispute. Likewise, in Pantranco North Express vs. NLRC (July 24, 1996), the dispute concerned an employee who was retired by the company since he had reached 25 years in service. He filed a case for illegal dismissal before the Arbiter. The issue is, did the Arbiter have jurisdiction over the case, since it concerned implementation of the CBA provision on retirement? The SC, applying the Sanyo Philippine Workers Union case, said that is not a grievance since it did not concern the parties to the CBA (the union and management) but only individual employees. As a matter of fact, the union and the company had agreed upon the provision in the CBA on compulsory retirement. Likewise, it was only the employee who questioned the compulsory retirement. This was thus a termination dispute which came under the jurisdiction of the Labor Arbiter. Applying this ruling, therefore, if you are dismissed, and: You alone question the dismissal, without union intervention; OR The dismissal is based on a CBA provision (agreed upon by the union and the company), THEN that is NOT a grievance since it is not disputed by the UNION, but only by an individual employee. When you first appear before the VA, you will define your issues which he will arbitrate upon. He will draw up what you call a submission agreement - one that defines and contains all the issues subject to arbitration. The VA shall have the following powers: 1. Hold hearings

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2. Receive evidence 3. Take whatever action is necessary to resolve the issues (including efforts to effect a voluntary settlement). Can the VA exclude some union members from the hearings because they tend to argue too much? NO. If they are deemed parties to a dispute shall be entitled to attend the proceedings. The VA should render a decision within 20 calendar days from submission. (When you say submission, you don't mean filing of complaint. You mean you have submitted all necessary documents and evidences and all that remains is for him to decide.) In Sime Darby v. Magsalin, the parties, in the submission agreement defined the issue as: "The issue of the performance bonus". When the VA decided it he said: 1. 2. Yes, the workers should get a bonus; AND Then he went on and said how much it should be.

Sime Darby protested: "All we submitted to arbitration was the issue of whether or not there should be a bonus!" But the SC said the VA had plenary power and jurisdiction to interpret the agreement to arbitrate and to determine the scope of his authority. So, he decided that it included not only Whether Or Not bonuses are warranted, but also their amount. The submission agreement did not qualify that that was the sole issue. Further, to say a bonus was required but leave the amount to management's discretion would be to make the decision of the VA superfluous. The company could simply say, they are entitled to hardly anything in bonuses. So the VA renders his decision. It becomes final 10 days from receipt. Can you file a motion for reconsideration? YES. When the 10 days prior to finality provision was added by law (RA 6715), presumably it allows a Motion for Reconsideration to be filed within that period. It is after that that the arbitrator loses jurisdiction. (Imperial Textile Mills v. Sampang, 219 SCRA 651) Review of VA decision Can you appeal the decision? NOT by ordinary appeal because the law says it becomes final and executory after 10 days.

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Is there any possible relief after it becomes final and executory?

YES. You can appeal by means of a special civil action for certiorari. This is provided under Rule 43, sec. 1 of the Revised Rules of Civil Procedure. The basis for this rules is that you cannot deprive the SC of its constitutional power of review over decisions of lower courts or quasi-judicial agencies. The VA is such a quasi-judicial agency. (Mantrade v. Bacungan; Oceanic Bic v. Romero) But the SC expanded this. Under the new rules on civil procedure, the Court of Appeals may review decisions of the voluntary arbitrator. This is based on the Luzon Development. Bank v. Association of Luzon Development. Bank Employees Association case wherein the SC said R.A. 7902 provides now that the CA has exclusive appellate jurisdiction over all final judgments and decisions of quasi-judicial agencies, among other things, except those falling within the appellate jurisdiction of the SC under the Constitution and Labor Code (this would refer to decisions of the Office of the Secretary of Labor and the NLRC). At the very least, the VA is a quasi-judicial instrumentality. Thus, his decisions may be appealed to the CA. (This is quite strange, since voluntary arbitration is also provided under the Labor Code.) So, from that date onward (Oct. 6, 1995), the SC will forward all appealed VA cases to the CA. But even if you can appeal, great respect is given to the decision of the VA, if he or she is a learned authority such as Flerida Ruth Romero or Dean Froilan Bacungan. Note however, that under Rule 43, sec. 2, cases covered by the Labor Code are not to be appealed by this process to the CA. However, arbitral awards are exlicitly covered under Sec. 1 as to be reviewd by the CA (even if they are provided for under the Labor Code.) Execution After the decision of the VA becomes final, what follows? Execution of the decision. Who can execute it? The VA can, or if he is absent or incapacitated, the Labor Arbiter in the region where the one seeking execution resides, can issue a writ of execution upon proper motion. Can the VA also decide that the sheriff made an error when he exceeded the authority granted by the writ of execution? YES. He has everything needed to put his powers who effect including ruling on the propriety of actions by the sheriff. Compensating the VA

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Very importantly, how do you pay the VA? First, the CBA must provide for a proportionate sharing scheme.

The Voluntary Arbitration fund, funded partly by the P1,000.00 CBA registration fee may partly answer for the fees. May the VA say, since he is such a noted expert in Labor Laws, he should get a big fee?

Yes. The law allows that the factors of 1. Nature of case, 2. Time consumed in hearing, 3. Professional standing of VA, 4. Capacity to pay of parties, and 5. The fees in the Rules of Court shall be taken into account in fixing the fees. Other means of dealing with employer So that is collective bargaining and voluntary arbitration.

Aside from collective bargaining, there are other means by which parties may bring matters to the attention of management and discuss it with them. 1. 2. Any group of employees may present petitions to the employer. They can also form a Labor Management Council/Committee.

Where there is no legitimate labor organization, LMCs may be formed voluntarily for promoting industrial peace. Likewise, under Art. 255, they may use the venue of LMC to participate in policy and decision-making processes affecting their rights and benefits. So, they can discuss, in the LMC, means to improving productivity, or of better compensating workers. LMCs have representatives from both labor and management. What is the effect of a resolution of the LMC? It is merely recommendatory, unless the parties otherwise agree. In line with this, RA 6971, the Productivity Incentives Act of 1990 provides that another possible function of a labor-management committee is to establish the productivity improvements program. It shall also settles disputes arising under the program. There is a difference between an LMC and a grievance committee. Don't get mistaken.

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An LMC does not have the role of resolving disputes under the CBA. You should refer these to the grievance machinery, which may have a grievance committee. The LMC is only a recommendatory body on the policy level, not an adjudication/dispute settling body, such as the Grievance Committee. Of course, nothing will stop the parties from making it an adjudicatory body. That would be a valid agreement. 3) Another means of resolving disputes voluntarily is through the exercise of the rights to engage in peaceful concerted actions.

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Concerted Actions Concerted actions are acts done by a group of employees, with the end of pressing a demand, whether or not related to a dispute. Ex. An open letter is written by disgruntled employees. They accuse the bank President of immorality and nepotism since he would promote shady characters, one of whom he was having an affair with; he allowed nepotism in employment, promotion and educational benefits; he would not take action against relatives involved in embezzlement; he would allow unauthorized withdrawals. The signatories were all dismissed. Was that ULP? The Bank President claims the letter was not a union action, but an individual act. So the dismissals had nothing to do with union activities. But the SC said, that is still protected. They were engaged in a concerted activity, in the exercise of their right to self-organization. This includes activities for mutual aid and protection. Joining protests, even by a small group of employees, if in furtherance of their activities as such, is a concerted activity which is protected. The issues complained of are within the sphere of collective bargaining. The reference to immorality supported the charge that the bank President failed to provide wholesome work conditions. What the bank should have done was to refer it to the grievance procedure. Since they did not, that is ULP. Collective bargaining is a continuous process imposing the mutual obligation, during the term of the CBA, to meet and convene promptly and expeditiously to adjust grievances or questions. Good faith bargaining requires you have an open mind and a sincere desire to negotiate over grievances (Republic Savings Bank v. CIR)

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But suppose a number of workers wrote letter - complaints on their own, that is not within the sphere of the right of self-organization. That is not a collective or concerted action. But don't think that this justifies any open letter in St. Mary's College v. NLRC, a 6-page manifesto was circulated in the college. It said the school forced them to sign affidavits waiving some benefits; the school was a prison without walls; there was no freedom, justice and peace in the school. It demanded that the directors and principal be replaced. Because of this, 6 faculty members were dismissed. The SC said that is gross misconduct. You ridiculed the directress and principal. You disrupted the good order in the school. You did not have the support of a substantial no. of their colleagues. We cannot believe you were in the process of organizing a union when you were dismissed. You did not even reach 30% of the rank & file. You cannot therefore claim ULP. (Note that, in this particluar case, there was lack of employee support for the letter. Though I personally feel the Republic Savings Bank ruling should apply.) Another example, you are all dismissed from a co. which later closes down. Can you picket the co. premises which has been sold to another corp. and protest the illegality of the closure? YES. Even if there is no employer-employee relationship. That is part of freedom of speech. There are other types of peaceful concerted actions such as a boycott - concerted refusal to patronize and employer's goods or services with intent to persuade others to like refusal noise barrage. As the various peaceful concerted actions go more and more into the realm of work stoppage, more and more, the laws on strike are applied to them. For example, if you will remember the case of IBM vs. Ferrer-Calleja, the workers boycotted OT. The SC said that was illegal as it was not the way to resolve a wage distortion. Without categorically stating that was a slowdown - a willful reduction in rate of work by concerted action of employees for the purpose of restricting the output of the employer in relation to a labor dispute, the SC said a slowdown is illegal - the workers continue to work and accept their wages yet selecting the work they will perform. In another case, the SC said that work slowdowns amount to an illegal strike and may be subject of an assumption of jurisdiction order. Every time the company would not accede to the union demands, production would decline. But when the demands of the union for restoration of overtime work were allowed, production would improve. That is strike on an installment basis apparently a pattern of manipulating production depending on whether or not the unions demands were met. (Philtread Workers Union vs. Secretary Nieves Confesor, Mar. 12, 1997) STRIKE: What is a strike? It is a 1. temporary

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2. stoppage of work 3. by concerted action of employees 4. as the result of a labor or industrial dispute For example, pilots of PAL decide to go on strike. Management is about to secure an assumption of jurisdiction. So the pilots are very angry. They say, "OK, we will not go on strike, we will all file applications for protest retirement, or protest resignation." And that is what they did. The retirement/resignation was enjoined. But they nevertheless filed their resignation/retirement. Two of these now ask for readmission. They were accepted but lost their seniority. They say, We should not lose our seniority. But the SC said that was not a strike. Employees who go on strike do not quit their employment. Since they did not assume the status of strikers. The protest retirement was not a concerted activity protected by law. A strike means only a "temporary stoppage of work! This was not temporary but a permanent cut-off of employment. When they did not follow the injunction order, this shows their bad faith. A legitimate concerted activity cannot be used to circumvent judicial orders. Then they say, "It was just a sham. We had no genuine desire to terminate our employment." SC said, that exposed you to the risk that PAL would act on your sham retirement seriously (Enriquez v. Zamora) In short, it must be a TEMPORARY stoppage of work. Another example, the workers in your plant ask if they can go and picket in front of Malacaang to protest police abuses. They will be absent one morning for this purpose. You say, "NO". But they go and picket anyway. Is that a strike? NO. It is not a result of a labor or industrial dispute. It is an action directed against the government. You cannot invoke business/economic reasons to stop the picket. In the hierarchy of rights, freedom of expression, of which this is an example, are superior to property rights. In short, a strike is the result of a labor or industrial dispute: One between the employer and employees. For example, a large federation of workers wants to engage in a general strike for one-day to protest the devaluation. If they go on a work-stoppage, will that be a strike (as contemplated by the Labor Code)? NO. That is not a labor dispute. It is a grievance against the government in the PBMOE mold.

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Suppose they go on a general strike to call for a wage increase?

That may be considered a strike as, ultimately, it will demand that the employer increase his wage benefits. Another example, there is a labor dispute - management is reducing the bonus it used to give the supervisors. So during their lunch break, the supervisions all picket outside the company premises. Is that a strike? NO. It is not a stoppage of work. There is no work to speak of during lunch break. In like manner, if the company lays-off a number of employees and these laid-off employees picket in front of the company premises to protest the terminations, that is not a strike. How can they be stopping work when they have no work to begin with? Suppose, you all work in a small hotel. In the food and beverage department, you have a master chef. He cooks all the food and directs the work of everyone else in the restaurant. There are about 6 of you in that department. One day, the master chef is so disgusted since the employer will not give him a raise. So he walks out of work. Since everyone else does not know what to do, they hang around doing nothing. Is that a strike? NO. The stoppage of work is not by a concerted action of the employees. It was only one person who instigated the work stoppage. There are different types of strikes. You have: a. General - over an entire area or industry. Local - over a single enterprise or industry. Particular - over a department or branch of the establishment

b. Primary - the employees waging the strike are directly interested in the grievances/bargaining demands v. the employer. Secondary - the strike is directed against a 3rd party with whom they have a grievance. (For example: You are security guards of Jaguar Security Agency. You are assigned to Ateneo Law School. Ateneo treats you poorly and does not give the respect you think you deserve as security guards. So, you all go on strike. It is secondary because the object of your grievances is not the agency, which is your employer, but Ateneo here would be a third party). Sympathetic strike - aimed at aiding employees in a different enterprise or bargaining unit. [For example: The company has a supervisory and a rank and file union. The supervisors discover that the rank & file union is planning on conducting a strike. So they also go on strike to coincide with that. They have no grievances of their own but decide to go on strike to support the members of another.]

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Economic - one which is conducted to compel the employer to grant benefits he is not required to grant under law or contract (in short, a bargaining strike) ULP - One due to ULP. Political - Undertaken to obtain concessions not from the employer, but from the government (local or national) 4) The DOLE, int its primer on strikes, also defines the following: a. Legal Strike - one called for a valid purpose and conducted through means allowed by law. Illegal Strike - the purpose is not recognized by law, or the means is not sanctioned by law Slow-down strike - one staged without the workers quitting their work but merely slackening or reducing their normal work output. In this league, we also have the following: Sit-down Strike - one where the workers stop working but do not leave their place of work Quickie Strike - A brief, unsustained stoppage of work for a day or less Wild-cat Strike - one declared and staged without majority approval of the recognized bargaining agent or without authorization of the union (it is staged perhaps, by a faction or group of union members) (For Example: Your CBA provides for yearly wage increases. The employer refuses to grant these. So you go on strike. Is that an economic strike? NO. It is a ULP strike. You are not asking that the employer do something it is not, under law or contract, obliged to perform. It is obliged to grant that - under the CBA). Note that government employees cannot go on strike under the Civil Service Decree. This is because of a Memoruandum Order of the Civil Service Commission (No. 6) and is implied by E.O 180 which says that their rights are subject to rules promulgated by the CSC. Then we have the requirements of a valid strike. We will divide this into: Procedural/Conditions Precedent Conduct of Strike Requirements/Limitations of Law PROCEDURAL REQUIREMENT (All of these have their own purposes) 1. Valid grounds

a. Deadlock in collective bargaining ULP - you include here illegal dismissal of union officers duly elected in accordance with the CBL which constitutes union busting. Note the elements -

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There is an illegal dismissal - If the dismissal is patently lawful or the union acknowledged the necessity for a retrenchment but only wanted to discuss the separation benefits, that would be in bad faith. The dismissal is of union officers - Dismissal of mere members would not be covered by this provision, therefore. The officers dismissed were duly elected - This precludes sudden appointment of dismissed members as officers. It also ensures that the dismissed member has a position of rank in the company. It constitutes union-busting - There must be anti-union intent. Mere illegality is not sufficient. If all these are met, then, you need not observe the cooling-off period. It may be an ordinary case of ULP. What if you conduct a strike due to ULP and then later, it is shown that there really was no ULP - that you were mistaken - is your strike automatically illegal? NO. What is sufficient is that, in good faith, you believed there was ULP. "Good faith" can be determined based on the circumstances. For example, the company retrenches some union members a few weeks before Collective Bargaining negotiations are to start. The union investigates and learns that there is another company involved in the same business being operated and run by the General Manager. The union doubts the claim of retrenchment since they noticed a large number of job orders done the past year. That would justify a good faith belief the company is dismissing union members as a threat and means to weaken the union before the negotiations start. That is restraint in exercise of the right to self-organization. Even if it is later on shown that the GM was only conducting a sideline without the company's knowledge and that the job orders were for a customer who never paid (he went bankrupt), the good faith belief is justification enough. (Philippine Metal Foundries v. CIR) What is an example of bad faith belief? One of the union officers is dismissed for refusal to comply with a transfer order. But prior to his dismissal, the SC found that there was sufficient time to have the transfer issue subjected to grievance. The union said that it would have only been an exercise in futility. The SC said, thats not a good reason to disregard that procedure. The wrong of the company cannot be remedied by another wrong. There was thus an absence of good faith or honest belief that the company was committing ULP. (J. Vitug, Panay Electirc Co. vs. NLRC, Oct. 4, 1995) Suppose during negotiations, the company just keeps delaying, saying, let's wait for the company President to return from his vacation abroad". You wait 3 months, the answer is the same. So the union gets impatient and declares a deadlock. WRONG! That's not deadlock. Deadlock means there is an impasse which supposes reasonable effort at good faith bargaining. But, despite noble intentions, you don't reach an agreement. Where there is no reasonable effort as good faith bargaining, that's ULP (Divine Word University v. Sec. of Labor)

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You cannot declare a strike on grounds of inter or intra-union disputes. (For example, you are negotiating with management. All of a sudden, there is a split inside your union. Now there are 2 groups claiming the right to bargain. One group demands that the employer negotiate with them. They go on strike when it does not. That is a strike due to what is essentially an intra-union dispute.) Substantial and not Trivial Grounds The strike must be declared on substantial grounds. If you go on strike due to rearrangement of office furniture, that is hardly substantial. For example, because employees wasted so much time making tsismis, entertaining visiting friends and personal phone calls, the management changed the seating arrangement in the underwriting department in this surety company. Four employees protested, claiming anti-union harassment and refused to move. The manager answered them and they started insulting him. Because they refused to move, they were suspended. Eventually, they were dismissed because of insubordination. The SC said that that change in seating arrangement was a valid exercise of management prerogative. It could hardly be ULP. We are at a loss to see how rearranging furniture can justify a four-month long strike. This is an example of a trivial ground. (Reliance Surety & Insurance Company vs. NLRC, Jan. 25, 1991). Or, for example, you go on strike due to failure to pay holiday pay for one day.

Or the company and union agree to continue the negotiations. The company is still going to answer the union's proposal and there was an agreement to maintain the status quo pending resolution of the PCE. Yet, the union declares a strike. The SC said that is trivial, unreasonable and unjust. The strike is therefore illegal (United Seamen's Union of the Philippines v Davao Shipowners Association, 20 SCRA 1226). Other examples of invalid grounds: Strike to compel the company to remove a foreman who happens to be the officer of a rival union. The foreman had no power to dismiss at all. (Luzon Marine Department Union v Roldan) 3. Wage distortion (IBM v NLRC) Notice of Strike Note that it must be in the form required by the IRR.

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What must you state in the notice? a. Names and addresses of employer and union b. Nature of industry c. No. of union members d. No. of workers in bargaining unit Other relevant data which may facilitate settlement, such as the list of pending cases f. In case of deadlock - unresolved issues written proposals proof of a conference to settle disputes in case of ULP - as far as practicable, you state the acts complained of, an the efforts to resolve the dispute amicably In connection with this, we have what you call "preventive mediation cases." The DOLE defines this as potential labor disputes that are subject of formal and informal requests for conciliation and mediation assistance and sought by either or both parties or upon initiative of NCMB to avoid the occurrence of actual labor disputes. (NCMB Manual of Procedures for Conciliation and Preventive Mediation cases) The SC held that you cannot therefore go on strike if the issue is subject to or converted to a preventive mediation case. The DOLE does not consider it a dispute. (Pal vs. Secretary of Labor) 4. deadlock - 30 days ULP - 15 days dismissal of officers constituting union-busting - 0 days (the union can take immediate action) What must be done during this time? The DOLE must exert efforts to settle it. They will call the parties to preventive mediation. In case the ground for a strike is dismissal of union officers constituting union-busting, must a notice of strike still be filed? YES. Art. 264(a) says: No labor organization shall declare a strike without: first having bargained collectively; or having filed the notice of strike; or the necessary strike vote first having been obtained and reported to the DOLE. 5. Strike vote Cooling-off period -

- You need - a majority of union members voting in favor of the strike - by secret ballot - in meetings or referenda held for the purpose. For example, you have 100 members of the bargaining unit. Only 50 out of 80 union members vote in favor of a strike. Can the union go on strike?

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YES. What you need is a majority vote of the union members, not the members of the bargaining unit. A strike is declared by the union, not the bargaining unit. Suppose they pass around a piece of paper. All in favor of the strike should sign on it. Is that a valid strike vote? NO. It must be by secret balloting. Suppose you put out a box with a hole in it. You paste a sign - "Place strike vote here". Anytime during the day, a union member can cast his ballot. There is a union officer sitting beside the box to guard it. Valid? YES. The law is in the plural: meetings or referenda. It is not required that it be accomplished in a single meeting. 6. Strike ban

This means that you cannot go on strike except after 7 days from furnishing the DOLE your results of the strike vote. (7 days after filing should lapse before you can go on strike). Is a strike vote and strike ban necessary if the ground is illegal dismissal of union officers constituting union-busting? (a) YES. Look at Art 263(f): "In every case, the union or the employer shall furnish the DOLE the results of the voting at least 7 days before the intended strike or lock-out, subject to the cooling-off period." So that means, notwithstanding the urgency of the matter, the 7-day period for strike ban must still be observed. Note that the law never says the union, under those conditions, may go on strike at once. What it says is "the 15-day cooling-off period shall not apply and the union may take action immediately." Therefore it is only the cooling-off period to which it provides an exception. When you say the union may take action, that does not necessarily mean they can go on strike. It means they can begin the process leading to a strike. The constitution and the law still gives premium to voluntary modes of settling disputes, such as conciliation and mediation. (b) However, take note of the NCMB Manual or Conciliation and Preventive Mediation. It says in case of illegal dismissal of union officers constituting union-busting, the 15-day strike vote shall not apply and the union may take action immediately after the strike vote is conducted and the results thereof submitted to the regional branch of the Board. It is silent as to the 7-day waiting period. It therefore seems to imply that in these cases, you don't need the strike ban (The rationale being due to the urgency of the matter, it being a measure of self-preservation on the part of the union). (Rule IV, Sec. 5) The law, however, is clear in requiring a strike vote and seven-day waiting period in every case. Before we go further, must all of these requisites be met?

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YES. They are mandatory in nature. The law says: the union may strike if the dispute remains unsettled until the lapse of the mandatory filing of the notice " (Art. 264(e)). Clearly, the union cannot go on strike before the period has lapsed. What is the reason for making them mandatory? NOTICE OF STRIKE AND COOLING-OFF PERIOD - This informs the DOLE of the dispute and provides an opportunity for mediation and conciliation. Thus, after filing of the notice, the DOLE is directed to exert all efforts at conciliation and mediation to effect a voluntary settlement. REPORT OF STRIKE VOTE/STRIKE BAN - The report gives the assurance that a strike vote has been taken and, if it is false, majority of the members may still take action before it is too late. Since we want to attain these objectives, the requisite periods must be mandatory. (National Federation of Sugar Workers v. Ovejera) The strike ban is also there to give DOLE a chance to verify if the strike to be conducted has imprimatur of majority of the union members. (Lapanday Workers Union v. NLRC, Sept. 7, 1995) Can the strike ban and the cooling-off period run simultaneously?

YES. Nothing in the law prohibits it. The law does not require you to wait 37 days before declaring a strike on grounds of bargaining deadlock. For example: You file your NOS on the ground of bargaining deadlock on April 1, 1996. The cooling-off period starts on April 1 and therefore expires on April 31, 1996. Suppose you conduct a strike vote within that 30-day period. You submit the results on April 10, 1996. The strike ban therefore ends on April 17, 1996. The question is can you go on a valid strike on April 31? YES. Both periods have been met. [Now if you will look at the DOLEs primer on strikes and lockouts, it will tell you something else. They say you must tack on the cooling-off period to the strike ban. So you wait 37 days. I ask, what is the basis for that? Without having to tack on the 2 periods, you have already complied with the purposes of the law.] Corollary to this, suppose you filed the NOS for deadlock on April 1. You conduct your strike vote and submit its results only on April 30. Can you go on strike on April 31? NO. You have to let the 7 days lapse. So, you can go on strike on May 6.

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Suppose your NOS is based on 2 grounds - ULP and bargaining deadlock (You go on strike because of deadlock and because the company is dealing with your members individually). When does your cooling-off period end? For the ground of ULP, after 15 days. For the ground of deadlock, after 30 days. Meaning, assuming the strike vote is filed and the strike ban has lapsed, if that particular ground still exists, you can go on strike. But of course, if the ground has been resolved, then your strike will not be in good faith and your ground will thus not be strikeable. 7. The union going on strike must have the requisite personality and authority. In short, it must be a legitimate labor organization. If the strike is economic (bargaining) in nature, it must also be the exclusive bargaining agent. If the strike is a ULP strike, it must also be the exclusive bargaining agent UNLESS there is no such agent selected. In which case, t is sufficient that it be a legitimate labor organization. Suppose there is a CBA, and during the freedom period, a new union is formed and registered and it files a PCE. The PCE drags on for several months. But the employer likes the incumbent bargaining agent so much that it dismisses all the officer of the new union. Can this new union go on strike? NOTE - there is an incumbent bargaining agent. I would think it can go on a valid strike. The PCE precisely is questioning the status of the incumbent bargaining agent. Note Art 256 (par.2): "At the expiration of the freedom period, the employer shall continue to recognize the majority status of the incumbent bargaining agent where no PCE is filed." That is the condition for the maintenance of the incumbents authority as bargaining agent - no representation issue has begun. Meaning, corollary to this, where a PCE has been filed and the freedom period has expired, the employer is not bound to recognize the incumbent bargaining agent's majority status. - It is equivalent to there being no certified bargaining agent. The employer has no obligation to negotiate with the incumbent bargaining agent. Likewise, the employer is no longer bound to negotiate with the incumbent bargaining agent. 8. There is no pending case involving the same grounds for the strike. (This is very often overlooked. You can find it in Art.264, par.2). For example: Union A is newly-organized. The employer does not like it. So it dismisses its two top officers. Union A files a case for ULP/illegal dismissal before the labor arbiter. The case drags on for three weeks. Union A, dissatisfied with the lack of prompt relief, decides to declare a strike instead. Assuming it complied with all the requirements we mentioned earlier, is the strike valid?

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NO. Because there was a pending case involving the same grounds. The law seeks to prevent forum-shopping. Once you've made a choice, stick to it. But suppose after two union officers are dismissed, Union A files a case for ULP/illegal dismissal. Then two more union officers are dismissed. It then goes on strike for ULP/illegal dismissal because of this. Is the strike illegal? NO, that strike is not based on a ground in a pending case. It is for a second instance of ULP, obviously. 9. Exhaustion of pacific means

You have exerted efforts to settle amicably in the plant. If necessary, bring it without the grievance machinery. Try to settle it there first. If not settled, either bring it to VA or file an NOS. In Master Iron Labor Union v NLRC, the Supreme Court said the refusal of the employer to undergo the grievance procedure (on the issues of CBA violations) shows a lack of intent to abide by the terms of the CBA. 10. It is not in violation of a no-strike/no-lockout provision.

However, the SC has noted that such a provision will apply only in the case of economic strikes. As we said, economic strikes are those where the union seeks to force wage or other concessions from the employer that he is not required, by law or contract, to grant. In short bargaining strikes. For example, during the term of the CBA of supervisory employees, the rank and file workers receive a bonus. The supervisory employees try to make management pay them a bonus as well. So they go on strike for that. The employer was not bound to pay that, there being no CBA or legal provision requiring them to do so. The union was therefore seeking to compel the employer to grant a benefit it was not bound to grant. (Panay Electric Co. v. NLRC, October 4, 1995, Master Iron Labor Union v NLRC). So also, where the strike is due to violation of the CBA provisions granting service allowances to workers assigned outside the company, this is not an economic strike. They are simply asking for implementation of what the CBA provides. While the demand is for an economic benefit or entitlement, none of the grounds are economic (Master Iron Labor Union v NLRC; Panay Electric Co. vs. NLRC, Oct. 4, 1995). Why is it that it won't apply to ULP strikes? Because it is the employer's act of ULP which led the union to go on strike. (It's as if they committed the first violation). What is the effect if you violate any of these?

The strike may be declared illegal.

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What's the effect if the strike is declared illegal?

Only officers shall be subject to termination. A finding of the illegality of the strike should not automatically be followed by wholesale dismissal of strikers. We should distinguish between ordinary members, who do not fully understand what is strikable or not, and the officers, who led them to believe they could go on strike. The ordinary members were ill-advised and not aware of the dire consequences of their acts. (Progressive Workers Union v Aguas). The officers, being aware of the law on strike, should be penalized, but not the ordinary members of the union who simply followed them and may have been misled. An officer who knowingly participates may be deemed to have lost employment status, Gold City Integrated Port v NLRC, 245 SCRA 627). The law therefore states:

Any union officer who knowingly participates in an illegal strike may be declared to have lost his employment status. (But mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment even if a replacement has been hired during such lawful strike). CONDUCT OF STRIKE: Even if they comply with all those, the following must also be followed if they don't want the strike to be declared illegal: 1) No violence, coercion or intimidation Ex. - The strikers stone the workers who want to continue working - this is an act of violence. - The strikers form a human barricade around cars of management personnel as they enter the company premises and rock them back and forth - intimidation. 2) No obstruction of free ingress to or egress from the employer's premises for lawful purposes. The law says no obstruction of free ingress or egress. ("Ingress or egress" means entrance and exit.) The egress/ingress must be used for lawful purposes under this provision. What are unlawful purposes? The law does not attempt to make a definition of when it is lawful. Suppose, as a company vehicle enters, you stand at the sides shouting and saying "Mga buwisit kayong mga eskirol!!! Patay kayo kapag pumasok kayo! Gaganti rin kami! Hala kayo!" That is not obstruction of the ingress and egress. But it is still illegal since it constitutes intimidation. But if you simply shout, "Welga kami! Makiisa kayo! Huwag kayong pumasok! Sige na! Please!" Then they turn back because they are ashamed to go in, that's all right. You can use all means of peaceful and friendly persuasion.

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3)

No obstruction of public thoroughfares.

So if you place a tent to the side of the wall and, since the sidewalk is so narrow, extend it over to the middle of the street, you are obstructing a public thoroughfare. Also, if you ask for alms/support from passersby, holding out a box with a hole in the center and shake it and, to ensure that passing motorists pay attention to you, stand in the middle of the road and shake the box at them, that is also obstruction of public thoroughfares. For example, during a strike, the workers conduct a picket in front of the company premises. Then, he comes the Assistant Corporate Secretary. He tries to enter the company premises. A union officer then shouts to all strikers. "Close up". So they close up. So Garcia continues and tries to pass through. He grabs one of the placards. That starts a fight. He suffers bruises and lacerations. In Insular Life Employees Association v Insular Life, the SC said, there is no violation committed. The police blotter said the strike was peaceful that day. The Asst. Corporate Secretary was obviously sent to create an incident so that the company could file criminal charges. (Why did he insist on entering the company premises when he company was then holding office elsewhere?) Third, the picketers were not legally bound to yield and withdraw. They had every reason to defend their selves against an assault or unlawful aggression. Heated altercations and occasional blows do not diminish the right to strike. Some disorder is usual in strikes. The incident was a necessary incident to strike and should not bar reinstatement. They were mere ordinary misdemeanors (Insular Life Assurance Company Employees Association v Insular Life). Likewise, where there was a strike, molotov bombs were thrown and exploded. Management personnel were hurt. The SC said, that in itself will not make the strike illegal. Violence will make a strike illegal ONLY IF: 1) It is pervasive and widespread; or 2) Consistently and deliberately resorted to as a matter of policy. The acts, however, are still illegal and there is thus individual liability for them (Shell Oil Workers Union v Shell Company). What about bad words? During the strike you might say: "Management Kuripot!" "Mga Ahas!" "Illegal Dismissal!" "Unfair to Labor !" "That's alright. You obviously can't expect them to be courteous and polite when they are angry. You can therefore insinuate. That is covered by freedom of expression. They have the right to disseminate the facts and appeal for public sympathy. (PCI Bank v PhilNabank Employees Ass., 105 SCRA 314) - But that has limitations. You can use it to persuade, but not coerce. You cannot threaten - that is prohibited.

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In such cases where the strike is not illegal, only the strikers committing illegal acts will be subject to termination. As the law puts it: "any worker who knowingly participates in the commission of illegal acts during a strike may be declared to have lost their employment status." (Art. 264. par 3) SCOPE OF STRIKE What is the strike area?

1) The establishment of the employer struck against - you will include here the warehouse, depot, plant or office & sites & premises used as run-away shops. 2) The immediate vicinity actually used by picketing strikers in moving to and for before all points of entrance to and exit from the establishment. 3) Including the run-away shop.

Note that the DOLE primer on strikes says that the strike area ends just before the point of exit and entrance. Therefore, it concludes, the ingress and egress is not part of the strike area. (I have doubts on the validity of that. Before means in front of. So if you picket in front of the entrance, that is still legitimately within the strike area.) What is a run-away shop?

That is the place used by the employer in carrying out part of its operations. For example, during the strike, they rent an office space where the managerial personnel can report to everyday. That is a run-away shop and is part of the strike area. It is not prohibited to operate a run-away shop. It is just part of the strike area. Now if the picket is not within the strike area, it may be enjoined. Suppose, you have this cooking gas manufacturing company. The company partly sells its products through a retail store. When the workers go on strike, they picket not only in front of the factory, but they picket, as well in front of: - the house of the company's general manager, and - the retail outlet So those two ask for an injunction with the regular courts. However, the Supreme Court said, if we look at these two, they have some connection with the company: The General Manager (who was also wife of the owner of the retail outlet) has an interest in the controversy involved. The retail outlet, as distributor, also has an indirect interest in the dispute.

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Then the Supreme Court went on to say: Picketing may be carried on not only against the manufacturer but against a non-union product sold by one who has a UNITY OF INTEREST with the manufacturer. In this case, there was such a unity of interest - the retail outlet was stocked with products of the company just before the strike in order to minimize its effects. As distributor, it was also engaged in the same business. The Supreme Court even went so far as to say if the union cannot follow the product to the place where it is sold, it will be deprived of a fair and proper means of bringing its plea to the attention of the public. If the manufacturer, for example, pays substandard wages, it and its retailers can undersell the products. This will reduce workers' wages. The two are therefore involved in the issues of the workers. (Association of Labor Unions v Borromeo) You cannot therefore prohibit peaceful picketing solely on the ground that it is carried on by persons not employed therein. If there is a UNITY OF INTEREST, the union can conduct the picket there. But of course, if there is no such UNITY OF INTEREST, then you can enjoin the strike. For example, in Liwayway Publications v Permanent Concrete Workers Union, you had one big compound where Liwayway and Permanent Concrete (PCP) had their buildings (one was a bodega of Liwayway; the other was a plant of PCP). Liwayway had its own road, its own gate, and it was separated from PCP by a cement and barbed wire fence. In front of the two was a national road. When the workers of PCP went on strike, they extended their strike to the premises in front of Liwayway. They barred trucks which wanted to load and unload newsprint from entering. They did not allow officers of Liwayway to enter. So Liwayway filed a petition for injunction with the Regular Courts. Note the regular courts will not grant this if there is a labor dispute involved between the parties. Was there a labor dispute? EMBED CorelDRAW.Graphic.6 NO. Liwayway had absolutely no relation to the union. It was just a sublessee in the compound. Liwayway published magazines. This had nothing to do with the manufacture of cement. if Liwayway wants to get newsprint from the bodega, how does that deal with the business of making cement? Likewise, if the company is leasing a lot in the compound of the establishment struck against, the strikers cannot prevent access to the workers going into such company. So when we get to peaceful picketing, it may be conducted against run-away shops and those who have unity of interest with the employer, but it cannot be conducted so as to prejudice Innocent Third Parties or Bystanders. These parties can get an injunction from the regular courts. In connection with this, we said that if there is a labor dispute, then you do not enjoin the picket by means of a petition before the regular courts. You can go to the NLRC. For example, the union goes on strike due to union-busting and ULP. It stages a picket in front of a store. The company files a petition for injunction with the regular courts. The RTC grants it because the picketers were all dismissed. They are therefore no longer employees.

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If they want to show that there is a labor dispute (and therefore not subject to a civil injunction), they must prove the dismissal and ULP. Supreme Court said NO. To require proof of ULP would be to promote conflict of jurisdiction. It would make useless the labor code's provision on original and exclusive jurisdiction of the NLRC over labor cases. (Samahang Manggagawa sa Liberty Commercial v Pimentel). So also, where there is a strike declared by supposedly "agency"-hired employees against Magnolia, demanding that they be regularized and given CBA benefits and SMC seeks an injunction before the regular courts saying since they are employed by an agency, there is no employer-employee relationship. The Supreme Court said that is a labor dispute. A labor dispute is defined as including any controversy or matter (1) concerning terms and conditions of employment or the association or representation of workers in negotiating, fixing, maintaining, fixing or arranging terms and conditions of employment, (2) regardless of whether or not the disputants stand in the proximate relation of employer and employee. It is therefore not essential that there be an employer-employee relation. What is needed is: does the dispute concern terms and conditions of employment, or representation of workers in fixing terms and conditions of employment? Since they were asking that they be regularized and given CBA benefits and included in the rank and file union, the Supreme Court said, yes that concerns terms and conditions of employment and representation of workers in fixing such terms and conditions. (SMC Employee Union v Bersamira, June 13, 1990) INJUNCTIONS So if there is no labor dispute, secure an injunction with the regular courts through a civil case. If there is a labor dispute, go to NLRC. And, in line with these, one of the powers of the Commission is the power to enjoin or restrain unlawful acts which, if not restrained, may cause grave or irreparable damage or render ineffectual any decision. NLRC can issue TROs and injunctions. When may an injunction be issued?

No temporary or permanent injunction shall be issued except after hearing (with crossexamination) and a finding of fact that: The unlawful acts have been threatened and will be committed and continued unless restrained; Substantial and irreparable damage to the petitioner's property will follow; As to each item of relief, greater injury will be inflicted upon complainant if relief is denied than will be inflicted on respondent if relief is granted; 4. Complainant has no adequate remedy at law; 5. Public officers are unable or unwilling to furnish adequate protection.

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Notice shall be served on all persons against whom relief is sought and to the Mayor/Governor of the province or city where the acts are supposed to be committed (because they have the duty to protect the complainant's property). When may a TRO be issued?

Complainant must allege that unless a TRO is issued without notice, substantial and irreparable damage to his property will be unavoidable. The TRO/Injunction will issue only if a bond is filed to pay the respondents for any losses they may suffer if it is erroneously issued plus attorney's fees and expenses. When does this injunction become relevant? During strikes, particularly when there is obstruction to free ingress and egress. As a matter of fact, while the provision (Art. 218 e) does not explicitly say so, that is its main object. Note, than the provision repeatedly refers to danger to the complainants property. The requirements are: the complainant must prove he stands to suffer substantial and irreparable damage to his property the public officials charged with duty to protect his property are unable or unwilling to furnish adequate protection. (Bisig ng Manggagawa sa Concrete Aggregates vs. NLRC) A TRO will be issued only if it is shown that without it, substantial and irreparable injury to complainant's property will be unavoidable. Note that the requirements must be complied with strictly if the union fails to appear at one hearing (the first) and it seems there was no return of service to them, it is wrong for the NLRC to continue with the hearing on the injunction. It would also be wrong to continue with such hearing where they never proved they sought the assistance of the police and the police did nothing. NOTE that you must show the inability of public officers to furnish adequate protection. (Bisig ng Manggagawa sa Concrete Aggregates vs. NLRC) May a Labor Arbiter issue a writ of injunction?

The NLRC Rules of Procedure say not as an original case, but only ancillary to any matter pending before him for resolution. That is one incident of a strike, therefore, injunctions.

A temporary injunction was issued despite the fact that, after the TRO was issued, all the barricades were removed. The people were able to enter. The Supreme Court said - There was an adequate remedy. No need for injunction. Further, the police were always patrolling. How can

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you say they failed to provide adequate remedy? Next, no copy of the petition for injunction reached the union. so it did not attend the hearings. So, the company had a field day in presenting its evidence ex parte. The Supreme Court said a TRO ex parte is not prohibited. But we should be very careful and issue it only if there is extreme necessity - the unlawful acts are causing substantial and irreparable injury to company properties and the company has no adequate remedy at law. Experience shows that ex parte applications for TROs are based often on fabricated facts. That is why they should be more minutely examined by hearing officers. Notably, the Supreme Court said, the union filed its own petition for injunction to enjoin use of military and police to escort scabs. No action was taken on this whereas the company got the TRO on the day of the filing of the petition. The disparate treatment is inexplicable considering the two are of equal importance. (Bisig ng Manggagawa sa Concrete Aggregates v NLRC, Sept. 16, 1993). Other incidents: IMPROVED OFFER BALLOTING: This is what the DOLE shall do in an effort to settle the strike. They must conduct it by means of secret ballot. The voting takes place only among union members, not the entire bargaining unit. When shall it be conducted? On or before the 30th day of the strike. What happens if the union refuses to recognize it? They cannot prevent DOLE from conducting it. But they can always boycott it. Suppose they vote on it and the vote is in favor of acceptance. What next?

They shall draft an agreement based on what was accepted and, upon signing, all workers must immediately return to work and the employer must readmit them. Suppose, before the union declared a strike, the offer and proposal were as follows:

Union proposal: Mgt. offer:1st yearP15.00/dayP1.002nd yearP15.00/dayP2.003rd yearP15.00/dayP3.00 The union declared a deadlock at this point. After 29 days, neither side agreed to the others counter-proposal, may the DOLE conduct the referendum? NO. It refers to an improved offer balloting. There being no improved offer, there is no justification for DOLE intervention.

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Suppose the employer said, "OK, I will increase it to this: 3-2-1." Shall the DOLE be justified in conducting the balloting? YES. There is a change in the total cost since the bigger wage increase was placed at the start. What is the effect if the workers accept the improved offer but some don't return to work?

The same as if they defied a return-to-work order. The law is silent but the use of the mandatory terms "shall return to work" and reading this in conjunction with the purpose of the law - urgent need to promote industrial peace due to labor dispute - I would think the provision is mandatory in nature. NOTE that majority of the entire union membership must vote to accept it, not majority of the bargaining unit. ASSUMPTION OF JURISDICTION: It shall be exercised when, in the opinion of the Secretary of Labor, there is: a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest. NOTE that the dispute must be causing or likely to cause a strike or lockout. If the parties are far from a deadlock and there is no sign of substantial disagreements, Assumption of Jurisdiction would therefore not be justified. It must be in an industry indispensable to the national interest. Prior to 1989, the standard was, the strike or lockout would be adverse to the national interest and they included here the list of some industries they deemed would fall under such criteria in the event of a strike or lockout. What are these? Utilities Communication Transportation Banking Power Supply Export-Oriented firms

But they amended it, took away the list and restated the standard to be in an industry indispensable to the national interest. So it seems to have become stricter. It should now be more difficult to justify an assumption order. What have been some of the criteria DOLE has used in determining whether or not a dispute is subject to Assumption of Jurisdiction. educational institution: this is a vital service

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large number of employees: many would suffer loss of work top dollar earning industry: a big hotel.

The tourist industry is one of our major income-generating industries. In one case, the SC said the fact that Philtread supplies 22% of the nations tire products and employs 700 workers shows that it is imbued with national interest. If the company closes down, this will aggravate the unemployment problem. We will lose a major source of tires. (Philtread Workers Union vs. Confesor, Mar. 12, 1997) In another case, you had a large mining corporation. The SC said: Marcopper operates the San Antonio Copper Project in Marinduque. The project is financed through long term loans granted by the Asian Development Bank and its co-financers, in the aggregate amount of US$40,000,000.00. It also supplies electrical power to the entire province of Marinduque. Also, any disruption in the operations of the Company will adversely affect its financial status and consequently its capacity to pay the loans acquired. Considering that the Company's project is basically financed by these loans, the continued operation of the project is threatened. Consequently, the means of livelihood of about 1,500 employees stands to suffer. Furthermore, the government will also be prejudiced by any work stoppage in the Company since it would mean loss of taxes and foreign exchange earnings from one of the major contributors of its sources of funds. Any work stoppage will also adversely affect the whole province of Marinduque whose supply of electrical energy depends on the uninterrupted operations in the Company. (Marcopper Mining Corp. vs. Secretary Brillantes, Mar. 11, 1996) Is the Secretary's determination subject to review? Of course. In GTE v Sanchez, you had here the Telephone Directory company. Sanchez assumed jurisdiction over a strike here. The Supreme Court said that is wrong. Then the standard was only "adverse to the national interest". The Supreme Court found that the Telephone Directory is hardly vital enough to justify an assumption order. Once a dispute has been subject to an assumption order, what happens to it? It shall be reduced to a litigation. Who shall hear it?

It can be heard by the Secretary of labor. Or he can certify it for compulsory arbitration to the NLRC. (Generally, deadlocked cases go to the Secretary of Labor, ULP case go to compulsory arbitration). What else is the effect of an assumption order?

If no strike has taken place, it is automatically enjoined. If a strike has begun, all striking workers must (shall) immediately return to work and the employer shall immediately resume operations and readmit them all under the same terms and conditions of employment before the strike.

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In short, you revert to the status quo prior to the strike. Note that while the previous listing of industries subject to assumption has been removed, one particular line of business has been identified - hospitals. As to hospitals, clinics and similar medical institutions, the rule is, avoid a strike, to every extent possible. Is a strike prohibited in hospitals?

NO. But the parties and government should exert all efforts to substantially minimize, if not prevent, their adverse effects on life and health. What does this mean? It means that while they can go on strike, the following measures must be undertaken: 1. The union and employer have the duty to provide and maintain an effective skeletal workforce of medical and other health personnel. 2. These personnel will have unhampered and unrestricted movement and services as are necessary to insure proper health and adequate protection of the life and health of its patients, especially emergency case. 3. The Secretary of Labor may immediately assume, within 24 hours from knowledge of the strike or lockout, jurisdiction over the same and certify it to NLRC for compulsory arbitration. Who asks for the assumption order?

Anyone. As a matter of fact, if you will read the case of PSBA v Noriel, Congressman Jabar of FFW wrote a letter asking for DOLE intervention when the strike erupted in PSBA. The DOLE can assume on its own. In that case, the Supreme Court said, under the circumstances - there was an unresolved labor dispute, it affected 9,000 students, it adversely affects national interest - the Secretary of Labor did what he should have done - assume jurisdiction. So what if there was a letter from FFW? The DOLE, under these circumstance, was justified in acting on its own. When he did so, he did not render any decision. He simply assumed jurisdiction. So you cannot blame him of partiality to FFW (dahil kay Jabar). When they issue an assumption order, sometimes it will read like this:

"All striking workers are hereby ordered to return to work and the employer to accept them under the same terms and conditions of employment prior to the strike. Both parties are ordered to refrain from any retaliatory acts. PAL was issued one such order when there was strike conducted

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by its staff. PAL complained. It said, we have the prerogative to dismiss employees for illegal acts! The Supreme Court said that is right. The strike is illegal. It was premature. It sought to modify an existing CBA before the freedom period. Since it is an illegal strike, the company has the right to take disciplinary action against the union officers and members guilty of illegal acts. All that the Secretary of Labor may do is enjoin the holding of a strike. he can't hold back the company's right of action vs. the strikers. (PAL v Secretary of Labor). What cases will be heard under an assumption order?

In PAL v Secretary of Labor, the strike was declared on grounds of deadlock and ULP. When the Secretary assumed jurisdiction, he decided the two issues of deadlock and strike and also declared that the strike was valid. The Supreme Court said that is wrong. Not only was the strike invalid (premature bargaining despite existence of CBA) the legality of the strike was not among the issues submitted to him for decision. However, in International Pharmaceuticals vs. Secretary of Labor, a strike was declared. There were three other pending labor cases: 1) 2) 3) Petition for injunction against the picket ULP case filed by the Union Petition to declare strike illegal

The Supreme Court said the Secretary can assume jurisdiction over all three as well (aside from the issues involved in the disputes leading to a strike). The reason is, while Art 217 vests labor arbiters with exclusive, original jurisdiction over employer-employee cases, it also states "except as otherwise provided under this Code). It was intended that the Secretary and arbiter share jurisdiction in some cases, otherwise, he would not be able to effectively dispose of the primary dispute. he should be allowed to completely dispose of the dispute and all its incidents. In Divine Word University v Secretary of Labor, it also said this should also avoid multiplicity of suits and confusion and delay. Are the two rulings (PAL/International Pharmaceuticals) contradictory?

NO. In St. Scholastica's College v Torres the Supreme Court said there is a difference. PAL v Sec. said the validity of strike issue could not be decided because it was never submitted for decision. So it was in excess of jurisdiction when the Secretary of Labor decided it. But if it is involved in the labor dispute itself or submited before the DOLE agency for resolution, then the International Pharmaceuticals ruling applies. The assumption order will therefore include and extend to all questions and controversies arising from the dispute, including cases over which the Arbiter has exclusive jurisdiction.

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So incidental issues in certified/assumed cases are one of the cases where the Secretary of Labor has concurrent jurisdiction with labor arbiter. So in St. Scholasticas', the school prayed the secretary uphold their dismissal of the striking workers. That request submitted the issue for decision. So, because of that, the Supreme Court said, you can also decide the issue of legality of the dismissal. That is in line with the intent to promote social justice and provide workers with immediate access to their rights and benefits. So that is the effect of an assumption order as to issues to be litigated/decided. What happens if the workers refuse comply with the return-to-work order? The Supreme Court said they may be deemed to have lost their employment status. Assumption has the effect of automatically enjoining the strike or requiring the workers to return to work. One reason is to protect workers. Another reason is to prevent impairment of the national interest which is disrupted by the strike. Returning to work is an obligation of the worker. (Sarmiento v Tuico). The union said in that case, But we filed a Motion for Reconsideration of the Assumption Order. So it was not yet final and we did not have to comply with it immediately. The Supreme Court said it does not matter if there was a Motion for Reconsideration. The nature of such an order is it is of utmost urgency - it should immediately be complied with because of danger to national interest. What if the union defies the return-to-work order but the strike is later on declared as legal?

That won't matter. The order is issued pending determination of the legality or illegality of the strike. It cannot be said it may be enforced only if the strike is illegal. Otherwise, the workers can simply claim the strike is lawful and refuse to go to work. But if you failed to return to work for justifiable reason (e.g. you were out of town when the order arrived, or sick but then immediately reported for work late) that is not ground for dismissal just because you do not return to work immediately. So note, even if you follow the procedural requirements and the rules governing conduct of strike, the strike may still be declared unlawful if it is conducted in defiance of: > > an accepted improved offer which was subjected to balloting; or an assumption of jurisdiction order

What else can occur during a strike?

Criminal actions: A strike may give rise to criminal actions. for example, union members company officials, or company vehicles drive through human barricade; or security guards fire upon strikers.

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Under a DOJ Memo Circular, it is provided that criminal prosecutions for these criminal complaints, if the fiscal learns it arose from a strike or lockout which is pending before DOLE for conclusion or arbitration, should be suspended and the case discussed in DOLE. But once the labor case is dismissed, or if an injunction is issued, then the criminal case can proceed. (Sarmiento v Tuico). Strike-breaking: The law prohibits strike-breaking. It also prohibits: 1. Aiding or abetting strike-breaking 2. Employment of a strike-breaker 3. Being employed as a strike-breaker Strike-breaking means obstructing, impeding or interfering with, by force, violence or intimidation, any peaceful picketing by employees during a labor controversy or in the exercise of the right to self-organization or collective bargaining. It includes aiding or abetting such obstruction or interference. We have what is called an anti-scab law. What does it say?

No public official or employee, including officers and personnel of the AFP or PNP, or any 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 strikers. For example, can police escort union members who want to work? YES. The prohibition only extends to escort of replacement workers - those seeking to replace strikers in their work. Union members are previously employed. They replace on one. Can the barangay captain escort replacement workers? NO. He is a public official. Can the secretary of the barangay captain then do it? NO. She/he is a public employee. Can a security guard escort them? NOT if he is armed. What about a Karate expert? He is not armed. He may escort. Can scabs work? YES! The prohibition is against those who escort them in entering and leaving work. What are scabs? Those who work during a strike.

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Scabs/replacement workers are entering the premises. Some angry strikers attack them and hit them on the head with placards. Can the barangay captain intervene? YES. They (public officers) should not be prevented from taking any measure necessary to maintain peace and order, protect life and property and/or enforce the law and legal order. Can the police therefore arrest strikers who are conducting a strike without having filed an NOS? (Illegal strike is a criminal offense) NO. The joint APP/PNP Guidelines say the police/army cannot determine the legality of the strike. Note those rules. Some salient aspects of them are:

Police must keep a 50 m radius from the picketline unless they have to stay nearer to maintain free flow of traffic Police must maintain neutrality - they cannot socialize with either side They will not intervene unless there is a DOLE order asking for their assistance or if a crime is happening in their presence. No union officers/members/organizers may be arrested or detained for union activities without previous consultation with the Secretary of Labor unless for national security and public peace, or in case of commission of a crime. I do not see how that will apply today. That's a throwback to the days of GO # 5 in 1972, when union activities were severely restrained. Even if a strike is illegal, when can the strikers return to work without any sanction? There are some instances: 1) Unconditional offer to return to work - If the union offers to return to work under the same conditions prior to the strike and the employer rejects this, then they are entitled to backwages from the date of refusal to accept. But note: It must be unconditional. If you go on strike because management withdrew some CBA benefits and offer to return to work if management observes the CBA, that is not unconditional - there is a condition: compliance with the CBA! You must offer to return under conditions immediately prior to the strike so that the company would be the one to blame for its own loss. (Consolidated Labor Ass. v Marsman) But if what you say is this, "We offer to return to work. Sana ipagpatuloy natin ang paguusap sa loob ng kompanya".

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Is there a condition? NO. You are only asking that you discuss the issues - in short, you only ask management that it comply with the grievance machinery - which is its obligation, in the first place. There is no change in the status quo. [Its as if, instead of striking, you brought the matter up to grievance insetad.] (Master Iron Labor Union v NLRC). 2) Discrimination in readmission - If for example, the union declares a bargaining strike. They reach an agreement to return to work and accept the company proposals. However, upon their reporting for work, the company refused to admit 69 strikers, making it a condition to readmission that they resign from the union. The Supreme Court said, while initially, the strike was economic, the strike changed its character when they were refused reinstatement due to union activities - it became a ULP strike. 3) Condonation - If there are, for example, 130 strikers. 25 return to work.. Management, despite pendency of an illegal strike case, admits them. It has condoned illegal acts as to those 25 but not as to the others, especially considering it still pursued the illegal strike case. (Phil. International Fashion v NLRC) NOTE in all 3, there was either an offer to return to work or an agreement to return to work. 4) In Pari Delicto - where the company engages in illegal lock-out and the union in an illegal strike, the courts will not authorize termination of the strikers but order their reinstatement without backwages. (Phil. Inter-Fashion v NLRC) For example, the union goes on strike. A return-to-work order is issued and management lets them in but they spend the entire week sitting around in the canteen because the company refuses to give them work. The Supreme Court said, the union went on illegal strike. The company went on illegal lockout. We will leave them as they are. (Ibid) EFFECTS OF A STRIKE 1) If lawful:

a) Readmission - all are entitled to readmission (officers and members) - Mere participation in a lawful strike shall not constitute ground by termination of employment even if a replacement had been hired. When we say readmission, we mean readmission to the same or substantially equivalent position. In UST v NLRC, there was a return-to-work order requiring the school to readmit striking professors. The school readmitted them but put them in clerical work. The Supreme Court said that was not a substantially equivalent position. Replacement workers - what happens to them? They took the job subject to the condition that upon termination of the strike, they are also terminated. They do not have a permanent right to their positions. (Rabi v Bautista, 1966)

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Reinstatement means restoration to a state from which you were removed or separated. Backwages - Generally, if it is an economic strike, NONE. "A fair days wage for a fair days' labor". - If ULP, it shall be discretionary on the courts (since the company caused you to go on strike). But courts rarely award backpay for any strike. The general rule is no-work, no pay. What if the worker has found a job elsewhere? That does not mean he forfeits his right to employment (Cromwell Comm. v CIR, 1964) (But it would be a case-to-case basis. Where, for example, reinstatement is impossible, as when they were under a job contractor, they stuck against the contractor, the court ordered their reinstatement but the company where they were assigned already gave those slots to someone lese. They would be entitled only to backwages) (Metro Coronel v CIR, 1968) But where, after notice to return to work, the strikers still refused to comply with the order of reinstatement, they have forfeited their right to reinstatement. (East Asiatic Co. v CIR, 1971; Jackbilt Concrete Block Co. v Norton & Harrison Co., 1976) 2) (a) If Illegal Strike Employment - officers who knowingly participate are deemed dismissed.

- members: generally no. They simply were misled by the officers, unless they have found sufficient and substantially equivalent employment in the meanwhile. What if permanent replacements have been hired? Note the old case of Consolidated Labor Association v Marsman (11 SCRA 589). If it is an economic strike, no more readmission. (This case referred to a strike, whether lawful or not. But because the Labor Code states that mere participation in a lawful strike shall not result in loss of employment status, this should only apply to illegal strikes.) But if it is a ULP strike, they may be readmitted despite hiring of permanent replacements. (Insular Life Assurance Co. Employee Association case / Cromwell Employees Union v CIR) The Supreme Court has sometimes been liberal and allowed good faith to make a strike which fails to meet the legal requirements not illegal but merely defective. Note the case of Bacus v Ople (132 SCRA 690). The workers were not paid their wages for several weeks, so they went on a sit-down strike. The Supreme Court said the mere finding of illegality of the strike should no be followed by wholesale dismissal of workers, considering the strike was very spontaneous and in good faith. Even if there was no NOS, strike vote or even a strikeable ground, at worst under the circumstances, it should have been treated as merely defective and premature. The company did not pay their salaries for 1 months . It broke their patience. They had a valid grievance inspired by the honest belief that the company was doing acts inimical to their interests relative to wages.

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Likewise in Ferrer v CIR (17 SCRA 352), the Supreme Court said even if there was no cooling off period, this was not an illegal strike but a "defective" strike-carried out in good faith, the unionists believing in good faith that there was ULP. The Bacus vs, Ople ruling wont apply where there is bad faith, as where the union went on strike because of rearrangement of office furniture. Good faith is still a valid defense, however, against illegality of a strike. (Reliance Surety vs. NLRC) But where the workers go on strike due to rearrangement of office furniture, no cooling-off period, no strike vote! No submission of its reports, and the strikers harass employers, that is not good faith. (Reliance Surety v NLRC, 1991) (b) (c) 3) Liability for damages - this is a possibility Liability for criminal acts violation of Art 264 If Illegal Acts during Strike

(a) Employment - workers or officers who knowingly participate in commission of illegal acts during a strike may be declared to have lost their employment status. (b) (c) Liability for damages - a possibility Liability for criminal acts violation of Art. 264 prosecution for other criminal acts (These two are mutually exclusive. You cannot entertain prosecutions for both for the same acts.)

LOCKOUT A lockout is the temporary refusal of an employer to furnish work as a result of an industrial or labor dispute. Therefore, if the company shut down for two days due to an inventory, that is not a lockout because there is no labor dispute. (IF the company pretends to be conducting an inventory so it has an excuse to bar entry to union members, that is a different matter.) What if the company refuses to let the union officers inside the company to prevent them from organizing? That is a lockout. It is a refusal to furnish work. It is not necessary that the refusal be directed to the entire company. For example, the company has a factory and a warehouse. The union stages a strike at the factory. The machines were sabotaged. At the warehouse, the warehouseman refuses to allow

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inside the union members for feat that they will sabotage the products, machineries and spare parts. Illegal? NO. As long as it was impelled by a justified apprehension that was not illegal. The motivation was not in order to encourage or discourage union membership. It was a purely defensive measure that was a valid lockout. (Rizal Cement Workers Union v Madrigal & Co., 119 Phil 1115). Suppose there is a strike. A petition to declare the strike is filed. Then the union makes an offer to return to work. The company refuses to accept it. Is there a lockout? NO. Refusal to accept an offer to return to work is not a lockout where there is a pending petition to declare the strike illegal. The strike cannot be converted into a lockout just because they file the offer to return during the pendency of the illegal strike case. (Rizal Cement Workers Union v CIR, 6 SCRA 841) Of course, even if the company has the right to declare a lockout, they cannot be discriminatory and choose to lock-out only some workers they identify to be union leaders. That would be ULP. (San Pablo Oil Factory v CIR, 6 SCRA 628) What are the requirement for a valid lock-out? You follow the requirements for a valid strike. a) Valid grounds bargaining deadlock ULP b) Substantial grounds c) Not a ground in any issue submitted to arbitration - So if the purpose is to bust the union, the lock-out is invalid. (Dinglasan v NLU, 98 Phil 649). d) Notice of Lock-out e) Cooling-off period deadlock - 30 days ULP - 15 days f) lock-out vote - secret ballot - majority - meetings or referenda This shall be done by majority of Board of Directors or of partners (the controlling share governs) g) Submission of Lock-out vote

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h) Lock-out ban (7 days after submission of vote results) - For a sole proprietorship, do you need a 7-day waiting period? NO. Since the purpose is to inform both DOLE and board/partners so they may take proper action, there is no need for this in a sole proprietorship. You are assured of 100% majority and you will never question your own acts. i) Exhaustion of Pacific Means The process must likewise be lawful. No lock-out may continue after an order for assumption of jurisdiction has been issued. If the lockout does not comply with these, it is illegal. What are the consequences of an illegal lockout? date of the

BACKWAGES - the workers are entitled to full backwages from the lockout. EMPLOYMENT - reinstatement of locked-out workers.

You also have reduced-offer balloting which will be conducted by the DOLE on the reduced offer (demand) of the union on or before the 30th day of the lock-out. XX ASSISTANCE T LABOR ORGANIZATIONS The DOLE shall extend special assistace for purposes of collectie bargaining to special types of labor organizations. These arethe organizations who, due to occupation, organizational stru6ture or insufficient incomes, are not normally covered by major labor organizations or federations. x: homeworkers employeesof cottage industries sidewalk vendors pedicab drivers

XXI FOREIGN ACTIVITIES May aliens employrd here form or join unions? YES, provided: a) b) They have valid work permits, and Their country allows F lipinos to unionize

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Suppose their country does not allow us to form unions, if we happen tobe working there. May they give mor l support to workers who want to form a union? NO. All aliens, natural or juridical Ninclud}g foreign organizations, are strictly grohibitT from xngagingirectlyor indirectly ~ all f $ms of rade unFZn acti ties. \ Does

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]negowion *admWrati 1f CBIz3. cCArted-`on a.3En 43ganiI, maSng o9=0sistiuniom0nven2;s, meetings, rallies, referenda, teach-ins, seminars, conferences & institutes. 5. any form of participation or involvement in rep. proceedings and union elections 6. other analogous activities Can they sit-in as observers to a union meeting? That's all right. That is not participation or involvement.

WALAY NOTE 6 CLASSES OF EMPLOYEES: What are the different classes of employees? 1. REGULAR - Engaged to perform work that is usually necessary or desirable in the usual business or trade of the employer; or Has rendered at least one year of service (whether continous or broken) with respect to the activity in which he is employed. The primary standard to use in determining whether or not an employee is regular is -- is there a reasonable connection between the activity performed in relation to the usual business or trade of the employer. The test is : is the activity usually necessary or desirable in the usual business or trade?

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For example, you are a janitor in a building. Are you a regular employee? Yes. It is necessary to maintain cleanliness.

clients.

You are a messenger in a bank. Are you regular? Yes. A bank needs messengerial services to be able to communicate properly with its

For example, you are working in a liquor manufacturing company. You are assigned to the Maintenance Section and your work is painting buildings of the company, painting company equipment and performing other odd maintenance jobs, such as cleaning and operating company equipment. Then, one day, after working for one year, the company dismisses you. A few weeks later, you are hired through a labor agency and made to do the same work. Are you regular? Yes. To determine whether or not there is a reasonable connection, consider the nature of the work in relation to the business or trade in its entirety. Also, the length of time is important. If the employee has performed the job for at least a year, the fact that there is a repeated and continuing need for his services is evidence of its necessity, if not indispensability. In this case, the SC said, he painted not only one building, but other buildings and equipment. He painted tools, cleaned and oiled machines and even operated a drilling machine. In short, when there were no painting jobs, he would perform other odd work. In short, looking at the entirety of his activities, the SC concluded he was not just a painter but a maintenance man. And maintenance is obviously needed in a liquor manufacturing plant. Furthermore, he worked for over 1 year. After dismissal he was retired. His activities exist on a regular basis. To determine regularity, you should not only look into work directly connected with the business. (De Leon v. NLRC) Even if the employer calls you contractual or project workers and pays you by means of vouchers (and not thru the regular payroll), that won't matter. What determines regularity is not the will or word of the employer, or how you are paid, but the nature of your work and, in some cases, length of its performance and continued existence. (De Leon v. NLRC) For example, you are hired on several contracts for Baguio Country Club. First, for 10 months as laborer and dishwasher. Next for 3 & 1/2 mos. as gardener. Then you are dismissed. Are you regular? Yes. The primary standard is there a reasonable connection between the activity performed and the usual business or trade. The following are clear:

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He was not contracted for a specific period but hired repeatedly for various tasks. This repeated rehiring and the continued need for his services are enough evidence of its indispensability. Just because his services were not directly related to entertainment of guests does not mean it is not necessary. Otherwise, there would be no need for a regular maintenance section in which he was hired. Further, his service lasted for over a year. By this fact alone, he is regular. After the one year, he became regular by operation of law (but note the Mercado vs. NLRC case). Just because he had a day-to-day contract, that does not matter. It is not the will of the employer but the nature of the activities that matter. (Baguio Country Club v. NLRC) Other examples of regular employment:

Meter inspectors, PABX operators, utility men, linesmen, messengers and secretaries in an electric cooperative. University physician Stevedores in a fishing corporation who unload tuna from deep-sea fishing vessels. Note that the law defines work of this nature as regular, the provisions of written agreements to the contrary notwithstanding and regardless of the oral agreements of the parties. Therefore, if for example, you are first taken on as a supposedly casual or temporary employee, then, over a year lapses before you are issued permanent and regular appointments, you claim I was entitled to CBA benefits as a regular employee covered by the CBA a long time ago. The company says, No - only when we extended to you a permanent appointment. Who is correct? Of course, you are. To insist you became regular only when extended a permanent appointment is deplorable. Said the SC: Articles 280-281 put an end to making permanent casuals by extending probationary appointments ad infinitum. The companys contention will result in a situation where there will be two types of regular employees - One covered by the CBA & one not covered. The labor code makes no distinction. (CENECO v. NLRC) Or you are made to work making molds for cement posts. You are hired by a cement construction firm. You work for 2 years, more or less but always on 3 months contracts. SC said you are regular. You were never deployed to any particular project but regularly assigned to do such carpentry work. That shows that you performed tasks usually necessary or desirable in the usual business or trade. It also shows your tasks did not end on a project basic, despite your being given separate contracts. What about if you have a company which manufactures furniture for export. It says "we perform work for job orders". So it says, since our work is based on job orders, we hire workers for specific periods only.

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But the SC noted, they were hired for special orders the company could not decline as a matter of business policy. These projects are necessary or desirable in the usual business or trade (otherwise, they would not have been accepted). You cannot say they are seasonal. they are regular, requiring virtually continuous service of "temporary workers. If we were to follow the company's theory, it would have no regular workers since all its orders would be projects. All would then be hired on a per contract basis. Secondly, the SC said they have worked for over a year on the contracts. (Mehitabel Furniture v. NLRC, 220 SCRA 602) The term specific project or undertaking therefore refers to one for a specific time or for the duration of the project, not activities commonly and habitually performed or done on a daily basis such as carpentry work, packing and driving work for the business of storing goods or manufacture of furniture for a company engaged in such manufacture on a daily basis. (Tucor Industries vs. NLRC, May 20, 1991) PROJECT EMPLOYMENT/ CONTRACTUAL EMPLOYMENT: One for : a specific project or undertaking the termination or completion of which has been determined at the time of the engagement of the employee. So, as the SC noted in the Mehitabel case, where work is accepted by the company on a per job order/contract basis and on a regular basis, the employees it hires to fulfill those jobs, even if limited to one job order at a time, would be regular. The company actually operated continuously as a regular manufacturing concern. The contracts were simply a way of getting business, instead of regularly selling it out to retailers. But let us distinguish this from the situation in Sandoval Shipyards vs. NLRC. (There, the workers were hired in the construction of vessels.) After one vessel was completed, they would be hired for another. The company was engaged in the building and repair of vessels. SC said they are project employees. They were hired for specific construction/repair projects. And since they were project employees, they are covered by Policy Instructions No. 20 of DOLE, governing project employees in the industry. Under Policy Inst. No. 20, you would be a project employee if you are employed in connection with a particular project. Thus, once the project is over, you are not entitled to retention in employment or to separation pay. The company did not construct vessels for sale to the general public and thus it did not require continuous production. It accepted contracts for ship-building one at a time.

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Note the difference between this and the case where a company operates continuously as a regular manufacturing concern. Even if they worked on separate job orders, insofar as the work of the employees was concerned, this was a regular day-to-day operation. In short, except as to how the employer would obtain business, work was like any other factory. (Regular employees may not be dismissed except for just cause and when there is authorized cause. In short, they have permanent status.) The Sandoval shipyards case concerns Policy Instructions # 20 which relates to project employees in the construction industry. That policy instruction has been superseded. The governing rule is now DOLE Dept. Order # 19: Guidelines Governing Employment of Workers in the Construction Industry. Under D.O. #19 (promulgated April 1, 1993), once a project employees project (or phase thereof) is over, then he is not entitled to separation pay (Salazar vs. NLRC, April 17, 1996). However, if he has worked in the construction company for at least one year and there is no day certain for termination of the relationship in this case, he shall be deemed a regular employee (D.O. #19). Thus, in ALU-TUCP v. NLRC (234 SCRA 678), the SC said services of project employees are coterminous with the project. You have two types of projects for which you can have project-employees: 1. Those which have some relation to the usual business. For example, the Sandoval case concerns a company with the regular business of repair and construction of vessels upon contract. 2. Those with no connection to the usual business. For example, National Steel Corp. cultivates, in its lot, fish and vegetables. Put differently, when we say project, we can therefore mean: (a) A particular job/undertaking within the regular or usual business but which is distinct and separate (and identifiable as such) from its other undertakings. It begins and ends at a determined or determinable time, as in the construction project of a construction company. (b) A particular job/undertaking NOT within the regular business. This must also be identifiably separate and distinct from the ordinary and regular business. It must also begin and end at determined or determinable times. program. An example is when National Steel Corporation undertook a 5-year expansion This was composed of 4 parts: Setting up a Cold Rolling Mill Establishment of a Billet Steel-Making Plant Cold Mills Peripheral Project Acquisition and Installation of a 5 stand TDM.

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This is a distinct undertaking separate from the ordinary business. Each component starts and ends at specified times determined at the time of engagement. Therefore, even if they have worked for 6 years , they are still project employees. What about that clause worked for at least 1 year with respect to that activity in which you are employed? The SC pointed to the Mercado v. NLRC case. In that case, we have some hacienda workers who claimed they worked for over a year performing various jobs at the ricelands. The SC said, first of all, you have not proven you worked year-round. Secondly, it seems you were engaged only for one aspect of planting. More importantly, you cannot invoke par. 2 of Art. 280. That does not refer to project or seasonal workers. You will read that proviso, applying rules of grammar, in reference to the immediately preceding part of the provision to which it is attached and not to the other sections unless a contrary intent is evident. Therefore, it qualifies only the last phrase: "Employment shall be deemed to be casual if it is not covered by the preceding paragraph" In short, only casual employees may become regular after one year in employment. (Cosmos Bottling Corp. vs. NLRC, March 29, 1996) So applying this ruling, the SC said, even if you have worked over 6 years, you cannot claim regular status. For example, you are hired as a "clerk-typist" by an electric corp. for the purpose of unclogging its files. There are so many files to fix up and it adds up everyday, that you work for an extended period of time. Can the company claim you are a project employee, because you were given a particular job or undertaking? No. Just because you were given one task does not mean you were hired for a "specific undertaking' within the context of what makes a project employee. First of all, its nature is still usually necessary or desirable. Second, what the law means is a special type of venture or project whose duration is coterminous with the completion of the project. (Beta Electric Corp. v. NLRC, 1990) Proof of project employee status Whether or not you are a project employee is thus also a matter of evidence. The terms used by the employer alone are not sufficient. If the employer cannot show that its employees were hired for a specific project (the duration of which had been determined at the time of hiring) and has not identified the specific project or undertaking or any phase thereof for which workers were hired, that belies the claim of their being project workers. He could have proven it by submitting documents such as employment contracts and employment records that would show the dates of hiring and termination in relation to the particular construction project or the phases in which they were employed. Likewise, if the employer does not present the termination reports required under Department Order No. 19, s. 1993 to be submitted to the Department of Labor and Employment Regional Office every time his employees' services were terminated upon completion of a project, that is evidence of their being regular, not project workers. (Uy vs. NLRC, September 6, 1996)

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Another indicator of regular, instead of project status would be continuous rehiring over an extended period of time (such as 13 or 28 years) with only a one-day or one-week gap in between projects. (Samson vs. NLRC, 253 SCRA 112; Caramol vs. NLRC, 225 SCRA 582) Termination of project When we say that the termination of the project has been determined at the time of engagement, we dont mean we have to know in advance exactly when the contract will end. As long as it is determinable, that is enough. For example, you are contracted to work in the construction of the EDSA LRT. While that may have a projected term of a few months, it is possible the project will be delayed and extend over 3 years. That does not mean you have become regular, since you still know or have determined the end of your work --upon completion of the project. Rada v NLRC (205 SCRA 69): Rada was employed as driver for the construction supervision phase of the Manila North Expressway Extension, 2nd State. He was hired under a "Contract of Employment for a Definite Period" wherein it was stated his services were coterminous which the phase of the project and not with the entire project. So the first contract period expired. So, since that phase was not yet over, it was extended under another "Contract of Employment for a Definite Period". This was extended a number of other times until finally, after over 8 years, it was no longer renewed. Now Rada claims he can no longer be dismissed since he is a regular employee. He says he was made to work after expiration of the contract and its repeated renewal. But the SC said, even if he worked for over 8 years, the fact that he worked for only one particular project which took 8 years to complete makes him a project employee. A non-project employee is hired for more than one project. An example of this would be where you are employed for 3 until 9 years as carpenters, laborers and masons, your jobs being continuous and on-going for several projects. Then you would form part of a work-pool from which the company draws its manpower supply. In this case, Rada did not belong to such a work pool. He was used for only one project. (NOTE: This was decided in line with P1 #20. DO # 19, s 1993 is silent as to the work pool Instead, it refers to project workers who have no "day certain" for termination of a project or phase thereof. If the contract he works on has such a day certain, he is a project worker. If not, he is regular. Nevertheless, the work pool concept still applies. The SC has held in several cases, that continuity of employment for several years and immediacy of rehiring after termination of one project shows that the employees actually belonged to a work pool from which employees for the firms various construction projects were drawn and therefore, they were performing work usually necessary or desirable to the business. In Samson vs. NLRC, 253 SCRA 112, we had employees hired on a project-to-project basis for 28 years. He would be rehired immediately after one project ended. In L.T Datu & Co. vs.

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NLRC, Feb. 9, 1996, we had employees transferred from project to project for around 12 years. In Uy vs. NLRC, Sept. 6, 1996, we had two employees hired for 3 and 10 years, their jobs being continuous and with immediate assignment after completion of one job. The SC observed in these cases that they all belonged to a work pool from which the firm drew its employees. They thus were virtually hired without reference to any particular project and were thus regular.) A project employees work depends on the availability of projects. Thus, his employment is not permanent but coterminous with the work to which he is assigned. If you are hired for a particular phase of a construction project, you may be dismissed upon termination of such phase. But what if, for example, the contract says you are assigned to a particular project and your appointment will be co-terminous with the need for construction of structures on the expressway DEPENDING on the ACCOMPLISHMENT OF THE PROJECT and it adds that the company is free to determine the personnel it needs as the work progresses. The SC said that is not a definite term - the completion depended on both progress accomplishment and the company's determination. That's not a term, it's a condition (De Jesus v PNCC, 1991). Likewise, suppose the project is over. The company then continues to extend your employment. Then you are removed from the scope of the term project employees and are now regular (Phesco, Inc. v NLRC, Dec. 27, 1994, Capitol Industrial Const. v NLRC, 1993) But if your hiring was not continuous, there being gaps in your employment history so that you were hired on and on and off basis, that is evidence that you are a project worker. For example, looking over your employment records, we see the specific dates on which you were hired, when you were laid-off and the reports submitted to DOLE. So, looking at all those gaps of months between your hiring, we can conclude you are a project worker - you did not work continuously but only intermittently for specific projects. (Fernandez v NLRC, Feb. 28, 1994) However, it is also evidence of regular status if, despite employer's claims that you are hired on a per contract/project basis, they never reported to the DOLE the termination of your contracts (Magante v NLRC, 1990). Tenure of project employees Do project employees have security of tenure?

YES. During the term of the contract, they cannot be terminated without just or authorized cause. But when it ends, they can be terminated without need of paying them separation pay. The DO #19, s. 1993 requires that, upon termination of his employment, this should be reported to the DOLE within 30 days from the termination. This was like the requirement under P.I. #20, (which required that DOLE also issue a clearance).

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(In one case, where no such notice was given, and therefore no clearance obtained, the SC said, that is an illegal dismissal. The worker is thus entitled to reinstatement and backwages. But since the project was finished, the Supreme Court said, he is entitled instead to separation pay.) Related to this are the fixed-term agreements:

4. TERM-EMPLOYMENT: Here, you are simply given a contract for a fixed period of time. It expires at the end of that period. However, project employment has also been treated by the SC as covered under this (PNOC v NLRC). Brent School v Zamora: This concerns an athletic director of a high-school. He (Alegre) was given a 5-year contract. That was not renewed. Now Alegre says he cannot be dismissed because he is regular. But the Supreme Court said he is wrong. Previously, the Labor Code referred to regular and permanent employment. After several amendments, the term "permanent" was removed. Does that mean there is no longer such a thing as temporary or fixed-term employment? SC said no. There is no clear intent to deny validity to fixed-term employment/employment for a definite period. We cannot be narrow and literal in our interpretation of Art. 280. It does not only fail to exhaust all possible employment contracts which may be entered into, but it also restricts the right of an employee to freely stipulate as to the duration of the agreement. Where undesirable consequences were never intended, a construction which will avoid all objectionable consequences is favored. There are, the SC noted, a number of fixed-term contracts recognized as valid-overseas employment contracts, Dean, Assistant Dean, College Secretary, Principal, Corporate officers (Pres. EVP, etc.) In these instances, fixed terms are necessary. Therefore, contracts for fixed terms or definite periods are not illegal. They will only be so where they were imposed to preclude acquisition of security of security. But where they were: 1. Voluntarily agreed upon knowingly and voluntarily without force, duress or improper pressure; or 2. Where the employer and employee dealt with each other more or less on equal terms without moral dominance by one over the other, then there would be a valid term contract. That's why, in the following cases, fixed term agreements were held to be valid:

Department Heads, Dean & Institution Secretary of a University : their appointments were clearly only for fixed terms. It is a practice in schools that such positions are held by faculty members on

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a temporary basis. The purpose is to give all teachers a chance to serve those positions (Blancaflor v NLRC, 218 SCRA 366). The practice of schools is that positions such as department head are held on a temporary basis at the pleasure of the school head or Board of Regents. This is valid, it gives other teachers a chance to fill in that position.. Thus, if a teacher is appointed as Department Head and then is found by the Board of Regents to be unqualified, they can revoke such appointment. (Salonga vs. NLRC, Feb. 13, 1996) [However, when you talk about ordinary teachers, who expect some permanency, you cannot apply this. (La Sallette of Santiago v. NLRC)] Service Driver hired by PNOC for its geothermal plant project in Sorsogon. In that case, he was employed only for that particular project. So he was validly dismissed upon the end of the project (PNOC v NLRC) But in Pakistan International Airlines v Ople, the employment contracts provided for a 3 year term, extendible by mutual consent. But PIA reserved the right to terminate the agreement anytime through a one-month notice or one-month pay. SC said that was clearly intended to circumvent security of tenure. The 3 year term was neutralized by the early termination clause. The net effect was to render their employment at PIA's pleasure. Cielo v NLRC, you had a truck driver who signed an agreement which said he would have a 6-month contract, unless otherwise earlier terminated at the option of either party. SC said the purpose was to evade application of labor laws to make it appear they were not regular employees. They were made to sign form contracts simply by filling in blanks. Clearly, the contract was intended to evade security of tenure. 5. SEASONAL EMPLOYMENT: Employment for work or services which are seasonal in nature and the employment is for the duration of the season. In Tacloban-Sagkahan Rice and Corn Mill v NLRC, there were 2 workers employed from 6-25 years in the mill. Then, suddenly, they were dismissed. The company says they were seasonal. Their work depended on availability of items or products to be worked on. They could thus be laid-off. The SC said they are NOT seasonal. The work was not seasonal in nature. The harvest of palay is seasonal. But the milling operations were not. This was a big rice will which operated year-round. Twould store palay and have it milled when needed throughout the year. There was no let-up in operations. For example, you have a hotel in Baguio. Every summer, it is peak season there. So the hotel hires more waiters, housekeeping staff, etc. For 3 months every year, they hire one particular set of persons. After 4 years, they have therefore worked for a broken period of 12 months (1 year). Can they say they are regular, and therefore entitled to re-hiring?

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If we follow the old ruling of Manila Hotel v CIR (Sept. 30, 1963), they would be regularseasonal, off-season, they are not discharged from employment. The employment relationship is only suspended. Therefore, they are entitled to re-admission next summer. But because of that Mercado v NLRC case, it appears you will not anymore use that rule, which relied on the proviso in Art. 280. In Mercado v NLRC, the SC said the farmworkers on the rice and sugar land worked only on a particular phase of the farmwork. they were either seasonal or casual, and not entitled to avail of the 1 year period. So to what kind of employment will the 1 year period apply? . . .

6. CASUAL WORKERS: Those not regular, contractual or seasonal - not covered by paragraph 1 of Article 280. For example, Yakult has a lawn at the back of its factory. they hire grass-cutters, to cut grass and weeds at the lawn. They had no fixed schedule. They worked any day of the week at their own discretion and convenience. Were they regular? NO. The work was not usually necessary or desirable to the usual business or trade. Yakult Manufacturers cultured milk. The cutting of cogon grass is hardly necessary or desirable in the industry. It is, in fact, alien thereto. These are examples of casual employees. (Capule v NLRC) Ironically, under the Mercado ruling, they would have more rights than project workers if they worked for at least a year. But it, of course, would depend on the circumstances. Suppose they were grass cutters at Ateneo de Manila University in Katipunan which is full of lawns all around the place? That would be regular. You need to cut the grass to make it conducive to learning and nice for strolling around. If this grass-cutter in the Capule case was made to work for over a year-then he would be regular. But, unfortunately, he was dismissed before 1 year. Note also, let's say they let him work over 1 year. Then Yakult decided to construct a basketball court on the lawn. Can it dismiss them? YES. They will be considered a regular employee with respect to the activity in which they are employed and their employment shall continue while such activity exists. There being no more grass, there would no longer be any reason to retain him. (However, the new rules (D.O. # 10, s. 1997) define casual employment as one 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.

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That seems to set aside the Mercado vs. NLRC ruling. It considers as casual project workers of the second type referred to in ALU vs. NLRC - those working in a project incidental to the business. It likewise changes the definition of casual how would you then classify the workers in the Capule case there wasnt any definite period? This seems to have no basis in the law. Thus, while it may benefit some project workers in extending to them regular status after one year, it appears to be beyond the DOLEs authority to pass.) PROBATIONARY EMPLOYEES: One engaged on a probationary (trial) basis. During that trial period, the employer shall determine whether or not he is qualified for permanent employment. The 1997 rules (D.O. # 9, s. 1997) define this as: where the employee, upon his engagement, is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment, based on reasonable standards made known to him at the time of engagement. The new rules also provide (D.O. # 10. s. 1997) that if no standards are made known to the employee at the time of engagement, he shall be deemed regular. This only affirms the Labor Code. Probationary period A probationary employee is therefore not a permanent employee. The period of probationary employment generally is 6 months. If he used to be an apprentice, he can no longer be subject to a probationary period. His apprenticeship shall be the probationary period. If he was a learner before, then he also cannot be hired as a probationary employee. The Labor Code requires that he be regularized after 3 months. Suppose he was hired on the job as a trainee for 3 months. After that, he was taken in as probationary for 6 months. On the 6th month of his probationary contract, they terminated him. The SC said: You can't do that. At the very least, he should have been deemed regular at the end of the 3rd month in his probationary contract. That was a scheme to prevent him from obtaining regular status. The SC said that is double probation instead to evade the law and make it easier to dismiss them. (Holiday Inn v NLRC) But you distinguish that from a trainee under the Dual Training System. Since the Dual Training Act says the trainee is NOT an employee but a trainee, he can later on be hired as probationary after the close of the traineeship. What happens if you are made to work after 6 months? You will be deemed regular. But can you be dismissed even before the 6 months period is over?

In International Catholic Migration Commission v NLRC, the Solicitor General said when you talk of probationary employment that is employment for a definite period of time. So let the employee finish the 6 months.

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But the SC said "NO". The term "probationary" describes the purpose of the term, not its period. It is a trial period. Therefore, it essence lies in the purpose sought to be attained-testing for fitness. The length of time is immaterial. Therefore, if the employer can determine, before the 6 months are up, whether or not he is fit, he can terminate the probationary employee even before the 6 months have expired. So you can end the contract even before the 6 months are up. Can you have a probationary period longer than 6 months? Buiser v Leogardo: Sales representives for the Yellow Pages were given an 18-month probationary period. They were tasked with soliciting ads for the yellow pages. Is the period valid? YES. 6 months is only the general rule. The exception is if the parties agree otherwise such as if there is an established company policy or when it is required by the nature of the work. The company here needs at least 18 months to determine your fitness for the job. The yellow pages come out only once a year. After the year, you cannot gauge their fitness based on their performance since the evaluation will be based on the published ads. In addition, both the employment contracts and the CBA provided for an 18-month probationary period. That is not contrary to law. Another case where you can have probationary period longer than 6 months. In Mariwasa v Leogardo the employee was hired as a general utility worker on a 6 month probationary period. Before it was over, he was told his performance is unsatisfactory since he did not meet the minimum standards. So they say, We can extend your probationary period. He agreed. He again failed to meet the standards after the extension. Can he now say he cannot be dismissed because he became regular? NO. As was held in Buiser v. Leogardo, probationary contracts longer than 6 months are valid if there is an agreement otherwise. There was no indication the extension was used to avoid regularization. As a matter of fact, it was an act of liberality to give him a second change to make good. This cannot now be turned against the employees. He voluntarily agreed to the extension. That is not contrary to public policy. He therefore waived any benefit attaching to his completing the 6-month period. Another case where a longer period is authorized: Private School Teachers. Under the Manual for Private School Teachers, they have a 3-year probationary period. During such 3 years, the school has the prerogative on whether or not to renew their contract for each term. And when it says 3 years, it means 3 years - not school years. Note that this refers only to full-time faculty members. Meaning their total work day is devoted to school, they have no other gainful employment and are paid on a regular monthly basis

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regardless of teaching hours. They have normal load for teaching of 18 hrs/mo. If they are not full time, they are not entitled to the 3-year term for permanency. Probationary employees are also entitled to security of tenure. If you will terminate a probationary employee, it should be subject to the following limitations: 1. 2. law 3. There must be no unlawful discrimination in the dismissal. Therefore, for example, if you will dismiss an employee for poor performance, you must be ready to substantiate this. It will be obvious he could not have been poor in performance if he had already been working in the same position at least a year before he was employed and despite your claims that he was inefficient, you retained him 4 months. (Euro-Linea Phil. v NLRC) In Manlimos v NLRC, March 2, 1995, there was a sale of business. The question was, should the successor-employer be required to regularize the probationary employees who had finished the period under the old employer? The SC said that determination on the hiring of employees on a probationary basis is an exclusive managerial prerogative. The employer has a privilege to decide who will be hired or not. Probationary employees do not enjoy permanent status. They may only be terminated for just cause or when they fail to qualify as regular. But this ends when the probationary period ends. Thereafter, the employer is free to renew the contract or not. ( But note that this case concerns the sale of business venture. Obviously, the probationary employees affected by the sale had no right to be hired after the company changed ownership.) The 1997 rules on Labor Relations make a nifty summary of the rights of the different employees with respect to grounds for termination and the process. The rules are silent, though, as to seasonal workers, but we may infer the rules: Type of employee_Grounds_Process___Regular_Just or authorized cause only_Written Notice and hearing____Probationary_Just or authorized cause Failure to qualify in accordance with standards of the employer made known at the time of engagement_Written Notice and hearing Written notice within reasonable time*____Project or term employment (or employee of legitimate contractor)_DURING the project - just or authorized cause only TERMINATION OF PROJECT OR PHASE THEREOF_Written Notice and hearing Written Notice a reasonable time before effective date of termination*____Seasonal_DURING the season - just or authorized cause only TERMINATION OF SEASON_Written Notice and hearing Written Notice a reasonable time before effective date of termination*___Casual_No ground required to justify termination_No notice required__ * This is not provided for under the law. It must be exercised in accordance with the specific requirements of the contract The dissatisfaction must be real and in good faith-not feigned as to circumvent the

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Even if a project employee is dismissed, there must still be compliance with due process. A termination of his employment must be for a lawful cause and must be done in a manner which affords him proper notice and hearing. He must be therefore given written notice of his impending dismissal and the opportunity to dispute its legality. (Archbuild Master and Construction v NLRC, Dec. 26, 1995) XXIII SECURITY OF TENURE SECURITY OF TENURE: This means protection against dismissal without just or authorized cause. So we have JUST causes and AUTHORIZED causes. Just causes are those arising from some fault or inadequacy on the part of the employee. He is generally not entitled to anything upon termination. Termination for just cause requires notice and hearing. Authorized causes are those arising not due to the fault or inadequacy of any party, but for reasons which generally are economic or health-related. The dismissed employee is entitled to separation pay, as a general rule. The dismissed employee is only entitled to notice (and separation pay). He need not be given the right to show why he should not be terminated since it was not due to his fault, anyway. XXIII-A JUST CAUSES The Just causes are:

1) Serious misconduct or willful disobedience of the lawful orders of the employer or his representative in connection with his work 2) Gross and habitual neglect of duties Fraud or willful breach of trust reposed in him by the employer or his duly authorized representative 4) Commission of a crime or offense by the employee against the person of the employer or any immediate member of his family or his duly authorized representative 5) Other analogous causes. 1. SERIOUS MISCONDUCT Aris, Phil. v NLRC: An employee, while in the canteen, is questioned by a canteen helper why he was using someone else's ID. He got mad and shouted: "Wala kang pakialam! Kung gusto mo, itapon ko itong pagkain ninyo!" He noticed everyone was watching him. so he left the canteen. 2 minutes later he returned and challenged them. "Sino ba ang nagagalit?" Then he started smashing food items and slapped the canteen helper so she fell. When the company asked him to explain why he should not be dismissed, he said, yes he was guilty, but was then drunk. May he be dismissed?

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__ EMBED CorelDRAW.Graphic.6 _____ NO. While this is serious misconduct, to constitute "just cause" for dismissal, it must be in relation to the performance of his duties so as to show him unfit to work. The misconduct was not work-related and did not disrupt work operations. Fighting A related case is North Camarines Lumber v Barreda. Here, a supervision had a boxing incident with a security guard. this happened in the store of someone which was located in the company auxiliary compound where the plant and houses were located. Was there misconduct? YES. Was it serious or gross misconduct? NO. The SC said whether or not it was committed inside the company building or while he was off-duty is not the issue, rather, it is the inequitable manner by which the supervisor was dismissed. The company acted so hastily. It blew the boxing incident out of proportion. It was a purely private matter with no bad effect on the companys interests. The penalty of dismissal was not commensurate with the misconduct. So when will fighting justify termination?

Likewise, just because the misconduct does not involve the company does not mean you may invoke the defense that it was a purely private matter: Navarro vs. Damasco (July 14, 1995): Navarro has the hots for one of his lady co-workers. He visits her a number of times in her dormitory (in the company compound). Binasted siya. So one day, he goes to the dorm, calls her and when she comes out, he pulls her, makes her fall, then jumps on her and does pumping motions. Serious misconduct? YES. Ground for dismissal? YES. You cannot say it is a purely personal matter. The harassment of an employee by a co-employee within the company premises even after office hours is a workrelated matter considering that the peace of the company is affected. The Code of Discipline is clear that immoral conduct within company premises is punishable, whether or not committed during work-time. Another example would be if a co-employee engaged another in a fight in company premises, in full view of other employees and visitors. This disturbed work in the office and constitutes serious misconduct. The mauling happened in the company premises and disturbed the work.. (Flores vs. NLRC, May 15, 1996) NOTE that you therefore cannot claim all fights or similar incidents are purely private in Navarro vs. Damasco, where a co-worker committed acts of lasciviousness on another in the

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dormitory, outside office hourse, the SC said that that arose out of employment. It also affected work relations. What about if an employee reports three others for theft of company property. They then gang up on him and beat him up inside company premises. That is serious misconduct which is ground for dismissal. The mauling incident was not a purely private matter. They beat up the worker because he reported them. The mauling was thus work-related. (Royo vs. NLRC, May 8, 1996) It will thus not be deemed a purely private matter if:

The work was disturbed or the work relations are destroyed. The misconduct arose out of work relations. Immorality What about acts of immorality? In Evelyn Chua Cua v Clave, the SC said, to constitute immorality, the circumstances of each particular case must be holistically considered and evaluated in the light of prevailing norms of conduct and the applicable law. _ EMBED CorelDRAW.Graphic.6 ____ The SC then went on to say, just because a high school teacher was often alone with her student in the classroom after class hours and they eventually got married is not sufficient evidence of immorality. Here is an explanation for their being in the classroom - she was tutoring him!__ The SC then went on to say, just because a high school teacher was often alone with her student in the classroom after class hours and they eventually got married is not sufficient evidence of immorality. There is an explanation for their being in the classroom - she was tutoring him! Just because she was much older than he was and they got married, that is not proof that they then were having amorous relations. If they eventually fell in love, this only lends substance to the truism that the heart has reasons of its own which reason does not know. But what about where a supervisor takes a very young concubine (no.2) and drives away his family from his home? In an old case, the SC said that is serious misconduct. As supervisor, he held a responsible position. he should have set a good example for his men. (Ang Tibay vs. CIR) Obscenity What about obscenity? Suppose, you work in a bank. Someone makes a mistake, so you say. "Tarantado ka pala". She throws the puncher at you and raises a commotion in the bank. Is your act serious misconduct? NO. The term 'Tarantado" could hardly be obscenity. It even seemed to be stated as a joke. Suppose you say, "Buwakanang-ina nilang mga supervisor, lahat sila pasipsipan!!" Just

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then, there was a supervisor around the corner and hears you. You see him staring at you and eventually, you apoligize. Serious misconduct? NO. Dismissal due to such remarks is too harsh, especially if he later apologized. The penalty is not commensurate to the gravity of the misdeed. (Maranaw Hotel & Resorts Corp. vs. CA) Suppose you ask the supervisor if you can work overtime. He tells you you can but first fill out an OT slip. You do so and present it to him. Then he tells you that you cannot work OT and to throw away the OT slip. You therefore tear up OT slip in anger, throw it and say : "Sinusubukan yata ako!" Serious misconduct? NO! You did not utter any obscenity. What you said was not surprising, under the circumstances. When you tore up the slip, you did it precisely because that is what you were told to do - throw it. You have an employee who is berated for doing his work the wrong way. He pretends to be sick. So he goes to the company doctor to ask for a certification of illness so he can go on sick leave. The doctor tells him to wait for further observation. Frustrated when no referral slip is given, he utters an obscenity. That is insubordination and conduct unbecoming. That is grounds for dismissal. (Mauro de la Cruz v NLRC, 1989) Acts relative to finances Suppose you deduct from the payroll to collect workers' payments for cigarettes they bought from you. Serious misconduct? NO. That is not tampering with the payroll. there is no damage to the company (Pacific Products v Pacific Products, Inc., 1987) You borrow money from patients in the hospital. You are a clerk in the hospital. Serious misconduct? NO. We should in fact be more sympathetic because you borrowed out of economic necessity. (Pearl S. Buck Foundation vs. NLRC) Other acts which may serve as grounds for dismissal:

Assault on co-employee in the company or because of rivalry within the company. Foreign Manager insults Filipinos and discriminates against them. He also orders food from the Food and Beverage Division beyond his normal needs. Circulation of a manifesto ridiculing the employer Pilot getting drunk on the day of the flight NOTE that the Anti-Sexual Harassment Act of 1995 makes sexual harrassment ground for termination. Villarama v Golden Donuts: A materials manager of a department of Dunkin Donuts invites all the girls of the department for dinner. During dinner, they are all offered drinks. The

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Manager then says he will drive home one of the girls. She notices that he is not driving her home and is going somewhere else. She discovers she was being brought to a motel. She was shocked. This is not, technically speaking, a violation of the law against sexual harassment. He did not impose as a condition of employment the granting of sexual favors. Nor did he commit discrimination against the lady when she refused his advances. But it is sexual harassment in its general understanding: Any act of sexual nature which is offensive. He was dismissed for loss of trust. But this could also constitute serious misconduct. Note, even if it is not prohibited under the Sexual Harassment Act, the anti-sexual harassment committee in the plant is mandated to make rules governing it. They can define what offensive acts of a sexual nature would be subject to penalty. 2. WILLFUL DISOBEDIENCE (Insubordination) For there to be willful disobedience, 2 requisites must concur:

The conduct is willful or intentional (willfulness being characterized by a wrongful and perverse attitude); AND The order is (a) reasonable, (b) lawful, (c) made known to the employee, and (d) must pertain to his duties. (Villeno vs. NLRC, 251 SCRA 494) For example: You hold a supervisory position. You let the company vehicle be taken out for a joy ride without authorization by some security guards. It winds up smashed into a Meralco post. That is willful: You were fully aware of the consequences of your act. The order was reasonable and lawful, rule prohibiting unauthorized use. You obviously knew of it. You were already warned for one infraction of this kind before. It obviously pertained to your duties. Considering your position vis-a-vis the guards, you should have admonished them. (Family Planning Organization of the Phil. v. NLRC, 1992) Reasonability But not every act of willful disobedience will warrant dismissal. There must be reasonable proportion between the willful disobedience and the penalty. For example, you are accused of undermeasuring cargo. You are insulted and go inside the office of your chief. You confront the witnesses against you who are co-workers. You start quarreling with them. The Chief tells you to stop provoking them and to behave properly. You don't. You get involved in a fistfight.

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There was insubordination. You did not obey the order to behave properly. You disregarded the courtesy and respect due to a superior. You likewise disobeyed an order not to breach the peace and order - necessary to maintain basic employee discipline. BUT, there is no reasonable proportionality between the disobedience and the penalty. There was no danger to the employees or to the public. There was no danger to the business. The fight was outside the offices, away from the public. (Gold City Integrated v NLRC). A 3-month suspension is enough. It would be different if he fought with a co-worker in front of all passengers and customers and all other employees. (Lausa v NLRC, Wenphil v NLRC). Lawful Suppose I am your superior in the company I tell you, let's go hunting tomorrow. But, you answer you cannot since it is a work day! So I tell you to falsify the time cards. You do it and we go hunting. Ground for dismissal? YES. While you followed my orders, the order was not lawful. You were not bound to follow it. As a matter of fact, you were bound to report it to the company. When you chose to obey the unlawful order, you assumed responsibilities for your acts (Rosello v NLRC, 1990) When you talk of willful disobedience, the offense must be serious or done over repeatedly. For example, the Company Rules say: "NO SMOKING. You smoke. Is that ground for dismissal? NO. Suppose you smoked in the gasoline storage area? Maybe now, it is ground for dismissal. It depends on the circumstances. Another example - The rules say : No sleeping on the job. You sleep on the job. Ground for dismissal? NO, if done only once. But suppose you are the security guard and while you were asleep, someone came and stole your gun and robbed the store? Ground for dismissal. The gravity of the insubordination depends on the circumstances. Suppose there is a company rule that penalized you for absenteeism. After each time you were absent without leave, you were suspended. Finally, after so many months of repeated absences (9), the company says, after your last unauthorized absence, that youre fired. Can you invoke as a defense the fact that you have been penalized for the past offenses already and a single days absence is not sufficient for there to be dismissal? NO. The company should take the offenses in their totality. All absences without leave should be taken together and not individually. Even if you were suspended for the past infractions, you are being dismissed because of the habitual nature of your offenses.

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In relation to this, we have the Company Code of Discipline or Code of Conduct. These are the rules on what to do and what not to do inside the company with respect to conduct. Some principles: 1. The penalty must be commensurate to the gravity of the offense and may be imposed only after due hearing. 2. The Code, being part of the employment contract, must be followed strictly. If it provides for a table of penalties, the company must adhere to that. It generally can't, for example, dismiss a worker if the Code only imposes suspension. 3. In interpreting the Code, the rule is doubts are to be construed in favor of labor.

For example, the table of penalties provides for discipline in case of all offenses which occur after the third offense. Does that mean you can now dismiss an employee if he commits a fourth offense? NO. The word "discipline" is vague. It is doubtful if it includes dismissal. In case of doubt, resolve it in favor of labor (BLTB v. CA) But note, the SC held here that it was not ground for dismissal because, while he did abuse "vale" privileges, these cash advances do not pertain to his duties. The rule imposing a limit on cash advances you can make cannot be a valid ground for dismissal, being primarily intended for the company's benefit. But that does not mean your hands will be tied by the rules. For example, a security guard instigates fellow guards to have a party in the Head office for Security. They drink. He dances on the table with a lady guard and does other lewd and obscene acts with her. The rules say that misuse of company property and abandonment of post warrant only 30day suspension. But the SC said, that is still ground for dismissal. The employer should not be stripped of his prerogative because of the rules. The acts clearly warrant dismissal constituting serious misconduct. (Stanford Micro-Systems v. NLRC). Must pertain to duties Or, if for example, a union officer is first dismissed for serious misconduct. The Grievance Committee, however, reverses this. But the Company President is not satisfied. Before a scheduled grievance hearing where he was supposed to appear, the union officer is ordered to go to the office of the President 50 km. away. He refuses. He says it's too far and he would not be able to attend the hearing. Insubordination? NO. It was not connected to his work duties. The order did not relate to his duty as comptroller. He did not even know why he was being called. Apparently, the

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President wanted to get an apology from him. That shows it was to extract a whimsical and oppressive condition and an extremely difficult one, since he was 50 km. Away. In the following cases, the SC said dismissal was not warranted despite disobedience to the rules: Refusal to be promoted. It is a privilege you can decline (Dosch v NLRC) Violation of a company policy where the superiors acquiesced and the policy was never strictly followed, [especially if you have a clear record]. (Tide Water Ass. v Victory Employees & Laborer's Association) Violation of a policy never strictly adhered to where there was no bad faith and the act had the clearance of the superiors. 3. GROSS & HABITUAL NEGLECT OF DUTIES This implies an absence or failure to exercise slight care or diligence, or the entire absence of care. It means a thoughtless disregard of consequences without exercising any effort to avoid them. (Samar II Electric Cooperative vs. NLRC, Mar. 21, 1997) There is thus no gross negligence if you are a machine operator and you left the building to get the proceeds of a loan you made while the engine was being tested. The SC said that is not so serious as to amount to gross negligence. The reason why the engine had to be operated at that time was so that it would be synchronized with the NRCs geothermal plant. Stoppage of operations would have defeated this purpose and violated the cooperatives franchise. . (Samar II Electric Cooperative vs. NLRC, Mar. 21, 1997) What are some examples?:

You are driving a vehicle towing a plane. You drive beyond normal speed. You don't observe proper parking procedure. Everyone is shouting warnings at you yet, you continue driving. As a result, the plane hits a bridge and destroys its left wing flap and engine.__ EMBED CorelDRAW.Graphic.6 _____ Gross negligence? Of course. (PAL v NLRC)__ You are a waiter carrying some soup to customers across the hallway. While walking across the lobby, you trip and spill the soup on a P120,000 carpet. Gross negligence? YES. (Puerto Azul v NLRC) You are a bank teller. During payday, everyone is lining up for their salary. You leave P200,000 unattended and exposed on the counter. When you look again, P50,000 is gone. Gross negligence? YES. Related to this are absences. You cannot be dismissed for one single absence without leave. But if your absences are repeated and recurring over a period of time, that is habitual neglect of duties.

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Of course, if you have been penalized for past absences, you cannot be penalized again for them. For example, you have been absent 4 times in a year's span. For that you are suspended. 3 years later, you are suspended 2 weeks due to 1 days' absence. Then, one day, you absent yourself due to stomach-ache. 5 days later, the doctor says you are fit to work. So the company says : "Aha! You are malingering!" So it dismisses you. The SC said, just because the doctor said, 5 days later, that he was fit does not mean he was not sick. If you dismiss him now, you would be penalizing him for past offenses for which he had already been punished. (Filipro v Ople) However, your past offenses, which may be minor and already penalized, may be accumulated and taken in their totality. It shows habituality. Also connected is Abandonment of Work. This means leaving work without intent to return. The elements are: Failure to report for work or absence without justifiable reason; and Clear intent to sever the employer-employee relationship. The second element is the more determinative factor and must be manifested by some overt acts. (Labor vs. NLRC, Sept. 14, 1995) So if, for example, you are a bus driver. You refuse to work because the company will not give you a conductor, that is not abandonment. If you go on leave and then after the leave is up, you don't return to work, that is not, ipso facto abandonment. But if you leave work for 2 months, and the company later finds out you are working fulltime elsewhere, that's abandonment. That is an overt act showing no intent to return. If you are absent for 30 days because the company doctor told you to rest and you did so but exceeded the 30-day period and reported back for work after 50 days, the SC said that reporting for work shows readiness to assume responsibilities. (Jackson Building Condominium Corp. vs. NLRC, July 14, 1995) Likewise, if a person has been employed for 5 years, the Sc said it is incongruous for him to give up his job just because he was reprimanded. (Caete vs. NLRC, Nov. 23, 1995) Abandonment requires a clear, deliberate and unjustified refusal to resume employment and not mere absence. For example, you work for your father's hacienda as farm administrator. Later you get very sick and have several operations. Your father has you hospitalized. You thus stop working for some time at the hacienda. After a while, your father stops paying your salaries. Can he claim that you have abandoned your work?

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NO. There was justifiable cause for your absences. As a matter of fact, your father clearly knew of it. It is only a clear, deliberate and unjustified refusal to resume employment and not mere absence that is required to constitute abandonment of work. As a matter of fact, a farm administrator is not always required to be on the farm. There must also be intent to sever the employment relations. Just because he once said "I have burned my bridges at Mancao". That is not enough to show abandonment. As a matter of fact, he continued activities relative to the farm operations after this. Further, he asked for his salaries. He wrote letters stating he had fully recovered and was ready to resume employment He filed a complaint for illegal dismissal. All these show intent to return. (De Ysasi III v NLRC, 231 SCRA 173) But just because you have committed abandonment does not mean the company can go ahead and hire a replacement. They must still comply with due process. They must give you notice (at your reported address) and a chance to explain. Timely filing of a complaint for illegal dismissal negates abandonment. it shows you intended to return. Abandonment still requires notice and hearing. (Remo Foods v NLRC, Oct. 18, 1995) Notice should be sent at the last known address of the employee. 4. BREACH OF TRUST If you commit theft of company property used by you, you breached the company's trust when you took the properties at entrusted to your care and custody. If you can no longer be trusted, it would be oppression to compel the company to continue to retain you knowing, in the long run, you can endanger its safety. That's why a company is justified in dismissing for loss of confidence. Other examples: You compete with your employer. (Elizalde v CA) You falsify time cards to make it appear you reported for work when, in reality, you went hunting. (SMC v NLRC) You use a weighing scale you know is defective so the shipper pays less and the airline does not earn what it should have (PAL v NLRC) Failure of a department head to supervise and monitor his employees (Saran v NLRC) Engineers who have repeated defects in their projects (Almighty v Pacific Architects) Salesmen who extend special favors to some customers only (Filipro v NLRC) But this ground cannot be issued for any cause. Just because you suspect someone, does not mean you can dismiss him or her. The following requisites must be met:

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1) The employee holds a position of trust and confidence (meaning, he is entrusted with confidence on delicate matters or with custody, handling or care and protection of company property); and 2) The breach of trust results in loss of confidence. 3) There is substantial evidence of your act constituting a breach of trust. (Estiva v NLRC) Position of Trust and Confidence For example, an operations manager. He was slowly divested of his powers until, one day, he discovers he has been dismissed. he asks why and was told, the next day, that he had been charged with absenteeism, tardiness and other infractions. While he may hold a position of trust and confidence, there was no proof of acts constituting its breach at all. Worse, he was dismissed before he learned of the grounds. For example, a checker at B-Meg. All he does is make reports, inventories, remittance of checks and securing of the padlock to the bodega. He was dismissed because, one day, the cash in the vault was found missing and prior to that, he had told a supervisor that he placed the daily collections in the vault. The Supreme Court said he did not hold a position of trust and confidence. His duties did not include receipt of collections. His functions basically were clerical. If you will therefore terminate an ordinary rank and file employee for these acts, you need proof he was involved in these events. (SMC v NLRC, July 8, 1992) For example, a roomboy in a hotel. He is entrusted with care of properties in rooms he cleans. Suppose, a room guest complains of lost items. It is in the room he is assigned to for the day. Can he be dismissed? No. There is no substantial evidence. Just because he was the assigned roomboy does not mean he took it. Others had access to the room: the friends of the guests, janitors, chambermaid, housekeeper, supervisor. The hotel even took numerous steps to find out his guilt. If searched his belongings and investigated him. (Manila Midtown v NLRC) But what about a warehouseman. He pilfered some properties in the bodega? That is ground for loss of trust. A warehouseman is in charge of custody and safekeeping of company materials. The nature of his work and special character of his duties involve utmost trust and confidence. (Falguera vs. Linsangan, Dec. 14, 1995) But although someone may hold a position of trust and confidence, you still need solid grounds showing breach of trust. If, fro example, a salesman-collector is suddenly transferred from one branch of a drugstore to another, he therefore incurs delays in settling his accounts. The company dismissed him for failing to settle such accounts in 24 hours. The SC said, even if he holds a fiduciary position, it is not surprising why he could not settle his accounts - the suddenness of the transfer. At any rate, he was cleared of any liability to the company. (J. Vitug, Mapalo vs. NLRC, June 17, 1994)

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Another example. A bank teller has shortages amounting to P10,000 because she failed to return the P8,000 cash withdrawal of a client and extended unauthorized accomodations to a client. Her last shortage occured 3 years ago. May she be dismissed? The SC said NO. She is not a habitual violator. Shortages are a common hazard for bank tellers. The infractions are not so grave as to warrant dismissal. (Philippine Commercial International bank vs. NLRC, Aug. 23, 1995) What then is the standard of evidence?

You do not need proof beyond reasonable doubt. What is enough is that you have "some basis", or reasonable grounds to believe, if not entertain the moral conviction that the employee has committed the misconduct and his participation therein renders him unworthy of the trust and confidence due his position. What about lack of technical knowhow, leadership and exhibiting a bad attitude towards work? In one case, the SC said, you simply cannot make a blanket statement like that without specifying what acts show lack of leadership, knowhow and bad attitude or what you mean by those terms. On the contrary, if what is established is that before the employee was hired, the employer required him to demonstrate his knowledge and skill and it was only after he had done so that he was hired for the job of supervisor which for nine months the SC said, there is no just cause for dismissal. (Anderson vs. NLRC, Jan. 22, 1996) Managerial Employees When we deal with managerial employees, the standard of evidence is even looser. A managerial employee stays in that position dependent on his retention of the employer's trust and confidence. Management therefore has wider discretion in terminating him. But you still need some basis. You cannot justify dismissal based on a mere suspicion (International Harvester Mcleod v IAC) Therefore, if you accuse a manager for misappropriation, but he has an explanation which can hold on its own, but you still remain suspicious, you cannot dismiss him. Neither can you dismiss a manager if he simply consulted the union lawyer about his transfer to another plant (which he was protesting). (J. Vitug, Antonio vs. NLRC, Nov. 28, 1995) Legal Officer What about a legal officer of a corporation? Even looser standards are applied. A lawyer holds a position of utmost trust and confidence since that is the nature of the lawyer-client relation. In Asis v NLRC, the legal officer encouraged employees to file cases for underpayment against the company. Even if that was what the law allowed, he was working against the interest of the company, contrary to his role as a legal officer. Likewise, even if the criteria for determining loss of confidence are generally lower than those for other just causes, you cannot: 1. simulate it, use it as a subterfuge for improper or unjustified causes, when there is strong evidence to the contrary.

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It must therefore be genuine, not the result of a mere afterthought to justify the earlier action taken in bad faith. Thus, if an employee is charged with stealing ballast from the company and his co-employees say it was someone else who took the ballast, there is no cause for dismissal especially if the fiscal himself dismissed the complaint for theft for lack of evidence. (Starlite Plastic v NLRC) In relation to this, we have crimes committed in employment, such as theft. That is obviously ground for dismissal. How much should be stolen to warrant dismissal? Note that in the Firestone v Lariosa case, he took only swabs used in cleaning tires and he had worked eleven (11) years. The Supreme Court said he may be terminated on grounds of loss of confidence. Put in PAL vs. PALEA, you had here a worker who took a piece of scrap metal. The Supreme Court said considering he had a clean record and the value of the metal was negligible, dismissal was too harsh a penalty. He was ordered reinstated without backwages. His penalty of suspension from work while the case was pending was penalty enough. (Note that in the Firestone case, involved were tools the company could still use. And he was caught red-handed. In the PAL case, it was scrap metal and he admitted his guilt.) Suppose they file a case against you before the fiscal. It reaches the courts - an information is filed. Then, you are acquitted for lack of evidence. May you still be dismissed? YES. Conviction in a criminal case is not indispensable to warrant dismissal. As a matter of fact, the dropping of a criminal complaint by the fiscal is not binding in a labor case (Starlite Plastic v. NLRC). But the fact that the information was filed - that shows the fiscal found a prima facie case. That has strong persuasive effect in establishing basis for loss of trust. But it should not be controlling, since its evidentiary requirement - prima facie evidence - is weaker than substantial evidence required in labor cases. But note the SMC v NLRC (1992) case, there, the Supreme Court hold, even if the information was filed, eventually he was acquitted because there was no proof he was involved in the theft of money from the cash vault. The only evidence against him was that he knew the vault's combination and possessed keys to the vault. This is based purely on inference. Likewise, just because the fiscal filed the information, it does not mean dismissal is warranted. Thus, in spite of the filing of the filing of the information, the SC has upheld the NLRCs decision absolving an employee of the offense. (JRS Business Corp. vs. NLRC, July 17, 1995) 5. COMMISSION OF CRIME AGAINST PERSON OF EMPLOYER OR IMMEDIATE MEMBER OF HIS FAMILY: This refers to crimes against persons. What about crimes against chastity, or liberty? That would not fall under this. But it may constitute serious misconduct or analogous causes.

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6. ANALOGOUS CAUSES: What is meant by this is, using the rule of ejusdem generis, the causes must be similar to the other just causes. (There must be fault on the part of the employee and it must be in relation to the employee and his work.) In IRRI v NLRC, an employee was convicted of homicide for stabbing someone to death in the beer house. He was about to apply for probation (there were two (2) mitigating circumstances). When he wanted to get back to work, the company would not let him in. It said the IRRI Personnel manual says you may be dismissed for conviction of a criminal offense involving moral turpitude. The Supreme Court said that is not one of the grounds enumerated. Neither is it breach of trust - that must relate to his official duties. The crime which may be ground for dismissal must be against the employer or his representative or a member of his family. Is it an analogous cause? - NO. It occurred outside office hours, outside company premises. It had no connection to his position. Neither it shown that the dismissal would be in consideration of the safety and welfare of the employees, IRRI's reputation and standing and its special obligations to the host country. As a matter of fact, the Director General recommended his retention. The Grievance Committee did the same, saying no one was at risk from him. The court also found him worthy of probation (he acted in incomplete self-defense. While in the CR, he was attacked and his face placed in a urinal. He drew his knife to defend himself.) That is NOT a crime involving moral turpitude under the circumstances. (IRRI v NLRC) Other analogous causes:

Inefficiency, failure to meet work quota (Buiser v. Leogardo) Truck drivers who are banned from entering the premises of one of the companies clients because they illegally diverted gasoline (Violago v. NLRC) Violation of a company rule prohibiting infliction of harm or physical injury against any person in the company. This is analogous to serious misconduct. (Oania vs. NLRC, June 1, 1995) But what about asthma? You are a miner and are laid-off because you have occasional bouts of asthma. Can the mining company say that is an analogous cause? NO. All just causes refer to voluntary and willful acts of the employee. Asthma is not analogous to any of them. It is not even an authorized cause. Occasional asthma is not a ground for termination due to disease. (Nadura v Benguet Consolidated) Note that the law has also considered the following cause for dismissal: sexual harassment illegal strike (for officers) illegal acts during a strike (for officers and members) Penalty not commensurate

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_Dismissal is a serious penalty. Thus, while there may be an offense, the SC has held that sometimes it will not warrant dismissal. Note the PAL v PALEA case where the PAL employee stole some lead material. The Supreme Court said considering it was his first offense in seventeen (17) years, the cost of the material was negligible, PAL lost nothing, he has been under preventive suspension and therefore that in addition to what he suffered, having been out of a job for so long, is enough punishment the penalty is not proportionate to the gravity of the offense. BUT long length of service, in itself, is not enough to justify the application of this doctrine. Just because an employee has worked for 27 years without any infraction of company rules will not have any bearing if the infraction is serious. In the other cases where dismissal was not upheld, the infractions were minor. Thus, where you suddenly leave the vessel you are supposed to be in charge of to go on shore and because of you the vessel is unable to leave on time, causing the shipowners losses, that is a serious infraction. (Villeno vs. NLRC, Dec. 26, 1995) It is therefore a case-to-case basis. Other cases where the penalty of dismissal was not proportionate: Foodmine, Inc. v NLRC - a co-employee supposedly slapped a co-worker's left breast, then grabbed and pulled it. The Supreme Court said that is not commensurate even if guilty (of course, Supreme Court said he simply brushed his hand accidentally against it). Rubberworld v. NLRC - You enter items in stock cards without counter-checking. The data is thus inadequate. there was no serious damage to the company. You are Absent Without Leave (AWOL) 9 days in one year. For that you are dismissed. Supreme Court said his lack of work during the pendency of the case was enough punishment. He was ordered reinstated without backwages. In case you commit your 1st offense in 6 years of work - fighting in company premises, the SC has held the penalty of dismissal is not commensurate to the offense. (Oania v NLRC) Theft of Lighter Fluid - if the employee has worked for 8 years with a clean record, dismissal would be too harsh. Repeated absence in a span of four years, the employee having worked for over 8 years (Michael, Inc. vs. NLRC, April 25, 1996) Eating while on the job, this being a tolerated practice and it being the first offense. (J. Vitug, Tanduay Distillery Labor Union vs. NLRC, Dec. 6, 1994) Constructive Dismissal In connection with this, we have constructive dismissal. That means: a quitting because continued employment is rendered unreasonable; impossible or unlikely. Examples: Demotion in rank or diminution in pay. As when or Production Recorder suddenly finds her position is occupied by anther and she has been demoted to rank and file. (Gaco v NLRC, 230 SCRA 260) Internal Auditor. He is ordered to buy 10 grams from the plant. he refuses, saying that is not his job. he was then demoted to log purchaser. (Now it was part of his job). The Supreme Court did not rule squarely on whether or not it was constructive dismissal. The main issue was whether or

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not there was jurisdiction with the CIR. But I'm sure it would have said there was constructive dismissal. (Quisaba v. Sta. Ines) Demotion from Principal to Teacher during your term of office (Del Rio v Bonilla, 1975) Repeated transfer to distant branches. Threatening worse conditions of employment if he does not resign. (Reyes v NLRC) A security guard in a plantation is made a common laborer. There is an obvious lowering in rank. Also, since a security guard is monthly-paid and a laborer daily-paid or paid by piece-work, there is diminution in pay laborers only work in the plantation during the proper season. (Oscar Ledesma and Company vs. NLRC, July 13, 1995) Resignation We also have Resignation: If voluntary, we have no problem. But if it is caused by force or intimidation or threat or coercion (in short, if there is vitiated consent), then it is equivalent to a dismissal. For example, you have a worker who was sales representative but given messengerial work (which was his original job). He refused to do messengerial work. So the company president called him and said if he did not resign, he would file charges against him and this would affect his chances of employment "I have a very good lawyer I will file charges versus you." The President even gave him the pen and paper to write the resignation letter. Was that an involuntary resignation? YES, there was intimidation. Intimidation may vitiate consent if: 1. it caused the consent to be given 2. the threatened act was unjust/unlawful 3. the threat is real or serious, there being evident disproportion between the evil and the resistance 4. it produces a well-grounded fear from the fact that the person from whom it comes has the means to inflict the threatened injury. When the President, to whom he should give respect and reverence, wrongly exerts pressure amounting to intimidation, that vitiates consent. This is seen from his threat to sue, the claim that he had a very good lawyer and the threat to block future employment. There was a real danger, considering the employee was not even a college graduate. (Guatson Int'l Travel & Tours v NLRC, 230 SCRA 815) But where a spot audit reveals you have a P50,000 shortage and you resign because they threaten to charge you with estafa, that is not intimidation. the threat must be of an unjust act, not a valid and legal act to enforce a claim. Secondly, if you are of high position and educational attainment, this shows you will not easily fall to pressure. (Callanta v NLRC, 225 SCRA 526) The SC has held that the fact that the employee immediately filed a complaint for illegal dismissal and repudiated his resignation negates the claim of the company that he voluntarily resigned. By vigorously pursuing his resignation, he showed he had no intent of relinquishing his employment (Molave Tours Corp. vs. NLRC, Nov. 24, 1995)

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When effective Where resignation is not accepted by the authority which is to accept it, it is not effective and may be withdrawn. Such as when you resign as officer in protest over a deal you question, but the board never categorically rules/acts on it. You can still withdraw your resignation. But where resignation has been accepted, even if it is still prospective, you are bound.

Intertrod Maritime v NLRC: A seaman asks to be relieved while the vessel was in Greece, because a co-worker was sick and needed assistance. But the Master said, "I approve it, but under our contract, you cannot resign until after 30 days, so we can find a replacement". So, when the ship moves on and goes to Egypt, he is discharged. He said, that is breach of contract! The reason I asked for discharge is so that I could take care of a crew member hospitalized in Greece. The Supreme Court said, we sympathize with him but he is wrong. Resignation is a voluntary act of one who finds himself in a situation where he believes personal reasons cannot be sacrificed for exigency of the service. He has then no other option but to dissociate himself from the employer. Resignation, once accepted, may not be withdrawn without consent of the employer. Resignation vs. dismissal The issue sometimes, is : Was there, in fact, a resignation? Or was it a dismissal?

For example, three workers who contracted to work in British Indian Ocean territory were told to dig and excavate canals, haul bags of cement and do other heavy jobs. They finally refused and said that that was not in their contract. They engaged to perform merely housekeeping chores. The supervisor therefore told them, OKAY, you have two options - apologize and go back to work or resign and be repatriated. So they resigned. The SC said these were not really options. They had no choice under the circumstances but to resign. (The SC also held that the dismissal was likewise illegal because if they were ordered to do housekeeping, they would not have refused. The economic hardships they would have gone through would have been worse than that. Their story is thus credible. (Tierra International vs. NLRC, April 2, 1996) Or suppose, because of financial reverses, the company decides to streamline operations. It eliminated some personnel from middle management for this and gave them the option: 1. Retrenchment with separation pay 2. Voluntary Resignation with better benefits. Of course, they chose the latter after negotiations. They later sued for illegal dismissal. The Supreme Court said that was not resignation as they were forced to choose between two (2) extremes.

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In termination cases, the employee is given no option. He is dismissed and his only recourse is to sue the company. In this case, they had an option to resign. There was no coercion, as a matter of fact, they had negotiations, obtained a better package and one even consulted his lawyer. DUE PROCESS: Due process essentially requires notice and hearing. Two notices are required Notice of the charges, which must be specific enough so that the worker will know what to respond to. Notice of the decision of termination Where the worker was notified of the charge of undermeasuring cargo, but, during the investigation, fought with one of the witnesses, the SC held that he could not be dismissed for fighting in work premises without violating his right to due process. He should have separate notice and hearing for that. The worker must also be given sufficient opportunity to explain his side. In one case, where the worker had a fight in the restaurant premises and immediately afterwards, the supervisor asked him to explain what happened and he refused to answer, that could not be deemed a compliance with due process. Under the circumstances, he was not given sufficient chance to explain his side. There is also a difference between opportunity to explain and an interrogation. Where the worker is brought inside the security office and questioned by security guards about his involvement in a theft, that is not due process. The worker may have a representative, if he desires, during the hearing of the case. The rules give him this right. But the hearing does not always have to be a formal hearing, wherein the worker is confronted with all the witnesses and has an opportunity to examine them. A notice to explain in writing may be sufficient, depending on the circumstances. What if a worker is dismissed for just cause but without due process? The Wenphil vs. NLRC case states that he is not entitled to reinstatement. He was ultimately accorded due process during the proceedings before the Labor Arbiter. However, due to the violation of his right by the company, he is entitled to damages. That case awarded the employee P1,000.00 in damages. Later cases went as high as P10,000.00 and then, most recently, down to P5,000.00. So, if you are dismissed for just cause but without due process, you may not be reinstated but may obtain damages. What kind of hearing is required? He should be allowed to answer within a reasonable period He shall be given ample opportunity to be heard and defend himself He may be assisted by a representative, if he desires (Implementing Rules)

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So if he is simply given a letter informing him of his termination, there is a no due process (Labudahon v NLRC, Dec. 11, 1995) You do not however, need a formal type hearing. All it requires is an opportunity or rights to be heard. If, for example, you have been accorded this right, then you do not appear, you have waived the right. (Pepsi Cola Distributors of Phil v NLRC, Aug 15, 1995) XXIII-B AUTHORIZED CAUSES You have first, the economic reasons: 1. Installation of Labor Saving Devices 2. Redundancy 3. Retrenchment to Prevent Closure 4. Closure (whether or not due to losses) 1. Installation of Labor-Saving Devices: What is the reason you allow for this? As the Supreme Court said in Phil. Sheet Metal v CIR, "You cannot stop the course of the times. To survive and prosper, the only alternative is to adapt to the exigencies of the modern world. you cannot use antiquated methods when there are methods more efficient and advanced. You need to elevate quality of production." Therefore, if you are in the weaving department of a garments firm and the company buys a computerized weaving machine, you can be terminated. Likewise, if you work in the lay-out department of a company, manually laying out the negatives of publications and then the company computerizes the publishing process, you can be terminated. The law imposes no obligation to train you for the position. 2. Redundancy: This means superfluity of position. For example, you are sales manager. You go on a trip abroad. When you return, they tell you your position no longer exists. Due to a cost-cutting measure, the company had an unusual low volume of orders and therefore had to abolish some positions as redundant. Can you say, you cannot dismiss me for redundancy - I alone performed those tasks! The Supreme Court said redundancy does not require duplication of work. Just because no one has performed the same tasks does not mean you cannot be redundant. As a matter of fact, rarely do you find two (2) or more doing the same tasks in a well-organized business. What is required is SUPERFLUITY of work. It may result from a number of factors: overhiring, decreased business/work, dropping of a product line and integration of functions In short, a company need not retain more than necessary for its operations. (Wiltshire File Company v NLRC)

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Other examples of redundancy:

For example, you work as Regional Cashier in a company branch in Baguio. To cut expenses, the company transfers you to the Accounting Department in Metro Manila and gives your functions as Regional Cashier to the Administrator. You say that is constructive dismissal as you are being demoted. That is valid. Abolition of position no longer necessary is a form of dismissal due to redundancy. The new position in Manila as Regional Cashier, even if two grades lower, was offered not to demote her but as an accommodation to her. (Grepalife v NLRC) To cut costs, your position as mechanic is abolished and your functions/work are contracted out to a job contractor. That is valid. It will make production more economic and efficient. In the absence of proof, it was done in a malicious or arbitrary manner, the courts will not review this exercise of management prerogative. (De Ocampo v NLRC) In another case, to make its workforce more efficient, the company decided to dismiss redundant or surplus personnel. Can you claim that is illegal because the company is making money and the volume of work in that personnel's department actually increased? As a matter of fact, they hired additional personnel! The Supreme Court said NO. In redundancy, what you look at is the position, the nature of services performed, and the necessity of the position. You do not have to inquire into losses or decreased business. NLRC) In short, redundancy means superfluity of position. It may arise from a number of factors: - loss of job orders for a particular products - bumping off a line of products - sub-contracting to cut costs - integration of functions - overall decrease in work It is not necessary that: - 2 or more perform the same work (it does not require duplication) - there be a decrease in volume of work in one department - no additional personnel have been hired int he department or section. But, if, for example, the department you work in "Engineering Department" is abolished and another one "Technical Services Department" is set up with the same functions, the Supreme Court said that is simply a change in nomenclature. Termination is illegal in that case. (Ilocos Sur Electric Coop v NLRC, Feb 1, 1995) What if there were other employees more junior and less technical in position? What matters in redundancy is the position, not seniority or priority in rank. (Tierra Int'l v

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3. Retrenchment to Prevent Losses: further losses.

Retrenchment means dismissal of employees to prevent

For retrenchment to be validly undertaken, as stated in the Lopez Sugar Corp. v PPW, the following are required: It is not necessary that actual losses be suffered yet. That is why the law refers to it as "retrenchment to prevent losses". It is authorized sometime before losses are actually sustained. The law did not intend to stay the employer's hand until losses have materialize, otherwise, this would be deprivation of property without due process of law. But it is not enough that there simply be a POSSIBILITY of loss. What you need to show are the following: 1. The expected losses are substantial (otherwise, the bona fide nature of the retrenchment will be put in question) 2. The losses must be imminent (the imminence must be perceived objectively and in good faith. There must be a certain degree of urgency.) 3. It is reasonably necessary and likely to prevent the loss. (The employer took other measures prior to or parallel to the retrenchment. If, for example, it still gave fat bonuses to executive, retrenchment is not justified. In short, it is a last resort) 4. The alleged losses or expected losses must be proved by sufficient and convincing evidence. (Otherwise, the ground would be subject to abuse) Thus, where the company never even presented audited financial statements and later hired 110 casuals, the Supreme Court said that hardly justifies retrenchment. Likewise, if you have a taxicab company operating in Clark Air Base and then say your business was stopped due to the eruption of Mt. Pinatubo, which made roads impassable, the SC said that is not enough. You must prove it by clear and convincing evidence. As a matter of fact, the SC said, the company was not losing at the time. It closed down because of the phase out of the US bases. (Naguiat vs. NLRC, Mar. 13, 1997) But after some lay-offs were made, and the union agreed that there would be consultations between the union and the company before any temporary lay-off, the SC held that that was a recognition on the part of the union that there would be a continuing need to lay-off due to the dwindling financial capacity of the company. Why would the union agree to additional mass layoffs if it did not believe that there was financial instability? (Revidad vs. NLRC, June 27, 1995) In this regard, where a hacienda suffers a net loss of P2.8 Million in one year, that will justify retrenchment. (Revidad vs. NLRC, June 27, 1995)

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When you evaluate the evidence of loss, it is on a case to case basis. So, a small rural bank with a measly capitalization of P500,000 should be judged differently from a huge commercial bank. (Balbalec v NLRC, Dec 19, 1995) Retrenchment is different from redundancy. There is redundancy where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Retrenchment, on the other hand, is used interchangeably with "lay-off". Retrenchment means termination of employment initiated by the employer through no fault of the employees and without prejudice to the later. It occurs during business recession, industrial depression, or seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials, conversion of plant for new methods or better machinery, or of automation. In short, it is dismissal of employees due to losses in operations, lack of work and considerable reduction in volume of business. (Sebuguero v NLRC, Sep 27, 1995) Retrenchment is permanent in nature if, for example, they put you on temporary lay-off, that cannot go on indefinitely. Upon reaching six (6) months, applying Art. 286 by analogy, you should either be recalled to work on permanently retrenched. if not, that would be tantamount to dismissal. (Sebuguero v NLRC, Sep 27, 1995) It is also different from closure. If, for example, this agricultural corporation owns six (6) haciendas. If one of them is closed down due to losses, that is not closure, but retrenchment. Closure means closure of the entire establishment, not a branch or unit. (Lopez Sugar Corp. v NLRC) No discrimination in selection of workers However, even if the situation warrants termination due to labor-saving devices, that does not mean that the termination of employees is lawful. It is still subject to law against discrimination. You must use fair and reasonable criteria in selecting who shall be dismissed. What would be fair and reasonable criteria? - employee services and conduct seniority: this must be seriously with respect to the position affected by the termination. In general, the employee cannot insist on company-wide seniority (Last In - First Out) - employee disciplinary record These standards must be applied evenly and without discrimination. 4. Closure: This must be closure of the entire establishment. It may be due to losses or not. In short, it can be for any reason - you're old and want to retire, you have ground tired of the business, you want to sell your business and make money fast - the only limitation is stated in an earlier paragraph: It should not be done for the purpose of circumventing the provisions of the CBA. For example, in Carmelcraft v NLRC, the closure was clearly done because the union had filed a PCE. The company said it was losing money and showed a financial statement showing a los of P1,603 for 1986. The SC said that was hardly serious to call for a closure. That was ULP.

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Likewise in UFW v NLRC, the SC said, if you will shutdown due to losses, the losses must be serious, actual and real. Otherwise, this will be subject to abuse by employers pretending business losses. For example, you say you're having a shut-down, but you maintain your Marketing and Export Division; or never apply for dissolution; or still continue exporting long after the date of closure. These show the closure was only feigned and not bonafide. Obviously, in this case, the workers should be reinstated with full backwages. But what about in the Carmelcraft v NLRC case, where the closure was for real, but to frustrate the rights to selforganization? Can the SC order it to reopen? NO. That is entirely within the company's prerogative. So, in that case, the SC awarded separation pay of half (1/2) month/year of service (as if there was not any ULP) But I would think exemplary damages should also be due. In connection with closure. What if the company sells all its assets. What happens to the employees? What happens to the CBA? The benefits of the employees? Labor contracts are in personam. The general rule is they are not enforceable against the transferee of an enterprise. There is no privity of contract between the transferee of an enterprise and the employees. The transferee or the successor-employer thus cannot be held liable for the labor contracts (employment and collective bargaining) of its predecessor. What are the exceptions? 1. When the transferee is an alter ego of the old employer.

For example, (Filipinas Port Services v NLRC), the stevedoring and arrastre operations in a port in Davao were all integrated into one firm. All the employees were absorbed by the new corporation - Filport. The SC said the rule that labor contracts may not be enforced against the transferee applies only when the transferee is an entirely new corporation with a personality distinct from the integrating firms and not merely an alter ego of the merging firms. Filport was a mere alter ego since the business operations remained unchanged. They hired substantially the same employees and used substantially the same facilities with the same work conditions and line of business. They used the same corporate control, although under new management and corporate personality. There was thus a succession which occurred and Filport had to include the workers' prior length of service in computing their separation pay. In short, they were never terminated. It was as if the employer were still the same. In Pepsi Cola Distributors v NLRC, Aug 15 1995, Pepsi Cola Distributors ceased operations. It then turned over the business to a locally - organized corporation, Pepsi-Cola Products Phil. During the time of the transfer, there was a pending complaint filed against PepsiCola Distributor. Can it subsist against Pepsi-Cola Product Phil?

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YES. Pepsi never stopped doing business. It sold the same softdrinks. It was thus an alter ego of the first corporation. (Pepsi Cola Distributors v NLRC, Aug 15 1995) Or where Avon Dale Garments takes over the business from Avon Dale Shirt Factory, continuing its operations with the same owner, business venture, address and employees, the SC said the two cannot be deemed separate. One is a continuation of the other. Avon Dale Garments is thus liable for the separation pay due from Avon Dale Shirt Factory. (Avon Dale Garments v NLRC, July 20, 1995) 2. When there is express assumption of liability. In the Filport case, the Philippine Ports Authority Circular expressly required them to absorb the employees and the obligations of the old employer. 3. When the transfer is done in bad faith. For example, three (3) months after a CBA is executed, the company properly is sold. The sales are made secretly and hurriedly. The buyer even had to amend its articles of incorporation to include the purchase of the business involved. Then the buildings were speedily leased to a corporation which did not yet exist. The transfer was thus in violation of the CBA. (Majestic and Republic Theaters Employees' Ass. v CIR) [What if it is not the properties alone which are sold, but the business and then the buyer continues to use the same corporate personality? In Manlimos v NLRC (Mar 2, 1995) that is what happened. There was only a change in ownership of the corporation. Is this covered by the exceptions? The SC said NO. The change in ownership was bona fide. As a matter of fact, the employees freely and voluntarily accepted separation pay and executed Deeds of Release or Waiver. An innocent transferee has no liability to the employees of the transfer or to continue employing them. If in good faith, he has no legal duty to absorb them. At most, he may give preference to them in filling-up vacancies.] So in short, it is not only closure and sale of assets which will warrant dismissal, but sale of the business. As long as there is a substantial change in ownership, then the employees may be terminated from employment, even if the business is continued. Note that in the Pepsi Cola and Filport cases, the new corporations were virtually the same as the old corporations. (We also have constructive dismissal, with respect to authorized causes.) Seniority of absorbed employees What if you are absorbed by the successor-employer? Are you entitled to the seniority you earned in the previous employer? In International Container Terminal Services vs. NLRC (April 10, 1996), the Manila International Container Terminal was previously owned and operated by the Philippine Ports Authority (PPA) which is under the DOTC. ICTSI took over its operations and management and agreed that it would use PPAs employees, provided it could screen them. After ICTSI took over, 23 workers were allowed to work. They were later terminated for no reason. ICTSI said they were not its obligations. CORRECT?

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NO. The fact that it opted to extend their services after it took over only shows that they were qualified and were thus chosen to perform work which was necessary to the business. Employees absorbed by a successor-employer enjoy the continuity of their employment status and their rights and privileges survive so as to be operative against such successor-employer. Constructive Dismissal For example, you are a security guard. You are assigned to various corporations. Then these corporations are sequestered and you are therefore put on floating status (you have no assignment). You are on that status for an indefinite period and receive no pay for that period. Applying Art. 286 by analogy, if bona fide suspension of business not exceeding six (6) months will not terminate employment, corollarily, if it exceeds six (6) months, termination of employment may be said to follow. Since you were on floating status for six (6) months, you are constructively dismissed. (Agro-Commercial Security Services v NLRC) The same if you are placed on rotation (you work only 3 days/week) If the total period you do not work reaches six (6) months, then you are also constructively dismissed and entitled to separation pay. (International Hardware v NLRC) SUSPENSION OF OPERATIONS: This is not termination provided it does not exceed six (6) months, in which case, you are terminated and entitled to separation pay. If the Philippines go to war and you are engaged in military service for seven (7) months, can you be deemed dismissed? NO, performance of military or civic duty shall not terminate employment, no matter how long. "6 months" only refers to suspension of operations. After its over, you are entitled to resume without loss of seniority or other rights PROVIDED it is not over one (1) month after the contingency that you report for work. DUE PROCESS IN ECONOMIC CAUSES In case of termination due to these causes, what must you do? give one-month notice to both employee and DOLE 2. pay separation pay to the employee Let's first discuss the one-month notice. The purpose of this is to give the employee a chance to find employment and let the DOLE inquire into the propriety/legality of the closure whether or not it is done in good faith (Revidad vs. NLRC, June 27, 1995). This is mandatory. Requirements as to the notice: The notice must be given one month before termination. If given 5 days before, the company is liable for damages. (Central Azucarera de La Carlota vs. NLRC, Dec. 29, 1995) You cannot give it after the termination. Otherwise, this will defeat the purpose of the period for the notice.

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It must clearly state that it is a termination. If it is not so definitely phrased, as when it simply says that the employees are being laid-off, that is not enough. It must be clear that it is a permanent layoff. (Sebuguero vs. NLRC, Sept. 27, 1995) It must be given to both the employee and the DOLE, considering its purposes. (Sebuguero vs. NLRC, Sept. 27, 1995) It is different from notice under termination for just cause, since the employee is not given a chance to show the employer why no dismissal should be made. But the SC has said that a VA case, where both parties presented evidence on whether or not there should be retrenchment, is substantial compliance. The VA proceedings have more than satisfied the intent of the law considering the parties were given a hearing. (Revidad v NLRC, June 27, 1995). Likewise, in case of constructive dismissal for authorized cause, where the employee was out of work for six (6) months and he filed a case seeking separation pay, the SC said there is no more need to give notice. (He himself asked to be terminated.) What is the effect if no prior notice is given to the employee? In Sebuguero v NLRC, Sep 27, 1995, the SC said it is not illegal. It is simply defective. The SC treated this the same way they did notice and hearing in case of just cause, insofar as the effect on liability in concerned. It said you do not require notice and hearing in case of termination for authorized cause. There is no need, since the employee does not have to refute any allegations. But, if you do not give him notice, that does not mean the dismissal is illegal. It is only defective. That means there is a sanction for violation of the right - follow the Wenphil doctrine. Pay indemnity (here, they ordered indemnity of P2,000). (An older case ordered payment of I month pay, which is more equitable. Another older case said, if he dismissed the employee without the one-month notice to DOLE, dismissal is effective only from the date of notice. (So the company is liable for salary until that date). Can the employer excuse itself from giving notice simply by paying notice pay equivalent to one-months pay? NO. The notice is not a mere technicality but a requirement of due process. If there is absence of the one-month notice, the employee shallbe awarded damages. [This may be in an amount greater than one months salary.] (JGB & Associates, 254 SCRA 457)

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SEPARATION PAY: How much?

_1. labor saving devices:_1 month pay/year_or one month pay_whichever__2. redundancy:_1 month pay/year_or one month pay_is __3. retrenchment:_one-half (1/2) month pay/year_or one month pay_higher__4. closure NOT due to losses:_half (1/2) month pay/year_or one month pay___ What about closure due to losses? Art. 283 does not obligate the employer to pay separation pay if the closure is due to losses. [North Davao Mining Corporation vs. NLRC (254 SCRA 721)] How much?

For example, you earn P3,000/month. You are dismissed due to redundancy. You worked 3 years. You get 3 x P3,000 = P9,000 What if the ground for dismissal was retrenchment? You get 3 x P1,500 = P4,500 What if one year was work as a casual employee. The next two as a regular employee? Same amount. The law makes no distinction between the types of status you held. Suppose you worked three (3) years and seven (7) months? 4 x P1,500 = P6,000 A fraction of six (6) months shall be deemed one year. Suppose you worked three (3) years, five (5) months and twenty four (24) days? Sorry, just three years. There is no fraction of 6 months. Suppose you worked one year only and then were retrenched? You get P3,000. In no case shall it be less than one months pay. Suppose you worked for 5 months only, then you were retrenched? Still P3,000. That will always be the minimum. Suppose you worked for 10 years, and then were dismissed due to theft of company property? NO separation pay. The general rule is separation pay is due only in case of termination due to authorized cause. But there are certain exceptions which we will get to later.

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Other Authorized Causes: 1. Disease: suffers from a disease and: This is allowed as a ground for termination when the employee

a) His continued employment is prohibited by law or prejudicial to his or his coemployee's health; and it is certified to by competent public health authority that: it cannot be cured within six (6) months even with proper medical attention. What if it can be cured within six (6) months but is prejudicial to others' health? Then he may be placed on leave until he is well. Remember the earlier case of Cebu Royal Plant v Deputy Minister of Labor, the SC said that where a syrup man had PTB Minimal but the certification as to the disease came from the company doctor, that is not a competent public health authority. Further, the certificate only said he had TB. That was all. We may surmise that if the certification of competent public health authority was not presented, it was because the disease was not of such nature that it could not be cured in six (6) month's time. In another case, just because an employee suffered from TB for a year you cannot say, that's even more conclusive that it cannot be cured within six (6) months than a certification from a public health officer! The certification would then be superfluous. Nevertheless, he can be barred from reinstatement until public health authority certified him as fit to work. (General Textile v NLRC Apr 4, 1995) In another case, a ticket inspector in a bus company stabbed the bus driver and was charged with frustrated homicide. Apparently, this was settled, but the legal department of the company recommended his dismissal. But before he could be dismissed, he met an accident and was injured. They found out he had TB at an advanced stage. So the company instead said it would retire him due to medical reasons. He did not want to. So after he was dismissed, he sued for illegal dismissal. Is his case meritorious? YES. The SC said the company did not submit the required certification by a competent public health authority to show that the employees illness could not be cured within the proper period. Though they presented a radiograph report, this merely stated the disease. In the absence of such certification, the retirement due to illness has no leg to stand on. Dismissal is the ultimate penalty that can be meted to an employee. It must, therefore, be based on a clear and not on an ambiguous or ambivalent ground. Any ambiguity or ambivalence on the ground relied upon by an employer in terminating the services of an employee denies the latter his full right to contest its

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legality. (Note that the SC, on the issue of serious misconduct, simply said it could not uphold the dismissal on this ground.) (PANTRANCO NORTH EXPRESS, INC vs. NLRC, January 24, 1996.] In case of termination due to disease, how much separation pay is due? Half (1/2) months salary/year of service or one (1) months pay, whichever is higher 2. Retirement: The age of retirement is that specified in the CBA or in the employment contract. If it is not specified, a) OPTIONAL - 60 years of age & 5 years in service b) COMPULSORY - 65 years of age (you don't need 5 yrs in service (IRR) What do you count in the 5 years of service?

Authorized absences vacations, regular holidays and mandatory fulfillment of civic or military duty (see Implementing Rules) What are the retirement benefits? Half (1/2) month salary/year of service A fraction of six (6) months is one (1) year What comprises 1/2 month salary? 15 days' pay + 1/12 13th month pay + cash equivalent of SIL for no more than 5 days + other benefits under agreement (IRR) If both parties contribute to a retirement fund, the employer's total contribution shall not be less than the total retirement benefits to which the employee would have been entitled had there been no retirement fund. If it is less the employer pays the deficiency. The retirement benefit is tax-exempt. For example, under the law, let us say you would be entitled to P50,000 from the employer in retirement benefits. Let us also say that the company has a retirement plan composed of contributions from both the employer and its employees. Upon retirement, you get the sum of what both you and the company contributed to your fund. What if you and the companys total contributions to the fund amount to P25,000 each? Under the company plan, you would only be entitled to a total of P50,000 in retirement benefits (half of which came from you). Can you demand more? YES. The law requires that the company contribute no less than what you would be entitled to under the law. It thus has to make good the deficiency otherwise, this would be an easy way to

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avoid liability. You would thus come home with a total of P75,000 (P50,000 from the company contributions, P25,000 from your own.). Suppose you work for a small eatery. You are the only cook. You are so loyal, you work until you reach 60, and then you retire. Can you claim retirement pay under this provision? NO, exempted are retail, service and agricultural establishments employing no more than 10 employees. This amendment to the law which made retirement pay compulosry on the employer was approved on Dec. 9, 1992. The question is, when a person retires, will you include his or her service prior to 1992 in computing the retirement benefits? YES, the law is curative in nature a piece of social legislation and therefore can work retrospectively as well. As held in Oro Enterprises v NLRC and affirmed in CJC Trading v NLRC, July 20, 1995, this law (RA 7691) may be given effect where: 1. the claimant was an employee when the law took effect (on Jan 7, 1993); and 2. the claimant was eligible for such benefits. (What is curious about the Oro case is that the lady who was involved first resigned and then later claimed her benefits. She lost before the Arbiter. While her case was on appeal, then the new law took effect. The SC said she was qualified for the benefits. But note, she was not claiming reinstatement and therefore was not an employee anymore then. The SC seems to have considered her qualified because she still had a case pending and an issue there was whether or not she was effectively retired.) PSVSIA vs. NLRC (Sept. 20, 1996) clarified this. R.A. 7641 which amended the law on retirement cannot apply to a retirement made before the law took effect. Its effect is prospective. Doubts are always resolved against retrospective effect. So you should include service prior to December of 1992 in computing retirement pay but you will not apply the law to retirements made before that date in determining who is entitled to retirement pay. May an employee still be hired after 65 years? YES, but that depends on the agreement of both parties. There is also the case of Aquino v NLRC (206 SCRA 118). The amendment was still not in effect the and retirement pay was still optional. But in this case, there was a CBA which provided for a group retirement plan to the effect that an employee terminated after 10 years in service is entitled to a lump sum benefit. The CBA also provided for payment of separation pay to all those separated without cause. If an employee is terminated due to the need to streamline operations (redundancy), can he claim both CBA benefits?

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The SC said yes, They have different purposes. Separation pay is there to provide the employe with the wherewithal while looking for another employment. Retirement benefits are intended to help employees enjoy the remaining years of his life, lessen the burden of financial support and reward him for loyalty and service. There being no prohibition against it, the workers can thus claim both. CONSEQUENCES OF DISMISSAL FOR JUST CAUSE The employee gets nothing.

Can they be awarded separation pay? Generally no, except, in the discretion of the NLRC, for valid but not iniquitous causes. The law does not allow for this but there is basis for it in the social justice provisions and protection to labor clause. So, if the case involves serious misconduct, or causes reflecting on moral character, no separation pay is allowed. For example, for misappropriation of funds, a security guard who is found sleeping on the job with a prostitute, habitual drunkenness, theft, offense involving moral turpitude - stealing company property, demanding bribe from customers to connect their phone lines - no separation pay may be awarded. If you grant it, maybe he will commit the offense again, expecting leniency. It is misplaced compassion to award separation pay in those cases. But separation pay may be awarded in the following cases: failure to meet standards subordinate who has irreconcilable policy or personal differences with an employer working mother who is frequently absent because she has to take care of her child inability to fill quota (PLDT vs. NLRC). CONSEQUENCES OF ILLEGAL DISMISSAL: 1) 2) Reinstatement to his former position UNLESS it no longer exists at the time of reinstatement (in which case he shall be given a substantially equivalent position without loss of seniority rights) 3) without loss of seniority rights and other privileges 4) with full backwages, inclusive of allowance, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of reinstatement. A. Reinstatement: Thus is not always warranted. In what cases will reinstatement no longer be feasible?

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For example: You are illegally detained without privilege of the writ of habeas corpus (PDA). You then are later released - mistaken identity. While they were gone, the company hired permanent substitutes (due to their three-month absence). The SC said this was a case of a false or non-existent cause: the employer does not intend to dismiss you but something (a cause) occurs which causes your dismissal. The cause then later turns out to be false. That is also illegal dismissal. But it would not be fair to reinstate them, under the circumstances, to the same position. He should be placed in a substantially equivalent position. Under the rules, if the establishment has closed down or the position no longer exists for reasons not due to the fault of the employer when the time comes for reinstatement, he shall be paid separation pay at one (1) months salary / year of service but not less than one month's pay. Other cases where reinstatement is no longer feasible: long passage of time realities of the situation facts transpired making it unjust or inequitable The most common reason is: strained relations. But the employer cannot simply invoke that anytime he wants to bar reinstatement in Globe Mackay v NLRC, the SC said the following must be met: 1. the employee holds such a position which enjoys trust and confidence; AND 2. it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated so as to adversely affect his efficiency and productivity. Strained relations must be so serious and compelling that continued employment is obnoxious to the business and inconsistent with peace and tranquility in the workplace. (Sibal v Notre Dame) (Examples of positions of dismissed employees which may justify no reinstatement due to strained relations are: - VP for Marketing - OIC of extension office - union organizer who is in a position to sabotage another union's organizing efforts - warehouseman of NGO - manager - high school teacher) You cannot apply strained relations indiscriminately. For example, you cannot dismiss an employee simply because he asserted his rights and filed a case. Nor can you dismiss a systems analyst where it was not shown that she took company property. That is not a confidential position. It has nothing to do with the lost property. Or if a union president reacts to bad work practices of the company that's not a valid ground for claiming strained relations. (Employee Association of Philamlife Insurance Co. v NLRC)

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But position alone is not always the determining factor. In the following cases, ordinary rank and file employees were barred from reinstatement: An employee suspected of having poisoned another (Century Textile rules v NLRC) Teacher getting married to student and causing a scandal in school (Chua Cua v Clave) An employee fights another, resulting in physical injuries. Avoid any possible confrontation. (Flores v Nuestro) The employee dismissed workers in a Catholic school (Divine Word v NLRC) So much antagonism already resulted. But just because they file a case and don't settle doesn't mean there is strained relations. You have to show acts/incidents indicating a tension-filled environment (Palmeria v NLRC, Aug 3, 1995) But where there has been strained relations due to adversarial positions in a case, (Pepsi Cola v NLRC), Aug 15, 1995) or protracted proceedings with confrontational exchanges (PCIB v NLRC, Aug 23, 1995), the SC has held there to be strained relations. Another cause which will bar reinstatement is abolition of the office. For example, in Pizza Inn v NLRC, the branch where she worked was burn down. She said, reinstate me in other branches! The SC said, there was no need for other employees each outlet had its own plantilla. You cannot force the employer to reinstate you if it will exceed its need. 2. Without loss of Seniority or Other Rights

For example, you originally work here for P4,000/month. You are assigned to work in the office of the company in Australia at a salary of $8,000/year. When you try to be reinstated to your former position after your work in Australia is over, you are denied reinstatement. That is illegal dismissal. He was awarded separation pay. But the questions is, what shall be the basis of computation - P4,000/mo. or $8,000/yr? SC says P4,000/mo. Reinstatement means restoration to a condition or state from which you were removed or separated. You assume the position prior to dismissal and, as a rule, are entitled only to your last salary in that position. Salary scales depend on the standard of living in the country. P4,000 was reasonable here. $8,000 was also reasonable in Australia because of the higher cost and standard of living. Therefore, there was actually no fare wage increase when he went to Australia. So, he should be paid P4,000 - the salary rate for Philippines. 3. Full Backwages This includes allowances and other benefits (or their monetary equivalent) History of the rule on backwages The SC, in Bustamante vs. NLRC (Nov.,1996) went through a brief history of the doctrine on this:

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R.A. 875 - Backpay could be awarded where, in the opinion of the Court of industrial Relation, it was necessary to effectuate the policies of the Industrial Peace Act. It was a matter of right only in one case - if the employer engaged in a lockout without bargaining. The CIR was thus given implied power to mitigate backwages. Itogon-Suyoc Mines vs. Sangilo-Itogon Workers Union (Aug. 30, 1968) - The SC restated the guidelines for qualification and deduction of backwages: Deduct earnings of the worker from other employment from the date of dismissal until his reinstatement (or until finality of the decision, if the worker does not wish to return). Reason: To prevent unjust enrichment Take account of what the worker should have earned elsewhere with the exercise of due diligence and deduct this amount. Reason: Otherwise, it would breed idleness. Mercury Drug Co. vs. CIR (April 30, 1974) - Award a fixed amount without qualification or deduction Reason: Expediency in execution. Justice Teehankee dissented and said that three years should serve as the base figure. Feati University Faculty Club vs. Feati University (Aug. 15, 1974) and other cases - The 3-year rule suggested by Justice Teehankee was adopted. P.D. 442 (The Labor Code) - The Labor Code stated that backwages were to be computed from the time of withholding of compensation until reinstatement. Nevertheless, the SC still applied the Mercury Drug rule. Medado vs. CA (May 7, 1990) - Any order granting backwages over 3 years if void as to the excess. R.A. 6715 (March 21, 1989) - The law was amended to state full backwages Still, the Mercury Drug ruling was applied in several cases. Maranaw Hotel Resorts Corp. vs. Court of Appeals - The SC said that, the law having been amended to refer to full backwages, backwages from date of termination until actual reinstatement must thus be awarded without the 3-year limit, but with qualification and deduction. This is to adhere to the old policy against unjust enrichment. Bustamante vs. NLRC (Nov. 28, 1996) - The SC said, the Court deems it proper to reconsider the earlier ruling on backwages. The legislative intent was that: The employee, during the pendency of the case, must still earn a living to support himself and his family; Full backwages is also a penalty on the employer for the illegal dismissal. The clear intent was thus to give more benefits to labor than they received under the Mercury Drug rule. Closer adherence to this policy points to full backwages - without qualification or deduction. The provision is clear, plain and free from ambiguity. Is a probationary employee who is dismissed entitled to full backwages?

YES. In Lopez vs. Javier (252 SCRA 68), the SC said that probationary employees who are unjustly dismissed during the probationary period are entitled to reinstatement and full backwages and other benefits from dismissal up to actual reinstatement. Thus, notwithstanding that

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they were still probationary when dismissed, due to the fact that they should have been regularized, they should receive full backwages. When you say probationary employee, you mean he is probationary only because he is subject to testing. He is entitled to all other rights of an employee, such as reinstatement with full backwages in case of illegal dismissal. What about a project employee?

Only to backwages until the actual end of the contract or project. You pay him for what he should have received had he not been dismissed. (Anderson vs. NLRC, Jan. 22, 1996)

XXIV DISPUTE SETTLEMENT JURISDICTION OF LABOR ARBITER: The Labor Arbiter exercises original and exclusive jurisdiction over: 1. ULP (note: this is also a ground for strike/grievance, if submitted) 2. Termination disputes 3. If accompanied by a claim for reinstatement, cases of workers concerning wages, hours of work, rates of pay and other terms and conditions of employment 4. Claims for actual, moral, exemplary and other forms of damages arising from employeremployee relations 5. Cases arising from violations of Art 264, including questions involving legality of strikes and lockouts 6. Except for claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims arising from employer-employee relations; including those of persons in

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domestic or household services involving an amount exceeding P5,000 whether or not with a claim for reinstatement. Other provisions of labor laws add the following:

Claims of workers arising from employer-employee relationship in overseas employment Unresolved wage distortions, where there is no CBA Violation of compromise agreements entered into in labor cases Likewise, the Arbiter may execute decisions of the Voluntary Arbitrator where the Arbitrator is incapable or unable to do so. Termination Disputes What if there is a CBA? Then a union member is dismissed. Where will you file your case with the Grievance Machinery/VA (since this involves implementation of a company personnel policy) or with the Arbiter (since this involves a termination dispute)? In this regard, DOLE Policy Instruction No. 56, s. 1993 says, if there is a termination dispute arising in or resulting from interpretation and implementation of CBA provisions and company personnel policies, IF this was initially processed through the Grievance Procedure, they would fall under the jurisdiction of the VA. If they initially processed it through Grievance, then file it with the Labor Arbiter, he will dismiss it for lack of jurisdiction and refer it to the NCMB for selection of a Voluntary Arbitrator. IF, however, the case was not initially processed through the Grievance Machinery, while the Policy Instruction does not say so, corollarily, you can file it directly with the Labor Arbiter. Note also the Sanyo Phil. Workers' Union case. The Supreme Court said termination of an employee pursuant to the union security clause is not within the jurisdiction of the VA. Grievances refer to disputes between parties to a CBA. That is not a dispute between parties to a CBA. As a matter of fact, the parties (union and management) are in agreement. Secondly, there will be a denial of due process, since the ones to hear the grievance will be the ones who dismissed the employee. Money Claims Note our discussion much earlier concerning labor standards violations. There are therefore 3 venues for money claims arising from labor standards violations. I Regional Director: through his Visitorial Power

There is no limit to the amount he may award due to the insertion of the phrase: "Notwithstanding the provisions of Article 129 and 217 of this Code to the contrary." The earlier case of Servando's vs. Secretary of Labor provided that, in order to harmonize Art. 128(b) with Arts. 129 and 127, such power to issue enforcement orders due to a routinary inspection would also be

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subject to the P5,000/employe limit. This amendment, under RA 7730 which was approved on June 2, 1994, sought to do away with that limit. But note that there still must be an existing employer-employee relationship for this provision to apply. Otherwise, you file it with the Labor Arbiter. Note that likewise, if the employer Contests the findings of the labor employment and enforcement o officer; and b) Raises issues supported by documentary proofs which were not considered in the course of inspection, then the office of the Regional Director must forward the case to the Labor Arbiter. He has now lost jurisdiction. II Regional Director: Adjudicatory Powers a)

This refers to a claim/complaint filed with his office. The requisites for this to apply are: The claim is presented by an employee or person in domestic or household service; 2. It arises from employer-employee relations; 3. The claimant does not seek reinstatement; and 4. The aggregate money claims of each employee do not exceed P5,000. III Labor Arbiter

Therefore, if there is a money claim arising from labor standards violations, the Arbiter has jurisdiction in the following cases: a. b. Where there is no employer-employee relationship anymore; or A complaint is filed and: i. ii. the complainant seeks reinstatement; or the aggregate claim per employee exceeds P5,000; or

c. An inspection is made and the employer questions the findings by raising issues supported by documentary proofs which were not considered in the course of inspection. Contractual Disputes What about money claims arising from contract?

In San Miguel Corp. v. NLRC, SMC sponsored an innovation program where employees who gave the best proposal for the company would get a prize. This employee submitted a proposal

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to eliminate defects in the quality and taste of the beer. SMC refused to give him the prize. If he will sue SMC, where should he go - to NLRC or the regular courts? The Supreme Court said - to the regular courts. While this may be a money claim, not all money claims filed by workers against the employer go to the Labor Arbiter. The determining factor is do they arise out of or in connection with an employer-employee relationship. Therefore, there must be some reasonable causal connection between the money claim and the employer-employee relationship. While the contest was open only to employees, that alone is not enough to place the claim within the jurisdiction of the Arbiter. The rule of thumb is, to resolve it, what law do I refer to Labor Code, or Civil Code? If to resolve it, you refer to labor laws, go to the Arbiter. Otherwise, go to the regular courts. The program being a contract with the employees, the issue therefore was there was an enforceable contract? This involves the application of civil laws. But in Pepsi-Cola v. Martinez, there also was a contest for top salesman. Someone was awarded the top salesman award. However, Pepsi refused to give him the prize. It said he cheated by falsifying reports and therefore dismissed him. If the employee will sue for the prize + backwages + separation pay + damages, where will he go? To the Arbiter. The claim for the prize arises from an employer-employee relationship. But more importantly, if we would inquire into whether or not the cause for refusal to give the prize (fraudulent collections) is valid, you ultimately would have to look into his actuation as an employee - whether or not there was serious misconduct. If you would require this to be litigated before the regular court, you would encourage split jurisdiction. He would claim the prize in the RTC and backwages in the Arbiter's office. What about if an employees sues for unpaid wages? The company then says "we don't need to pay you since you have unpaid subscription". It invokes set-off. The Supreme Court said jurisdiction over that issue is with the SEC, the issue being the propriety of the set-off - was the unpaid subscription due? You cannot therefore invoke it as a defense before the Arbiter. (Apodaca v. NLRC) Suppose a sales manager of a motor shop advances the cost of spare parts. The company does not pay him. Where can he sue to recover the cost of spare parts? RTC. This is a case for damages due to tort. Labor laws are not involved. (Molave Motor Sales v. Laron)

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Suppose, in the employment contract, it states: "In case of abandonment of work, the employee and his sureties shall be liable for liquidated damages." You abandon your work, so the company sues you for liquidated damages. Where will it sue? Civil Courts. The primary relief sought is liquidated damages due to breach of contract. (Singapore Airlines v. Pano) Suppose you own a rice mill. You enter into an agreement with someone who will regularly bring you palay which you will then mill. You will pay him a fixed price per sack of rice + 10% commission. If he sues you for unpaid commissions, where will he file the claim? With the civil courts. There is no employer-employee relationship. It is a case of supplierdealer. (Sara v. Agarrado) DAMAGES DUE TO TORT What about money claims arising from a charge of tortious act? In Medina v. Castro Bartolome, the President and CEO of Pepsi went into the Pepsi plant and without any provocation, shouted at and humiliated 2 employees. He said: "God damn it! You fucked me up. You shut up! Fuck you! You are both shit to me! You are fired! You too are fired!" The 2 filed a civil action for damages due to the tortious manner in which they were dismissed. This involves the Civil Code. Therefore, the civil courts have jurisdiction. But if the moral damages are accompanied by a claim for illegal dismissal, since the principal issue is whether or not the dismissal was lawful, you go to the Arbiter. In the Medina v. CastroBartolome case, there was no claim for illegal dismissal. It hinged purely on the manner by which they were dismissed. TERMINATION OF CORPORATE OFFICERS The Supreme Court has, time and again, ruled that if a corporate officer such as a General Manager, VP and Pres, is terminated, jurisdiction is with the SEC. Sec. 3 of PD 902-A vests upon the SEC absolute jurisdiction over all corporation - over controversies arising out of intra-corporate or partnership relations, between and among stockholders; the stockholders and the company; the company and the state AND controversies in election or appointment of directors, officers, trustees or managers. If you hold a corporate office, such as EVP, and you lose your position because your appointment is deferred, then your office is declared vacant, it is not a case of dismissal. It is declaration of an office as vacant. Whether or not you shall be reelected is a prerogative of the Board. Your non-reappointment is always a corporate act. Suppose you also ask for backwages and damages?

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That will not divest SEC of jurisdiction. These reliefs are perquisites of your position and therefore intimately linked with your relations to the corporation. (Espino v. NLRC, Jan. 5, 1995) In short, the ultimate issue was inquiry into the corporate acts of the board. In the same manner, if you claim that your termination from your post was through an illegal meeting which led to your ouster, you are precisely questioning the propriety of their corporate acts. You will be asking whether or not the dismissal was done in accordance with principles of corporation law. (Luzon v. NLRC, Jan. 2, 1995) Since the question of whether or not to retain a corporate officer is a prerogative belonging to the Board of Directors, you cannot treat it in the same manner as you would a dismissal. (Fortune Cement v. NLRC; PSBA v. Leano) But note the case of Gregorio Araneta University v. Teodoro. A VP/Treasurer was terminated by the school. He sued for illegal dismissal and money claims. The Supreme Court said, in this case, you are not questioning whether or not the Board acted properly in convening or exercising their prerogatives. The issue here was whether or not he was a regular employee entitled to security of tenure. That being the issue, you would have to apply labor laws. So the Arbiter had jurisdiction. ELECTRIC COOPERATIVES PD 269, which created the National Electrification Administration, provides that NEA, in the exercise of its supervision and control over electric cooperatives has power to conduct investigations in all matters affecting the electric cooperatives. It may therefore take preventive and disciplinary measures, such as suspending or removing Board members, officers or employees of the cooperative. Does this mean that in case of termination of employment in an electric cooperative, it is the NEA and not the Arbiter who has jurisdiction? NO. Nothing in the law says NEA has power to hear termination cases of employees in electric coops. Dismissal would still be a purely labor dispute within the jurisdiction of the Arbiter. (Ilocos Sur Electric Coop v. NLRC, Feb. 1, 1995) INTERNATIONAL ORGANIZATIONS What about international organizations, such as IRRI, Southeast Asian Fisheries Development Center, UN Revolving Fund for Natural Resources Exploration, US Bases? One of the immunities of international organizations is their immunity from local jurisdiction. The reason for this is to subject them to authority of our local courts would allow host governments to interfere and control their policies and decisions. It would also impair their capacity to discharge their responsibilities. Therefore, they cannot be sued before the Arbiter. (The treaty creating them or a law usually specifies such immunity. It also provides for its own internal

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remedies). (Southeast Asian Fisheries Dev't. Center v. NLRC, Feb. 23, 1995; Callado v. IRRI, May 22, 1995; Lasco v. UNRENRE, Feb. 23, 1995). In the same vein, Asian Development Bank cannot be sued for illegal dismissal since it has been extended a diplomatic status. In DFA vs. NLRC, Sept. 18, 1996, it was contended that since it entered into a contract for services with a worker, it waived its immunity from suit. The SC said just because it enters into a contract does not mean there is such a waiver. The test is - was that contract entered into as an activity in the regular course of business? Service contracts ADB may enter into are not intended for profit and gain but are official acts. But this does not mean that a dismissed employee will be deprived of due process. The UN Convention on the Privileges and Immunities of its Specialized Agencies provides that each of its agencies have previsions for dispute settlement. Likewise, such agencies sometimes have claims in their Memorandum of Agreement with the host country that the latter may withdraw such immunities accorded, such as what ICMC (International Catholic Migration Commission and the Philippine government have agreed. [NOTE that this relates to specialized agencies of the UN.] (EBRO III vs. NLRC, Sept. 4, 1996) GOVERNMENT CORPORATIONS Again, they are governed by civil-service law, which embraces every branch, agency, etc... of government including GOCCs. But don't forget to distinguish. If created under special law - they are covered by civil service. If created under corporation code (gen. law) - they are covered by the Labor Code. In NAWASA vs. NLRC (July 3, 1996), you had a return-to-work agreement entered into with the employees when NAWASA was still MWSS - a private corporation. After it was constituted as a government corporation, the question was, could you still enforce that judgment based on the agreement before the NLRC? The SC said yes, because when the MWSS became a government corporation, the employees already had acquired a vested contractual right they could not be derpived of. It would be different if the cotnroversy arose after MWSS became NAWASA. Then, the Civil Service law would apply and the Civil Service Commission, not the NLRC, would have jurisdiction. (MWSS vs. Hernandez, 143 SCRA 602) REFERRAL TO BARANGAY COURTS Under the Local Government Code, minor cases must be referred to barangay courts (Katarungang Pambarangay) before you file them in court. Does this also apply to labor cases? NO. The law, in its various provisions, always refer to courts of justice; judges and fiscals. Clearly, they refer to regular courts. To require conciliation before barangay courts before filing of the case before the Arbiter would defeat the purpose of the law. It would not simplify, but only delay proceedings.

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May a class action be filed to recover workers' benefits?

In Independent Sagay-Escalante Planters v. NLRC, workers in one hacienda sued to recover the 60% share of workers in the social amelioration act. The hacienda now claims they cannot do that since there will be no employer-employee relationship between it and the other sugar workers. But the Supreme Court said there is a labor dispute. The claims are inextricably linked to employment status. The benefits were additional compensation intended to improve work conditions in sugar cane plantations. They therefore arose from an employer-employee relationship. PROCEDURE BEFORE THE LABOR ARBITER The rule to be followed before the Arbiter is that you must observe administrative due process. In the Ang Tibay v. CIR case, the Supreme Court enunciated these 7 cardinal requirements as: 1. There is a right to a hearing 2. The tribunal must consider the evidence presented The evidence must be substantial (such relevant evidence as a reasonable mind might accept as adequate to support a conclusion) The decision is rendered on the evidence presented at the hearing or at least contained in the record and disclosed to the parties. The NLRC must act on its own independent consideration and not simply accept the views of a subordinate. 6. The decision must have something to support itself The NLRC should, in all controversial questions, render its decision in such a manner that the parties know the issues and the reasons. So a hearing is required. The parties shall be asked to submit position papers. The Arbiter then has the discretion or whether or not to conduct a trial, after reading the position papers, based on the pleadings. What if one side is not furnished a copy of the position paper? This is not so fatal as to invalidate the Arbiter's decision. Rules of evidence in courts of law shall not be controlling in proceedings before the Arbiter. It is the spirit and intent of the Code that shall be used to ascertain the facts of each case speedily and objectively without regard to technicalities. At any rate, when the party appealed and filed a Motion for Reconsideration, this defect was cured. (Vallende v. NLRC, July 7, 1995) Other examples of laxity in applying rules: Failure to pay appeal fees confers only a directory power to dismiss the appeal. The Arbiter has discretion (Acda v. MOL, 136 SCRA 669) If the fee is subsequently paid, even if late, the broader interests of justice required it be given due course. (CW Tan Mfg v. NLRC, 1989)

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Failure to give copy of appeal not a fatal defeat. Failure to give memo of appeal not fatal. It is a mere formal lapse.

If there are 2 respondents, one appeals and the other does not. The other can still file a Motion for Reconsideration upon denial of the appeal. In one case concerning an OFW, the agency changed its address. It gave notice to the licensing department of POEA. It therefore no longer gave notice to the POEA Hearing officer (before whom the cases were still being litigated). The SC said that the licensing department has nothing to do with the adjudication of the complaints by OFWs against agencies. The notice to the department is treated separately. In adjudication of complaints, the hearing officer has custody of the records. What is not in the records is not binding on him. (United Placement International vs. NLRC, June 17, 1996) Representative parties When a union files a complaint on behalf of its members, that is not really in the nature of a class action. Why? In a class suit, there is only a single cause of action pertaining to several parties with a common interest. Where, for example, the union files a complaint for illegal dismissal of several of its members, these are multiple causes of action pertaining to several distinct employees. The rule which applies is that on representative parties. A party authorized by statute may sue and be sued without joining the party for whose benefit the action is prosecuted or defended. A legitimate labor organization may thus sue in its name on behalf of its workers who were dismissed without including each and every dismissed member as a party. (Lianas Supermarket vs. NLRC, May 31, 1996) Can he simply rely on position papers and documents, without calling for trial or clarificatory questions? [The rules say that after submission of the position papers and other pleadings, he shall determine whether or not to call for a trial (formal hearing) or to decide based on the pleadings.] YES. He has discretion especially where public interest demands speedy resolution. (PT & T v. NLRC, Dec. 7, 1993). Especially agreed upon by the parties. This does not violate the due process clause. The affidavits will take the place of direct testimony. But if he wants, he may call for trial. (Coca-Cola v. NLRC, 180 SCRA 195) But just because he does not call a formal hearing or trial, that is not a violation of due process as long as all parties are afforded fair and reasonable opportunity to explain their sides. (Llora Motors v. Drilon, 179 SCRA 175) For example, the representative of the complainant did not appear at the hearings. So the Arbiter orders the parties to file their position papers. He could have filed a reply, but did not. Likewise, he signed the minutes which stated that in case a formal hearing is no longer necessary, the case shall be deemed submitted for decision. The Arbiter was therefore correct when he did not call for a trial. Sec. 3, Rule VII of the NLRC Rules of Procedure grants the Arbiter wide discretion to

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determine whether there is a need for formal hearing after submission of position papers. (Palomado vs. NLRC, June 28, 1986) But in Greenhills Air-Conditioning v. NLRC, June 7, 1995, the Supreme Court said where the issue was whether or not an employee was regular. The Arbiter should not simply have relied on the bare allegations of the pleadings. The issues require a hearing and reception of evidence. So he should have set the case for hearing. During the hearings, the primary rules which will govern shall be the NLRC Rules of Procedure. The Rules of Court apply only in a suppletory capacity. So, for example, in case of change of counsel, the new counsel must enter his appearance. (UERM Employees v. Leogardo) Alos, the rule on service by registered mail applies. Under the Rules of Court, service by registered mail is complete upon actual receipt or failure to claim the mail within five days from the first notice. (United Placement International vs. NLRC, June 17, 1996) What is the quantum of evidence required?

Substantial evidence. The rules say technical rules of evidence are not binding. As a matter of fact, even if you present new evidence for the first time on appeal, NLRC has discretion to consider this. There is no denial of due process since you still have every chance to rebut them. So, if you win before the Arbiter, then, on appeal, your opponent presents new evidence, don't simply object to them, reply to them/rebut them. (Caete v. NLRC, Nov. 23, 1995) Likewise, claims of OFWs should not be submitted to the rules of procedure and evidence the courts usually apply to other parties (who can more easliy obtain the evidences). Thus, where a seaman goes crazy in Dubai and is shot by a policeman in Bangkok subsequently because he attacked him, we need not require evidence of mental state when he could not be expected to udnergo psychiatric examination after discharge in Dubai. It was a foreign land and he was out of a job. (Interorient Maritime Enterprises vs. NLRC, Sept. 9, 1996) Substantial evidence means such relevant evidence that a reasonable mind will accept as sufficient to support a conclusion. In termination cases, the burden of proof is on the employer to prove the validity of the dismissal. (Egypt Air v. NLRC) What about appearances before Labor Arbiter? Who can appear? 1. 2. Lawyers; and Non-lawyers if: a. they represent themselves, or b. their organization or its members.

The rules add:

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c. if he is a duly-accredited member of a legal aid office recognized by DOJ or IBP in cases referred to by the latter. (This is analogous to Rule 138-A of the Rules of Court allowing 4th year students enrolled in a Clinical Legal Aid Program to appear before the courts). What about compromises, settlement of cases, or quitclaims?

There is a difference between a quitclaim and a compromise agreement. A compromise agreement is entered into to settle a pending case. It should be submitted to the Arbiter for his approval. In case of the parties entering into a compromise, the Arbiter must ensure that this is fair and freely and voluntarily agreed upon, with full understanding of its terms, conditions and consequences. He must therefore explain to the parties its contents. Where, for example, there was a compromise agreement, then a Motion for a Writ of Execution was filed, and then a Position Paper was filed, and then a Motion to Correct Errors in the Compromise Agreement, then a Motion for Breach of Agreement - this shows that they did not fully understand the contents of the agreement due to all the contradictory pleadings. The Supreme Court said the Arbiter should have called the parties and explained the agreement to them. (Santiago v. De Guzman). The Arbiter should have treated the Motions as repudiation of the agreement due to mistake. Quitclaims are generally looked on with disfavor. This rule goes back to the old case of Cario vs. ACCFA (September 29, 1966, 18 SCRA 183) which said: 'Acceptance of those benefits would not amount to estoppel. The reason is plain. Employer and employee, obviously, do not stand on the same footing. The employer drove the employee to the wall. The latter must have to get of money. Because, out of job, he had to face the harsh necessities of life, he thus found himself in no position to resist the money proffered. His, then, is a case of adherence, not of choice. One thing sure, however, is that petitioners are not deemed not have waived any of their rights. Renuntiationon praesumitur.' Thus,the fact that a worker signed his notice of termination and failed to make any outright objection thereto did not mean voluntariness. Even if he executed a final settlement and receipt of the amounts agreed upon bar his right to sue for illegal dismissal. Quitclaims and/or complete releases executed by the employees do not estop them from pursuing their claims arising for the unfair labor practice of the employer. The basic reason for this is that such quitclaims and/or complete releases are against public policy and therefore, null and void. The acceptance of termination pay does not divest a laborer of the right to prosecute his employer for unfair labor practice acts. (Cario vs. ACCFA, L-19808, September 29, 1966, 18 SCRA 183; Philippine Sugar Institute vs. CIR, L-13475, September 29, 1960, 109 Phil. 452; Mercury drug Co., Inc. vs. CIR, L23357, April 30, 1974, 56 SCRA 694, 704) Further, the fact that a worker immediately files a case shows that he does not voluntarily consent to his dismissal. (Agoy vs. NLRC, January 30, 1996)

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But the general rule is that a compromise agreement, approved or entered into with the Arbiter's assistance is valid. No court or the NLRC shall assume jurisdiction except in case of noncompliance or prima facie evidence of fraud, misrepresentation or coercion. BUT if a union enters into a compromise of a case for money claims or illegal dismissal without consent of the workers affected, that is void, unless they have power of attorney. Such waiver is a personal right on the part of each worker. (Lianas Supermarket vs. NLRC, May 31, 1996) Quitclaims, on the other hand, need not be entered into in consideration of a pending case. Very often, an employee who is terminated from employment is made to sign a quitclaim to the effect that he holds the company free from any liability of claim that may arise by virtue of his employment. Dire necessity as a defense against quitclaim Quitclaims may be stricken down for being induced by dire necessity. The Supreme Court has said, in signing these quitclaims, the employee is forced to the wall. Being out of employment, he is economically forced into accepting whatever the company imposes. The parties do not stand on equal footing. They are contracts of adherence, not of choice. Therefore, quitclaims are commonly frowned upon as contrary to public policy. They do not bar claims. However, dire necessity is not sufficient reason to set aside a quitclaim if it is not shown that the employee was forced to sign it, especially is it is a reasonable settlement. How can you show dire necessity? For example, the consideration is unconsciously low or the employee was tricked into accepting the package. Where you have an employee who is a repeated awardee for his work as a salesman and then he resigns when he believes the company is floundering because the company tells the workers that it will be bought out and only a few in the production staff would be retained, the Supreme Court said his resignation should not be taken against him. There was misrepresentation by the company. He needed a crutch for survival. As a matter of fact, the employees were advised to keep their options open and scout for other work. (Wyeth-Suaco v. NLRC, March 2, 1993) In Marcos v. NLRC (Sept. 8, 1995), where Insular life dismissed its employees and then paid them a redundancy benefit, one questioned it, claiming they were also entitled to service awards and pro-rated bonuses. Nevertheless, the company made them sign a "Quitclaim". They signed a written protest. The Supreme Court said the law does not consider as valid an agreement to received less compensation than what one is entitled to. In this case, there was a written manifestation of the right to demand payment. This negates total voluntariness. They even sought the opinion of DOLE. This shows their adamant desire to obtain their service award and show their disagreement with the Quitclaim.

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Thus, in one case, a corporate officer was given retirement benefits of P267,458. The Supreme Court said he was entitled to P558,000. The fact that he received his retirement benefit voluntarily and execute a quitclaim does not militate against him. (Fuentes v. NLRC, 1988) In Labor v. NLRC (September 14, 1995), the Supreme Court said even a compromise agreement may be stricken down if it is shown that it was: 1. 2. not voluntarily entered into, and does not represent a reasonable settlement of the claims.

If the amounts are unreasonably low, that is not a valid settlement. Likewise if a compromise agreement was executed without the knowledge and participation of the NLRC, it is invalid as being improperly executed. The rule is, compromise agreements involving labor standards cases must be reduced in writing and signed in the presence of the Regional Director or his representative. Otherwise, they are not duly executed. (Avon Dale Garments v. NLRC, July 20, 1995) In Talla v. NLRC, the Supreme Court said if an employee resigns and then signs a quitclaim that is valid and it will ban recovery UNLESS: (1) it was secured by fraud or coercion; or (2) there is evidence of an unwritten agreement to pay a monetary consideration. In this case, the workers said they were supposed to have been paid commissions for their sales before they resigned. The Supreme Court said, there is evidence of that - the checks written payable to you which were uncashed. However, if it is a valid and reasonable settlement, the Supreme Court will uphold it. For example, someone accused of estafa was offered the following package if he resigned: 1. and 2. He would not be charged with estafa. He agreed. The Supreme Court said that was a reasonable compromise. The company waived the larger amount lost and the action against him. This was a compromise agreement - in exchange for the contemplated criminal case, he would resign and pay up. (Pasudeco v. NLRC) Note also that settlements, to be made, must be done only by the parties themselves, or by someone with a special power of attorney. If you settle a case without authority of the individual parties (even if the complaint is filed by the union), that is invalid and won't affect whoever did not give consent. In one case, a supposed attorney-in-fact appears. Before the case was decided, he settled the claim of P2 Million for the sum of P100,000 on behalf of all the workers. Then, the decision The company would collect from him an amount less than the total losses;

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suddenly is rendered for the sum of P2 Million. The company invokes the settlement. The complainants are surprised - they never knew of such an attorney-in-fact. The SC said that that compromise is not binding since they repudiated the action of the agent. (Unicane Workers Union vs. NLRC, Sept. 4, 1996) Appeals So now we go to APPEALS

You have 10 days from receipt of your copy of the decision to appeal. 10 days means 10 calendar days. This is non-extendible. What do you mean by "receipt of decision"? You apply the Rules of Court - if you are represented by counsel, notice shall be sent to your counsel. In one case, NLRC was very lax. The complainant followed up his case and obtained the copy of the decision. He bought this to the lawyer. No other copy was given to the lawyer. The Supreme Court said that was not proper service of notice. The effect is that the period to appeal has not yet even begun. The 10-day period is jurisdictional. If you appeal outside it, too bad. But the Supreme Court has admitted appeals filed beyond the reglementary period in some very meritorious cases. For example, if the rules on appeals previously referred to work days, not calendar days. The Supreme Court said, we will forgive you for not being aware of our interpretation in this case. Likewise, where the complainants were mere salesgirls trying to obtain better work conditions by claiming a very large amount in damages. The Supreme Court allowed the appeal. Social Justice and compassionate policy towards laborer prevailed over technical rules (City Fair Corp. v. NLRC, April 21, 1995) Likewise, where no copy of the appeal memorandum was given to the adverse counsel, the Supreme Court said this is only a minor defect. It is not fatal as long as the other side eventually has a chance to answer. What if the appeal falls on a Sunday? File it next day. (For Sundays and legal holidays) What if it falls on a Saturday? The NLRC Rules of Procedure say file it next Monday. Posting of Appeal Bond In case it is the employer who loses, there are special rules as to perfection of appeals.

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If the decision orders payment of money (a monetary award), an appeal bond must be posted in an amount equivalent to the monetary award. How will you determine this? Generally, the order/decision will state it. If not, the NLRC will compute it. What if the 10 days lapse and there is still no computation.? You cannot expect the employer to post the bond. What you should do, if you are counsel for the employer, is wait for the computation and within a reasonable time from its determination, post it. The complainant cannot file a motion for issuance of writ of execution just because no appeal bond was posted, if no definite amount of the award has yet been determined. If you are counsel for the employee, you should wait for it to be determined, let the employer raise objections. After this, if he still won't post a bond and his objections are not valid, have it executed. Otherwise, there will be a denial of due process. (NFL v. Ladrido) Art 223 (par. 2) requires the posting of a bond before an appeal may be perfected. There is a difference between filing an appeal and the perfection of an appeal. Perfection of an appeal may transpire even after the lapse of the reglementary period. Therefore, if the appellant moves for reduction of the appeal bond, which is allowed, and that motion is filed within the 10-day reglementary period, that is sufficient. The appeal is not yet perfected and the Arbiter retains his jurisdiction over the case until the NLRC has acted on the motion and the bond is filed. (Star Angel Handicraft v. NLRC, Sept. 20, 1994) Reinstatement pending appeal In case the Arbiter's decision orders reinstatement, if the employer appeals, he must reinstate the employee either in his actual position or in the payroll. The choice is with the employer. If he wishes to reinstate him in the payroll, the worker can't force him to do so, otherwise, he may have practical reasons for refusing to reinstate. (Maranaw Hotel v. NLRC, Nov. 16, 1994) What if the employee does not want reinstatement pending appeal?

Then he foregoes such temporary relief and shall not be paid his salary while it is pending. If he wins the case, then he gets backwages covering such period. (Jardine Davies v. NLRC) But suppose, you win the dismissal case. The Arbiter orders your reinstatement. You therefore file a Motion for Execution. The Arbiter does nothing. You sit and wait. No Writ of Execution is issued. Then, the NLRC issues an order reversing the decision and holding the dismissal to be valid. In Maranaw Hotel v. NLRC (Nov. 16, 1994), the NLRC nevertheless awarded the employee backwages during the pendency of the appeal since there should have been reinstatement pending appeal.

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The Supreme Court said that is wrong! While the decision of the Arbiter ordering reinstatement is immediately executory, it is not self-executory. If it were self-executory, you would not need any writ of execution. If it were immediately executory, the Arbiter should still issue a writ of execution. Therefore, what the worker should have done was, after the Motion for Execution was filed and not acted upon, file a Motion to Resolve. Failing to do this, the Supreme Court said she is deemed to have abandoned her motion for execution pending appeal. The hotel was therefore under no legal obligation to readmit her back to work, there being no writ of execution. So where you don't show you exerted efforts to have your motion for execution resolved, you are deemed to have abandoned your motion. (Achilles Mfg. v. NLRC, June 2, 1995; Ram vs. NLRC, June 2, 1995). Likewise, where there is an order for your reinstatement pending appeal but you refuse to go to work, saying the company should first give you your uniform, the failure to enter into performance of work is due to your own faults. You are not entitled to backwages (Ex-Bataan Veterans Security Agency v. NLRC, Nov. 29, 1995) Motion for Reconsideration The appeal will be decided by the NLRC. After the NLRC renders it decision, there are 10 days from receipt before it becomes final and executory. Within that period, you can file a Motion for Reconsideration. It is the Division which has jurisdiction over a case. So even if the commissioners originally hearing your case were assigned to a different division, the case will not follow them. (Mina v. NLRC, July 14, 1995) You will therefore still file your Motion for Reconsideration with the original division which heard your case. As a matter of fact, the SC is quite strict now without the Motion for Reconsideration, your petition for certiorari may be dismissed outright. If the merits are strong, however, the SC may entertain it. After final decision by the NLRC, you can appeal to the Supreme Court by Special Civil Action for Certiorari under Rule 65. Finality of Decision Then the case becomes final, and we have execution of judgment. Writ of execution will lie against the properties of the judgment debtor. This may be stopped by the filing of a 3rd party claim to the effect that it belongs to someone else, or has a prior mortgage to another party. If the judgment creditor posts a bond to the effect that he will indemnify the 3rd party claimant if execution is improper, execution on those properties may continue.

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May a final decision still be amended?

Modification of judgment will generally not be allowed after finality. But in Valderrama vs. NLRC (April 25, 1996), the SC allowed a clarification of the decision which held the company liable. This was because the company had long since closed down and there was no showing it had filed bankruptcy proceedings. There was no other recourse but to say that Consuelo, a majority stockholder (who owned over 90% of the shares), was also liable under the concept that responsible officers may be held liable for labor obligations of the company under Art. 265, also being considered employers. The SC noted that even if the dispositive portion only mentioned the company as liable, the text kept on referring to the respondents, which included Consuelo. So this was not really an amendment, but a clarification. EXECUTION If the decision is final and executory and the respondent does not want to comply with it, the solution is to file a writ of execution. What happens if the respondents bank refuses to comply with the writ and release the respondents funds? In one case, the complainant filed an action for mandamus. The SC said, for mandamus to prosper, there must be no other plain, speedy and adequate remedy. In this case, there is such a remedy - contempt. File a motion to cite the bank in contempt. (J. Vitug, Metropolitan Bank and Trust Company Employees Union - ALU-TUCP vs. NLRC) What about execution on properties claimed by a third party?

In one case, a writ of execution was issued to enforce an award of backwages in a labor case. The sheriff levied on properties of the judgment debtor which were mortgaged previously to Philguarantee, a government corporation. A third-party claim was filed. When an indemnity bond was posted, the execution sale was scheduled. Philguarantee filed a petition for annulment of sale, recovery of possession and injunction against the execution sale with the RTC. A preliminary injunction was granted. HELD: While ostensibly the complaint was for annulment of sale, recovery of possession and injunction, in essence, it challenged the legal propriety of the execution sale as well as the Arbiters and the Sheriffs acts. The petition to annul the execution sale was in reality a motion to quash the writ of execution on a case within the Arbiters jurisdiction. Article 254 of the Labor Code prohibits injunctions issued by regular courts in any case involving or growing out of labor disputes. A civil court cannot interfere by injunction with the execution of a final and executory judgment of the NLRC. (Philippine Export and Foreign Loan Guarantee Corporation, GR 118701, Dec. 12, 1995) Liability of corporate officers Against whom can you go after in labor cases? Generally, the employer.

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What about corporate officers?

They are not liable in their individual capacities as a general rule unless it is shown that they exceeded their authority. Just because, for example, someone owns all or nearly all of the capital stocks is not enough to disregard separate corporate personality. However, you can disregard legal fiction and hold them liable when:

The incorporators and directors belong to a single family - they can be considered as one to avoid it being used to evade or subvert justice It is deliberately and maliciously designed to evade financial obligations to employees or used to perpetrate fraud. (Pabalan v. NLRC) In Mam Realty Corp. vs. NLRC, the SC listed some other cases wherein corporate officers may be held personally liable: If they vote for or assent to a patently unlawful act of the corporation; If they act in bad faith or with gross negligence in directing corporate affairs; If they are guilty of a conflict of interest to the prejudice of the corporation, its stockholders, members and others; If they consent to the issuance of watered stocks (or have knowledge of this and do not file a written objection with the corporate secretary); If they agree to hold themsleves personally and solidarily liable with the corporation; If, by specific provision of law, they are liable; In labor cases, if they terminate employees with malice or bad faith (which must be proven). Under Section 100, par. 5 of the Corporation Code, to the extent that stockholders of a close corporation are actively engaged in the management or operation of the business, they are personally liable for corporate torts. Thus, a director or officer may be held liable. However, just because someone is called General Manager does not mean that he is automatically liable. He must also have acted in that capacity (Naguiat vs. NLRC, Mar. 13, 1997). Note the A.C. Ransom v. NLRC case where the Supreme Court held liable corporate responsible officers in their individual capacity as they were covered by the definition of employer. Likewise, where the company was closing due to financial reverses, and what this officer did was to first use its assets to satisfy all liabilities to himself before the other creditors could get to it, the Supreme Court held he was solidarily liable with the company for the money claims of the workers due to his bad faith. Also, in Chua vs. NLRC, the vice-president was held liable. The basis was the definition of employer under Article 212(e), which includes anyone acting in the interest of the employer. The SC interpreted that to mean the responsible officer who usually is the General Manager. In Santos vs. NLRC (Mar. 13, 1996), J. Vitug noted that in A.C. Ransom, the corporate entity was a family institution and execution could not be effected against it because the corporation disposed of all its assets. Thus piercing the corporate veil was appropriate. In the Chua case, there

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was also a family corporation wherein there was a conflict between two brothers holding ranking positions in the company. Because of extreme animosity between the two, one of the brothers was eased out in bad faith. Piercing the corporate veil was also utilized. It should be noted, however, that this A.C. Ransom ruling has been applied even to coporations which are not close family corporations (see Valderrama vs. NLRC, April 25, 1996). But just because someone is owner of one-half of the interest in the company will not make him liable personally. Nor shall he be liable if there is no evidence of bad faith on his part. Likewise, where a corporate officer is not shown to have had a direct hand in dismissing an employee and was impleaded only because he was the general manager, the more he cannot be liable. Attorneys fees How are lawyers to be paid? In case of claims for unpaid wages, they should not receive more than 10% of the award. Note the cases relating to collection of attorney's fees. In Philippine Banking Corporation v. Clave, the lawyer sought to have deducted 10% of the total benefits from the CBA arising from the case concerning the deadlock of such CBA. The Supreme Court said that cannot be done. It is squarely covered by Art.222 which is intended to protect the employee against unwarranted practices that diminish his compensation without his knowledge and consent. Art. 242 also provides that union members have a right against being checked-off special assessments or extraordinary fees unless authorized by a majority resolution. He can collect only from union funds. In BPI v. NLRC, decided later, there was also a check-off of 5% for attorney's fees of the total benefits arising from a CBA deadlock. The basis for this was a union resolution agreeing to give the lawyer 5% of the total economic benefits. The Supreme Court said this is valid. Payment of attorney's fees is prohibited only when effected through forced contributions from worker's own funds. The purpose is to prevent imposition of the duty on the individual member. It is the union funds which should answer for this. But in this case, there was no such compulsion. They voluntarily agreed to the check-off. As a matter of fact, the authorized deductions affected only those who adopted and signed the resolution. It is different from the PBC v. Clave case. There, there was no similar agreement for checkoff. Note also the case of RCPI v. Secretary of Labor, a collective check-off authorization was given for attorney's fees in opposing an application for exemption from wage order. The Supreme Court said that is all right, even if not individual. The purpose of the law is to protect workers from practices that unwarrantedly diminish their take-home pay without their

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consent. That purpose was met by the collective authorization (even if it did not strictly follow the letter of the law). The law allows 10% of the award to be received as attorneys fees. This refers to claims for unpaid wages. But this 10% only sets the maximum amount. It does not mean that a lawyer may automatically receive this. The rules is still quantum meruit - what did the lawyers efforts merit? Thus, in one case where the award was P175,574.43, the lawyer sought 10% of that. The SC said the equitable fee is only P10,000.00. (Traders Royal Bank Employees Union - Independent vs. NLRC, Mar. 14, 1997) May an attorney claim the 10% even if he is paid a general retainership? YES. The general retainership is merely consideration for a commitment to render services in the agreement. It does not cover the fees for services actually rendered. (Traders Royal Bank Employees Union - Independent vs. NLRC, Mar. 14, 1997). How can you, as a lawyer, assure yourself of payment? Then you can file an attorneys lien. While it may be filed anytime before judgment and afterwards, determination of its amount will come only after judgment. (Traders Royal Bank Employees Union - Independent vs. NLRC, Mar. 14, 1997) PRESCRIPTION Prescriptive Periods:

Money claims :3 years2. ULP :1 year3. Offenses under Labor Code:3 years4. Illegal Recruitment under R.A. 8042 :5 yrs (20 yrs if it constitutes economic sabotage) What about illegal dismissal? Since the principal cause of action is for the dismissal, while there may be a prayer for backwages, it is not a money claim but an action for injury to rights. The prescriptive period, applying the Civil Code in a suppletory capacity, is therefore 4 years. But where all you are asking for is for separation pay or retirement benefits, that is purely a money claim which prescribes in 3 years. Cadalin v. POEA (Dec. 5, 1994): This concerns an overseas employment claim. The worker was deployed to Bahrain. The question was, which prescriptive period should apply? 1. 2. 3. Amiri Decree No. 23 - 1 year period after expiry of contract Civil Code - 10 years (action upon a written contract, Art. 1144) Labor Code - 3 years for money claims.

There was a violation of the employment contract. The companies invoke the Amiri Decree, arguing that there is in force a "borrowing law" Sec. 48 of the Code of Civil Procedure. Under the concept of "borrowing law" while foreign procedural law is not applied, whether or not a law is procedural or substantive will depend on

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whether the country of the forum has a "borrowing statute". This means a law directing the state of the forum to apply the foreign statute of limitations to the pending claim based on the foreign law. Under the Code of Civil Procedure (Sec. 48), if an action is barred in the state where the cause of action arose, it is also barred in the Phil. This has not been repealed or amended. But due to the constitution, it will not apply. Our courts will not apply any foreign claim obnoxious to public policy. If we enforce the 1 year period, it would contravene public policy on protection to labor. The POEA said the period is 10 years - since it is founded on a written contract (applying PALEA v. PAL, 1976). But the Supreme Court said that was decided under the 8-hour labor law. The prescriptive period applied to actions arising under such law. The Supreme Court then said Art 291 refers to money claims arising from employeremployee relations. This does not apply only to money claims arising under the Labor Code. The language is plain and clear. If it is money claim and it arises from employer-employee relations, the 3 year-period will apply. Suppose you were employed as a project worker in HK. You work until January, 1992 when the project is completed. Instead of being reassigned, you are instead given the run-around. So you sue for separation pay and/or retirement benefits on Dec., 1995. Then, on Feb. 1996, you amend your claim to illegal dismissal. Has it prescribed? First, when did the cause of action accrue? It accrued after termination of project, after your arrival from HK, when you were not assigned or paid salary. The first complaint only asked for separation pay/retirement benefits. This was a mere money claim which prescribes in 3 years January 1995. But since he amended it and changed it to illegal dismissal, it became a case for injury to rights, which prescribes in 4 years - January, 1996. So on both counts, it has prescribed. (Magno v. PNCC, 198 SCRA 230) What about where you enter into a CBA on July 17, 1983. So you all receive wage increases. Later on, in 1987, you finally get a copy of the CBA (because of resignation of the Union President) and discover that the wage increases there were not observed. So, on March 27, 1987, you file a NOS for ULP. Has it prescribed? No, due to the peculiar factual circumstances. Even if the CBA took effect in 1983, the union was only able to get a copy in 1987. It then took action immediately. Even if the union President knew of it, it would be unfair to apply a 1-year prescriptive period. As school registrar, she was probably deterred from demanding implementation. (Meycauayan College v. Drilon, 185 SCRA 50) Likewise, if within the four-year period, the union took action, such as undertaking petitions or dialogues with management to seek reinstatement of the worker, this supends the period. Laches

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What about laches?

The Supreme Court has held, where the claim is properly filed within the 3-year period, it cannot be barred by laches. Courts should never apply the doctrine of laches earlier than the expiration of time for filing (Chavez v. Bonto-Perez, March 1, 1995) Laches may be applied only upon the most convincing evidence of deliberate inaction, for the rights of laborers are protected by the social justice provision. (Reno Foods v. NLRC, Oct. 18, 1995) -------------------------------------------------------------------------------------------NOTES to FLOWCHART: * Under Article 226 of the Labor Code, the Bureao of Labor Relations and the Labor Relations Division of the DOLE Rehional Office shall have original and exclusive jurisdiction over all interunion and intra-union conflicts and disputes arising from labor-management relations (except those arising from the implementation or interpretation of the CBA). The rules, however, split this up. Likewise, conciliation and mediation functions have now been vested with the National Conciliation and Mediation Board (NCMB). Notably, information and statements in conciliation are privileged and cannot be used as evidence. ** An example of an inter-union dispute would be certification election proceedings. *** Examples of intra-union disputes would be complaints for violations of the union constitution and by-laws, petition for local union elections, petition for audit of union funds and complaint for a violation of rights and conditions of membership. **** The Arbiter will not take cognizance of issues involved in a compromise agreement unless there is primae facie evidence of fraud, misrepresentation, coercion or there is non-compliance with said agreement. ***** NOTE: If the employer contests the findings of the labor inspection and raises questions thereon supported by documentary proofs not considered in the course of inspection, or there is no longer any employer-employee relationship, then jurisdiction over monetary claims arising from the Regional offices exercise of visitorial power is with the Labor Arbiter.

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SOCIAL WELFARE LEGISLATION This refers to legislation intended to benefit all persons, not only workers. It provides benefits in case of contingencies or for other needs in order that we may have decent and adequate living, such as medical assistance, compensation and allowance in case of illness or injury, housing loans, retirement and death. The pieces of social welfare legislation are: Medicare/National Health Insurance - medical assistance Employees' Compensation - compensation for work-related illness or injury SSS/GSIS - social security, in general Pag-ibig - housing XXVI EMPLOYEES COMPENSATION Who are covered by this? Employers, on the first day of operation.

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Employees, generally, on the day of employment. If you are over 60 and paying contributions, you are also covered. Government employees are covered by this as well. The Code refers to all employees. As long as you are covered by SSS, you are covered. EC shall pay for the following contingencies:

Death or disability of the employee, UNLESS (1) due to intoxication; willful intent to injure or kill himself or another; notorious negligence; or other grounds provided in the title. Compensable Injury Under the Amended Rules, for injury or death to be compensable, it must result from an accident satisfying the following conditions: 1. 2. 3. You were injured at the place where your work required you to be; You were performing your official functions; If you were injured elsewhere, you were executing an order for the employer.

Soldiers & Policemen For example, you are a soldier on overnight pass. You are killed due to the accidental discharge of a fellow soldier's rifle. Is that compensable? YES. Even if on overnight pass, we cannot literally apply the concept of workplace to a soldier. A soldier is on duty 24 hours a day. He is subject to call at all times, except when on vacation leave. He is therefore presumed on official duty unless he has clearly set aside that status (e.g. VL) In the same manner, a policeman, even if not in uniform, if while he is delivering his son to the station for a crime the son committed and is hurt in the process, is still covered. Coming and Going Rule In relation to "workplace", we have the coming and going rule. As stated in Iloilo Dock and Engineering Co. v. WCC (26 SCRA 104), the coming and going rule says if you are going to work or coming home from work, you are not covered by EC. But there are 4 exceptions: 1. You are coming/going to work on the employer's premises You are about to enter or leave the premises through the exclusive or customary means of ingress and egress

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You are charged with some duty or errand on the way home or from work The employer provides means of transport to and from place of employment as an incident of employment. In like manner, the proximity rule says that if you are coming to or going home from work, even if you are off the actual work premises, as long as: 1. 2. 3. 4. 5. you are in close proximity thereto proceeding diligently at an appropriate time by reasonable means over the natural, practical, customary and recognized way of ingress and egress on land under the employer's control or adjacent property with his consent, you are covered by EC.

3.

For example, you are coming home on a sidewalk that is normally used in leaving the factory. You are run over by a car. To a limited degree, that sidewalk is part of the premises. If you are walking home from the gate, on the roadway out of the company, 20 m. from the gate and 2 min. after work, that is work-connected injury. IN SHORT, you include a reasonable margin of time and space to be used in passing to and from the place of work. But the Supreme Court has been very liberal in applying this rule. As long as you were on your way to work or at a certain place when the injury occurred, that is covered because you would not have been hurt were it not for your work. For example, a high school principal, while waiting at the bus stop early morning to go to work, is run over by a van. Covered. You work Over Time then, on your way home, the jeep you're riding in turns turtle. That is covered. There is still reasonable distance. You are driving your motorcycle on the way to work. It skids and you fall and hit your head on a bridge rail. You are covered since you were on your way to work. After work, you ride a bus home. You step on the platform of a service truck, you slip, fall and are run over by the truck. Covered. There is still a reasonable margin of time and space from the workplace. In short, if you are accidentally injured at: 1. 2. a place reasonably proximate to the place of work while going to or coming home from work,

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the injury is deemed to have arisen in the course of employment. Compensable Disease With respect to diseases, to be a compensable disease, it must be listed as an occupational disease, or if not listed, it must be proven that the risk of contracting the same is increased by work conditions. For example, the following have been deemed occupational diseases: TB for teachers, drivers, land inspectors Increased Risk Under the old law (Workmens Compensation), if the disease was not listed, there was a presumption of compensability. In Raro v. ECC, the Supreme Court said, with the new law on EC, that is no longer the case. Before, it was the employer who had to pay the compensation. Therefore, since the employee had to face the opposition of the employer, who could hire better lawyers, you had to create a presumption in his favor. Now, it is the government which answers for it. The situation is no longer as adversarial. The rationale for the presumption thus no longer applies. So, if not listed as an occupational disease, you have to prove that the nature of the work increased or aggravated the risk of contracting the disease. This is the theory of Increased Risk. For example, you are a teacher. You suffer from uremia (caused by retention of urinary waste products). Is that compensable? YES. Your work requires you to bathroom. Likewise, as budget examiner, if he suffers from this disease, can be compensated. His work requires detailed preparation of budgets and reports. He has to sit for hours and forego going to the CR. Prolonged sitting and delaying urination results in stagnation of urine. (Narazo v. ECC) While the disease is not a direct result of the work, the risk of contracting it was aggravated. Principle of Proximate Cause The PRINCIPLE OF PROXIMATE CAUSE means: if the primary injury arose in the course of employment, every natural consequence thereof arose out of employment unless there is an independent intervening cause due to the employee's negligence or misconduct. For example, a pregnant teacher slips while teaching and falls on the floor. Then she gets pain in the stomach and in the abdomen. Then she has a premature delivery. Then she still suffers from abdominal pain. Then, because she was poor, and had to have her premature delivery in her home, she died from infected lacerations in her vagina. schistosomiasis for teachers in far-flung towns leprosy for workers at a skin clinic. cataracts and glaucoma for x-ray machine technician cataracts for construction worker (due to exposure to heat and dust)

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Compensable. The fall was the proximate cause. It set in motion a chain of events leading to her death. Even if she would probably have lived if she delivered in a hospital, her poverty, due to her low income as a teacher, forced her to scrimp on her money. The fund is not liable for death due to intoxication, intentional act or notorious negligence.

INTOXICATION/NEGLIGENCE: You are a soldier. You go drinking with some friends. On your way back to camp, you pass a hanging bridge. You fall, hit your head and die. Compensable? YES. Even if you drank, you were not EXTREMELY drunk. Intoxication which will bar you from doing your work will not bar recovery, even if it contributed to the injury. A person may drink a few bottles of beer, yet remain sober. There was no NOTORIOUS negligence. That means more than simple or contributory negligence. It means a deliberate act to disregard your own safety. Mere disobedience to rules is not notorious negligence. For a soldier, crossing a hanging bridge is normal. Danger is second to nature to you. (Nitura v ECC). But what would be notorious negligence? You play Russian Roulette. The gun goes off. Intentional act: A seaman goes on board a ship very drunk. He goes to the messhall, gets an axe and challenges those eating. He is pacified and led to his cabin. While outside, he returns to the messhall. He smashes things. He throws a cup at one crew member. The two fight and he winds up being brought to the hospital. He dies. Not compensable. If death results from a deliberate and willful act on his own life and is directly attributable to him, it is not compensable. Suicide would be one example. Another example is if someone gets drunk, runs amuck and he is killed in self-defense. The death could be deemed a deliberate and willful act on his own life attributable to him. (Mabuhay Shipping v NLRC, 193 SCRA 142). In Interorient Maritime vs. NLRC (November, 1996), however, a seaman went crazy, was discharged and wandered around Bangkok until he attacked a policeman. He was shot and he died.. The SC held that not to be due to an intentional act. He was crazy - he had no control of his mental faculties. (It would be a different case if he attacked the policeman while drunk. Liability of Employees Compensation Commission What if, while you were running an errand for your employer, you were run over by a drunk driver. You are injured and claim from Employees' Compensation. What can EC do? It can go after the drunk driver. If EC gets more than it paid you, the excess shall go to you or your dependents after deducting costs and expenses.

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No contract or device can operate to deprive you of income benefits. So a CBA cannot state that it shall provide free hospitalization, with a right to recover from ECC. Contributions & Benefits Who contributes to EC? The employer alone. He pays 1% of monthly salary credit. What are the benefits? 1. 2. 3. 4. 5. 6. 7. Medical Benefits - These include doctor, hospital and rehabilitation facility. EC shall pay only for accredited hospitals and wards. Rehabilitation Services Temporary Total Disability Permanent Total Disability Permanent Partial Disability Death Funeral

NOTE: There is no temporary partial disability. Permanent Total Disability means:

Temporary Total Disability of over 120 days Complete loss of sight in both eyes Loss of two limbs at or above the ankle or wrist Paralysis of two limbs Brain injury resulting in incurable imbecility/ insanity Other cases as determined by SSS and approved by ECC EMBED CorelDRAW.Graphic.6 This does not require absolute helplessness. It simply means the inability to earn wages in the same or similar work or any work a person of your mentality and attainment could do even if you perform odd jobs, the disability may still be total. The test is: is he capable of performing your work despite the disability.? Even if you are disabled, if by sheer determination, you can still pursue your work, that does not mean you are not disabled. For example, a classroom teacher in Capiz retired at age 55 due to poor health. Three years prior to her retirement, while scrubbing and sweeping the classroom floor, she slipped and her

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back hit the edge of a desk. She had difficulty walking afterwards. An X-ray revelaed that she had PTB and a compression of the spine with sclerosis. A second X-ray showed that she had bone destruction resulting in spinal curvature. She thus filed a claim for temporary total disability benefits. It was disapproved. GSIS denied it since it said her disability does not qualify as Permanent Total Disability. The SC said that disability should not be understood on its medical significance, but more on loss of earning capacity. Permanent Total Disability means disablement to earn wages in the same kind of work or work of a nature which is similar to what you were trained for or accustomed to perform, or any work one of your mentality of attainment could do. It does not mean absolute helplessness. The teacher couldnt stand or sit without help. She had very poor health. The fracture became worse to the extent that she needed an operation. She therefore became bedridden. While disability might not emerge at once, its possible that a disability which is now temporary total in nature may later become permanent. Where one is forced to retire early due to bad physical condition, that is indicative that she has permanent total disability. Likewise, suppose you are injured while at work. The injury blinds you in the right eye. You get permanent partial benefits. They you retire. After retirement, you become totally blind. Can you get permanent total disability benefits? YES. Even if the aggravation occurred after retirement, since the proximate cause was the initial injury, the causal connection is clear. It is therefore possible that a disability, which at first is temporary, may later become permanent. If the aggravation of the condition arose from the same injury, it is compensable. (Aguja v GSIS). For permanent total disability, you are entitled to a monthly benefit. In no case shall it be less than 5 years. It may, however, be suspended if (1) you fail to present yourself to the SSS for yearly examinations or (2) if you fail to submit a quarterly medical report certified by your doctor; or (3) upon complete or full recovery; or (4) upon being gainfully employed. Temporary total disability shall be paid for 120 days. This may be extended in case the injury or illness requires attendance beyond 120 days, but not to exceed 240 days. If it exceeds 120 days, if conditions warrant, it may be declared permanent total. For Permanent partial disability, the benefits are those provided in the schedule. If you lose a joint, that is equal to loss of the member.

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If you lose 1/3 of your little toe, you get 1/3 of the full benefit (it is proportionate). If you suffer a new injury resulting in greater disability you get full benefits for the new disability. But if the new disability is related to the old one, you get only the difference in benefits. are: Death Benefits: When we speak of this, we have to discuss who the worker's beneficiaries

PRIMARY BENEFICIARIES: Legitimate spouse living with him upon death

2) Legal child(1) unmarried3) Legally adopted child(2) not gainfully employedAcknowledged Natural Child (provided there are no other dependent children qualified or eligible)(3) not over 21 years, unless with incapacity or incapable of supporting self due to physical mental defect which is congenital or acquired during minority. *Note that the illegitimate child is not included. SECONDARY BENEFICIARIES: 1) Legal parents wholly dependent on worker for support 2) Legal descendants and illegitimate children if: a) unmarried b) not gainfully employed c) not over 21 years, unless with incapacity or incapable of supporting self due to physical/mental defect which is congenital or acquired during minority. Priority of claim: 1) 2) 3) Primary beneficiaries Secondary beneficiaries Employees Compensation Commission

Funeral Benefit - Upon death of a member, this goes to: a) b) c) surviving spouse, legal child who spent for funeral services, or anyone else who can prove he paid for funeral expenses

PROCEDURAL MATTERS So that one can avail of these benefits, the following must occur: 1) 2) You were reported to SSS/GSIS Your death, injury or illness is work-related

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3)

The SSS/GSIS was notified thereof

If you were not reported, the employer shall pay. If an injury occurs, what is the procedure?

Notify the employer (unless (a) it happened at the workplace, (b) the employer already knows or (c) it happened during work) The employer will then record this in his logbook within 5 days from notice 3) Then give notice to SSS/GSIS within 5 days from recording it. Likewise, if the employer fails to remit contributions, SSS/GSIS shall go after him for whatever benefits it paid. What is the nature of claims for compensation? 1) 2) It is not transferable It is not subject to tax, garnishment, levy or seizure, except to pay debts to SSS.

For example, you die. SSS pays the death benefit to your illegitimate child. Then here comes your legally adopted child and files a claim. What should SSS say? It is already discharged. If it paid in good faith, a dependent with an inferior right or with only a share of the benefit, it is discharged unless it was notified by your adopted child before payment was made. What if you have a wife - a teacher at Ateneo. She objected. She is not entitled to anything as she is not a dependent.

No one pursuing or in charge of preparing or filing a claim shall charge any fee. But of course, if the claim is denied and you go to the SSS to prove you are entitled to it, yo can claim fees. Claims prescribe in three years from accrual of course of action - meaning when your disease/injury became evident. Recovery Under the Civil Code NOTE that Articles 1711 and 1712 of the Civil Code provide for recovery from the employer in case of work-connected illnesses or injuries. IF the illness, death or injury arose out of or in the course of employment, event if it was an accident or arose from fortuitous event, the employer is liable. IF there was contributory negligence on the part of the employee, this will only mitigate the damages.

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IF the death or injury is due to the negligence of a fellow-worker, he will be solidarily liable with the employer. BUT: IF the cause of the mishap was the employees own notorious negligence, voluntary act or drunkenness. The employer will then not be liable. Likewise, if the death or injury is due to the fellow-workers intentional or malicious act, the employer shall not be liable UNLESS it is shown it did not exercise due care in selection and supervision of employees. For example, you are working in a vetsin-manufacturing plant. You fall into a vat of the vetsin mixture. The fumes are very strong. You get dizzy and become unconscious. The vat is mixed and processed and you become mixed with the vetsin which will be sold in the stores a month from now. The general rule is the company is liable for damages due to your death. IF you fell in the vat due to an accident, the company is liable, even if you were careless. But, the damages may be lessened. IF you fell into the vat because there was an earthquake and the railing above it suddenly gave way (fortuitous event), the company is still liable under the Civil Code. IF you fell because you wanted to kill yourself, then the company will not be liable. IF you fell because a co-worker put a banana peel on the railing negligently, then the company is liable in a solidary capacity with the co-worker. IF, however, he pushed you into the vat, then he alone is liable, unless he was crazy and the company admitted him to work knowing of his insanity. The question now is, can you recover against the company, under the Civil Code and against the State Insurance Fund, under the Labor Code? The SC has held, in a number of cases, that you have to make the choice Civil Code or ECC. You cannot first claim under ECC, then, to get more, sue the employer under the Civil Code. BUT if the ECC rejects your claim, then you can try and sue under the Civil Code. (Ysmael Maritime COrp. vs. Avelino, June 30, 1987; Floresca vs. Philex, 136 SCRA 141) XXVII SOCIAL SECURITY SYSTEM The new law on SSS is RA 8282, passed on May 6, 1997. (NOTE: Amendments/Changes are written in italicized form for easy reference.) The purpose is to provide covered employees and their families protection against disability, old age and death. It is not a contract between the government and the employees but a police power measure. Therefore, when you have to pay premiums, these are not taxes, but collections imposed under police power.

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Who pays premiums?

Unlike EC where only the employer pays premiums, the employer and employee must pay the premiums. Relative to premiums, note that under RA 1161, as amended by RA 1792, they are tax exempt. Likewise, suppose you used to work in a government office (and were therefor a GSIS member). Then, you resign and work in a private company, can your payments of premiums under GSIS be credited to SSS? YES, under RA 7699 (May 1, 1994). This provides for the limited portability scheme. When we say portability, we mean transfer of funds for the account and benefit of the worker who transfers from one system to another. If you are covered by the SSS/GSIS and transfer to government/private sector, or both, your service and contributions in both SSS and GSIS shall be credited and totaled. The overlap of service will be credited only once. For example, you worked in a private company from 1986 to 1990. (You are therefore covered by SSS premiums for that period). Then, in 1988-1995, you worked in the government (and are therefore covered by GSIS premiums for that period). You will get credited for only 10 years. That is what the law means when the overlap of service (1988-1990) shall be credited only once. EMBED DrawPlus This is the limit to portability. Likewise, you will apply this scheme only if you will not be able to apply for any benefit without it. Coverage SSS law covers any employer (natural, juridical, domestic, or foreign) who hires another. Of course, government offices are covered by GSIS, this includes GOCCs. Any employee is covered (subject to the exceptions below). If you are self-employed. You are deemed both employer and employee. Note that casuals, who perform work which is not connected with the business are not covered. Domestics, however, are covered if they are paid at least P1,000/month. Compulsory coverage - 60 years and below - self-employed who earn above P1,800/yr

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- individual farmers/fishermen. The new law dispenses with the old requirement that there be minimum earnings of at least P1,500/month The new law adds: Domestics who have a salary of at least P1,000.00 per month Agricultural workers, including tenants The self-employed (under the old law, you would be subject to compulsory coverage if you were self-employed and earning at least P1,800 per year. This minimum has been done away with.) Voluntary Coverage - Overseas Filipino Workers

(But note the 1988 MOA between DOLE and SSS in the Ben Sta. Rita case. Standard Employment Contracts should include SSS coverage to Filipino seafarers). The new law includes spouses who work in the household full-time, unless they have other vocations. SSS registration of workers is compulsory on those who are employers, therefore. Who are employers under SSS? Those who carry on any trade, business, industry, undertaking or activity in the Philippines and use the services of another under his orders as regards the employment. The government, however, is not covered by this. So if you conduct research on the monkey-eating eagle and go to the forests and hire guides for one year, you are an employer. If you come here and sell Amway or Cosway, and have people contact others for you and you give them commission, you are an employer. Who now, is an employee?

One performing services in which mental and/or physical efforts are used who receive compensation for this, where there is an employer-employee relationship. Note, however, that the following are not deemed employment (and therefore not subject to compulsory coverage): Purely casual employment Government service (These and those in GOCCs are covered by the GSIS) Service on an alien vessel outside Philippines (but note the Ben Sta Rita case) Service for foreign government, international organizations or their wholly-owned instrumentality (unless Philippines has an agreement with them for coverage) Temporary employees excluded by regulation. The new law has therefore taken away these from the exception:

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Tenant farmers (no regular wage/basic pay AND does not work for an uninterrupted period of at least 6 mos/yr. Domestics One employed by his son, daughter of spouse, or the service of a child under 21 in the employ of his parents. EFFECT OF CONTINGENCIES ON CONTRIBUTIONS

a) If you are dismissed: Once a member, always a member (in the sense that you are still entitled to benefits). However, the contributions cease at the end of the month of dismissal.

The worker has the option to continue it on his own (but must pay both contributions) The contributions paid remain credited. You cannot ask for a refund.

b) If you are self-employed and you realize no net income in a calendar month (it used to be in a year); There is no need to pay contributions for that month. But the worker has the option to continue on his own (by paying both contributions)

BENEFITS

Monthly pension: This is the basic benefit to be paid in case of death, retirement and under the new law, permanent total disability. The new rate for this is : P300 + 20% of ave. monthly salary credit (AMSC) per credited year over 10 months OR 40% of AMSC or P1000.00 The minimum pension shall not be less than P1,200 if you have been in service for 10 years or P2,400 if for 20 years. The dependents also receive 10% (or P250.00, whichever is higher, under the new law) per dependent, but not to exceed 5 children. The new law says you should start counting from the youngest without substitution. The new law also sets the dependents pension which is to be paid under the same circumstances as above. This is 10% of the monthly pension or P250.00, whichever is higher. It

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shall be paid for each dependent child until five starting from the youngest. Illegitimate children are also deemed dependents, but legitimate children have preference over them. 1. Retirement benefits: You are entitled to this for life. To be entitled, you must have: Paid at least 120 monthly contributions prior to the semester of your retirement; AND Are 60 years old and under the new law, is separated from employment OR ceased to be selfemployed (Before, the added condition was that you receive no monthly compensation of P300 or more.) or You are 65 years of age. Under the new law, either you receive it for life or get the first 18 monthly pensions in lump sum. If you are 60 years and not qualified, you get a lump sum of all contributions paid for you (provided you are separated and not paying contributions on your own). If, before reaching 65 years, you are reemployed, the pension is suspended (before, it was simply reduced). If you retire, then die, your primary beneficiaries get the entire monthly pension (it used to be, they got only 80%.) If you have no primary beneficiaries, and you die within 60 months from the start of your monthly pension, then your secondary beneficiaries get a 5-year pension in lump sum. (It used to be that they got only 20 x the monthly pensions OR 60 x the total pensions paid.) 2. Death Benefits: Upon death, if you gave at least 36 monthly contributions prior to your semester of death, your (1) primary beneficiaries receive a monthly pension and (2) your dependents receive a dependents' pension. If you have no primary beneficiaries, the secondary beneficiaries get a lump sum payment of 36 x the monthly pension. If you did not reach the 36 monthly contributions, they receive lump sum payments of, as provided under the new law: - primary beneficiaries: number of monthly contributions x monthly pension OR 12 x the monthly pension, whichever is higher. (The old law set a minimum amount. This has been deleted.) 3. Permanent Total Disability Benefits - What are cases of permanent total disability under SSS: a) b) complete loss of sight of both eyes loss of two limbs at or above the ankle or wrists

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c) Permanent complete paralysis of two limbs d) Brain injury resulting in incurable imbecility or insanity e) Other cases determined and approved by SSS (virtually the same as with ECC except as to absence of temporary total disability of over 120 days) You must have paid at least 36 monthly contributions for entitlement. If not, you get a lump sum (monthly pension x number of contributions OR monthly pension, whichever is higher). The pension shall be suspended (no longer just reduced) if you are: reemployed, resume work recover or fail to present yourself for examination at least once a year. What if you have already received a lump sum benefit and then resume employment? If this happens within one year, you will be subject again to compulsory coverage as if you were a new member. If you die, then your primary beneficiaries get the pension. If you have no primary beneficiaries, and die within 60 months from the time your pension started, the secondary beneficiaries get a lump sum benefit. (This is equivalent to the total monthly pensions for e fiveyear guaranteed period, under the new law.) Likewise, if you die, then the new law says, your disability pension must obviously cease. 5) Permanent Partial Disability: This also refers to loss of one digit, an ear, eye or sight in one eye or hearing in both ears. For this, you get a monthly pension for a number of months depending on what the disability is. As with ECC, if you lose a toe, and receive a pension in full, then you lose the foot, you will receive the pension in full for this new disability, provided it is distinct, separate and unrelated. For example, if your foot was lost becase of the infection that caused the loss of the toe, then what you received shall be added on. 6) Funeral Benefit: P12,000 (before, it was only P10,000) to defray funeral expenses, if the one who died is a member, a permanently totally disable employee or a retiree. The SSS is now given the option to pay it in cash or kind. 7) Sickness Benefit: Aside from payment of three monthly contributions prior to the semester of the illness, this also requires confinement for more than 3 days in a hospital or other place with the SSS' approval. But payment shall not exceed 120 days in one year or 240 days for the same confinement. The new law says this is not cumulative, meaning, you cant carry over unused benefits to the next year.

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In relation to this, the employee must notify the employer of the sickness or injury within 5 calendar days after the start of confinement UNLESS he is in the hospital he became sick or injured at work premises or while working If the claimant is unemployed, he must notify the SSS within 5 calendar days UNLESS he is confined in a hospital. Where notice is necessary, confinement starts not earlier than the 5th day before notice.

The compensable confinement starts on the first day of sickness. The employer shall pay it every payday. Allowance starts after all leaves of absence with pay are exhausted. After the employer proves he paid the compensation, and upon proof of its legality, he gets 100% reimbursement. But the condition is the employer gives SSS notice within 5 days after it itself was notified. If he gives notice beyond 5 days after it itself was notified. If he gives notice beyond 5 days, reimbursement shall only be for the 10th calendar day before the SSS was notified. (So, for example, on August 1, 1996, the employee got sick. He should give notice to the employer on or before August 6, 1996. If he gives it on August 10, 1996, he can claim compensation only starting on August 5 (5 days preceding the notice), After the employer was notified, say, on August 6, he should give notice to SSS within 5 days in or before August 11. If the employer notifies SSS beyon 5 days (for example on August 16) it can claim reimbursement only starting on August 6). If the employer fails to notify SSS, it gets no reimbursement.

EMBED DrawPlus You have a 1 year period to claim reimbursement. If you file it, it must be adjudicated within 2 months from receipt. If after 3 months from receipt there is still no payment, it shall earn 1% interest per month. 8) Maternity Leave Benefit: It is required that you be paid at least 3 monthly contributions in the 12 months prior to the semester of birth, abortion or miscarriage. So obviously, abortion is covered.

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You get 60 days maternity leave for normal childbirth. 78 days if it is cesarean. The condition for your entitlement to this are:

a) You notified the employer of your probable date of birth and the employer notified the SSS. b) The employer advances to you payment in 2 equal installments within 30 days from the filing of the leave application c) This shall exclude sickness benefits for the same event d) It shall be paid for only the first 4 deliveries e) The employer must give proof of payment of the leave benefit before it may be reimbursed 100% f) If the employer did not remit the contributions or did not give notice to SSS, the employer shall pay SSS damages. (equivalent to the benefits due) Beneficiaries: a) b) Primary and Dependent spouse until he/she remarries > dependent children (legitimate, legitimated, legally adopted and illegitimate children) Secondary > Dependent parents The new law took away: > Legal descendants > illegitimate children In their absence, anyone.

Who shall be the dependents? (1) unmarried (2) not gainfully employed (3) under 21 years UNLESS congenitally incapacitated and incapable of self-support physically or mentally

a) legitimate legitimated legally adopted child and illegitimate child

b) legal spouse entitled to receive support (the old qualification was dependent on him/her for support) c) parents receiving regular support from the member (before, the parents had to be the legal parents dependent on the member for regular support) Suppose A marries B. They have a child - X. A & B later separate (without annulment). A then marries C. They have a child - Y. When A dies, both kids claim. Who is entitled to the death benefits?

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Under the old law, it would have been X. The second marriage is void for being bigamous. Y being an illegitimate child, the primary beneficiary would thus be X. However, since the law has been amended to include illegitimate children as a dependent, both would be entitled. Benefits The benefits are non-transferable. Only those entitled to it may claim.

Suppose you are a foreigner working here. So that your foreign beneficiary may claim these benefits, your state must also extend the seamen benefits to Filipino beneficiaries residing in the Philippines. If it does not, or if your country is not recognized by the Philippines, your foreign beneficiaries get nothing. (But SSS may direct payment where the best interest of SSS is served). If no beneficiary qualifies for death benefits, the heirs can get it.

Claims under ECC: The old law stated that payment of benefits under SSS bars payment for EC for the same contingency, and vice-versa. If you get sick and it is work-related, this section says if you receive benefits for it under SSS, you cannot claim under EC. (Sec. 15, as amended by PD 735) The new law took away this bar against double-claims. At any rate, under the old law, you could still claim under both. Why? Art 173 of the Labor Code says that payment of EC benefits shall not bar recovery under RA 1161/RA 610 --> PD 1921. This law came later than PD 735! In Maao Sugar Central v CA, Aug. 27, 1990, the Supreme Court said the benefits under ECC and the Civil Code differ from those of the SSS. Acceptance of one therefore does not wipe out the other. ECC / CIVIL CODE SSS

1. Reason for payment: Illness or injury arising in the course of employment. The company is responsible (solely) for this. The contingency covered occursNature of payment: Indemnity for for injury/damage. Insurance or protection vs. hazards or risks stated in law Basis: The industry should be liable for the death or injury.Paid as a matter of right when the contingency covered occurs.

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To deny payment of SSS benefits because it is compensable under ECC is to deprive the SSS members of benefits they have bought and paid for. Likewise, the DOJ has an Opinion that sec. 15 of RA 1161 and Art 1173 of the Labor Code both barred simultaneous recovery until PD 1921 amended the Labor Code in 1984. This lifted the ban against simultaneous recovery. There is thus an implied repeal - but it will only affect contingencies occurring after 1984. These provide the rationale for the deletion, in addition to the aim to give more benefits to workers. As in EC, no one helping prepare or pursue a claim can charge a fee. But if you act as counsel, you can claim fees not more than 10% of the benefits. This is not payable before the worker actually receives the benefits. Contributions These start on the last day of the month when the employee's contribution takes effect. They are to be remitted within the first 7 days of the month. In case of non-remittance there is a 3% penalty per month. this also applies to selfemployed. Failure to make contributions shall not prejudice the employee.

The SSS can sue the employer for non-remittance. This right of action prescribes in 20 years from knowledge of delinquency or from the time the benefit accrued. All employees must be immediately reported to SSS. Before employment, each employer shall have the employee present his/her registration number from the SSS. The law places more importance on the duty of the employer to report its employees rather than on its duty to remit the premiums on time. The consequence of failing to report, for the employee, is that he is excluded from SSS coverage. In turn, the employer becomes responsible for full payment of benefits. But if the only remission of the employer was non-remittance, the employee is still entitled to benefits of coverage. The consequence on the employer will only be 3% monthly penalty. Note, however, that both are subject to penal sanction. If you make deductions from an employee's wage s for SSS premiums, but do not remit them to SSS within 30 days, your are presumed to have misappropriated the same. That is worse. You can be held liable for estafa. [If there is no salary because you are on leave without pay, must the contribution still be paid? NO. The SSS provides that the employer pays contributions in accordance with the schedule in Sec. 18. Sec. 18 tabulates the schedule of monthly compensation in accordance with earnings. Without earnings, you have no counterpart contribution.]

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The funds contributed are public in nature. They do not belong to the members but are held in trust by the government. They are impressed with public character. Suppose the SSC pays part of these public funds to a priest, for sickness benefit. Is this not unconstitutional for establishing religion? NO. It is paid to him as employee (Roman Catholic Archbishop of Manila v SSC, 1 SCRA 10) Who can commence criminal action for non-remittance?

It can constitute either a violation of RA 1161 or the Revised Penal Code. Either the SSC or the employer may file it. No need for prior SSC consent. (De Jesus v CA, 212 SCRA 823). What is the prescriptive period for filing suit?

Sec. 22 sets a 20-year period to bring action. This deals with remittance of contributions NOT penal sanctions. The context does not refer to penalty. Penal actions are governed by the Miscellaneous Provisions - Sec. 28. They provide for 4 years. Otherwise, you will treat it like a capital crime by giving it the same prescriptive period. (Benedicto v Abad, 21 March 1990) XXVIII GOVERNMENT SERVICE INSURANCE SYSTEM: The new law on the GSIS is R.A. 8291 which was approved on May 30, 1997. (Amendments/Changes are italicized for easy reference.) The employer here is the national government, including all its political subdivisions, branches, agencies or instrumentalities, GOCCs, Phil TB Society, Red Cross, Phil. Veterans Bank. An employee is any person in the service of such employer who receives compensation therefor. So. To know who is an employee, we have to know what is compensation: Basic pay or salary received pursuant to ones election or appointment Excluding: per diems bonuses Overtime pay allowances, and, the new law adds: honoraria any other emoluments received or in addition to basic pay which are not integrated into basic pay.

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So, if all you receive are honoraria for talks you give to various government agencies, you are still not an employee under GSIS coverage. Also, if you are appointed member of a government committee and receive a per diem for every committee meeting you attend, you are still not under GSIS. What about a Sandiganbayan member who receives per diems and no salaries. Is that compensation which will qualify him as an employee? It is not the nomenclature of the payment, but its nature which governs. Under GSIS law, "per diem" is a daily allowance given for each day that a government employee is away from his home base. It covers cost of lodging and subsistence. Under the circumstance of the case, the per diem is paid for his services as Sandiganbayan member. it is therefore not a mere reimbursement but compensation. (GSIS V CSC & Baradero, June 19, 1995). In the same manner, if you are appointed to an additional position and paid honorarium for your services in that post, that is compensation, since that is actually additional pay for the additional position. Who are the dependents?

legal, legitimated legally adopted, or illegitimate child who is . . . . . . . . . . . (The term acknowledged natural child has been removed in the amended law) unmarried (2) not gainfully employed not over 21 UNLESS incapacitated or due to a mental or physical defect acquired prior to age of maturity (before, it was physic-ally or mentally incapable of self- support. And it needed not be congenital.)legitimate spouse dependent for support on himleg. parents dependent for support on him (It is not necessary anymore that they be wholly dependent for support.) Who are beneficiaries? a) Primary dependent spouse until he remarries dependent children dependent parents legitimate descendants subject to restrictions on dependent

b) Secondary children)

Coverage: It is compulsory on all (1) employees (It is no longer necessary that he be permanent) (2) below the compulsory retirement age (It used to be 60 years.). The new law now says, irrespective of employment status but it still excludes contractuals with no employeremployee relationship with the agency they serve (for example, janitors under a job contractor servicing a government agency).

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Effect of termination: Once a member, always a member (for entitlement pruposes). You are entitled to whatever benefits have been earned or accrued. Benefits

1) Separation benefits: This is new. They may take two forms: Unemployment or Involuntary Separation benefits - These are monthly cash payments. They become due when: A permanent employee is voluntarily separated from service due to abolition of office or position (usually resulting from reorganization), AND the employee has been paying integrated contributions for at least 1 year prior to the separation. Separation benefits - These are cash payments due to workers who resign or are terminated. They become due when: An employee resigns or is separated. The amount of benefits will depend on whether he had 3 to less than 15 OR 15 or more years of service years of service when he resigned or was separated. 2. Old-age pension - to be entitled, you must have: a) Fifteen years of service or more (credited service); b) 60 years of age at the time of retirement; and c) Under the new law: Not receiving a monthly pension benefit from permanent total disability. (The old law required that you be Separated from service. But that is now covered by another benefit. So they had to distinguish this.) If you are 65 years of age, If you have less than 15 years in service, you can continue as CSC may provide in its rules. The old law said you may continue until you reach the 15 years. But the SC said if we took this strictly, it would be a bit unjust to government service. This service is extendible, therefore, to make you entitled. The purpose of the pension is two-fold: 1. 2. To entice applicants to the government, and let them retire with relative security

Old decisions allowed for extension beyond the 60 year ceiling even for 14 more years, so that the employee could qualify. The SC said we should apply a liberal rule of interpretation in favor of the employee. He should therefore not be covered by Sec. 12 (b), where he would be disqualified for failure to meet the 15 year service requirement, but covered by Sec. 11(b), which allows for an extension. (Cena v CSC, July 3, 1992)

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Retirement laws are liberally construed in favor of the retiree because their intent is to provide for his sustenance & comfort. When he no longer has the stamina to continue earning. (Profeta v Drilon, Dec. 22, 1992). However, this rule has since been reversed and in Rabor vs. CSC (May, 1995) the SC held as valid a Memorandum Circular which limited the extension to only one year, otherwise, this would allow an employee who is 64 years old to continue until he was 79 years old, to the detriment of the public service. The reason for this is that otherwise, this would discriminate against late-comers in the government service who entered at a younger age. It would delay promotion of younger staff. I would also prejudice others who qualify but must wait for extendees who are beyond the retirement age to vacate their posts. The SC said it is true we should bear in mind the interests of the retirees, but it would be absurd to have an employee who worked for only 3 years at age 65 who can extend her service for 12 years and finally retire at 77 years. This reduces the significance of the general principle of compulsory retirement at 65 years. Cena vs CSC was thus modified to the extent that the said CSC memorandum circular (No. 27, 2. 1990) was declared valid. BUT the government agency concerned has discretion in allowing or disallowing extension of an official or employee who has reached 65 without the 15-year service requirement. What shall the pensioner receive?

(a) Monthly pension for life (b) If he worked 3 but for less than 15 years upon retirement, he gets cash payment of 100% average monthly compensation If he is reemployed, the pension is suspended. If he has received a lump sum payment, he must refund the amount corresponding to the unexpired period. If the compensation he receives is less than the pension, he gets the difference. 2) Permanent Disability Benefits: To avail of this, your disability must not be compensable under any other law. Note that under previous rulings, it is not necessary that you be helpless. Thus under the new law, it is defined as loss or impairment of normal functions of your physical or mental faculty which reduces or eliminates your capacity with your current gainful occupation or to engage in any other lawful occupation. There are two types of permanent disability benefits under the new law:

Permanent total - This means recovery is medically remote Permanent partial- You lose or impair irrevocably certain portions of your physical faculties but can still pursue a gainful occupation.

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PERMANENT DISABILITY: Under the new law, no benefits are available of it is due to grave misconduct notorious negligence, habitual intoxication or willful intent to injure or kill oneself or another. LIKEWISE, you must have been in service when the disability occurred. NOTE: The new law has deleted the provision that the disability is not compensable under other laws. Disability will be deemed total if one is completely unable to continue with his or her present job or engage in any gainful occupation due to the loss or impairment of his or her normal functions or mental faculties. PERMANENT TOTAL When is a disability permanent total? It is the same as with the SSS: Complete loss of sight in 2 eyes Loss of 2 limbs at or above the ankle or wrist Permanent complete paralysis of 2 limbs Brain injury resulting in incurable imbecility or insanity Other cases according to GSIS You get a monthly pension for this. The pension may be suspended if: a) Your are reemployed and receive compensation equal to the pension (if less, he gets the difference). b) You recover from the disability c) You fail to present yourself for medical exam when required PERMANENT PARTIAL This is defined as complete and permanent loss of any digit or sight or hearing in one or both eyes or ears. GSIS may add for other cases covered by the benefit. For this, under the new law, you will get a cash [ayment provided you were in service when you were disabled and paid the required number of contributions. TEMPORARY TOTAL This means you are completely unable to continue with your present job or do any gainful occupation due to loss or impairment of your normal functions or mental faculties. BUT your faculties may be rehabilitated. You are entitled to 75% of your current daily compensation for not more than 120 days in 1 year after you have exhausted sick leaves and CBA sick leave benefits (in the case of GOCCs which may have CBAs).

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You must also be in service at the time of disability or, if separated, worked at last 3 years and paid at least 6 monthly contributions in the 12 months before the disability. The treatment may be extended but no more than 240 days. Survivorship Benefits: This is actually death benefits. It shall go to the beneficiaries when a member (one still employed and paying contributions) or pensioner (one who is on Permanent Total Disability benefits or who has received the lump sum benefit for the disability) dies. It consists of the following: Basic survivorship pension: 50% of the basic monthly pension Dependent childrens pension: Not more than 50% of the basic monthly pension Under the new law, we have a new scheme for benefits. But the essential element in all benefits is that, to be entitled to the same, either the member was in service at the time of death; or was separated and with at least 3 years of service. In case of DEATH OF A MEMBER, the primary beneficiaries would receive either:: Survivorship pensionIF the deceased was in service; or was separated and with at least three years of service and 36 monthly contributions in the five year period before the death OR had made 180 monthly contributions prior to his deathSurvivorship pension AND Cash payment of 100% of the average monthly compen-sation (amc) for every year of serviceIF the deceased was in service with at least 3 years of serviceCash payment of 100% of the amc for each year of service wherein he paid contributions but not less than P12,000.00IF the deceased had at least 3 years of service before death and is not qualified for the above two benefits If there is no dependent spouse or dependent children, the benefits will go to the secondary beneficiaries. They will get 100% of the amc per year of service that they made contributions, but the amount shall not be less than P12,000.00. BUT again, the member must have had at least 3 years of service. If there is no secondary beneficiary, it shall go to the legal heirs.

The old law also provided that if the spouse married the pensioner 3 years before he qualified for a pension, he or she would be disqualified (so the pension appeared to have been much sought after by potential brides or husbands). This has been removed from the new law.

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4) Funeral Benefit: P12,000 will be given to whoever can show proof of paying funeral expenses. NOTE: The sickness income benefit has been replaced by temporary total disability benefits. 5) Life Insurance:

You have compulsory and optional life insurance. It is compulsory on all except members of the AFP and PNP. What are some benefits available under compulsory life insurance? Maturity benefits, death benefit, accidental death benefit, cash surrender value, loans. Under optional insurance, you may have coverage for life, health, hospitalization, education, memorial plan and any other plans. Government offices and agencies may also apply for group insurance. There is a difference between retirement and life insurance as to who will benefit. In retirement insurance, the beneficiary is the employee (or his heirs, if he is dead). In life insurance, it is the person named who is the beneficiary (he need not be an heir). Vda de Consuegra v GSIS (Jan. 30, 1971): A married B. Then A marries C. Between B and C, who is entitled to the proceeds of his insurance? They split 50-50. B gets 1/2 since it pertains to the conjugal partnership of gains (as the first marriage has not been dissolved). C gets 1/2 since the marriage needs a judicial decision of nullity. Only solution, give her 1/2. Benefits The new law maintains the previous provision on on exclusiveness of benefits:

If other laws provide similar benefits, the member can choose. If what he chooses is less than what he is entitled to under GSIS law, he gets the difference. If you avail of employees compensation benefits, can you also avail of GSIS benefits?

If we apply the decision of Maao Sugar Central v CA, YES. They have different purposes. Employees Compensation is basically an obligation of the industry/ agency where you work. It is in the nature of damages. GSIS is social insurance and you receive its benefits because the contingency provided for occurred. Likewise, since you were entitled to both, it would be unjust to deprive you of the benefits of either. Note that this case referred to SSS benefits, but the principles should be the same. The benefits are not subject to garnishment, attachment or other process except as to:

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1) Obligations to system, or When they are assigned with the authority of the system. The prescriptive period for benefits (except for life and retirement) is 4 years from the date of the contingency. GOOD LUCK!!!! The End

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