LABOR RELATIONS

Course Outline
By: Atty. Ma. Corazon L. Katalbas

Book V Title I POLICY AND DEFINITIONS

Art. 211 Declaration of Policy

Labor Standards minimum terms & conditions of employment which

employees are legally entitled to and employers must comply with
Labor Relations refers to the interactions between employer and
employees or their representatives and the mechanism by which the standards
and other terms and conditions of employment are negotiated, adjusted and
enforced

Sec. 3 Art. XIII 1987 Constitution

PAL vs. NLRC 225 SCRA 301- The policy about workers
participation in policy making was applied by the Supreme Court in ruling that
employees or their union should be allowed to participate in the formulation of
the code of discipline which the employees will be told to observe. In a
Philippine Airlines case the NLRC directed the company to share (with the
union) the prerogative to formulate a Code of Discipline. The company, charging
NLRC with grave abuse of discretion, elevated the case to the Supreme Court.
The Court turned down the employers appeal. It upheld the unions objection to
the implementation of the Code which the management had revised without the
unions participation.

The government labor relations policy declared in Art. 211 is a focused

elaboration of the basic labor policy announced in Art. 3 which, in turn, echoes
constitutional mandates. The policy is intended to install industrial democracy
centered on collective bargaining, leading to social justice as the end goal.
Labor relations is essentially inter-party, which means that, basically, the
employer and employees themselves must deal with their problems in a manner
that mutually suits them best. This is the reason the policy promotes free
bargaining and negotiation between employers and employees. The law
encourages a democratic and self-devised method of regulating labor-
management relations. Free agreement between the parties is the rule;
government intervention, the exception. This basic philosophy is reinforced in
the last sentence of this article.
The inter-party character of labor relations is likewise the reason the policy
prefers voluntary instead of compulsory modes of dispute settlement. The
government steps in only when the parties themselves fail to reach an agreement
to the prejudice of public interest or when one disregards the defined rights of the
other. For instance, when the employer busts the union or commits other form of
unfair labor practice (ULP) or when the union blockades the company gate-in
short, when the legal boundaries are transgressed-the injunctive power of the
State may be invoked.
In fine, labor relations is human relations. The prescriptions for natural
peace will naturally follow if the parties would only adhere to the civil law
precept of human relations-Every person must, in the exercise of his rights and
in the performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith. (Art. 19, NCC)
Art. 212 Definitions

Employee (EE) EEs may be a member of a LO even if they belong to

different ERs; includes any individual whose work has ceased as a result
or in connection with any current labor dispute of because of ULP

Employer (ER) - being a member of a LO does not automatically make

you its EE; any person acting in the interest of an employer, directly or
indirectly

Labor Organization (LO) means any union or association of employees

in whole or in part for the purpose of collective bargaining

Legitimate Labor Organization (LLO) any labor organization duly

registered with the DOLE

Unfair Labor Practice (ULP) ULP in (f) means that a case of ULP was
filed whether criminal in nature, pending or otherwise;

Managerial EE lays down and execute management policy; power to

hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees; Under Art. 212 managerial staff not included (see different
meaning in Book III);

Supervisory EE who, in the interest of the employer effectively

recommends such managerial actions if the exercise of such authority is
not merely routinary or clerical in nature but requires the use of
independent judgment; relate to definition of Confidential EEs

Labor Dispute controversy or matter concerning terms or conditions of

employment or the association or representation of persons in negotiating,
fixing, maintaining, changing or arranging the terms and conditions of
employment

Strike temporary stoppage of work by concerted action of employees as

a result of an industrial or labor dispute

Lock-out temporary refusal of an employer to furnish work as a result of

an industrial or labor dispute

Book V Title II NATIONAL LABOR RELATIONS COMMISSION (NLRC)

Art. 213 NLRC the NLRC is the primary government agency that hears and
decides labor-management disputes. It is the countrys labor court. In deciding
cases that it hears, the NLRC is independent from DOLE. It is attached to the
Department of Labor and Employment only for purposes of policy-coordination.
Tripartism public sector/govt, employers rep/employees rep or labor
organization
Exclusive and Original Jurisdiction
1. Cases certified to it for compulsory arbitration by the Sec. of
Labor under Art. 263 Certified Cases
2. Injunction cases under Art. 218 and 264
3. Contempt cases
Exclusive Appelate Jurisdiction
1. Cases decided by the Labor Arbiters under Art. 217b and RA
8012 (Migrant Workers Act)

2
 2. Cases decided by the Regional offices of the DOLE in the
exercise if its adjudicatory function under Art. 129
Decisions of the NLRC where appealed:
St. Martin Funeral Homes vs. NLRC G.R. No. 130866
Findings of fact by a labor tribunal are accorded the utmost respect by the
courts and are well-nigh conclusive if supported by substantial evidence.

NOTE: In quasi-judicial bodies, decision of a division cannot be appealed

en banc except the COMELEC
*The Commission may sit en banc only for purposes of 1) promulgating
rules and regulations governing the hearing and disposition of cases 2)
formulating policies affecting its administration and operations 3) to allow
cases within the jurisdiction of any division to be heard and decided by
any other division.
*Art. 213-216, as amended by R. A. 6715 (March 21, 1989), restore
tripartite representation in the NLRC, regionalize its operations, raise the
qualifications of its members, and upgrade their salaries and those of
labor arbiters.
*In Art. 215 this article is amended by RA 6715 insofar as it requires the
confirmation by the Commission on Appointments of the appointments of
the Chairman and Members of the National Labor Relations Commission,
was declared unconstitutional and of no legal force and effect, by the
Supreme Court in the case of John Peter Calderon vs. Bartolome Carale,
et al. En Banc G. R. No. 91636 April 23, 1992.

Art. 217 Jurisdiction although the article speaks of exclusive and Original
Jurisdiction of labor arbiters, the cases enumerated may instead be submitted to
a voluntary arbitrator by agreement of the parties under Art. 262. The law prefers
voluntary over compulsory arbitration.

NOTE: The question of jurisdiction may be raised at any stage of the

proceedings, because the matter of jurisdiction is conferred by law. The
exception to this rule is when the party is barred from raising this question on the
ground of estoppel (Tijam vs. Sibonghanoy, 23 SCRA 29)

Mainland vs. Movilla G. R. No. 118088 Nov. 23, 1995

Tabang vs. NLRC G. R. No. 121143 Jan. 21, 1997

Art. 218 Powers of the Commission

Powers of the NLRC
1. Rule-making power the rules and regulations promulgated by
the Commission have the force and effect of law and are
entitled to great respect.
2. Power to issue compulsory processes power to administer
oaths, summon parties and issue subpoenas
3. Power to investigate matters and hear disputes within its
jurisdiction conduct investigations, hear and determine
disputes
4. Contempt power hold any person in contempt directly or
indirectly
5. Power to issue injunctions and restraining orders to enjoin any
actual or threatened commission of any or all prohibited or
unlawful acts, however, frowned upon as a matter of labor
relations policy

Procedure for the Issuance of Restraining Order/Injunction (20 days)

1. File a verified petition

3
 2. hearing after due and personal notice has been served
3. reception at the hearing of the testimony of witnesses with
opportunity for cross-examination
4. Finding of fact by the Commission that:
a. prohibited or unlawful acts have been committed
b. substantial and irreparable injury will follow
c. greater injury will be inflicted
d. no adequate remedy at law
e. PO unwilling to furnish adequate protection
5. Posting of a Bond to be fixed by the Commission

Who can issue TRO/Injunctions in Labor Dispute

1. President (Art. 263 g)
2. Secretary of Labor (Art 263 g)
3. Labor Arbiters (Art. 216, IRR Rule XI Sec 1)
4. NLRC ( Art. 218)
5. Regional Directors
6. Med-Arbiters
Ilaw at Buklod ng Manggagawa vs. NLRC June 27, 1991

Art. 219 Ocular Inspection

Who are authorized relate to Art. 128

Art. 221 Technical Rules not Binding and Prior Resort to Amicable Settlement
Evidence prevailing in court of law shall not be controlling
However, it must have a modicum of admissibility for it to be given
probative value
Evidence, to support a finding or conclusion must be substantial
Decision/Order may be arrived at by position papers, affidavits or
documentary evidence
Ang Tibay vs. CIR, 69 Phil. 335, procedural due process in
administrative proceedings
(1) The right to a hearing, which includes the
right to present ones case and submit evidence
in support thereof; (2) The tribunal must
consider the evidence presented; (3) The
decision must have something to support itself;
(4) The evidence must be substantial.
Substantial evidence means such reasonable
evidence as a reasonable mind accept as
adequate to support a conclusion; (5) The
decision must be based on the evidence
presented at the hearing, or at least contained in
the record and disclosed to the parties affected;
(6) The tribunal or body or any of its judges must
act on its own independent consideration of the
law and facts of the controversy, and not simply
accept the views of a subordinate; (7) The Board
or body should, in all controversial questions,
render its decision in such manner that the
parties to the proceeding can know the various

4
 issues involved, and the reason for the decision
rendered.
Art. 222 Appearance and Fees
Non-lawyers may appear on their behalf or if they represent their
organization or members thereof
Attorneys Fees none shall be imposed on any individual member of the
contracting union, must be taken from union funds, any agreement to the
contrary shall be null and void
NOTE: Maximum of 10% of the monetary benefits awarded to the
employees excluding the award for moral and exemplary damages.

Art. 223 Appeal

Grounds for Appeal abuse of discretion, secured through fraud, purely
questions of law and serious errors of fact which would cause grave or
irreparable injury
Periods within which to Appeal 10 calendar days
Virjen Shipping and Marine Services vs. NLRC July 20, 1982
Requisites for the Perfection of an Appeal posting of a bond, cash,
property or surety, appeal bond excludes moral and exemplary damages
Execution Pending Appeal as far as the reinstatement aspect is
concerned, employee shall be admitted back to work under the same
terms and conditions prevailing prior to dismissal
Pioneer Texturizing Co. vs. NLRC
Options of the Employer in Reinstatement Cases- payroll reinstatement
Reinstatement Not Stayed by Appeal
Appeal from the Decision of the NLRC
Motion for Reconsideration may be dispensed with in certain
instances, no 2nd motion allowed if so allowed NLRC
commits grave abuse of discretion (Jardin vs. NLRC, 2/23/2000)
Rule 65 of the Revised Rules of Court petition for Certiorari
Petition for Relief from Decision of LA
Appeal Bond: Filing on Time; Exceptions
Rosewood Processing Inc. vs. NLRC G.R. No. 116476 May 21/98
Substantial compliance
Decision did not state the amount
Misled by notice of Decision
Filing distinguished from Perfection of Appeal reduction of bond
Star Angel Handicraft vs. NLRC G. R. No. 108914 Sept 20, 1994

Art. 224 , Execution of Decisions, Orders and Awards

Both Party and Counsel must be Notified
Writ may be issued motu priopio or on motion by any interested
party
In MAI Phils.Inc. vs. NLRC [1987], the SC held that if the employer
fails to or is unable to comply with the reinstatement aspect of the
decision, the plain and obvious remedy is the compulsion of the
employer by writ of execution to effect the mandated reinstatement.
However, in the case of Pioneer Texturizing vs. NLRC [Oct. 16,
1997], the SC held that to require the application for and issuance
of the a writ for execution as prerequisite for the execution o a
reinstatement award would certainly betray and run counter to the
very object and intent of Article 223, i.e., the immediate execution of
a reinstatement order. This overturned the SC ruling in the
Maranaw case.

5
 Supervening events once a judgment becomes final and
executory it can no longer be disturbed, altered or modified.
However, the correctness of the execution of the decision may be
appealed to the NLRC.

Book V Title III BUREAU OF LABOR RELATIONS

Art. 226 Bureau of Labor Relations (in the regional offices of the DOLE)
Jurisdiction:
Quasi-Judicial
Inter-Union Dispute
Intra-Union Dispute
Special requirements: Involving Entire membership;
Individual member only
D.O. No. 9
Disputes, Grievances arising from or affecting labor-
management relations except those arising from the
implementation or interpretation of CBAs
Administrative
Regulation of registration of labor unions
Keeping of registry of labor unions
Maintenance of a file of CBAs

Art. 227 Compromise Agreements preferential use of voluntary modes of

settling disputes, may be effected at any stage of the proceedings and even
when there is already a final executory judgment
With or Without Assistance of DOLE
NLRC shall not assume jurisdiction except:
In case of non-compliance with the compromise agreement
Prima facie evidence of fraud, misrepresentation or coercion
in obtaining the settlement
Requisites of a Valid Quitclaim general rule, the law looks with disfavor
upon quitclaims and releases executed by employees. In order to be
valid, the following must be present:
In writing
Signed by the parties
In the presence of the Regional Director
Dire Necessity not an acceptable ground for annulling the releases,
especially since it has not been show that the EEs were forced to execute
them.

Art. 232 Prohibition on Certification Election the contract bar rule {means that
when a valid and registered CBA is subsisting, the Bureau is not allowed to hold
an election contesting the majority status of the incumbent union}

Book V Title IV LABOR ORGANIZATIONS

Art. 234 Requirements of Registration enumeration is self-explanatory

What is a Labor Organization? - Art. 212(g) speaks of 2 broad purposes:
Collective bargaining exercised only by an LLO
Dealing with the employer generic description of
interaction between the ER and the EE concerning
grievances, wages, work hours, etc
Local or chapter if registration is secured through a
national union, labor federation or trade union center
Independent possesses a registration of its own

6
 National Union /Federation LO with a least 10
locals/chapters each of which must be a duly certified CB
agent
Principle of Agency Applied relationship governing a local or chapter
and that of a national union or federation is that of agency, where the local
is the principal and the federation the agent.

Why register? The fact of being registered with the DOLE makes a LO
legitimate in the sense
that it is clothes with legal personality to claim the representational and
bargaining rights enumerated in Art. 242 or to strike and picket under Art. 263.

Independent Registration vs. Chartering D.O. No. 9 (June 21, 1997)

segregates the requirements for (a) independent union (b) local/chapter
(c) federation or national union (d) industry or trade union (e) workers
association (see Implementing Rules)
All supporting requirements shall be certified under oath by the
secretary or the treasurer and attested by its president
No court or administrative agency has authority to require data
other than those expressly required by law. Such addl requirement
is an illegal diminution or reduction of the sum of rights guaranteed
by law in Art. 242

How a Local or Chapter Becomes LLO

Progressive Dev. Corp. vs. Sec of Labor Feb. 4, 1992
Upon the submission of the following to the BLR
A charter certificate within 30 days from its issuance by the
federation or national union
Constitution and by-laws, set of officers, books of account, all of
which are certified under oath by the secretary or treasurer and
attested by the president
D. O. No. 9 books of account is nowhere mentioned, what the
new rules require are two copies of annual financial reports.
The financial reports are required of an independent union but
not of a local or chapter
Unions personality is not subject to collateral attack.
Remedy is to file cancellation of registration under Art. 238-
239
Recognition by the BLR is not a ministerial duty. A review of
the application is ministerial but the issuance of the
certificate of registration is not, contrary to DOLE resolution
dated Dec. 29, 1993 and in the case of Progressive vs.
Laguesma April 18, 1997 which reverses the SC ruling in
Umali vs. Lovina
The effectiveness of the reversal is of limited duration as DO
No.9 took effect on June 21, 1997 and Sec. 3, Rule I
bestows legal personality upon the filing of complete
documents in behalf of a local or chapter
What is a CBU?
Registration requires membership of at least 20% of the employees
in the BU it seeks to represent
BU is always a group of employees, composition must be
appropriate there must be unity of interest
Where to File Application for Registration - BLR
Disaffiliation: When to Disaffiliate; Effects

7
 The right to disaffiliate from its mother union is well settled. It is
consistent with the constitutional guarantee of freedom of
association
A union may disaffiliate from the mother union during the 60 day
freedom period immediately preceding the expiration of the CBA
Before the freedom period, disaffiliation may still be carried out if it
is effected by a majority of the members in BU

Substitutionary Doctrine employees cannot revoke the validly

executed collective bargaining contract with their employer by the simple
expedient of changing their bargaining agent, the new agent must respect
the contract. The employees through their new bargaining agent may
negotiate for the shortening thereof.

Revocation of Charter by reason of disloyalty or such grounds as may

be specified in their by-laws. Serve a verified notice of revocation copy
furnished the bureau. The revocation shall divest the local/chapter of its
legal personality upon receipt of the notice by the bureau unless the
local/chapter has acquired independent registration.

Effect of Cancellation of Registration of Federation or National Union

it shall operate to divest its locals/chapters of their status as LLO, unless
the locals/chapters are covered by a duly registered CBA. If so availing,
the local/chapter shall be allowed to register as independent unions, failing
which they shall lose their legitimate status upon the expiration of the
CBA.,

Art. 239 Grounds for Cancellation of Union Registration

Failure to comply with any of the requirements prescribed under

Art. 234, 237 and 238
Violation of any of the provisions of Art. 239
Commission of any of the acts enumerated in Art. 241 (rights and
conditions of membership)
NOTE: No petition for cancellation based on the last ground may
be granted unless supported by at least 30% of all members of the
respondent LO
Fraudulent Acts
Inaction or Omission
Unlawful Acts illegal strike is not a ground to cancel union registration
Itogon-Suyoc Mines vs. Sangilo-Itogon Workers 24 SCRA 873
Acting as cabo supplies workers to an employer
Sweetheart contract terms and conditions are below minimum standards
Checking off special assessments or any other fees without individually
signed authorization

Art. 241 Rights and Conditions of Membership in a LO

Rights of Union Members
Political rights
Directly elect through secret balloting at interval of 5 years
Deliberative and decision-making right
Decide major policy matters
Shall not admit as members any individual belonging to a
subversive organization or engaged in subversive acts
Rights over money matters

8
 No arbitrary or excessive initiation fees
Entitled to full and detailed report of all financial transactions
Officers shall not be entitled to compensation other than the
salaries and expenses due to their position as provided in the
constitution and by-laws
No special assessments and extraordinary fees shall be levied
Right to information
Persons who are Prohibited from Becoming Members/Officers of LO
No person who has been convicted of a crime involving moral
turpitude shall be eligible for election as a union officer or for
appointment to any position in the union
Check-Off vs. Agency Fee
Agency fee paid by non members as they enjoy the fruits of the
labor of the bargaining agent
Special Assessment vs. Check-Off
Special assessment- written resolution of all the members at a
general membership meeting duly called for the purpose (local
meeting not compliance)
Check-off individual written authorization duly signed by the
employee. It shall state the amount, purpose and beneficiary

VIOLATION of the enumerated rights and conditions in Art. 241

shall be a ground for cancellation of union registration or expulsion of
officer from office whichever is appropriate. At least 30% of all members
may report such violation, except when it affects 1 or 2 members only.

Art. 242 Rights of Legitimate Labor Organizations

To act as representative of its members (most impt. Right)
To be certified as the exclusive representative of all employees in
an appropriate CBU
To be furnished by the ER with financial statements, balance sheet
etc.

Compromise Binding Upon Minority Members of Union withdrawal of

a ULP case against the ER binding upon the minority members otherwise
it will be a contravention of the Magna Carta of Labor and no ER would
ever enter into a compromise. However, money claims due to EE cannot
be the object of settlement or compromise without the specific individual
consent of each laborer concerned.

Book V Title V COVERAGE

Art. 243 Coverage and EEs Right to Self-Organization all persons employed
in commercial, industrial and agricultural enterprise are allowed to from, join or
assist labor organizations of their own choosing for purposes of collective
bargaining
Exceptions:
Art. 244 employees in the civil service
Right to strike withheld from members of the AFP, firemen and
jail guards
Right to form association for the furtherance and protection of
their interests
Art. 245 managerial employees
Coverage of the Right to Organize; Exceptions

9
 San Jose Electric Service Cooperative vs. Min. of Labor May 31/89
employee/members of cooperative cannot invoke the right to
collective bargaining for certainly an owner cannot bargain with
himself or his co-owner
Callado vs. IRRI May 22, 1995 immunity from local jurisdiction,
the grant of immunity is a political question
Victoriano vs. Elizalde Rope Workers Union Sept. 12, 1974
religious objectors as freedom of religion is paramount than the
freedom of association and the right to collective bargaining.
Kapatiran sa Meat and Canning Division vs. Calleja June 20, 1988
Ebranilag vs. Division Superintendent of Cebu, March 1, 1993
Principle of Reciprocity

Art. 244 Rights of Employees in the Public Service

Government EEs under Civil Service Law
EE in GOCCs with Charter
EE in GOCCs without Charter

Art. 245 Ineligibility of Managerial EEs to join any LO; Right of Supervisory EEs

Managerial EE those who have the authority to devise, implement and

control strategic and operational policies effectively recommends
Rationale: union might not be assured of their loyalty in view of the
evident conflict of interest and union may become company dominated with the
presence of managerial employees in union membership
United Pepsi-Cola Supervisory Union vs. Laguesma Mar. 25, 1998
Supervisory EE; RA 6715 those whose task is simply to ensure that
such policies are carried out by the rank and file EEs
Confidential EEs Doctrine of Necessary Implication those who assist
or act in a confidential capacity to or have access to confidential matters of
persons who exercise managerial functions in the field of labor relations privy
to sensitive and highly confidential records
Metrolab vs. Confessor Feb. 28, 1996

Art. 246 Nonabridgment of Right to Self-Organization it shall be unlawful for

any person to restrain, coerce, discriminate against or unduly interfere with
employees and workers in their exercise of the right to self-organization.

Book V Title VI Unfair Labor Practice

Art. 247 Concept of ULP and Procedure for Prosecution Thereof

Elements of ULP 1) ER-EE relationship; 2) act done is expressly defined in the Code
as ULP

Aspect of ULP Civil and Criminal (victim of the offense is not just the
workers as a body and the well meaning employers, but the State as well,
thus the attack is considered as crime)

Civil Aspect Compliance before Criminal Aspect may be Instituted,

passed upon by the LA and may include damages and requires only
substantial evidence
Criminal Aspect after finality of judgment in the civil case, however,
judgment will not serve as evidence in the criminal case and requires
proof beyond reasonable doubt

10
 Prescription Art. 290 prescribes in (1) year, all other offenses [3] yrs.

Art. 248 ULP of Employers prohibited acts are all related to the workers self-
organization right and to the observance of a collective bargaining agreement or
anti-unionism [exception: giving testimony under this code]

NO ULP: Illustrative Instances of Valid Exercise of Management Rights:

Personnel Movements valid promotion, transfer or even demotion
as long as it does not point to interference of EEs rights to self-
organization
Acceptance of Mass Resignation pilots mass protest/retirement
was not a concerted activity protected by law
Grant of Profit-Sharing Benefits to Non-Union Members
Forced Vacation Leave mandatory VL due to economic crisis
Issuance of Rules or Policy as long as exercised in good faith
Taking Action Against Slowdown ER may validly discharge EEs
engaged in a slow down
Appraisal of Motives look at attendant circumstances, history of ERs
conduct, connection between the ERs actions and the union;s affiliation or
activities

Nine ULP Acts of Employer

Interference outright and unconcealed intimidation
Dabuet et al, vs. Roche Pharmaceuticals, Inc 149 SCRA 386
dismissal of the union members amounted to interference
with and restraint or coercion of the petitioners in their
exercise of their right to engage in concerted activities
for their mutual aid and protection.
Interrogating an EE as to his union activities is not
ULP per se but circumstances may make it as
such
ULP even before union is registered
Prohibiting organizing activities unlawful if it
applies to non-workingtime as well [anti-union
motives]
Violence or intimidation at gunpoint
Espionage and surveillance
Economic inducements to vote against the union
ERs expression of opinion
Totality of Conduct Doctrine
The Insular Life Assurance Co. Ltd. Employees Association
Vs. The Insular Life Assurance Co. 37 SCRA 244
expression of opinion by an employer, though
innocent in themselves, frequently were held to be
culpable because of the circumstances under which
they were uttered.

TOTALITY OF CONDUCT DOCTRINE - whereby the culpability of an ERs

remarks were to be evaluated not only on the basis of their implicit implications,
but were to be appraised against the background of and in conjunction with
collateral circumstances.

Mass layoff amounting to ULP lame excuse and

a veritable smoke screen of ERs scheme to bust
the union

11
 Lock-out or Closure amounting to ULP actual or
threatened as a means of dissuading the EEs from
exercising their right
Sale in Bad faith simulated and merely
a device resorted to get rid of union
members, the applicability of the
rule that labor contracts being in
personam are not enforceable
against the transferee is not
considered
Assumption of Obligations by new
company when assignment of
assets is attended with bad faith

Successor Employer Ruling; Piercing the Corporate Veil

If the new company is engaged in the same line of business,
owned by the same people then doctrine of successor
employer will apply
SUCCESSOR EMPLOYER RULING this doctrine shall be applied if the new
company is engaging in the same business as the closed company or is owned by
the same people, and the closure is calculated to defeat the workers
organizational right; such closure may be declared a subterfuge.

Yellow Dog Condition

YELLOW DOG DOCTRINE is a promise exacted from workers as a condition of
employment that they are not to belong to, or attempt to foster, a union during their
period of employment.

Contracting Out
Shell Oil Workers Union vs. Shell, Ltd. May 31, 1971
CONTRACTING OUT considered as ULP if employer contract out services or
functions being performed by union members when such act will interfere with,
restrain, or coerce employees in the exercise of their right to self-organization.
However, it is valid if for business reasons such as decline in business,
inadequacy of equipment or the need to reduce cost, even if the employers
estimate of his cost is based on a projected increase attributable to unionization.
Valid Contracting Out:
1. decline in business
2. inadequacy of equipment
3. need to reduce cost

Runaway Shop
RUN-AWAY SHOP defined as an industrial plant moved by its owners from one
location to another to escape union labor regulations, but the term is also used to
describe a plant removed to a new location in order to discriminate against
employees at the old plant because of their union activities.

Company Unionism or company domination of union

initiation of the company union idea; financial support to the
union; employer encouragement and assistance; supervisory
assistance
Discrimination for or Against Union Membership to
discourage membership in labor organization

Discrimination in work quota

12
 Discrimination in bonus allocation Manila Hotel and Pines
Hotel case (50% bonus vs 5% bonus)
Discrimination in lay-off or dismissal
Discrimination in regularization
Discrimination in blacklisting
Indirect discrimination dismissal due to wife or brothers
union activities

Valid Discrimination: Union Security Clause imposes upon EEs the obligation to
acquire or retain union membership as a condition affecting employment
Kinds of Union Security Arrangements:
1. Closed Shop must appear in the CBA contract
2. Union Shop
3. Agency Shop agency fee cannot be imposed on EEs already in the service of another
union
UNION SECURITY CLAUSE

Discrimination favoring unionism

A valid kind of discrimination
Objective is to assure continued existence of the union
ER not guilty of ULP if it merely complies in good faith with the request of the certified
union for the dismissal of employees expelled from the union pursuant to the union
security clause in the CBA

GENERAL RULE: All members in the BU covered by a closed-shop agreement are subject to its
terms

EXCEPTION:
1. any employee who at the time the closed shop agreement takes effect is a bona fide
member of religious organization which prohibits its members from joining labor unions on
religious grounds;
2. employees already in the service and already members of a labor union or unions other
than the majority union at the time the closed shop agreement took effect;
3. supervisors ineligible under the Act to join the majority union because of the membership
therein of employees under their supervision;
4. confidential employees who are excluded from the rank and file BU;
5. employees excluded from the closed shop by express terms of the agreement.

Closed Shop: To Whom Not Applicable

1. member of a religious organization
2. already in the service and member of a labor union other then the
majority union at the time the closed shop agreement took effect
3. supervisors ineligible to join majority union because of membership
therein of EEs under their supervision
4. confidential employees
5. those excluded by express terms of the agreement
Agency Shop

Discrimination because of Testimony

Violation of Duty to Bargain Art. 251 and 252
Paid Negotiation paying the union/officers/agents any
negotiation fee or attorneys fees as part of the settlement
Violation of CBA must be gross violation art. 261

13
 Six ULP Acts of Labor Organization
Restraint or Coercion no interference
Coercing in participation in strike
Discrimination ULP for Lo to attempt to cause the ER to
discriminate against non-union members
Arbitrary Use of Union Security Clause union security
clause must be used in a valid manner, fairly and
judiciously
Salunga vs. CIR 21 SCRA 216
Manila Mandarin Employees Union v. NLRC 154 SCRA 369
Refusal to Bargain union of majority must not refuse to sit
down with management
Featherbedding and Make-Work Arrangements
FEATHERBEDDING name given to EE practices which create or spread
employment by unnecessarily maintaining or increasing the number of
employees used, or the amount of time consumed, to work on a particular
job./ER pays for services not rendered
Accept Negotiation and Attorneys Fees from Employer
Violation of CBA

Book V Title VII COLLECTIVE BARGAINING & ADMINISTRATION OF

AGREEMENTS

Art. 250 Procedure in Collective Bargaining

Collective Bargaining Nature
To stabilize the relation bet. Labor and management to create a
climate of industrial peace
A mutual responsibility and a legal obligation
Jurisdictional Preconditions to Collective Bargaining
Possession of the status of majority representation of the
employees representative in accordance with any of the means of
selection or designation provided for in the Labor Code
Proof of majority representation
A demand to bargain under Art. 250 (a) of the Labor Code
Kiok Loy vs. NLRC G.R. No. 54334, Jan. 22, 1986

CBA defined a contract executed upon request of either the employer

or the exclusive bargaining representative of the employees incorporating the
agreement reached after negotiations with respect to wages, hours of work and
all other terms and conditions of employment, including proposals for adjusting
any grievances or questions under such agreement.
Mandatory Provisions of the CBA wages, working hours, etc.

Art. 252 Meaning of Duty to Bargain Collectively

Duty to Bargain Defined
Situation 1 there is yet no CBA
1. mutual obligation to meet and convene, the purpose of which
is to negotiate an agreement on the mandatory subjects, and
to execute a contract incorporating such agreement if
requested by either party.
2. compliance required must be prompt, expeditious and in
good faith
3. limited by non-compulsion to agree to a proposal or to make
a concession
Situation 2 where a CBA exists

14
 1. all of the above
2. the obligation not to terminate or modify the CBA during its
lifetime, duty bound to keep the status quo
Four Forms of ULP in Bargaining
Failure or refusal to meet and convene
Successor Employer Rule: Continuity & Identity if there is a
substantial and material alteration in the employing
enterprise, the new employer need not bargain with the
incumbent union
Do Economic Exigencies Justify Refusal to Bargain financial
hardship constitutes no excuse for refusing to bargain
collectively (as long as ER continues to negotiate)
Acts not Deemed Refusal to Bargain
Adoption of an adamant bargaining position in good faith
Refusal to bargain over demands for commission of ULP
Refusal to bargain during period of illegal strike
Non-Reply to Proposal
Kiok Loy Vs. NLRC and Kilusan 141 SCRA 179
Evading the Mandatory subjects of bargaining it is the
duty of the ER and the EEs rep to bargain with each other with
respect to wages, hours of work and other terms and conditions
of employment.. Mandatory Subjects of Bargaining
No Duty to Agree Even on Mandatory Subjects only a duty to
discuss, either party may bargain to an impasse as long as
he bargains in good faith
Non-mandatory Subjects an ER cannot insist to the point of creating an
impasse on the inclusion of non-mandatory subjects even if he acts in
good faith
Bargaining to the Point of Impasse: Not Necessarily Bad Faith the ruling
means that bargaining to the point of deadlock may or may not amount to
bargaining in bad faith depending on whether the insistence refers to a
mandatory or non-mandatory subject of bargaining
Impasse presupposes a reasonable effort at good faith bar.gaining
which despite noble intentions does not conclude in an agreement
between the parties.
Bad faith in bargaining, including refusal to execute the
CBA, if requested (only when bargaining is in progress)

Boulwarism take it or leave it stand

Gross violation of the CBA

Ratification; Mandatory Requirements

1. ratified by majority of the workers in the BU
2. posting in 2 conspicuous places for five days
When Ratification Not Needed when the CBA is a product of an arbitral
award by an appropriate government authority or by a VA
CBA must be registered to render the contract bar rule operative

Art. 253 Duty to Bargain Collectively when there exists a Bargaining Agreement
Automatic Renewal Clause if not renewed within the 60 day freedom
period (to keep the status quo)

Art. 253-A Terms of a Collective Bargaining Agreement

Duration of CBA
*Representative issue 5 yrs.
*Economic issue 3 yrs

15
 Retroactivity
*within 6 months from expiry retroact to the day immediately
following such date of expiry
*beyond 6 months parties shall agree on the retroactivity
Rule on Retroactive Effects of Agreement Provisions

Art. 254 No Injunction Rule Labor disputes not subject to injunction, except
Art. 218, and 264
In Art. 218 workers should stop striking and should return to work, ER
should accept all workers;
In Art. 264 regular courts cannot issue injunction in labor disputes but it
can hear the criminal aspect
Third Parties/Innocent Bystanders only in protection of 3 rd parties
Republic Flour Mills vs. Reyes 18 SCRA 796
PAFLU vs. Cloribel, March 28, 1969

Art. 255 Exclusive Bargaining Representation and Workers Participation in

Policy and Decision-Making
Extent of Workers Right to Participate right does not include
participation in crafting of business policies but only on voluntary modes of
settling grievances and in the formulation of the code of conduct
PAL vs. NLRC, August 13, 1993
Labor Management Councils versatile, may exist with or without the
presence of a union, real aim is employee participation in whatever form
Individual Grievance 2nd sentence of Art. 255 respects the right of an EE
to present grievances to their ER at any time
Collective Bargaining Unit Defined that group of jobs represented by the
recognized or certified union when it bargains with the employer
Appropriateness of BU; Factors Considered
community of interest
substantial similarity of work and duties
similarity in compensation and working conditions
Laguna College vs. CIR 25 SCRA 167
The Globe Doctrine desire of the employees is paramount when
considerations are evenly balanced
One Union-One Company Policy; Its Exceptions are:
1. daily paid vs. monthly paid
2. exclusion from the rank & file group
3. employer unit has to give way to craft unit, plant unit, etc
Subsidiaries and Spun-Off Corporations two corporations cannot be
treated as a single bargaining unit even if their businesses are related
San Miguel Employees vs. Confessor, Sept. 19, 1996
Summation of Significance
Distinguishing the CBU from the union is important because
1. in a C.E. the voters are the BU
2. in strike voting, the voters are the members of the union
3. in CBA ratification, the voters are the BU

Art. 256-259 Petition for Certification Election (Med-Arbiter)

Bargaining Rep. LLO or any officer or agent of such org. whether or not
employed by the employer.
Exclusive Bargaining Rep. LLO duly recognized or certified as sole and
exclusive bargaining agent of all employees in a bargaining unit.

3 Modes of Choosing the Exclusive Bargaining Unit

16
 Voluntary Recognition usu. based on the selection by the
majority of the EEs as the Bargaining rep. for the BU
Under D.O. No. 9, requirements:
1. In unorganized establishment a) within 30 days from
recognition, the ER and union president shall submit to
the Regl office a joint statement attesting to the fact of
voluntary recognition;
2. Proof of posting of the joint statement for 15 days in 2
conspicuous places
3. # of EEs in the BU with names and signatures of at least
majority
4. statement that there is no LLO operating within the BU
Joint statement must be under oath

Certification Election with or without Run-Off

1.1 means the process of determining through secret ballot
the sole and exclusive bargaining unit for purposes of
collective bargaining.
1.2 direct certification no longer allowed, even without any
opposition.
1.3 Non-adversary but fact finding in character
1.4 Involves only 2 issues:
1.4.1 proper composition and constituency of the BU
1.4.2 validity of majority representation claims of the
asserted BR or of competitive BR

1.5 Pre-election conference:

1.5.1 list of qualified voters
1.5.2 date, time and place of election
1.5.3 names of workers/representative
1.5.4 no. & location of polling precinct/booth
1.5.5 no. of ballots to be prepared

Who Files Petition for C. E. any LLO or ER when

requested to bargain collectively
In Progressive Dev. Corp. vs. Sec. of Labor, Feb. 4,
92, the local chapter as the principal must file the
petition, but it must first be a LLO
= Art. 257 directs the automatic conduct of a CE in an
unorganized establishment
= the petition must be accompanied by the signature
of at least 25% of all EEs in the BU

Employer Not a Party in C. E. exception is where the ER

has to file a petition for certification election pursuant
to Art. 258 because it was requested to bargain collectively.
Thereafter, his role ceases and he becomes a
bystander, but he may protest against election irregularities
(fraud, etc.).

Where to File Petition Med-Arbiter (Regl. office) which has

jurisdiction over the principal office of the ER or where the
bargaining unit is situated.

When to File Petition depends if theres a CBA or not. If it

has no CBA, anytime; if it has a CBA, only within the
last 60 days of the 5th year of the CBA

17
 Who can Vote in the C. E. ticklish question! All members
of the BU sought to be represented by the petitioner
at the time of the CE shall be qualified to vote. ER certified
list or payroll for the last 3 months preceding the Decision of
the Med-Arbiter

Conduct of Election
1) set on a regular business day
2) post notice of election 5 days before the actual
date
3) posted in 2 conspicuous places
4) by secret ballot
5) election officer may rule on any on-the spot
question but cannot rule on any of the grounds
for challenge of voter
How to Challenge: No ER-EE relationship & not a member
of the BU which petitioner seeks to represent

*take note, not labor union, for a non-member may

vote as long as he is part of the BU

Double Majority Rule union which obtains majority of the valid

votes and at least majority of all eligible voters in the BU must have
cast their votes.
Requisites for a valid run-off election: (concurrent conditions)
1.) A valid election took place (majority of CBU members voted)
2.) Election presented at least 3 choices
3.) Not one of the choices obtained the majority of the valid votes
4.) Total votes for the unions is at least 50% of the votes cast
5.) There is no unresolved challenge of voter or election protest

Rules which Prevent the Holding of a Certification Election

Contract-Bar Rule petition for a CE can only be
entertained within 60 days prior to the expiry date of
an existing registered CBA or FREEDOM period
Applies to Extended CBA under Deadlock no
petition for CE may be filed after the lapse of the 60
day freedom period. The old CBA is extended
until a new one is signed (NACUSIP vs. Calleja,
1/27/92).
Not applicable:
1. defective (in its ratification) CBA (ALU vs. Calleja,
5/5/89
2. CBA signed before or within freedom period to
exclude/bar contending union (ALU vs. Calleja,
11/6/89)

Deadlock Bar Rule must be a valid deadlock that was

submitted to a conciliator or arbitrator or that the
deadlock is the subject of a valid notice of strike or lock-out
(Kaisahan
vs. Trajano, Sept. 9, 1991)

Negotiation Bar Rule neither can a petition be entertained

of the duly recognized or certified union had commenced

18
 negotiations with the ER w/in one year and the
negotiation is on-going.

Certification Year Rule no petition for CE may be filed

within one year from the date of a valid certification,
consent or run-off election or from the date of voluntary
recognition. Reason:
To give a short period of rest from inter-union electoral
contest.
Exception: change in circumstance as to structure,
functions or membership of the contracting union
Upon completion of the canvass and there being a valid
election, the election officer shall proclaim and certify as
winner the union which obtained a majority of the valid votes
cast provided: no protest had been filed or if one was filed it
was not perfected within the 5 day period and no challenge
or eligibility issue was raised or even if one was raised, it will
not materially change the result. The Med-Arbiter must issue
the certification order for the one year (1) period to
commence.

Consent Election election voluntarily agreed upon by the

parties, with or without the intervention of the DOLE, usually
used to determine who enjoys the support of the majority
and who will implement the CBA and not to determine the
Exc. Barg. Rep (Warren Manufacturing vls. BLR, 3/30/88)

Appeal of Order Granting or Denying the Petition for a C.E.

Med-arbiter to DOLE Sec. for violation of IRR and other
grounds, filed with the Regl office where the case originated,
within 10 calendar days from receipt of appeal a reply may
be filed; and the Sec. of Labor has 15 calendar days to
decide the appeal from receipt of the records.

Finally, Art. 255 and 256 are contradictory, the first one
requiring a majority of the EEs in an appropriate BU, while
256 requires only a majority of the valid votes cast, resulting
to a union bargaining with management without the mandate
of the majority of the employees that the union purports to
represent.

Book V Title VII-A GRIEVANCE MACHINERY & VOLUNTARY ARBITRATION

Art. 260 Grievance Machinery and Voluntary Arbitration

CBA law between the parties must be respected, must contain
grievance procedure, EEs must exhaust all remedies in the grievance
procedure before resorting to the courts to enforce his rights under a
bargaining contract

Who are entitled to its benefits? Even non-member EEs are entitled to its
benefits otherwise it would result to undue discrimination against non-
members

Grievance any question by either the employer or the union regarding

the interpretation or application of the CBA or CPP or any claim by either
party that the other party is violating any provision of the CBA or CPP.

19
 Grievance Machinery - it is a must provision in the CBA
1. complaint is filed assisted by the unions shop steward
2. management shall discuss
3. labor-management panel/council if both agrees, issue is settled.
If not, it should be submitted for arbitration. (Parties must agree in
advance the selection of an arbitrator or panel of arbitrators)

Arbitration resolution of a dispute arrived at by resort to a disinterested

third party whose decision is final and binding on the parties (Rule 65 on
grave abuse of discretion)
*Voluntary arbitration takes precedence over other dispute
settlement devices
*arbitral award is non-appealable to the NLRC; only by certiorari
*substantial evidence needed in arbitration (findings of fact)

Enforceability Against Transferee of Enterprise

Labor Contracts: In Personam; its Exceptions (same business,
same machinery, same personnel, etc.)

Wiley Doctrine applied during merger or consolidation

A duty to arbitrate arising from a CBA survives the ERs
ceasing to do business as a separate entity after its merger
with a substantially large corporation, so as to be binding on
the larger corporation where there is substantial continuity of
identity in the business enterprise.
But a duty to arbitrate arising from CBA does not survive in
every case in which the ownership or corporate structure of
an enterprise is changed. It does not survive where there is
lack of substantial continuity of identity on the business
enterprise before and after a change, or where the union
abandons its right to arbitration by failing to make its claims
known

Substitutionary Doctrine provides that the employees cannot revoke a

validly executed CBA with their employer by the simple expedient of
changing their bargaining representative (ex. Disaffiliation); it continues to
bind them till its expiration.

Art. 261 Jurisdiction of Voluntary Arbitrators

Gross Violation of the CBA flagrant and malicious refusal to
comply with the economic provisions of the CBA
Distinguish from Mediation
Award/Decision becomes final after 10 calendar days

Book V Title VIII STRIKES & LOCKOUTS & FOREIGN INVOLVEMENT IN

TRADE UNION ACTIVITIES

Art. 263 Strikes [temporary stoppage of work as a result of an industrial or

labor dispute], Picketing [the marching to and from at the employers premises
usually accompanied by the display of placards and other signs] and Lockouts
[temporary refusal to furnish work on account of a labor dispute]

No strike/lockout on grounds involving inter-union and intra-union

disputes.
Concerted Activities when an activity is planned and accomplished by
people acting together (to encourage free trade unionism)

20
A VALID STRIKE can only take place in the presence of and in relation to a labor
dispute between the employer and employees involved.

Legal Strike may be held because of:

1. Economic Strike on collective bargaining deadlock/economic
concessions which is not required by law from the employer
2. ULP Strike ULP act of employer, including union busting
Ferrer vs, CIR, May 31, 196
Note: a secondary strike or sympathetic strike is an invalid strike
(product relation) (no product relation)

Protection of Strike:
1. not subject to labor injunction or restraining order
2. EEs may not be discriminated against merely by joining a strike
3. use of strike-breaker is prohibited
4. mere participation does not terminate ER-EE relationship

Role of the Police: strict neutrality, maintain a 50 meter radius, should be in

uniform with proper namecloth attached at all times

Tests in Determining the Legality of a Strike; the 6 Factors

l
1. Purpose Test is it contrary to a specific provision of law?
*government EEs are not allowed to strike (disputes bet EEs & govt
are settled with the Public Sector LMC = to NCMB in the private
sector)

2. Compliance with Procedural & Substantive Requirements of Law

does it violate a specific requirement of law?

Notice of Strike-file with the DOLE spec. NCMB

Cooling-Off Period-NCMB mediates during this period
30 days in economic strike; 15 days in ULP strike;
None in case of union busting
Strike Vote-by secret ballot, NCMB must be informed 24 hrs
prior to the voting process, requires the majority of the
total union members in the BU concerned, minority union
need not be called during the strike-vote meeting
Strike Vote Report-result of strike vote must be reported to
the NCMB 7 days before the intended strike; 7 days is added
to the cooling off period

Procedural Requirements: Mandatory non-observance makes the

strike illegal
NFSW vs. Ovejera, May 31, 1982

3.Purpose; Economic or ULP strike

ULP strike a strike which is provoked or prolonged by a refusal to
bargain or a discriminatory discharge or any other sort of unfair
labor practice by the employer is a ULP strike
Economic strike a strike held to force wage or other concessions
from the employer

The Conversion Doctrine from economic to ULP strike, when the

acts of the ER prolonged the strike beyond the date it would have
terminated in due course as an economic strike

21
 Lawful Purpose: ULP Strike in Good Faith
When ER performs acts which under the circ
umstances, the strikers believed were ULP on the part of
management, although they were not, the court ruled that the strike
cannot be held illegal
Good Faith Strike (FFW vs. PICC, 3/15/82), but it must have
rational basis

5. Means and Methods:

Prohibited activities commit any act of violence, coercion or
intimidation; obstruct the free ingress or egress from the employers
premises for lawful purpose, or obstruct public thoroughfares

6. Violation of an Existing Injunction

When the Sec. of Labor Assume Jurisdiction over a Strike
*such assumption or certification has the effect of automatically
enjoining the intended or impending strike or lock-out

Defiance of Return to Work Order may lead to a valid dismissal

not only of the officers but of the members as well

Effects of the Assumption of Jurisdiction of the Sec. of Labor

strike now becomes an illegal activity and strikers may be validly
dismissed

7. Contrary to existing Agreement such as no strike clause or conclusive

arbitration clause

No-Strike Clause in CBA applicable only to economic strikes

Master Iron Labor Union vs. NLRC Feb. 17, 1993
If members disregard a no-strike clause, union may become liable for
damages

CONSEQUENCES of STRIKE = employment merely suspended

Strike-Duration Pay
In economic strike no BW since this is a voluntary act and in
Application of the principle a fair days wage for a fair days work
In ULP 1) those who were discriminatorily dismissed due to their
Union activities, 2) those who voluntarily went on strike in protest of
An ULP (no BW)

Vicarious Liability Rule union member may not be held

responsible for the unions illegal strike on the sole basis of such
membership or on account of his having voted affirmatively for the
holding of a strike late declared illegal.
Liability for strike is personal/individual

Strikers Loss of Employment

Union Officers/Leaders may be terminated when he knowingly
participates in an illegal strike
Union Members cannot be terminated for mere participation in an
illegal strike. There must be proof that he committed illegal acts during a
strike.

22
 Liability for Violent Acts no distinction bet. Officers and members

Rule on Reinstatement of Striking Workers

Economic strike ERs may hire replacement on a permanent basis
and is not bound to discharge such permanent replacement in the event the
strikers decide to resume employment
ULP EEs have the right to reinstatement

Employers Right to Hire Replacement During Strike

Discharge of Replacements; in ULP and Economic Strike
Civil Liability of Labor Organizations
Other Kinds of Strike

Art. 264 Prohibited Activities

Labor Organizations there must be prior bargaining, there must be filing
of notice and there must be a strike vote
Third Persons -
Employers no employment of strike breaker
Public Official or Employee including police shall escort in any manner
any individual who seeks to replace the striking workers
Persons Engaged in Picketing shall not commit any act of violence,
coercion or intimidation
Innocent Bystanders
PAFLU vs. Cloribel, March 28, 1969
Boycott
Slowdown

Art. 265 Improved Offer vs. Reduced Offer Balloting

Art. 266 Arrest and Detention

Art. 269 Prohibition Against Aliens; Exceptions

Rule on Reciprocity

Art. 273-277 Special Provisions

Visitorial-Enforcement Power
Tripartism and Tripartite Conferences

Art. 279 Security of Tenure

Constitution provides security of tenure to all workers, without qualification

Art. 280 Regular and Casual Employment

Regular employees performing jobs which are usually necessary or
desirable in the usual business or trade of the employer; consider the
nature of the work performed and the length of time of service
1. Regular EEs by nature of work
2. Regular EEs by years of service

23
 Casual employees performs work not usual to the business of the ER
nor is it necessary and desirable; may become regular if after one (1) year
of service he performs work only for that work activity for which he was
hired.
Project employees employment has been fixed for a specific project or
undertaking, the completion or termination of which has been determined
at the time of the engagement of the EE or where the work or service to
be performed is seasonal in nature and the employment is for the duration
of the season.
1. project that is within the regular or usual business of the ER
company but which is distinct and identifiable as such from the
other undertakings of the company. Ex. Construction company
2. project that is not within the regular business of the corporation,
likewise distinct and identifiable as such. Ex. School undertakes
renovation
What makes a project EE regular?
1. there is a continuous rehiring of project employees even after the
cessation of a project;
2. the tasks performed by the alleged project EE are vital, necessary
and indispensable to the usual business or trade of the employer
NOTE: Mercado ruling project EEs do not become regular
although service exceeds one year length of time applies only
to casual EEs
Seasonal employees called to work from time to time, their employment
relationship during off season is never severed but only suspended
Fixed Period Employment 1) contract entered into voluntarily; 2) all
parties stand on equal footing with no moral dominance exercised by the
ER. Regular in 2 senses:
1. the nature of his work is necessary or desirable in the principal
business of the ER;
2. he enjoys security of tenure during the limited time of his
employment

Probationary Employment shall not exceed 6 months and reasonable

standards must be made known to the EE at the time of engagement. An
EE who is allowed to work after a probationary period shall be considered
a regular EE.
NOTE : No successive probation allowed but extension of
probationary period allowed if favorable to the EE.
Art. 282 Termination be Employer
Management Rights
right to manage people
right to contract jobs out
right to discipline
right to transfer employees
right to demote
right to dismiss not absolute/twin notice rule, expiration of tenure not
dismissal
Just Causes of Termination:
Serious Misconduct Immorality, Sexual Harassment, Cheating
Misconduct is improper or wrong conduct; it is the
transgression of some established and definite rule of action,
a forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error in judgment

24
 Serious such grave and aggravated character and not
merely trivial or unimportant
Immorality must be such conduct that is prejudicial or in
some way detrimental to the employers interest
Anti-Sexual Harassment Law of 1995 (Feb. 14, 1995)
Willful Disobedience
Elements
Gold City vs. NLRC G.R. No. 86000, Sept. 21, 1990
Employees assailed conduct must have been willful or
intentional, the willfulness being characterized by a
wrong and perverse attitude and the
Orders, regulations or instructions of the employer must
be:
o Reasonable and lawful
o Sufficiently known to the employee
o In connection with the duties which the employee
has been engaged to discharge
Transfer if valid, may justify dismissal if disobeyed
Homeowners SLA vs. NLRC, Sept. 26, 1996
Management has the right to transfer or reassign an
employee, an employee may not refuse a valid transfer,
otherwise, he is liable for disobedience
Escobin vs. NLRC, April 15, 1998
Transfer if invalid
Done for an illicit or underhanded purpose, such as to
defeat the EEs right to self-organization
With grave of discretion
Transfer with Promotion; if Rejected
A transfer becomes unenforceable if the transfer is
coupled with or is in the nature of a promotion, where the
promotion is rejected by the employee
Gross and Habitual Neglect of Duties
Gross Neglect means an absence of that diligence that an
ordinarily prudent man would use in his own affairs
Neglect of duties must not only be gross but also habitual
Abandonment Elements
The failure to report for work or absence without valid or
justifiable reason
A clear intention to sever the employer-employee
relationship and manifested by overt acts
Immediate filing of complaint negates abandonment
Fraud any act or omission or concealment which involves breach
of legal duty, trust, or confidence justly reposed and is injurious to
another; must be committed against the ER or representative and
in connection with the EEs work
Dishonesty Falsification, Theft, Unauthorized Use of Vehicle
Loss Of Confidence must be genuine, not a mere
afterthought
When Applicable Position of Trust
Should apply only:
To cases involving employees occupying positions of
trust and confidence or
To those situations where the employee is routinely
charged with the care and custody of the employers
money or property

25
 Riker vs. Ople G.R. No. 50492, Oct. 27, 1987
Proof Required - Substantial Evidence, not mere arbitrary
Guidelines for Applying Doctrine of Loss of Confidence
Loss of confidence should not be simulated
It should not be used as a subterfuge for causes which
are improper, illegal, or unjustified
It may not be arbitrarily asserted in the face of
overwhelming evidence to the contrary
It must be genuine, not a mere afterthought to justify
earlier action taken in bad faith
The employee involved holds a position of trust and
confidence
Commission of a Crime or Offense Art. 11 (2), RPC
Conviction/Prosecution not Required; even if eventually
exonerated from the criminal charges filed
Analogous Causes

Art. 283 Closure of Establishment and Reduction of Personnel

Authorized Causes in General; Required Notice; Separation Pay
Installation of Labor-Saving Device
Redundancy exists where the services of an employee are in
excess of what is reasonably demanded by the actual requirements
of the enterprise
Retrenchment one of the economic grounds to dismiss
employees. It is resorted to by an ER primarily to avoid or minimize
business losses.
Criteria; Whom to Lay-Off
Less preferred status
Efficiency rating
Seniority
Four Standards of Retrenchment
Lopez Sugar Corp. vs. FFW G.R. No. 75700-01,
August 30, 1990
The losses expected should be substantial and not
merely de minimis in extent
The substantial loss apprehended must be reasonably
imminent
It must be reasonably necessary and likely to effectively
prevent the expected losses
Alleged losses, if already realized and the expected
imminent losses sought to be forestalled must be proven
by sufficient and convincing evidence
Evidence to Prove Losses
Hiring of Replacemments after Retrenchment
Bogo Medellin vs. NLRC, Sept. 25, 1998
Redundancy vs. Retrenchment
Sebuguero vs. NLRC, Sept. 27, 1995
Requisites of Valid Retrenchment
The retrenchment is necessary to prevent losses and
such losses are proven
Written notice to the employees and to the DOLE at least
one month prior to the intended date of retrenchment
Payment of separation pay equivalent to one month pay
or at least month pay for every year of service
whichever is higher.

26
 Closure of Business
Requirements for Cessation of Business not due to Business
Losses:
Service of a written notice to the EEs and to the DOLE at
least (1) month before the intended date thereof
The cessation or withdrawal from business operations
must be bona fide in character
Payment to the employees of termination pay amounting
to at least month pay for each year of service or (1)
month whichever is higher.
Serious Business Losses
North Davao Mining Corp. vs. NLRC, Mar. 13, 1996
Reahs Corp. vs. NLRC, April 15, 1997
Previous Generosity Ruling
BISSI vs. NLRC, April 5, 1993l
North Davao Mining Corp. vs. NLRC, Mar. 13, 1996
Justification for Closure ULP
Sale in Good Faith ULP & Successor Employer Doctrine
No law prohibits bona fide sale of a going enterprise
If sale is tinged with bad faith, the law and rulings on ULP
and doctrine of successor ER may apply
Otherwise, there is no obligation on the part of the new
ER to hire previous EEs as labor contracts are contracts
in personam
Merger & Consolidation successor ER principle
applies

Art. 284 Disease

Medical Certificate issued by Competent Public Health Authority
MC must state that the disease of such nature or at such
stage that it cannot be cured within a period of six
months even with proper medical treatment
Award of separation pay is in the form of a financial
assistance

PROCEDURE TO TERMINATE EMPLOYEMENT

Two Facets of Valid Termination

Act of Dismissal if illegal = to discharge w/out just cause
Manner of Dismissal if illegal = to discharge w/out due process
Standards of Due Process
Under Art. 282
o Notice specifying grounds for termination
o Hearing or conference as opportunity to respond to charges
o Notice of termination with justifying grounds
Under Art. 283
o Written notice to EE and DOLE 30 days prior to intended
date of termination
o No prior notice required for termination of contract
o For probationary EE, written notice w/in a reasonable time
Twin Notice Requirement
Notice which apprises the EE of the particular acts or omissions for
which his dismissal is sought

27
 Subsequent notice which informs the EE of the ERs decision to
dismiss him
Burden of Proof Substantial Evidence
Dismissal for Cause but without Due Process
Wenphil Doctrine
Wenphil Corp. vs. NLRC G.R. No. 80587, Feb. 8, 1989
Indemnity in the form of P1,000.00 imposed upon the
ER for termination w/out due process
EE not reinstated
ER was sanctioned, but dismissal still VALID
Serrano Doctrine
Serrano vs. NLRC G.R. No. 117040, January 27, 2000
ER liable for full Backwages from the time of
dismissal to finality of courts decision
EE not reinstated
Dismissal considered ineffectual or defective
Agabon Doctrine
Agabon vs. NLRC 442 SCRA 573
Dismissal considered VALID
ER pays the EE nominal damage
Nominal damage is worth P30,000 (stiffer sanction)
Tempered vs. Stiffer sanctions
JAKA vs. Pacot, March 28, 2005
SC found the need to make a material distinction as
regards the gravity of the sanction
P30K indemnity in Agabon is ot a uniform amount
Tempered if EEs dismissal based on Art. 282 but
w/out due process (EEs acts)
Stiffer if EEs dismissal based on Art. 283 but w/out
due process (mgmt prerogative)
Preventive Suspension 30 days w/out pay (IRR)
Valid if resorted to for protection of ERs property
Invalid if EE does not pose a threat to the life &
property of ER or co-EEs
Sanction is imposed on ER violating the maximum 30
day preventive suspension

CONSEQUENCES OF TERMINATION

Separation Pay: Prior to the Labor Code

Rt to terminate with or w/out just cause
Conditioned only on the serving of notice or pay SP if w/out notice
EE could not demand reinstatement

Separation Pay Four Context

Separation Pay for Authorized Causes under Arts. 283-284
Separation Pay as Financial Assistance in Legal Dismissal under Art. 282
As an act of social justice, compassionate justice
Amount of financial assistance is at the discretion of the labor
arbiter or of the courts
Separation Pay in lieu of Reinstatement in Illegal Dismissal cases
Reinstatement is neither possible nor advisable such as:
o When the EEs position no longer exists
o Company has closed down

28
 o Severely strained relations has set in between the parties
Separation Pay as an Employment Benefit granted in a CBA or company
policy
Also called resignation pay or gratuity pay
Backwages - are granted on the grounds of equity for earnings which a worker
or EE has lost due to his illegal dismissal
Reinstatement means restoration to a state of condition from which one had
been removed or separated
Separation Pay granted where reinstatement no longer possible
Distinguish from Separation Pay
SP based on the length of EE service
BW based on the actual period when he was unlawfully
prevented from working
Full Backwages
Prior to R.A. 6715
BW minus wages actually earned (deduction of interim
earnings actually causes the delay in payment0
Mercury Drug Rule
Mercury Drug vs. CIR 56 SCRA 694
BW for a maximum of three years without qualification and
deduction
Rule after R.A. 6715 (Date to Reckon March 21, 1989)
Alex Ferrer vs. NLRC July 5, 1993
Full backwages but with deduction of any amount which the
employee may have earned during the period of his illegal
dismissal.(Justice Padillas dissenting opinion) cannot be
full if with deduction
Pines City vs. NLRC Nov. 10, 1993
Pines City Ruling Abandoned
Bustamante vs. NLRC Nov. 28, 1bn 996
Reconsidered the Pines City ruling
Full backwages has to be paid as part of the price or penalty
the ER has to pay for dismissing his EE illegally
No Retroactivity
Maranaw Hotel vs. CA, Nov. 6, 1992
For illegal dismissal cases filed before March 21, 1989,
Mercury Drug ruling still holds
For cases filed on or after March 21, 1989, the Bustamante
ruling is applicable

Reinstatement to former position without loss of seniority rights and the

payment of Backwages
Reinstatement without Backwages where ER acted in good faith
An award of BW presupposes a finding of illegal dismissal, not
every case of illegal dismissal entails an award of backwages
Reinstatement not feasible; Separation pay in lieu of reinstatement
How Much? (1) month pay for very year of service
Separation Pay in lieu of Reinstatement different from separation
Pay in Legal Termination (Art. 283, 284) and Compassionate Pay in
Art. 282
Strained Relationship Bar to Reinstatement
Limitations to the Application position of trust & confidence
Is a question of fact
Must be pleaded and proved
Reinstatement immediately executory and self-executory

29
Damages does not accrue from the fact of dismissal but from the
circumstances proved by the EE during the case
Moral Damages should be grounded on the Civil Code where ER acted
fraudulently or in bad faith, act oppressive to labor, done contrary to
morals, good customs or public policy
Exemplary Damages where EE had been harassed by the ER
Indemnity sanctioned to ERs who failed to observe the procedural
requirements
See Wenphil, Serrano, Agabon and Jaka above
Attorneys Fees not recoverable where there is no sufficient showing of bad
faith on the part of the ER
Sunio Doctrine where there appears to be no evidence on record that a
stockholder/owner/officer/manager of a company has acted maliciously or in bad
faith in terminating its EEs, the act was within the scope of his authority and he
should not be made personally liable with the company

Art. 285 Termination by Employee

Resignation and Resignation Notice voluntary act of the EE, notice of at
least (1) month in advance
Resignation Pay generally no, unless stipulated in the CBA or company
policy
Constructive Dismissal; Forced Resignation an act amounting to
dismissal but made to appear as if it were not, a dismissal in disguise, e.g.
status changed from regular to casual

Art. 286 When Employment not Deemed Terminated

Suspension of Operations; Floating Status
Sentinel Security Agency vs. NLRC, Sept. 3, 1998
Floating status only for 6 months
More than 6 months considered to have been illegally
dismissed
Prolonged Floating Status may Amount to Constructive Dismissal
Agro Commercial Security Services vs. NLRC, July 31, 1989

Book VI Title II RETIREMENT FROM THE SERVICE

Art. 287 Retirement (22.5 days)

Retirement defined withdrawal from office, business, occupation or
public duty
Kinds of Retirement
Compulsory age 65
Optional based on CBA
R.A.7641 given Retroactive Effect; Conditions for Retroactive Application
RA 7641 an act of social legislation
Conditioned on the following:
o The claimant for retirement benefits wa still the
employee of the employer at the time the statute took
effect; and
o The claimant was in compliance with the
requirements for eligibility under the statute for such
retirement benefits
Retirement Benefits and Separation Pay do not exclude each other

30
 BOOK VII TRANSITORY AND FINAL PROVISIONS
Book VII Title I Penal Provisions and Liabilities
Art. 288 Penalties
Distinguish from Art. 272
Book VII Title II Prescription of Offenses and Claims
Art. 290 Offenses
3 Year under the Labor Code
1 Year ULP
Art. 291 Money Claims
Money Claim that Accrued Before the Labor Code

REP. ACT NO. 7877 ANTI-SEXUAL HARASSMENT ACT OF 1995

Sec. 3 Work, education, training-related sexual harassment (WET)

Work, education or training-related sexual harassment is committed by an employer,

employee, manager, supervisor, agent of the employer, teacher, instructor, professor, coach,
trainor, or any other person, who, having authority, influence or moral ascendancy over another
in a work or training or education environment, demands, requests, or otherwise requires any
sexual favor from the other, regardless of whether the demand, request of requirement for
submission is accepted by the object of said act.

(a) In a work related or employment environment, sexual harassment is committed when:

o The sexual favor is made as a condition in the hiring or in the
employment, re-employment or continued employment of said individual
o The above acts would impair the employees rights or privileges under
existing labor laws.
o The above acts would result in an intimidating, hostile, or offensive
environment for the employee.

(b) In an education or training environment, sexual harassment is committed:

o Against one who is under the care, custody or supervision of the offender
o Against one whose education, training or apprenticeship is entrusted to
the offender
o When the sexual favor is made a condition to the giving of a passing
grade, or the granting of honors and scholarships, or the payment of a
stipend, allowance or other benefits, privileges or considerations
o When the sexual advances result in an intimidating, hostile or offensive
environment for the student, trainee or apprentice

31