Labor Arbitration

Atty. Cecilio D. Duka, Ed.D.

San Sebastian College, Manila

Labor
The term labor simply means physical toil.
It could also mean productive work especially physical work done for wages.
Labor may refer to a social class comprising those who do manual labor or work for wages.

Labor in Biblical Perspective

Cursed is the ground because of you; through painful toil you will eat of it all the days of your life.
It will produce thorns and thistles for you and you will eat the plants of the field.
By the sweat of your brow you will eat your food until you return to the ground, since from it you were taken; for
dust you are and to dust you will return." Genesis 3: 17 19

Constitutional Mandate
Article II, Section 18 - The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare.

Article XII, Section 12 - The State shall promote the preferential use of Filipino labor, domestic materials and locally
produced goods, and adopt measures that help make them competitive.
Constitutional Mandate

Article XIII - Social Justice and Human Rights, Section 3

The State shall:
afford full protection to labor, local and overseas, organized and unorganized,
promote full employment and equality of employment opportunities for all.
guarantee the rights of all workers to self-organizations, and peaceful concerted activities, including the right to
strike in accordance with law.
promote the principle of shared responsibility between workers and employers and the preferential use of
voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to
foster industrial peace.

Labor provisions are not self-executing

Agabon vs. NLRC, November 17, 2004
Thus, the constitutional mandates of protection to labor and security of tenure may be deemed as self-executing in
the sense that these are automatically acknowledged and observed without need for any enabling legislation.
However, to declare that the constitutional provisions are enough to guarantee the full exercise of the rights
embodied therein, and the realization of ideals therein expressed, would be impractical, if not unrealistic. The
espousal of such view presents the dangerous tendency of being overbroad and exaggerated.

Serrano vs. Gallant Maritime, March 24, 2009

Thus, Section 3, Article XIII cannot be treated as a principal source of direct enforceable rights, for the violation of
which the questioned clause may be declared unconstitutional.
It may unwittingly risk opening the floodgates of litigation to every worker or union over every conceivable
violation of so broad a concept as social justice for labor.

Bases of Labor Laws

Police Power
The latin maxim salus populi est surprema lex embodies the character of the entire spectrum of public laws aimed
at promoting the general welfare of the people under the State's police power.
As an inherent attribute of sovereignty which virtually "extends to all public needs," this "least limitable" of
governmental powers grants a wide panoply of instruments through which the state, as parens patriae gives effect
to a host of its regulatory powers.
JMM Promotion and Management, Inc., vs. Court of Appeals, G.R. No. 120095, August 5, 1996

Social justice

Social Justice is neither communism, nor despotism, nor atomism, nor anarchy, but the humanization of laws and
the equalization of social and economic force by the State so that justice in its rational and objectively secular
conception may at least be approximated.
underlying the existence of all governments on the time-honored principle of salus populi est suprema lex.
(Calalang vs. Williams, G. R. No. 47800, December 2, 1940 [70 Phil 726])

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Premature Termination of Employment Contract
In case of termination of overseas employment without just, valid or authorized cause as defined by law or
contract, the workers shall be entitled to
full reimbursement of his placement fee
with interest of twelve percent (12%) per annum,
plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the
unexpired term, whichever is less. (Sec. 10, RA No.8042) Marsaman Manning Agency vs. NLRC, August 25, 1999

Serrano vs. Gallant Maritime Services, Inc. March 24, 2009

Whether his salaries for the unexpired portion of his employment contract or three (3) months salary for
every year of the unexpired term, whichever is less, comes into play only when the employment contract
concerned has a term of at least one (1) year or more.
It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the unexpired portions thereof,
were treated alike in terms of the computation of their monetary benefits in case of illegal dismissal.
Their claims were subjected to a uniform rule of computation: their basic salaries multiplied by the entire
unexpired portion of their employment contracts.
The subject clause or for three months for every year of the unexpired term, whichever is less in the 5th
paragraph of Section 10 of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL

RA 10022
In case of termination of overseas employment without just, valid or authorized cause as defined by law or
contract, the workers shall be entitled to
full reimbursement of his placement fee
with interest of twelve percent (12%) per annum,
plus his salaries for the unexpired portion of his employment contract or for three (3) months for every
year of the unexpired term, whichever is less. (Sec. 7, RA No. 10022)

Auto Bus Transport Systems, Inc. vs. Bautista, G.R. No. 156367, May 16, 2005
At this point, it is necessary to stress that the definition of a field personnel is not merely concerned
with the location where the employee regularly performs his duties but also with the fact that the employees
performance is unsupervised by the employer.
As discussed above, field personnel are those who regularly perform their duties away from the principal place of
business of the employer and whose actual hours of work in the field cannot be determined with reasonable
certainty.

Article 94 - Right to holiday pay

(a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service
establishments regularly employing less than ten (10) workers;

Movable holidays RA 9492

In the event the holiday falls on a Wednesday, the holiday will be observed on the Monday of the week.
If the holiday falls on a Sunday, the holiday will be observed on the Monday that follows:
Provided, That for movable holidays, the President shall issue a proclamation, at least six (6) months prior to the
holiday concerned, the specific date that shall be declared as a nonworking day:
Provided, however, The Eidul Adha shall be celebrated as a regional holiday in the Autonomous Region in Muslim
Mindanao.

Two Regular Holidays Falling on the Same Day

DOLE Bulletin on Workers Entitlement to Holiday Pay on 9 April 1993, Araw ng Kagitingan and Good Friday

1. If the employee did not work he is entitled to receive 200% of basic pay;
2. If the employee worked, he is entitled to 300% of basic pay.
The said Bulletin dated March 11, 1993, was reproduced on January 23, 1998, when April 9, 1998 was both
Maundy Thursday and Araw ng Kagitingan.

In the case of Asian Transmission Corporation vs. Court of Appeals, G. R. No. 144664, March 15, 2004, the Supreme
Court affirmed the validity of DOLEs March 11, 1993 Explanatory Bulletin and ruled that Article 94 of the Labor
Code, as amended, affords a worker the enjoyment of ten paid regular holidays.
The provision is mandatory, regardless of whether an employee is paid on a monthly or daily basis.
Asian Transmission Corporation vs. Court of Appeals, G. R. No. 144664, March 15, 2004
Only an employee who works on the day immediately preceding or after a regular holiday shall be entitled to the
holiday pay.
A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment in addition to
normal vacation pay but will not entitle the employee to another vacation leave.
Prohibition against elimination or diminution of benefits (Art. 100)

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Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee
benefits being enjoyed at the time of promulgation of this Code.

Overtime does not fall under Article 100

Respondent was not obliged to allow all its employees to render overtime work everyday for the whole year,
but only those employees whose services were needed after their regular working hours and only upon
the instructions of the management.
The overtime pay was not given to each employee consistently, deliberately and unconditionally, but as a
compensation for additional services rendered.
Thus, overtime pay does not fall within the definition of benefits under Article 100 of the Labor Code on
prohibition against elimination or diminution of benefits. Manila Jockey Club Employees Labor Union vs. Manila
Jockey Club, G.R. No. 167760, March 07, 2007

Article 128 - Visitorial and enforcement power

The Secretary of Labor and Employment or his duly authorized representatives, including labor regulation officers,
shall have access to employers records and premises at any time of the day or night whenever work is being
undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition
or matter which may be necessary to determine violations or which may aid in the enforcement of this Code and of
any labor law, wage order or rules and regulations issued pursuant thereto.

Recovery of wages, simple money claims and other benefits

Under Article 129, the Regional Director has jurisdiction if the following concur:
1. the claim must arise from employer-employee relationship;
2. the claimant is no longer employed and does not seek reinstatement;
3. the aggregate money claim of each employee does not exceed P5,000.00.
In the absence of any of the three (3) requisites, the Labor Arbiters have exclusive original jurisdiction over all
claims arising from employer-employee relations, other than claims for employee's compensation, social security,
medicare and maternity benefits.
Brokenshire Memorial Hospital, Inc., vs. Minister of Labor and Employment, et. al., G.R. No. 74621, February 7,
1990)

Balladares vs. Peak Ventures, Inc. - July 16, 2009

The visitorial and enforcement powers of the DOLE Regional director to order and enforce compliance with labor
standard laws can be exercised even where the individual claim exceeds P5,000.
However, if the labor standards case is covered by the exception clause in Article 128 (b) of the Labor Code, then
the Regional Director will have to endorse the case to the appropriate Arbitration Branch of the NLRC.

SEXUAL HARASSMENT
Republic Act No. 7877 The Anti Sexual Harassment Law (February 14, 1995)
Prohibits all forms of sexual harassment in the employment, education or training environment.

Sexual harassment abounds in all sick societies. It is reprehensible enough but more so when inflicted by those with
moral ascendancy over their victims.
It is a valid cause for separation from service.
Villarama vs.NLRC Sept. 2, 1994
Sexual harassment is an imposition of misplaced superiority which is enough to dampen an employees spirit and
her capacity for advancement.
It affects her sense of judgment; it changes her life. Domingo vs. Rayala, February 18, 2008

Demands for sexual favor

The demand, request, or requirement of a sexual favor need not be articulated in a categorical oral or written
statement and instead may already be sufficiently discerned from the offenders acts.
Even though no offer of work favors, such as continued employment or promotion, nor threats such as dismissal,
were extended by Rayala to Domingo, the Court found the acts complained by Domingo as enough conditions for
harassment for generating an intimidating, hostile, or offensive environment for the employee, which is one of
the conditions provided under Section 3 of RA 7877, defining work-related sexual harassment. Domingo vs. Rayala,
February 18, 2008

Mere casual buss on the cheek is not a sexual conduct or favor

We have reviewed carefully the records of this case and found no convincing evidence to sustain complainants
charges.
What we perceive to have been committed by respondent judge are casual gestures of friendship and camaraderie,
nothing more, nothing less.
In kissing complainant, we find no indication that respondent was motivated by malice or lewd design.

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Evidently, she misunderstood his actuations and construed them as work-related sexual harassment under R.A.
7877. (Atty. Susan M. Aquino vs. Hon. Ernesto D. Acosta, Presiding Judge, Court of Tax Appeals, A. M. No. CTA-01-1,
April 2, 2002)

Article 136 - Stipulation against marriage

It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a
woman employee shall not get married, or to stipulate expressly or tacitly that upon getting married, a woman
employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise
prejudice a woman employee merely by reason of her marriage.

Duncan Association of Detailman vs. Glaxo Wellcome Philippines, Inc., September 17, 2004
Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential
programs and information from competitors, especially so that it and Astra are rival companies in the highly
competitive pharmaceutical industry.
The prohibition against personal or marital relationships with employees of competitor companies upon Glaxos
employees is reasonable under the circumstances because relationships of that nature might compromise the
interests of the company.
In laying down the assailed company policy, Glaxo only aims to protect its interests against the possibility that a
competitor company will gain access to its secrets and procedures.

New Labor Legislations

Republic Act 9347
An Act Rationalizing the Composition and Functions of the National Labor Relations Commission
Republic Act 9481
An Act Strengthening the Workers Constitutional Right to Self Organization
Republic Act 9347
An Act Rationalizing the Composition and Functions of the National Labor Relations Commission
It amended Articles 213,214,215 and 216 of the Labor Code

Reimbursement of income received during the pendency of a case for illegal dismissal
Roquero vs. Philippine Airlines, Inc. G.R. No. 152329, April 22, 2003
Panuncillo vs. CAP Philippines, G.R. No. 161305, February 9, 2007
Genuino vs. National Labor Relations Commission, G.R. Nos. 142732-33, December 4, 2007
Garcia vs. PAL, Jan. 20, 2009

Article 254- Injunction prohibited

No temporary or permanent injunction or restraining order in any case involving or growing out of labor disputes
shall be issued by any court or other entity, except as otherwise provided in Articles 218 and 264 of this Code (As
amended by Batas Pambansa Bilang 227, June 1, 1982).
Halaguea vs. PAL, Oct. 2, 2009

Arbitration
Arbitration means a voluntary dispute resolution process in which one or more arbitrators, appointed in
accordance with the agreement of the parties, or rules promulgated pursuant to The ADR Act of 2004, resolve a
dispute by rendering an award. (Sec. 3(d), The ADR Act of 2004.

The advantages of arbitration versus court litigation

A. Parties can choose the arbitrators, local or foreign.
B. Proceedings are private and confidential.
C. Compared to court litigation, arbitration is speedier and more cost efficient.
D. Parties can choose the place of arbitration, and the place where arbitration proceedings will be conducted.
E. In international commercial arbitration, parties can be represented by local lawyers or foreign
F. A foreign arbitral award can be enforced in any country which has acceded to the New York Convention of 1958.

Types of arbitration
Institutional arbitration is one in which the arbitral process is administered by regular arbitral center, e.g., the
Philippine Dispute Resolution Center, Inc. (PDRCI).
An ad hoc arbitration is one in which the parties themselves devise the rules of procedure.
Advantages of institutional arbitration
A. Arbitral centers have comprehensive rules of procedure.
Advantages of institutional arbitration
C. Arbitral centers have panels of trained, experienced and competent arbitrators.
Advantages of institutional arbitration
C. The arbitral center can provide the parties with a competent Secretariat and physical facilities, such as hearing
rooms, conference rooms and the office equipment. (Adapted from www.pdrci.org)