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Labor Laws and Social Legislations

Atty. Cecilio D. Duka, Ed.D.

Social Legislations
Social legislations are laws, rules, and regulations that promote welfare of all sectors of society.
Social Legislation includes laws that provide particular kinds of protection or benefits to the society, in
furtherance of social justice. Not all social legislations are labor laws. Labor laws directly affect
employment they directly govern effects of employment. All labor laws are social legislations. But not all
social legislations are labor laws.

Construction in favor of labor


The liberality of law in favor of the working man and woman still prevails and the official agency
charged by law to implement the constitutional guarantee of social justice should adopt a liberal attitude in
favor of the employee in deciding claims for compensability, especially in light of compassionate policy
towards labor which the 1987 Constitution vivifies and enhances. (Employees Compensation
Commission vs. Court of Appeals, G.R. No. 121545, 14 November 1996, 264 SCRA 248)

Corporate Officers are not covered by the Labor Code


Section 25 of the Corporation Code plainly states that the corporate officers are the President,
Secretary, Treasurer and such other officers as may be provided for in the By-Laws. Whoever are the
corporate officers enumerated in the by-laws are the exclusive Officers of the corporation and the Board
has no power to create other Offices without amending first the corporate By-laws. (Matling Industrial
Corporation vs. Coros, October 13, 2010)

POEA
Under Executive Order No. 797 (May 1, 1982) and Executive Order No. 247 (E.O. No. 247), the
POEA was established and mandated to assume the functions of the Overseas Employment
Development Board (OEDB Art. 17), the National Seamen Board (NSB Art. 20), and the overseas
employment function of the Bureau of Employment Services (BES Art. 15). [Trans Action Overseas
Corporation, vs. Secretary of Labor, G.R. No. 109583, September 5, 1997]

Money Claims of OFW


We reiterate our finding in Serrano v. Gallant Maritime that limiting wages that should be
recovered by an illegally dismissed overseas worker to three months is both a violation of due process
and the equal protection clauses of the Constitution. The money claims of OFW whose contract is
prematurely terminated is reimbursement of placement fees plus 12% interest per annum and the salary
for the unexpired portion of the contract. (Sameer Overseas Placement vs. Cabiles, August 5, 2014)

Rates of OFW Remittance


Seamen and mariners 80% of the basic salary, Construction companies and their workers
70% of the basic salary, Professional workers (e.g. doctors, nurses, engineers, teachers) whose
employment contracts provide for free board and lodging 70% of the basic salary, Professionals without
free board and lodging 50% of the basic salary, Domestic and other service workers 50% of the basic
salary, all other workers 50% of the basic salary (Section 2, of Executive Order 857)

Economic sabotage
Illegal recruitment when committed by a syndicate or in large scale shall be considered as
offense involving economic sabotage.
Illegal recruitment is deemed committed in large scale if committed against three or more persons
individually or as a group. In this case, five complainants testified against appellants acts of illegal
recruitment, thereby rendering his acts tantamount to economic sabotage.

Syndicated Illegal Recruitment


Illegal recruitment is deemed committed by a syndicate when carried out by a group of three (3)
or more persons conspiring or confederating with one another. (Section 6, Republic Act No. 8042)

Atty. Cecilio D. Duka, Ed,D. 1


Large Scale Illegal Recruitment
It is deemed committed in large scale if committed against three (3) or more persons individually
or as a group. (Section 6, Republic Act No. 8042)
Illegal recruitment in large scale is committed when a person "(a) undertakes any recruitment
activity defined under Article 13 (b) or any prohibited practice enumerated under Article 34 of the Labor
Code; (b) does not have a license or authority to lawfully engage in the recruitment and placement of
workers; and (c) commits the same against three or more persons, individually or as a group. (People of
the Philippines vs. Calonzo, G.R. Nos. 115150-55, September 27, 1996)

Penalties for Illegal Recruitment


The penalties for illegal recruitment today are the ones provided by Section 6, Republic Act No.
10022 which amended Republic Act No. 8042 which provided for higher penalties on illegal recruitment
than what are provided by Article 39 of the Labor Code. Thus:

Simple illegal recruitment - imprisonment of 12 years and 1 day to 20 years and a fine of1 million to
2 million pesos. Illegal recruitment deemed as economic sabotage- life imprisonment and a fine of
2 million to 5 million pesos. The maximum penalty shall be imposed if the person illegally recruited is less
than eighteen (18) years of age or committed by a non-licensee or non-holder of authority

Prescription of action for illegal recruitment


Illegal recruitment cases under this Act shall prescribe in five (5) years: Provided, however, That
illegal recruitment cases involving economic sabotage as defined herein shall prescribe in twenty (20)
years. (Section 12, Republic Act 8042)

Doctrine of Imputed Knowledge


The theory of imputed knowledge ascribes the knowledge of the agent, to the principal,
employer not the other way around. The knowledge of the principal-foreign employer cannot,
therefore, be imputed to its agent. (Sunace International Management Inc. vs. NLRC, G.R. No.
161757, January 25, 2006)

Apprentice
An apprentice is a worker who is undergoing training for an approved apprenticeable occupation
covered by a written apprenticeship agreement with an individual employer.

Requirements for an apprentice


1. Must at least be 15 years old as Section 12 A of Republic Act No. 9231 prohibits the
employment of minor below 15 years old, except those employed in entertainment business where a
necessary permit is issued by the Department of Labor and Employment.
2. Must have the vocational aptitude and capacity for appropriate tests;
3. Must possess the ability to comprehend or follow oral and written instructions.

Learners
Learners refers to persons hired as trainees in semi-skilled and other industrial occupations which
are non-apprenticeable. Learnership programs must be approved by the Technical Education and Skills
Development Authority based on the provisions of Republic Act No. 7796.

Disabled persons
Disabled persons are those suffering from restriction or different abilities, as result of a mental,
physical or sensory impairment, to perform an activity in the manner or within the range considered
normal for a human being.

Supervisory Employees are deemed managerial employees in view of Article 82


Officers or members of a managerial staff if they perform the following duties and responsibilities:

Atty. Cecilio D. Duka, Ed,D. 2


(1) The primary duty consists of the performance of work directly related to management policies
of their employer; (2) Customarily and regularly exercise discretion and independent judgment; and (3) (i)
Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the
management of the establishment in which he is employed or subdivision thereof; or (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; and (4) Who do
not devote more than 20 percent of their hours worked in a work week to activities which are not directly
and closely related to the performance of the work described in paragraphs (1), (2) and (3) above. (Rule I,
Section 2(c), Labor Code Implementing Rules and Regulation, Book III)

Bus Drivers and Conductors are not Field Personnel


The driver is under constant supervision while in the performance of this work. He cannot be
considered field personnel. (Auto Bus Transport Systems, Inc. vs. Bautista, G.R. No. 156367, May 16,
2005)

Rules on meal periods


Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as
compensable working time. Thus, the eight-hour work period does not include the meal break. Nowhere
in the law may it be inferred that employees must take their meals within the company premises.
Employees are not prohibited from going out of the premises as long as they return to their posts on time.
Private respondent's act, therefore, of going home to take his dinner does not constitute abandonment.
(Philippine Air Lines, Inc. vs. National Labor Relations Commission, G.R. No. 132805, February 2, 1999)

Night shift differential


Night shift differential is the amount which every employee is entitled to receive which is
equivalent to ten percent (10%) of his regular wage for every hour he has worked between 10 pm to 6
am. (Section 2 Rule II, Implementing Rules and Regulation, Book III)
Those who are assigned to work on the so called graveyard shift are entitled to night shift
differential pay.

Overtime pay
Overtime pay means the additional compensation for work performed beyond 8 hours.
Premium pay means the additional compensation required by law for work performed within 8
hours on non-working days, such as rest days and special days.

To be entitled to two (2) days successive holidays:


1. One must be present on the day immediately preceding the first holiday; or
2. One is on leave with pay

Two Regular Holidays Falling on the Same Day


When Araw ng Kagitingan falls on the same day as Maundy Thursday or Good Friday, a covered
employee is entitled to at least two hundred percent (200%) of his/her basic wage even if said day is
unworked. Where the employee is required to work on that day, he/she is entitled to an additional 100%
of the basic wage.(2012 Handbook on Workers Statutory Monetary Benefits Dole Bureau of Working
Conditions)

Requisites for the Enjoyment of Service Incentive Leave


1. A total of 5 days leave in one year with pay
2. The employee must have been in the service for at least 1 year whether broken or continuous
3. If unused the 5 days are paid their cash equivalent at the end of the year
4. It covers all employees except the general exceptions and establishments already giving sick
leaves/vacation leaves with pay for at least 5 days.

Service charge
If the establishments like hotel, motels, restaurants and the likes collect service charges and/or
the customers give tips for their services the following rules must be observed: 1. Services-charges or

Atty. Cecilio D. Duka, Ed,D. 3


compensation for service rendered 2. Tips are for the recognition for satisfactory or efficient service 3.
The service charges must be pooled 4. The amount collected is divided between the company (15%) and
employees (85%) 5. It shall be given twice a month with intervals of not more than 15 days 6. If
discontinued, removed, or stopped, the average, share of the employees of their service charge or tips
shall be integrated with their basic wage

Facilities are deductible from wages


Facilities are items of expense necessary for the laborer's and his family's existence and
subsistence so that by express provision of law they form part of the wage and when furnished by the
employer are deductible therefrom, since if they are not so furnished, the laborer would spend and pay for
them just the same. They shall include all 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 employers business. They form part of the wage and deductible from the
wage.(Mabeza vs. National Labor Relations Commission, G.R. No. 118506, April 18, 1997 (271 SCRA
670)

Supplements are not deductible from wages


Supplements constitute extra remuneration or special privileges or benefits given to or received
by the laborers over and above their ordinary earnings or wages. They are independent of the wage and
not wage deductible. More significantly, the food and lodging, or the electricity and water consumed by
the petitioner were not facilities but supplements. A benefit or privilege granted to an employee for the
convenience of the employer is not a facility. (Mabeza vs. National Labor Relations Commission, G.R. No.
118506, April 18, 1997)

A company practice favoring employees cannot be withheld unilaterally by the employer


A company practice favorable to the employees had indeed been established and the payments
made pursuant thereto, ripened into benefits enjoyed by them. And any benefit and supplement being
enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer, by
virtue of Sec. 10 of the Rules and Regulations Implementing P.D. No. 851, and Art. 100 of the Labor
Code of the Philippines which prohibit the diminution or elimination by the employer of the employees
existing benefits. (Sevilla Trading Co. vs. Semana, G.R. No. 152456, April 28, 2004)

Job contracting
There is "job contracting" where (a) The contractor carries on a distinct and independent business
and undertakes the contract work on his account under his own responsibility according to his own
manner and method, free from the control and direction of his employer or principal in all matters
connected with the performance of his work except as to the results thereof; (b) The contractor has
substantial capital or investment; and (c) The agreement between the principal and the contractor or
subcontractor assures the contractual employees' entitlement to all labor and occupational safety and
health standards, free exercise of the right to self-organization, security of tenure, and social welfare
benefits.(Babas vs. Lorenzo Shipping, December 15, 2010)

Department Order No. 18-A, November 14, 2011


Substantial capital refers to paid up capital stocks/shares of at least three million pesos (Php
3,000,000.00) in the case of corporations, partnerships and cooperatives; in the case of single
proprietorship, a net worth of at least three million pesos (Php 3,000,000.00)

Elements of labor only contracting


Under the Labor Code, two (2) elements must exist for a finding of labor-only contracting: (a) the
person supplying workers to an employer does not have substantial capital or investment in the form of
tools, equipment, machineries, work premises, among others, and (b) the workers recruited and placed
by such persons are performing activities directly related to the principal business of such employer.
(Filipinas Synthetic Fiber Corporation (FILSYN) vs. National Labor Relations Commission, G.R. No.
113347, June 14, 1996)

Atty. Cecilio D. Duka, Ed,D. 4


Wage Distortion
The term "wage distortion", under the Rules Implementing Republic Act 6727, is defined, thus:
Wage Distortion means a situation where an increase in prescribed wage rates results in the
elimination or severe contradiction of intentional quantitative differences in wage or salary rates between
and among employee groups in an establishment as to effectively obliterate the distinctions embodied in
such wage structure based on skills, length of service, or other logical bases of differentiation.
(Metropolitan Bank & Trust Company Employees Union-ALU TUCP, vs. National Labor Relations
Commission, G.R. No. 102636, September 10, 1993)

Appeal from the orders of DOLE Regional Director under Art 128
The order of the Regional Director shall be final and executory unless appealed to the Secretary
of Labor and Employment within ten (10) calendar days from receipt thereof. (Section 1, Rule IV, Rules
on the Disposition of Labor Standards Cases in the Regional Offices)

Jurisdiction of the DOLE Regional Director under Art. 129


Under Article 129, the Regional Director or any of the duly authorized hearing officers of DOLE
has jurisdiction over claims for recovery of wages, simple money claims and other benefits, provided that
the claim is filed by an employee or person employed in domestic or household service or househelper
and the following must 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)

Jurisdiction of DOLERegional Director if the amount exceeds P5000


But even if the amount of the claim exceeds P5,000.00, the claim is not on that account
necessary removed from the Regional Director's competence. In respect thereof, he may still exercise the
visitorial and enforcement powers vested in him by Article 128 of the Labor Code, as amended, supra;
that is to say, he may still direct his labor regulations officers or industrial safety engineers to inspect the
employer's premises and examine his records. (Brokenshire Memorial Hospital, Inc., vs. Minister of Labor
and Employment, et. al., G.R. No. 74621, February 7, 1990)

Batas Kasambahay - R.A. 10361


SEC. 37. Mechanism for Settlement of Disputes. All labor-related disputes shall be elevated to
the DOLE Regional Office having jurisdiction over the workplace without prejudice to the filing of a civil or
criminal action in appropriate cases. The DOLE Regional Office shall exhaust all conciliation and
mediation efforts before a decision shall be rendered.
Ordinary crimes or offenses committed under the Revised Penal Code and other special penal
laws by either party shall be filed with the regular courts.

Period to file the claims


All money claims arising from employer-employee relations accruing during the effectivity of this
Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall
be forever barred. (Article 306, Labor Code)

The Anti Sexual Harassment Law


Sexual harassment abounds in all sick societies. It is reprehensible enough but more so when
inflicted by those with moral ascendancy over their victims. We rule that it is a valid cause for separation
from service. (Villarama vs. National Labor Relations Commission, G.R. No. 106341, September 2, 1994

Maternity Leave under Republic Act No. 8282 (SSS Law)


A female member who has paid at least three (3) monthly contributions in the twelve-month
period immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity

Atty. Cecilio D. Duka, Ed,D. 5


benefit equivalent to one hundred percent (100%) of her average daily salary credit for sixty (60) days or
seventy-eight (78) days in case of caesarean delivery.

Paternity Benefit (R.A. 8187)


This benefit shall apply to the first four deliveries or miscarriage of the employees lawful wife with
whom he is cohabiting. For this purpose, cohabiting refers to the obligation of the husband and wife to live
together. Where the spouses are not physically living together because of the work station or occupation,
the male employee is still entitled to the paternity leave benefit. The leave shall be for seven (7) days,
with full pay, consisting of basic salary and mandatory allowances fixed by the Regional Wage Board, if
any, provided that his pay shall not be less than the mandated minimum wage. Availment of the paternity
leave may be after the delivery, without prejudice to an employers policy of allowing the employee to
avail of the benefit before or during the delivery, provided that the total number of days shall not be more
than seven (7) days for each covered delivery. (Handbook on Workers Statutory Monetary Benefits, p.38)

Republic Act No 10911 Anti Age Discrimination in Employment Act


(a) It shall be unlawful for an employer to: (1) Print or publish, or cause to be printed or published,
in any form of media, including the internet, any notice of advertisement relating to employment
suggesting preferences, limitations, specifications, and discrimination based on age (2) Require the
declaration of age or birth date during the application process; (3) Decline any employment application
because of the individual's age; (4) Discriminate against an individual in terms of compensation, terms
and conditions or privileges of employment on account of such individual's age; (5) Deny any employee's
or worker's promotion or opportunity for training because of age; (6) Forcibly lay off an employee or
worker because of old age; or (7) Impose early retirement on the basis of such employee's or worker's
age.
An individual or entity shall be meted the penalty of fine of not less than fifty thousand pesos
(P50,000) but not more than five hundred thousand pesos (P500,000) or imprisonment of not less than
three (3) months but not more than two (2) years, or both.

Employment of Children
Children below fifteen (15) years of age shall not be employed except when a child works directly
under the sole responsibility of his/her parents or legal guardian and where only members of his/her
family are employed provided that his/her employment neither endangers his/her life, safety, health, and
morals, nor impairs his/her normal development, provided further that the parent or legal guardian shall
provide the said child with the prescribed primary and/or secondary education. For purposes of this
Article, the term "child" shall apply to all persons under eighteen (18) years of age. (Section 2, Republic
Act No. 9231)

Hours of Work of a Working Child


(1) A child below fifteen (15) years of age may be allowed to work for not more than twenty (20)
hours a week provided that the work shall not be more than four (4) hours at any given day;(2) A child
fifteen (15) years of age but below eighteen (18) shall not be allowed to work for more than eight (8)
hours a day, and in no case beyond forty (40) hours a week;(3) No child below fifteen (15) years of age
shall be allowed to work between eight o'clock in the evening and six o'clock in the morning of the
following day and no child fifteen (15) years of age but below eighteen (18) shall be allowed to work
between ten o'clock in the evening and six o'clock in the morning of the following day.(Section 3, Republic
Act No. 9231)

Republic Act No. 10361 Batas Kasambahay


January 18, 2013. All articles or provisions of Chapter III of Presidential Decree No. 442, as amended
and renumbered by Republic Act No. 10151 are hereby expressly repealed. (Sec. 44). This law governs
the working conditions of all kasambahay.

The term "house helper" as used herein is synonymous to the term "domestic servant" and shall
refer to any person, whether male or female, who renders services in and about the employer's home and
which services are usually necessary or desirable for the maintenance and enjoyment thereof, and

Atty. Cecilio D. Duka, Ed,D. 6


ministers exclusively to the personal comfort and enjoyment of the employer's family. (Section 1, Rule
XIII, Implementing Rules and Regulation of Book III, of the Labor Code)

While a homeworker is one who performs in or about his home any processing of goods or
materials, in whole or in part which have been furnished directly or indirectly by an employer and
thereafter to be returned to the latter.

Republic Act No. 10151 the night workers law


It repealed Articles 130 and 131 of the Labor Code The new provisions in the Labor Code covering
Articles 154 to 161 are brought about by Republic Act No. 10151 which was approved on June 21, 2011.
This law also repealed Articles 130 and 131 of the Labor Code and abolished the provisions of law which
prohibits night work for women.

Health Assessment (Article 155)


At their request, workers shall have the right to undergo a health assessment without charge and
to receive advice on how to reduce or avoid health problems associated with their work: (a) Before taking
up an assignment as a night worker; (b) At regular intervals during such an assignment; and (c) If they
experience health problems during such an assignment which are not caused by factors other than the
performance of night work.

Appointees to NLRC not subject to confirmation of the Commission on Appointments


Deciding on what laws to pass is a legislative prerogative. Determining their constitutionality is a
judicial function. The Court respects the laudable intention of the legislature. Regretfully, however, the
constitutional infirmity of Sec. 13 of RA 6715 amending Art. 215 of the Labor Code, insofar as it requires
confirmation of the Commission on Appointments over appointments of the Chairman and Member of the
National Labor Relations Commission (NLRC) is, as we see it, beyond redemption if we are to render
fealty to the mandate of the Constitution in Sec. 16, Art. VII thereof. (Calderon vs. Carale, G.R. No.
91636, April 23, 1992)

Jurisdiction of the Labor Arbiters


1. Unfair labor practice cases; 2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages,
rates of pay, hours of work and other terms and conditions of employment; 4. Claims for actual, moral,
exemplary and other forms of damages arising from the employer-employee relations; 5. Cases arising
from any violation of Article 264 of this Code, including questions involving the legality of strikes and
lockouts; and 6. Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims arising from employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00)
regardless of whether accompanied with a claim for reinstatement. (Except those of the kasambahay,
Section 37, RA 10361) 7. Cases arising from the interpretation or implementation of collective bargaining
agreements and those arising from the interpretation or enforcement of company personnel policies

Jurisdiction over Overseas Filipino Workers


The Labor Arbiter has original and exclusive jurisdiction over claims arising out of an employer-
employee relationship or by virtue of any law or contract involving Filipino workers for overseas
employment including claims for actual, moral, exemplary and other forms of damages.

Jurisdiction of the BLR


1. Inter-union disputes or representation disputes which refer to cases involving petition
for certification election filed by a duly registered labor organization which is seeking to be recognized as
the sole and exclusive bargaining agent of the rank-and-file employees in the appropriate bargaining unit
of a company, firm or establishment.
2. Intra-union disputes or internal union disputes which refer to disputes or grievances
arising from any violation of or disagreement over any provision of the constitution and by-laws of the
union, including any violation of the rights and conditions of union membership provided for in the Labor
Code.

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The NCMB
The Conciliation, mediation and voluntary arbitration functions of the Bureau of Labor Relations
(BLR) shall be absorbed by NCMB. It is an attached agency under the administrative supervision of the
Secretary of Labor and Employment. It is headed by an Administrator and 2 Deputy Administrators. The
NCMB has jurisdiction over conciliation, mediation and voluntary arbitration cases.

Personality of Labor Union not subject to collateral attack


We rule, however, that such legal personality may not be subject to a collateral attack but only
through a separate action instituted particularly for the purpose of assailing it. This is categorically
prescribed by Section 5, Rule V of the Implementing Rules of Book V. (Laguna Autoparts Manufacturing
Corporation vs. Office of the Secretary, Department of Labor and Employment G.R. No. 157146. April
29, 2005) Once a labor union attains the status of a legitimate labor organization, it continues as such
until its certificate of registration is cancelled or revoked in an independent action for cancellation. In
addition, the legal personality of a labor organization cannot be collaterally attacked. (Coastal Subic Bay
Terminal Inc. vs. Department of Labor and Employment Office of the Secretary, G.R. No. 157117,
November 20, 2006)

Grounds for cancellation of union registration


(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of
the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members
who took part in the ratification; (b) Misrepresentation, false statements or fraud in connection with the
election of officers, minutes of the election of officers, and the list of voters; (c) Voluntary dissolution by
the members (Republic Act No. 9481, May 25, 2007) Republic Act No. 9481which lapsed into law on
May 25, 2007 has effectively reduced to just three (3) the grounds for the cancellation of registration of a
legitimate labor organization. Under the old provisions of Article 239, there were ten grounds for the
cancellation of union registration.

Mixture of employees in one union is not a ground for cancellation of its registration
Clearly then, for the purpose of de-certifying a union, it is not enough to establish that the rank-
and-file union includes ineligible employees in its membership. Pursuant to Article 239 (a) and (c) of the
Labor Code, it must be shown that there was misrepresentation, false statement or fraud in connection
with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of
ratification, or in connection with the election of officers, minutes of the election of officers, the list of
voters, or failure to submit these documents together with the list of the newly elected-appointed officers
and their postal addresses to the BLR. (Air Philippines Corporation vs. Bureau of Labor Relations, G.R.
No. 155395 June 22, 2006)

Employees who do not have the right to self-organization


The following are the groups of people whose right to self-organization is restricted by the labor
laws: high ranking government employees, employees of international organizations enjoying immunity
from suits, managerial employees, members of the AFP, PNP, firemen, jail guards, confidential
employees and employees of the cooperative who are members of that same cooperative.

Security Guards Right to Self Organization


The security guards and other personnel employed by the security service contractor shall have
the right to form, join or assist in the formation of a labor organization of their own choosing for purposes
of collective bargaining and to engage in concerted activities which are not contrary to law including the
right to strike. (Section 10, Department Order N0. 14 Series of 2001, December 18, 2001)

Government employees do not have the right to strike


The Court can concede hypothetically that the protest rally and gathering in question did not
involve some specific material demand. But then the absence of such economic-related demand, even if
true, did not, under the premises, make such mass action less of a prohibited concerted activity. For, as
articulated earlier, any collective activity undertaken by government employees with the intent of effecting
work stoppage or service disruption in order to realize their demands or force concessions, economic or

Atty. Cecilio D. Duka, Ed,D. 8


otherwise, is a prohibited concerted mass action and doubtless actionable administratively. xxx [i]n the
absence of statute, public employees do not have the right to engage in concerted work stoppages for
any purpose (Government Service Insurance System vs. Kapisanan ng mga Manggagawa sa GSIS, G.R.
No. 170132, December 6, 2006)

Unfair labor practice


Unfair labor practice refers to acts that violate the workers right to organize. The prohibited acts
are related to the workers right to self-organization and to the observance of a Collective Bargaining
Agreement. Without that element, the acts, no matter how unfair, are not unfair labor practices. (Philcom
Employees Union vs. Philippine Global Communications, G.R. No. 144315, July 17, 2006)

Dismissal due to union security clause


It has been the jurisprudential rule for quite some time that the employer is not considered guilty
of unfair labor practice if it merely complied 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 (Soriano
v. Atienza, G.R. No. 68619, March 16, 1989, 171 SCRA 284,289-290). Hence, the company may not be
ordered to grant either backwages or financial assistance in the form of separation pay as a form of
penalty. Thus, where reinstatement is adjudged, the award of backwages and other benefits continues
beyond the date of the Labor Arbiters decision ordering reinstatement and extends up to the time said
order of reinstatement is actually carried out. (Olvido, et. al. vs. Court of Appeals, G. R. Nos. 141166
67, October 15, 2007)

Contract Bar Rule


When there is an existing CBA, neither the employer nor the union may terminate nor modify the
Collective Bargaining Agreement during its lifetime. The parties are mandated by law to keep the status
quo and to continue with full force and effect the terms and conditions of the existing CBA. This is known
as the contract bar rule the existence of the CBA (a contract between the employer and the union) bars
the modification or termination of the CBA except during the freedom period.

Freedom Period
The freedom period refers to the sixty (60) days span prior to the expiration of the CBA. It is the
time when the parties may terminate or modify the terms and conditions of the CBA.

Automatic Renewal Clause


Article 264 provides that the CBA shall remain effective and enforceable even after the expiration
of the period fixed by the parties as long as no new agreement is reached by them and no petition for
certification election is filed.

Automatic Retroaction Clause


Any new agreement that has been concluded within six months from the expiration of the original
agreement shall retroact to the day after the expiration of the original agreement.

The Exclusive Bargaining Status Cannot Go Beyond Five Years


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 five-year 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. 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. (FVC Labor Union-Philippine Transport and
General Workers Organization vs. Sama-Samang Nagkakaisang Manggagawa Sa FVC-Solidarity Of
Independent and General Labor Organizations, G.R. No. 176249, November 27, 2009)
Substitutionary doctrine
Stated otherwise, the "substitutionary" doctrine only provides that the employees cannot revoke
the validly executed collective bargaining contract with their employer by the simple expedient of
changing their bargaining agent. And it is in the light of this that the phrase "said new agent would have to
respect said contract" must be understood. It only means that the employees, thru their new bargaining

Atty. Cecilio D. Duka, Ed,D. 9


agent, cannot renege on their collective bargaining contract, except of course to negotiate with
management for the shortening thereof.

Test in determining the appropriate bargaining unit


In order to determine the appropriate bargaining unit the Supreme Court has time and again
applied the four tests to wit: (1) will of the employees (Globe Doctrine); (2) affinity and unit of employees
interest, such as substantial similarity of work and duties, or similarity of compensation and working
conditions; (3) prior collective bargaining history; and (4) employment status, such as temporary,
seasonal and probationary employees. (University of the Philippines vs. Hon. Pura Ferrer-Calleja, G.R.
No. 96189 July 14, 1992)

Certification election
Certification election refers to the process of determining through secret ballot the sole and
exclusive representative of the employees in an appropriate bargaining unit for purposes of collective
bargaining or negotiation. A certification election is ordered by the Department of Labor and Employment
(Department Order 40 03, Rule I, Section 1 [h])

Members of religious groups who do not want to join unions may vote in a certification election
That the INC employees, as employees in the same bargaining unit in the true sense of the term,
do have the right of self-organization, is also in truth beyond question, as well as the fact that when they
voted that the employees in their bargaining unit should be represented by "NO UNION," they were
simply exercising that right of self-organization, albeit in its negative aspect. No law, administrative rule or
precedent prescribes forfeiture of the right to vote by reason of neglect to exercise the right in past
certification elections. In denying the petitioners' right to vote upon these egregiously fallacious grounds,
the public respondents exercised their discretion whimsically, capriciously and oppressively and gravely
abused the same. (Reyes vs. Trajano, G.R. No. 84433, June 2, 1992)

Run Off election


Run-off Election refers to an election between the labor unions receiving the two (2) highest
number of votes in a certification or consent election with three (3) or more choices, where such a
certified or consent results in none of the three (3) or more choices receiving the majority of the valid
votes cast; provided that the total number of votes for all contending unions is at least fifty percent (50%)
of the number of votes cast. (Section 1(ss), Rule I, Department Order 40 03)

Voluntary Recognition
Voluntary Recognition refers to the process by which a legitimate labor union is recognized by the
employer as the exclusive bargaining representative or agent in a bargaining unit, reported with the
Regional Office in accordance with Rule VII, Section 2, Department Order 40 03 (Department Order 40
03, Rule I, Section 1 [bbb])

Grievance
Grievance refers to any question by either the employer or the union regarding the interpretation
or implementation of any provision of the collective bargaining agreement or interpretation or enforcement
of company personnel policies.(Department Order No. 40 03, Rule I, Section 1[u])

Voluntary arbitration
Voluntary arbitration refers to the mode of settling labor-management disputes by which the
parties select a competent, trained and impartial third person who shall decide on the merits of the case
and whose decision is final and executory. (NCMB Revised Procedural Guidelines in the Conduct of
Voluntary Arbitration Proceedings, Section 1 [d], Rule II [Oct. 15, 2004])

Gross Violations of Collective Bargaining Agreement is ULP


Gross violations of Collective Bargaining Agreement under Article 261 means flagrant and/or
malicious refusal to comply with the economic provisions of such agreement. Such gross violations do not
fall within the jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators because they are
considered as unfair labor practice (ULP) under Article 248 thus, cognizable by the Labor Arbiter and the

Atty. Cecilio D. Duka, Ed,D. 10


NLRC. (Isalama Machine Works Corporation vs. National Labor Relations Commission, G.R. No. 100167,
March 2, 1995)

Appeals from the Decisions of Voluntary Arbitrator or Panel of Voluntary Arbitrators Court of
Appeals
The decisions of a voluntary arbitrator fall within the exclusive appellate jurisdiction of the Court of
Appeals. Indeed, this Court took this decision into consideration in approving the 1997 Rules of Civil
Procedure. (Nippon Paint Employees Union Olalia vs. Court of Appeals, G.R. No. 159010. November
19, 2004)

The requisites of a valid strike are mandatory


The requisites for a valid strike are as follows: (a) a notice of strike filed with the DOLE thirty days
before the intended date thereof or fifteen days in case of unfair labor practice; (b) strike vote approved
by a majority of the total union membership in the bargaining unit concerned obtained by secret ballot in a
meeting called for that purpose; (c) notice given to the DOLE of the results of the voting at least seven
days before the intended strike. These requirements are mandatory and failure of a union to comply
therewith renders the strike illegal (Piero vs. National Labor Relations Commission, August 20, 2004)

Assumption of jurisdiction is discretionary


The powers granted to the Secretary under Article 263(g) of the Labor Code have been
characterized as an exercise of the police power of the State, with the aim of promoting public good.
When the Secretary exercises these powers, he is granted great breadth of discretion in order to find a
solution to a labor dispute. The most obvious of these powers is the automatic enjoining of an impending
strike or lockout or its lifting if one has already taken place. The authority of the Secretary to assume
jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable
to national interest includes and extends to all questions and controversies arising from such labor
dispute. The power is plenary and discretionary in nature to enable him to effectively and efficiently
dispose of the dispute. (Philcom Employees Union vs. Philippine Global communications, G.R. No.
144315, July 17, 2006 [495 SCRA 214[) attycdduka

Mere participation of a worker in a lawful strike shall not constitute sufficient ground for
termination of his employment, even if a replacement had been hired by the employer during such
lawful strike.
In Samahang Manggagawa sa Sulpicio Lines, Inc.-NAFLU v. Sulpicio Lines, Inc. this Court
explained that the effects of such illegal strikes, outlined in Article 264, make a distinction between
workers and union officers who participate therein: an ordinary striking worker cannot be terminated for
mere participation in an illegal strike. There must be proof that he or she committed illegal acts during a
strike. In all cases, the striker must be identified. But proof beyond reasonable doubt is not required.
Substantial evidence available under the attendant circumstances, which may justify the imposition of the
penalty of dismissal, may suffice. Liability for prohibited acts is to be determined on an individual basis.
( Sukhothai Cuisine and Restaurant vs. Court of Appeals, G.R. No. 150437, July 17 , 2 00 6)

Full backwages
Finally came our ruling in Bustamante which superseded Pines City Educational Center and
allowed full recovery of backwages without deduction and without qualification pursuant to the express
provisions of Article 279 (now Art 294) of the Labor Code, as amended by Rep. Act No. 6715, i.e.,
without any deduction of income the employee may have derived from employment elsewhere from the
date of his dismissal up to his reinstatement, that is, covering the entirety of the period of the dismissal.
(Equitable Banking Corporation vs. Sadac, G.R. No. 164772, June 8, 2006)

Salary increase not included in the computation of backwages


There was no lawful decree or order supporting his claim, such that his salary increases can be
made a component in the computation of backwages. What is evident is that salary increases are a mere
expectancy. They are, by its nature volatile and are dependent on numerous variables, including the
companys fiscal situation and even the employees future performance on the job, or the employees
continued stay in a position subject to management prerogative to transfer him to another position where

Atty. Cecilio D. Duka, Ed,D. 11


his services are needed. In short, there is no vested right to salary increases. That respondent Sadac
may have received salary increases in the past only proves fact of receipt but does not establish a degree
of assuredness that is inherent in backwages. From the foregoing, the plain conclusion is that
respondent Sadacs computation of his full backwages which includes his prospective salary increases
cannot be permitted. (Equitable Banking Corporation vs. Sadac, G.R. No. 164772, June 8, 2006)

Separation pay in lieu of reinstatement


Under the law, an illegally dismissed employee is entitled to reinstatement and backwages, and if
reinstatement is no longer possible, he may be given separation pay in lieu of reinstatement. (Bunagan
vs. Sentinel Watchman & Protective Agency, Inc., G.R. No. 144376, September 13, 2006) attycdduka

Repeated rehiring of project employee


At this time, we wish to allay any fears that this decision unduly burdens an employer by imposing
a duty to re-hire a project employee even after completion of the project for which he was hired. The
import of this decision is not to impose a positive and sweeping obligation upon the employer to re-hire
project employees. What this decision merely accomplishes is a judicial recognition of the employment
status of a project or work pool employee in accordance with what is fait accompli, i.e., the continuous re-
hiring by the employer of project or work pool employees who perform tasks necessary or desirable to the
employers usual business or trade. (Maraguinot, Jr. vs. National Labor Relations Commission, G.R. No.
120969, January 22, 1998)

Probationary Period of Private School Teachers


Section 93 of the 1992 Manual of Regulations for Private Schools, provides that full-time teachers
who have satisfactorily completed their probationary period shall be considered regular or permanent.
Furthermore, the probationary period shall not be more than six consecutive regular semesters of
satisfactory service for those in the tertiary level. Thus, the following requisites must concur before a
private school teacher acquires permanent status: (1) the teacher is a full-time teacher; (2) the teacher
must have rendered three consecutive years of service; and (3) such service must have been
satisfactory. (Saint Marys University vs. Court of Appeals, G.R. No. 157788, March 08, 2005)

Distinction between a dismissal just cause and a dismissal for authorized cause
The clear-cut distinction between a dismissal for just cause under Article 282 and a dismissal for
authorized cause under Article 283 is further reinforced by the fact that in the first, payment of separation
pay, as a rule, is not required, while in the second, the law requires payment of separation pay. (Jaka
Food Processing Corporation vs. Pacot, et. al., G.R. No. 151378, March 28, 2005)

Requisites for dismissal due to loss of trust and confidence


Thus, in order to be a valid cause for dismissal, loss of confidence should not be (a) simulated,
(b) used as a subterfuge for causes which are improper, illegal or unjustified, (c) arbitrarily asserted in the
face of overwhelming evidence to the contrary, and (d) a mere afterthought to justify earlier action taken
in bad faith. While in the termination of services of managerial employees for loss of confidence,
employers are given wider latitude of discretion, there must, however, be substantial proof thereof. The
employers evidence must clearly and convincingly establish the facts and incidents upon which the loss
of confidence may fairly be made to rest. (Wah Yuen Restaurant, vs. Jayona, G.R. No. 159448,
December 16, 2005)

Disease as a ground for dismissal


The burden of proving the validity of the dismissal rests on the employer. As such, the employer
must prove that the requisites for a valid dismissal due to a disease have been complied with. In the
absence of the required certification by a competent public health authority, this Court has ruled against
the validity of the employees dismissal. (Manly Express Inc. vs. Payong, Jr., G.R. No. 167462, October
25, 2005)

No separation pay upon resignation general rule


The general rule is that an employee who voluntarily resigns from employment is not entitled to
separation pay unless, however, there is a stipulation for payment of such in the employment contract or

Atty. Cecilio D. Duka, Ed,D. 12


Collective Bargaining Agreement (CBA), or payment of the amount is sanctioned by established employer
practice or policy. (Travelaire & Tours Corp. vs. National Labor Relations Commission, G.R. No. 131523,
August 20, 1998)

Retirement
Retirement is a different species of termination of employment from dismissal for just or
authorized causes under Articles 282 and 283 of the Labor Code. While in all three cases, the employee
to be terminated may be unwilling to part from service; there are eminently higher standards to be met by
the employer validly exercising the prerogative to dismiss for just or authorized causes. In those two
instances, it is indispensable that the employer establishes the existence of just or authorized causes for
dismissal as spelled out in the Labor Code. Retirement, on the other hand, is the result of a bilateral act of
the parties, a voluntary agreement between the employer and the employee whereby the latter after
reaching a certain age agrees and/or consents to sever his employment with the former. (Cainta Catholic
School vs. Cainta Catholic School Employees Union, G.R. No.151021, May 4, 2006, 489 SCRA
468[2006])

Computation of retirement pay


For the purpose of determining the minimum retirement pay due an employee under this Rule,
the term one-half month salary shall include all the following: (a) Fifteen (15) days salary of the
employee based on his latest salary rate. (b) The cash equivalent of not more than five (5) days of service
incentive leave; (c) One-twelfth of the 13th month pay due an employee; (d) All other benefits that the
employer and employee may agree upon that should be included in the computation of the employees
retirement pay. The foregoing rules are clear that the whole 5 days of SIL are included in the computation
of a retiring employees pay. (Enriquez Security Services, Inc. vs. Cabotaje, G.R. No. 147993, July 21,
2006)

Compulsory Retirement
An employer is free to impose a retirement age less than 65 for as long as it has the employees
consent. Stated conversely, employees are free to accept the employers offer to lower the retirement age
if they feel they can get a better deal with the retirement plan presented by the employer. Thus, having
terminated petitioner solely on the basis of a provision of a retirement plan which was not freely assented
to by her, respondent was guilty of illegal dismissal. (Jaculbe vs. Silliman University, G. R. No. 156934,
March 16, 2007,Cercado vs. Uniprom, Inc. October 13, 2010)

Employees contribution must be deducted first


Retirement benefits, on the other hand, are intended to help the employee enjoy the remaining
years of his life, releasing him from the burden of worrying for his financial support, and are a form of
reward for his loyalty to the employer. Since the computed amount of her retirement pay is much lower
than that provided under the law, she is entitled to receive the difference between the actual amount of
her retirement benefits as required by law and that provided for under the PERAA. (Sta. Catalina College
vs. National Labor Relations Commission, G. R. No. 144483, November 19, 2003)

Retirement of underground miners


On February 26, 1998, Republic Act No. 8558 was signed into law and amended Article 287 of
the Labor Code and provided for the retirement benefits of underground miners. Based on R.A. 8558, n
underground mining employee upon reaching the age of fifty (50) years or more, but not beyond sixty (60)
years which is hereby declared the compulsory retirement age for underground mine workers, who has
served at least five (5) years as underground mine worker, may retire and shall be entitled to all the
retirement benefits provided for in this Article.

Prescription
Article 305 Offenses penalized under this Code and the rules and regulations issued pursuant
thereto shall prescribe in three (3) years.
The Labor Code, however, does not contain any provisions on the mode of computation of the
three-year prescriptive period it established. Prescription shall begin to run from the day of the
commission of the violation of the law, and if the same be not known at the time, from the discovery

Atty. Cecilio D. Duka, Ed,D. 13


thereof and institution of judicial proceedings for its investigation and punishment. The term of
prescription shall not run when the offender is absent from the Philippine Archipelago. (People of the
Philippines vs. Duque, G.R. No. 100285, August 13, 1992)

Prescription period for money claims


Article 291 (now Art. 306) of the Labor Code which provides that all money claims arising from
employer-employee relationship shall be filed within three (3) years from the time the cause of action
accrued. (Central Negros Electric Cooperative (CENECO), Inc. vs. National Labor Relations Commission,
G.R. No. 106246, September 1, 1994)

Prescription for all money claims


What rules on prescription should apply in cases like this one has long been decided by this
Court. In illegal dismissal, it is settled, that the ten-year prescriptive period fixed in Article 1144 of the Civil
Code may not be invoked by petitioners, for the Civil Code is a law of general application, while the
prescriptive period fixed in Article 292 of the Labor Code [now Article 291] is a SPECIAL LAW applicable
to claims arising from employee-employer relations. The language of Art. 291 of the Labor Code does not
limit its application only to "money claims specifically recoverable under said Code" but covers all money
claims arising from an employee-employer relations" (Citing Cadalin vs. POEA Administrator, 238 SCRA
721, 764 [1994]; and Uy vs. National Labor Relations Commission, 261 SCRA 505, 515 [1996]). . .
It should be noted further that Article 291 of the Labor Code is a special law applicable to money
claims arising from employer-employee relations; thus, it necessarily prevails over Article 1144 of the Civil
Code, a general law. Basic is the rule in statutory construction that "where two statutes are of equal
theoretical application to a particular case, the one designed therefore should prevail."
We base our conclusion not on Article 1144 of the Civil Code but on which sets the prescription
period at three (3) years and which governs under this jurisdiction. (Laureano vs. Court of Appeals, G.R.
No. 114776, February 2, 2000)

Prescription period for illegal dismissal


Verily, the dismissal without just cause of an employee from his employment constitutes a
violation of the Labor Code and its implementing rules and regulations. Such violation, however, does not
amount to an "offense" as understood under Article 291 of the Labor Code. In its broad sense, an offense
is an illegal act which does not amount to a crime as defined in the penal law, but which by statute carries
with it a penalty similar to those imposed by law for the punishment of a crime.
Indeed there is, merit in the contention of petitioner that the four [4]-year prescriptive period under
Article 1146 of the New Civil Code, applies by way of supplement, in the instant case, to wit: Art. 1146.
The following actions must be instituted within four years. [1] Upon an injury to the lights of the plaintiff.
Clearly then, when one is arbitrarily and unjustly deprived of his job or means of livelihood, the
action instituted to contest the legality of one's dismissal from employment constitutes, in essence, an
action predicated "upon an injury to the rights of the plaintiff," as contemplated under Art. 1146 of the New
Civil Code, which must be brought within four [4] years. (Callanta vs. Carnation Philippines, Inc., G.R. No.
70615 October 28, 1986)
In illegal dismissal cases, the employee concerned is given a period of four years from the time of
his dismissal within which to institute a complaint. This is based on Article 1146 of the New Civil Code
which states that actions based upon an injury to the rights of the plaintiff must be brought within four
years. Thus, the four-year prescriptive period shall be counted and computed from the date of the
employee's dismissal up to the date of the filing of complaint for unlawful termination of employment.
(Victory Liner, Inc. vs. Race, G.R. No. 164820, March 28, 2007)

Give and it will be given to you. A good measure, pressed down, shaken together and
running over, will be poured into your lap. For with the measure you use, it will be measured to
you. (Luke 6:38)
Those who are in possession of this review material have the obligation to share it with
others. God bless you as you take the Bar Examinations Atty. Cecilio D. Duka

Atty. Cecilio D. Duka, Ed,D. 14