The Labor Code and The Dynamics

Between Employees
and Employers
ATTY. J. OSWALD B. LORENZO

Former Labor Arbiter, NCR-NLRC; Professor of Law and Pre-Bar

Reviewer; President, The Center for Law Advocacy and
Specialized Studies (CLASS); former Assistant Secretary, DENR
and POEA Director for Licensing and Past President, National
Association of Labor Arbiters (NALA), Inc.
 BAR ITEM NO. 1
PROTECTION TO LABOR CLAUSE

 BASIC PRINCIPLES ON PROTECTION TO LABOR

The State shall afford protection to labor, promote full
employment, ensure equal work opportunities regardless of sex,
race or creed and regulate the relations between workers and
employers.
The State shall assure the rights of workers to self-organization,
collective bargaining, security of tenure, and just and humane
conditions of work.
Labor contracts are not ordinary contracts as the relation
between capital and labor is impressed with public interest.
 BAR ITEM NO. 2
GENERAL PRINCIPLES
2.1. Art. 4 – Construction in Favor of Labor
clause
2.2. Test of a Valid Rule of Regulation
2.3. ONAR/UP LAW CENTER should be furnished
rules and regulation issue
2.4. Substantive Law vs. IRR/Rules or
Regulations
2.5. Labor Code applies to all workers, whether
agricultural or non-agricultural
 BAR ITEM NO. 3

AREAS OF JURISDICTIONAL CONFLICT

Labor Arbiter vs. Civil Service Commission (Line Agency
Employees)
Labor Arbiter vs. Civil Service Commission (GOCC’s
with Original Charter)
Labor Arbiter vs. Civil Service Commission (GOCC’s
without Original Charter)
Corporate Officers (Labor Arbiter vs. RTC)
Employees of International/Specialized Agencies
Reasonable Causal Connection of Money Claims (LA vs.
RTC)
 BAR ITEM NO. 4

OVERSEAS EMPLOYMENT

Illegal Recruitment; Kinds of and Penalties

Marsaman and Skipper Cases abandoned by
Serrano vs. Gallant Maritime
Venue of Illegal Recruitment Cases
Solidary Liability
Jurisprudence of Note
 BAR ITEM NO. 5

WORKING CONDITIONS

 Coverage and Exclusions

 NASURECO CASE ON SUSPERVISORS
 Concepts: Management Prerogative and
Employer-Employee Relationship
 BAR ITEM NO. 6

VITAL MATTERS IN BOOK III

 Labor Benefits
 Hours of Work and Overtime and the Non-
Offsetting Rule
 Non-Interference in the Disposal of Wages
 Payment thru ATM and Checks
 Minors; Househelpers and Home Workers
 BAR ITEM NO. 7

JURISDICTION OF THE NLRC DIVISIONS

 Original - Art. 218 (e) Injunction /Temporary

Restraining Order (TRO); Art. 218 (d) Contempt;
Certified Cases

 Appellate - Art. 217 (b), Labor Code

 BAR ITEM NO. 8

JURISDICTION OF THE LABOR ARBITER

Art. 217. JURISDICTION OF LABOR ARBITERS AND

THE COMMISSION – (a) Except as otherwise provided
under this Code, the Labor Arbiters shall have original
and exclusive jurisdiction to hear and decide within
thirty (30) calendar days after the submission of the
case by the parties for decision without extension, even
in the absence of stenographic notes, the following
cases involving all workers, whether agricultural or
non-agricultural:
Unfair labor practice cases;

Termination disputes;

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;

Claims for actual, moral, exemplary and other forms

of damages arising from the employer-employee
relations;
Cases arising from any violation of Article 264 of this
Code, including questions involving the legality of
strikes and lockouts;

Excepts 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.
 BAR ITEM NO. 9

ART. 223 OF THE LABOR CODE

Period to Appeal (10 Calendar Days)

 Grounds for Appeal (6)
 Posting of Bond is Mandatory (Cash or Surety)
 Property Bond allowed in Certain Cases
 Reinstatement Pending Appeal (Physical or
Merely on Payroll at Employer’s Option)
 BAR ITEM NO. 10
JURISDICTION OF THE BLR; MED-
ARBITER AND NCMB

BAR ITEM NO. 11

MODES OF UNION FORMATION
Independent Union (Art. 234, Labor Code) and
Chartered Local (Book V Rules)
Federation or National Union
 BAR ITEM NO. 12

AFFILIATION AND DISAFFILIATION

 Benguet Consolidated Case

 Effects of Disaffiliation on Indepemdent
Unions and Chartered Locals
 Substitutionary Doctrine
 BAR ITEM NO. 13

CANCELLATION OF UNION
REGISTRATION (GROUNDS)

 Where Filed? Where Appealed?

 Effects of Cancellation? (Itogon Suyoc
Case)
 Effects of Final Cancellation
 BAR ITEM NO. 14

RIGHTS AND CONDITIONS OF UNION

MEMBERSHIP

 Art. 241 (d), Labor Code- Questions of Major

Policy
 Additional Compensation (Art. 241 (k), Labor
Code)
 Special Assessment (Attorney’s Fees, etc.)
Art. 241(n), Labor Code
 BAR ITEM NO. 15

CASES ON VIOLATIONS OF ART. 241,

LABOR CODE

 Art. 241 to be Distinguished with Art. 274 of

the Labor Code

 Vercelles vs. BLR (2005 Case)

 BAR ITEM NO. 16

RIGHT TO SELF-ORGANIZATION AND THE

NON-ABRIDGMENT CLAUSE

 Public Sector Unionism (Art. 244, Labor Code and

E.O. No. 180)
 Private Sector Unionism
 Iglesia ni Kristo Cases
 Electric Cooperative Cases
 The Non-Abridgment Clause (Art. 246, Labor
Code)
 BAR ITEM NO. 17

UNFAIR LABOR PRACTICE

(ART. 247 to 249, LABOR CODE)

 Concepts
 Examples of Unfair Labor Practice
 Jurisprudence
 BAR ITEM NO. 18

UNION SECURITY CLAUSES (ART. 248,

LABOR CODE)

 Nature and Kind

 Agency Fee
 Check-Off; Concept and When Check-
Off Not Required
 BAR ITEM NO. 19

COLLECTIVE BARGAINING

 When there is a Collective Bargaining

Agreement
 When there is NO Collective Bargaining
Agreement
 KIOK LOY vs. NLRC, 141 SCRA 179
 Bargaining in Good or Bad Faith
 Other Concepts: Surface Bargaining, Blue Sky
Demand, etc.
 BAR ITEM NO. 20

ART. 253-A, LABOR CODE, AS

AMENDED

 Effectivity of Collective Barganing

Agreements
 St. Lukes and Meralco vs. Quisumbing
Case
 BAR ITEM NO. 21

CERTIFICATION ELECTION

 Organized Establishment (Art. 256)

 Unorganized Establishment (Art. 257)
 Petition for Certification Election Filed by
Employer (Art. 258 and 258 -A)
 Run-Off vs. Re-Run Elections
 BAR ITEM NO. 22

BARS TO CERTIFICATION ELECTIONS

 Contract Bar Rule

 Deadlock Bar Rule
 One (1) year Ban; Certification Year Bar and
Negotiation Year Bar;
 Consent Election as Bar
 Charge of Company Domination
 BAR ITEM NO. 23

BOOK V (NEW) EFFECTS OF GRANT OR

DENIAL OF PETITION FOR
CERTIFICATION ELECTION

 Unorganized – VPCE is Granted – No Appeal –

PCE is DENIED - Subject to Appeal

 Organized – VPCE is GRANTED or DENIED –

Subject to Appeal
 BAR ITEM NO. 24

STRIKES AND LOCKOUTS

 Requisites for a Valid Strike

 Art. 263 (c) and Art. 263 (f)-Notice of Strike and
Strike Vote Report are Mandarory
 Capitol Medical Center vs. NLRC (2005)
 Legal Effects of an Illegal Strike
 May a Strike be the Subject of Injunction or TRO?
 BAR ITEM NO. 25
ART. 263 (g) ASSUMPTION POWER OF THE SECRETARY
OF LABOR

BAR ITEM NO. 26

PURPOSE AND MEANS TEST

BAR ITEM NO. 27

IMPROVED AND REDUCED OFFER BALLOTING (Art. 265,
Labor Code)
 BAR ITEM NO. 28

VOLUNTARY ARBITRATION

 Nature of Office of the Voluntary

Arbitrator
 Decision of Voluntary Arbitrator; Where
Appealed
 Jurisprudence
 BAR ITEM NO. 29

ART. 277 (b) MISCELLANEOUS PROVISIONS

BAR ITEM NO. 30

ART. 278 AND 279

Security of Tenure and Due Process
Backwages- Basis
Bustamante and Other Cases
 BAR ITEM NO. 31

KINDS OF EMPLOYMENT

 Art. 280, Labor Code (Regular and Casual

Employment) –Reasonable Connection Test
 Probationary Employment (Art. 281)
 Fixed Period; Seasonal; Project Employees
 BAR ITEM NO. 32
JUST CAUSES FOR DISMISSAL (ART. 282)

Art. 282. Termination by employer. – An

employer may terminate an employment for
any of the following causes:
(a) Serious misconduct or willful disobedience
by the employee of the lawful orders of his
employer or representative in connection
with his work;
(b) Gross and habitual neglect by the
employee of his duties;
(c) Fraud of willful breach by the employee of
the trust reposed in him by his employer
or duly authorized representative;
(d) Commission of a crime or offense by the
employee against the person of his
employer or any immediate member of his
family of his duly authorized
representative; and
(e) Other causes analogous to the foregoing.
 BAR ITEM NO. 33

AUTHORIZED CAUSES- ART. 283 AND 284

Redundancy; Automation (ILSD);

Closure or Lay-off for Reason other than

Serious business Losses; and Disease

North Davao Mining vs. NLRC and sister cases

 BAR ITEM NO. 34

ART. 285 AND ART. 286

When Employee May Sever Relationship?

(With Notice or Without Notice)

Temporary Cessation of Business Operations

Rendering of Civic or Military Duty

 BAR ITEM NO. 35

RETIREMENT
(ART. 287, LABOR CODE AND
REP. ACT NO. 7641)

 Basic Retirement Benefits

 Jurisprudence
 BAR ITEM NO. 36

SALE, MERGER AND CONSOLIDATION

 Sundowner Dev’t. Corp. vs Drilon - on Sale or

Transfer of Business in good faith

 Filport Case on Merger and Consolidation

 Piercing of the Veil of Corporate Entity (Sale or

Transfer in Bad Faith)
 BAR ITEM NO. 37

AGABON, JAKA FOODS AND WENPHIL

CASES
 Agabon Case – Just Causes – Nominal Damages
is P30,000.00

Jaka Foods Case – Authorized Causes –

P50,000.00

Wenphil Doctrine (Reinstated); Serrano Doctrine

(Abandoned)
 BAR ITEM NO. 38

STRAINED RELATIONS

How Construed

When and When Should Strained Relations be

raised

Jurisprudence
 BAR ITEM NO. 39

13TH MONTH PAY AND BONUS

 What is included in 13th Month Computation

 Sevilla Trading vs. Voluntary Arbitrator Tomas
Semana
 Is Commission Included in the Computation of
13th Month Pay? Yes, if commission was pre-
determined with guaranteed wage or salary
 Pro-rated 13th Month Pay in case of Resignation
 BAR ITEM NO. 40

AIM-WET-IHO - THE ANTI-SEXUAL

HARASSMENT LAW (REP. ACT NO. 7877)

Concept

Jurisprudence
 BAR ITEM NO. 41

SSS AND GSIS

Coverage and Exceptions

System of Claims and Appeal

Benefits/Beneficiaries
 BAR ITEM NO. 42

ART. 106 – 109, Labor Code

(LABOR ONLY CONTRACTING VS. JOB OR
INDEPENDENT CONTRACTING)

Substantial Investment – Capital OR TEMP

Indicators of JOB or Independent Contracting

Legal Effects of Labor Only Contracting

 BAR ITEM NO. 43

ART. 110 – WORKERS PREFERENCE

Mortgage Credits vs. Workers

Preference

DBP vs. NLRC Cases

 BAR ITEM NO. 44

ART. 128 (VISITORIAL AND INSPECTION

POWERS OF SECRETARY OF LABOR ; AND
129 AND 217 (a)(6), LABOR CODE, ON
MONEY CLAIMS

Rep. Act. No. 7730; June, 1994

No Shared Jurisdiction on Money Claims
Between the Regional Director and the Labor
Arbiter
Jurisprudence and Examples
 BAR ITEM NO. 45

ART. 111 AND 222 IN RELATION TO 241 (n),

LABOR CODE

Traders Royal Bank Case

Pacific Bank vs. Clave

Art. 241 (n) on Special Assessment of

Attorney’s Fees and Negotiation fees and
Requisites
 BAR ITEM NO. 46

WAGE ORDER AND WAGE DISTORTION

 Correction of Distortion on Wages

 Jurisprudence (Prubankers and Cagayan
Sugar Milling Cases)
 The Edna Bonto Perez (Metrobank Formula)
 Frequency of Wage Orders to be Issued by
Regional Board
 Jurisprudence
 BAR ITEM NO. 47

FACTORS IN DETERMINING BARGAINING

UNITS

Globe Doctrine, etc.

UP vs. Calleja and Sister Cases

Jurisprudence
 BAR ITEM NO. 48

APPEALS IN LABOR CASES RENDERED BY

VARIOUS LABOR AGENCIES
Decision of Labor Arbiter

Decision of BLR and Med-Arbiter

Decision of Voluntary Arbitrator

Decision of Regional Director on Money Claims

Decision of Secretary of Labor

 BAR ITEM NO. 49

SEPARATION PAY AND RETIREMENT

BENEFITS

May Both Separation Pay and Retirement

Benefits be Paid to Retrenched or Retired
Employees?

Jurisprudence
 BAR ITEM NO. 50

ART. 248 (i) AND ART. 261, LABOR CODE

Gross ULP vs. Grievable Matters

Labor Arbiter (Economic) and Voluntary

Arbitrator (Non-Economic)
 BAR ITEM NO. 51

THE DOCTRINE OF FORUM NON- CONVENIENCE

MAY THIS DOCTRINE BE INVOKED AGAINST THE
EXERCISE OF JURISDICTION BY THE LABOR
ARBITER?
Under the rule of forum non conveniens, a Philippine court
or agency MAY assume jurisdiction over a case if it chooses to
do so, PROVIDED:
a. that the Philippine court is one to which the parties may
conveniently resort to;
b. that the Philippine court is in a position to make an
intelligent decision as to the law and the facts; and
c. that the Philippine court has or is likely to have power to
enforce its decision.
This doctrine may be invoked against the exercise of
jurisdiction of the labor arbiters as held in the case of
Manila Hotel Corporation and Manila Hotel International
limited vs. NLRC and Marcelo Santos wherein the SC
ruled that the NLRC was a seriously an inconvenient
forum.
Philippine National Bank vs. Cabansag, [G. R. No. 157010,
June 21, 2005]. Here, the doctrine of forum non
conveniens was rejected by the SC.as argued by
PNB. Instead, there was reason to presume per the SC
that Cabansag was a migrant worker, wherein the
petitioner cannot escape the application of Philippine
laws or the jurisdiction of the NLRC and the Labor
Arbiter.
 BAR ITEM NO. 52
WHAT IS THE HOBSON DOCTRINE?
In San Miguel Corporation vs. NLRC, [G. R.
No. 107693, July 23, 1998], the employees were given
the option to retire, be retrenched or dismissed but
they were made to understand that they had no
choice but to leave the company. This is known as the
Hobson’s choice which means that they have no
choice at all. All that the private respondents were
offered was a choice on the means or method of
terminating their services but never as to the status
of their employment.
In short, they were never asked if they still
wanted to work for petitioner. The mere
absence of actual physical force to compel
private respondents to ink an application for
retirement did not make their retirement
voluntary. Confronted with the danger of
being jobless, unable to provide their families
even with the basic needs or necessities of
life, the private respondents had no choice but
to sign the documents proffered to them