Labor-2-cases-and-doctrines-3.pdf

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

VI. STRIKES, ACTIONS A.

LOCKOUTS

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AND

CONCERTED

CONCERTED ACTIONS

CASES Republic Savings Bank vs. CIR, 21 SCRA 226 Ilaw at Buklod ng Manggagawa vs. San Miguel Corporation, 198 SCRA 586 The controversy at bar had its origin in the "wage distortions" affecting the employees of respondent San Miguel Corporation allegedly caused by Republic Act No. 6727, otherwise known as the Wage Rationalization Act. Upon the effectivity of the Act on June 5, 1989, the union known as "Ilaw at Buklod Ng Manggagawa (IBM)" — said to represent 4,500 employees of San Miguel Corporation, more or less, "working at the various plants, offices, and warehouses located at the National Capital Region" - presented to the company a "demand" for correction of the significant distortion in the workers' wages. But the Union claims that "demand was ignored. IBM filed a notice of strike. The company moved to declare the strike illegal. Held: The more common of these concerted activities as far as employees are concerned are: strikes — the temporary stoppage of work as a result of an industrial or labor dispute; picketing — the marching to and fro at the employer's premises, usually accompanied by the display of placards and other signs making known the facts involved in a labor dispute; and boycotts — the concerted refusal to patronize an employer's goods or services and to persuade others to a like refusal. On the other hand, the counterpart activity that management may licitly undertake is the lockout — the temporary refusal to furnish work on account of a labor dispute. In this connection, the same Article 263 provides that the "right of legitimate labor organizations to strike and picket and of employer to lockout, consistent with the national interest, shall continue to be

recognized and respected." The legality of these activities is usually dependent on the legality of the purposes sought to be attained and the means employed therefor. It goes without saying that these joint or coordinated activities may be forbidden or restricted by law or contract. In the particular instance of "distortions of the wage structure within an establishment" resulting from "the application of any prescribed wage increase by virtue of a law or wage order," Section 3 of Republic Act No. 6727 prescribes a specific, detailed and comprehensive procedure for the correction thereof, thereby implicitly excluding strikes or lockouts or other concerted activities as modes of settlement of the issue. The legislative intent that solution of the problem of wage distortions shall be sought by voluntary negotiation or arbitration, and not by strikes, lockouts, or other concerted activities of the employees or management, is made clear in the rules implementing RA 6727 issued by the Secretary of Labor and Employment pursuant to the authority granted by Section 13 of the Act. Section 16, Chapter I of these implementing rules, after reiterating the policy that wage distortions be first settled voluntarily by the parties and eventually by compulsory arbitration, declares that, "Any issue involving wage distortion shall not be a ground for a strike/lockout.”

B. STRIKES LABOR CODE Art. 212. Definitions. (o) “Strike” means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. (p)

“Lockout” means the temporary refusal of an employer to furnish work as a result of an industrial or labor dispute.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

(q)

(r)

(s)

“Internal union dispute” includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by-laws of a union, including any violation of the rights and conditions of union membership provided for in this Code. “Strike breaker” means any person who obstructs, impedes, or interferes with by force, violence, coercion, threats or intimidation any peaceful picketing by employees during any labor controversy affecting wages, hours or conditions of work or in the exercise of the right of self-organization or collective bargaining. “Strike area” means the establishment, warehouses, depots, plants or offices, including the sites or premises used as runaway shops, of the employer struck against, as well as the immediate vicinity actually used by picketing strikers in moving to and fro before all points of entrance to and exit from said establishment. (As amended by RA 6715)

Art. 263. Strikes, picketing and lockouts. — (a) It is the policy of the State to encourage free trade unionism and free collective bargaining. (b) Workers shall have the right to engage in concerted activities for purposes of collective bargaining or for their mutual benefit and protection. The right of legitimate labor organizations to strike and picket and of employers to lockout, consistent with the national interest, shall continue to be recognized and respected. However, no labor union may strike and no employer may declare a lockout on grounds involving inter-union and intra-union disputes. (c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the employer may file a notice of lockout with the Department at least thirty (30) days before the intended date thereof. In cases of unfair labor practice, the period of notice shall be fifteen (15) days and in the absence of a duly certified or recognized

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bargaining agent, the notice of strike may be filed by any legitimate labor organization in behalf of its members. However, in case of dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws, which may constitute union busting where the existence of the union is threatened, the 15-day cooling-off period shall not apply and the union may take action immediately. (d)

(e)

(f)

(g)

The notice must be in accordance with such implementing rules and regulations as the Secretary of Labor and Employment may promulgate. During the cooling-off period, it shall be the duty of the Department to exert all efforts at mediation and conciliation to effect a voluntary settlement. Should the dispute remain unsettled until the lapse of the requisite number of days from the mandatory filing of the notice, the labor union may strike or the employer may declare a lockout. A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in meetings or referenda called for that purpose. A decision to declare a lockout must be approved by majority of the board of directors of the corporation or association or of the partners in a partnership, obtained by secret ballot in a meeting called for that purpose. The decision shall be valid for the duration of the dispute based on substantially the same grounds considered when the strike or lockout vote was taken. The Department may, at its own initiative or upon the request of any affected party, supervise the conduct of the secret balloting. In every case, the union or the employer shall furnish the Department the results of the voting at least seven days before the intended strike or lockout, subject to the cooling-off period herein provided. When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same. In line with the national concern for and the highest respect accorded to the right of patients to life and health, strikes and lockouts in hospitals, clinics and similar medical institutions shall, to every extent possible, be avoided, and all serious efforts, not only by labor and management but government as well, be exhausted to substantially minimize, if not prevent, their adverse effects on such life and health, through the exercise, however legitimate, by labor of its right to strike and by management to lockout. In labor disputes adversely affecting the continued operation of such hospitals, clinics or medical institutions, it shall be the duty of the striking union or locking-out employer to provide and maintain an effective skeletal workforce of medical and other health personnel, whose movement and services shall be unhampered and unrestricted, as are necessary to insure the proper and adequate protection of the life and health of its patients, most especially emergency cases, for the duration of the strike or lockout. In such cases, therefore, the Secretary of Labor and Employment may immediately assume, within twenty four (24) hours from knowledge of the occurrence of such a strike or lockout, jurisdiction over the same or certify it to the Commission for compulsory arbitration. For this

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purpose, the contending parties are strictly enjoined to comply with such orders, prohibitions and/or injunctions as are issued by the Secretary of Labor and Employment or the Commission, under pain of immediate disciplinary action, including dismissal or loss of employment status or payment by the locking-out employer of backwages, damages and other affirmative relief, even criminal prosecution against either or both of them.

(h)

(i)

The foregoing notwithstanding, the President of the Philippines shall not be precluded from determining the industries that, in his opinion, are indispensable to the national interest, and from intervening at any time and assuming jurisdiction over any labor dispute in such industries in order to settle or terminate the same. Before or at any stage of the compulsory arbitration process, the parties may opt to submit their dispute to voluntary arbitration. The Secretary of Labor and Employment, the Commission or the voluntary arbitrator or panel of voluntary arbitrators shall decide or resolve the dispute within thirty (30) calendar days from the date of the assumption of jurisdiction or the certification or submission of the dispute, as the case may be. The decision of the President, the Secretary of Labor and Employment, the Commission or the voluntary arbitrator or panel of voluntary arbitrators shall be final and executory ten (10) calendar days after receipt thereof by the parties. (As amended by RA 6715)

Art. 264. Prohibited activities. — (a) No labor organization or employer shall declare a strike or lockout without first having bargained collectively in accordance with Title VII of this Book or without first having filed the notice required in the preceding Article or without the necessary strike or lockout vote first having been obtained and reported to the Department.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

No strike or lockout shall be declared after assumption of jurisdiction by the President or the Secretary or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout. Any worker whose employment has been terminated as a consequence of an unlawful lockout shall be entitled to reinstatement with full backwages. Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment right: Provided, That 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. (b) No person shall obstruct, impede or interfere with by force, violence, coercion, threats or intimidation any peaceful picketing by employees during any labor controversy or in the exercise of the right of self-organization or collective bargaining or shall aid or abet such obstruction or interference. (c) No employer shall use or employ any strike-breaker nor shall any person be employed as a strike-breaker. (d) No public official or employee, including officers and personnel of the New Armed Forces of the Philippines or the Integrated National Police, or armed persons, shall bring in, introduce or escort in any manner, any individual who seeks to replace strikers in entering or leaving the premises of a strike area, or work in place of the strikers. The police force shall keep out of the picket lines unless actual violence or other criminal acts occur therein: Provided, That nothing herein shall be interpreted to prevent any public officers from taking any measure necessary to maintain peace and order, protect life and property, and/or enforce the law and legal order. (e)

No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress

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to or egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares. Art. 265. Improved offer balloting. — In an effort to settle a strike, the Department of Labor and Employment shall conduct a referendum by secret balloting on the improved offer of the employer on or before the 30th day of the strike. When at least a majority of the union members vote to accept the improved offer, the striking workers shall immediately return to work and the employer shall thereupon readmit them upon the signing of the agreement. In case of a lockout, the Department of Labor and Employment shall also conduct a referendum by secret balloting on the reduced offer of the union on or before the 30th day of the lockout. When at least a majority of the board of directors or trustees or the partners holding the controlling interest in the case of a partnership vote to accept the reduced offer, the workers shall immediately return to work and the employer shall thereupon readmit them upon the signing of the agreement. (As amended by RA 6715) Art. 266. Requirement for arrest and detention. — Except on grounds of national security and public peace, no union members or union organizers may be arrested or detained for union activities without previous consultations with the Secretary of Labor and Employment. OMNIBUS RULES, AS AMENDED BY DO 40-03 RULE XXII CONCILIATION, STRIKES AND LOCKOUTS Section 1. Conciliation of labor-management disputes. - The board may, upon request of either of both parties or upon its own initiative, provide conciliation-mediation services to labor disputes other than notices of strikes or lockouts. Conciliation cases which are not subjects of notices of strike or lockout shall be docketed as preventive mediation cases.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Section 2. Privileged communication. - Information and statements given in confidence at conciliation proceedings shall be treated as privileged communications. Conciliators and similar officials shall not testify in any court or body regarding any matter taken up at conciliation proceedings conducted by them. Section 3. Issuance of subpoena. - The Board shall have the power to require the appearance of any parties at conciliation meetings. Section 4. Compromise Agreements. - Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Board and its regional branches shall be final and binding upon the parties. The National Labor Relations Commission or any court shall not assume jurisdiction over issues involved therein except in case of noncompliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion. Upon motion of any interested party, the Labor Arbiter in the region where the agreement was reached may issue a writ of execution requiring a sheriff of the Commission or the courts to enforce the terms of the agreement. Section 5. Grounds for strike or lockout. - A strike or lockout may be declared in cases of bargaining deadlocks and unfair labor practices. Violations of collective bargaining agreements, except flagrant and/or malicious refusal to comply with its economic provisions, shall not be considered unfair labor practice and shall not be strikeable. No strike or lockout may be declared on grounds involving inter-union and intra-union disputes without first having filed a notice of strike or lockout or without the necessary strike or lockout vote having been obtained and reported to the Board. Neither will a strike be declared after assumption of jurisdiction by the Secretary or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout. Section 6. Who may declare a strike or lockout. - Any certified or duly recognized bargaining representative may declare a strike in

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cases of bargaining deadlocks and unfair labor practices. The employer may declare a lockout in the same cases. In the absence of a certified or duly recognized bargaining representative, any legitimate labor organization in the establishment may declare a strike but only on grounds of unfair labor practices. Section 7. Notice of strike or lockout. - In bargaining deadlocks, a notice of strike or lockout shall be filed with the regional branch of the Board at least thirty (30) days before the intended date thereof, a copy of said notice having been served on the other party concerned. In cases of unfair labor practice, the period of notice shall be fifteen (15) days. However, in case of unfair labor practice involving the dismissal from employment of any union officer duly elected in accordance with the union constitution and by-laws which may constitute union-busting where the existence of the union is threatened, the fifteen-day cooling-off period shall not apply and the union may take action immediately after the strike vote is conducted and the results thereof submitted to the appropriate regional branch of the Board. Section 8. Contents of notice. - The notice shall state, among others, the names and addresses of the employer and the union involved, the nature of the industry to which the employer belongs, the number of union members and of the workers in the bargaining unit, and such other relevant data as may facilitate the settlement of the dispute, such as a brief statement or enumeration of all pending labor disputes involving the same parties. In cases of bargaining deadlocks, the notice shall, as far as practicable, further state the unresolved issues in the bargaining negotiations and be accompanied by the written proposals of the union, the counter-proposals of the employer and the proof of a request for conference to settle the differences. In cases of unfair labor practices, the notice shall, as far as practicable, state the acts complained of and the efforts taken to resolve the dispute amicably. In case a notice does not conform with the requirements of this and the foregoing section/s, the regional branch of the Board shall inform the concerned party of such fact. Section 9. Action on Notice. - Upon receipt of the notice, the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

regional branch of the Board shall exert all efforts at mediation and conciliation to enable the parties to settle the dispute amicably. The regional branch of the Board may, upon agreement of the parties, treat a notice as a preventive mediation case. It shall also encourage the parties to submit the dispute to voluntary arbitration. During the proceedings, the parties shall not do any act which may disrupt or impede the early settlement of the dispute. They are obliged, as part of their duty to bargain collectively in good faith and to participate fully and promptly in the conciliation meetings called by the regional branch of the Board. A notice, upon agreement of the parties, may be referred to alternative modes of dispute resolution, including voluntary arbitration. Section 10. Strike or lockout vote. - A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned obtained by secret ballot in meetings or referenda called for the purpose. A decision to declare a lockout must be approved by a majority of the Board of Directors of the employer, corporation or association or the partners in a partnership obtained by a secret ballot in a meeting called for the purpose. The regional branch of the Board may, at its own initiative or upon request of any affected party, supervise the conduct of the secret balloting. In every case, the union or the employer shall furnish the regional branch of the Board and the notice of meetings referred to in the preceding paragraph at least twenty-four (24) hours before such meetings as well as the results of the voting at least seven (7) days before the intended strike or lockout, subject to the cooling-off period provided in this Rule. Section 11. Declaration of strike or lockout. - Should the dispute remain unsettled after the lapse of the requisite number of days from the filing of the notice of strike or lockout and of the results of the election required in the preceding section, the labor union may strike or the employer may lock out its workers. The regional branch of the Board shall continue mediating and conciliating. Section 12. Improved offer balloting. - In case of a strike, the regional branch of the Board shall, at its own initiative or upon the

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request of any affected party, conduct a referendum by secret balloting on the improved offer of the employer on or before the 30th day of strike. When at least a majority of the union members vote to accept the improved offer, the striking workers shall immediately return to work and the employer shall thereupon re-admit them upon the signing of the agreement. In case of a lockout, the regional branch of the Board shall also conduct a referendum by secret balloting on the reduced offer of the union on or before the 30th day of the lockout. When at least a majority of the board of directors or trustees or the partners holding the controlling interest in the case of partnership vote to accept the reduced offer, the workers shall immediately return to work and the employer shall thereupon readmit them upon the signing of the agreement. Section 13. Peaceful picketing. - Workers shall have the right to peaceful picketing. No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employer's premises for lawful purposes, or obstruct public thoroughfares. No person shall obstruct, impede or interfere with, by force, violence, coercion, threats or intimidation, any peaceful picketing by workers during any labor controversy or in the exercise of the right to selforganization or collective bargaining or shall aid or abet such obstruction or interference. No employer shall use or employ any person to commit such acts nor shall any person be employed for such purpose. Section 14. Injunctions. - No court or entity shall enjoin any picketing, strike or lockout, except as provided in Articles 218 and 263 of the Labor Code. The Commission shall have the power to issue temporary restraining orders in such cases but only after due notice and hearing and in accordance with its rules. The reception of evidence for the application of a writ of injunction may be delegated by the Commission to any Labor Arbiter who shall submit his recommendations to the Commission for its consideration and

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

resolution. Any ex parte restraining order issued by the Commission, or its chairman or Vice-Chairman where the Commission is not in session and as prescribed by its rules, shall be valid for a period not exceeding twenty (20) days. Section 15. Criminal prosecution. - The regular courts shall have jurisdiction over any criminal action under Article 272 of the Labor Code.

CONCEPT AND SCOPE CASES Enrique vs. Zamora, 146 SCRA 393

ALU vs. Borromeo, 26 SCRA 86 In the case at bar, the ALU introduced evidence to the effect that SUGECO products had been brought to Cebu Home and were being distributed in the latter, as a means to circumvent, defeat or minimize the adverse effects of the picketing conducted in the SUGECO plant

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and offices in Mandaue and Cebu City respectively by ALU. It is true that respondents averred that said products were purchased by Cebu Home before the strike was declared against SUGECO and that some of said products were obtained from SUGECO in other parts of the country; but, even if true, these circumstances did not place the picketing of the Cebu Home beyond the pale of the aforesaid Section 9 of Republic Act No. 875 because, as distributor of SUGECO products, Cebu Home was engaged in the same trade as SUGECO. Neither does the claim that some SUGECO products marketed by Cebu Home had come, not from the Mandaue plant, but from other parts of the Philippines, detract from the applicability of said provisions, considering that ALU had struck against SUGECO and had announced, as early as March 1, 1966 — or 3 days before it struck — its intent to picket "any place where your business may be found" and that SUGECO in Cebu is a sister company of SUGECO elsewhere in the Philippines. Held: Picketing may be carried on not only against the manufacturer but also against a non-union product sold by one in unity of interest with the manufacturer who is in the same business for profit (Goldfinger v. Feintuch, 11 N.E. 2d 920). A union may picket a retail store selling goods made in non-union factory between which and the union there is an industrial dispute, provided there is a unity of interest between the retailer and the manufacturer (31 Am. Jur. 752). As ruled by the Supreme Court of Pennsylvania: "Where corporate employer had separate plants in Missouri and Pennsylvania, and labor dispute existed at Missouri plant, but not at the Pennsylvania plant, peaceful picketing at Pennsylvania plant by members of union representing employees at Missouri plant was not an unfair labor practice as defined by Labor Management Relations Act" (American Brake Shoe Co. v. District Lodge 9 of International Association of Machinists, 94 A. 2d 884). LiwaywayPublications vs. Permanent Concrete Workers Union, 100 SCRA 161

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

While a labor dispute between defendant-appellant union and Permanent Concrete Products, Inc. was pending before the Court of Industrial Relations, the Court of First Instance of Manila issued in an action for damages filed by the plaintiff-appellee Liwayway Publications, Inc. a writ of preliminary injunction against appellant union which picketed and prevented entrance to the gate leading to the bodega of appellee and threatened its officers and employees despite the fact that the appellee is not in anyway related to the striking union but a mere sublessee of said bodega in the compound of Permanent Concrete Products, Inc. against whom the strike was staged. Held: The right to picket as a means of communicating the facts of a labor dispute is a phase of the freedom of speech guaranteed by the constitution. If peacefully carried out, it cannot be curtailed even in the absence of employer- employee relationship. The right is, however, not an absolute one. While peaceful picketing is entitled to protection as an exercise of free speech, we believe that courts are not without power to confine or localize the sphere of communication or the demonstration to the parties to the labor dispute, including those with related interest, and to insulate establishments or persons with no industrial connection or having interest totally foreign to the context of the dispute. Thus, the fight may he regulated at the instance of third parties or `innocent bystanders' if it appears that the inevitable result of its exercise is to create an impression that a labor dispute with which they have no connection or interest exists between them and the picketing union or constitute an invasion of their rights. Interphil Laboratories Employees Union-FFW vs. Interphil, 372 SCRA 658

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REQUISITES OF A VALID STRIKE CASES NFSW vs. Ovejera, 114 SCRA 354 Petitioner, the bargaining respondent Central Azucarera de la Carlota (CAC) employees entered into collective bargaining agreement with it wherein the parties agreed to maintain the present practice on the grant of Christmas bonus, milling bonus and amelioration bonus equivalent to 1 1/2 month's salary. On November 30, 1981, petitioner and respondent CAC entered into a compromise agreement two days after the petition struck to compel payment of the 13th month pay agreeing to abide by the final decision of the Supreme Court in any case involving the 13th month pay if it clearly held that the employer is liable to pay the same separate and distinct from the bonuses already given. Meanwhile, G.R. No. 51254, Petition for Certiorari and Prohibition filed by Marcopper Mining Corporation which sought to annul the decision of the Labor Deputy Minister granting the 13th month pay to its employees in addition to mid-year ands Christmas bonuses under a CBA was dismissed on June 11, 1981 on the vote of seven (7) Justices and the motion for its reconsideration was denied by a vote of five Justices. Thereafter, petitioner struck after six days notice with the Ministry of Labor and Employment (MOLE). One day after the commencement of the strike, petitioner filed a strike vote report with MOLE . The strike was declared illegal by respondent Ovejera for violation of the 15 day cooling-off period and the 7 day strike ban required by B.P. 130. Without appealing to the NLRC, the present petition was filed questioning the declaration of illegality of the strike and the denial of the 13th month pay.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Held: The provisions of Article 264 (c, e, f) and Article 265 of the Labor Code hardly leave any room for doubt that the cooling-off period in Article 264(c) were meant to be and should be deemed, mandatory. When the law says "the labor union may strike" should the dispute "remain unsettled until the lapse of the requisite number of days (cooling-off) period from the mandatory filing of the notice," the unmistakable implication is that the union may not strike before the lapse of the cooling-off period. Similarly, the mandatory character of the 7 day strike ban after the report on the strike vote is manifest in the provisions that "in every case," the union shall furnish the MOLE with the results of the voting "at least seven (7) days before the intended strike, subject to the (prescribed) cooling-off period and the 7 day strike ban must both complied with, although a labor union may take a strike vote and report within the statutory cooling-off period. PURPOSE OF STRIKE NOTICE AND COOLING- OFF PERIOD. — In requiring a strike notice and a cooling-off period, the avowed intent of the law is to provide an opportunity for mediation and conciliation. It thus directs the MOLE " to exert all efforts at mediation and reconciliation to effect a voluntary settlement" during the cooling-off period. STRIKE VOTE REPORT, PURPOSE. — The submission of the report gives assurance that a strike vote has been taken and that, if the report concerning it is false, the majority of the members can take appropriate remedy before it is too late. In this case, the NFSW declared the strike (6) days after filing of strike notice. i.e., before the lapse of mandatory cooling-off period. It is also file with the MOLE before launching the strike a report on the strike vote, when it should have filed such report "at least 7 days before the intended strike." Under the circumstances , the strike stated by petitioner is not in conformity with the law.

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Lapanday Workers Union vs. NLRC, 248 SCRA 95 The Union filed a notice of strike with the National Conciliation and Mediation Board(NCMB), accusing the Co. of ULP (coercion of employees, intimidation of union officers and union- busting). During the pendency of a conciliation conference called by the NCMB, a director of the Union was gunned down by a man later identified to be an alleged member of the new security forces of the Co. For failing to report for work and complying with the quota system adopted by management, the Co. filed charges against the Union for illegal strike, ULP and damages. A strike was conducted among the members of the Union. The result of the strike was then submitted to the NCMB. 2 days later, the Union struck. Held: 1. Some of the limitations on the exercise of the right of strike are provided for in paragraphs (c) and (f) of Article 263 of the LC. They provide for the procedural steps to be followed before staging a strike— filing of notice of strike, taking of strike vote, and reporting of the strike to DOLE. The 7 day waiting period is intended to give DOLE an opportunity to verify whether the projected strike really carries the imprimatur of the majority of the union members. Strike is usually the last weapon of labor to compel capital to concede to its bargaining demands or to defend itself against ULPs of management. In addition, a majority vote assures the Union it will go to war against management with the strength derived from unity and hence, with better chance to succeed. 2.

3.

In the case at bar, we rule that the strike conducted by the union is plainly illegal as it was held within the 7- day waiting period provided by par. f of Art. 263. The haste in holding the strike prevented DOLE from verifying whether it carried the approval of the majority of the union members. We affirm the penalty of dismissal meted only to the leaders of the illegal strike, esp. the Union officers who served as major players. They cannot claim good faith to exculpate themselves

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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having admitted knowledge of the law on strike, including its procedure. Members who were merely instigated to participate are entitled to reinstatement but not to backwages as they should not be compensated for services skipped during the illegal strike. First City Interlink Transportation Co., Inc. vs. Roldan- Confesor, 272 SCRA 124 Nagkakaisang Manggagawa ng Fil Transit- NFL went on strike twice after several failed conciliation conferences with Fil Transit(business name of First City Interlink). The company claims that the strikes held were illegal since a) no strike vote had been obtained before the strike was called and b) assuming there was, the result of strike vote was not reported to the DOLE. Thus, Co. refused to comply with the return-to-work order. DOLE granted backwages. Held: 1. Pursuant to Art. 263(c)(f), the requisites for a valid strike are as follows: (1) a notice of strike filed with the Department of Labor at least 30 days before the intended date thereof or 15 days in case of unfair labor practice; (2) 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; (3) notice given to the Dept. of the results of the voting at least 7 days before the intended strike. These requirements are mandatory.

2.

In none of the numerous pleadings filed by the Union has it been shown that a strike vote had been taken before declaring a strike. As between the Co. and the Union, the latter is in a better position to present proof of such fact. The Union’s failure to do so raises the strong probability that there was no strike vote taken. The statement that there was in the Secretary’s order is contrary to evidence in the record. Even assuming that there was a vote taken, the SC agrees that the Union nevertheless failed to observe the required sevenday strike ban from the date the strike vote should have been

reported to the DOLE up to the time the Union staged the strike. The importance of the strike vote and reporting of the results to the DOLE cannot be gainsaid as it is the Union itself that the law seeks to protect by ensuring that the majority of its members voted in favor of the strike. Consequently, good faith cannot be invoked by the Union in this case. 3.

The strike declared by the Union was attended by pervasive and widespread violence. The acts of violence committed were not mere isolated incidents which could normally occur during any strike. Nevertheless, we are constrained to uphold the Secretary’s ruling that responsibility for these illegal acts must be on an individual and not collective basis. Therefore, although the strike was illegal, only the union officers and criminal acts against the employer are deemed to have lost their employment status. Union members who were merely instigated to participate in the illegal strike should be treated differently.

Tiu vs, NLRC, August 18, 1997 This is a petition for certiorari under Rule 65 of the Rules of Court to annul and set aside the resolution of the National Labor Relations Commission (NLRC) dated 28 November 1994 in NCR Case No. 00-08-0453-91 which affirmed the decision of labor arbiter Edgardo Madriaga dated 18 February 1994 holding the strike held by GMA Channel 7 Employees Union (GMAEU) on 2 August 1991 as illegal and declaring the fourteen (14) GMAEU union officers who knowingly participated in the illegal strike to have lost their employment status. The records show that of the fourteen (14) GMAEU officers involved in the strike, ten (10) officers did not appeal the labor arbiter's decision and opted to avail of the optional retirement benefits under the collective bargaining agreement with private respondent Republic Broadcasting System Inc. (RBS). The remaining four (4) union officers, namely: Mario Tiu, Nani Hayuhay, Bong Cerezo and Virgilio Santoyo, appealed to the NLRC.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Held: The notice of strike filed by the union before the NCMB on 12 July 1991 contained general allegations that RBS management committed unfair labor practices by its gross violation of the economic provisions in their collective bargaining agreement and by alleged acts of coercion, union interference and discrimination which amounted to union busting. It is the union, therefore, who had the burden of proof to present substantial evidence to support these allegations. Significantly, the union had two (2) conciliatory meetings arranged by the NCMB at which it could have substantiated these additional allegations. However, the fact that it had submitted the results of the strike vote even ahead of the conciliatory meetings, and continuously refused to substantiate its allegations in its notice of strike thereafter, lends credence to the NLRC's observation that these charges were indiscriminately hurled against RBS to give a semblance of validity to its notice of strike. Under Rule XIII Sec. 4 Book V of the Implementing Rules of the Labor Code. — ". . . In cases of unfair labor practices, the notice of strike shall as far as practicable, state the acts complained of and the efforts to resolve the dispute amicably." Upon the other hand, Rule III Sec. 6 provides that "xxx xxx xxx During the (conciliation) proceeding, the parties shall not do any act which may disrupt or impede the early settlement of the dispute. They are obliged, as part of their duty to bargain collectively in good faith, to participate fully and promptly in the conciliation meetings called by the regional branch of the board . . ." (emphasis supplied) Petitioners plead that their contemporaneous acts, reckoned from their 26 June 1991 letter to RBS up to the actual strike held on 2 August 1991, were justified based on its honest belief that RBS was committing unfair labor practices. Stated otherwise, "the presumption of legality (of the strike) prevails even if the allegations of unfair labor practices are subsequently found out to be untrue." (citing Master Iron Labor Union v. NLRC, 219 SCRA 47)

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However, in the case at bar the facts and the evidence did not establish even at least a rational basis why the union would wield a strike based on alleged unfair labor practices it did not even bother to substantiate during the conciliation proceedings. It is not enough that the union believed that the employer committed acts of unfair labor practice when the circumstances clearly negate even a prima facie showing to warrant such a belief. The evidence show that the union anchored its position on alleged unfair labor practices in order to evade not only the grievance machinery but also the no strike clause in their collective bargaining agreement with RBS. RBS did not issue its implementing guidelines dated 24 June 1991 concerning the availment of leaves and rendering of overtime services in an arbitrary manner. The union was promptly informed that RBS' decision was based on its management prerogative to regulate all aspects of employment, subject of course to well-defined limitations imposed by law or by contract. Even assuming arguendo that in the issuance of said guidelines RBS may have violated some provisions in the collective bargaining agreement, there was no palpable showing that the same was a flagrant and/or malicious refusal to comply with its economic provisions. National Union of Workers in Hotels, Restaurants & Allied Industries vs. NLRC, 287 SCRA 192 Due to unheeded demands, a faction of the Union proclaimed itself as the Interim Union Junta. This Junta requested from the Hotel the conduct of a special election of officers which was disallowed. A notice of strike was filed by the Junta before the NCMB alleging ULP against the Co. The NCMB dismissed said notice on the ground that the imputed ULP acts were mere conflicts between two sets of union officers or intra- union disputes, and, being categorized as “non- strikeable acts,” they fall under DOLE jurisdiction. Held:

1.

Generally, a strike based on a non- strikeable ground is an illegal strike. Corollarily, a strike grounded on ULP is illegal if no such acts actually exist. As an exception, even if no ULP acts are committed by the ER, if the EEs believe in good faith that ULP acts

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

exist soa s to constitute a valid ground to strike, the strike held pursuant to such belief may be legal, although subsequently, such allegations of ULP were found to be groundless. Mere claim of good faith would not justify the holding of a strike under the exception. In addition, the circumstances must have warranted such belief. Moreover, failure of the Junta to comply with the prohibition to strike by dismissal of their notice is reflective of bad faith. 2.

As such, their discharge by the ER was lawful especially in this case where such “wildcat” strike was an attempt to undermine the Union’s position as the exclusive bargaining representative, and was therefore, an unprotected activity.

Philippines Inter- Fashion, Inc. vs. NLRC, 117 SCRA 659 After being informed by the Co. of the an intended retrenchment, about 200 EEs went to DOLE during their breaktime. On their 2nd visit, the SOLE issued to them an RWO. Upon their return to Co. premises, they were made to stay in the canteen only on the pretext that the machines needed repair. Nonetheless, they were paid their wages for the days they weren’t allowed to work. Co. applied for clearance to terminate EEs who participated in the alleged walk out Held: 1. There was no clear and unequivocal waiver by the ER of its right to pursue the case for illegal strike against the 114 EEs who weren’t reinstated. It actually pursued its application for their dismissal. However, in view of the undisputed findings of illegal strike and illegal lockoout, both parties are in pari delicto and such situation warrants the restoration of the status quo ante (i.e., before the illegal strike and lockout) through reinstatement of the 114 EEs. 2. On the basis of the general rule that strikers aren’t entitled to backwages, the award of backwages to the 114 EEs is deleted. The principle of “no work, no pay” applies.

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INJUNCTION LABOR CODE Art. 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 BP Blg. 227)

CASES Samahang Manggagawa ng Liberty Commercial vs. Pimentel, 156 SCRA 138 The respondent court, in its questioned order, sustained the position of the plaintiff (private respondent herein) and denied petitioners' motion to dismiss and issued a writ of preliminary injunction, on the theory that jurisdiction is determined by the allegations in the complaint; that the facts, as established by the evidence, showed that no employer-employee relationship existed between the plaintiff and the defendants who were either dismissed or resigned employees of the plaintiff; and that the petition for direct certification filed by petitioners was already dismissed by the Labor Arbiter. Said the respondent court: "At this point in time, considering the admissions of the defendants that they are not connected with the plaintiff's establishments as employees, and that their allegations as to their having been terminated, resigned or abandoned their work constitute unfair labor practices, such allegations must be proven first before the proper forum, but the fact remains at this time that there exists no labor dispute between the parties and they are not employees anymore when they staged picketing at the plaintiff's establishment on May 3, 4, 24 and 25, 1987 up to the present.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

A notice of strike does not necessarily mean that there is a labor dispute, for a notice of strike can be filed by any labor organization, or by anyone at all. Even if there is a complaint for unfair labor practice filed by the defendants, or some of them, it does not prove a labor relationship. MSF Tire and Rubber, Inc. vs. CA, August 5, 1999 SOLE assumed jurisdiction over Union and Co. dispute. Pending resolution, the Co. entered into a Memorandunm of Agreement with Siam Tyre Public Co. where the equipment and plant of Philtread (the Co.) were to be sold to MSF, Inc. and its land to Sucat Land Corp. MSF asked the Union to desist from picketing and upon the latter’s refusal, filed a complaint for injunction with the RTC. Union moved to dismiss on the ground that MSF, being a mere alter ego of Philtread, was not an “innocent bystander” and therfore not entitled to injunction. Held: 1. The right to picket is not absolute. The courts are authorized to confine or localize the sphere of the demonstration to the parties to the labor dispute, including those with related interest, and to insulate establishments or persons with no industrial connection or having interest totally foreign to the context of the dispute. The right may be regulated at the instance of 3Ps or “innocent bystanders” when the exercise of the right would constitute an invasion of their rights. 2. Said innocent bystander must, however, satisfy the court that it is entirely different from, without any connection whatsoever to, either party to the dispute. In the transaction bet/ Philtread and Siam, Philtrad remains 20% owner of MSF and 60% owner of Sucat Land. MSF not an innocent bystander. (Court refused to apply doctrine of piercing saying that it is the innocent bystander rule which is applicable.) Deltaventures Resources, Inc. v. Cabato, 327 SCRA 521

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LA found that respondents were illegally dismissed, ordering Green Mountain Farm, Roberto Ongpin and Almus Alabe to pay the former various amounts. SC denied appeal. Respondents moved for issuance of writ of execution, which LA granted. The Sheriff levied on real property owned by Ongpin and scheduled its public auction. A month before the auction, Deltaventures filed a third-party claim asserting ownership over the property. LA suspended auction. Later, Deltaventures filed with RTC a complaint for injunction and damages, with a prayer for the issuance of a TRO against the Sheriff. RTC Judge issued TRO. Eventually, RTC ruled that it cannot enjoin the execution of a decision of the NLRC, with which it is of equal rank. Issue: Whether RTC may take cognizance of petitioner’s complaint and consequently provide the injunctive relief sought Held: NO. Petitioner filed the third-party claim before the court a quo by reason of a writ of execution issued by the NLRC-CAR Sheriff against a property to which it claims ownership. Ostensibly the complaint before the trial court was for the recovery of possession and injunction, but in essence it was an action challenging the legality or propriety of the levy vis-a-vis the alias writ of execution, including the acts performed by the LA and the Deputy Sheriff implementing the writ. The complaint was in effect a motion to quash the writ of execution of a decision rendered on a case properly within the jurisdiction of the LA, to wit: Illegal Dismissal and Unfair Labor Practice. Considering the factual setting, it is then logical to conclude that the subject matter of the third party claim is but an incident of the labor case, a matter beyond the jurisdiction of RTCs. Precedents abound confirming the rule that said courts have no jurisdiction to act on labor cases or various incidents arising therefrom, including the execution of decisions, awards or orders. Jurisdiction to try and adjudicate such cases pertains exclusively to the proper labor official concerned under the DOLE. To hold otherwise is to sanction split jurisdiction which is obnoxious to the orderly administration of justice. Petitioner failed to realize that by filing its third-party claim with the deputy sheriff, it submitted itself to the jurisdiction of the NLRC acting through the LA. It failed to

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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perceive the fact that what it is really controverting is the decision of the LA and not the act of the deputy sheriff in executing said order issued as a consequence of said decision rendered. ASSUMPTION OF JURISDICTION; RETURN-TO-WORK ORDER

to work and for the Co. to accept all returning employees under the same terms prior to the strike.). During the pendency of these cases, some students filed a complaint before the RTC to enjoin the company and the union from continuing with their picket which the RTC dismissed.

Philtread Workers Union vs. Confesor, 269 SCRA 393 PTWU filed a notice of strike on grounds of ULP. The Co. filed a notice of lockout and a petition to declare the work slowdowns staged by the Union illegal. After a failure in conciliation, the company declared a company- wide lockout which resulted in the dismissal of 80 Union members, which in turn brought about a notice of strike being filed by the Union in self- defense. In exercise of his power under Art. 263 (g), the Sec. of Labor certified the case for compulsory arbitration to the NLRC enjoining the strike and issued a return-to work order which is being questioned by the Union. Held: Art. 263 (g) does not violate the rights of workers to strike. It was a valid exercise of police power of the State and is pursuant to the Secretary’s work of maintaining industrial peace. The rights granted by the Constitution are not absolute. They are still subject to the limitation of not being exercised arbitrarily. The Labor Code vests upon the Secretary discretion as to which industries are indispensable to national interest. The co. supplies 22% of the tire products in the country and employs about 700 people. Any work disruption thereat will certainly prejudice the employment and livelihood of their workers and their dependents, which will aggravate the already worsening unemployment situation in the country and discourage foreign and domestic investors from further investing in the country. Thus, upon such determination of the Secretary, he will assume jurisdiction over the dispute of said industry. The intervention of the Secretary was necessary to settle the labor dispute. No GAD on his part.

Held:

PSBA-Manila vs. Noriel, 164 SCRA 402 A complaint for ULP and declaration of illegality of strike was filed by PSBA against the union. The DOLE Sec. assumed jurisdiction and enjoined the parties to maintain status quo (for the EEs to return

1.

2.

The facts and the law fully support the acting secretary’s assumption of jurisdiction. It may be added that due to PSBA’s intransigent refusal to attend the conciliation conferences called after the union struck, assumption of jurisdiction by the secretary and the issuance of a return-towork order had become the only way of breaking the deadlock. The regional trial court was without jurisdiction over the subject matter of the case filed by the students. That the regular courts have no jurisdiction over labor disputes and to issue injunctions against strikes is well-settled.

St. Scholastica’s College vs. Torres, 210 SCRA 565 Workers and teachers at the St. Scholastica’s College formed for the first time, a labor union. They filed a petition for CE to which the school objected. The teacher struck. Upon petition of the school, the DOLE Sec. assumed jurisdiction and ordered the teachers to return to work twice. For refusing to comply with such orders, the school dismissed the teachers. Held: The dismissal of the teachers was valid. The assumption of jurisdiction by the secretary over labor disputes involving academic institutions was already upheld in PSBA vs. Noriel. Art. 263 (g) provides that if a strike has already taken place at the time of assumption, all striking employees shall immediately return to work. This means a return to work order is immediately effective and executory notwithstanding the filing of a MfR. Under Art. 264, all workers who knowingly participate in an illegal strike are deemed to have lost their employment status. Not only union officers but union members can be dismissed when they knowingly

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

participate in an illegal strike. It is presumed that when a striking worker insists on the strike when told by the Sec. to return to work, they have forfeited their right to be readmitted. Sarmiento vs. Tuico, 162 SCRA 676 Asian Transmission Corporation dismissed Catalino Sarmiento who was the Vice President of Bisig ng Asian Transmission Labor Union. The company dismissed him for allegedly carrying a deadly weapon within company premises. The union filed a notice of strike claiming ULP. SOLE assumed jurisdiction and certified the case to NLRC. NLRC issued a return-to work order. All this happened while criminal complaints were pending against the workers for staging an illegal strike. Held: There can be no question that the SOLE acted correctly in certifying the labor dispute to the NLRC. The return-to-work order issued by the NLRC was equally valid as a statutory part and parcel of the certification order issued by the SOLE. It was merely an implementation of the law and a reiteration of the SOLE’s directive. The law itself provides that such assumption or certification shall have the effect of automatically enjoining the impending strike. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately readmit them. The legality of the order is also not affected by the pendency of the determination of the legality of the strike. It is, therefore, not correct to say that the return-to-work order may be enforced only if the strike is illegal, for the purpose precisely is to maintain the status quo while the determination is being made. Reformist Union of R.B. Liner vs. NLRC, 266 SCRA 713 The Union struck. The SOLE assumed jurisdiction and certified the case to NLRC. Case was dismissed after the two parties reached an agreement that included the holding of CE. The winner of the CE made CBA proposals but the co. refused to bargain so the Union filed a ULP case again while the co. countered with a case seeking to declare the strike illegal. Strike declared illegal and Ees deemed to have lost employment for participating.

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Held: The co. can no longer contest the legality of the strike held by the union before the agreement as it was even the one which sought compulsory arbitration to resolve the issue. By acceding to the peaceful settlement brokered by the NLRC, the co. waived the issue of the illegality of the strike which was already resolved. The very nature of compulsory arbitration, that of a compromise agreement, makes the settlement binding on the parties. It could no longer be reviewed by the Labor Arbiter, much less by the NLRC as the Code provides that decisions in compulsory arbitration proceedings shall be final and executory 10 calendar days after receipt by the parties. As regards the illegal lockout alleged, the co. was culpable. Since there was no defiance of the SOLE’s RWO and there being no cause to decree the Ees’ dismissal, reinstatement can be the only outcome (but was infeasible here so sep. pay na lang). Consolidated Labor Associaton of the Philippines vs. Marsman & Co., Inc., 11 SCRA 589

Cromwell Commercial Employees and Laborer’s Union-PTUC vs. CIR, 12 SCRA 124

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

CONSEQUENCES OF STRIKE Shell Oil Workers Union vs. Shell Co., 42 SCRA 224

Bacus vs. Ople, 132 SCRA 690

Gold City Integrated Port Services, Inc. vs. NLRC, 254 SCRA 627

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First City Interlink Transportation Co., Inc. vs. Roldan- Confesor, 272 SCRA 124 Nagkakaisang Manggagawa ng Fil Transit- NFL went on strike twice after several failed conciliation conferences with Fil Transit(business name of First City Interlink). The company claims that the strikes held were illegal since a) no strike vote had been obtained before the strike was called and b) assuming there was, the result of strike vote was not reported to the DOLE. Thus, Co. refused to comply with the return-to-work order. DOLE granted backwages. Held: 1. Pursuant to Art. 263(c)(f), the requisites for a valid strike are as follows: (1) a notice of strike filed with the Department of Labor at least 30 days before the intended date thereof or 15 days in case of unfair labor practice; (2) 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; (3) notice given to the Dept. of the results of the voting at least 7 days before the intended strike. These requirements are mandatory. In none of the numerous pleadings filed by the Union has it been shown that a strike vote had been taken before declaring a strike. As between the Co. and the Union, the latter is in a better position to present proof of such fact. The Union’s failure to do so raises the strong probability that there was no strike vote taken. The statement that there was in the Secretary’s order is contrary to evidence in the record. 2. Even assuming that there was a vote taken, the SC agrees that the Union nevertheless failed to observe the required sevenday strike ban from the date the strike vote should have been reported to the DOLE up to the time the Union staged the strike. The importance of the strike vote and reporting of the results to the DOLE cannot be gainsaid as it is the Union itself that the law seeks to protect by ensuring that the majority of its

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

3.

members voted in favor of the strike. Consequently, good faith cannot be invoked by the Union in this case. The strike declared by the Union was attended by pervasive and widespread violence. The acts of violence committed were not mere isolated incidents which could normally occur during any strike. Nevertheless, we are constrained to uphold the Secretary’s ruling that responsibility for these illegal acts must be on an individual and not collective basis. Therefore, although the strike was illegal, only the union officers and criminal acts against the employer are deemed to have lost their employment status. Union members who were merely instigated to participate in the illegal strike should be treated differently.

Sarmiento vs. Tuico, 162 SCRA 676 Asian Transmission Corporation dismissed Catalino Sarmiento who was the Vice President of Bisig ng Asian Transmission Labor Union. The company dismissed him for allegedly carrying a deadly weapon within company premises. The union filed a notice of strike claiming ULP. SOLE assumed jurisdiction and certified the case to NLRC. NLRC issued a return-to work order. All this happened while criminal complaints were pending against the workers for staging an illegal strike. Held: There can be no question that the SOLE acted correctly in certifying the labor dispute to the NLRC. The return-to-work order issued by the NLRC was equally valid as a statutory part and parcel of the certification order issued by the SOLE. It was merely an implementation of the law and a reiteration of the SOLE’s directive. The law itself provides that such assumption or certification shall have the effect of automatically enjoining the impending strike. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately readmit them. The legality of the order is also not affected by the pendency of the determination of the legality of the strike. It is, therefore, not correct to say that the return-to-work order may be enforced only if

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the strike is illegal, for the purpose precisely is to maintain the status quo while the determination is being made. Telefunken Semiconductors Employees’ Union- FFW vs. SOLE, 283 SCRA 145 After striking Ees refused to comply with an RWO of the SOLE, violence erupted in their picket lines. Complaints for threats, defamation, illegal detention and physical injuries against the strikers for stoning the service bus ferrying non- striking Ees. The Ees were eventually terminated. The Union now questions the exclusion of union officers, shop stewards and those with pending crim cases in the SOLE order for the ER to accept striking EEs. Held: We cannot see how the SOLE arrived at his decision of excluding Union officers, et al. It may be true that the workers struck after the SOLE assumed jurisdiction over the case and that they may have failed to immediately return to work even after issuance of the RWO, making their strike illegal (for an RWO is immediately effective). But the liability of each of the union officers and the workers, if any, has yet to be determined. This is evident as the DOLE has yet to hear and receive evidence on the matter. Thus, excluding the specified workers w/o first determining whether they knowingly committed illegal acts would be tantamount to dismissal without due process of law = GAD. As to the issue of the enforcement of the Writ of Execution for the implementation of the RWO, no legal impediment existed to such as the said issue was not raised to the SC and has thus become final. Telefunken Semiconductors Ees’ Union- FFW vs. CA, GR 1430313-14, December 18, 2000 SOLE issued an Assumption Order after te Union filed a notice of strike. Union still struck. SOLE then issued an RWO along with directive on the Co. to reinstate all striking workers “except union officers, shop stewards, and those with pending criminal charges” while the resolution on the legality of the strike was pending. SOLE subsequently declared the strike illegal on the basis of position

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

papers and evidence submitted by the Co. only since theUnin refused to adduce evidence on the ground of insufficiency of the prosecution’s evidence. Held: The office of a pet. for review on certio (R45) requires only questions of law. The factual findings of quasi- judicial agencies, like DOLE, when supported by substantial evidence are entitled to great respect in view of their expertise. The need to determine the individual liabilities of the striking workers, the union officers and members alike, was correctly dispensed with by the Sec. of Labor after ha gave sufficient opportunity to the striking workers to cease and desist from continung with ther picket. It is clear from Art. 263 (g) that the moment the SOLE assumes jurisdiction over a labor dispute in an industry indispensabe to national interest, such assumption shall have the effect of automatically enjoining the intended or impending strike. It was not even necessary for the SOLE to issue another order directing them to return to work. The mere issuance of an assumption order automatically arries with it an RWO, even if the directive to return to work is not expressly stated in the assumption order. Regularity of the service having been established, the strike is deemed illgal for having been staged in knowing defiance of the assumption and returto work orders. Association of Independent Unions in the Phils. vs. NLRC, 305 SCRA 219 Casual EEs were excluded from membership with the bargaining rep. A strike was staged by a union formed by casual employees seeking regularization during which they perpetrated illegal acts like coercing non- striking ees to not report for work. Union filed cases for ULP and illegal lockout. The Co. sought injunction and declaration of illegal strike. Strike held illegal and union officers to have lost employment status. Held: 1. The strike staged was in the nature of a union-recognitionstrike which is calculated to compel the ER to recognize one’s

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2.

3.

4.

union, and not the other contending group, as the bargaining representative despite teh striking union’s doubtful majority status to merit voluntary recognition and lack of formal certification as the exclusive rep. The strike was illegal. The right to strike is never meant to oppress or destroy the ER. The law provides limits such as the prohibited activities under Art. 264, particularly (e): commission of acts of violence, coercion, intimidation, etc. Even if a strike is valid because its objective is lawful, it may still be declared invalid where the means employed are illegal. It follows, therefore, that dismissal of the union officers of the striking union was justified and valid as a consequence of the illegality of the strike staged by them in accordance with Art. 264 (a):knowing participation in an illegal strike. No illegal lockout. It was the EEs who voluntarily stopped working because of their strike.

PNOC Dockyard and Engineering Corporation vs. NLRC, 291 SCRA 219

UST vs. NLRC, 190 SCRA 758

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Jacinto vs. CA, GR 124540, November 14, 1997 Public teachers staged a “mass action’ for the purpose of pressuring gov’t. to grant their demands. DECS Sec. Cariño issued an RWO. Upon their refusal, Cariño issued formal charges & preventive suspension orders against them for gross misconduct, found guilty by the CSC. He found them guilty and ordered their dismissal. CA said the mass action was for all intents and purposes a strike which civil service employees, like these public teachers, did not have a right to. Held: 1. There are allowable standards to freedom of speech such as the overriding considerations of national security and preservation of democratic institutions. As regards to the right to strike, the Constitution itself qualifies its exercise with the proviso “in accordance with law”, which is a manifestation of the State’s right to regulate its use or even deny certain sectors such right. EO180 enjoins under pain of administrative sanctions, all gov’t officers and EEs from staging strikes, demonstrations, mass leaves, walkouts, and other forms of mass action that will result in temporary work stoppage or disruption of public service. Jurisprudence is also clear in holding that workers in the public sector do not enjoy the right to strike. 2. Strike means any temporary stoppage of work by the concerted action of EEs as a result of an industrial or labor dispute. In this case, the teachers were not penalized for the exercise of their right to assemble peacefully and to petition the gov’t. for redress but of conduct prejudicial to the best interest of the service for having absented themselves without prior authority from their schools which led to deprivation of students of education. Had they availed themselves of their free time—not the DECS, the CSC nor the SC—could have held them liable for the valid exercise of their constitutionally guaranteed rights. 3.

No backwages for suspension was justified. Decision of the Sec. confirming dismissal of an EE under his jurisdiction is

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executory even pending appeal thereof. It was the Sec’s final judgment which were carried out. Acosta vs. CA, GR 132088, June 28, 2000 Public school teachers didn’t report for work and instead staged mass actions at Liwasang Bonifacio. For refusal to comply with DECS SEC. Cariño’s RWO, they were charged with gross neglect of duty, etc. The Sec. Found them guilty after an investigation and ordered their dismissal from the service. Held: 1. Jacinto vs. CA, Mla. Public School Teachers’ Assoc vs. Laguio constitute stare decisis from which the Court finds no reason to deviate. 2. Since dismissal orders remain valid and effective until modified or set aside, the intervening period during which an EE is not permitted to work cannot be argued as amounting to unjustified suspension. Preventive suspension not a penalty. Moreover, after full ventilation of their case before the Merit Systems Protection Board (MSPB), the CSC and the CA, they cannot no w allege denial of due process to justify claim for backwages. Appeal is curative of supposed denial. LECTURE Strikes What is a strike? Any temporary stoppage of work through concerted action of the workers because of a labor dispute. To be considered a strike, the stoppage of work must be the result of a labor dispute. Assuming you have a stoppage of work, the proximate or remote cause of such must be due to a labor dispute, and the stoppage must be through concerted effort of the workers. There are three elements: 1. Stoppage of work 2. Concerted action of the employees

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

3. A labor dispute Without the concurrence of the three elements, there is no strike. For example: 1. Stoppage of work because the machinery shut down due to a technical problem 2. Stoppage of work because of a labor dispute and because of a commotion in the negotiations room, the workers out of their own initiative stopped work, with not concerted efforts The basis of the right to strike is the Constitution and the Labor Code. However, remember that: 1. This pertains only to the private sector employees. 2. There can never be a strike if there is no legitimate union in the company 3. The right to strike should be exercised only after the exercise of the right to self-organization Thus, one can strike even before filing a petition for certification election. One can strike the moment one becomes a legitimate labor organization. Grounds for Strike 1. Bargaining deadlock – obviously only the LLO bargaining agent may file for notice for strike under this ground 2. ULP – any LLO can initiate in the absence of a bargaining agreement 3. Union busting – the officers of the union are terminated in bad faith 4. No ULP – when the union believed in good faith that there is ULP despite a finding to the contrary later on Requisites for a strike

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1. CBA (collective bargaining agreement) deadlock or ULP (unfair labor practice) – these are the ONLY grounds for a valid strike 2. Notice of strike filed with the NCMB Regional Office and the employer 30 or 15 (if ULP) days before the intended date thereof 3. Efforts of the NCMB at conciliation and mediation through the conciliator 4. File notice with the NCMB regarding the strike vote to be conducted 24 hours after notice 5. Report of the strike vote The strike vote is done in order to determine whether to proceed with the strike, under the grounds raised in the notice of strike. The earliest it can be filed is simultaneous with the notice of strike. If the first strike vote fails, can a second strike vote be conducted again? There is no prohibition under the law to allow this. *A common mistake is to think the Med-Arbiter has something to do with strikes. No. His only function is to act upon and decide petitions for certification election and nothing else. Who can file a notice of strike?  If bargaining deadlock is the cause, the bargaining agent  If ULP, both bargaining agent and, to Sir’s mind =) other LLO’s as well. Art. 263 (c) is not a clear prohibition that any LLO can file a notice only in cases where there is no bargaining agent. Besides, in reality, the minority union is usually the victim of ULP! The importance of notice of strike is that, aside from the fact that it should be filed, it also initiates the conciliation process, and the day of strike is reckoned from the day the notice of strike is filed.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

*Union busting as a ground to strike may be so, when the existence of the union is threatened:  In such a case, there is a dismissal of a DULY ELECTED officer of a union  In this situation, the cooling off period does not apply After the cooling-off period, the earliest time a strike may be conducted is right after such cooling-off period. Noticeably, the law does not give an expiry date for a notice of strike. It does not state a maximum period between filing the notice and conducting the strike. The law also does not give any period within which to submit the report of the strike vote. However, the law states the strike may be held only seven days after the report of the strike vote is filed. Now the NCMB manual states that the 7-day period must be counted after the 30/15 day ban. But that’s wrong because that’s not in the law. There are two views regarding cases of union busting: View 1 – the 15 day period is dispensed with, but the 7-day ban must still be followed, or View 2 – this is an emergency situation where the 7 day period should not be made to apply as well. The reason why the 15-day period is dispensed with in union busting is because of the exigency of the situation, and if the 7day period is to be made to apply, it only defeats the purpose of removing the 15-day period. Illegality of Strikes When is a strike illegal? When it is attended with any of the following: 1. Procedural requirements are not complied with 2. Non-strikeable grounds 3. Use of violence – such will be considered illegal only if it is pervasive and widespread. Isolated acts will not affect the legality of the strike.

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4. Use of strikebreaker – e.g. use of police force to stop the strike Also, the strike cannot be conducted with the use of violence, force or intimidation or blockage of the ingress/egress of the premises and public thoroughfares Effect of illegal strike 1. Union officer – will be terminated if he knowingly participated in an illegal strike 2. Union member – must knowingly participated in the commission of the illegal acts for him to be terminated If prohibited or unlawful acts are committed by the strikers, can injunction issue? YES, but only against the prohibited activities, not against the strike. A strike without valid ground is not tantamount to an illegal strike, if the workers believed in good faith that there was valid ground to strike. But this belief must be based on actual circumstances justifying the belief.

INNOCENT BYSTANDER DOCTRINE Persons affected by the strike or picket, who are not parties to the dispute, and whose interests are completely foreign, may file before the regular courts for a civil case of injunction. The acts complained of are prohibited acts that may be committed either by the LLO or the employer.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Assumption of Jurisdiction *Secretary of Labor or president may assume jurisdiction which are indispensable to the national interest (may be motu propio or upon request) Assumption Order – the Secretary of Labor intervenes and decides the case/issue, not even to conciliate/mediate Certification Order – Secretary certifies the NLRC to arbitrate 

It depends on the Secretary of Labor whether the case should be a case for issuance of an AO or CO, but usually if there is a bargaining deadlock, an AO is issued. If it is a ULP= CO. When the Secretary assumes jurisdiction, the employee must return to work and the employer is required to accept them back, and follow the status quo ante the strike. No order is needed, it automatically operates. The general rule is that in no case can there be a wholesale dismissal of all strikers if there is an illegal strike. The exception is when there is an assumption/certification order but the employees refuse to obey such order despite notice. The employees’ refusal to return, despite having been duly notified of the Secretary’s assumption of jurisdiction, is a ground for termination. However, not all the employees who defied the assumption order or participated in an illegal strike may be terminated at once. Each employee must be judged on their individual culpability (due process pa rin!!!). During the strike, no work=no pay except if the employee returned voluntarily and the employer refused to get them back. The employer can hire replacements while the strike is ongoing. After the strike, the temporary employees can be terminated for redundancy.

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VII. POST-EMPLOYMENT A. CLASSES OF EMPLOYEES LABOR CODE Art. 278. Coverage. – The provisions of this Title shall apply to all establishments or undertakings, whether for profit or not. Art. 280. Regular and casual employment. — The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreements of the parties, an employment shall be deemed to be: - REGULAR where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer - except where the 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 employee - or where the work or service to be performed is SEASONAL in nature and the employment is for the duration of the season. An employment shall be deemed to be CASUAL if it is not covered by the preceding paragraph; - provided, - that any employee who has rendered at least one year of service, - whether such service is continuous or broken, - shall be considered a REGULAR employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Art. 281.

Probationary employment. —

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Probationary employment - shall not exceed six months from the date the employee started working, - unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated - for a just cause or - when he fails to qualify as a regular employee a) in accordance with reasonable standards b) made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.

OMNIBUS RULES, BOOK VI SECTION 5. (a) Regular employment. The provisions of written agreements to the contrary notwithstanding and regardless of the oral agreements of the parties, employment shall be deemed regular for purposes of Book VI of the Labor code where the employees has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the 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 employee or where the job, work or service to be performed is seasonal in nature and the employment is for the duration of the season. (b) Casual employment. There is casual employment where an employee is engaged to perform a job, work or service which is merely incidental to the business of the employer, and such job, work or service is for a definite period made known to the employee at the time of engagement; provided, that any employee who has rendered at least one year of service, whether such service is continuous or not shall be considered a regular employee with respect to the

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activity in which he is employed and his employment shall continue while such activity exists. Notwithstanding the foregoing distinctions every employee shall be entitled to the rights and privileges and shall be subject to the duties and obligations, as may be granted by law to regular employees during the period of their actual employment. SECTION 6. Probationary employment. — There is probationary employment where the employee upon his engagement, is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement. Probationary employment shall be governed by the following rules: (a) where the work for which the employee has been engaged is learned or apprenticeable in accordance with the standards prescribed by the Department of Labor and Employment, the period of probationary employment shall be limited to authorized learnership or apprenticeship, period which is applicable. (b) Where the work is either learnable nor apprenticeable, the period of probationary employment shall not exceed six months reckoned from the date the employee actually started working. (c) The services of any employee who has been engaged on probationary basis may be terminated only for a just or authorized cause, when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer. (d) In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee.

REGULAR EMPLOYEES De Leon V. NLRC, 176 SCRA 615 De Leon was employed by La Tondena as a painter and on the agreement that he is considered a casual employee. He was made to clean and oil machines and other odd jobs when he had no painting job. After more than a year of service, he requested to be included in

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

the payroll of regular workers. La Tondena responded by dismissing him. The Labor Arbiter found that de Leon was illegally dismissed and, in light of the facts, is considered a regular employee. NLRC reversed. Petition for review with the Supreme Court. Held: Petition granted, employer must reinstate De Leon as a regular maintenance man. Contrary agreements notwithstanding, an employment is deemed regular when the activities performed by the employee are usually necessary or desirable in the usual business or trade of the employer. Not considered regular are the so-called “project employment” the completion or termination of which is more or less determinable at the time of employment, such as those employed in connection with a particular construction project, and seasonal employment which by its nature is only desirable for a limited period of time. However, any employee who has rendered at least one year of service, whether continuous or intermittent, is deemed regular with respect to the activity he performed and while such activity actually exists. The primary standard, therefore, of determining a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Also, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. What determines whether a certain employment is regular or casual is not the will and word of the employer, to which the

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desperate worker often accedes, much less the procedure of hiring the employee or the manner of paying his salary. It is the nature of the activities performed in relation to the particular business or trade considering all circumstances, and in some cases the length of time of its performance and its continued existence. Aurora Land vs. NLRC, 266 SCRA 48 Honorio Dagui was hired by Dona Aurora Suntay Tanjangco in 1953 to take charge of the maintenance and repair of the Tanjangco apartments and residential buildings. He was to perform carpentry, plumbing, electrical and masonry work. Upon the death of Dona Aurora Tanjangco in 1982, her daughter, petitioner Teresita Tanjangco Quazon, took over the administration of all the Tanjangco properties. On June 8, 1991, his services was terminated. He filed a complaint for illegal dismissal with the Labor Arbiter. Petitioners insist that Dagui had never been their employee. Since the establishment of Aurora Plaza, Dagui served therein only as a job contractor. Dagui had control and supervision of whoever he would take to perform a contracted job. On occasion, Dagui was hired only as a “tubero” or plumber as the need arises in order to unclog sewerage pipes. Every time his services were needed, he was paid accordingly. It was understood that his job was limited to the specific undertaking of unclogging the pipes. In effect, petitioners would like the Court to believe that Dagui was an independent contractor, particularly a job contractor, and not an employee of Aurora Plaza. Held: An employer-employee relationship exists. Section 8, RuleVIII, Book III of the Implementing Rules and Regulations of the Labor Code provide the essential requisites before one is considered a job contractor. Honorio Dagui earns a measly sum of P180.00 a day (latest salary). Ostensibly, and by no stretch of the imagination can Dagui qualify as a job contractor. Whenever the existence of an employment relationship is in dispute, four elements constitute the reliable yardstick:  the selection and engagement of the employee (hiring);

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

  

the payment of wages (wages); the power of dismissal (firing); and the employer’s power to control the employee’s conduct (control). It is the so-called “control test”, whether the employer controls or has reserved the right to control the employee not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished, which constitute the most important index of the existence of the employer-employee relationship. An employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end to be achieved but also the means to be used in reaching such end. Labor Congress of the Phils. v NLRC, 290 SCRA 509 LCP is the exclusive bargaining representative of the employees of Empire Food Products. A MOA was entered into by the employees and the company. Later, the employees, represented by LCP, filed a complaint for ULP, union busting, violation of the MOA and for underpayment of wages. The labor arbiter and the NLRC held that there was no underpayment of wages nor were they entitled to other benefits because the employees were “pakiao” workers and paid on the basis of their output subject to the limitation that the payment conformed with the minimum wage rate to an 8-hour workday. Being pakiao workers, they are not entitled to any other benefits to which regular workers are entitled to receive. Issue: Whether the employees are piece rate workers which make them not entitled to other benefits being given to regular employees. Held: Petitioners are entitled to holiday pay, premium pay, 13th month pay and service incentive leave. There are 3 factors which led the court to conclude that petitioners, although piece rate workers, were regular employees of private respondents. First, as to the nature of petitioners’ tasks, their job of repacking snack food was necessary or desirable in the usual business of private respondents,

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who were engaged in the manufacture and selling of such food products; second, petitioners worked for private respondents throughout the year, their employment not having been dependent on a specific project or season; and third, the length of time that petitioners worked for private respondents. Thus, while petitioners’ mode of compensation was on a “per piece basis” the status and nature of their employment was that of regular employees. The Rules Implementing the Labor Code exclude certain employees from receiving benefits such as nighttime pay, holiday pay, service incentive leave and 13th month pay, inter alia, “field personnel and other employees whose time and performance is unsupervised by the employer, including those who are engaged on task or contract basis, purely commissions basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof.” Plainly, petitioners as piecerate workers do not fall within this group. Not only did petitioners labor under the control of private respondents as their employer, likewise did petitioners toil throughout the year with the fulfillment of their quota as supposed basis for compensation. Further, in Section 8(b), Rule IV, Book III, piece workers are specifically mentioned as being entitled to holiday pay. In addition, the Revised Guidelines on the Implementation of the 13th Month Pay Law, in view of the modifications to P.D. No. 851 by Memorandum Order No. 28, clearly exclude employer of piece rate workers from those exempted from paying the 13th month pay. The Revised Guidelines as well as the Rules and Regulations identify those workers who fall under the piece-rate category as those who are paid a standard amount for every piece or unit of work produced that is more or less regularly replicated, without regard to the time spent in producing the same. As to overtime pay, the rules, however, are different. According to Sec 2(e), Rule I, Book III of the Implementing Rules, workers who are paid by results including those who are paid on piece-work, takay, pakiao, or task basis, if their output rates are in

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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accordance with the standards prescribed under Sec. 8, Rule VII, Book III, of these regulations, or where such rates have been fixed by the Secretary of Labor in accordance with the aforesaid section, are not entitled to receive overtime pay. Private respondents did not allege adherence to the standards set forth in Sec. 8 or with the rates prescribed by the Secretary of Labor. As such, petitioners are beyond the ambit of exempted persons and are therefore entitled to overtime pay.

Held: Yes. The SC held that although their contracts were valid, the fact that after its expiration petitioner decided to continue her services, she is now entitled to security of tenure. Moreover, the fact that the employee was not required to report at a fixed hour or to keep fixed hours of work does not detract from her status as a regular employee. As petitioner itself admits, Quinta was a managerial employee and therefore not covered by the Labor Code provisions on hours of work.

Caurdanetaan Piece Workers Union v. Laguesma, 286 SCRA 401 (case where the SC uses Art. 280 to prove ‘er-’ee relationship) Paid wages directly to employee, wielded power of dismissal, and members of union did not possess substantial capital which belies claim that they were independent contractors.

Neither does the fact that Quinta was teaching full time at the Cebu Doctors’ College negate her regular status since this fact does not affect the nature of her work. Whether one’s employment is regular is not determined by the number of hours one works, but by the nature of the work and by the length of time one has been in that particular job.

Maraguinot v. NLRC, 284 SCRA 539 It is settled that contracting out of labor is allowed only in case of job-contracting. For a contactor to be job-contactor, must have tools, equipment, machinery, work premises, and other materials necessary to his business, or substantial capital or investment. As labor-only contracting is prohibited, the law considers the person or entity engaged in the same, a mere agent or intermediary of the direct employer. International Pharmaceuticals, Inc. v NLRC, 287 SCRA 313 Petitioner employed Quinta as Medical Director for the development of its herbal medicine department. Their contract had a period of 1 year. After the contract, Quinta was allowed to continue working until she was terminated. She filed a case for illegal dismissal. Petitioner claims that she was only a project employee. Moreover, it is claimed by petitioner that she was not required to keep fixed hours of work, thus she couldn’t have been a regular employee. Issue: Whether Quinta became a regular employee.

Highway Copra Traders vs. NLRC, 293 SCRA 350 “…[A]n employment is deemed regular when the activities performed by the employee are usually necessary or desirable in the usual business or trade of the employer. The nature of his work as a general utility man was definitely necessary and desirable to petitioner’s business of trading copra and charcoal and regardless of the length of time. The argument of the respondent was only engaged for a specific task, the completion of which is resulted in the cessation of his employment is untenable. By specific project or undertaking, Article 280 of the Labor Code contemplates an activity which is not commonly or habitually performed or such type of work which is not done on a daily basis but only for a specific duration of time or until completion in which case the services of an employee are necessary and desirable in the employer’s usual business only for the period of time it takes to complete the project. Philippine Federation of Credit Cooperatives vs. NLRC, Dec. 11, 1998 A probationary employee who is engaged to work beyond the probationary period of 6 months or for any length of time set forth by the employer, shall be considered a regular employee.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Bernardo vs. NLRC, July 12, 1999 Those who have worked beyond worked beyond 6 months and whose contracts have been renewed are already regularized. The accommodation argument does not change the nature of their employment. An employee is regular because of the nature of work and the length of service, not because of the mode or even the reason for hiring them. The character of employment is determined not by stipulations in the contract but by the nature of the work performed. Otherwise no employee can become regular by the simple expedient of incorporating this condition in the contract of employment. Where an employee has been engaged to perform activities which are usually necessary or desirable in the usual business of the employer, such employee is deemed a regular employee and is entitled to security of tenure notwithstanding the contrary provisions of his contract of employment.

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Mehitabel Furniture Co. vs NLRC, 220 SCRA 602

Magcalas vs. NLRC, 269 SCRA 453

PROJECT EMPLOYEES Sandoval Shipyard vs. NLRC, 136 SCRA 647

Rada vs. NLRC, 205 SCRA 69

San Miguel Corporation vs. NLRC, 297 SCRA 277 An employment is deemed regular when the activities performed by the employee are usually necessary or desirable in the usual trade or business of the employer even if the parties enter into an agreement stating otherwise. But considered not regular are the “project employment” the termination of which is more or less determinable at the time of employment, and seasonal employment which by its nature is only for one season of the year the employment is limited for the duration of the season. Nevertheless, an exception to the exception is made: any employee who has rendered at least one year of service whether continuous or intermittent with respect to the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

activity he performed and while such activity actually exists, must be deemed regular. It must be noted that the respondent was employed only for seven months. First he was employed for repair and upgrading of furnaces, upon completion of such , he was terminated. A few days after, two other furnaces required draining/cooling down and emergency repair. Thus he was hired again. Upon completion of such second undertaking, he was likewise terminated. He was not hired for a third time and his two engagements taken together did not total one full year. Clearly, he was hired for a specific project that was not within the regular business of the corporation. Villa vs. NLRC, 284 SCRA 105 By entering into such contract of project employment, an employee is deemed to understand that his employment is coterminous with the project. Project employment contracts are not lopsided agreements in favor of one party. Thus, the fact that workers work under different project employment contracts for several years cannot be made a basis to consider them as regular employees, for they remain project employees regardless of the number of projects in which they have worked. Length of service is not the controlling determinant of the employment tenure of a project employee. PAL vs. NLRC, 298 SCRA 430 The janitorial service agreement is not a labor-only contracting. There is labor only contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machinery, work premises, among others and the workers recruited and placed by such persons are performing activities that are directly related to the principal business of such employer. Stellar was not engaged in labor only contracting because it has sufficient capital form of tools and equipment, like vacuum cleaners, polishers, and substantial capitalization as proven by its financial statements. STELLAR even has other clients like San

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Miguel Corporation and etc. Thus PAL is not the employer of the janitors. Imbuido vs. NLRC, GR 114734, 329 SCRA 357 The principal test for determining whether an employee is a project employee or a regular employee is whether the project employee was assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employee was engaged for that project. A project employee is one whose 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 employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. In the recent case of Maraguinot, Jr. v. NLRC, we held that “[a] project employee or a member of a work pool may acquire the status of a regular employee when the following concur: 1) There is a continuous rehiring of project employees even after [the] cessation of a project; and 2) The tasks performed by the alleged “project” employee are vital, necessary and indispensable to the usual business or trade of the emplyer.”

TERM EMPLOYEES Brent School vs. Zamora, 181 SCRA 702 Brent School, Inc. (“BS”) employed Doroteo R. Alegre (“DA”) as athletic director. The employment contract fixed a specific term for its existence: 5 years (18 July 1971 to 17 July 1976). 3 subsequent subsidiary agreements reiterated the same terms and conditions stipulated in the original contract. 20 April 1976. DA received copy of report filed by BS with DOLE advising of the termination of his services effective 16 July1976. The ground: “completion of contract, expiration of the definite period of employment.” DA protested, arguing that he had acquired regular employment status and could not be removed except

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

for valid cause because his services were UNOD in UTOB and his employment had lasted for 5 years. DOLE Regional Director ruled in favor of DA. Secretary of Labor sustained. Office of the President dismissed BS’ appeal and affirmed SOL decision. Held: Since the entire purpose behind the development of legislation culminating in the present Art. 280 of the Labor Code clearly appears to have been, as already observed, to prevent circumvention of the employee’s right to be secure in his tenure, the clause in said article indiscriminately and completely ruling out all written or oral agreements conflicting with the concept of regular employment as defined therein should be construed to refer to the substantive evil that the Code itself has singled out: agreements entered into precisely to circumvent security of tenure. It should have no application to instances where a fixed period of employment was agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any circumstances vitiating his consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. Unless thus limited in its purview, the law would be made to apply to purposes other than those explicitly stated by its framers; it thus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and unintended consequences. There was a valid fixed term employment contract. DA’s employment was terminated upon the expiration of his last contract with BS on 16 July 1976 without necessity of any notice. Concurring and dissenting opinion (J. Sarmiento): “I cannot liken employment contracts to ordinary civil contracts in which the relationship is established by stipulations agreed upon.” Millares vs. NLRC, July 29, 2002

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Blancaflor vs. NLRC, 218 SCRA 366

Romares vs. NLRC, 294 SCRA 411 There are two kinds of regular employees: those who are engaged to perform activities which are UNOD in UTOB, and those casual employees who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed. The scheme of rehiring him for a two to three month contract on a temporary job as a mason is a clear circumvention of the employee’s right to security of tenure and to other benefits. Despite the provisions of the contract of employment, as long as the activities are UNOD in UTOB, such employee is already regular. SEASONAL EMPLOYEES Mercado vs. NLRC, 201 SCRA 332 Petitioners are farm workers who are contending that they are regular farm workers of Cruz and other respondents and thus, are entitled to benefits like overtime pay, holiday pay, service incentive leave, ECOLA, 13th month pay, etc.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

They claim that they have been working for 12 hours a day the whole year round for almost 19 years (others, for 30 years). Respondents deny that petitioners are regular workers since they are only hired to work for six months (during the harvesting of sugar canes) a year and for the rest of the year, petitioners are allowed to seek employment elsewhere. Petitioners contend that the proviso in the second paragraph of Art. 280 is applicable to their case, and that the Labor Arbiter should have considered them regular by virtue of said proviso. Held: They are seasonal workers. The first paragraph of Art 280 answers the question of who are regular employees. It states that regardless of any written or oral agreement to the contrary, an employee is deemed regular where he is engaged in necessary or desirable activities in the usual business or trade of the employer, except for project employees. A project employee has been defined to be one whose 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 employee, or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. The second paragraph demarcates as “casual” employees, all other employees who do not fall under the definition of the preceding paragraph. Policy Instruction No 12 discloses that the concept of regular and casual employees was designed to put an end to casual employment in regular jobs, which has been abused by many employers to prevent so-called casuals from enjoying the benefits of regular employees or to prevent casuals from joining unions. The same instructions show that the proviso in the second paragraph was not designed to stifle small scale businesses nor to oppress agricultural land owners to further the interests of laborers, whether agricultural or industrial. What it seeks to eliminate are abuses of employers against their employees and not, as petitioners would have us believe, to prevent small scale businesses from engaging in

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legitimate methods to realize profits. Hence the proviso is applicable only to the employees who are deemed casuals but not to the project employees nor the regular employees treated in paragraph one of Art 280. Tacloban Sgkahan Rice Mill vs. NLRC, 183 SCRA 425

Philippine Tobacco Flue-Curing Corp. vs. NLRC, 300 SCRA 37 They are entitled to separation pay. Seasonal workers who work from time to time and are temporarily laid off during off-season are not separated from service in said period, but are merely considered on leave until re-employed. Since they are repeatedly rehired, such is sufficient evidence of the necessity and indispensability of services, and is equated to a regular employee. On the contrary, when an employee is rehired every year but may work with another, one is not seasonal but a project employee and would naturally end upon the completion of each project. The doctrine in Mercado vs. NLRC is inapplicable to the case at bar because in Mercado, the seasonal employees were not in the employer’s regular employ. They performed different phases of agricultural work in a given year, and during such periods they could work for others, which they did. They were free to contract with others even if they were presently working for the employer.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Rather, the case at bar is pretty much similar to the case of Gaco vs. NLRC, where the Court likewise ruled that Gaco was a regular employee, due to his repeated rehiring every season, spanning over fifteen years. PROBATIONARY EMPLOYEES International Catholic Migration Commission v. NLRC, 169 SCRA 606 Petitioner engaged the services of private respondent Galang as a probationary cultural orientation teacher for a probationary period of 6 months. Three months thereafter, she was informed, orally and in writing , that her services were being terminated for her failure to meet the prescribed standards of petitioner as reflected in the performance evaluation of her supervisors during the teacher evaluation program she underwent along with other newly-hired personnel. She subsequently filed a complaint for illegal dismissal, unfair labor practice and unpaid wages against petitioner with the then Ministry of Labor and Employment, praying for reinstatement with backwages, exemplary and moral damages. The labor arbiter dismissed the complaint, but awarded payment for the unexpired portion of the agreed period. NLRC affirmed. Petitioner questions the award. Held: For the petitioner. A probationary employee, as understood under Art 281 of the Labor Code, is one who is on trial by an employer, during which the employer determines whether or not he is qualified for permanent employment. A probationary employment is made to afford the employer an opportunity to observe the fitness of a probationer while at work, and to ascertain whether he will become a proper and efficient employee. The word “probationary”, as used to describe the period of employment, implies the PURPOSE of the term or period, but not its length.

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Being in the nature of a “trial period”, the essence of a probationary period of employment fundamentally lies in the purpose or objective sought to be attained by both the employer and the employee during said period. The length of time is immaterial to determining correlative rights of both in dealing with each other during said period. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer, on the other, seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment. The employer has the right or is at liberty to choose who will be hired and who will be denied employment. In that sense, it is within the exercise of the right to select his employees that the employer may set or fix a probationary period within which the latter may test and observe the conduct of the former before hiring him permanently. Art 281 of the LC gives ample authority to the employer to terminate a probationary employee for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. There is nothing under Art 281 of the LC that would preclude the employer from extending a regular or permanent appointment to an employee once the employer finds that the employee is qualified for regular employment even before the expiration of the probationary period. Conversely, if the purpose sought by the employer is neither attained nor attainable within the said period, Art 281 does not likewise preclude the employer from terminating the probationary employment on justifiable causes. The dissatisfaction of the petitioner over the performance of private respondent Galang is a legitimate exercise of its prerogative to select whom to hire or refuse employment for the success of its program or undertaking. More importantly, Galang failed to show that there was unlawful discrimination in the dismissal. Mariwasa Manufacturing vs. Leodegario, 169 SCRA 465

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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LECTURE (PART ONE)

Manila Hotel Corp. vs. NlRC, 141 SCRA 169

Colegio de San Agustin vs. NLRC, 201 SCRA 398

It is important to distinguish the classes in order to apply the proper rules in labor standards, or apply the security of tenure provisions (illegal termination). It is also important in labor relations, because in a certification election, the definition of a bargaining unit depends on the classes of employee agreed upon by the parties allowed to join. The general rule is that all employees are regular employees. The standard test is that there must be a reasonable connection between the job and the employer’s business. Regular employee: 1. Performs tasks which are UNOD in UTOB; and the word “usually” is used because it does not mean they always have to perform tasks which are necessary or desirable. 2. It also refers to casual employees who have rendered at least one year of service, whether continuous or broken, with respect to the activity they are employed. 3. Probationary or term employees are also considered regular once they are allowed to work beyond the term or duration of the project.

CASUAL EMPLOYEES Capule vs. NLRC, 191 SCRA 374

4. Project employee who has been continuously rehired (Maraguinot case) – becomes regular for the specific job continuously rehired for a. The employee is continuously rehired from project to project even with gaps of time in between b. Task is UNOD in UTOB, or else the project ee is considered only a casual ee c.

Rehired for the same task or nature of task.

A project employee converted to regular employee is still not paid for the period he does not work. But the employer is required to hire him when the next project requires he particular job he does, or else, the employer is guilty of illegal termination. Project employee:

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Those employed for a fixed project or specific task, the completion of which has been determined and made known to the ee at the time of engagement. Two kinds: 1. Tasks which are UNOD in UTOB 2. Tasks which are not UNOD in UTOB a.

The job must be distinct from the totality of the er’s business

b.

The project must be definite as to its completion

c.

Employment terminates with the project, regardless of the period

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Probationary Employee: Hired for 6 months to determine qualification, or capacity as a regular employee, though an ee can become regular right away without going through probation -

The employee is given the standards at the time of engagement (employer must explain, not merely giving document)

-

General rule is that it is limited to 6 months, except a. When the qualifications cannot be determined during the 6 months, as part of company policy

A Workpool is not necessary in order to convert the project ee into regular. But its existence may signify that the proj. ee has become regular if there is continuous rehiring.

b. When the ee is the one who asked for the extension Casual Employee:

Fixed Term:

-

The job is assigned a specific date of expiration even if the job is considered UNOD in UTOB. The important aspect is that the job is time bound.

One who does not fall under the definition of a regular, project, seasonal or fixed employee

-

The job is not UNOD in UTOB

Brent School ruling: requirements for a valid FT employment:

-

Casual converted to regular after rendering more than a year of service with respect to that activity employed, whether continuous or broken

-

If broken but has served more than one year already, during the intervals he does not have work due to temporary layoff, he can look for another job, but not during the times the er needs him.

a. The parties dealt on equal footing (bargaining position) b. The contract is reasonable, not oppressive c.

The employee entered into it voluntarily

d. There is no intent to circumvent labor laws e. Usually apply to teachers; sadly, it is used in other types of jobs and has been subject of abuse

- Any doubts must be resolved in favor of regular employment (PFCCI case)

Seasonal Employee:

Lecture (Part Two) Types of employment

Hired for a specific period of time during the year, and may be UNOD in UTOB -

Rehired whenever their services are required (e.g. farmworkers)

-

At the arrival of the season must be rehired, or else the er is guilty of illegal termination

-

Allowed to seek work elsewhere while off-season (Mercado case is clarified by the Phil Tobacco case).

Remember that the presumption is in favor of regular employment. It may be shown that one is not a regular employee, but proof must be given to show this. How to determine regular employment? The nature of the work is UNOD in UTOB of the employer, and if a casual is employed for more than one year, he is considered an employee. Probationary employment:

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

probe period is 6 months for the employer to determine the eligibility of the employee. But the period may be shortened or extended. Probe converts to regular after the period imposed has lapsed, and the employee continues to work. It implies that the employee has passed and is eligible for regular employment. Also, if the terms and conditions of employment are not clearly provided by the employer, the standards are not clear then the employee is deemed a regular employee. This is because the employee has no knowledge of what standards he or she must meet, and so this should not work to his or her prejudice. Project employment: Project employee is one who works for a specific project or undertaking which is separate and distinct from the main business of the employer. E.g. the Ateneo Law School wants to computerize its records. The employees hired to do such are project employees. But remember the project or undertaking MAY be within the regular business of the employer. That is, it may be necessary or desirable to the main business. But it is considered a project because it is distinguishable as separate from the main business. There are three instances when the project employee is converted into a regular employee. 1.

A project employee may be converted to regular status when he was employed for a specific project, the completion of which is determined, but despite the termination of the project, he is still made to work. It negates the essence of project employment. It shows the employee’s work is needed not only in the specific project.

2.

Within the project itself, and before the completion of the project, the employee is given tasks not related at all to the project. Giving the employee additional work negates again the essence of project employment. It shows again the need of his services is not limited to the project. Even if the extra work is not UNOD in UTOB to the main business, he is converted to a regular employee.

3.

The case of Maraguinot. Under multiple succeeding projects, can you have gaps between each project, and the employee still be converted to regular status? YES. But only when the project

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employee is rehired continuously, and for the same nature of task. There is a pattern showing that UNOD in UTOB. Remember that the one year rule in the Code applies only to casual employment, not to project nor seasonal employees. If a project employee is converted to a regular employee, when can he reckon his conversion to regular employment? At the start of the project? According to Sir, there is no clear answer to that. Two possible options: One is to say that regular employment starts from day one, because it can be analogous to the ground of “psychological incapacity” under the Family Code. Theoretically it should have existed from the very start, even if it manifests much later. Hence, one theory is that from day one, the work done is UNOD in UTOB, thus regular employee from day one. The second option is after showing a series of rehiring, a pattern, only then will conversion occur. But it is hard to determine what exact date the regular employment will be counted – should it be counted from the start of the third project? Or from the second project? Etc. etc. Again, there is no clear-cut formula. Casual Employment: A casual employee is one whose employment is not UNOD in UTOB, but his term of employment is not made known at the time of the employment, unlike a project ee. A casual converts to regular ee if after one year of service, whether continuous or broken, he still works for the employer. The length of time is an indication that his job is UNOD in UTOB. Now what if this scenario happens: hired

hired again 6 months

vacancy

hired again 7 months

vacancy

6 months regular

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

In this case, the employee becomes regular after one year, that is, under the second undertaking. Hence he is deemed a regular employee, and so he may demand to be rehired when there is another available undertaking, even though the intervals between jobs may stretch to months. During the second vacancy, the employee is still considered a regular employee, but since there is no job to do, the Court considers this a temporary lay-off without pay. Hence he is still a regular employee who follows the “no work, no pay” rule. The same principle “temporary lay off” applies to a project and seasonal employee/employment, who acquires regular employment. Such employee can demand that he be rehired for the next casual work. If the company hires someone else, then it is guilty of illegal termination – illegally terminating the employee converted to regular employee. During the period that he is temporarily laid off, the worker may seek work elsewhere. This will not negate his conversion to a regular employee in the first company. After the one year, the employee has the right to demand that he be rehired for succeeding undertakings. Conversely, management can demand and compel the employee to report for work for the next undertaking. If the employee is working elsewhere, then the employer can deem the employee as refusing to work, a ground for disciplinary action and termination. REMEMBER: A casual employee becomes regular after completion of service of one year for the SAME task or nature of tasks. He must complete the one year period for the SAME tasks/nature of tasks. So let’s say for the second undertaking he was hired as a driver, but in the first undertaking he was hired as a waiter, then there is no conversion. The Principle in project or seasonal employment that once a project/seasonal employee is made to do tasks other than or outside of the work for which he was hired makes him a regular employee, DOES NOT apply to casual employment. * The codal provisions are very important especially for bar purposes. The cases are interpretations of the provisions. You must know the provisions first before the cases.

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Seasonal Employment: In this case, conversion occurs similar to project employees. When they are continuously rehired for the same task/nature of task, they become regular employees. During off-season, they are temporarily laid off, without pay, but they are still considered regular employees. So during off-season, the relationship is still continuous. “Regular seasonal employees”. Sir uses this term only because the Court used it. But the correct term should be “seasonal employees converted to regular employees. Anyway, the hiring must be for the same task/nature of task. If not, there is no pattern for UNOD in UTOB. Except in cases where the employer hires an “all around” person. Obviously, not the same nature of task. But there is still that pattern showing his services are UNOD in UTOB. So he becomes regular as well. In the Phil. Tobacco case, the workers were hired season after season after season. So obviously they were regular employees. Remember our discussion awhile ago, regarding project employees, as to when to reckon an employee to be regular once there is conversion? The same two scenarios apply to seasonal employees. There is also no clear-cut answer to seasonal employees. But it is easier to defend the first scenario that from day one they were regular, it became manifest only after some time. Use the principle of resolving all doubts in favor of labor. Otherwise it will be difficult to defend the time of conversion. Remember that once an employee is converted to a regular employee, he should enjoy or derive all benefits covered by the CBA that is given to regular employees. Now, look at the codal provision. In effect, it says that if one is not regular, he is project/seasonal. If he is not project/seasonal, he is casual. But there is another type of employment created by jurisprudential rule: Fixed Term employment: Unlike project, where what is fixed is the term of completion of the project, in Fixed Term, the PERIOD of employment is fixed. The Court clarified that Fixed term is allowed only if:

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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

it was entered into by both parties negotiating on a more-or-less equal bargaining position



the worker should not be coerced



the worker should not be deprived of his workers rights as an employee

B. SECURITY OF TENURE



it must be a good faith agreement, not entered into by the employer to circumvent the law on regular employment

LABOR CODE

This is the Brent ruling. The Court upheld this pursuant to provisions on the Civil Code, that one must respect the terms of a contract entered into by the parties. Is this correct? Partly yes, essentially no. Yes the CC contains the provisions recognizing the parties’ rights to fix the terms of a contract. But the CC itself says that for employment relationship it is not the CC that applies but rather the Labor Code. For a contract of employment is not an ordinary contract-it is so vested with public interest that it should be covered by special provisions. Even the CC points us back to special laws. Is the Brent doctrine applicable to any situation? No. It will NOT apply to a factory and a factory worker. Remember that the people involved in Brent were the school and an athletic director. Similar to a probationary/project/seasonal employee being made to work beyond the period/project/season, a fixed term employee made to work beyond the fixed term should be considered regular, because it negates the essence of fixed term employment. Even if the parties bargained on equal footing. Second, is repeatedly rehiring the fixed term employee through fixed term employment contracts. The element of circumvention in this case is clearly shown. It lacks one of the conditions under the Brent doctrine that the fixed term employment must be done in good faith. Hence in the second situation the employee should be deemed regular as well. Remember that it is not a general rule that you can fix the term of employment. It is an exceptional case that must be applied in exceptional circumstances. The general rule is one is a regular employee. Remember the rule in statutory construction – that exceptions to the general rule must be construed strictly. So if you are not sure whether the employee falls under one of the exceptional circumstances, then he should be deemed regular. Is there a

problem with that? There is none because an employer can hire an employee as regular starting from day one.

Art. 277. Miscellaneous Provisions. — (b)

Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just or authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the workers whose employment is so sought to be terminated a written notice containing a statement of the cause for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. The Secretary of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off. (As amended by RA 6715)

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

ART. 279. Security of Tenure. — In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and to his backwages computed from the time his compensation was withheld from him up to time of his actual reinstatement. (As amended by RA 6715) ART. 282. Termination by employer. — An employer may terminate an employment for any of the following just 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 or 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 or his duly authorized representative; and (e) Other causes analogous to the foregoing. ART. 283. Closure of establishment and reduction of personnel. — The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this title, by serving a written notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the

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worker affected thereby shall be entitled to a separation pay equivalent to at least one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. Art. 284. Disease as ground for termination. — An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as the health of his co-employees: Provided, That he is paid separation pay equivalent to at least one month salary or to one-half month salary for every year of service, whichever is greater, a fraction of at least six months being considered as one whole year. Art. 285. Termination by employee. — (a) An employee may terminate without just cause the employee-employer relationship by serving a written notice on the employer at least one month in advance. The employer upon whom no such notice was served may hold the employee liable for damages. (b) An employee may put an end to the relationship without serving any notice on the employer for any of the following just causes: (1) Serious insult by the employer or his representative on the honor and person of the employee; (2) Inhuman and unbearable treatment accorded the employee by the employer or his representative; (3) Commission of a crime or offense by the employer or his representative against the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

(4)

person of the employee or any of the immediate members of his family; and Other causes analogous to any of the foregoing.

Art. 286. When employment not deemed terminated. — The bona fide suspension of the operation of a business or undertaking for a period not exceeding six months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one month from the resumption of operations of his employer or from his relief from the military or civic duty. Art. 287. Retirement. — Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining or other agreements: Provided, however, That an employee’s retirement benefits under any collective bargaining and other agreements shall not be less than those provided herein. In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year.

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Unless the parties provide for broader inclusions, the term “one half (1/2) month” salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. Retail, service and agricultural establishments or operations employing not more than ten (10) employees or workers are exempted from the coverage of this provision. Violation of this provision is hereby declared unlawful and subject to the penal provisions under Article 288 of this Code.

OMNIBUS RULES IMPLEMENTING BOOK VI SECTION 2. Security of tenure. — (a) In cases of regular employment, the employer shall not terminate the service of an employee except for just or authorized causes as provided by law, and subject to the requirements of due process. (b) The foregoing shall also apply in cases of probationary employment; provided, however, that in such cases, termination of employment due to failure of the employee to qualify in accordance with the standards of the employer made known to the former at the time engagement may also be a ground for termination of employment. (c) In cases of employment covered by contracting or subcontracting arrangement, no employee shall be dismissed prior to the expiration of the contract between the principal and contractor or subcontractor as defined in Rule VIII-A, Book III of these Rules, unless the dismissal is for just or authorized cause, or is brought about by the completion of the phase of the contract for which the employee was engaged, but in any case, subject to the requirements of due process or prior notice. (d) In all cases of termination of employment, the following standards of due process shall be substantially observed: For determination of employment based on just causes as defined in Article 282 of the Labor Code:

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

(i) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side. (ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires is give opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him. (iii) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. For termination of employment as defined in Article 283 of the Labor Code, the requirement of due process shall be deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the Department of Labor and Employment at least thirty days before effectivity of the termination, specifying the ground or grounds for termination. If the termination is brought about by the completion of a contract or phase thereof, or by failure of an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination. SECTION 5. (a) Regular employment. The provisions of written agreements to the contrary notwithstanding and regardless of the oral agreements of the parties, employment shall be deemed regular for purposes of Book VI of the Labor code where the employees has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the 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 employee or where the job, work or service to be performed is seasonal in nature and the employment is for the duration of the season. (b) Casual employment. There is casual employment where an employee is engaged to perform a job, work or service which is merely incidental to the business of the employer, and such job, work or service is for a definite period made known to the employee at the time of engagement; provided, that any employee who has rendered at least one year of service, whether such service is continuous or not shall be considered a regular employee with respect to the

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activity in which he is employed and his employment shall continue while such activity exists. Notwithstanding the foregoing distinctions every employee shall be entitled to the rights and privileges and shall be subject to the duties and obligations, as may be granted by law to regular employees during the period of their actual employment. SECTION 6. Probationary employment. — There is probationary employment where the employee upon his engagement, is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement. Probationary employment shall be governed by the following rules: (a) where the work for which the employee has been engaged is learned or apprenticeable in accordance with the standards prescribed by the Department of Labor and Employment, the period of probationary employment shall be limited to authorized learnership or apprenticeship, period which is applicable. (b) Where the work is either learnable nor apprenticeable, the period of probationary employment shall not exceed six months reckoned from the date the employee actually started working. (c) The services of any employee who has been engaged on probationary basis may be terminated only for a just or authorized cause, when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer. (d) In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee.

OMNIBUS RULES IMPLEMENTING BOOK V AS AMENDED BY DO 40-03 RULE XXIII CONTEMPT Section 1. Direct contempt; Person guilty of misbehavior. - A person guilty of misbehavior in the presence of or so near the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Secretary, the Chairman or any member of the Commission, Bureau Director or any Labor Arbiter as to obstruct or interrupt the proceedings before the same, including disrespect toward said officials, offensive personalities toward others, or refusal to be sworn or to answer as a witness or to subscribe an affidavit or deposition when lawfully required to do so may be summarily adjudged in direct contempt by said officials and punished by fines not exceeding five hundred pesos (P500.00) or imprisonment not exceeding five (5) days or both, if it be the Secretary, the Commission or members thereof, or a fine not exceeding one hundred pesos (P100.00) or imprisonment not exceeding one (1) day, or both, if it be the Bureau Director or Labor Arbiter. The person adjudged in direct contempt by a Labor Arbiter may appeal to the Commission while the person adjudged in direct contempt by the Bureau Director may appeal to the Secretary. The execution of the judgment shall be suspended pending the resolution of the appeal upon the filing by such person of a bond on condition that he will abide by and perform the judgment should the appeal be decided against him. The judgment of the Commission and the Secretary is immediately executory and inappealable. Section 2. Indirect contempt. -- Indirect contempt shall be dealt with by the Secretary, Commission, Bureau Director or Labor Arbiter in the manner prescribed under Rule 71 of the Revised Rules of Court.

1. JUST CAUSES

(a) GROUNDS SERIOUS MISCONDUCT Asian Design & Manufacturing Corp. vs. Deputy Minister of Labor, 142 SCRA 79

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Evelyn Chua-Qua vs. Clave, 189 SCRA 117 “Love has its reasons which reason itself does not know…” Petitioner is a teacher in Tay Tung High School in Bacolod. She has been teaching for 13 years when the dispute arose because a student, one Booby Qua, was assigned to remedial instructions after class. Because of this, they fell in love and eventually got married. Tay Tung dismissed her on the ground of immorality or grave misconduct. Held: 1. On due process, there is no denial of due process where a party was afforded an opportunity to present his side. Also, the procedure by which issues are resolved based on position papers, affidavits and other documentary evidence is recognized as not violative of such right. 2. Now, on the merits. The determination of the legality of the dismissal hinges on the issue of whether or not there is substantial evidence to prove that the antecedent facts which culminated in the marriage between petitioner and her student constitute immorality and or grave misconduct. There is, however no direct evidence on record which proves the charges of immorality and grave misconduct by petitioner. It would seem quite obvious that the avowed policy of the school in rearing and educating children is being unnecessarily bannered to justify the dismissal of petitioner. This policy, however, is not at odds with and should not be capitalized on to defeat the security of tenure granted by the Constitution to labor. In termination cases, the burden of proving just and valid cause for dismissing an employee rests on the employer

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

and his failure to do so would result in a finding that the dismissal is unjustified. The charge against petitioner not having been substantiated, we declare her dismissal as unwarranted and illegal. St. Mary’s College vs. NLRC, 181 SCRA 62

Autobus Workers vs. NLRC, 291 SCRA 219 Ricardo E. Escanlar worked with Autobus as a Cutting Machine Operator. He was later elected President of the Autobus Workers’ Union (AWU), the union for the rank and file employees. He was transferred to another division and he allegedly used profane or obscene language against his manager in the division. After investigation, Escanlar was dismissed on gross misconduct. Held: 1. 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. The misconduct must be of such a grave and aggravated character and not merely trivial or unimportant. The charge of serious misconduct finds ample support in the record. Petitioner failed to satisfactorily rebut this accusation, his only defense being self-serving denials. 2. It is the prerogative of management, in the interest of effective operations, to transfer employees in good faith, if it means better operations. 3. The twin requirements of notice and hearing constitute the essential elements of due process. Due process of law simply means giving opportunity to be heard before judgment is rendered. In fact, there is no violation of due process even if no hearing was conducted, where the party was given a chance

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to explain his side of the controversy. What is frowned upon is the denial of the opportunity to be heard.

Samson v. NLRC, 330 SCRA 460 Samson was dismissed from work due to utterances of obscene, insulting and offensive words, referring to or directed against the company’s management committee. Held: Invalid dismissal. The company argued that the actuation of Samson constituted gross misconduct warranting his dismissal. The court however said that 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. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. Such misconduct, however serious, must nevertheless, be in connection with the employee’s work to constitute just cause for his separation. In this case, the alleged misconduct of Samson, when viewed in its context, is not of such serious and grave character as to warrant his dismissal. The utterances were made during an informal Christmas gathering of the company’s district sales managers. There was probably a little bit of drinking going on. Employees should be allowed wider latitude to freely express their sentiments during these kinds of occasions. The outbursts were not pointed to any senior employees and were not intended to malign any person from the management. It was just a reaction on a certain case involving the company. The court did not consider it a case were utter lack of respect for superiors was patent. WILLFUL DISOBEDIENCE Family Planning Organization of the Philippines vs. NLRC, 207 SCRA 415

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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Cando vs. NLRC, 189 SCRA 666

Mabeza vs. NLRC, 271 SCRA 670 Norma Mabeza contends that she was made to sign by the hotel’s management an instrument attesting to the latter’s compliance with minimum wage and other labor standard provisions of law. She refused to swear to the instrument however. She was chided by management for her refusal to swear the affidavit. She went on LOA but when she returned, she was not accepted. Filed case for illegal dismissal.

Gold City Integrated Port Services vs. NLRC, 189 SCRA 811

Held: 1. It is settled that in termination cases the employer bears the burden of proof to show that the dismissal is for just cause, the failure of which would mean that the dismissal is not justified and the employee is entitled to reinstatement. 2.

3.

The claim of abandonment by the employer cannot be sustained as for abandonment to arise, there must be concurrence of two things: 1) lack of intention to work; and 2) the presence of overt acts signifying the employee’s intention not to work. The fact that she returned after her LOA negates an intention to abandon. Loss of confidence as a just cause for dismissal was never intended to provide employers with a blank check for terminating their employees. Such a vague, all-encompassing pretext as loss of confidence, if unqualifiedly given the seal of approval by this Court, could readily reduce to barren form the words of the constitutional guarantee of security of tenure.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Having this in mind, loss of confidence should ideally 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 employer’s money or property. To the first class belong managerial employees, i.e., those vested with the powers or prerogatives to lay down management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions; and to the second class belong cashiers, auditors, property custodians, etc., or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property. Evidently, an ordinary chambermaid who has to sign out for linen and other hotel property from the property custodian each day and who has to account for each and every towel or bedsheet utilized by the hotel’s guests at the end of her shift would not fall under any of these two classes of employees for which loss of confidence, if ably supported by evidence, would normally apply. Cosep vs. NLRC, 290 SCRA 704 Alma Cosep, et. al. were regular employees of Premiere Development Bank at its Guadalupe Branch. When one of her coemployees was suspended on alleged malversation of money belonging to its clients, petitioners wrote an open letter which criticized private respondent’s handling of the case. Bank sent to each petitioner a memorandum dismissing them from the service effective immediately, on the ground that they undermined the interest of the bank. Held: 1. For there be willful disobedience of the employer’s lawful orders, as a just cause for dismissal of an employee, the concurrence of at least two (2) requisites is needed: the employee’s assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful

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2.

and perverse attitude; and the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. The Bank has not established nor presented sufficient basis for the dismissal of petitioners from service on the ground of serious misconduct. 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. The misconduct to be serious within the meaning of the Act must be of such a grave and aggravated character and not merely trivial or unimportant. Such misconduct, however serious, must, nevertheless, be in connection with the employee’s work to constitute just cause for his separation.

Escobin vs. NLRC, 289 SCRA 48 PEFTOK is a watchman and protective agency while UP-NDC is a corp. which is the owner/possessor of lands in Basilan. The petitioners are guards hired to worl in guarding the plantation. Later, they were dismissed by PISI for insubordination and grave misconduct, as a result of their refusal to ring the bell in the evening while on duty in the premises of the plantation. But it was revoked upon intervention of Congressman. What the agency did was to transfer them to Manila. Petitioners did not report to Manila. Dismissed again for disobedience. Held: 1. Disobedience, to be a just cause for termination, must be willful or intentional, willfulness being characterized by a wrongful and perverse mental attitude rendering the employee’s act inconsistent with proper subordination. A willful or intentional disobedience of such rule, order or instruction justifies dismissal only where such rule, order or instruction is (1) reasonable and lawful, (2) sufficiently known to the employee, and (3) connected with the duties which the employee has been engaged to discharge.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

2.

3.

4.

First, it was grossly inconvenient for petitioners, who were residents and heads of families residing in Basilan, to commute to Manila. Second, petitioners were not provided with funds to defray their transportation and living expenses. The right to transfer employees from one office to another — provided there is no demotion in rank or diminution of salary, benefits and other privileges — is judicially recognized as a prerogative inherent in the employer’s right to effectively control and manage the enterprise. But this principle is not at issue here. The issue is whether petitioners’ alleged disobedience constituted a just and valid cause to dismiss them. It is obvious to us that the dismissal was effected with mala fides, as it was intended to punish petitioners for their refusal to heed their employer’s unreasonable directive. Abandonment, as a just and valid cause for dismissal, requires a deliberate, unjustified refusal of an employee to resume his work, coupled with a clear absence of any intention of returning to his work. No evidence was presented to establish that petitioners relinquished their jobs. Constructive discharge is an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank and/or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee. In this particular case, petitioners were not constructively dismissed; they were actually dismissed without just and valid cause.

Lagatic vs. NLRC, 285 SCRA 251 Lagatic was employed in May 1986 by Cityland as a marketing specialist. He was tasked with making client calls and cold calls, among others. Cold calls refer to the practice of prospecting for clients through the telephone directory. Cityland requires the submission of daily progress reports on the same. Cityland issued a written reprimand to Lagatic for his failure to submit cold call reports. Lagatic claimed that the same

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was an honest omission brought about by his concentration on other aspects of his job. Cityland found said excuse inadequate and suspended him for 3 days, with similar warning. Lagatic again failed to submit cold call reports. He was verbally reminded to submit the same. Instead of complying with said directive, he wrote a note, “TO HELL WITH COLD CALLS! WHO CARES?” and exhibited the same to his co-employees. To worsen matters, he left the same lying on his desk where everyone could see it. Held: An employee may be validly dismissed for violation of a reasonable company rule or regulation adopted for the conduct of the company business. An employer cannot rationally be expected to retain the employment of a person whose…lack of regard for his employer’s rules…has so plainly and completely been bared. Willful disobedience requires the concurrence of at least two requisites: the employee’s assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude; and the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. The requirement of a hearing is complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing be conducted. Lagatic had an opportunity to be heard as he submitted a letter reply to the charge. There is no necessity for a formal hearing where an employee admits responsibility for an alleged misconduct. Additionally, there is no law which requires employers to pay commissions, and when they do so, as stated in the letteropinion of the DOLE dated February 19, 1993, “there is no law which prescribed a method for computing commissions. The determination of the amount of commissions is the result of collective bargaining negotiations, individual employment contracts or established employer practice.” Sine the formula for the computation of commissions was presented to and accepted by Lagatic, such prescribed formula is in order. As to the allegation that said formula diminishes the benefits being received by him

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

whenever there is a wage increase, it must be noted that his commissions are not meant to be in a fixed amount. In fact, there was no assurance that he would receive any commission at all. Non-diminution of benefits, as applied here, merely means that the company may not remove the privilege of sales personnel to earn a commission, not that they are entitled to a fixed amount thereof. It is Cityland’s practice to offset rest day or holiday work with equivalent time on a regular workday on the ground that the same is authorized by DO 21, Series of 1990. Said D.O. was misapplied in this case which it involves the shortening of the workweek from 6 days to 5 days but with prolonged hours on those 5 days. Under this scheme, non-payment of overtime premiums was allowed in exchange for longer weekends for employees. In the instant case, Lagatic’s workweek was never compressed. Instead, he claims payment for work over and above his normal 5 ½ days of work in a week. Applying by analogy the principle that overtime cannot be offset by under time, to allow offsetting would prejudice the worker. He would be deprived of the additional pay for the rest day work he has rendered and which is utilized to offset his equivalent time off on regular workdays. To allow Cityland to do so would be to circumvent the law on payment of premiums for the rest they day and holiday work. Notwithstanding the foregoing discussion, Lagatic failed to show his entitlement to overtime and rest day pay due, to the lack of sufficient evidence as to the number of days and hours when he rendered overtime and rest day work. Entitlement to overtime pay must first be established by proof that said overtime work was actually performed, before an employee may avail of said benefit. To support his allegations, Lagatic submitted in evidence minutes of meetings wherein he was assigned to work on weekends and holidays at Cityland’s housing projects. Said minutes do not prove that he actually worked on said dates.

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NEGLIGENCE; ABANDONMENT PAL vs. NLRC, 194 SCRA 139 Nathaniel Pinuela was ground equipment and tug operator for PAL. He was 5 years employed when incident occurred. He was towing a plane which crashed into a bridge causing damage to the plane. After investigation, he was dismissed. Held: Pinuela was comparing with other sanctions imposed by PAL on other erring employees. The SC said: Lastly, Pinuela should not compare the penalty of dismissal imposed on him in relation to lesser sanctions previously meted by PAL on its other employees. We are solely concerned here with the sufficiency of the evidence surrounding Pinuela’s dismissal. Besides, Pinuela’s examples do not involve a plane with a scheduled flight. A mere delay on petitioner’s flight schedule due to aircraft damage entails problems like hotel accommodations for its passengers, re-booking, the possibility of law suits, and payment of special landing fees not to mention the soaring costs of replacing aircraft parts. All told, Pinuela’s gross negligence which called for dismissal is evident. Judy Phils. vs. NLRC, 289 SCRA 755 Virginia Antiola was employed by petitioner Judy Philippines as an assorter of baby infant dresses. Virginia Antiola was directed by her supervisor, to sort out baby infant dresses pursuant to an instruction sheet. She was subsequently made to explain her erroneous assortment and packaging of 2,680 dozens of infant wear. She was dismissed for negligence. Held: Article 282(b) of the Labor Code requires that . . . such neglect must not only be gross, it should be ‘Gross and habitual neglect’ in character.” There is no doubt that Antiola was negligent, nonetheless, her wrongdoing does not warrant dismissal inasmuch as dismissal is the ultimate penalty that can be meted to an employee.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

NASUREFCO vs. NLRC, 286 SCRA 476

Del Monte vs. NLRC, 287 SCRA 71 Procesa Alsola was a packer paid by the hour in Del Monte Cagayan de Oro. For incurring a total of 57 days of absences without permission, she was sent a total of 17 show-cause letters requiring her to explain her absences. Hence, she was dismissed after failure to show cause. Held: 1. The rule is that an employer’s power to discipline its workers may not be exercised in an arbitrary manner as to erode the constitutional guarantee of security of tenure. Here, the company did not follow its own procedure when instead of reprimanding and following the scales of penalties in successive violations of rules, what they did was to dismiss her outright. 2. Abandonment, as a just and valid ground for termination, means the deliberate, unjustified refusal of an employee to resume his employment. The burden of proof is on the employer to show a clear and deliberate intent on the part of the employee to discontinue employment. The intent cannot

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be lightly inferred or legally presumed from certain equivocal acts. For abandonment to be a valid ground for dismissal, two (2) elements must be proved: the intention of an employee to abandon, coupled with an overt act from which it may be inferred that the employee has no more intent to resume his work. In the case at bar, these elements were not established. VH Manufacturing, Inc. v. NLRC, GR 130957, January 19, 2000 Gamido was allegedly caught sleeping on the job. He was terminated for violation of company rules which provide for a penalty of separation for sleeping during work hours. He questioned the decision. Held: Not a valid termination. In termination disputes, the burden of proof is always on the employer to prove that the dismissal was for a just and valid cause. The records show that the allegation that Gamido was sleeping was not substantiated by any convincing evidence other than the bare allegation of the company. Also, sleeping on the job is not always a valid ground for dismissal. The court has only allowed termination of security guards whose duty necessitates that they be awake and watchful at all times. While an employer enjoys a wide latitude of discretion in the promulgation of policies, rules and regulations, these directives must always be fair and reasonable, and the corresponding penalties must be commensurate to the offense involved and to the degree of the infraction. Here, the dismissal under the circumstances appears to be too harsh a penalty. Jo v. NLRC, GR 121605, February 2, 2000, 324 SCRA 437 Mejila, a barber, got into an altercation with a co-barber. He reported the incident to the labor department, which investigated the matter and called several conferences for mediating the problem. Mejila did not attend the meetings but turned over his keys to the barber shop, took all his belongings and began working for another barber shop. He then filed a complaint for illegal dismissal. Held: There was abandonment, not illegal dismissal. To constitute abandonment, there must be concurrence of the intention to abandon

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

and some overt acts from which it may be inferred that the employee concerned has no more interest in working. There must be a clear, deliberate and unjustified refusal to resume employment and a clear intention to sever the employer-employee relationship on the part of the employee. Here, such elements are present. Metro Transit v. NLRC, 307 SCRA 747 Turing was dismissed for abandonment of work. He was always absent without leave allegedly because of domestic problems (iniwan ng asawa). He questioned the dismissal. Held: Illegal dismissal. For abandonment of work to be a just and valid cause for dismissal, there must be a deliberate and unjustified refusal on the part of an employee to resume his employment. The burden of proof is on the employer to show an unequivocal intent on the part of the employee to discontinue employment. To warrant a finding of abandonment, there must be evidence not only of the failure of an employee to report for work or his absence without valid or justifiable reason, but also of his intention to sever the employer-employee relationship. The second element is the more determinative factor, being manifested by overt acts. Here, Turing cannot be said to have abandoned his work. No proof of overt acts showing clearly his intention to abandon his work. Upon learning he had been dismissed, he filed an illegal dismissal case. The court has ruled in so many cases that a timely filing of an illegal dismissal case negates abandonment of work. Icawat v. NLRC, GR 133573, June 20, 2000 Yape, a driver, lost his driver’s license. He sought his employer’s permission to go on leave to secure a new one. When he got his new license, he reported for work but was informed that a new driver had already taken his place. He filed a case for illegal dismissal. Held: Illegal dismissal. To constitute abandonment, two elements must concur : (1) the failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the second element as the

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more determinative factor and being manifested by some overt acts. Mere absence is not sufficient. To prove abandonment, the employer must show that the employee deliberately and unjustifiably refused to resume his employment without any intention of returning. Here, no such intention was manifested. After getting his license, he immediately reported for work. Plus, upon learning of his dismissal, he filed a case for illegal dismissal. A charge of abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal. FRAUD / BREACH OF TRUST / LOST OF CONFIDENCE Firestone Tire & Rubber Co. vs. Lariosa, 148 SCRA 187

International Harvester Macleod vs. IAC, 149 SCRA 641

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Caoile vs. NLRC, 299 SCRA 76 Caoile was hired by Coca-Cola as an Electronic Data Processing Supervisor. He was later dismissed on the ground of loss of trust and confidence for his involvement in an anomalous encashment of check payments made by a contractor. Held: Law and jurisprudence have long recognized the right of employers to dismiss employees by reason of loss of trust and confidence. In the case of supervisors or personnel occupying positions of responsibility, loss of trust and confidence justifies termination. This ground is premised from the fact that an employee concerned holds a position of trust and confidence. This situation holds where a person is entrusted with confidence on delicate matters, such as custody, handling, or care of the employer’s property. It must also be “work-related”. Farrol v. CA, GR 133259, February 10, 2000 Farrol, a cashier, was dismissed for having cash shortage. It was due to the violation of a company circular which requires daily and upto-date preparation of statistical reports and depositing of cash collections twice a day. He requested that he be reinstated, then after a while, manifested that he was willing to settle the case. When the company denied the request, he sued for illegal dismissal. Held: Illegal dismissal. It cannot be presumed that when there is shortage, there is a corresponding breach of trust. Cash shortages in a cashier’s work may happen, and when there is no proof that the same was deliberately done for a fraudulent or wrongful purpose, it cannot constitute breach of trust so as to render the dismissal from work invalid. Assuming that there was breach of trust and confidence, it was only the first infraction. Although the employer has the prerogative to discipline or dismiss its employee, such

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prerogative cannot be exercised wantonly, but must be controlled by substantive due process and tempered by the fundamental policy of protection to labor enshrined in the constitution. Infractions committed by an employee should merit only the corresponding sanctions demanded by the circumstances. The penalty must be commensurate with the act, conduct or omission imputed to the employee and imposed in connection with the employer’s disciplinary authority. Here, a lighter penalty would have been more just considering it was just his first offense. Deles v. NLRC, 327 SCRA 540, G.R. 121348 Deles was the shift supervisor of employer FPIC, and was tasked to oversee the entire pipeline operation in the employer’s terminal. One day, the quality of fuel delivered to FCPI’s pipelines suffered severe downgrading of quality. Deles was placed under preventive suspension. It was found that the mishap occurred due to the fact that his subordinate failed to correctly execute his orders, and he was found to have tampered with the pipeline equipment as well. He was dismissed for loss of confidence. Held: Valid dismissal. The ground of loss of trust and confidence applies because Deles holds a position of trust and confidence. The delicate nature of the business shows that the company has to exercise extraordinary diligence in conducting its operations. In this light, Deles is tasked to perform kay functions and is bound by exacting work ethic. His position requires the full trust and confidence of his employer in every exercise of managerial discretion He tampered with very sensitive equipment which exposed the complex and adjacent communities to the danger of a major disaster that could be caused by tank explosions and conflagration. Dela Cruz v. NLRC, 268 SCRA 458 Dela Cruz was barred from the premises of the employer/company and was handed a memorandum of her lay-off allegedly due to a cost-saving program. Upon her return to work, she was put under investigation for unauthorized possession of company property,

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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equipment and supply punishable by outright dismissal (bag). She was termiated for dishonesty. She filed a complaint for illegal dismissal. Held: The temporary lay-off was not valid. There should be good faith. In this case, there was none. The company said it was for cost-cutting. However, the court noted that Dela Cruz was the only one laid-off. It was a sham.

In termination cases, the burden of proving just and valid cause for dismissing an employee rests upon the employer, and the latter’s failure to do so results in a finding that the dismissal is unjustified. Although the alleged defense of dela Cruz against the accusations against her were weak, the employer must still show that the allegations are real. Akin to a criminal case, the employer’s cause stands or falls on the strength of is evidence, not on the weakness of the employee’s defense. Here, the company was not able to show that dela Cruz had violated the rules and that there was dishonesty on her part. An employer may terminate an employee due to loss of trust and confidence. However, the loss must be based not on ordinary breach by the latter of the trust reposed on him, but on willful breach. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable cause, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer’s arbitrariness, whims, caprices or suspicion, It should be genuine and not simulated. Nor should it appear as a mere afterthought to justify earlier action taken in bad faith or a subterfuge for causes which are improper, illegal or unjustified. Here, the employee was not a managerial employee. Trust and confidence only applies to such employees. Gonzales vs. NLRC, March 26, 2001

Sulpicio Lines vs. Gulde, GR 149930, February 22, 2002

National Bookstore vs. CA, GR 146741, February 27, 2002

IMMORALITY; SEXUAL HARRASMENT Santos, Jr. vs. NLRC, 287 SCRA 117 Santos, a married man, was employed as a teacher by Hagonoy Institute. Likewise working as a teacher for Hagonoy was Mrs. Arlene T. Martin, also married. In the course of their employment, the couple fell in love. Thereafter, rumors regarding the couple’s relationship spread, especially among the faculty members and school officials. What Hagonoy did was to advise Martin to take a

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

LOA which Martin did not do. Based on her refusal, she was dismissed. Held: 1. Having an extra-marital affair is an affront to the sanctity of marriage, which is a basic institution of society. Even our Family Code provides that husband and wife must live together, observe mutual love, respect and fidelity. As a teacher, petitioner serves as an example to his pupils, especially during their formative years and stands in loco parentis to them. Consequently, it is but stating the obvious to assert that teachers must adhere to the exacting standards of morality and decency. There is no dichotomy of morality. A teacher, both in his official and personal conduct, must display exemplary behavior. He must freely and willingly accept restrictions on his conduct that might be viewed irk-some by ordinary citizens. In other words, the personal behavior of teachers, in and outside the classroom, must be beyond reproach. Accordingly, teachers must abide by a standard of personal conduct which not only proscribes the commission of immoral acts, but also prohibits behavior creating a suspicion of immorality because of the harmful impression it might have on the students. From the foregoing, it seems obvious that when a teacher engages in extra-marital relationship, especially when the parties are both married, such behavior amounts to immorality, justifying his termination from employment. 2. Having concluded that immorality is a just cause for dismissing petitioner, it is imperative that the private respondent prove the same. Since the burden of proof rests upon the employer to show that the dismissal was for a just and valid cause, the same must be supported by substantial evidence. Here it was, so dismissal affirmed.

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Libres v. NLRC, 307 SCRA 675 Libres was put under investigation then was suspended for sexually harassing a secretary. The findings were that he “touched a female subordinate’s hand and shoulder, caressed her nape and told other people that it was the girl who had hugged and kissed him or that she responded to the sexual advances.” He questioned the suspension. Held: Before R.A. 7877 (An Act Declaring Sexual Harassment Unlawful in the Employment, Education or Training Environment and for Other Purposes) was in effect, the Labor Arbiters had to rely on the common connotation of sexual harassment as it is generally understood by the public. It also relied upon the Managerial Evaluation Committee Report (MEC) defining sexual harassment. It said that “sexual harassment is an unwelcome or uninvited sexual advance, request for sexual favors and other verbal or physical conduct of sexual nature, and that such conduct unreasonably interferes with the individual’s performance at work, or creates an intimidating, hostile or offensive work environment.” The court agreed that Libres, by his actions, had sexually harassed the secretary. As a managerial employee, he is bound by more exacting work ethics. He failed to live up to his standard of responsibility when he succumbed to his moral perversity. And when such moral perversity is perpetrated against his subordinate, he proves a justifiable ground for his dismissal for lack of trust and confidence. It is the right and duty of every employer to protect its employees from oversexed superiors. CRIME OR OFFENSE Starlite Plastic Industrial Corp. vs. NLRC, 171 SCRA 315

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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1.

UNION SECURITY CLAUSE MSMG-UWP v. Ramos, GR 113907, February 28, 2000 An intra-union dispute arose out of disputes from the election of union officers. Several officers were dismissed from the union for acts of disloyalty and inimical to the interest and violative of the constitution and by-laws of the union. Since the union has a closedshop agreement in the CBA, the company terminated the ousted union members. Held: While a company may validly dismiss employees expelled by the union for disloyalty under the union security clause of the CBA, the dismissal should not be done hastily and summarily thereby eroding the employees’ right to due process, self-organization and security of tenure. The enforcement of union-security clauses is authorized by law provided such enforcement is not characterized by arbitrariness and always with due process. There must always be a separate hearing conducted by the company before the expelled union members are dismissed by the company. (b) PROCEDURE IN TERMINATION

Salaw vs. NLRC, 202 SCRA 7 Espero Santos Salaw was employed by Associated Bank as a credit investigator-appraiser. The police extorted a confession from to the effect that he sold some foreclosed properties by the bank, the proceeds of which he shared with a co-employee. After a hearing, he was dismissed for alleged serious misconduct or willful disobedience and fraud or willful breach of the trust reposed on him. Held:

2.

3.

Under the Labor Code, an amended, the requirements for the lawful dismissal of an employee by his employer are two-fold: the substantive and the procedural. Not only must the dismissal be for a valid or authorized cause as provided by law (Articles 279, 281, 282-284, New Labor Code), but the rudimentary requirements of due process — notice of hearing — must also be observed before an employee may be dismissed. One does not suffice; without their concurrence, the termination would, in the eyes of the law, be illegal. The inviolability of notice and hearing for a valid dismissal of an employee can not be over-emphasized. Those twin requirements constitute essential elements of due process in cases of employee dismissal. The requirement of notice is intended to inform the employee concerned of the employer’s intent to dismiss him and the reason for the proposed dismissal; on the other hand, the requirement of hearing affords the employee the opportunity to answer his employer’s charges against him and accordingly to defend himself therefrom before dismissal is effected. Neither one of these two requirements can be dispensed with without running afoul of the due process requirement of the Constitution. The investigation of petitioner Salaw by the respondent Bank’s investigating committee violated his constitutional right to due process, in as much as he was not given a chance to defend himself, as provided in Rule XIV, Book V of the Implementing Rules and Regulations of the Labor Code governing the dismissal of employees. Section 5 of the said Rule requires that “the employer shall afford the worker ample opportunity to be heard and to defend himself with the assistance of his representative, if he so desires.” Here petitioner was perfunctorily denied the assistance of counsel during the investigation to be conducted by the PDIC (not the Phil. Dep. Ins. Corp, this is what they call their internal discipline board). No reasons were proffered which vitiated the denial with irregularity and unfairness. Significantly, the dismissal of the petitioner from his employment was

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

4.

characterized by undue haste. The law is clear that even in the disposition of labor cases, due process must not be subordinated to expediency or dispatch. Otherwise, the dismissal of the employee will be tainted with illegality. In Santos v. NLRC (G.R. No. 76721, September 21, 1987, 154 SCRA 166), the SC held that “the normal consequences of a finding that an employee has been illegally dismissed are, firstly, that the employee becomes entitled to reinstatement to his former position without loss of seniority rights and, secondly, the payment of backwages corresponding to the period from his illegal dismissal up to actual reinstatement.”

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4.

HOWEVER AGAIN, Wendy’s must nevertheless be held to account for failure to extend to private respondent his right to an investigation before causing his dismissal. It must be imposed a sanction for its failure to give a formal notice and conduct an investigation as required by law before dismissing petitioner from employment. Tama na ang P1000 na parusa.

China City Restaurant Corp. vs. NLRC, 217 SCRA 443

Wenphil vs. NLRC, 170 SCRA 69 Roberto Mallare was hired by Wendy’s as a crew member at its Cubao Branch. Mallare had an altercation with a co-employee (near the salad bar), Job Barrameda, as a result of which he was suspended and subsequently dismissed. It is claimed by Wendy’s that Mallare waived the right to investigation, hearing, etc. Held: 1. Right not waived. Mere failure on the part of Mallare to explain his actions after the incident is not a waiver. 2. The failure of petitioner to give private respondent the benefit of a hearing before he was dismissed constitutes an infringement of his constitutional right to due process of law and equal protection of the laws. 3. HOWEVER, when Mallare was granted his rights to present his side before the Labor arbiter, it was found that his dismissal was indeed for just cause.The policy of ordering the reinstatement to the service of an employee when it appears he was not afforded due process, although his dismissal was found to be for just and authorized cause should be reexamined. It will be highly prejudicial to the interests of the employer to impose on him the services of an employee who has been shown to be guilty of the charges that warranted his dismissal from employment.

Farrol v. CA, GR 133259, February 10, 2000 Farrol, a cashier, was dismissed for having cash shortage. It was due to the violation of a company circular which requires daily and upto-date preparation of statistical reports and depositing of cash collections twice a day. He requested that he be reinstated, then after a while, manifested that he was willing to settle the case. When the company denied the request, he sued for illegal dismissal. Held: Illegal dismissal. It cannot be presumed that when there is shortage, there is a corresponding breach of trust. Cash shortages in a cashier’s work may happen, and when there is no proof that the same was deliberately done for a fraudulent or wrongful purpose, it cannot constitute breach of trust so as to render the dismissal from work invalid. Assuming that there was breach of trust and confidence, it was only the first infraction. Although the employer has the prerogative to discipline or dismiss its employee, such prerogative cannot be exercised wantonly, but must be controlled by substantive due process and tempered by the fundamental policy of

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

protection to labor enshrined in the constitution. Infractions committed by an employee should merit only the corresponding sanctions demanded by the circumstances. The penalty must be commensurate with the act, conduct or omission imputed to the employee and imposed in connection with the employer’s disciplinary authority. Here, a lighter penalty would have been more just considering it was just his first offense.

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(d) CONSTRUCTIVE DISMISSAL JAM Transport vs. Flores, 220 SCRA 114

(c) DISPROPORTIONATE PENALTY PAL vs. PALEA, 57 SCRA 489

ALU-TUCP v. NLRC, 302 SCRA 708 Felizardo was caught by a security guard bringing out company property. He was dismissed for dishonesty and theft of company property. The union questioned the dismissal. Held: In this case, there is no question of Felizardo’s guilt. He stole a pair of boots, a drinking container and 15 hamburger patties. The question is whether dismissal is an appropriate penalty. The employer has the inherent right to discipline, including that of dismissing its employees for just causes. That right is, however, subject to reasonable regulation. The court here decided that dismissal was not proportionate to the gravity of the offense. Considering the value of the articles stolen and the fact that he had no previous record during his employment, he should not have been terminated.

Phil. Japan Active Carbon Corp. v. NLRC, 171 SCRA 164 Olga, an Executive Secretary to the Executive VP and General Manager was transferred to the Production Department as Production Secretary. Said transfer was neither with reason or notice, nor however was it with a change in salary and workload. Issue: Whether Olga was constructively dismissed. Held: Nope. A constructive discharge is a quitting because continued employment is rendered impossible, unreasonable, or unlikely; as, an offer involving a demotion in rank and a diminution in pay. Here, Olga’s assignment as Production Secretary was not unreasonable as it did not involve a demotion in rank (her rank was still that of a dept. secretary) nor a change in workplace (the office is in the same building) nor a diminution in pay, benefits, and privileges. It is the employer’s prerogative to move its employees where they will be most useful. Security of tenure does not give an employee a vested right to his position as would deprive the employer of this prerogative. A transfer using this prerogative is not tantamount to constructive dismissal if such is not unreasonable,

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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inconvenient, or prejudicial, or if it does not involve a demotion in rank, or a diminution of salaries, benefits and other privileges.

relationship. Again, the filing of a complaint for illegal dismissal is inconsistent with a charge of abandonment.

Singa Ship Management Phils. v. NLRC, 288 SCRA 692 Sangil worked on board the cruise vessel Crown Odyssey. A heated argument with a Greek steward resulted to an altercation where Sangil suffered a scalp injury. While Sangil was confined in a nearby hospital, the ship left without him. The affidavit he executed before the Philippine Consul revealed that the Greek crew continuously ridiculed and even threatened him. He was then, repatriated.

Zafra vs. CA, GR 139013, September 17, 2002

Issue: Whether there was constructive dismissal. Held: YUP. Constructive dismissal exists when there is a quitting because continued employment is rendered impossible, unreasonable or unlikely. It does not always involve diminution; an act of clear discrimination, insensibility, or disdain by an employer may become so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment. Here, Sangil quit because he feared for his life and his fear was well founded. The intense undercurrent between the Filipinos and the Greeks that could erupt into violence at the slightest provocation was apparent. Also, Sangil could not get any protection from the Greek ship captain, not even the slightest assurance of safety from him. Thus, Sangil’s decision to leave was not voluntary but impelled by the legitimate desire for self-preservation. Leonardo v. NLRC, 333 SCRA 589 Fuerte, allegedly not meeting his sales quota, was transferred to another company plant which resulted in the withdrawal of his supervisor’s allowance. He protested his transfer and subsequently filed a case for illegal termination. Held: Illegal dismissal. Fuerte’s act of staying off work are not indicative of abandonment. To constitute such a ground for dismissal there must be (1) failure to report to work or absence without valid or justifiable reason; and (2) a clear intention, as manifested by some overt acts, to sever the employer-employee

(e) PREVENTIVE SUSPENSION Manila Doctors Hospital v. NLRC, 135 SCRA 262 Macatubal, admitting his guilt for the loss of x-ray films at the Manila Doctors Hospital (MDH), implicated co-employees Cantor and Pepito. MDH suspended the latter and filed an application with the NLRC for clearance to terminate them. Issue: Whether there was justification for the preventive suspension of Cantor and Pepito. Held: NONE. Preventive suspension can only be imposed if the continued employment of the employee poses a serious and imminent threat to the life or property of the employer or his coemployees. Any preventive suspension before the filing of the application for clearance shall be considered working days and shall be duly paid if the continued presence of the employee concerned does not pose a serious threat to the life and property of the employer or of his co-employees. Here, there was no such threat. It was only Macatubal who admitted responsibility for the loss and in fact, the fiscal’s office ordered the dismissal of the case filed against Cantor and Pepito. Notwithstanding, MDH withheld the salaries of the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

latter. Thus, the latter are entitled to 50% of backwages from time of suspension to finality of decision. Philippine Airlines, Inc. v. NLRC, 292 SCRA 40 PAL preventively suspended Castro for grave misconduct after government authorities apprehended him for violating a CB Circular. An investigation was conducted and after 3 years & 6 months of suspension, PAL issued a resolution finding him guilty but nonetheless reinstating him explaining that the period within which he was out of work shall serve as his penalty for suspension. Upon reinstatement, Castro filed a claim against PAL for backwages and salary increases granted under the CBA covering the period of his suspension. Issue: Whether an employee who has been preventively suspended beyond the maximum 30-day period is entitled to backwages and salary increases granted under the CBA during the period of his suspension. Held: YUP. Under §§ 3 & 4, Rule XIV of the Omnibus Rules, a preventive suspension shall not exceed 30 days, after which the employee must be reinstated to his former position. If the suspension is extended, the employee shall be entitled to his salaries and other benefits that may accrue to him during the period of such suspension. 2. AUTHORIZED CAUSES (a) GROUNDS INSTALLATION OF LABOR-SAVING DEVICES Philippine Sheet Metal Workers Union vs. CIR, 46 OG 5462

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REDUNDANCY Wiltshire File Co. v. NLRC, 193 SCRA 665 A Sales Manager after returning from a (business and pleasure) trip abroad was terminated by Wiltshire Co. He tried to get an explanation but he was left with letter merely handed to him by the Security Guard. The letter justifies his dismissal on the ground of redundancy. The Sales Manager in his complaint before the L.A. for illegal dismissal alleges that his position cannot be redundant because nobody in the company was then performing the same duties. The Co. in its answer invokes that termination was a cost cutting measure as company had experienced unusually low volume of orders and that it was forced to rotate employees in order to save the company because of its continued experience of financial losses. After review of records (audited financial losses), court found that co was indeed suffering from serious financial losses. While letter of termination used the word redundant, the letter also referred to the company having incurred financial losses which in fact has compelled the company to resort to retrenchment. Redundancy in an employer’s personnel force DOES NOT necessarily or even ordinarily refers to duplication of work. That “no other person was holding the same position that an employee held prior to the termination of his services,” does NOT show that his position had not become redundant. (in a well organized corp. hardly would there be any duplication of work/ 2 persons doing the same work) Redundancy , for the purposes of the Labor Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. A position is redundant where it is superfluous, and superfluity of a position(s) may be the outcome of a number of factors like overhiring of workers, decreased volume of business, or dropping of a

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

particular product line or service activity previously manufactured or undertaken by the enterprise. RETRENCHMENT Asiaworld Publishing House vs. Ople, 152 SCRA 219

Almoite vs. Pacific Architects, 142 SCRA 623

Lopez Sugar v. FFW, 189 SCRA 179 Lopez Sugar filed an application to retrench (27) and retire (56) some of its employees to prevent losses due to major economic problems. It is doing so in exercise of its privilege under its CBA. Union contests the application saying that it is violative of security of tenure of its members and that to justify retrenchment, there should be serious business reverses – it must be actual, real and amply supported by sufficient and convincing evidence. Court has enumerated four standard of justification of retrenchment:

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1. The losses expected should be substantial and not merely de minimis in extent. 2. The substantial loss apprehended must be reasonable imminent, and such imminence can be perceived objectively and in good faith by the employer. 3. Because the consequential nature of retrenchment, it must, be reasonably necessary and likely to effectively prevent the expected losses. The employer should have taken other measures prior or parallel to retrenchment to forestall losses. (i.e., cut other costs than labor costs) 4. The alleged losses if already realized, and the expected imminent looses sought to be forestalled, must be proven by sufficient and convincing evidence. Whether an employer would imminently suffer serious or substantial losses for economic reasons is essentially a question of fact for the L.A. and NLRC to determine. In this case, no audited financial statements were showing financial condition of petitioner corporation were presented. Company made a passing reference to cast reduction measures it had allegedly undertaken. It failed to specify the cost reduction measures actually undertaken in goodfaith. It asked some 110 casual workers to register after reducing its workforce. Anino vs. NLRC, 290 SCRA 489 Retrenchment is resorted to by an employer because of losses in the operation of business occasioned by lack of work and considerable reduction in the volume of business. It is a management prerogative consistently recognized and affirmed by this Court, subject only to faithful compliance with the substantive and procedural requirements laid down by law and jurisprudence. To justify retrenchment, the following requisites must be complied with: “(a) the losses expected should be substantial and not merely de minimis in extent; (b) the substantial losses apprehended must be reasonably imminent; (c) the retrenchment must be reasonably necessary and likely to effectively prevent the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

expected losses; and (d) the alleged losses, if already incurred, and the expected imminent losses sought to be forestalled must be proved by sufficient and convincing evidence. “In a nutshell, the law recognizes a company’s right to retrench employees when ‘made necessary or compelled by economic factors that would otherwise endanger its stability or existence.’…[R]etrenchment is only ‘a measure of last resort when other less drastic means have been tried and found to be inadequate.’” International Hardware, Inc. vs. NLRC, 176 SCRA 256

Agro Commercial Services Agency vs. NLRC, 287 SCRA 420

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Edge Apparel v. NLRC, 286 SCRA 302 Article 284 provides that an employer would be authorized to terminate the services of an employee found to be suffering from any disease if the employee’s continued employment is prohibited by law or is prjudicial to his health or tho the health of his fellow employees. The installation of labor-saving devices contemplates the installation of machinery to effect economy ad efficiency in the its method of production. Redundancy exists where the services of an employee are in excess of what whould reasonably be demanded by the actual requirements of the enterprise. A position is redundant when it is superfluous, and superfluity of a position or positions chould be the result of a number of factors, such as the overhiring of workers, a decrease in the volume of business or the dropping of a particular line or service previoulsy manyfactured or undertaken by the enterprise. An employer has no legal obligation to keep on the payroll employees more than the number needed for the operation of the business. Retrenchment is, in many ways, a measure of last resort when other less drastic means have been tried and found to be inadequate. Retrenchment, in contrast to redundancy, is an economic ground to reduce the number of employees. In order to be justified, the termination of employment by reason of retrenchment must be due to business losses or reverses which are serious, actual and real. Not every loss incurred or expected to be incurred by the employer will justify retrenchment, since, in the nature of things, the possibility of incurring losses is constantly present, in greater or lesser degree, in carrying on the business operations. Retrenchment is normally resorted by management during periods of business reverses and economic difficulties occasioned by such events as recession, industrial depression, or seasonal fluctuations. Somerville Stainless Steel Corp. v. NLRC, 287 SCRA 420

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

The law recognizes the company’s right to retrench employees when “made necessary or compelled by economic factors that would otherwise endanger its stability or existence. Retrenchment is only a measure of last resort when other less drastic means have been tried and found to be inadequate. Philippine Tuberculosis Society, Inc. V. National Labor Union, 294 SCRA 567 [Retrenchment is] an act of the employer of dismissing employees because of losses in the operation of a business, lack of work, and considerable reduction in the volume of his business, a right consistently recognized and affirmed by this Court. However, the employer’s prerogative to layoff employees is subject to certain limitations set forth in Lopez Sugar Corporation v. Federation of Free Workers as follows: Firstly, the losses expected should be substantial and not merely de minimis in extent. Itf the loss purportedly sought to be forestalled by retrenchment is clearly shown to be insubstantial and inconsequential in character, the bonafide nature of the retrenchment would appear to be seriously in question. Secondly, the substantial loss apprehended must be reasonably imminent, as such imminence can be perceived objectively and in good faith by the employer. There should, in other words, be a certain degree of urgency for the retrenchment, which is after all a drastic recourse with serious consequences for the livelihood of the employees retired or otherwise laid off. Because of the consequential nature of retrenchment, it must, thirdly, be reasonably necessary and likely to effectively prevent the expected losses. The employer should have taken other measures prior or parallel to retrenchment to forestall losses, i.e., cut other costs than labor costs. An employer who, for instance, lays off substantial numbers of workers while continuing to dispense fat executive bonuses and perquisites or socalled “golden parachutes” can scarcely claim to be retrenching in good faith to avoid losses. To impart the constitutional meaning to the constitutional policy of providing “full protection” to labor, the employer’s prerogative to bring down labor costs by retrenching must be

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exercised essentially as measure of last resort, after less drastic means---e.g., reduction of both management and rank and file bonuses and salaries, going on reduced time, improving manufacturing efficiencies, trimming of marketing and advertising costs---have been tried and found wanting. Lastly, but certainly not the least important, alleged losses if already realized, and the expected imminent losses sought to be forestalled, must be proved by sufficient and convincing evidence. Retrenchment must be implemented in a just and proper manner. As held in Asiaworld Publishing House, Inc. v. Ople: there must be fair and reasonable criteria to be used in selecting employees to be dismissed, such as: (a) less preferred status; (b) efficiency rating (c) seniority. Asian Alcohol Corp vs. NLRC, 305 SCRA 416 The condition of business losses is normally shown by audited financial documents like yearly balance sheets and profit and loss statements as well as annual income tax returns. It is our ruling that financial statements must be prepared and signed by independent auditors…It is necessary that the employer also show that its losses increased through a period of time and that the condition of the company is not likely to improve in the near future. Redundancy exists when the service capability of the work force is in excess of what is reasonably needed to meet the demands on the enterprise. A redundant position is one rendered superfluous by any number of factors, such as overhiring of workers, decreased volume of business, dropping of particular product line previously manufactured by the company or phasing out of a service activity priorly undertaken by the business. Under these conditions, the employer has no legal obligation to keep in its payroll more employees than are necessary for the operation of its business. Requisites for the implementation of a redundancy program: 1. Written notice served on both the employees and the DOLE at least one month prior to the intended date of retrenchment;

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

2. Payment of separation pay equivalent to at least one month pay or at least month pay for every year of service, whichever is higher; 3. Good faith in abolishing the redundant positions; and 4. Fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished

CLOSURE

UFW vs. NLRC, 207 SCRA 435

Carmelcraft Corp. vs. NLRC, 186 SCRA 393

Del Mar Domestice Ent. v. NLRC, 282 SCRA 602 Complainants were dismissed by the Company during the strike for alleged abandonment of work. The complainants protets that they were only verbally informed that their services were no longer

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needed and that they were considered dismissed from work. They now seek moral and exemplary damamges. Company invokes that the strike was in gross violation of CBA provision. It also claimed that during the height of the strike, a fire of undtermined origin razed to the ground about 70% of the company’s premises rendering the factory useless and inoperable. The Labor Arbiter and NLRC ruled that the employees are entitled to separation pay. Company claims that employees are not entitled to separation pay because the abandoned their work. SC: Ees entitled to Separation Pay because (1) No abandonment - Ees have no intent to sever employement and (2) Serious Business Losses Not proven by company. Abandonment as a valid cause for termination requires a deliberate, unjustified refusal of the employee to resume his employment. Failure to report for work or absence without valid or justifiable reason does not constitute abandonment if not coupled with a clear intention to sever the employer-employee relationship. In this case, employees reported for work after the factory was burned, but the company informed them to wait for the resumption of operations. The company’s contention that “while the strike was in progress, the factory building was razed by fire,” was not sustained by the SC because such alleged serious business losses sustained by company form the fire were not substantiated by competent evidence. Financial statements audited by independent external auditors constitute the normal method of proof of the profit and loss performance of a company. Although the fire caused losses to company, it failed to show how such fire so affected the company’s financial health that it had to close shop. To exempt an employer from the payment of separation pay, he or she must establish by sufficient and convincing evidence that the losses were serious, substantial and actual. Sundowner Development Corp. v Drilon, 180 SCRA 14

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Hotel Mabuhay, Inc., due to financial difficulties, sold all its assets and personal properties to Sundowner. (blablabla, strike, complaint, strike, dispute – a lot of events immaterial to the issue) This case was subsequently filed by the Union representing the rank and file employees of Mabuhay. This case involves several issues, all of which revolve about the singular issue of whether or not Sundowner may be compelled to absorb the employees of Mabuhay. Held: NO. As a general rule, there is no law requiring a bona fide purchaser of assets of an ongoing concern to absorb in its employ the employees of the latter. The rule is that, unless expressly assumed, labor contracts such as employment contracts and CBAs are not enforceable against the transferee of an enterprise, labor contracts being in personam and thus binding only the parties thereto. (Implied from the obiter in the last sentence that when there is a bone fide transfer of interest over an enterprise the CBA entered into with the transferor does not bind the transferee: there exists no contract bar to the filing of a petition for certification election since there is actually no CBA with respect to the transferee/new employer.) MDD Supervisors & Confidential Employees Ass. Vs. Presidential Assistant for Legal Affairs, 79 SCRA 40

Marina Port Services vs. Iniego, 181 SCRA 304

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Phil. Tobacco Flue-Curing and Redrying Corp. vs. NLRC, Dec. 10, 1998 Art. 283 of the Labor Code also requires the employer to furnish both the employee and DOLE a written Notice of Closure at least one month prior to closure. True, in the present case the Notices of Termination were given to the employees on August 3, 1994, and the intended date of closure was September 15, 1994. However, the employees were in fact not allowed to work after August 3, 1994. Therefore, the termination notices to the employees were given in violation of the requisite one-month prior notice under Art. 283 of the Labor Code. This Court has previously ruled in Manila Hotel Company v. CIR that seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not separated form service in said period, but are merely considered on leave until reemployed, viz.: “The nature of their relationshipx x x is such that during off season they are re-employed, or when their services may be needed. They are not strictly speaking separated from the service but are merely considered as on leave of absence without pay until they are re-employed.” Valdez vs. NLRC, 286 SCRA 87 Under Art. 286 of the Labor Code, the bona fide suspension of the operation of a business or undertaking for a period not exceeding 6 months shall not terminate employment. Consequently, when the bona fide suspension of the operation of a business or undertaking exceeds 6 months, then the employment of the employee shall be terminated. By the same token and applying said rule by analogy, if the employee was forced to remain without work or assignment for a period exceeding 6 months, then he is in effect constructively dismissed. The so-called “floating status” of an employee should last only for a legally prescribed period of time. When that “floating status” of an employee lasts for more than 6 months, he may be

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

considered to have been illegally dismissed from service. Thus, he is entitled to the corresponding benefits for his separation, and this would apply to the two types of work suspension heretofore noted, that is, either of the entire business or of specific component thereof. Resignation is inconsistent with the filing of a complaint of illegal dismissal. Resignation is defined as the voluntary act of an employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and, that he has no other choice but to disassociate himself from his employment. Resignation is a formal pronouncement of relinquishment of an office. It must be made with the intention of relinquishment the office accompanied by an act of relinquishment. Sentinel Security Agency, Inc. vs. NLRC, 295 SCRA 123 Being sidelined temporarily is a standard stipulation in employment contracts, as the availability of assignment for security guards is primarily dependent on the contracts entered into by the agency with third parties. Most contracts for security services, as in this case, stipulate that the client may request the replacement of the guards assigned to it. In security agency parlance, being placed “off detail” or on floating status means “waited to be posted.” This circumstance is not equivalent to dismissal, so long as such status does not continue beyond a reasonable time. Abandonment, as a just and valid cause for termination, requires a deliberate and unjustified refusal of an employee to resume his work, coupled with a clear absence of any intention of returning to his or her work. Abandonment has recently been ruled to be incompatible with constructive dismissal. A floating status requires dire exigency of the employer’s bona fide suspension of operation, business or undertaking. In security services, this happens when the clients that do not renew their contracts with a security agency are more than those that do and the new ones that the agency gets.

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Cheniver Deco vs. NLRC, GR 122876, February 17, 2000 The company relocated from Makati to Batangas, in view of the expiration of its lease of the land in Makati. It was informed by the employees that they did not want to work in Batangas. The company told them to report at the new site within seven days lest they be considered to have lost interest in their work, and will be replaced. Employees filed for illegal dismissal. Labor arbiter and NLRC found that dismissal was not illegal, but awarded separation pay, which the company contests. The company says that the employees should be deemed to have voluntarily resigned from their jobs, and the transfer of business is not tantamount to closure nor retrenchment. Held: Separation pay awarded. The transfer of business amounts to a cessation of the business in Makati. Art. 283 of the Labor Code pertains to both complete cessation of all business operations and the cessation of only a part of the company’s business. This exercise of management prerogative to transfer is due to a reason beyond the company’s control, but still it must pay to afford the employees some relief. NFL V. NLRC, 327 SCRA 158 Petitioners are employees of Patalon Coconut Estate (PCE)in Zamboanga City. Due to the passage of the Comprehensive Agrarian Reform Law, the PCE was awarded to PEARA, a cooperative accredited by the Dept. of Agraraian Reform, and of which the petitioners are members and co-owners. As a result, the employers shut down the operation of PCE but did not award any separation pay. Held: Petitioners NOT entitled to separation pay. The closure envisaged by Art. 283 of the Labor Code is one pursuant to a unilateral and voluntary act of the employer. Art. 283 does not contemplate a situation where the closure of the business is forced upon the employer and ultimately for the benefit of the employees. Hence, no separation pay is awarded where the closure was due to the act of the government, a compulsory acquisition for purposes of agrarian reform, where the petitioners themselves are made the agrarian lot beneficiaries.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

De Leon vs. NLRC, May 30, 2001

(b) PROCEDURE FOR TERMINATION Sebuguero v. NLRC, 248 SCRA 532 38 regular employees of GTI Sportswear were given temporary layoff notices due to aleged lack of work and havy losses cause by the cancellation of orders from abroad and by the garments embargo of 1990. SC: Article 283 of the Labor Code which covers retrenchment speaks of permanent retrenchment as opposed to temporary lay-off as in this case. There is no specific provision of law which treats of a temporary retrenchment or lay-off and provides for the requisites in effecting it or a period or duration therefor To remedy this situation, Art. 286 may be applied but only by analogy to set a specific period that employees may remain temporarily laid-off or in floating status. Six months is the period set by law that the operation of a business or undertaking may be suspended thereby suspending the employment of the employees concerned. The temporary lay-off wherein the employees likewise cease to work should also not last longer than 6 months. After six months, the employees should either be recalled to work or permanently

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retrench following the requirements of the law, and that failing to comply with this could be tantamount to dismissing the employees. Under Art 283 of the Labor Code, there are 3 basic requirements for a valid retrenchment: 1. Retrenchment is necessary to prevent losses and such losses are proven. 2. Written notice to the employees and to the DOLE at least one month prior to the intended date of retrenchment; 3. Payment of separation pay equivalent to one month pay or at least ½ month pay for every year of service. Whichever is higher. Lack of written notice to employees and to DOLE does not make retrenchment illegal such that they are entitled to the payment of backwages and separation pay in lieu of reinstatement as they contend. It merely makes retrenchment defective. Illegal retrenchment is when it is not proven that there’s imminent and actual serious losses or substantial losses – this entitles employees to reinstatement and backwages.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

C. CONSEQUENCES OF DISMISSAL

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Anscor Transport vs. NLRC, 190 SCRA 147

(a) WITH CAUSE Philippine National Construction Corp. vs. NLRC, 170 SCRA 207

PLDT vs. NLRC, 164 SCRA 671

Globe Mackay Cable and Wire Corp. vs. NLRC, 206 SCRA 701

(b) WITHOUT CAUSE REINSTATEMENT Pedrosa vs. Castro, 141 SCRA 252

Quijano v Mercury Drug Corp, 292 SCRA 109 Facts: Quijano was a warehouseman of Mercury Drug. He has been working for the company for 8 yrs. Records show that his working performance was good during this entire period. Sometime in 1990, he exposed the existence of a “five-six” loan system in their workplace operated by some of its officers. He then incurred the ire of Altavano, the company’s manager, who operated usurious transactions. Quijano was charged with violations of company policies. Thereafter, he was terminated. He filed an illegal dismissal case against the company. The Labor Arbiter ruled that Quijano was indeed illegally dismissed and ordered the latter’s reinstatement. On

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

appeal, the NLRC affirmed the finding of illegal dismissal, but ordered that Quijano be given separation pay in lieu of reinstatement. Quijano is now questioning the decision of the NLRC with regard to the order of payment of separation pay in lieu of reinstatement. Held: Quijano should be reinstated. Well-entrenched is the rule that an illegally dismissed employee is entitled to reinstatement as a matter of right. Case law, however, developed that where reinstatement is not feasible, expedient or practical, as where reinstatement would only exacerbate the tension and strained relations between the parties, or where the relationship between the employer and employee has been unduly strained by reason of their irreconcilable differences, it would be more prudent to order payment of separation pay instead of reinstatement. The doctrine of “strained relations”, however, should be strictly applied so as not to deprive an illegally dismissed employee of his right of reinstatement. In the case at bar, the company’s charges of misbehavior against Quijano cannot serve as basis to justify the latter’s dismissal, let alone his non-reinstatement. The antagonism was caused substantially, if not solely, by the misdeeds of the company’s superiors. The Arbiter found that the charges against Quijano were false and were merely filed by his superiors against him to punish him for exposing their usurious loan operations. Hence, to deny Quijano reinstatement due to the “strained relations” with his accusers whose charges were found to be false would result in rewarding the accusers and penalizing Quijano. Capili v NLRC, 270 SCRA 488 Facts: Upon assumption of ownership and operation of public utility jeepneys, Capili required the drivers to sign individual contracts of lease of the jeeps to formalize their lessor-lessee relationship. However, having gathered the impression that the signing of the contract of lease was a condition precedent before they could continue driving for Capili, all the drivers stopped plying their assigned routes. Thereafter, they filed a complaint for illegal dismissal and prayed for the grant of separation pay.

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Held: The drivers are not entitled to separation pay. The legal basis for the award of separation pay is clearly provided by Art. 279 of the Labor Code which states that the remedy for illegal dismissal is reinstatement without loss of seniority rights plus backwages. However, there may be instances where reinstatement is not a viable remedy as where the relations between employer and employee have been so severely strained that it is no longer advisable to order reinstatement or where the employee decides not to be reinstated. In such events, the employer will instead be ordered to pay separation pay. But the award of separation pay cannot be justified solely because of the existence of “strained relations” between the employer and the employee. It must be given to the employee only as an alternative to reinstatement emanating from illegal dismissal. When there is no illegal dismissal, even if the relations are strained, separation pay has no legal basis. In the case at bar, there was no dismissal at all. Buenviaje vs. VA, GR 147806, November 12, 2002

Filflex Industrial & Manufacturing Corp. vs. NLRC, Feb. 12, 1998

Philippine Tobacco Flue-Curing v NLRC, 300 SCRA 37 Facts: There are two groups of employees in this case, namely, the Lubat group and the Luris group. The Lubat group is composed of petitioner’s seasonal employees who were not rehired for the 1994 tobacco season. At the start of that season, they were merely informed that their employment had been terminated at the end of the 1993 season. They claimed that petitioner’s refusal to allow them to report for work without mention of any just or authorized cause

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

constituted illegal dismissal. In their Complaint, they prayed for separation pay, backwages, attorney’s fees and moral damages. On the other hand, the Luris group is made up of seasonal employees who worked during the 1994 season. On August 3, 1994, they received a notice informing them that, due to serious business losses, petitioner planned to close its Balintawak plant and transfer its tobacco processing and redrying operations to Ilocos Sur. Although the closure was to be effective Sept. 15, 1994, they were no longer all9owed to work starting August 4, 1994. Instead, petitioner awarded them separation pay computed according to the following formula: total no. of days actually worked x daily rate x 15 days total no. of working days in one year In their Complaint, they claimed that the computation should be based not on the above mathematical equation, but on the actual number of years served. In addition, they contended that they were illegally dismissed, and thus they prayed for backwages. Held: The Supreme Court held that the Lubat group was indeed illegally dismissed. The seasonal workers who are temporarily laid off during off-season are not separated from service but merely considered on leave. Thus, petitioner should be responsible for the reinstatement of the Lubat group and the payment of their backwages. However, since reinstatement is no longer possible as petitioner has already closed its Balintawak plant, respondent members of the said group should instead be awarded normal separation pay (in lieu of reinstatement) equivalent to at least one month pay, or one moth pay for every year of service, whichever is higher. It must be stressed that the separation pay being awarded tot he Lubat group is due to illegal dismissal; hence, it is different from the amount of separation pay provided for in Article 283 in case of retrenchment to prevent losses or in case of closure or cessation of the employer’s business, in either of which the separation pay is equivalent to at least one (1) month or one-half (1/2) month pay for every year of service, whichever is higher. With regard to the claim

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of the Luris group, the Supreme Court held that the amount of separation pay which seasonal workers should receive is one-half (1/2) their respective average monthly pay during the last season they worked multiplied by the number of years they actually rendered service, provided that they worked for at least six months during a given year. WITHOUT LOSS OF SENIORITY OR OTHER RIGHTS Grolier International Inc., vs. Executive Labor Arbiter, 177 SCRA 196

BACKWAGES Paramount Vinyl Products Corp. Vs. NLRC, 190 SCRA 525

Mariners Polytechnic School vs. Leogardo, 171 SCRA 597

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Lantion vs. NLRC, 181 SCRA 513

Pizza Inn vs. NLRC, 162 SCRA 773

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backwages have to be paid by the employer as part of the price or penalty he has to pay for illegally dismissing his employee. The clear legislative intent of the amendment in RA 6715 is to give more benefits to workers than was previously given them under the Mercury Drug rule or the “deduction of earnings elsewhere” rule. A closer adherence to the legislative policy behind RA 6715 points to “full backwages” as meaning exactly that, i.e., without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. Thus, petitioners are entitled to their full backwages, inclusive of allowances and other benefits or their monetary equivalent, from the time their actual compensation was withheld from them up to the time of their actual reinstatement. Buhain vs. CA, GR 143709, July 2, 2002

Bustamante v NLRC, 265 SCRA 61 Facts: In this case, the company is questioning the decision of the Court granting backwages to its illegally dismissed employees computed from the time of their illegal dismissal up to the date of their reinstatement. The company is insisting that salary earned elsewhere by the employees should be deducted from the award of backwages. Held: The SC held that backwages to be awarded to an illegally dismissed employee should not as a general rule, be diminished or reduced by the earnings derived by him elsewhere during the period of his illegal dismissal. The underlying reason for this ruling is that the employee, while litigating the legality/illegality of his dismissal, must still earn a living to support himself and his family while full

PNCC v NLRC, 286 SCRA 329 Facts: The private respondent in this case is a carpenter who is part of a regular work pool of the petitioner company. Sometime in 1979, private respondent worked in petitioner’s project in the Middle East, with a salary of $2.20 per hour. Upon completion of the project in 1984, private respondent returned to the Philippines. Petitioner then failed to give him work in its local projects. Thereafter, private respondent sued for illegal dismissal. NLRC ordered the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

reinstatement of private respondent to his former position and the payment of his backwages for 3 years. This order was affirmed by the SC which ordered the case to be remanded to the Labor Arbiter for the computation of backwages. Petitioner is now questioning the basis of the computation of the backwages (in computing the backwages, NLRC used private respondent’s salary rate in the Middle East). It claimed that private respondent’s backwages should not be based on his salary abroad since his overseas employment contract was for a definite term and that the project covered by the said contract had been completed in 1984. It submitted its own computation of private respondent’s backwages based on the latter’s local wage rate at the time of his transfer to the overseas project. Held: The basis of computation of private respondent’s backwages should have been the local wage rate at the time of his transfer to the overseas project and not his overseas rate. An illegally dismissed employee is usually reinstated to his former position without loss of seniority rights and paid backwages from the time he was separated from work up to his actual reinstatement. The purpose of the reinstatement is to restore the employee to the state or condition from which he has been removed or separated. Backwages aim to replenish the income that was lost by reason of the unlawful dismissal. In the case at bar, records show that private respondent was not illegally dismissed while working in the Middle East project of the petitioner. His overseas assignment was a specific project and for a definite period. Thus, when private respondent prayed for reinstatement, he meant reinstatement to his position as a regular member of petitioner’s work pool. If private respondent were given local assignments after his stint abroad, he would have received the local wage. This is the “loss” which backwages aim to restore. Wenphil Corp. v NLRC, 170 SCRA 69 Facts: Mallare was dismissed after having an altercation with a coemployee. The petitioner company failed to give Malare the benefit of a hearing before he was dismissed. Held: The Supreme Court held that although the dismissal of Mallare is warranted as it was based on a just cause provided by the

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labor code, such dismissal is still considered as illegal because of the failure of the petitioner company to observe due process in effecting such dismissal. However, the employee should not be reinstated because of non-compliance with the procedural requirements. The employer cannot be forced to retain the services of an employee who has committed a just cause for dismissal. But there must be a penalty for violation of the right to procedural due process. The Supreme Court awarded damages in the amount of P1,000 in this case. Serrano v NLRC, GR 117040, January 27, 2000 & May 4, 2000 Facts: The employee in this case was dismissed for an authorized cause. However, the requirement of due process was not observed by the employer in effecting the dismissal. Held: The Supreme Court held that the dismissal is still illegal despite the fact that it is based on an authorized cause. This is because of the employer’s failure to observe the requirement of due process in effecting the dismissal. However, the Supreme Court held that the employee is still not entitled to reinstatement because of the presence of the authorized cause. But the Court awarded full backwages from the time of dismissal up to the finality of the decision plus separation pay. Dela Cruz v NLRC, Nov. 20, 1998 Facts: The petitioner in this case is questioning the decision of the Labor Arbiter and NLRC refusing the award of backwages to the latter despite a finding of illegal dismissal. Held: The Labor Arbiter and the NLRC committed grave abuse of discretion in refusing to award backwages to petitioner simply because the latter did not ask for such relief in his complaint. The award of backwages resulting from the illegal dismissal of an employee is a substantive right. Failure to claim backwages in a complaint for illegal dismissal has been held to be a mere procedural lapse which cannot defeat a right granted under substantive law. Equitable v NLRC, 273 SCRA 352

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Facts: Atty. Sadac was appointed vice-president for the legal department of the petitioner bank. He was also designated as the bank’s general counsel. Sometime later, nine of the lawyer’s of the bank’s legal department addressed a letter to the chairman of the board of directors of the bank accusing Atty. Sadac of abusive conduct, inefficiency, mismanagement and indecisiveness. The charge was investigated and on the basis of the findings, a memo was sent to Atty. Sadac asking him to voluntarily resign. He asked for a full hearing but was not granted. Thus, he filed a complaint against the bank for illegal dismissal and damages. Held: There was illegal dismissal in this case. The dismissal was without just cause and there was no notice and hearing. However, the Supreme Court held that Atty. Sadac is not entitled to moral and exemplary damages. Moral damages are recoverable when the dismissal of an employee is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy. Exemplary damages may be awarded if the dismissal is effected in a wanton, oppressive or malevolent manner. In this case, the Court is of the considered view that petitioners have not motivated by malice or bad faith nor have they acted in wanton, oppressive or malevolent manner such as to warrant a judgment against them for moral and exemplary damages. Malice or bad faith implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity; it is different from the negative idea of negligence in that malice or bad faith contemplates a state of mind affirmatively operating with furtive design or ill will. Millares v NLRC, 305 SCRA 500 Facts: In this case, petitioners were retrenched to prevent losses. They are now contending the decision of the NLRC holding that the Staff/Manager’s transportation and Bislig allowances did not form part of the salary base used in computing the separation pay of petitioners. Held: The Supreme Court held that the decision of the NLRC is correct. Separation pay when awarded to an illegally dismissed

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employee in lieu of reinstatement or to a retrenched employee should be computed based not only on the basic salary but also on the regular allowances that the employee had been receiving. The Supreme Court, however, held that the disputed allowances were not regularly received by the petitioners in this case. The receipt of an allowance on a monthly basis does not ipso facto characterize it as regular and forming part of salary because the nature of the grant is a factor worth considering. The Supreme Court agree with the observation of the Office of the Solicitor General that the subject allowances were temporarily, not regularly, received by petitioners because: 1. In the case of the housing allowance, once a vacancy occurs in the company-provided housing accommodations, the employee concerned transfers to the company premises and his housing allowance is discontinued 2. The transportation allowance is in the form of advances for actual transportation expenses subject to liquidation and given only to employees who have personal cars 3. The Bislig allowance is given to Division Managers and corporate officers assigned in Bislig, Surigao del Norte. Once the officer is transferred outside Bislig, the allowance stops Thus, the petitioners’ continuous enjoyment of the disputed allowances was based on contingencies the occurrence of which wrote finis to such enjoyment. Fernandez v NLRC, 289 SCRA 433 Facts: In his decision, the labor arbiter granted varying amounts of service incentive leave pay to the petitioners based on the length of their tenure (the shortest was six years and the longest was thirtythree years). The solicitor general recommended that the award of service incentive leave be limited to three years. Held: The award of service incentive leave should not be limited to three years. The clear policy of the Labor Code is to grant service incentive leave pay to workers in all establishments, subject to a few exceptions. Service incentive leave is a right which accrues to every

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

employee who has served “within 12 months, whether continuous or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contracts, is less than 12 months, in which case said period shall be considered as one year.” It is commutable to its money equivalent if not used or exhausted at the end of the year. Thus, to limit the award to three years is to unduly restrict such right. Since a service incentive leave is clearly demandable after one year of service or its equivalent period, and it is one of the benefits which would have accrued if an employee was not otherwise illegally dismissed, it is fair and legal that its computation should be from the date of illegal dismissal up to the date of reinstatement. DAMAGES Lim vs. NLRC, 171 SCRA 328

Estiva vs. NLRC, 225 SCRA 169

Quijano v Mercury Drug Corp, 292 SCRA 109 Facts: Quijano was a warehouseman of Mercury Drug. He has been working for the company for 8 yrs. Records show that his working performance was good during this entire period. Sometime in 1990, he exposed the existence of a “five-six” loan system in their workplace operated by some of its officers. He then incurred the ire of Altavano, the company’s manager, who operated usurious

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transactions. Quijano was charged with violations of company policies. Thereafter, he was terminated. He filed an illegal dismissal case against the company. The Labor Arbiter ruled that Quijano was indeed illegally dismissed and ordered the latter’s reinstatement. On appeal, the NLRC affirmed the finding of illegal dismissal, but ordered that Quijano be given separation pay in lieu of reinstatement. Quijano is now questioning the decision of the NLRC with regard to the order of payment of separation pay in lieu of reinstatement. Held: Quijano should be reinstated. Well-entrenched is the rule that an illegally dismissed employee is entitled to reinstatement as a matter of right. Case law, however, developed that where reinstatement is not feasible, expedient or practical, as where reinstatement would only exacerbate the tension and strained relations between the parties, or where the relationship between the employer and employee has been unduly strained by reason of their irreconcilable differences, it would be more prudent to order payment of separation pay instead of reinstatement. The doctrine of “strained relations”, however, should be strictly applied so as not to deprive an illegally dismissed employee of his right of reinstatement. In the case at bar, the company’s charges of misbehavior against Quijano cannot serve as basis to justify the latter’s dismissal, let alone his non-reinstatement. The antagonism was caused substantially, if not solely, by the misdeeds of the company’s superiors. The Arbiter found that the charges against Quijano were false and were merely filed by his superiors against him to punish him for exposing their usurious loan operations. Hence, to deny Quijano reinstatement due to the “strained relations” with his accusers whose charges were found to be false would result in rewarding the accusers and penalizing Quijano. Phil. Aeolus v NLRC, 331 SCRA 237 Facts: Cortez filed a case of illegal dismissal against the petitioner company. In her complaint, she also prayed for damages in the event that the illegality of her dismissal is sustained. Held: The Supreme Court held that Cortez was indeed illegally dismissed and that she is entitled to moral and exemplary damages.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Anxiety was gradual in Cortez’s five-year employment. It began when her plant manager showed an obvious partiality for her which went out of hand when he started to make it clear that he would terminate her services if she would not give in to his sexual advances. Sexual harassment is an imposition of misplaced “superiority” which is enough to dampen an employee’s spirit in her capacity for advancement. It affects her sense of judgment; it changes her life. If for this alone Cortez should be adequately compensated. Thus, for the anxiety, the seen and unseen hurt that she suffered, petitioners should also be made to pay her moral damages, plus exemplary damages, for the oppressive manner with which petitioners effected her dismissal from the service, and to serve as a forewarning to lecherous officers and employers who take undue advantage of their ascendancy over their employees.

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business losses and financial reverses were not amply shown or proved. Pabalan vs. NLRC, 184 SCRA 495

LIABILITY FOR MONETARY CLAIMS Reahs’ Corp. v NLRC, 271 SCRA 247 Facts: Reahs’ Corporation closed its business allegedly due to poor business. Its employees filed a case for illegal dismissal and demanded for separation pay. The Labor Arbiter dismissed the case for illegal dismissal but upheld the claims for separation pay. Reahs’ Corporation is contending that Art. 283 exempts establishments from payment of separation pay when the closure of the business is due to serious business losses or financial reverses. Held: The dismissed employees are entitled to separation pay. The grant of separation pay, as an incidence of termination of employment under Art. 283, is a statutory obligation on the part of the employer and a demandable right on the part of the employee, except only where the closure or cessation of operations was due to serious business losses or financial reverses and there is sufficient proof of this fact or condition. In the absence of such proof of serous business losses or financial reverses, the employer closing his business is obligated to pay his employees and workers their separation pay. In the case at bar, the corporation’s alleged serious

Asionics Phils. v NLRC, 290 SCRA 164 Facts: Asionics Phils. implemented a company-wide retrenchment affecting 105 employees from a workforce that totaled 304. Among the employees who were dismissed were Boaquina and Gayola. They joined Lakas Union which staged a strike against Asionics Phils. The Labor Arbiter declared the strike illegal, but declared that the separation pay of the striking members as valid under the companywide retrenchment program. The company is contending that the striking employees should not be entitled to separation pay because of their involvement in the strike which was declared illegal. Held: The employees are entitled to separation pay. The termination of employment of the striking employees was due to the retrenchment policy adopted by the company and not because of their union activities. It should suffice to say that the retrenchment of the employees has, in fact, preceded the declaration of strike. The Court also held that Frank Yih, the President and majority stockholder of the company cannot be held personally liable

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

as nothing on record is shown that he has acted in bad faith or with malice in carrying out the retrenchment program of the company. PNCC v NLRC, 307 SCRA 218 Facts: Private respondents in this case were dismissed for serious misconduct. He is now contending that he is entitled to separation pay and mid-year bonus. Held: The Supreme Court held that they are not entitled to separation pay and mid-year bonus. An employee who is dismissed for just cause is generally not entitled to separation pay. In some cases, however, the Court awards separation pay to a legally dismissed employee on the grounds of equity and social justice. This is not allowed, though, when the employee has been dismissed for serious misconduct or some other cause reflecting on his moral character. Likewise, private respondents are not entitled to the midyear bonus they are claiming. The Supreme Court does not agree with the Solicitor General’s contention that private respondents have already earned their mid-year bonus at the time of their dismissal. A bonus is a gift from the employer and the grant thereof is a management prerogative. Petitioner may not be compelled to award a bonus to private respondents whom it found guilty of serious misconduct.

D. PREVENTIVE SUSPENSION; CONSTRUCTIVE DISMISSAL Leonardo v. NLRC, 333 SCRA 589 At Reynaldo’s Marketing Corporation, Fuerte was a supervisor receiving P122 a day, augmented by a weekly supervisor’s allowance. Fuerte was later transferred to the Sucat plant for failure to meet his sales quota and his allowance was withdrawn. He thus filed a complaint for illegal dismissal. Issue: Whether there was constructive dismissal. Held: NOPE. An employer acts well within its rights in transferring an employee as it sees fit provided there is no demotion in rank or

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diminution in pay. The two circumstances are deemed badges of bad faith, and thus constitutive of constructive dismissal. Here, although the transfer was undertaken beyond the parameters above-mentioned, the employer does not deny that it was really demoting Fuerte but, for cause. It should be borne in mind that the right to demote an employee also falls within the category of management prerogatives. An employer is entitled to impose productivity standards for its workers, and in fact, non-compliance may be visited with a penalty even more severe than demotion. E. DISEASE Cebu Royal Plant vs. Deputy Minister of Labor, 153 SCRA 38 Ramon Pilones handled ingredients in the processing of soft drinks. Later he was removed due to “pulmonary tuberculosis minimal”. He filed for illegal dismissal. Regional Director found in favor of employer. However on appeal, the Minister ordered reinstatement, as it was found that he was a permanent employee, and that the ailment was not certified as incurable within six months as to justify separation. Also, the Minister said that the employer should have first obtained a clearance for termination of employment, as required by the regulations then in force. Employer insists he was a probationary employee at the time he was dismissed. It is also argued that the regional director’s findings should not be disturbed on appeal, since he had direct access to the facts. Held: Employee should be reinstated. It is shown that employee continued working as usual way beyond the six-month period of probation. Hence he was on permanent status at the time he was dismissed. Also, the record does not contain the certification as required by the Rules. The medical certificate offered by the employer came from its own physician who was not a competent public health authority, and merely stated the employee’s disease without more.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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We may surmise that if the required certification was not presented, it was because the disease was not of such a nature or seriousness that it could not be cured within a period of six months even with proper treatment. The court reaffirms its concern for the lowly worker who, often at the mercy of his employers, must look up to the law for his protection.

REPUBLIC ACT NO. 7641 AN ACT AMENDING ARTICLE 287 OF PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES, BY PROVIDING FOR RETIREMENT PAY TO QUALIFIED PRIVATE SECTOR EMPLOYEES IN THE ABSENCE OF ANY RETIREMENT PLAN IN THE ESTABLISHMENT

Tan v. NLRC, 271 SCRA 216 Ibutnandi was dismissed because he failed to present a medical certificate from a government doctor certifying that he was already cured of pulmonary tuberculosis (PTB), hence, already fit to work.

Sec. 1. Article 287 of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines, is hereby amended to read as follows:

Issue: Whether Ibutnandi was validly dismissed. Held: NOPE. It undeniable that Ibutnandi became afflicted with PTB and that under Art. 284 of the Labor Code, an employer may terminate the services of his employee found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to that of his co-employees. However, the fact that an employee is suffering from such a disease does not ipso facto make him a sure candidate for dismissal. It is only where there is a prior certification from a competent public authority that the disease is of such nature or at such stage that it cannot be cured within 6 months even with proper medical treatment that the employee could be validly terminated. Here, there is absolutely nothing to show that the employer obtained such certification. Rather, it was Ibutnandi who presented a certificate from a doctor certifying that he was already fit to return to work. The employer rejected this and insisted that Ibutnandi present one issued by a government physician. According to the Rules, the burden is on the employer, not the employee, to justify dismissal with a certificate from public authority that the disease is not curable within 6 months. Hence for failure of the employer to present one, dismissal was not valid. F. RETIREMENT

“Art. 287. Retirement. – Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. “In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided, however, That an employee’s retirement benefits under any collective bargaining and other agreements shall not be less than those provided herein. “In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. “Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

“Retail, service and agricultural establishments or operations employing not more than (10) employees or workers are exempted from the coverage of this provision. “Violation of this provision is hereby declared unlawful and subject to the penal provisions provided under Article 288 of this Code.” Sec. 2. Nothing in this Act shall deprive any employee of benefits to which he may be entitled under existing laws or company policies or practices. Sec. 3. This Act shall take effect fifteen (15) days after its complete publication in the Official Gazette or in at least two (2) national newspapers of general circulation, whichever comes earlier. Approved: December 9, 1992

PSVSIA v. NLRC, 271 SCRA 209 Federico worked for PVSIA as a security guard for 23 years. When he turned 60, he tendered his “letter of resignation” citing as his reasons his physical disability to perform his duties and desire to spend the rest of his life in the province. He later sought termination pay corresponding to his years of service, or retirement pay. PVSIA rejected Federico’s claim. Issue: Whether Federico is entitled to the benefits of RA 7641. Held: NO. R.A 7641, enacted as a labor protection measure and as a curative statute, applies to labor contracts still existing at the time the statute took effect. Its benefits can be reckoned retroactively to the time the employment contract started. However, two circumstances must concur: (1) the claimant was still the employer’s employee at the effectivity of the statute; (2) the claimant complies with the requirements for eligibility under the statute for such retirement benefits. Here, only the second circumstance exists. Prior to the effectivity of RA 7641, Federico already severed his employment with PVSIA

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when he tendered his “letter of resignation”. In fact the issue before the NLRC was not the existence of the employer-employee relationship between the parties; rather, considering the cessation of his service, whether he was entitled to monetary awards. Aquino v. NLRC, 206 SCRA 118 Petitioners’ services were terminated on the ground of retrenchment. They receivd separation pay double than required by the Labor Code. Later, they demanded retirement benefits invoking the retirement plan of the company. Issue: Whether receipt of separation pay precludes a claim for retirement benefits. Held: Not necessarily. Provided the CBA does not contain a provision prohibiting the receipt of both termination and retirement pay, an employee is entitled to both. Here, both the CBA and the Retirement Plan contain no such prohibition. Hence, petitioners should get retirement benefits in addition to separation pay. Although the company paid separation pay double than that required by law, this generosity does not excuse it from paying retirement benefits because petitioners are not pleading for generosity but are demanding their rights embodied in the CBA. When the employer signed the CBA, it recognized the rights of the workers and did not merely concede certain privileges to them out of generosity. Producers Bank v. NLRC, 298 SCRA 517 Producers Bank was placed under a conservator. The bank’s employees then demanded from the conservator the implementation of the CBA provisions on retirement. The bank objected and a deadlock ensued. The employees filed a complaint for ULP and violations of the CBA. The bank countered that the employees have already retired thus, there was no more employer-employee relationship and therefore, the employees had no personality to sue. Issues: 1. Whether the conservator can refuse to implement the CBA provisions on retirement.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

2. Whether the employees have no personality to sue. Held: NO to both. 1. A conservator cannot post-facto repudiate perfected transactions in violation of the non-impairment clause of the Constitution. He can only revoke contracts that are deemed to be defective. Since he cannot rescind valid contracts, and since the CBA is the law between the parties; the conservator cannot disallow the implementation of the CBA provisions on retirement considering that the ideals of social justice and labor protection are guaranteed not only by the Labor Code but also by the Constitution. 2. Retirement does not in itself affect employment status, especially when it involves the rights and benefits due to an employee. The retirement scheme is part of the employment package and the benefits therefrom constitute a continuing consideration for services rendered as well as an inducement for remaining with the employer. Thus, when an employee has retired but his benefits under the law or the CBA have not yet been given, he still retains, for the purpose of prosecuting his claims, the status of an employee entitled to protection under the Labor Code. Capili v. NLRC, 273 SCRA 576 Capili, a school instructor was informed by his employer that under the school’s retirement plan, it could retire him, arguing that the employee has the option only in the absence of a retirement plan. Issue: Whether an instructor of a private educational institution may be compelled to retire at the age of 60 years. Held: Article 287 of the Labor Code provides for two types of retirement: compulsory at the age of 65; and optional, which is primarily determined by the CBA, employment contract, or employer’s retirement plan. In the absence of any provision on optional retirement in a CBA, etc., an employee may optionally retire at age 60 or more but not beyond 65 provided he has served at least 5 years in the establishment concerned. That prerogative is exclusively lodged in the employee.

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By accepting the retirement benefits, Capili is deemed to have opted to retire under the 3rd paragraph of Art. 287. Thereunder, he could choose to retire upon age 60, provided it is before the age 65. It is worth noting his statement that he had long been unjustly denied of his retirement benefits since Aug 18,1993. He was entitled to retirement benefits as early as that date but was denied thereof without justifiable reason. This could only mean that he has already acceded to his retirement, effective on such date - when he reached the age of 60. Progressive Development Corp. (PDC) v. NLRC, 344 SCRA 512 PDC’s retirement plan provides that any participant with twenty years of service, regardless of age, may be retired at his option or at the option of the company. Pursuant to the plan, a number of employees were retired. Issue: Whether the retirement program of the company is valid. Held: Yes. The retirement plan under which the employees were retired is valid for it forms part of the employment contract of the company. In fact, the Bureau of Working Conditions of the DOLE recognized the validity of the plan. The retirement plan now forms part of the employment contract since it is made known to the employees and accepted by them, and such plan has an express provision that the company has the choice to retire an employee regardless of age, with twenty years of service, said policy is within the bounds contemplated by the Labor Code. In addition, a number of employees had availed of the plan since its effectivity; thus the plan has already been part of the employment contract of the company. PAL vs. ALPAP, GR 1433686, January 15, 2002

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

G. RESIGNATION Metro Transit Organization v. NLRC, 284 SCRA 308 Garcia, a station teller at Metro Transit, left work for a few weeks to look for his missing family. Upon his return (he didn’t find his family), he was advised by Metro to resign. Still weighed down by his serious family problem, he at once prepared a resignation letter then left again to look for his family. Later, his resignation was accepted. Issue: Whether there was valid resignation. Held: Metro Transit could have settled the problem of its employee and avoided litigation had it listened judiciously to the Garcia’s explanation for his absences. The objectives of social justice can be realized only if employers in appropriate situations extend their hand to their employees in dire need of help. The reinstatement of Garcia is in keeping with established jurisprudence. A termination without cause entitles a worker to reinstatement. Philippines Today, Inc. v. NLRC, 267 SCRA 202 Alegre filed for a leave of absence citing medical reasons, which were not proved. He also wrote a memorandum containing all his grievances. He cleared his desk of personal belongings, did not report back for work, and expressly manifested his intention to resign. He, however, was not deprived of his chance to return to work.

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resignation at his whim and without the conformity of his employer. A resigned employee who wants his job back has to reapply therefor, and he shall have the status of a stranger who cannot unilaterally demand an appointment. He cannot arrogate unto himself the same position which he earlier decided to leave. To allow him to do so would be to deprive the employer of his basic right to choose whom to employ. An employer is free to regulate, according to his own discretion and judgement, all aspects of employment, including hiring. Alfaro vs. CA, August 28, 2001

LECTURE

Issues: 1. Whether Alegre resigned.

Termination of Employee

2. Whether he can unilaterally withdraw his resignation. Held:

Substantial requirements

1. Yes. The facts establish that Alegre resigned. 2. No. Resignations, once accepted may not be withdrawn without the consent of the employer. If withdrawal is accepted, the employee retains his job. If not, the employee cannot claim illegal dismissal. An employer cannot backtrack on his

What is the difference between just causes and authorized causes? An authorized cause has nothing to do with acts allegedly committed by the employee. A just cause has something to do with and is precisely because of an act allegedly committed by the employee.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

This in turn will be used by the employer as a ground for termination. Just causes Serious Misconduct. A willful misconduct is not always serious. A misconduct is not necessarily a ground for termination. If it is not serious, the misconduct will not justify termination. Willful Disobedience. It must be willful disobedience. It is characterized by a perverse attitude. That the employee deliberately disobeyed the employer. Thus if the employer issues an ambiguous order and the employee disobeyed the employer because he could not understand the order, that disobedience cannot be a just cause for termination. There must be an intent to defy a lawful order of the employer. The order must be related to his work. True or False. As long as there is gross misconduct or willful disobedience committed by an employee, there is valid ground for termination. False. The serious misconduct or willful disobedience must be committed by an employee in relation to his work. Can an employee possibly commit a series of serious misconduct and yet not be terminated by the employer? Yes. It must be in connection with his work or must affect his work. Serious misconduct must be in relation to his work. It can be a fight which was committed inside the premises but outside office hours. If the fight has nothing to do with the work of the employees and if that fight did not interrupt, did not disrupt the work and did not affect the working relationship of the employees in the performance of their job, then such misconduct will not amount to a valid ground for termination. But it is a misconduct. And it is serious, it injured. But you have to be careful with examples and illustration. It is not necessary that the misconduct be committed within the premises of

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the employer. The validity of the ground for termination based on misconduct is not determined by the place of commission but by the effect of the misconduct on the work of the employee. It can be committed outside the premises of the company, it can be committed outside office hours, but it can still affect the work of the employee or his performance of the job. Why should the misconduct be related or in connection with the performance of the work? Because you are terminating the employee because he is no longer fit to work and can no longer function effectively. And that is your reason for termination. So if the misconduct of the employee, however serious in character, if it has nothing to do, and it does not affect the performance of the work of the employee, it will not affect the employer-employee relationship and therefore the employer should not have anything to do with that misconduct. That will not justify termination. Thus it has the work or affect the performance of the work. Even willful disobedience. It must affect the performance of the work. In short if the disobedience pertains to an order which has nothing to do with the performance of the work, then that disobedience, no matter how deliberate in character even if it amounts to defiance, has nothing to do with the performance of the work and therefore has nothing to do with the employer-employee relationship. And therefore cannot justify termination by the employer. You have to go back to the rationale why a particular ground is allowed to justify termination. Remember that the general rule is you cannot terminate an employee, these should be considered as the exceptions – these are the only grounds. And the exceptions should be construed strictly and unless you fall under one exception, then you cannot be considered as an exception. Of course, we are discussing a case here which is different from the other cases involving exceptions because in this case we have a catch-all provision, saying that it may include other cases not specifically mentioned. Gross misconduct and willful disobedience are two different grounds even if they are stated in one sentence. So you do not need an order before you can have serious misconduct.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Gross and habitual negligence. Negligence means failure to exercise the diligence required of the job and it is without regard to the consequences of your action. Should the negligence be workrelated? Yes, it must be neglect of duties. Duties of an employee, not the duties of a good father or husband. So your negligence which is not work-related will not be a ground for termination. The negligence has to be gross and habitual. It should be a serious negligence and must not be based on an isolated act but should be habitual in character. Habitual means that there’s a pattern of the negligent act. Should the first offense of neglect of duties which is gross in character be subject of disciplinary action? Yes. But not termination. We are not saying that the first offense should be go unnoticed by the employer. We are not condoning the offense of the employee which is connected to his work which is gross negligence in the performance of his duties. It should not go unpunished. What we are saying however is that the punishment could not amount to termination in that first instance. Because the law says that the negligence should not only be gross but also habitual. The law is clear. It says gross and habitual neglect. You do not see that in misconduct. The misconduct only has gross. There is no qualification that the misconduct should be also habitual. There is no formula for habituality. You have to look at the circumstances. It can be justified in some cases and not justified in other cases. The justification will also depend on the seriousness of the negligence. If the negligence is so serious and it was penalized the first time, the second offense may justify termination. In short, management is not required to wait for a third offense. But what is clear is that the first offense is not a valid ground for termination if the ground is negligence.

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What is different between misconduct and negligence? We have to distinguish between misconduct and negligence because misconduct is a ground for dismissal at the first instance. Misconduct is a sin of commission. While negligence is a sin of omission. In misconduct you do something. But in negligence you failed to do something which is required of you. Remember that difference, because in some cases, the court seemed to have confused the two grounds. Minsan negligence lang, sinasabing misconduct. And that is very important, because a single act of negligence cannot be a ground for termination. So if you treat an act of negligence as an act of misconduct, then the conclusion will be to terminate. In short, the termination will be valid. But it should not be. Because the misconduct is not really a misconduct but mere negligence which although serious, if not habitual, is not a ground for termination. Again, it’s very important to note the difference because in some case, mere negligence may appear to be a misconduct and in fact in particular decisions, the court will confuse negligence with misconduct. Some cases are examples of that particular ground, I assigned a case of sleeping while on duty. It’s a very good example of how you should treat each particular ground for termination because sleeping while on duty is a ground for termination for some employees and not a ground for termination for some other employees. Kung security guard ka at natutulog ka while on duty, it can be a ground for termination. However, if you are not a security guard, if you’re a factory worker and nakatulog ka while on duty, that may not justify termination according to the decision. So what is the rationale of that? You always have to go back to the effect of the cause on the performance of the job. If the cause does not have an effect or has a limited effect on the performance of the job, it should not justify termination. It will justify a disciplinary action which is not termination. Sleeping on the job is a sin of omission. In short, it’s not bad to sleep. It’s not a misbehavior. But because you are sleeping, you are

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

not doing your job. So the act of sleeping is a positive act which means that you cannot do something else. And therefore, I don’t think it can be considered a gross misconduct. If it can be considered a misconduct at all. In short, the act of sleeping will not be a justification for termination at the first instance, even if you’re a security guard because it is negligence and not misconduct. If you’re only job is to make sure that all equipment are turned off and to make sure that nothing is left on which will cause an accident and you failed to do that, the result is so gross, it can be akin to misconduct. Are we saying that that negligence is misconduct and are we confusing negligence with misconduct? No. We are going to the last item, which is analogous. We are not saying that this particular act of negligence is equivalent to misconduct. We are saying that this is analogous to the first cause which is misconduct. While it is good to distinguish between gross misconduct from gross and habitual negligence, some extraordinary cases may fall under the analogous reasons item, in which case a negligent act could be considered a misconduct. But that doesn’t mean that we will equate in all cases, negligence with misconduct. Fraud or willful breach by employee of the trust reposed on him by the employee. Fraud is always willful. It should always be deliberate that’s why there is no need for the adjective willful in fraud. Loss of trust and confidence is one of the most abused ground for termination. The waiter example. Can a waiter be fired on the ground of loss of trust and confidence? What if the waiter eats the food he is supposed to serve? Is your primary consideration in hiring the waiter your determination that that waiter will not eat the food? NO, that is not the primary reason for hiring the waiter. There is no trust reposed on the waiter

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that that waiter will not eat the food that he is supposed to serve. If there is no trust, there can be no breach. Because the basis is breach of trust. So when can that waiter be terminated for breach of trust? In no case can the waiter be terminated for breach of trust because in no case is trust reposed on the waiter. Is the ground of loss of trust and confidence applicable to all employees? No, only to employees to whom the employer has reposed his trust and confidence. Why do you say that the employer repose trust and confidence to a cashier and not to a factory employee? Because the cashier handles amounts of money of the employer. Those employees who are primarily in charge of handling company funds, company money or property. There’s a difference between the handling of a cashier of the money and the handling of the waiters. The waiters handling company assets will be temporary and will not be the main function of that particular employee as opposed to a cashier whose main function is to handle and to account for company funds. Who else can be under that category? A warehouse person for example. An officer in charge of the custody of the warehouse where you have the supplies and the raw materials of the management, I think that employee can be terminated for breach of trust. But ordinary employees who are performing jobs which are not primarily handling or in custody of company property or assets cannot be terminated for breach of trust and confidence. It has to be either misconduct or any other ground but not breach of trust and confidence. Why? Because there can be no breach if there is no trust reposed, no trust or confidence reposed in the employee. Why is there need for breach of trust as a ground? Why can’t it just fall under serious misconduct? Serious misconduct must be a positive act. It must be shown that the employee clearly committed something. In breach of trust, that

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

positive act may not be clearly committed. And yet who have grounds to terminate an employee because of a particular breach of trust and confidence. But we have to be careful about that. In one case, the court said there’s a difference between the treatment of managerial employees and ordinary employees. For managerial employees, it would seem that the ground of breach of confidence, you don’t need to point to a particular misconduct, particularly to a particular act of the managerial employee. In short, suspicion which is grounded on factual circumstances may be enough. I repeat, suspicion which is based on factual circumstances will justify the termination of a managerial employee. Why? Because while there is no misconduct which is clearly shown, but there is breach of trust and confidence. However, the court said, that cannot be applied to non-managerial employee. Meaning for non-managerial employees, you must show a particular act of breach of trust and confidence. So in that case, for managerial employees, you will find value in using breach of trust instead of misconduct. Because an act or a set of facts will or may justify breach of trust but not misconduct for a particular managerial employee. So when it comes to that managerial employee, you will terminate him not because of serious misconduct but due to breach of trust which you can prove with other factual circumstances. I think the category recited by Mr. Ariston (wowee, sikat!) can also be considered as part of that set of employees which can be terminated for breach of trust. Let’s say a secretary who handles confidential information and confidential documents and mishandles such documents, it can also be applied. Again, it has to be applied strictly and you have to show the circumstances showing a clear breach of trust. So the only employees you can terminate for breach are managerial employees and employees whose jobs primarily consists in handling company properties and company funds.

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Again, be careful about the terms. Take note of the term used, it’s willful breach. Willful breach is entirely different from simple loss of trust and confidence. How is it different? When you say willful breach, you are referring to a particular act of an employee. If you simply say loss of trust or confidence, it’s simply the employer losing trust and confidence in the employee. It’s not the ground contemplated by the law. The ground mentioned is not simply loss of trust which is subjective on the part of the employer, but breach of trust which is a positive act on the part of the employee. According to the decision of the Court, for managerial employees, mere circumstantial evidence may be enough. But for cashiers, or rank and file employees, you have to prove the acts constituting the breach of trust. In short, the actual evidence of the positive act of the employee which can be considered as a willful breach of trust. In short, madali kang matanggal if you’re a managerial employee. Commission of a crime. Is there need for an actual case? No. The minimum requirement of the law is the commission. And can you say that something is committed even before you file the case? Yes, of course. The employer does not have the responsibility to file a criminal case first or even to file it after or even report it to the police before terminating an employee who has committed an offense against the employer. You don’t need a case. You certainly don’t need a conviction before you can do that. A mere commission of an offense against the employer will justify termination. We can use offense and crime interchangeably here. This is not a penal law, the term crime against the “person” of the employer should not be interpreted as an offense against the person (as opposed to offenses against the chastity or liberty). I don’t think that we have to place the technical meaning it has in criminal cases. I’ll give you an example: If an employee committed an offense, let’s say acts of lasciviousness against the daughter of the employer, that will not fall under serious misconduct unless it’s work-related. But it

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

should fall under this case. And I don’t think the employee can raise the defense that “I did not commit a crime against persons.” This ground is not work-related. The work-related qualification no longer applies to subparagraph (d). Nakita mo sa labas yung employer mo, sinaksak mo. You cannot claim “hey, that’s not workrelated.” I don’t think you can do that. What if the employee says something to the employer which is tantamount to oral defamation? Can the employee be terminated based on that? Depending on the gravity of what he said. Which will take us now to the qualification that even if you have one of these things, even if you have a ground under Article 282. It does not automatically mean that termination is the proper remedy of the employer. Even if it can be considered serious misconduct, the court in many cases will say, you have to look at the circumstances, for example, length of service, the effect of that serious misconduct, the value of the property involved (if property was lost because of serious misconduct). And the court said that penalty should be commensurate to the offense committed. The term “offense committed” will certainly refer to the offenses enumerated under Article 282. What I’m saying is that the mere existence of an offense that fall under Article 282 will not justify termination, if a penalty less severe will already be sufficient. So hindi basta pumasok kayo under the definition, you will terminate. Other causes analogous to the foregoing. While I said that this means have some leeway in considering other causes, again the causes must be analogous to those items specifically stated in subparagraphs. The term analogous should likewise be construed narrowly. You cannot simply state that this is analogous to subparagraph (a) or subparagraph (b), it has to be strictly construed. And unless you can show a relation between that particular offense and the offenses which are specifically allowed to be ground for termination, then you cannot justify termination. Let me give you

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some examples, the court has allowed in some cases, the employer to terminate employees based on the employee’s violated of the employer’s Code of Conduct. But the offenses enumerated in the Code of Conduct must not be remote from the nature of the offenses enumerated under Article 282. So the employer is not limited to a, b, c, d. The employer can impose additional causes but those causes and the validity of those causes as justification for termination will be judged on the basis of whether they are on the same in thrust as a, b, c, d. Procedural requirements. Three steps: 1. First notice – A notice to the employee of the intent of the employer to dismiss  Also known as a “show cause” letter  Contents: a. Ground relied upon b. Facts which constitute the ground  Cannot simply say that “this is the second serious offense since January 22, 2002 c. Giving the employee the opportunity to prepare and explain his side d. Intention of the employer to dismiss  It has to be clear in the letter. Simply asking the employee to explain in writing the incident that happen in a particular date and a particular place. That is not a show cause letter. It’s a show cause letter because the employee is required to show cause why he or she should not be dismissed from the employment. It is not simply an explanation of an incident. The employee must justify why he must not be terminated by management and unless you have that, the show cause letter is insufficient. You have to notify the employee in advance that that explanation letter is so important because it could cause him or her his employment.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

2. A hearing to give the employee an opportunity to be heard  Not really adversarial but employee may have a lawyer with him if he wants 3. Second notice – a notice of dismissal Authorized causes Automation or labor-saving devices Because of the installation of labor-saving devices, you no longer need the services of employees. How is it different from redundancy? Redundancy is not the result of the installation of labor-saving device. Is there a value for knowing the difference between laborsaving device or redundancy? Assuming you have this situation where the installation of laborsaving device resulted in employees’ services being redundant – meaning you don’t need the group of employees anymore because you have installed a labor-saving device. Will the employee be terminated due to installation of labor-saving device or redundancy? Is there any difference in the consequences or the procedure of terminating due to labor-saving device and redundancy? If the installation of labor-saving device will mean that a group of employees will no longer be required, I don’t think that there is any reason to think about the difference of installation of labor-saving device and redundancy. Termination due to installation of laborsaving device or redundancy will have the same effect. The procedure will be the same. The separation pay will be the same. But not all redundancy will be the effect of installation of laborsaving device. You can have redundancy which is the result of dropping one product in the production line. You don’t need that production line anymore. So while you haven’t installed a laborsaving device, that is still redundancy.

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In redundancy, the employee terminated cannot claim that the termination is invalid because he or she was the only one occupying that particular position at the time of termination. We are not referring to positions only, we are referring services of the employees. And services may no longer be necessary even if you’re the only person occupying that particular position. Di mo puedeng sabihin na ako lang yung may ganun na trabaho sa kumpanya. Di nga kailangan yung trabaho mo na yun e. Therefore, you are redundant. Redundancy is not simply duplication. The services of the redundant employee should be in excess of the needs or the requirements of the business of the employer. I have 15 employees doing a particular job. Then I hire a group of employees through a subcontractor. Then I terminate the first 15 because of redundancy. Is that valid? No. Because the services are not redundant because you still need a group of employees to provide that service. But the Court in Serrano made a statement appearing to justify that. That the hiring of contractual employees and terminating regular employees because they are no longer need. Small item of Serrano. But Serrano has other portions which claim infamy. We know Serrano because of something else, not that. Retrenchment. Termination of employee to prevent further losses involved in the company. Different from redundancy. Retrenchment pertains to prevention of loss. In redundancy, there is no qualification that you are terminating the employees because you are losing money. There is no connection between redundancy and loss. Is there value in determining the difference between retrenchment and redundancy? The effect of retrenchment and redundancy as to separation pay is different. In retrenchment, the employer pays less

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

thus he has to prove loss before he can terminate due to retrenchment. What are the remedies of an illegally dismissed worker? 1. Reinstatement/separation pay and payment of backwages Payment of full backwages from the time actually illegally dismissed until actual reinstatement, or if reinstatement is not possible, up to the finality of the decision. Full backwages means all allowances he should have received. Basic rule in computing backwages, whatever he should have received had he not been illegally terminated. In the case of Bustamante the Court said it is a penalty for the employer, and since it is a penalty, then it is not in the nature of compensatory damages. Rather it is in the nature of exemplary damages. Hence it is not compensating for anything, rather it is penalizing the employer for something. If it were compensatory in nature, then earnings elsewhere should mitigate the damages or the liability of the employer, because you need not compensate the employee. The employee did not lose anything during that period. In fact he earned something during that period. Hence whatever earned elsewhere is immaterial in computing the amount to be paid as backwages. 2. If reinstatement is impossible, separation pay should be given. If reinstatement no longer possible, due to factual circumstances or strained relations, separation pay to be reckoned from the date he was hired in the company until finality of decision. Instead of reinstatement, he should be paid an amount equivalent to one-month pay for every year of service (this rate is based on jurisprudence. It is not in the law). Remember, this is the formula to be applied as long as it is found that at the point of termination, such was illegal. So, if the employer alleges lawful dismissal on the ground of just or authorized causes, but it is later proven that termination is illegal as the ground does not exist, he is entitled to reinstatement. If

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impossible, then in lieu of that, separation pay equal to 1 month for every year of service. Don’t confuse the formulas for separation pay for termination due to authorized causes and illegal termination. For instance a company closes in 1990 due to business losses. The workers (e.g. who were hired in 1980) don’t believe that and file a case, where eventually the Supreme Court finds that the closure was fraudulent. The Court cannot order reinstatement due to the fact of closure, but it can order the company to pay separation pay worth 1 month salary for every year of service. Case is final as of March 1, 2002. The company must pay separation pay from 1980 up to 2002, and backwages from 1990 up to 2002. The separation pay is supposed to replace the employee’s right to continue working. IT is similar to retirement pay. On the other hand, backwages is supposed to answer for compensation he should have received had he not been dismissed illegally. Now in the above example, if the employer paid the ½ month rate per yr. of service, following the rules on authorized causes, then he is obligated to pay only the difference (another ½ mo. per yr. of service) if the Court finds the closure illegal. But since this is an illegal dismissal claim, malamang hindi tinanggap ng employees ang ½ month for every year of service separation pay, as they are contesting its validity. I would personally advise them not to receive it. Such act on their part would be cited by the employer to show that the termination is valid. As a general rule, a waiver/quitclaim signed by the employees cannot bar their right to question the validity of termination and reap whatever amount due them if found to be illegally terminated. The employees will not be estopped from questioning the legality of termination even if they sign waivers or receive separation pay. But if I were counsel for the workers, I would advise them not to receive separation payments and sign under such quitclaim. It would be an additional issue to be threshed out, but still, such fact of receipt/acceptance would not estop the workers from questioning the legality of the quitclaim or their dismissal.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Let’s say eventually the courts find that there was a valid dismissal due to authorized causes. The worker is entitled to such separation pay even if he refused to receive it in the beginning. He is not barred from claiming what is due him. Now, remember it is the award of full amount of backwages that serves as a penalty to the employer. The separation pay on the other hand, is given as a form of remedy to the employee, since reinstatement is impossible already. The rate of separation pay should be based on the rate he should have been receiving as of finality of judgment. In the above example, it would be as of 2002. The point of this is because his years of service is being counted up to 2002. It should be treated as if the employee is being reinstated and he is retiring. Be careful, contrary to this jurisprudential rule, some decisions will tell you the rate should be as of the time when he was terminated, which is wrong. All of this, separation pay in lieu of reinstatement, is purely jurisprudential ruling. The only remedy provided in the Labor Code is pure reinstatement. But the SC recognized the situation where this may be impossible, and so it supplied what was missing in the law to avoid injustice to the worker. Otherwise, the worker will not have a remedy in case reinstatement is not possible. Now strained relations means the relations would not be workable-avoid the restoration of relations when the restoration would not be good for both parties. It applies only to those positions held in trust and confidence-managerial employees. This ground cannot apply to rank and file employees. And filing a case, litigation cannot be invoked to justify strained relations. Remember to merit full credit you must answer, that the employee is entitled to reinstatement to the former or an equivalent position, without loss of seniority rights, and full backwages.

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Without loss of seniority rights – means that if by 2002, he would have rendered 22 years of service had he not been terminated in 1990, then when he returns in 2002, he should be given the same seniority level as if he has not stopped working. So assuming that because of the render of 22 years of service, he should have been given a car by the company, when he is reinstated in 2002, he is entitled to that car. However, insofar as salaries are concerned, if the company has a salary scale that takes into consideration a job weighing scale (looks at the seniority level vis-à-vis the rate), at the time of reinstatement he should be placed on the level he should have been had he not been terminated. But, promotions he could have gotten will not be applicable UNLESS it operates automatically because of the number of years worked. Usually promotions take into consideration a lot of factors. Same with benefits-if these should have attached automatically, as long as the employee rendered a certain number of years of service, then the reinstated employee is entitled to it. All this is hinged on the phrase “as if the employee had not been dismissed”. This same operative phrase in backwages applies in reinstatement. These remedies are applicable to a fixed term employment. For example we have a valid fixed term contract good for ten years, then the employee is illegally dismissed on the fifth year. Litigation lasted beyond the ten-year term of the contract, but the Court found in favor of the employee. Thus, the employee is entitled to backwages. The backwages should be computed for good for five years only. Now, reinstatement is impossible because the term has expired. So there is no award of separation pay in lieu of reinstatement. Then the present salaries of his contemporaries may be taken into consideration if the raise in their salaries are purely attributable to length of service and no other factors.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

“Payroll reinstatement” – where the employer implements the reinstatement order by paying the employee his salaries pending appeal, but he does not let the employee report for work. In such a case, the employee may look for other work if he chooses to do so, following the Bustamante doctrine. If a collective bargaining agreement gives automatic raises then this must be included in the payment of backwages. It covers everything one should receive had he not been illegally terminated. A probationary employee should be considered past the probationary period and so entitled to the same principle under Bustamante. He should be considered a regular employee otherwise the backwages will not run, and the employer would be able to defeat the rights of an illegally dismissed employee. Even without action, or evaluation on the part of an employer, the mere lapse of time makes a probie employee converted to regular. The employer should be made to bear the cost for removing the opportunity of the employee to convert to regular ee under ordinary circumstances. This is premised under the idea that management illegally took the opportunity away because the dismissal was illegal. This means the employer was unable to show any cause to terminate the probationary period. Now Serrano complicates matters. Under the Wenphil doctrine, the lack of procedural due process makes the dismissal illegal, and awards damages because of this. However Serrano says the lack of procedural due process makes the dismissal merely INEFFECTUAL, and so the termination is effective only upon finality of the decision, hence the employee is awarded backwages. Why is Serrano bad? It is good as it increased the benefits of a dismissed worker who cannot be reinstated because there is just/authorized cause to dismiss him, but it is bad because it removed the right of a worker to procedural due process-the procedural rights prior to termination.

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Serrano did not say the dismissal is illegal. Worse it says the employee is not entitled to due process at all, because it involves private parties. Justice Mendoza in this case says such right may be invoked only in relations against the Government. It argued using the Constitutional provisions, not the Labor Code provisions! Your bar chairman’s forte is Constitution. To a person who is good at using a hammer, every problem is looked at as a nail. This case is a perfect example. So you cannot invoke due process using Serrano. Serrano is more of a Consti case but has repercussions beyond that. However, this is penned by J. Mendoza, so don’t attack this case in your bar exams ^_^. If at the time of finality of judgment, the employercorporation has been dissolved, who becomes liable to pay backwages? In some cases the Court pierced the veil of corporate fiction, and allowed the employee to seek relief against the corporation’s officers, because the employee did not have any other available remedy. CLASS NOTES Illegal dismissal case is filed with the Labor Arbiter of the NLRC. Remember that codal provision that proper interpretations of company policies shall be coursed through the voluntary arbitrator. However, if for example, an employee is dismissed because of the application of the company’s code of conduct, and so there is a dispute as to the proper interpretation and application of such, it is still within the jurisdiction of the Labor Arbiter because it is mainly a termination dispute which is under the jurisdiction of the LA. A Labor Arbiter’s “immediate reinstatement order” is not final pending appeal, however it is immediately executory. There is no need to issue a writ of execution. Thus, pending appeal the employer must implement the ruling. If it is not followed, file a motion to cite the employer in contempt, if he refuses to implement the order. BUT REMEMBER, the Labor Code refers only to the LA’s reinstatement order as immediately executory, and nothing else. So for instance,

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

the LA says the dismissal was valid, then on appeal the NLRC says illegal dismissal-reinstate, such order is not immediately executory. Now let’s take a little stroll down remedial law lane as applied to illegal dismissal cases ^_^: 1. file with the Labor Arbiter 2. then appeal to Secretary of Labor 3. then to the Court of Appeals under Rule 65 4. file a Motion for Reconsideration 5. then to the Supreme Court under Rule 45. The same procedure applies to strike cases and voluntary arbitrator’s decisions. There a two instances where the Labor Arbiter has no jurisdiction over termination disputes: 1) when the parties submit the question of illegal dismissal to voluntary arbitration 2) when the dismissal has become basis for filing a notice of strike, and the Secretary of Labor assumed jurisdiction, the Secretary acquires jurisdiction over the termination dispute as well When the voluntary arbitration decision is “final”, it may be challenged before the Court of Appeals under Rule 65, because it is the only mode or remedy available, as stated in the DBP case (I’m not sure if this case is in the syllabus, but Sir cites this as recent case doctrine). One cannot file under Rule 43, because the Labor Code says the Voluntary Arbitrator’s decision is a final decision.

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It would be worthwhile to reflect upon the rationalization of Zialcita, et al vs. Philippine Air Lines, a decision that emanated from the Office of the President. There, a policy of Philippine Air Lines requiring that prospective flight attendants must be single and that they will be automatically separated from the service once they marry, was declared void, it being violative of the clear mandate in Article 136 of the Labor with regard discrimination against married women.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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An order issued by the duly authorized representative of the Secretary of Labor and Employment under this article may be appealed to the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed from. (As amended by RA 7730)

XI. DISPUTE SETTLEMENT LABOR CODE CHAPTER VI Administration and Enforcement Art. 128. (a)

(b)

Visitorial and enforcement power. —

The Secretary of Labor and Employment or his duly authorized representatives, including labor regulation officers, shall have access to employer’s 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 to 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. Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection.

(c)

The Secretary of Labor may likewise order stoppage of work or suspension of operations of any unit or department of an establishment when noncompliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace. Within twenty-four hours, a hearing shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall be lifted or not. In case the violation is attributable to the fault of the employer, he shall pay the employees concerned their salaries or wages during the period of such stoppage of work or suspension of operation.

(d)

It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective the orders of the Secretary of Labor or his duly authorized representatives issued pursuant to the authority granted under this Article, and no inferior court or entity shall issue temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the enforcement orders issued in accordance with this Article.

(e)

Any government employee found guilty of violation of, or abuse of authority under this Article shall, after appropriate administrative investigation, be subject to summary dismissal from the service.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

(f)

The Secretary of Labor may, by appropriate regulations require employers to keep and maintain such employment records as may be necessary in aid of his visitorial and enforcement powers under this Code.

Art. 129. Recovery of wages, simple money claims and other benefits. — Upon complaint of any interested party, the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or household service or househelper under this Code, arising from employer-employee relations: Provided, That such complaint does not include a claim for reinstatement: Provided, further, That the aggregate money claims of each employee or househelper do not exceed five thousand pesos (P5,000). The Regional Director or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the filing of the same. Any sum thus recovered on behalf of any employee or househelper pursuant to this Article shall be held in a special deposit account by, and shall be paid, on order of the Secretary of Labor and Employment or the Regional Director directly to the employee or househelper concerned. Any such sum not paid to the employee or househelper, because he cannot be located after diligent and reasonable effort to locate him within a period of three (3) years, shall be held as a special fund of the Department of Labor and Employment to be used exclusively for the amelioration and benefit of workers. Any decision or resolution of the Regional Director or hearing officer pursuant to this provision may be appealed on the same grounds provided in Article 223 of this Code, within five (5) calendar days from receipt of a

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copy of said decision or resolution, to the National Labor Relations Commission which shall resolve the appeal within ten (10) calendar days from the submission of the last pleading required or allowed under its rules. The Secretary of Labor and Employment or his duly authorized representative may supervise the payment of unpaid wages and other monetary claims and benefits, including legal interest, found owing to any employee or househelper under this Code. (As amended by RA 6715) TITLE II - National Labor Relations Commission CHAPTER I Creation and Composition Art. 213. National Labor Relations Commission. — There shall be a National Labor Relations Commission which shall be attached to the Department of Labor and Employment for program and policy coordination only, composed of a Chairman and fourteen (14) members. Five (5) members each shall be chosen from among the nominees of the workers and employers organizations, respectively. The Chairman and the four (4) remaining members shall come from the public sector, with the latter to be chosen from among the recommendees of the Secretary of Labor and Employment. Upon assumption into office, the members nominated by the workers and employers organizations shall divest themselves of any affiliation with or interest in the federation or association to which they belong. The Commission may sit en banc or in five (5) divisions, each composed of three (3) members. The Commission shall sit en banc only for purposes of promulgating rules and regulations governing the hearing and disposition of cases before any of its divisions and regional branches and formulating policies affecting its administration and operations. The Commission shall

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

exercise its adjudicatory and all other powers, functions, and duties through its divisions. Of the five (5) divisions, the first and second divisions shall handle cases coming from the National Capital Region and the third, fourth and fifth divisions, cases from other parts of Luzon, from the Visayas and Mindanao, respectively. The divisions of the Commission shall have exclusive appellate jurisdiction over cases within their respective territorial jurisdiction. The concurrence of two (2) Commissioners of a division shall be necessary for the pronouncement of a judgment or resolution. Whenever the required membership in a division is not complete and the concurrence of two (2) Commissioners to arrive at a judgment or resolution cannot be obtained, the Chairman shall designate such number of additional Commissioners from the other divisions as may be necessary. The conclusions of a division on any case submitted to it for decision shall be reached in consultation before the case is assigned to a member for the writing of the opinion. It shall be mandatory for the division to meet for purposes of the consultation ordained therein. A certification to this effect signed by the Presiding Commissioner of the division shall be issued, and a copy thereof attached to the record of the case and served upon the parties. The Chairman shall be the Presiding Commissioner of the first division, and the four (4) other members from the public sector shall be the Presiding Commissioners of the second, third, fourth and fifth divisions, respectively. In case of the effective absence or incapacity of the Chairman, the Presiding Commissioner of the second division shall be the Acting Chairman. The Chairman, aided by the Executive Clerk of the Commission, shall have administrative supervision over the Commission and its regional branches and all its personnel, including the Executive Labor Arbiters and Labor Arbiters.

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The Commission, when sitting en banc, shall be assisted by the same Executive Clerk, and, when acting thru its divisions, by said Executive Clerk for its first division and four (4) other Deputy Executive Clerks for the second, third, fourth and fifth divisions, respectively, in the performance of such similar or equivalent functions and duties as are discharged by the Clerk of Court and Deputy Clerks of Court of the Court of Appeals. (As amended by RA 6715) Art. 214. Headquarters, branches and provincial extension units. — The Commission and its First, Second, and Third divisions shall have their main offices in Metropolitan Manila, and the fourth and fifth divisions in the cities of Cebu and Cagayan de Oro, respectively. The Commission shall establish as many regional branches as there are regional offices of the Department of Labor and Employment, sub-regional branches or provincial extension units. There shall be as many labor Arbiters as may be necessary for the effective and efficient operation of the Commission. Each regional branch shall be headed by an Executive Labor Arbiter. (As amended by RA 6715) Art. 215. Appointment and qualifications. — The Chairman and other Commissioners shall be members of the Philippine Bar and must have been engaged in the practice of law in the Philippines for at least fifteen (15) years, with at least five (5) years experience or exposure in the field of labor-management relations, and shall preferably be residents of the region where they are to hold office. The Executive Labor Arbiters and Labor Arbiters shall likewise be members of the Philippine Bar and must have been engaged in the practice of law in the Philippines for at least seven (7) years, with at least three (3) years experience or exposure in the field of labor-management relations: Provided, however, that incumbent Executive Labor Arbiters and Labor Arbiters who have been engaged in the practice of law for at least five (5) years may be considered as already

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

qualified for purposes of reappointment as such under this Act. The Chairman and the other Commissioners, the Executive Labor Arbiters and Labor Arbiters shall hold office during good behavior until they reach the age of sixty-five (65) years, unless sooner removed for cause as provided by law or become incapacitated to discharge the duties of their office. The Chairman, the Division Presiding Commissioners and other Commissioners shall all be appointed by the President, subject to confirmation by the Commission on Appointments. Appointment to any vacancy shall come from the nominees of the sector which nominated the predecessor. The Executive Labor Arbiters and Labor Arbiters shall also be appointed by the President, upon recommendation of the Secretary of Labor and Employment, and shall be subject to the Civil Service Law, rules and regulations. The Secretary of Labor and Employment shall, in consultation with the Chairman of the Commission, appoint the staff and employees of the Commission, and its regional branches as the needs of the service may require, subject to the Civil Service Law, rules and regulations, and upgrade their current salaries, benefits and other emoluments in accordance with law. (As amended by RA 6715) Art. 216. Salaries, benefits and other emoluments. — The Chairman and members of the Commission shall receive an annual salary at least equivalent to, and be entitled to the same allowances and benefits as, those of the Presiding Justice and Associate Justices of the Court of Appeals, respectively. The Executive Labor Arbiters shall receive an annual salary at least equivalent to that of an Assistance Regional Director of the Department of Labor and Employment and shall be entitled to the same allowances and benefits as that of a Regional Director of said Department. The Labor Arbiters shall receive an annual

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salary at least equivalent to, and be entitled to the same allowances and benefits as, that of an Assistant Regional Director of the Department of Labor and Employment. In no case, however, shall be the provision of this Article result in the diminution of existing salaries, allowances and benefits of the aforementioned officials. (As amended by RA 6715) CHAPTER II Powers and Duties Art. 217. Jurisdiction Commission. —

of

Labor

Arbiters

and

the

(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: (1)

Unfair labor practice cases;

(2)

Termination disputes;

(3)

If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rate 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 employeremployee 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

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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exceeding five thousand pesos (P5,000.00), whether or not accompanied with a claim for reinstatement. (b)

The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.

(c)

Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements. (As amended by RA 6715)

Art. 218. Powers of the Commission. Commission shall have the power and authority:

—

The

(a)

To promulgate rules and regulations governing the hearing and disposition of cases before it and its regional branches, as well as those pertaining to its internal functions and such rules and regulations as may be necessary to carry out the purposes of this Code;

(b)

To administer oaths, summon the parties to a controversy, issue subpoenas requiring the attendance and testimony of witnesses or the production of such books, papers, contracts, records, statements of accounts, agreements, and others as may be material to a just determination of the matter under investigation, and to testify in any investigation or hearing conducted in pursuance of this Code;

(c)

To conduct investigation for the determination of a question, matter or controversy within its jurisdiction, proceed to hear and determine the disputes in the absence of any party thereto who has been summoned or served with notice to appear, adjourn its hearings to any time and place, refer technical matters or

accounts to an expert and to accept his report as evidence after hearing of the parties upon due notice, direct parties to be joined in or excluded from the proceedings, correct, amend, or waive any error, defect or irregularity, whether in substance or in form, give all such directions as it may deem necessary or expedient in the determination of the dispute before it, and dismiss any matter or refrain from further hearing or from determining the dispute or part thereof, where it is trivial or where further proceedings by the Commission are not necessary or desirable; and (d)

To hold any person in contempt direct or indirectly and impose appropriate penalties therefor in accordance with law. A person guilty of misbehavior in the presence of or so near the Chairman or any member of the Commission or any Labor Arbiter as to obstruct or interrupt the proceedings before the same, including disrespect toward said officials, offensive personalities toward others, or refusal to be sworn or to answer as a witness, or to subscribe an affidavit or deposition when lawfully required to do so, may summarily adjudged in direct contempt by said officials and punished by fine not exceeding five hundred pesos (P500) or imprisonment not exceeding five (5) days, or both if it be the Commission or a member thereof, or by a fine not exceeding one hundred pesos (P100) or imprisonment not exceeding one (1) day, or both if it be a Labor Arbiter. The person adjudged in direct contempt by a Labor Arbiter may appeal to the Commission and the execution of the judgment shall be suspended pending the resolution of the appeal upon the filing of subject person of a bond on condition that he will abide by and perform the judgment of the Commission should the appeal be decided against him. Judgment of the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

(e)

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Commission on direct contempt is immediately executory and unappealable. Indirect contempt shall be dealt with by the Commission or Labor Arbiter in the manner prescribed under Rule 71 of the Revised Rules of Court; and

(4)

That complainant has no adequate remedy at law; and

(5)

That the public officers charged with the duty to protect complainant’s property are unable or unwilling to furnish adequate protection.

To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to require the performance of a particular act in any labor dispute which, if not restrained or performed forthwith, may cause grave or irreparable damage to any party: Provided, That no temporary or permanent injunction in any case involving or growing out of a labor dispute as defined in this Code shall be issued except after hearing the testimony of witnesses, with opportunity for cross-examination, in support of the allegations of a complaint made under oath, and testimony in opposition thereto, if offered, and only after a finding of fact by the Commission, to the effect:

Such hearing shall be held after due and personal notice thereof has been served, in such manner as the Commission shall direct, to all known persons against whom relief is sought, and also to the Chief Executive and other public officials of the province or city within which the unlawful acts have been threatened or committed charged with the duty to protect complainant’s property: Provided, however, That if a complainant shall also allege that, unless a temporary restraining order shall be issued without notice, a substantial and irreparable injury to complainant’s property will be unavoidable, such a temporary restraining order may be issued upon testimony under oath, sufficient, if sustained, to justify the Commission in issuing a temporary injunction upon hearing after notice. Such a temporary restraining order shall be effective for no longer than twenty (20) days and shall become void at the expiration of said twenty (20) days. No such temporary restraining order or temporary injunction shall be issued except on condition that complainant shall first file an undertaking with adequate security in an amount to be fixed by the Commission sufficient to recompense those enjoined for any loss, expense or damage caused by the improvident or erroneous issuance of such order or injunction, including all reasonable costs, together with a reasonable attorney’s fee, and expense of defense against the order or against the granting of any injunctive relief sought in the same proceeding and subsequently denied by the Commission.

(1)

That prohibited or unlawful acts have been threatened and will be committed and will be continued unless restrained, or have been committed and will be continued unless restrained, but no injunction or temporary restraining order shall be issued on account of any threat, prohibited or unlawful act, except against the person or persons, association or organization making the threat or committing the prohibited or unlawful act or actually authorizing or ratifying the same after actual knowledge thereof;

(2)

That substantial and irreparable complainant’s property will follow;

(3)

That, as to each item of relief to be granted, greater injury will be inflicted upon complainant by the denial of relief than will be inflicted upon defendants by the granting of relief;

injury

to

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

The undertaking herein mentioned shall be understood to constitute an agreement entered into by the complainant and the surety upon which an order may be rendered in the same suit or proceeding against said complainant and surety, upon a hearing to assess damages, of which hearing complainant and surety shall have reasonable notice, the said complainant and surety submitting themselves to the jurisdiction of the Commission for that purpose. But nothing herein contained shall deprive any party having a claim or cause of action under or upon such undertaking from electing to pursue his ordinary remedy by suit at law or in equity: Provided, further, That the reception of evidence for the application of a writ of injunction may be delegated by the Commission to any of its Labor Arbiters who shall conduct such hearings in such places as he may determine to be accessible to the parties and their witnesses and shall submit thereafter his recommendation to the Commission. (As amended by RA 6715) Art. 219. Ocular inspection. — The Chairman, any Commissioner, Labor Arbiter or their duly authorized representatives may at any time during working hours conduct an ocular inspection on any establishment, building, ship or vessel, place or premises, including any work, material, implement, machinery, appliance or any object therein, and ask any employee, laborer or any person as the case may be for any information or data concerning any matter or question relative to the object of the investigation. Art. 220. Compulsory Arbitrators. — The Commission or any Labor Arbiter shall have the power to seek the assistance of other government officials and qualified private citizens to act as compulsory arbitrators on cases referred to them and to fix and assess the fees of such compulsory arbitrators, taking into account the nature of

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the case, the time consumed in hearing of the case, the professional standing of the arbitrators, the financial capacity of the parties, and the fees provided in the Rules of Court. (Repealed by Sec. 16, BP Blg. 130). Art. 221. Technical rules not binding and prior resort to amicable settlement. — In any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling, and it is the spirit and intention of this Code that the Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process. In any proceeding before the Commission or any Labor Arbiter, the parties may be represented by legal counsel but it shall be the duty of the Chairman, any Presiding Commissioner or Commissioner or any Labor Arbiter to exercise complete control of the proceedings at all stages. Any provision of law to the contrary notwithstanding, the Labor Arbiter shall exert all efforts towards the amicable settlement of a labor dispute within his jurisdiction on or before the first hearing. The same rule shall apply to the Commission in the exercise of its original jurisdiction. (As amended by RA 6715) Art. 222. (a)

(b)

Appearances and fees. —

Non-lawyers may appear before the Commissioner or any Labor Arbiter only: 1.

If they represent themselves; or

2.

If they represent their organization or members thereof.

No attorney’s fees, negotiation fees or similar charges of any kind arising from any collective bargaining negotiations or conclusion of the collective agreement shall be imposed on any individual member of the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

contracting union: Provided, however, That attorney’s fees may be charged against union funds in an amount to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null and void. CHAPTER III Appeal Art. 223. Appeal. — Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds:

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payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein. To discourage frivolous or dilatory appeals, the Commission or the Labor Arbiter shall impose reasonable penalty, including fines or censures, upon the erring parties. In all cases, the appellant shall furnish a copy of the memorandum of appeal to the other party who shall file an answer not later than ten (10) calendar days from receipt thereof. The Commission shall decide all cases within twenty (20) calendar days from receipt of the answer of the appellee. The decision of the Commission shall be final and executory after ten (10) calendar days from receipt thereof by the parties.

(a)

If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;

(b)

If the decision, order or award was secured through fraud or coercion, including graft and corruption;

Any law enforcement agency may be deputized by the Secretary of Labor and Employment or the Commission in the enforcement of decisions, awards, or orders. (As amended by RA 6715)

(c)

If made purely on questions of law; and

(d)

If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant.

Art. 224.

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from. In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the

Execution of decisions, orders, or awards. —

(a) The Secretary of Labor and Employment or any Regional Director, the Commission or any Labor Arbiter or MedArbiter, or the voluntary arbitrator or panel of voluntary arbitrators may, motu propio or on motion of any interested party, issue a writ of execution on a judgment within five (5) years from the date it becomes final and executory, requiring a sheriff or a duly deputized officer to execute or enforce final decisions, orders or awards of the Secretary of Labor and Employment or Regional Director, the Commission, or the Labor Arbiter or Med-Arbiter, or voluntary arbitrator or panel of voluntary arbitrators. In any case, it shall be the duty of the responsible officer to separately furnish immediately the counsel of record and the parties with copies of said decisions, orders or awards. Failure to comply with the duty

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

prescribed herein shall subject such responsible officer to appropriate administrative sanctions. (b)

The Secretary of Labor and Employment, and the Chairman of the Commission may designate special sheriffs and take any measure under existing laws to ensure compliance with their decisions, orders or awards and those of Labor Arbiters and voluntary arbitrators or panel of voluntary arbitrators, including the imposition of administrative fines which shall not be less than five hundred pesos (P500.00) nor more than ten thousand pesos (P10,000.00). (As amended by RA 6715).

Art. 225. Contempt powers of the Secretary of Labor and Employment. — In the exercise of his powers under this Code, the Secretary of Labor and Employment may hold any person in direct or indirect contempt and impose the appropriate penalties therefor. TITLE III Bureau of Labor Relations Art. 226. Bureau of Labor Relations. — The Bureau of Labor Relations and the Labor Relations Divisions in the regional offices of the Department of Labor and Employment shall have original and exclusive authority to act, at their own initiative or upon request of either or both parties, on all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or affecting labormanagement relations in all workplaces whether agricultural or non-agricultural, except those arising from the implementation or interpretation of collective bargaining agreements which shall be the subject of grievance procedure and/or voluntary arbitration. The Bureau shall have fifteen (15) calendar days to act on labor cases before it, subject to extension by agreement of the parties. (As amended by RA 6715)

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Art. 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 BP Blg. 227) TITLE VII-A Grievance Machinery and Voluntary Arbitration Art. 260. Grievance machinery and voluntary arbitration. — The parties to a collective bargaining agreement shall include therein provisions that will ensure the mutual observance of its terms and conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the interpretation or implementation of their collective bargaining agreement and those arising from the interpretation or enforcement of company personnel policies. All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the collective bargaining agreement. For this purpose, parties to a collective bargaining agreement shall name and designate in advance a voluntary arbitrator or panel of voluntary arbitrators, or include in the agreement a procedure for the selection of such voluntary arbitrator or panel of voluntary arbitrators, preferably from the listing of qualified Voluntary Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the collective bargaining agreement, which shall act with the same force and effect as if the voluntary arbitrator or panel of voluntary

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

arbitrators have been selected by the parties as described above. (As added by RA 6715) Art. 261. Jurisdiction of voluntary arbitrators and panel of voluntary arbitrators. — The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the immediately preceding Article. Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes of this Article, gross violations of a Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement. The Commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not entertain disputes, grievances or matters under the exclusive and original jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators and shall immediately dispose and refer the same to the grievance machinery or voluntary arbitration provided in the collective bargaining agreement. (As added by RA 6715) Art. 262. Jurisdiction over other labor disputes. — The voluntary arbitrator or panel of voluntary arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks. (As added by RA 6715) Art. 262-A. Procedures. — The voluntary arbitrator or panel of voluntary arbitrators shall have the power to hold hearings, receive evidences and take whatever action is necessary to resolve the issue or issues subject of the

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dispute, including efforts to effect a voluntary settlement between parties. All parties to the dispute shall be entitled to attend the arbitration proceedings. The attendance of any third party or the exclusion of any witness from the proceedings shall be determined by the voluntary arbitrator or panel of voluntary arbitrators. Hearings may be adjourned for cause or upon agreement by the parties. Unless the parties agree otherwise, it shall be mandatory for the voluntary arbitrator or panel of voluntary arbitrators to render an award or decision within twenty (20) calendar days from the date of submission of the dispute to voluntary arbitration. The award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators shall contain the facts and the law on which it is based. It shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision by the parties. Upon motion of any interested party, the voluntary arbitrator or panel of voluntary arbitrators or the Labor Arbiter in the region where the movant resides, in case of the absence or incapacity of the voluntary arbitrator or panel of voluntary arbitrators for any reason, may issue a writ of execution requiring either the sheriff of the Commission or regular courts or any public official whom the parties may designate in the submission agreement to execute the final decision, order or award. (As added by RA 6715) Art. 262-B. Cost of Voluntary Arbitration and Voluntary Arbitrator’s fee. — The parties to a Collective Bargaining Agreement shall provide therein a proportionate sharing scheme on the cost of Voluntary Arbitration including the Voluntary Arbitrator’s fee. The fixing of fee of Voluntary Arbitrators or panel of Voluntary Arbitrators, whether shouldered wholly by the parties or subsidized by the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Special Voluntary Arbitration Fund, shall take into account the following factors: (a)

Nature of the case;

(b)

Time consumed in hearing the case;

(c)

Professional standing of the voluntary arbitrator;

(d)

Capacity to pay of the parties; and

(e)

Fees provided for in the Revised Rules of Court. (As added by RA 6715)

Art. 263. Strikes and Lockouts. (g)

When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same. In line with the national concern for and the highest respect accorded to the right of patients to life and health, strikes and lockouts in hospitals, clinics and similar medical institutions shall, to every extent possible, be avoided, and all serious efforts, not only by labor and management but government as well, be

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exhausted to substantially minimize, if not prevent, their adverse effects on such life and health, through the exercise, however legitimate, by labor of its right to strike and by management to lockout. In labor disputes adversely affecting the continued operation of such hospitals, clinics or medical institutions, it shall be the duty of the striking union or locking-out employer to provide and maintain an effective skeletal workforce of medical and other health personnel, whose movement and services shall be unhampered and unrestricted, as are necessary to insure the proper and adequate protection of the life and health of its patients, most especially emergency cases, for the duration of the strike or lockout. In such cases, therefore, the Secretary of Labor and Employment may immediately assume, within twenty four (24) hours from knowledge of the occurrence of such a strike or lockout, jurisdiction over the same or certify it to the Commission for compulsory arbitration. For this purpose, the contending parties are strictly enjoined to comply with such orders, prohibitions and/or injunctions as are issued by the Secretary of Labor and Employment or the Commission, under pain of immediate disciplinary action, including dismissal or loss of employment status or payment by the lockingout employer of backwages, damages and other affirmative relief, even criminal prosecution against either or both of them. The foregoing notwithstanding, the President of the Philippines shall not be precluded from determining the industries that, in his opinion, are indispensable to the national interest, and from intervening at any time and assuming jurisdiction over any labor dispute in such industries in order to settle or terminate the same.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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(h)

Before or at any stage of the compulsory arbitration process, the parties may opt to submit their dispute to voluntary arbitration.

(f)

The possible ways of increasing the usefulness and efficiency of collective bargaining for settling differences; cda

(i)

The Secretary of Labor and Employment, the Commission or the voluntary arbitrator or panel of voluntary arbitrators shall decide or resolve the dispute within thirty (30) calendar days from the date of the assumption of jurisdiction or the certification or submission of the dispute, as the case may be. The decision of the President, the Secretary of Labor and Employment, the Commission or the voluntary arbitrator or panel of voluntary arbitrators shall be final and executory ten (10) calendar days after receipt thereof by the parties. (As amended by RA 6715)

(g)

The possibilities for the adoption of practical and effective methods of labor-management cooperation;

(h)

Any other aspects of employer-employee relations concerning the promotion of harmony and understanding between the parties; and

(i)

The relevance of labor laws and labor relations to national development.

TITLE IX Special Provisions Art. 273. Study of labor-management relations. — The Secretary of Labor and Employment shall have the power and it shall be his duty to inquire into: (a)

The existing relations between employees in the Philippines;

employers

and

(b)

The growth of associations of employees and the effect of such associations upon employer-employee relations;

(c)

The extent and results of the methods of collective bargaining in the determination of terms and conditions of employment;

(d)

The methods which have been tried by employers and associations of employees for maintaining mutually satisfactory relations;

(e)

Desirable industrial practices which have been developed through collective bargaining for settling differences;

The Secretary of Labor and Employment shall also inquire into the causes of industrial unrest and take all the necessary steps within his powers as may be prescribed by law to alleviate the same, and shall from time to time recommend the enactment of such remedial legislation as in his judgment may be desirable for the maintenance and promotion of industrial peace. Art. 274. Visitorial power. — The Secretary of Labor and Employment or his duly authorized representative is hereby empowered to inquire into the financial activities of legitimate labor organizations upon the filing of a complainant under oath and duly supported by the written consent of at least twenty percent (20%) of the total membership of the labor organization concerned and to examine their books of accounts and other records to determine compliance or non-compliance with the law and to prosecute any violations of the law and the union constitution and by-laws: Provided, That such inquiry or examination shall not be conducted during the sixty (60) day freedom period nor within thirty (30) days immediately preceding the date of election of union officials. (As amended by RA 6715) Art. 275.

Tripartism and tripartite conferences. —

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

(a)

Tripartism in labor relations is hereby declared a State policy. Towards this end, workers and employers shall, as far as practicable, be represented in decision and policy-making bodies of the government.

(b)

The Secretary of Labor and Employment or his duly authorized representatives may from time to time call a national, regional, or industrial tripartite conference of representatives of government, workers and employers for the consideration and adoption of voluntary codes of principles designed to promote industrial peace based on social justice or to align labor movement relations with established priorities in economic and social development. In calling such conference, the Secretary of Labor and Employment may consult with accredited representatives of workers and employers. (As amended by RA 6715)

Art. 277. Miscellaneous Provisions. (b)

Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just or authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the workers whose employment is so sought to be terminated a written notice containing a statement of the cause for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall

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rest on the employer. The Secretary of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off. (As amended by RA 6715) TITLE II Prescription of Offenses and Claims Art. 290. Offenses. — Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall prescribe in three years. All unfair labor practices arising from Book V shall be filed with the appropriate agency within one year from accrual of such unfair labor practice; otherwise, they shall be forever barred. Art. 291. Money claims. — All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three years from the time the cause of action accrued; otherwise they shall be forever barred. All money claims accruing prior to the effectivity of this Code shall be filed with the appropriate entities established under this Code within one year from the date of such effectivity, and shall be processed or determined in accordance with implementing rules and regulations of the Code; otherwise they shall be forever barred. Workmen’s compensation claims accruing prior to the effectivity of this Code and during the period from November 1, 1974 up to December 31, 1974, shall be filed with the appropriate regional offices of the Department of Labor and Employment not later than March 31, 1975; otherwise they shall be forever barred. These claims shall

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

be processed and adjudicated in accordance with the law and rules at the time their causes of action accrued. Art. 292. Institution of money claims. — Money claims specified in the immediately preceding Article shall be filed before the appropriate entity independently of the criminal action that may be instituted in the proper courts. Pending the final determination of the merits of money claims filed with the appropriate entity, no civil action arising from the same cause of action shall be filed with any court. This provision shall not apply to employees compensation cases which shall be processed and determined strictly in accordance with the pertinent provisions of this Code.

EXECUTIVE ORDER NO. 126, AS AMENDED BY EXECUTIVE ORDER NO. 251 EXECUTIVE ORDER NO. 126 REORGANIZING THE MINISTRY OF LABOR AND EMPLOYMENT AND FOR OTHER PURPOSES RECALLING that the reorganization of the government is mandated expressly in Article II, Section I (a), and Article III of the Freedom Constitution; HAVING IN MIND that pursuant to Executive Order No. 5 (1986), it is directed that necessary and proper changes in the organizational and functional structures of the government, its agencies and instrumentalities, be effected in order to promote efficiency and effectiveness in the delivery of public services; CONSIDERING that it has become necessary to introduce critical structural and functional changes in the Ministry of Labor and Employment to make it more responsive to the urgent demands of national economic recovery;

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BELIEVING that the same Ministry has to streamline its operations by rationalizing its functions, structure and organization to make it more efficient and effective in undertaking its principal mission of translating the declared policy of the state on labor into meaningful program on employment promotion, manpower development and utilization, advancement of workers’ welfare, provision for a decent living wage and other just and humane conditions of work and promotion of sound and stable industrial harmony as essential components of national economic recovery and development; RECOGNIZING that women and rural workers have a vital role in nation-building, the same Ministry has to create, promote and develop the conditions for their full utilization, including their protection and welfare. NOW, THEREFORE, I, CORAZON C. AQUINO, by the powers vested in me by the sovereign will of the Filipino People and the Freedom Constitution, do hereby order: SEC. 1. Title. — This Executive Order shall otherwise be known as the Reorganization Act of the Ministry of Labor and Employment. SEC. 2. Reorganization. — The Ministry of Labor and Employment, hereinafter referred to as Ministry, is hereby reorganized, structurally and functionally in accordance with the provisions of this Executive Order. SEC. 3. Declaration of Policy. — It is the declared policy of the State to 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 the workers to self-organization, collective bargaining, security of tenure, and just and human conditions of work.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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SEC. 4. Mandate and Objectives. — The Ministry shall be the primary policy, programming, coordinating and administrative entity of the Executive Branch of the government in the field of labor and employment. It shall assume primary responsibility for:

that is consistent with national economic and social development plans; (f)

Provide for safe, decent, humane and improved working conditions and environment for all workers, particularly women and young workers;

(a)

The promotion of gainful employment opportunities and the optimization of the development and utilization of the country’s manpower resources;

(g)

(b)

The advancement of workers’ welfare by providing for just and humane working conditions and terms of employment;

Maintain harmonious, equitable and stable labor relations system that is supportive of the national economic policies and programs;

(h)

(c)

The maintenance of industrial peace by promoting harmonious, equitable, and stable employment relations that assure equal protection for the rights of all concerned parties.

Uphold the right of workers and employers to organize and to promote free collective bargaining as the foundation of the labor relations system;

(i)

Provide and ensure the fair and expeditious settlement and disposition of labor and industrial disputes through collective bargaining, grievance machinery, conciliation, mediation, voluntary arbitration, compulsory arbitration as may be provided by law, and other modes that may be voluntarily agreed upon by the parties concerned.

SEC. 5. Powers and Functions. — In pursuit of its mandate, the Ministry shall have the following powers and functions: (a)

Formulate and recommend policies, plans and programs for manpower development, training, allocation, and utilization;

(b)

Protect and promote the interest of every citizen desiring to work locally or overseas by securing for him the most equitable terms and conditions of employment, and by providing social and welfare services;

(c)

Regulate the employment of aliens, including the establishment of a registration and/or work permit system for such aliens;

(d)

Formulate general guidelines concerning wage and income policy;

(e)

Recommend necessary adjustments in wage structures with a view to developing a wage system

SEC. 6. Minister of Labor and Employment. — The authority and responsibility for the exercise of the mandate of the Ministry and for the discharge of its powers and functions shall be vested in the Minister of Labor and Employment, hereinafter referred to as the Minister, who shall be appointed by the President and who shall have supervision and control over the Ministry. For such purposes, the Minister shall have the following powers and functions: (a)

Advise the President on the promulgation of executive/administrative orders, other regulative issuances and legislative proposals on matters pertaining to labor and employment;

(b)

Formulate policies, guidelines, rules and regulations and other issuances necessary to carry out Ministry policies, plans, programs and projects;

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

(c)

Issue orders, directives, rules and regulations and other issuances to carry out labor and employment policies, plans, programs and projects;

(d)

Provide overall direction, supervision, and control over all offices under the Ministry to ensure effective and efficient implementation of its policies, plans, programs and projects;

(e)

Coordinate with other government offices, labor, organizations, employers associations, and any other group to carry out the mandate of the Ministry;

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and objectives of the Ministry; and provided, further, that no Deputy Minister shall be assigned primarily administrative responsibilities. Within his functional area of responsibility, a Deputy Minister shall have the following functions: (a)

Advise and assist the Minister in the formulation and implementation of the Ministry’s policies, plans, programs and projects;

(b)

Oversee the operational activities of the Ministry;

(c)

(f)

Evaluate the policy, plans, programs and project accomplishment of the Ministry;

Coordinate the programs and projects of the Ministry for efficient and effective administration;

(d)

Serve as deputy for the Minister;

(g)

Prepare reports for the President and for the public;

(e)

(h)

Delegate authority for the performance of any function to officers and employees of the Ministry;

Perform, when so designated, the power and functions of the Minister, during the latter’s absence or incapacity; and

(i)

Exercise such other powers and functions as may be provided by law or assigned by the President.

(f)

Perform such other functions as may be provided by law or assigned by the Minister to promote the efficiency and effectiveness in the delivery of public services.

Sec. 7. Office of the Secretary. — The Office of the Secretary shall consist of the Secretary and his immediate staff. In addition, there is hereby created in the Office of the Secretary a Joint RP-US Lab or Committee Staff Unit which shall provide technical and other necessary services to the Philippine panel in the Joint Labor Committee created under the RP-US Base Labor Agreement and for other special projects. The Unit who shall be headed by a Head Executive Assistant who shall be assisted by five (5) Staff Assistants. (As amended by E.O. No. 251) SEC. 8. Deputy Minister. — The Minister shall be assisted by not more than four (4) Deputy Ministers who shall be appointed by the President upon the recommendation of the Minister. The Minister is hereby authorized to delineate and assign the respective functional areas of responsibility of the Deputy Ministers, provided, that such responsibility shall be with respect to the mandate

SEC. 9. Assistant Ministers. — The Minister shall likewise be assisted by not more than four (4) Assistant Ministers who shall be appointed by the President upon the recommendation of the Minister. The Minister is hereby authorized to delineate and assign the respective areas of functional responsibility of the Assistant Ministers. Within his functional area of responsibility, an Assistant Minister shall assist the Minister and Deputy Ministers in the formulation, determination and implementation of laws, policies, plans, programs and projects on labor and shall oversee the day-to-day administration and supervision of the constituent units of the Ministry. SEC. 10. Structural Organization. — The Ministry shall consist of the Ministry proper comprising the Office of the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Minister, the Office of the Deputy and Assistant Ministers, the Services and the Staff Bureaus, and its Regional Offices. SEC. 11. Planning Service. — The Planning Service shall provide the Ministry with efficient, effective and economical services relating to planning, programming, project development and evaluation, and the development and implementation of a management information system. SEC. 12. Administrative Service. — The Administrative Service shall provide the Ministry with efficient, effective and economical services relating to records, management, supplies, equipment, collections, disbursements, building administration and maintenance, security and custodial work. SEC. 13. Human Resource Development Service. — The Human Resource Development Service shall provide the Ministry with a program and corresponding projects that shall make available training, education and development opportunities needed to upgrade the levels of competence and productivity of Ministry managers and personnel. It shall absorb the powers and functions of the Administrative Service in relation to the development and administration of personnel programs including selection and placement, development, performance evaluation, employee relations and welfare. SEC. 14. Financial Management Service. — The Financial and Management Service shall be responsible for providing the Ministry with efficient, effective and economical services relating to budgetary, financial, management improvement and internal control matters. SEC. 15. Legal Service. — The Legal Service shall provide legal advice and service to Ministry officers and employees; prepare informative or clarificatory opinions on labor laws, rules and regulations for uniform interpretation

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thereof; answer legal queries from the public; assist the Office of the Solicitor General in suits involving the Ministry or its officers or employees or act as their principal counsel in all actions taken in their official capacity or other causes before judicial or administrative bodies. SEC. 16. International Labor Affairs Service. — The International Labor Affairs Service shall be responsible for monitoring the observance and implementation of all obligations, courtesies, and facilities required by international labor affairs, particularly the International Labor Organization, the Conference of Asian Pacific Labor Ministries, the ASEAN Labor Ministers Meeting of which the Philippines is a member, and related international labor standards and agreements reached in various international labor forums, treaties, and other multilateral, bilateral or multi-bilateral agreements in the area of labor and employment; provide staff support and policy guidelines to the Minister in the supervision, monitoring and reporting of the activities of the Philippine overseas labor officers assigned in different countries; serve as the instrumentality of the Ministry for technical cooperation, programs and activities with other countries and international institutions. SEC. 17. Information and Publication Service. — The Information and Publication Service shall be responsible for promoting rapport and understanding between the Ministry and the public through the development of public relations programs and the dissemination of accurate and updated information on labor and employment, by means of publications and media coverages of special events and related matters on the Ministry’s policies, plans, programs, and projects; shall likewise be responsible for providing answers to queries from the public regarding the Ministry’s policies, rules, regulations, programs, activities and services.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

SEC. 18. Bureaus. — The following staff bureaus of the Department are hereby retained and shall continue to have the same functions, except as otherwise provided herein: (a)

Bureau of Local Employment;

(b)

Bureau of Women and Minors, which hereby renamed as the Bureau of Women and Young Workers;

(c)

Bureau of Rural Workers;

(d)

Bureau of Labor Relations, which shall continue to perform its present functions except those to be absorbed by the National Mediation and Conciliation Board as provided under Sec. 29 (c) hereof; and

(e)

Bureau of Working Conditions. (As amended by E.O. 251)

SEC. 19. Attached Agencies. — The following agencies shall continue to be attached to the Ministry for policy and program coordination and administrative supervision:

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to as the Institute, which shall attached to the Department of Labor and Employment for policy and program coordination and administrative supervision. The Institute shall absorb the research and publication functions of the Institute of Labor and Manpower Studies which is hereby abolished in accordance with Sec. 29(b) of this Executive Order. The Institute, to be headed by an Executive Director, assisted by a Deputy Executive Director, shall have the following functions: (a)

Undertake research and studies in all areas of labor and manpower policy and administration.

(b)

Review the rationale of existing legislation and regulations and analyze the cost involved in the implementation of such legislation against the benefits expected to be derived;

(c)

Study and develop innovative and indigenous approaches towards the promotion harmonious and productive labor-management relations, and the improvement of workers’ welfare services;

(a)

National Wages Council;

(b)

Philippine Overseas Employment Administration;

(d)

(c)

Employees Compensation Commission which is hereby reorganized to include the Executive Director of the ECC as an ex-officio member of the Commission; asia dc

Develop and undertake research programs and projects in collaboration with other national agencies to enhance the Department’s capability to participate in national decision and policy making;

(e)

Enter into agreements with international or bilateral agencies for the carrying out of the foregoing functions;

(f)

Expand the scope of its research interests into other countries and regions;

(g)

Publish its research studies for dissemination to government as well as to all concerned parties; and

(d)

The National Manpower and Youth Council;

(e)

The National Labor Relations Commission;

(f)

The Welfare Fund for Overseas Workers’ Administration which is hereby renamed as the Overseas Workers’ Welfare Administration;

(g)

Maritime Training Council; and

(h)

National Maritime Polytechnic Foundation.

SEC. 20. Institute For Labor Studies. — There is hereby created an Institute for Labor Studies, hereinafter referred

(h)

Perform such other functions as may be provided by law or assigned by the Secretary. (As amended by E.O. 251) SEC. 21. Bureaus of Labor and Employment Statistics. — A Bureau of Labor and Employment Statistics is hereby

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

created and shall absorb the functions of the Labor Statistics Service which is hereby abolished in accordance with Sec. 29 (b). The Bureau shall have the following functions: (a)

Formulate, develop and implement plans and programs on the labor statistical system in order to provide the government with timely, accurate and reliable data on labor and employment;

(b)

Conduct nationwide surveys and studies which will generate trends and structures on labor and employment;

(c)

Develop and prescribe uniform statistical standards, nomenclatures and methodologies for the collection, processing, presentation and analysis of labor and employment data;

(d)

Establish appropriate mechanisms for the coordination of all statistical activities in the Ministry and for collaboration with other government and private agencies including international research organizations in the conduct of surveys and studies in the area of labor and employment;

(e)

Disseminate statistical information and provide statistical services/advice to the users by establishing a data bank and issuing the Bureau’s statistical materials and research findings;

(f)

Develop and undertake programs and projects geared towards the enhancement of the technical competence of the Ministry on theories, techniques and methodologies for the improvement of the labor statistical system;

(g)

Monitor and exercise technical supervision over the statistical units in the Ministry and its agencies; and

(h)

Perform such other functions as may be provided by law or assigned by the Minister.

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SEC. 22. National Conciliation and Mediation Board. — A National Conciliation and Mediation Board, herein referred to as the “Board”, is hereby created and which shall absorb the conciliation mediation and voluntary arbitration functions of the Bureau of Labor of Relations in accordance with Sec. 29 (c) hereof. The Board shall be composed of an Administrator and two (2) Deputy Administrators. It shall be an attached agency under the administrative supervision of the Secretary of Labor and Employment. The Administrators and the Deputy Administrators shall be appointed by the President upon recommendation of the Secretary of Labor and Employment. There shall be as many Conciliators-Mediators as the needs of the public service require, who shall have at least three (3) years of experience in handling labor relations and who shall be appointed by the Secretary. The Board shall have its main office in Metropolitan Manila and its Administrators shall exercise supervision over Conciliators-Mediators and all its personnel. It shall establish as many branches as there are administrative regions in the country, with a many Conciliator-mediators as shall be necessary for its effective operation. Each branch of the Board shall be headed by an Executive Conciliator-Mediator. The Board shall have the following functions: (a)

Formulate policies, programs, standards, procedures, manuals of operation and guidelines pertaining to effective mediation and conciliation of labor disputes;

(b)

Perform preventive functions;

(c)

Coordinate and maintain linkages with other sectors of institutions, and other government authorities concerned with matters relative to the prevention and settlement of labor disputes;

(d)

Formulate policies, plans, programs, standards, procedures, manuals of operation and guidelines

mediation

and

conciliation

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

pertaining to the promotion of cooperative and nonadversarial schemes, grievance handling, voluntary arbitration and other voluntary modes of dispute settlements; (e)

Administer the voluntary arbitration program; maintain/update a list of voluntary arbitrations; compile arbitration awards and decisions;

(f)

Provide counselling and preventive mediation assistance particularly in the administration of collective agreement; awards and decisions;

(g)

Monitor and exercise technical supervision over the Board programs being implemented in the regional offices; and

(h)

Perform such other functions as may be provided by law or assigned by the Secretary.

A Tripartite Voluntary Arbitration Advisory Council is hereby created and attached to the National Conciliation and Mediation Board. The Tripartite Voluntary Arbitration Advisory Council shall advise the National Conciliation Board on matters pertaining to the promotion of voluntary arbitration as the preferred mode of dispute settlement. The Tripartite Voluntary Arbitration Advisory Council shall consist of the Administrator of the National Conciliation and Mediation Board as Chairman, one other member from the government, two members representing labor, and two other members representing management. The members shall be appointed by the President to serve for a term of three (3) years. The Chairman and Members thereof shall serve without compensation. (As amended by E.O. 251) SEC. 23. Transfer. — The National Productivity Commission is hereby transferred from the National Economic Development Authority and attached to the Ministry in accordance with Sec. 29 (c) hereof. The Commission shall primarily deal with productivity promotion and enhancement, education and training,

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coordination/monitoring, funding and the conduct of special and policy studies directly related to its activities. It shall have the Minister of Trade and Industry as Chairman and the Minister of Labor and Employment as Vice-Chairman. Sec. 24. Regional Offices, District Offices and Provincial Extension Units. — The Department is hereby authorized to establish, operate and maintain such Department-wide Regional Offices, District Offices and Provincial Extension Units in each of the administrative regions of the country, insofar as necessary to promote economy and efficiency in the delivery of its services. Each Regional Office shall be headed by a Regional Director who shall have supervision and control thereof. The Regional Director, whenever necessary, shall be assisted by an Assistant Regional Director. A Regional Office shall have, within its regional areas, the following functions: (a)

Implement laws, policies, plans, programs, projects, rules and regulations of the Department;

(b)

Provide economical, efficient and effective service to the people;

(c)

Coordinate with regional offices of other departments and agencies;

(d)

Coordinate with local government units;

(e)

Perform such other functions as may be provided by law or assigned by the Secretary. (As amended by E.O. 251)

SEC. 25. New Structure and Pattern. — Upon approval of this Executive Order, the officers and employees of the Ministry shall in a holdover capacity, continue to perform their respective duties and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from government service pursuant to Executive Order No. 17 (1986) or Article III of the Freedom Constitution.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

The new position structure and staffing pattern of the Ministry shall be approved and prescribed by the Minister for the Ministry within one hundred twenty (120) days from the approval of this Executive Order and the authorized positions created thereunder shall be filled with regular appointments by him or by the President as the case may be. Those incumbents whose positions are not included therein or who are not reappointed shall be deemed separated from the service. Those separated from the service shall receive the retirement benefits to which they may be entitled under existing laws, rules and regulations. Otherwise, they shall be paid the equivalent of one-month basic salary for every year of service, or the equivalent nearest fraction thereof favorable to them on the basis of the highest salary received, but in no case shall such payment exceed the equivalent of 12 months salary. No court or administrative body shall issue any writ or preliminary injunctions or restraining order to enjoin the separation/replacement of any officer or employee affected under this Executive Order. SEC. 26. Prohibition Against Reorganizational Change. — No change in the reorganization herein prescribed shall be valid except upon prior approval of the President for the purpose of promoting efficiency and effectiveness in the delivery of public services. SEC. 27. Funding. — Funds needed to carry out the provisions of this Executive Order shall be taken from funds available in the Ministry. SEC. 28. Implementing Authority of Minister. — The Minister shall issue such rules, regulations and other issuances as may be necessary to ensure the effective implementation of the provisions of this Executive Order.

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SEC. 29. Transitory Provisions. — In the abolition/transfer of entity/functions as prescribed in the Executive Order, the following rules shall be provided: (a)

Any transfer of entities shall include the functions, appropriations, funds, records, equipment, facilities, other properties, assets, and liabilities and of the transferred entity as well as the personnel thereof as may be necessary, who shall, in a holdover capacity, continue to perform their respective duties and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from government service pursuant to Executive Order No. 17 (1986) or Article III of the Freedom Constitution. Those personnel from the transferred entity whose positions are not included in the new position structure and staffing pattern approved by the Minister or who are not reappointed shall be entitled to the benefits provided in the second paragraph of Sec. 25 hereof.

(b)

Any transfer of functions which results in the abolition of the entity that has exercised such transferred functions shall include as may be necessary, to the proper discharge of the transferred functions, the appropriations, funds, records, equipment, facilities, other assets, and personnel of the entity from which such functions have been transferred. The remaining appropriations and funds shall revert to the General Fund and the remaining records, equipment, facilities and other assets shall be allocated to such appropriate units as the Minister shall determine or otherwise shall be disposed of, in accordance with the Auditing Code and other pertinent laws, rules and regulations. The liabilities, if any, of the abolished entity shall be treated likewise in accordance with the Auditing Code and other pertinent laws, rules and regulations. Incumbents of the abolished entity shall, in a holdover capacity continue to perform their respective duties

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from government service pursuant to Executive Order No. 17 (1986) or Article III of the Freedom Constitution. Any such personnel whose position is not included in the new position structure and staffing pattern approved by the Minister or who is not reappointed shall be entitled to the benefits provided in the second paragraph of Sec. 25 hereof. (c)

(d)

Any transfer of functions which does not result in the abolition of the entity that has exercised such transferred functions shall include the appropriations, funds, records, equipment, facilities, other assets as well as the personnel of the entity from which such functions have been transferred that are necessary to the proper discharge of such transferred functions. The liabilities, if any, which have been incurred in connection with the discharge of the transferred functions shall be allocated in accordance with the Auditing Code and the pertinent laws, rules and regulations. Such personnel shall, in a holdover capacity, continue to perform their respective duties and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from government service pursuant to Executive Order No. 17 (1986) or Article III of the Freedom Constitution. Any such personnel whose position is not included in the new position structure and staffing pattern approved by the Minister or who is not reappointed shall be entitled to the benefits provided in the second paragraph of Sec. 25 hereof. In case of the abolition of an entity which does not result in the transfer of its functions to another entity, the appropriations and funds of the abolished entity shall revert to the General Fund, while the records, equipment, facilities and other assets thereof shall be allocated to such appropriate units as the Minister

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shall determine or otherwise shall be disposed of in accordance with the Auditing Code and other pertinent laws, rules and regulations. The liabilities, if any, of the abolished entity shall be treated in accordance with the Auditing Code and other pertinent laws, while the personnel thereof shall be entitled to the benefits provided in the second paragraph of Sec. 25 hereof. SEC. 30. Change of Nomenclatures. — In the event of the adoption of a new Constitution which provides for a presidential form of government, the Ministry shall be called Department of Labor and Employment and the titles of Minister, Deputy Minister, and Assistant Minister shall be changed to Secretary, Undersecretary, and Assistant Secretary, respectively. SEC. 31. Notice or Consent Requirement. — If any reorganizational change herein authorized is of such substance or materiality as to prejudice third persons with rights recognized by law or contract such that notice to or consent of creditors is required to be made or obtained pursuant to any agreement entered into with any of such creditors, such notice or consent requirement shall be complied with prior to the implementation of such reorganizational change. SEC. 32. Separability Clause. — Any portion or provision of this Executive Order that may declared unconstitutional shall not have the effect of nullifying other portions or provisions hereof as long as such remaining portions can still subsist and be given effect in their entirety. SEC. 33. Repealing Clause. — All laws, ordinances, rules, regulations, other issuances or parts thereof, which are inconsistent with this Executive Order, are hereby repealed or modified accordingly.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

SEC. 34. Effectivity. — This Executive Order shall take effect immediately upon its approval. APPROVED in the City of Manila, Philippines, this 31st day of January, in the year of Our Lord, nineteen hundred and eighty-seven

A. JURISDICTION; PROCEDURE Guico, Jr. v. Quisumbing, 298 SCRA 667 Pursuant to Art. 128 LC, the DOLE-Regional Director inspected Copylandia Services & Trading finding these violations as regards 21 copier operators: underpayment of wages and 13th month pay and no service incentive leave pay. Copylandia argues that the Regional Director has no jurisdiction over the complaint because the individual monetary claims of the employees exceeded P5000 and under Art. 129 LC and the IRR jurisdiction is with the Labor Arbiter. Issue: Whether the Regional Director has jurisdiction Held: YES. Following Servando v. Sec. of Labor and Employment, the enactment of R.A. No. 7730, amending Art. 138(b) LC did away with the rule that the visitorial powers of the SOLE to order and enforce compliance with labor standards laws cannot be exercised where the individual claim exceeds P5,000. Maneja v. NLRC, 290 SCRA 603 Manila Midtown Hotel dismissed Maneja for dishonesty thereby violating company policies. Maneja filed a complaint for illegal dismissal. The Labor Arbiter found for Maneja—it assumed jurisdiction under Art. 217 despite acknowledging that under the Art 217(c) matters involving the implementation and interpretation of existing company policies falls within the ambit of grievance procedure under the CBA, then, if unresolved, subject to voluntary arbitration. NLRC dismissed the case for lack of jurisdiction of the LA; voluntary arbitration should have been conducted. Issue: Whether the LA has jurisdiction

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Held: YES. Pursuant to Art. 217 LC, termination cases fall under the original and exclusive jurisdiction of the LA. Art. 217(c) should be read in conjunction with Art. 261 which grants to voluntary arbitrators the original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation and implementation of the CBA and those arising from the interpretation or enforcement of company personnel policies. In this case, Maneja’s termination is not an unresolved grievance. Morevoer, Maneja’s dismissal does not fall within the phrase “grievances arising from the interpretation and implementation of the CBA and those arising from the interpretation or enforcement of company personnel policies” because only disputes involving the union and company shall be referred to the grievance machinery or voluntary arbitrators. Here, the union neither objected nor dissented to the dismissal. Following Sanyo Phils. Workers Union-PSSLU v. Canizares, since there has been an actual termination, the matter falls within the jurisdiction of the LA. Maneja’s dismissal does not call for the interpretation or enforcement of company personnel policies but is a termination dispute under the LA’s jurisdiction. St. Martin Funeral Homes v. NLRC, 295 SCRA 494 The remedy of an aggrieved party from a decision by the NLRC is to timely file a motion for reconsideration as a precondition for any further or subsequent remedy, and then seasonably file a petition for certiorari under Rule 65 to the Court of Appeals. Bottom-line rationale: SC had to divest its dockets of labor cases. N.B. From the CA you go to the SC via Rule 45. NFL v. Laguesma, 304 SCRA 405 The Med-Arbiter dismissed ANGLO-KMU’s petition for certification election on the ground that the submission of the documents evidencing the due creation of a local was made after the lapse of the freedom period. SOLE set aside Med-Arbiter’s resolution. NFL now before SC via Rule 65. Held: SC did not rule on the merits; rather it applied the St. Martin ratio and referred the case to the CA. Specifically, the SC observed

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

that the LC and its IRR generally do not provide for any mode of reviewing the decision of the SOLE, except for 2 instances where there is specific mention of a remedy from a SOLE decision: (1) Sec. 15, Rule IX, Book V, IRR—SOLE decision on appeal from the MedArbiter’s decision on a petition for certification election shall be final and executory, but the implementation of the SOLE’s decision affirming the Med-Arbiter’s decision to conduct a certification election “shall not be stayed unless restrained by the appropriate court”; (2) Sec. 5, Rule V, Rules on the Disposition of Labor Standards Cases in Regional Offices—”the filing of a petition for certiorari before the SC shall not stay the decision of the [appealed] order or decision unless the aggrieved party secures a temporary restraining order from the Court.” SC finds that it is procedurally feasible and practicable that petitions for certiorari under Rule 65 against the decisions of the SOLE rendered under the LC and its IRR be filed initially in the CA. Thus, SC reads “the appropriate court” in no. (1) to refer to the CA; while no. (2) cannot be read to mean that the petition can only be filed with the SC, rather it should be read in relation to the pertinent laws on the concurrent original jurisdiction of the SC and CA in Rule 65 petitions.

Vivero v. CA, 344 SCRA 268 The CBA between AMOSUP (union) and Hanseatic Shipping required that unresolved disputes after recourse to grievance machinery shall be referred to a Volunatry Arbitration Committee. Vivero, an AMOSUP member, was repatriated by Hanseatic. Vivero filed a complaint for illegal dismissal. Grievance proceedings were held in vain, thus Vivero filed a complaint with the POEA. Pending POEA case, Hanseatic moved to dismiss due to lack of jurisdiction because Vivero failed to refer the case to a Voluntary Arbitration Committee pursuant to the CBA. The case eventually ended up with the NLRC pursuant to RA 8042. The LA dismissed the complaint for want of jurisdiction—CBA provided for referral to a Voluntary Arbitration Committee should grievance committee fail to settle the

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dispute and Art. 261 LC mandates original and exclusive jurisdiction of voluntary arbitrators. NLRC set aside LA decision, holding that referral to arbitration is voluntary. CA reversed. Issue: Whether the NLRC is deprived of jurisdiction over illegal dismissal cases whenever a CBA provides for grievance machinery and voluntary arbitration proceedings. Held: NO. CA DECISION SET ASIDE; CASE REMANDED TO LA. Following SMC v. NLRC’s construction of the phrase “all other disputes” in Art. 262, it is not sufficient to merely say that parties to the CBA agree on the principle that “all disputes” should first be submitted to a voluntary arbitrator. There is a need for an express stipulation in the CBA that illegal termination disputes should be resolved by a voluntary arbitrator or panel of voluntary arbitrators, since the same fall within a special class of disputes that are generally within the exclusive original jurisdiction of LA’s. Absent such express stipulation, “all disputes” should be construed as limited to areas of conflict traditionally within the jurisdiction of voluntary arbitrators—disputes relating to contract-interpretation, contract-implementation, or interpretation or enforcement of company personnel policies. Illegal termination disputes does not fall under any of these categories. In this case, while the parties did agree to make termination disputes the proper subject of voluntary arbitration, such submission remains discretionary upon the parties. The CBA provisions on Job Security (Sec. 4, Art. XVII) use the word “may,” thereby showing the intention of the parties to submit illegal termination dispute to the jurisdiction of the LA, rather than to a voluntary arbitrator. Vivero validly exercised his option to submit his case to a LA when he filed his complaint with the proper government agency. Where under the CBA, both Union and the employer are responsible for selecting an impartial arbitrator or for convening an arbitration committee, yet neither made a move towards this end, the employee should not be deprived of his legitimate recourse because of the refusal of both Union and employer to follow the grievance procedure. Here AMOSUP did not inform Vivero of his option to

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

settle the case through voluntary arbitration, and Hanseatic did not timely invoke the provision in their CBA requiring the referral of their unresolved disputes to a VA once it becomes apparent that the grievance machinery failed to resolve it prior to the filing of the case before the proper tribunal. Luzon Dev’t Bank v. Association of LDB Employees, 249 SCRA 162 This case is the precursor to St. Martin. SC discussed arbitration within the labor law context: compulsory vs. voluntary, voluntary arbitrator under Art. 261/262, LC vs. Labor Arbiter under Art. 217. Pertinently, SC notes that while there is an express mode of appeal from the decision of a LA (i.e., NLRC under Art. 228), RA 6715 is silent with respect to an appeal from the decision of a VA. Past practice has equated the VA with the NLRC or the CA in that certiorari to the SC is the remedy. Now, the SC views this illogical and imposes an unnecessary burden upon it. Under the rulings in Volkschel Labor Union v. NLRC and Oceanic Bic Division v. Romero, it follows that the VA enjoys in law the status of a quasijudicial agency but independent of, and apart from, the NLRC since his decisions are not appealable to the latter. More accurately, a VA is comprehended within the concept of a quasi-judicial instrumentality whose decisions fall under the exclusive appellate jurisdiction of the CA under RA 7902, amending BP 129. Moreover, the SC reads Sec 22 of the Arbitration Law as equating the award or decision of the voluntary arbitrator with that of the RTC. Consequently, in a petition for certiorari from that award or decision, the CA must be deemed to have concurrent jurisdiction with the SC. Thus, as a matter of policy, the SC shall henceforth remand to the CA petitions of this nature for proper disposition. Villaruel v. NLRC, 284 SCRA 399 Guarino was master baker of spouses Villaruel’s bakery and earns P40/day. After he asked for a P10 increase the Villaruels told him to no longer report for work. Guarino filed a complaint for illegal dismissal. LA dismissed the complaint finding that there is no

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employer-employee relationship between the two, giving credence to the Villaruel’s claim that Guarino is not an employee but a partner. NLRC reversed, finding Guarino a regular employee. Issue: Whether NLRC committed GAD in finding that Guarino is a regular employee and that he did not abandon the partnership and in directing payment of salary differentials et al. Held: NO. The petition essentially raises a factual issue. SC’s jurisdiction under Rule 65 does not include correction of the NLRC’s evaluation of the evidence but is confined to issues of jurisdiction or grave abuse of discretion. An abuse of discretion does not necessarily follow because there is a reversal by the NLRC of a decision of the LA. Neither does the mere variance in the evidentiary assessment of the NLRC and that of the LA warrant another full review of the facts. In this case, NLRC’s ruling is supported by substantial evidence. Manila Central Line Corp. v. MCL Free Workers Union-NFL, 290 SCRA 690 Due to a bargaining deadlock and after failure to resolve the same with the aid of the NCMB, the union petitioned for compulsory arbitration. LA rendered a decision embodying provisions of a new CBA. NLRC denied employer’s appeal. Before SC, employer aver that NLRC erred in upholding the jurisdiction of the LA, contending that the policy of the law now is to encourage resort to conciliation and voluntary arbitration. Held: Art. 262, LC provides that upon agreement of the parties, the VA shall also hear and decide all other labor disputes including ULP and bargaining deadlocks. This is what the parties did in this case. After the NCMB failed to resolve the deadlock, the union petitioned for compulsory arbitration. Although the union’s petition was for “compulsory arbitration,” the subsequent agreement of petitioner to submit the matter for arbitration in effect made the arbitration a voluntary one. The essence of voluntary arbitration, after all, is that it is by agreement of the parties, rather than compulsion of law, that a matter is submitted for arbitration. It does not matter that the person chosen as arbitrator is a labor arbiter who is charged with the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

compulsory arbitration of certain labor cases. There is nothing in the law that prohibits these labor arbiters from also acting as voluntary arbitrators as long as the parties agree to have him hear and decide their dispute. National Union of Bank Employees v. Lazaro, 157 SCRA 123 Commercial Bank & Trust Co. entered into a CBA with its union. During the time for re-negotiation, CBTC suspended negotiations. Eventually CBTC merged with BPI. Union filed a case against CBTC and BPI for specific performance and damages with the CFI alleging, inter alia, that BPI induced CBTC to violate its existing CBA. CFI dismissed for lack of jurisdiction. Issue: Whether regular courts may take cognizance of claims for damages arising from a labor controversy. Held: NO. This case is a ULP controversy within the original and exclusive jurisdiction of the LA and the exclusive appellate jurisdiction of the NLRC. The claim against BPI consists mainly of the civil aspect of the ULP charge referred to under Art. 247. The act complained of falls under the broad scope of ULP under Art. 248(a) & (g). Since it involves collective bargaining—whether it involved an accompanying violation of the Civil Code—it may rightly be categorized as ULP. The civil implications thereof do not defeat its nature as a fundamental labor offense. The fact that BPI was not the employer when the act was committed does not abate a recourse to the LA. It should be noted that BPI assumed all the assets and liabilities of CBTC. San Jose v. NLRC, 294 SCRA 336 San Jose filed with the LA a case for money claim (underpayment of retirement benefits) against Ocean Terminal Services, Inc. LA decided in his favor. NLRC reversed on jurisdictional grounds, arguing that since San Jose’s claim is based on the CBA thus arising from an interpretation or implementation for a CBA, the LA lacks jurisdiction over the case under Art. 217(c), LC. Issue: Whether the NLRC erred in dismissing the case

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Held: NO. (N.B. please refer to the Code) An analysis of Arts. 217, 261 and 262 indicates that: 1. The jurisdiction of the LA and VA or Panel of VAs over cases enumerated in these articles can possibly include money claims in one form or another. 2. The cases where the LA has original and exclusive jurisdiction are enumerated in Art. 217 and that of the VA or Panel of VAs in Art. 261. 3. The original and exclusive jurisdiction of LA s is qualified by an exception, i.e., Art. 217(c) and Art. 262. The original and exclusive jurisdiction of the LA under Art. 217(c) for money claims is limited only to those arising from statutes or contracts other than a CBA. 4. The jurisdiction of VA or Panel of VAs is provided for in Arts. 261 and 262. From the foregoing, the NLRC correctly ruled that the LA had no jurisdiction over San Jose’s money claim-underpayment of retirement benefits, as the controversy involved an issue arising from the interpretation or implementation of a provision of the CBA. It is the VA or Panel of VAs who has jurisdiction. SMC v. Ectuban, 319 SCRA 704 Claiming poor sales performance, SMC encouraged its Mandaue City Brewery regular employees, including respondents, to avail of the retrenchment program, which the latter did in 1981, 1982 and 1983. In 1985, respondents learned that SMC had never really been in distress but was growing in sales during the time of the retrenchment and that it hired new employees. In 1986, they filed a complaint to annul the retrenchment program. LA dismissed due to prescription. NLRC affirmed. In 1993, respondents filed with RTC a complaint for damages against SMC. SMC moved to dismiss, RTC granted, arguing that the complaint is a labor dispute. CA reversed Issue: Whether RTC has jurisdiction

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Held: NO. Under the REASONABLE CAUSAL CONNECTION RULE, if there is a reasonable causal connection between the claim asserted and the employer-employee relations, then the case is within the jurisdiction of our labor courts. In the absence of such nexus, it is the regular courts that have jurisdiction. In this case, while respondents insist that their action is for the declaration of nullity of their “contract of termination,” what is inescapable is that fact that it is really an action for damages emanating from employer-employee relations. First, their claim for damages is grounded on SMC’s deception—a case of illegal dismissal. Second, the prayer and allegations in their LA complaint and RTC complaint are almost identical, save for the exclusion of prayer for reinstatement and substitution of claim for backwages with claim for actual damages in the latter. These are telltale signs that respondents’ claim for damages is intertwined with their having been separated from their employment without just cause and, thus, has a reasonable causal connection with their employer-employee relations with SMC. Accordingly, jurisdiction lies with the LA under Art. 217, para. 4. Lapanday Agricultural Dev’t Corp. v CA, 324 SCRA 39 Commando Security Services and Lapanday entered into a Guard Service Contract. Commando demanded that the contract be upgraded in compliance with 2 wage orders increasing the minimum wage, Lapanday refused. The contract expired without the implementation of the wage orders. Commando filed a complaint with RTC which ruled in its favor. CA affirmed. Lapanday, inter alia, assails jurisdiction of regular courts. Issue: Whether RTC has jurisdiction Held: YES. In its complaint Commando is not seeking any relief under the Labor Code but seeks payment of a sum of money and damages on account of Lapaday’s alleged breach of its obligation under their contract. The action is within the realm of civil law, hence regular courts have jurisdiction. While the resolution of the issue involves the application of labor laws, reference to the labor code was only for the determinations of the solidary liability of Lapanday to Commando where no employer-employee relationship

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exists. In the cases enumerated in Art. 217, an employer-employee relationship is an indispensable jurisdictional requirement, and there is none in this case. (N.B. on the merits, Commando lost because in order for Lapanday to be liable the former should have actually paid the adjusted wages of the guards. This it did not, thus it had no cause of action.) Abbot Laboratories Phils., Inc. v. Abbot Labs Employees Union, 323 SCRA 392 Abbot filed for the cancellation of certificate of registration of ALEU due to procedural infirmities. Regional Director-BLR cancelled. ALEU appealed to SOLE, who referred the matter to the BLR Director, who reversed. Abbot appealed to SOLE. SOLE refused to act on the ground that it had no jurisdiction to review the decision of the BLR on appeals in cancellation cases emanating from the Regional Offices. Issue: Whether SOLE can review BLR decisions rendered in its appellate jurisdiction over decisions of the Regional Director in cases involving cancellation of certificates of registration of labor unions Held: NO. Pursuant to Rule VIII, Book V, IRR, the appellate jurisdiction of the SOLE is limited only to a review of cancellation proceedings decided by the BLR in the exercise of its exclusive and original jurisdictions. The SOLE has no jurisdiction over decisions of the BLR rendered in exercise of its appellate power to review the decision of the Regional Director in a petition to cancel the union’s certificate of registration, said decision being final and unappealable. The remedy of an aggrieved party is to seasonably avail of Rule 65. Deltaventures Resources, Inc. v. Cabato, 327 SCRA 521 LA found that respondents were illegally dismissed, ordering Green Mountain Farm, Roberto Ongpin and Almus Alabe to pay the former various amounts. SC denied appeal. Respondents moved for issuance of writ of execution, which LA granted. The Sheriff levied on real property owned by Ongpin and scheduled its public auction. A month before the auction, Deltaventures filed a third-party claim asserting ownership over the property. LA suspended auction. Later,

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Deltaventures filed with RTC a complaint for injunction and damages, with a prayer for the issuance of a TRO against the Sheriff. RTC Judge issued TRO. Eventually, RTC ruled that it cannot enjoin the execution of a decision of the NLRC, with which it is of equal rank. Issue: Whether RTC may take cognizance of petitioner’s complaint and consequently provide the injunctive relief sought Held: NO. Petitioner filed the third-party claim before the court a quo by reason of a writ of execution issued by the NLRC-CAR Sheriff against a property to which it claims ownership. Ostensibly the complaint before the trial court was for the recovery of possession and injunction, but in essence it was an action challenging the legality or propriety of the levy vis-a-vis the alias writ of execution, including the acts performed by the LA and the Deputy Sheriff implementing the writ. The complaint was in effect a motion to quash the writ of execution of a decision rendered on a case properly within the jurisdiction of the LA, to wit: Illegal Dismissal and Unfair Labor Practice. Considering the factual setting, it is then logical to conclude that the subject matter of the third party claim is but an incident of the labor case, a matter beyond the jurisdiction of RTCs. Precedents abound confirming the rule that said courts have no jurisdiction to act on labor cases or various incidents arising therefrom, including the execution of decisions, awards or orders. Jurisdiction to try and adjudicate such cases pertains exclusively to the proper labor official concerned under the DOLE. To hold otherwise is to sanction split jurisdiction which is obnoxious to the orderly administration of justice. Petitioner failed to realize that by filing its third-party claim with the deputy sheriff, it submitted itself to the jurisdiction of the NLRC acting through the LA. It failed to perceive the fact that what it is really controverting is the decision of the LA and not the act of the deputy sheriff in executing said order issued as a consequence of said decision rendered. Bañez v. Valdevilla, 331 SCRA 584 Petitioner filed a complaint for illegal dismissal against Oro Mktg., Inc. LA ruled in his favor. NLRC affirmed. SC dismissed Oro’s

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petition for certiorari. Later, Oro filed a complaint for damages against petitioner with the RTC. Petitioner moved to dismiss on the ground of lack of jurisdiction over the subject matter of the action, res judicata, splitting of causes of action, and forum-shopping. RTC denied. Issue: Whether RTC has jurisdiction Held: NO. Presently, and as amended by R.A. 6715, the jurisdiction of Labor Arbiters and the NLRC in Article 217 is comprehensive enough to include claims for all forms of damages “arising from the employer-employee relations.” Whereas this Court in a number of occasions had applied the jurisdictional provisions of Article 217 to claims for damages filed by employees, we hold that by the designating clause “arising from the employer-employee relations” Article 217 should apply with equal force to the claim of an employer for actual damages against its dismissed employee, where the basis for the claim arises from or is necessarily connected with the fact of termination, and should be entered as a counterclaim in the illegal dismissal case. There is no mistaking the fact that Oro’s claim against petitioner for actual damages arose from a prior employer-employee relationship. In the first place Oro would not have taken issue with petitioner’s “doing business of his own” had the latter not been concurrently its employee. Second, and more importantly, to allow RTC to proceed with the instant action for damages would be to open anew the factual issue of whether petitioner’s installment sale scheme resulted in business losses and the dissipation of Oro’s property. Clearly, respondent court’s taking jurisdiction over the instant case would bring about precisely the harm that the lawmakers sought to avoid in amending the Labor Code to restore jurisdiction over claims for damages of this nature to the NLRC. This is, of course, to distinguish from cases of actions for damages where the employer-employee relationship is merely incidental and the cause of action proceeds from a different source of obligation. Thus, the jurisdiction of regular courts was upheld where the damages, claimed for were based on, malicious prosecution, or breach of contract, as when the claimant seeks to recover a debt from a former employee or

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

seeks liquidated damages in enforcement of a prior employment contract.

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Alcantara vs. CA, GR 143397, August 6, 2002

Atlas vs. NLRC, GR 142244, November 18, 2002

NDC-Guthrie Plantations, Inc. vs. NLRC, August 9, 2001 Union of Nestlea Workers vs. Nestle Phils., GR 148303, October 17, 2002

Nova vs. Judge Dames, March 28, 2001

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

B. PROCEDURE Maricalum Mining Corp. vs. NLRC, 298 SCRA 378 The certificate of non-forum shopping as provided by this Court Circular 04-94 is mandatory and should accompany pleadings filed before the NLRC. Court Circular No. 04-94 is clear and needs no further interpretation. The NLRC is a quasi-judicial agency, hence, initiatory pleadings filed before it should be accompanied by a certificate of non-forum-shopping. Philtranco Service Enterprise, Inc. vs. NLRC, 288 SCRA 585 “Sec. 1, Rule IV of the 1990 NLRC Rules additionally provides that, ‘for purposes of venue, workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose.’ From the foregoing, it is obvious that the filing of the complaint with the National Capital Region Arbitration Branch was proper, Manila being considered as part of Nieva’s workplace by reason of his plying the Legaspi City-Pasay City route. It should be noted that a petition for certiorari under Rule 65 of the Rules of Court will prosper only if there is a showing of grave abuse of discretion or an act without or in excess of jurisdiction on the part of the National Labor Relations Commission. It does not include an inquiry as to the correctness of the evaluation of evidence which was the basis of the labor official or officer in determining his conclusion. It is not for this Court to re-examine conflicting evidence, re-evaluate the credibility of witnesses, nor substitute the findings of fact of an administrative tribunal which has gained expertise in its special field. Vinta Maritime Co., Inc vs. NLRC, 284 SCRA 656 Issue: Rendering the assailed resolution and decisions without a fullblown trial on the merits Held: Trial is Not Indispensable in Administrative Due Process

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Petitioners claim that Respondent Commission gravely abused its discretion in upholding the POEA’s decision, which was based on the position papers and documents submitted by the parties in view of a motion for trial which remained unacted upon. They insist that a hearing was an indispensable condition before a judgment could be rendered in this case. We do not agree. Although bound by law and practice to observe due process, administrative agencies exercising quasijudicial powers are nonetheless free from the rigidity of certain procedural requirements.

As applied to these proceedings, due process requires only an opportunity to explain one’s side In labor cases, this Court has consistently held that due process does not necessarily mean or require a hearing, but simply an opportunity or a right to be heard. The requirements of due process are deemed to have been satisfied when parties are given the opportunity to submit position papers. The holding of an adversarial trial is discretionary on the labor arbiter and the parties cannot demand it as a matter of right. More often than not, a litigant may be heard more creditably through pleadings than through oral arguments. In administrative proceedings, technical rules of procedure and evidence are not strictly applied; administrative due process cannot be fully equated with due process in its strict judicial sense. Due process was designed to afford an opportunity to be heard, and an actual verbal hearing need not always be held. The necessity of conducting a hearing is addressed to the sound discretion of the labor arbiter. These rules equally apply to cases filed with the Philippine Overseas Employment Administration Adjudication Office. Sec. 6 of Rule III, Book VII of the POEA Rules and Regulations of 1991 categorically states that proceedings before a POEA hearing officer is non-litigious, although they are still subject to the requirements of due process. Under the POEA Rules in force at the time the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

complaint was filed, summary judgments — in which the pleadings, affidavits and evidence submitted are sufficient to render a decision — are allowed under Sec. 4. Where the parties fail to agree on an amicable settlement and summary judgment is not appropriate, a judgment based on position papers may be resorted to under Section 5. Where there are complicated factual issues involved which cannot be resolved through such means, the hearing officer may direct the parties to submit suggested written clarificatory questions to be propounded to the party concerned. Tabang vs. NLRC, 266 SCRA 462 We agree with the findings of the NLRC that it is the SEC which has jurisdiction over the case at bar. The charges against herein private respondent partake of the nature of an intra-corporate controversy. Similarly, the determination of the rights of petitioner and the concomitant liability of private respondent arising from her ouster as a medical director and/or hospital administrator, which are corporate offices, is an intra-corporate controversy subject to the jurisdiction of the SEC. Contrary to the contention of petitioner, a medical director and a hospital administrator are considered as corporate officers under the by-laws of respondent corporation. Section 2(i), Article I thereof states that one of the powers of the Board of Trustees is “(t)o appoint a Medical Director, Comptroller/Administrator, Chiefs of Services and such other officers as it may deem necessary and prescribe their powers and duties.” The president, vice-president, secretary and treasurer are commonly regarded as the principal or executive officers of a corporation, and modern corporation statutes usually designate them as the officers of the corporation. However, other offices are sometimes created by the charter or by-laws of a corporation, or the board of directors may be empowered under the by-laws of a corporation to create additional offices as may be necessary. It has been held that an “office” is created by the charter of the corporation and the officer is elected by the directors or stockholders. On the other hand, an “employee” usually occupies no

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office and generally is employed not by action of the directors or stockholders but by the managing officer of the corporation who also determines the compensation to be paid to such employee. In the case at bar, considering that herein petitioner, unlike an ordinary employee, was appointed by respondent corporation’s Board of she is deemed an officer of the corporation. Perforce, Section 5(c) of Presidential Decree No. 902-A, which provides that the SEC exercises exclusive jurisdiction over controversies in the election or appointment of directors, trustees, officers or managers of corporations, partnerships or associations, applies in the present dispute. Accordingly, jurisdiction over the same is vested in the SEC, and not in the Labor Arbiter or the NLRC.

Prangan vs. NLRC, 289 SCRA 142 Prangan was hired for security services by Masagana Security Services Corp and was assigned to Cat House Bar and Restaurant until the latter’s closure. Prangan filed a complaint against Masagana for underpayment and non-payment of wages and other benefits. Masagana rejected the claim and alleged that it is a mere agent and the real liability is attached with Cat House, as direct employer. Held: (on the issue of evidence) In the instant case, there is no dispute that matters concerning an employee’s actual hours of work are within the ambit of management prerogative. When an employer alleges that his employee works less than the normal hours of employment as provided for in the law, he bears the burden of proving his allegation with clear and satisfactory evidence. The NLRC relied solely on the supposed daily time records submitted by the employer. But this is not substantial evidence to prove Prangan worked only four hours a day. Prangan asserted that his signature in the DTRs were forged. This was hardly controverted by the employer, who did not even try to submit employment

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

contracts, payrolls, notice of assignment, cash vouchers or any other convincing evidence. Rubberworld, vs .NLRC, April 14, 1999 Presidential Decree 902-A, as amended, provides that “upon the appointment of a management committee, rehabilitation receiver, board or body pursuant to this Decree, all actions for claims against corporations, partnerships, or associations under management or receivership pending before any court, tribunal, board or body shall be suspended accordingly.” Such suspension is intended to give enough breathing space for the management committee or rehabilitation receiver to make the business viable again, without having to divert attention and resources to litigations in various fora. Among the actions suspended are those for money claims before labor tribunals, like the National Labor Relations Commission (NLRC) and the labor arbiters. Labor Claims Included In Suspension Order The law is clear: upon the creation of a management committee or the appointment of a rehabilitation receiver, all claims for actions “shall be suspended accordingly.” No exception in favor of labor claims is mentioned in the law. Since the law makes no distinction or exemptions, neither should this Court. Ubi lex non distinguit nec nos distinguere debemos. Allowing labor cases to proceed clearly defeats the purpose of the automatic stay and severely encumbers the management committee’s time and resources. The said committee would need to defend against these suits, to the detriment of its primary and urgent duty to work towards rehabilitating the corporation and making it viable again. To rule otherwise would open the floodgates to other similarly situated claimants and forestall if not defeat the rescue efforts. Besides, even if the NLRC awards the claims of private respondents, as it did, its ruling could not be enforced as long as the petitioner is under the management committee. In Chua v. National Labor Relations Commission, we ruled that labor claims cannot proceed independently of a bankruptcy

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liquidation proceeding, since these claims “would spawn needless controversy, delays, and confusion.” With more reason, allowing labor claims to continue in spite of a SEC suspension order in a rehabilitation case would merely lead to such results. Article 217 of the Labor Code should be construed not in isolation but in harmony with PD 902-A, according to the basic rule in statutory construction that implied repeals are not favored. Indeed, it is axiomatic that each and every statute must be construed in a way that would avoid conflict with existing laws. True, the NLRC has the power to hear and decide labor disputes, but such authority is deemed suspended when PD 902-A is put into effect by the Securities and Exchange Commission. PALABOK: Preference in Favor of Workers in Case of Bankruptcy or Liquidation The preferential right of workers and employees under Article 110 of the Labor Code may be invoked only upon the institution of insolvency or judicial liquidation proceedings. Indeed, it is wellsettled that “a declaration of bankruptcy or a judicial liquidation must be present before preferences over various money claims may be enforced.” But debtors resort to preference of credit — giving preferred creditors the right to have their claims paid ahead of those of other claimants — only when their assets are insufficient to pay their debts fully. The purpose of rehabilitation proceedings is precisely to enable the company to gain a new lease on life and thereby allow creditors to be paid their claims from its earnings. In insolvency proceedings, on the other hand, the company stops operating, and the claims of creditors are satisfied from the assets of the insolvent corporation. The present case involves the rehabilitation, not the liquidation, of petitioner-corporation. Hence, the preference of credit granted to workers or employees under Article 110 of the Labor Code is not applicable.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Alemar’s Sibal and Sons, Inc., vs. NLRC, GR 114761, Jan. 19, 2000 Facts: In 1985, Labor Arbiter rendered a decision ordering Penalosa to pay private respondent separation pay equivalent to one-half (½) month pay for every year of service. At the hearing held in 1988, petitioner and private respondent agreed to the computation of the separation pay. Thus, Labor Arbiter Jose de Vera directed petitioner to pay the agreed amount of P20,736.53 representing 10% of the total amount of the separation pay due the complainants on May 16, 1988. On June 10, 1988, the Rehabilitation Receiver of petitioner submitted a Manifestation with Motion, alleging that petitioner was not yet in a position to comply with the directive of Labor Arbiter de Vera for the reason that it was still under Rehabilitation Receivership by virtue of the order of the Securities and Exchange Commission (SEC) dated August 1, 1984. Thus, it sought deferment of such payment until the SEC will issue an order formally approving the rehabilitation of petitioner and allowing complainants to file their claims with the Rehabilitation Receiver. Held: We note that at the time this petition had been filed on May 4, 1994, petitioner had been placed under rehabilitation receivership. Jurisprudence has established that a stay of execution may be warranted by the fact that a petitioner corporation has been placed under rehabilitation receivership. However, it is undisputed that on March 5, 1997, the Securities and Exchange Commission issued an order approving the proposed rehabilitation plan of petitioner and placing it under liquidation pursuant to Presidential Decree 902-A. Subject to the control of the SEC, the liquidator was ordered to “wind up the affairs of the corporation, continue to manage the corporation for purposes of liquidation in order to protect the interest of its creditors and avoid dissipation, loss, wastage, or destruction of the remaining assets and other properties of the corporation and to ensure orderly payment of claims against such corporation in accordance with applicable laws.”

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Thus, petitioner pointed out that the SEC’s order suspending all claims against it pending before any other court, tribunal or body was pursuant to the rehabilitation receivership proceedings. Such order was necessary to enable the rehabilitation receiver to effectively exercise its powers free from any judicial or extra-judicial interference that might unduly hinder the rescue of the distressed company. Since receivership proceedings have ceased and petitioner’s rehabilitation receiver and liquidator, has been given the imprimatur to proceed with corporate liquidation, the cited order of the Securities and Exchange Commission has been rendered functus officio. Thus, there is no legal impediment for the execution of the decision of the Labor Arbiter for the payment of separation pay. Considering that petitioner’s monetary obligation to private respondent is long overdue and that petitioner has signified its willingness to comply with such obligation by entering into an agreement with private respondent as to the amount and manner of payment, petitioner can not delay satisfaction of private respondent’s claim. However, due to events subsequent to the filing of this petition, private respondent must present its claim with the rehabilitation receiver and liquidator of petitioner, subject to the rules on preference of credits. Diamonon vs. DOLE, GR 108951, Mar. 7, 2000 When the Constitution and by-laws of both unions dictated the remedy for intra-union dispute, such as petitioner’s complaint against private respondents for unauthorized or illegal disbursement of unions funds, this should be resorted to before recourse can be made to the appropriate administrative or judicial body, not only to give the grievance machinery or appeals’ body of the union the opportunity to decide the matter by itself, but also to prevent unnecessary and premature resort to administrative or judicial bodies. Thus, a party with an administrative remedy must not merely initiate the prescribed administrative procedure to obtain relief, but also pursue it to its appropriate conclusion before seeking judicial intervention. This rule clearly applies to the instant case. The underlying principle of the rule on exhaustion of administrative

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

remedies rests on the presumption that when the administrative body, or grievance machinery, as in this case, is afforded a chance to pass upon the matter, it will decide the same correctly. Petitioner’s premature invocation of public respondent’s intervention is fatal to his cause of action. Evidently, when petitioner brought before the DOLE his complaint charging private respondents with unauthorized and illegal disbursement of union funds, he overlooked or deliberately ignored the fact that the same is clearly dismissible for non-exhaustion of administrative remedies

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Curaza vs. NLRC, Marh 15, 2001

Asuncion vs. NLRC, July 31, 2001

C. Appeal; Judicial Review

Food Terminal, Inc. vs. NLRC, April 27, 2001

Mabuhay Dev’t Industries vs. NLRC, 288 SCRA 1 MENDOZA, J p: (BAR EXAMINER!) Art. 223 of the Labor Code, which provides: Appeal. — Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Indeed, as already stated, a copy of the Labor Arbiter’s decision was served on private respondents’ counsel on August 18, 1989 but they filed an appeal memorandum only on August 30, 1989 and paid the appeal fees only on September 1, 1989. As a rule, the perfection of an appeal in the manner and within the period prescribed by law is jurisdictional and failure to perfect an appeal as required by law renders the judgment final and executory. There may be exceptional cases, however, where, as pointed out in City Fair Corporation v. NLRC, greater injustice may occur if an appeal is not given due course than if the reglementary period to appeal were strictly followed. In such cases, proceedings before such agencies as

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

the NLRC need not adhere strictly to technicalities to attain substantial justice. In the case at bar, the NLRC was justified in giving Art. 223 of the Labor Code a liberal application because, as will presently be shown, there is no clear evidence to prove that private respondents were liable for the loss of merchandise. In addition, petitioners did not oppose private respondents’ appeal or question the jurisdiction of the NLRC until an adverse judgment was rendered against them. Petitioners were thus estopped to deny the jurisdiction of the NLRC Philippine Scout Veterans Security and Investigation Agency, Inc. vs. NLRC, December 4, 1998 Article 221 of the Labor Code provides that in any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling. It is the spirit and intention of the Code that the Commission and its members as well as the Labor Arbiters use all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process. Clearly, respondent NLRC committed grave abuse of discretion by strictly applying procedural technicalities in the case before it, in complete disregard of established policy of the Labor Code and jurisprudence. In affirming the doctrine that the Commission and the Labor Arbiters may avail themselves of all reasonable means to speedily ascertain the facts of a controversy, we uphold the power of respondent NLRC to consider even on appeal such other and additional documentary evidence from the parties if only to support their contentions. This is in accord with the well settled doctrine that rules of procedure and evidence should not be applied in a very rigid and technical sense in labor cases and that technicality should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties. Alcosero vs. NLRC, 288 SCRA 129 Petitioners Alcosero et al. wrote DOLE Regional Director presenting their claims for unpaid wages and 13th month pay against Apex

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Mining Co., Inc. for 1990. In a conference before the LA, Apex did not contest some of the collectibles presented by petitioners. LA ordered Apex to pay. Eventually, Apex did, with petitioners signing corresponding receipts and quitclaims. Later petitioners submitted another certificate of net collectibles for the years 1991 and 1992, with added claims for vacation and sick leave pay, and uniform allowances. LA ruled for petitioners. NLRC reversed. Petitioners went to the SC via Rule 65, without previously filing a motion for reconsideration of the NLRC decision. One of the petitioners explained such omission: Alcosero (who was deputized by the others via a special power of attorney) refused to see their counsel, and delay in contacting the other petitioners. Issue: Whether certiorari lies despite petitioners’ failure to move for reconsideration Held: NO. It is settled that the filing of a motion for reconsideration of the order, resolution or decision of the tribunal, board or office is, subject to well-recognized exceptions, a condition sine qua non to the institution of a special civil action for certiorari. The rationale therefor is that the law intends to afford the tribunal, board or office an opportunity to rectify the errors and mistakes it may have lapsed into before resort to the courts of justice can be had. Petitioners’ explanation concerning their failure to move for reconsideration is not sufficient justification for dispensing with the requirement. In fact, it is not even among the recognized exceptions to the above rule. Certiorari cannot be resorted to as a shield from the adverse consequences of petitioners’ own omission to file the required motion for reconsideration. It is worth stressing that certiorari will lie only if there is no appeal nor any other plain, speedy and adequate remedy in the ordinary course of law against the acts of the NLRC. In the instant case, the remedy expressly provided by law was a motion for reconsideration, which was not only expected to be but would actually have provided an adequate and more speedy remedy than the present petition for certiorari. Also, Sec. 2, pars. (a), (b) and (c), Rule VIII, of the New Rules of Procedure of the NLRC specifically provides for the finality of the decision of the Commission after the lapse of the 10-day reglementary period. Thus,

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

without the required motion for reconsideration nothing prevented the resolution of the NLRC from becoming final and executory. Petitioners cannot now, by an overdue strategy, question the correctness of the resolution. PNCC V. NLRC, 292 SCRA 266 Petitioner did not file a motion for reconsideration stating that it was not aware of the appeal interposed by private respondents, as it was not furnished a copy of private respondents’ memorandum of appeal. Instead, petitioner directly filed this petition for certiorari. After a careful examination of the records, the Court fully agrees with the Solicitor General’s view that the proceedings before the NLRC were tainted with due process violation. It appears that petitioner was not a participant in the appeal interposed by private respondents. Apparently, such non-participation was never petitioner’s choice as the record is bereft of any indication that petitioner was ever informed or notified of private respondents’ appeal. There is no proof that petitioner was furnished a copy of private respondents’ Memorandum of Appeal, nor was it required to comment thereon. No reference is made whatsoever in the NLRC Decision to any argument, position or comment raised by petitioner in response to the appeal. That petitioner was denied due process is well-substantiated. The NLRC’s grave omission to afford petitioner a chance to be heard on appeal is a clear violation of its constitutional right and has the effect of rendering its judgment null and void. It is a cardinal rule in law that a decision or judgment is fatally defective if rendered in violation of a party-litigant’s right to due process Petitioner’s non-filing of a motion for reconsideration of the NLRC’s decision is understandable considering that it was deprived of due process. The Court has ruled that a motion for reconsideration may be dispensed with prior to commencement of an action for certiorari where the decision is a patent nullity or where petitioner was deprived of due process.

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UERM vs. National Labor Relations Commission, 269 SCRA 70 The applicable law is Article 223 of the Labor Code, as amended by Republic Act No. 6715, which provides: “In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from.” We have given a liberal interpretation to this provision. In YBL (Your Bus Line) v. NLRC , 190 SCRA 164 (1990) we ruled: “. . . that while Article 223 of the Labor Code, as amended by Republic Act No. 6715, requiring a cash or surety bond in the amount equivalent to the monetary award in the judgment appealed from for the appeal to be perfected, may be considered a jurisdictional requirement, nevertheless, adhering to the principle that substantial justice is better served by allowing the appeal on the merits threshed out by the NLRC, the Court finds and so holds that the foregoing requirement of the law should be given a liberal interpretation.” Then too, in Oriental Mindoro Electric Cooperative, Inc. v. National Labor Relations Commission (246 SCRA 801 [1995]), we held: “The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal by the employer is underscored by the provision that an appeal by the employer may be perfected “only upon the posting of a cash or surety bond.” The word “only” makes it perfectly clear, that the lawmakers intended the posting of a cash or surety bond by the employer to be the exclusive means by which an employer’s appeal may be perfected. The requirement is intended to discourage employers from using an appeal to delay, or even evade, their obligation to satisfy their employees’ just and lawful claims. Considering, however, that the current policy is not to strictly follow technical rules but rather to take into account the spirit and intention of the Labor Code, it would be prudent for us to look into the merits

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

of the case, especially since petitioner disputes the allegation that private respondent was illegally dismissed.” Biogenerics vs. NLRC, Sept.8, 1999 The requirement of a cash or surety bond for the perfection of an appeal from a Labor Arbiter’s monetary award is jurisdictional; noncompliance therewith is fatal and renders the award final and executory. Corollarilly, failure to file a motion for reconsideration of a resolution of the National Labor Relations Commission (NLRC) as a requisite sine qua non in pursuing any further relief or subsequent remedy likewise gives a stamp of finality to the resolution. We have ruled that the implementing rules of respondent NLRC are unequivocal in requiring that a motion for reconsideration of the order, resolution or decision of respondent Commission should be seasonably filed as a precondition for pursuing any further or subsequent recourse, otherwise, the order, resolution or decision would become final and executory after ten (10) calendar days from receipt thereof. 9 Obviously, the rationale therefor is that the law intends to afford the NLRC an opportunity to rectify such errors or mistakes it may have committed before resort to courts of justice can be had. This merely adopts the rule that the function of a motion for reconsideration is to point out to the court the error it may have committed and to give it a chance to correct itself. Subsequent issuance by the NLRC of the questioned Resolution dated 5 June 1995 was, therefore, a mere surplusage sought only to formalize the finality of the order. On the other hand, the motion for reconsideration thereon by petitioners was futile and belated as there was already a final judgment. It is obvious that since no appeal bond was posted by petitioners, no appeal was perfected from the decision of the Labor Arbiter, for which reason the decision sought to be appealed to the NLRC had in the meantime become final and executory and therefore immutable. Appeals from decisions of the Labor Arbiter are governed by the provisions of Rule VI of the New Rules of Procedure of the NLRC Thus it is clear that the appeal from any decision, award or

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order of the Labor Arbiter to the NLRC shall be made within ten (10) calendar days from receipt of such decision, award or order, and must be under oath, with proof of payment of the required appeal fee accompanied by a memorandum of appeal. In case the decision of the Labor Arbiter involves a monetary award, the appeal is deemed perfected only upon the posting of a cash or surety bond also within ten (10) calendar days from receipt of such decision in an amount equivalent to the monetary award. The mandatory filing of a bond for the perfection of an appeal is evident from the aforequoted provision that the appeal may be perfected only upon the posting of cash or surety bond. It is not an excuse that the over P2 million award is too much for a small business enterprise, like the petitioner company, to shoulder. The law does not require its outright payment, but only the posting of a bond to ensure that the award will be eventually paid should the appeal fail. What petitioners have to pay is moderate and reasonable sum for the premium for such bond. D. EXECUTION Pioneer Texturing vs. NLRC, 280 SCRA 806 Pioneer argues that an order for reinstatement is not self-executory; that there must be a writ of execution which may be issued by the NLRC or by the Labor Arbiter motu proprio or on motion of an interested party. Further that even if a writ of execution was issued, a timely appeal coupled by the posting of appropriate supersedeas bond, effectively forestalled and stayed execution of the reinstatement order of the Labor Arbiter. As supporting authority, petitioners emphatically cite and bank on the case of Maranaw Hotel Resort Corporation (Century Park Sheraton Manila) v. NLRC , 238 SCRA 190. Complainant de Jesus, maintains that petitioner should have reinstated her immediately after the decision of the Labor Arbiter since the law mandates that an order for reinstatement is immediately executory. An appeal, she says, could not stay the execution of a reinstatement order for she could either be admitted back to work or merely reinstated in the payroll without need of a writ of execution.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

De Jesus argues that a writ of execution is necessary only for the enforcement of decisions, orders, or awards which have acquired finality. In effect, de Jesus is urging the Court to re-examine the ruling laid down in Maranaw. Issue: Whether or not an order for reinstatement needs a writ of execution. Held: Article 223 of the Labor Code, as amended by R.A. No. 6715 pertinently provides: “ART. 223. Appeal. — Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds: xxx xxx xxx “In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein.” The amendment introduced by R.A. No. 6715 employs the phrase “shall immediately be executory” without qualification. As a rule, “shall” when used in a statute, is mandatory. An appeal or posting of bond, by plain mandate of the law, could not even forestall nor stay the executory nature of an order of reinstatement. In conformity with the executory nature of the reinstatement order, Rule V, Section 16 (3) of the New Rules of Procedure of the NLRC strictly requires the Labor Arbiter to direct the employer to immediately reinstate the dismissed employee. A closer examination shows that the necessity for a writ of execution under Article 224 applies only to final and executory decisions which are not within the coverage of Article 223. Article

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224 states that the need for a writ of execution applies only within five (5) years from the date a decision, an order or award becomes final and executory. It can not relate to an award or order of reinstatement still to be appealed or pending appeal which Article 223 contemplates. The provision of Article 223 is clear that an award for reinstatement shall be immediately executory even pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. The legislative intent is to make an award of reinstatement immediately enforceable, even pending appeal. To require the application for and issuance of a writ of execution as prerequisites for the execution of 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. The reason is simple. An application for a writ of execution and its issuance could be delayed for numerous reasons. Co Tuan vs. NLRC, 289 SCRA 415 Judgment was rendered for the complainant CLUP against respondent Buda Enterprises. A writ of execution was issued and 5 parcels of land allegedly belonging to Buda Enterprises but later found to be registered under the names of the petitioners Co Tuan, et al., were levied upon. Upon learning of such levy, the petitioners filed an Urgent Motion to Quash the Writ of Execution, claiming that they hold valid and lawful title to the said properties. The motion was granted and complainants appealed to the NLRC asking that the Labor Arbiter be ordered to implead the petitioners as respondents, and praying that the sale between the petitioners and Buda Enterprises, be declared void. The NLRC directed the Labor Arbiter to implead the petitioners and to conduct a hearing to determine whether the sale of the land was made to avoid the payment of their claims. The Labor Arbiter issued an order holding that his Office was incompetent to determine whether fraud tainted the questioned sale. Complainants again appealed such decision, contending that the Labor Arbiter gravely abused its discretion in ignoring the directives of the Commission to implead the petitioners and conduct

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

a hearing. On appeal, the NLRC ruled that the Labor Arbiter erred in not impleading the petitioners. Aggrieved, petitioners have come to this Court, theorizing that NLRC is incompetent to determine the legality of the sale between the petitioners and the respondent company, the task being judicial in nature. Held: The Petition was granted. A government functionary like the respondent labor arbiter is incompetent to make a determination of the issue on hand. The task is judicial and the proceedings must be adversary. In a long line of cases, this Court has pronounced that the power of the court, or the NLRC, for that matter, to execute its judgment extends only to properties unquestionably belonging to the judgment debtor. Therefore, if the property under levy does not belong to the judgment debtor in the NLRC case, it could not be validly levied upon by the sheriff for the satisfaction of the judgment therein. Even upon a mere prima facie showing of ownership by the third party claimant, if the third party claim does not involve nor grows out of, a labor dispute, a separate action for injunctive relief against such levy may be maintained in court. SGS Far East Ltd. Vs. NLRC, 286 SCRA 335 A complaint for underpayment of wages and violation of labor standard laws, was filed by Philippine Social Security Labor Union Federation (PSSLU) and thirteen (13) of its members. The case was amicably settled when the parties executed a compromise agreement where the 13 complainants will be paid P50,000.00 and there shall be no change in the terms and conditions governing the employment of all the 13 complainants in this case. Thus, the NLRC Case was dismissed. 3 years later, 4 of the complainants filed a Manifestation and Motion alleging that violated the August 4, 1982 Compromise Agreement. Petitioner SGS filed a Motion to Dismiss alleging that Labor Arbiter had no jurisdiction to decide private respondents’ Motion and Manifestation which raised a cause of action not covered

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by the Compromise Agreement. The Labor Arbiter rendered judgment ordering respondents to pay the four (4) individual complainants P20,129.43 each; to reinstate them with backwages for three (3) years. SGS appealed to the NLRC. The NLRC reversed the Labor Arbiter and ruled that the latter had no jurisdiction and that private respondents should file a new case. Private respondents filed a Petition for Certiorari before the SC who resolved that Labor Arbiter had jurisdiction to decide the claims of private respondents. The case was referred to a different labor arbiter for execution. The Labor Arbiter required the parties to submit their respective computations of the monetary award given in the decision of first Labor Arbiter. Private respondents’ computation reached P4,806,052.41. The computation of petitioners merely totalled P298,552.48. The Labor Arbiter issued a writ of execution for the amount of P4,806,052.41. Petitioners appealed the writ to the NLRC. But the NLRC dismissed it holding it has no jurisdiction because this was merely the implementation of a SC decision. Held: The SC held that NLRC gravely abused its discretion in refusing to assume jurisdiction over the appeal of the petitioners. Its refusal is based on the general rule that “after a decision has become final, the prevailing party becomes entitled as a matter of right to its execution, that it becomes merely the ministerial duty of the court to issue the execution.” The general rule, however, cannot be applied where the writ of execution is assailed as having varied the decision. In the case at bar, petitioners have vigorously assailed the correctness of the computation of the Labor Arbiter. They also alleged it has materially altered the decision of first arbiter. If petitioners are correct, they are entitled to the remedy of appeal to the NLRC. The NLRC is vested with authority to look into the correctness of the execution of the decision and to consider supervening events that may affect such execution. IMIDC vs. NLRC, 331 SCRA 640

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

In September 1984, a complaint with the Department of Labor and Employment, against INIMACO for payment of separation pay and unpaid wages. Judgment was rendered in favor of complainants. The Labor Arbiter issued an Alias Writ of Execution. Petitioner filed a “Motion to Quash Alias Writ of Execution and Set Aside Decision,” 3 alleging the alias writ of execution altered and changed the tenor of the decision by changing the liability of therein respondents from joint to solidary, by the insertion of the words “AND/OR” between “Antonio Gonzales/Industrial Management Development Corporation and Filipinas Carbon and Mining Corporation, et al.” The Labor Arbiter denied the motion. Issue: The only issue in this petition is whether petitioner’s liability pursuant to the Decision of the Labor Arbiter dated March 10, 1987, is solidary or not. Held: The SC ruled that petitioner INIMACO’s liability is not solidary but merely joint and that the respondent NLRC acted with grave abuse of discretion in upholding the Labor Arbiter’s Alias Writ of Execution and subsequent Orders to the effect that petitioner’s liability is solidary. Well-entrenched is the rule that solidary obligation cannot lightly be inferred. In the dispositive portion of the Labor Arbiter, the word “solidary” does not appear. It is already a well-settled doctrine in this jurisdiction that, when it is not provided in a judgment that the defendants are liable to pay jointly and severally a certain sum of money, none of them may be compelled to satisfy in full said judgment. The dispositive part of a decision or order is the controlling factor as to settlement of rights of the parties. Once a decision or order becomes final and executory, it is removed from the power or jurisdiction of the court which rendered it to further alter or amend it. It thereby becomes immutable and unalterable and any amendment or alteration which substantially affects a final and executory judgment is null and void for lack of jurisdiction, including the entire proceedings held for that purpose. An order of execution which varies the tenor of the judgment or exceeds the terms thereof is a nullity. Tag Fibers vs. NLRC, 344 SCRA 2000

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Petitioner Tag Fibers, Inc. absorbed respondents from its predecessors, Smith Bell and Company as regular and permanent employees until they were all terminated because of company losses. Later petitioner Tag Fibers, Inc. re-hired respondents Ricardo Abanes and twenty (20) others effective on the day after the termination of their employment as piece-rate workers. When petitioners learned that respondents filed a complaint for violation of the Minimum Wage Law petitioners prohibited them from working. Respondents filed with the Labor Arbiter a complaint for illegal dismissal. The Labor Arbiter rendered a decision ordering Tag Fibers to reinstate complainants to their respective former positions without loss of seniority rights and privileges and to pay P10,858.68. The petitioners paid respondents the full amount of the monetary award of P10,858.68, but refused to reinstate the respondents. Consequently, the issue of reinstatement was set for a conference between the parties. Respondents filed a motion to direct petitioners to pay them backwages in view of petitioners’ refusal to reinstate them. The Labor Arbiter issued a resolution finding that strained relationship existed between the employer and employees and resolved to grant respondents the sum of P27,300.00 each or a total of P573,300, in the concept of separation pay of P2,730.00 each per year of service from February 1983 to June 1993 Issue: Petitioners contend that the monetary aspect of the judgment dated January 11, 1985 has been satisfied and the Labor Arbiter’s authority to enforce judgment is merely ministerial; hence, the Labor Arbiter cannot modify or vary the final and executory decision of the NLRC. Held: The petition is meritorious. Under Rule 39, Section 6, 1964 Revised Rules of Court, a judgment may be executed on motion within five (5) years from the date of its entry or from the date it becomes final and executory. After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action. This rule applies

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

to the case as the Rules of Court are applicable to labor cases in a suppletory capacity. In this particular case, the of the Labor Arbiter became final. Hence, the Labor Arbiter had no jurisdiction when he set a conference on March 23, 1993. The conference could no longer be lawfully convoked. When the NLRC issued the resolution ordering the petitioner to pay separation pay from February 1983 to June 1993, it modified its own final judgment, and worse, acted without jurisdiction. The finality of a decision is a jurisdictional event that cannot be made to depend on the convenience of a party. Yupangco Cotton Mills vs. CA, GR 126322, January 16, 2000

E. INJUNCTION PAL vs. NLRC, 287 SCRA 672 Can the National Labor Relations Commission (NLRC), even without a complaint for illegal dismissal filed before the labor arbiter, entertain an action for injunction and issue such writ enjoining petitioner Philippine Airlines, Inc. from enforcing its Orders of dismissal against private respondents, and ordering petitioner to reinstate the private respondents to their previous positions?

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Private respondents are flight stewards of the petitioner. Both were dismissed from the service. Aggrieved by said dismissal, private respondents filed with the NLRC a petition for injunction praying that PAL be ordered to reinstate petitioners to their former positions pending the hearing of this case. Injunction was granted by the NLRC. Hence, the present recourse. Held: In labor cases, Article 218 of the Labor Code empowers the NLRC — “(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to require the performance of a particular act in any labor dispute which, if not restrained or performed forthwith, may cause grave or irreparable damage to any party or render ineffectual any decision in favor of such party. From the foregoing provisions of law, the power of the NLRC to issue an injunctive writ originates from “any labor dispute” upon application by a party. It is an essential requirement that there must first be a labor dispute between the contending parties before the labor arbiter. In the present case, there is no labor dispute between the petitioner and private respondents as there has yet been no complaint for illegal dismissal filed with the labor arbiter by the private respondents against the petitioner. The petition for injunction directly filed before the NLRC is in reality an action for illegal dismissal. This is clear from the allegations in the petition which prays for; reinstatement of private respondents; award of full backwages, moral and exemplary damages; and attorney’s fees. As such, the petition should have been filed with the labor arbiter who has the original and exclusive jurisdiction to hear and decide the case. The jurisdiction conferred by the foregoing legal provision to the labor arbiter is both original and exclusive, meaning, no other officer or tribunal can take cognizance of, hear and decide any of the cases therein enumerated. On the other hand, the NLRC shall have exclusive appellate jurisdiction over all cases decided by labor arbiters as provided in Article 217(b) of the Labor Code. In short, the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

jurisdiction of the NLRC in illegal dismissal cases is appellate in nature and, therefore, it cannot entertain the private respondents’ petition for injunction which challenges the dismissal orders of petitioner. Article 218(e) of the Labor Code does not provide blanket authority to the NLRC or any of its divisions to issue writs of injunction, considering that Section 1 of Rule XI of the New Rules of Procedure of the NLRC makes injunction only an ancillary remedy in ordinary labor disputes. Thus, the NLRC exceeded its jurisdiction when it issued the assailed Order granting private respondents’ petition for injunction and ordering the petitioner to reinstate private respondents. MSF vs. CA, 311 SCRA 785 A labor dispute arose between Philtread and its Union, as a result of which picketing was done outside the gate of Philtread’s plant. Secretary of Labor Nieves Confesor assumed jurisdiction over the labor dispute and certified it for compulsory arbitration. She enjoined the Union from striking and Philtread from locking out members of the Union. On December 9, 1994, during the pendency of the labor dispute, Philtread entered into a Memorandum of Agreement with Siam Tyre wherein Philtread’s plant and equipment would be sold to a new company petitioner MSF Tire and Rubber, Inc., 80% of which would be owned by Siam Tyre and 20% by Philtread, while the land on which the plant was located would be sold to another company, 60% of which would be owned by Philtread and 40% by Siam Tyre. This was done and the Union was informed of the purchase of the plant by MSF. MSF then asked the Union to desist from picketing outside its plant and to remove the banners, streamers, and tent which it had placed outside the plant’s fence. As the Union refused MSF’s request, a complaint for injunction with damages was filed against the Union before the Regional Trial Court of Makati. The Union moved to dismiss the complaint alleging lack of jurisdiction on the part of the trial court. It insisted that the parties were involved in a labor dispute and that

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MSF, being a mere “alter ego” of Philtread, was not an “innocent bystander.” The motion to dismiss was denied and injunctive relief granted. The Union filed a petition for certiorari and prohibition before the Court of Appeals. The appellate court rendered a decision granting the Union’s petition and ordering the trial court to dismiss the civil case for lack of jurisdiction. Hence, this petition for review. Issue: Petitioner asserts that its status as with respect to the labor dispute between entitles it to a writ of injunction from the appellate court erred in not upholding its independent of Philtread’s.

an “innocent bystander” Philtread and the Union civil courts and that the corporate personality as

Held: The “innocent bystander” rule is as follows: The right to picket as a means of communicating the facts of a labor dispute is a phase of the freedom of speech guaranteed by the constitution. The right is, however, not an absolute one. While peaceful picketing is entitled to protection as an exercise of free speech, we believe the courts are not without power to confine or localize the sphere. Thus the right may be regulated at the instance of third parties or “innocent bystanders” if it appears that the inevitable result of its exercise is to create an impression that a labor dispute with which they have no connection or interest exists between them and the picketing union or constitute an invasion of their rights. Thus, an “innocent bystander,” who seeks to enjoin a labor strike, must satisfy the court that aside from the grounds specified in Rule 58 of the Rules of Court, it is entirely different from, without any connection whatsoever to, either party to the dispute and, therefore, its interests are totally foreign to the context thereof. In the case at bar, petitioner cannot be said not to have such connection to the dispute. As correctly observed by the appellate court: Coming now to the case before us, we find that the “negotiation, contract of sale, and the post transaction” between

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Philtread, as vendor, and Siam Tyre, as vendee, reveals a legal relation between them which, in the interest of petitioner, we cannot ignore. To be sure, the transaction between Philtread and Siam Tyre, was not a simple sale whereby Philtread ceased to have any proprietary rights over its sold assets. On the contrary, Philtread remains as 20% owner of private respondent and 60% owner of Sucat Land Corporation which was likewise incorporated in accordance with the terms of the Memorandum of Agreement with Siam Tyre, and which now owns the land were subject plant is located. This, together with the fact that private respondent uses the same plant or factory; similar or substantially the same working conditions; same machinery, tools, and equipment; and manufacture the same products as Philtread, lead us to safely conclude that private respondent’s personality is so closely linked to Philtread as to bar its entitlement to an injunctive writ. Stated differently, given its close links with Philtread as to bar its entitlement to an injunctive writ. Stated differently, given its close links with Philtread, we find no clear and unmistakable right on the part of private respondent to entitle it to the writ of preliminary injunction it prayed for below. Deltaventures vs. Cabato, 327 SCRA 521 A decision was rendered by Executive Labor Arbiter declaring the respondents guilty of Illegal Dismissal and Unfair Labor Practice and ordering them to pay the complainants. The Sheriff proceeded to enforce the writ by levying upon a real property, registered in the name of Roberto Ongpin. A month before the scheduled auction sale of the real property, herein petitioner filed before the Commission a third-party claim asserting ownership over the property. Petitioner then filed with the Regional Trial Court of La Trinidad, Benguet a complaint for injunction and damages. Respondent Judge eventually dismissed the complaint. Issue: The core issue is whether or not the trial court may take cognizance of the complaint filed by petitioner and consequently provide the injunctive relief sought. Held: Petitioner filed the third-party claim before the court a quo by reason of a writ of execution against a property to which it claims

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ownership. Ostensibly the complaint before the trial court was for the recovery of possession and injunction, but in essence it was an action challenging the legality or propriety of the levy vis-a-vis the alias writ of execution, including the acts performed by the Labor Arbiter and the Deputy Sheriff implementing the writ. The complaint was in effect a motion to quash the writ of execution of a decision rendered on a case properly within the jurisdiction of the Labor Arbiter, it is then logical to conclude that the subject matter of the third party claim is but an incident of the labor case, a matter beyond the jurisdiction of regional trial courts. Petitioner failed to realize that by filing its third-party claim with the deputy sheriff, it submitted itself to the jurisdiction of the Commission acting through the Labor Arbiter. It failed to perceive the fact that what it is really controverting is the decision of the Labor Arbiter and not the act of the deputy sheriff in executing said order issued as a consequence of said decision rendered. Petitioner should have filed its third-party claim before the Labor Arbiter, from whom the writ of execution originated, before instituting said civil case.

F. PRESCRIPTION Mendoza vs. NLRC, 287 SCRA 51 Petitioner was employed by respondent Baliwag Transit, Inc. as a passenger bus driver. The bus driven by petitioner was heavily damaged in an accident. Petitioner was “grounded” and advised by respondent Baliwag to wait for the result of the police investigation and the actions that might be taken by the owners of the other vehicles. Petitioner patiently waited. Realizing that he has waited too long, petitioner requested respondent Baliwag to reinstate him as he needed money to support his family. But, private respondent formally informed him to look for another job because the management has terminated his services on account of the May 20, 1983 vehicular accident. Petitioner filed a complaint against

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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respondent Baliwag for illegal dismissal, damages and attorney’s fees before the Arbitration Branch of the NLRC. In answer, respondent Baliwag denied petitioner’s allegation contending that petitioner was not dismissed but abandoned his job after the incident of May 30, 1983. Respondent likewise asserted that petitioner’s cause of action had long prescribed and that he is guilty of laches in not asserting his right sooner.

Plaintiff Laureano was offered a contract of employment as an expatriate B-707. Sometime in 1982, defendant, hit by a recession, initiated cost-cutting measures. On October 5, 1982, defendant informed plaintiff of his termination effective November 1, 1982. Plaintiff filed the instant case for damages due to illegal termination of contract of services before the court a quo.

Labor Arbiter rendered a decision in favor of respondent Baliwag. Held: The SC held that the private respondent’s right of action could not have accrued from the mere fact of the occurrence of the mishap on August 10, 1974, as he was not considered automatically dismissed on that date. At best, he was deemed suspended from his work. Hence, there existed no justification at that time for private respondent to demand reinstatement and no opportunity warrant either for the petitioner to reject that demand.

Defendant filed its answer reiterating the grounds relied upon in its motion to dismiss and further arguing that plaintiff is barred by laches, waiver, and estoppel from instituting the complaint and that he has no cause of action . The trial court handed down its decision in favor of plaintiff. This was reversed by the CA saying that the period of 4 years has prescribed. Issue: Petitioner raises the issue of whether his action is one based on Article 1144 or on Article 1146 of the Civil Code. According to him, his termination of employment effective November 1, 1982, was based on an employment contract which is under Article 1144, so his action should prescribe in 10 years as provided for in said article. Thus he claims the ruling of the appellate court based on Article 1146 where prescription is only four (4) years, is an error. Held: The SC however stated that neither Article 1144 nor Article 1146 of the Civil Code is here pertinent. What is applicable is Article 291 of the Labor Code, viz: “ARTICLE 291. Money claims. — All money claims arising from employee-employer 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.

The Court agrees with the private respondent that May 10, 1980, is the date when his cause of action accrued, for it was then that the petitioner denied his demand for reinstatement and so committed the act of omission ‘constituting a breach of the obligation of the defendant to the plaintiff.’ The earlier requests made by him having been warded off with indefinite promises, and the private respondent not yet having decided to assert his right, his cause of action could not be said to have then already accrued. The issues had not yet been joined, so to speak. This happened only when the private respondent finally demanded his reinstatement on May 2, 1980, and his demand was categorically rejected by the petitioner on May 10, 1980. Applying the aforesaid ruling, petitioner’s cause of action accrued only in December 1986 when respondent Baliwag formally dismissed him from the service. Thus, it is clear from the foregoing, that the action for illegal dismissal filed by petitioner had not yet prescribed. Laureano vs. CA, 324 SCRA 414

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. It should be noted further that Article 291 of the Labor Code is a

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

special law applicable to money claims arising from employeremployee relations; thus it necessarily prevails over Article 1144 of the Civil Code, a general law. Hence the cause of action has prescribed. Petitioner also claims that the running of the prescriptive period was tolled when he filed his complaint for illegal dismissal before the Labor Arbiter of the National Labor Relations Commission. However, this claim deserves scant consideration; it has no legal leg to stand on. In Olympia International, Inc. vs. Court of Appeals, it was held that “although the commencement of a civil action stops the running of the statute of prescription or limitations, its dismissal or voluntary abandonment by plaintiff leaves the parties in exactly the same position as though no action had been commenced at all.” G. QUITCLAIMS; COMPROMISE AGREEMENTS Periquet vs. NLRC, 186 SCRA 724 The petitioner was dismissed as toll collector by the Construction Development Corporation of the Philippines, private respondent herein, for willful breach of trust and unauthorized possession of accountable toll tickets allegedly found in her purse during a surprise inspection. Claiming she had been “framed,” she filed a complaint for illegal dismissal and was sustained by the labor arbiter, who ordered her reinstatement within ten days “without loss of seniority rights and other privileges and with full back wages to be computed from the date of her actual dismissal up to date of her actual reinstatement.” On appeal, this order was affirmed in toto by public respondent NLRC. On March 11, 1989, almost nine years later, the petitioner filed a motion for the issuance of a writ of execution of the decision. The motion was granted by the executive labor arbiter. However, the NLRC sustained the appeal of the CDCP holding that the motion for execution was time-barred, having been filed beyond the five-year period prescribed by both the Rules of Court and the Labor Code. The petitioner contends that this decision is tainted with grave abuse of discretion and asks for its reversal.

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Held: The original decision called for her reinstatement within ten days from receipt thereof following its affirmance by the NLRC on August 29, 1980, but there is no evidence that she demanded her reinstatement or that she complained when her demand was rejected. What appears is that she entered into a compromise agreement with CDCP where she waived her right to reinstatement and received from the CDCP the sum of P14,000.00 representing her back wages from the date of her dismissal to the date of the agreement. Dismissing the compromise agreement, the petitioner now claims she was actually reinstated only on March 16, 1987, and so should be granted back pay for the period beginning November 28, 1978, date of her dismissal, until the date of her reinstatement. She conveniently omits to mention several significant developments that transpired during and after this period that seriously cast doubt on her candor and bona fides. Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction, But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking. As in this case. Agoy vs. NLRC, 252 SCRA 588

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Anino vs. NLRC, 290 SCRA 489 Complainants allege that they are employees of respondent Hinatuan Mining Corporation (HMC) holding supervisory positions. Sometime in September 1993, complainants planned the formation of a supervisors union with HMC. On or about 03 November 1993, HIMSU formally notified the company of its legal existence through a letter addressed to SALVADOR B. ZAMORA III, President of respondent HMC. It formally informed the company of its desire for a collective bargaining agreement and submitted its proposals. The company, complainant claims, completely ignored the union’s proposals and did not answer HIMSU about it, which constrained the union to file an unfair labor practice case against HMC on 13 May 1994. In order to weaken and if possible destroy the union, respondents, in the guise of retrenchment, dismissed the complainants who are the active leaders of the union. Issue: Whether or not the National Labor Relations Commission likewise exceeded its jurisdiction in recognizing the waivers/quitclaims executed by petitioners as an effective bar to this complaint Private respondents also insist that petitioners’ acceptance of separation benefits and execution of waivers and quitclaims negate their claim of illegal dismissal. The waivers and quitclaims allegedly constitute valid and binding contracts between petitioners and respondent corporation. Held: The recognized and accepted doctrine is that a dismissed employee who has accepted separation pay is not necessarily estopped from challenging the validity of his or her dismissal. Neither does it relieve the employer of legal obligations. Waivers and quitclaims, on the other hand, are generally looked upon with disfavor. Golden Donuts vs. NLRC, 322 SCRA 294: Complainants were members of KMDD-CFW who staged a strike on November 16, 1989. a Complaint with Prayer for Preliminary

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Injunction was filed by Golden Donuts, Inc. on January 9, 1990, seeking to declare the strike illegal and to dismiss all officers of the union and members who participated in the commission of illegal acts; to pay petitioner actual, moral and exemplary damages, plus attorney’s fees. After KMU’s Atty. Pontenciano Flores was retained as counsel by the union and strikers, and sensing the gravity of the penalties attendant to the strike resorted to, including the financial award that may be due the Golden Donuts, Inc. and civil liabilities that may be awarded thereafter, said counsel pleaded for a compromise. Hence, on July 16, 1990, a compromise agreement was entered into by the KMDD-CFW and Golden Donuts, Inc. Out of the said 262 striking force, only the complainants disagree and did not receive the amount due, arguing that the compromise agreement was entered into by their counsel and the President of the Union without their individual consent and/or authority and that the same was not approved nor ratified by the majority of the union membership. On January 29, 1993, the Labor Arbiter rendered a decision upholding the dismissal of private respondents and ruling that they were bound by the compromise agreement entered into by the union with petitioners. On appeal, the NLRC issued a resolution ordering respondent to reinstate complainants to their former positions without loss of seniority rights and back-wages limited to three years from the time of their dismissal. Issues: The questions presented in the petition are: (1) whether or not a union may compromise or waive the rights to security of tenure and money claims of its minority members, without the latter’s consent, and (2) whether or not the compromise agreement entered into by the union with petitioner company, which has not been consented to nor ratified by respondents minority members has the effect of res judicata upon them. As a consequence of a negative ruling on the foregoing issues, there arises the issue of whether private respondents are entitled to monetary benefits subject of their individual complaints. Held: The petition is without merit.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

First, even if a clear majority of the union members agreed to a settlement with the employer, the union has no authority to compromise the individual claims of members who did not consent to such settlement. Rule 138 Section 23 of the 1964 Revised Rules of Court requires a special authority before an attorney may compromise his client’s litigation. “The authority to compromise cannot lightly be presumed and should be duly established by evidence.” In the case at bar, minority union members did not authorize the union to compromise their individual claims. Absent a showing of the union’s special authority to compromise the individual claims of private respondents for reinstatement and back wages, there is no valid waiver of the aforesaid rights. As private respondents did not authorize the union to represent them in the compromise settlement, they are not bound by the terms thereof. Second, money claims due to laborers cannot be the object of settlement or compromise effected by a union or counsel without the specific individual consent of each laborer concerned. The beneficiaries are the individual complainants themselves. The union to which they belong can only assist them but cannot decide for them. The waiver of money claims, which in this case were accrued money claims, by workers and employees must be regarded as a personal right, that is, a right that must be personally exercised. For a waiver thereof to be legally effective, the individual consent or ratification of the workers or employees involved must be shown. Neither the officers nor the majority or the union had any authority to waive the accrued rights pertaining to the dissenting minority members, even under a collective bargaining agreement which provided for a ‘union shop’. We have consistently ruled that “a compromise is governed by the basic principle that the obligations arising therefrom have the force of law between the parties.” Consequently, private respondents may pursue their individual claims against petitioners before the Labor Arbiter.

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The judgment of the Labor Arbiter based on the compromise agreement in question does not have the effect of res judicata upon private respondents who did not agree thereto. “A compromise, once approved by final orders of the court has the force of res judicata between the parties and should not be disturbed except for vices of consent or forgery.” A compromise is basically a contract perfected by mere consent. “Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract.” A compromise agreement is not valid when a party in the case has not signed the same or when someone signs for and in behalf of such party without authority to do so. Viewed in light of the foregoing legal principles, the conclusion is inescapable that private respondents are not bound by the compromise agreement entered into by the union without their consent. They have not waived their right to security of tenure nor can they be barred from entitlement of their individual claims. Since the Labor Arbiter found no evidence showing that private respondents committed any illegal act during the strike, petitioners’ failure to reinstate them after the settlement of the strike amounts to illegal dismissal, entitling them to the twin reliefs of reinstatement and back wages. PCEA vs PCMC, 340 SCRA 383 The Union is the certified sole and exclusive collective bargaining agent of all rank and file employees in Philippine Carpet Manufacturing Corporation. Jonathan Barquin is a union member who was hired by the company as casual worker By virtue of Wage order No. 4 and 4-A the Union demanded an across-the-board implementation, threatening legal action against the company in the event that the said demand is denied. The Company’s position is that the employees are not covered by Wage order No. 4 and 4-A for the reason that nobody in the company is receiving a salary of P145.00 a day. In the meantime, Jonathan Barquin received a notice dated March 14, 1996 from the company,

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

advising him that his services were to be terminated effective at the close of working hours on April 13, 1996. In lieu of the 30-day notice requirement for his termination, he was placed on forced leave status effective March 15, 1996 but was paid in full for the duration of the said leave. The company justified Baquin’s separation from the service as a valid act of retrenchment. While the Union averred that the separation is tantamount to illegal dismissal resorted to by the company to avoid compliance with the provisions of Wage Order 4 and 4-A. Failing to resolve the issues in the mediation level, the parties agreed to submit the case for voluntary arbitration. On August 3, 1996, the voluntary arbitrator ruled that Jonathan Barquin (BARQUIN) was hastily dismissed to avoid compliance with Wage Order Nos. 4 and 4-A, but held that he is not entitled to reinstatement because he received his separation pay and voluntarily signed the Deed of Release and Quitclaim and acquiesced to his separation. The Court of Appeals on appeal affirmed the decision. Issue: The only issue posed now concerns the reinstatement of BARQUIN. In essence, the petitioners maintain that since both the voluntary arbitrator and the Court of Appeals found that petitioner, BARQUIN, was illegally dismissed, he is entitled to reinstatement as a matter of right pursuant to Article 279 of the Labor Code. Respondents, on the other hand, maintain that the consideration therein was a fair and full settlement of the amount legally due to BARQUIN who never alleged that he was physically threatened or intimidated into signing the quitclaim. Held: The petition is meritorious. It is not disputed that the respondent company was guilty of illegal dismissal in terminating BARQUIN’s employment. In holding that although BARQUIN was illegally dismissed he was not entitled to reinstatement, both the Court of Appeals and the voluntary arbitrator upheld the validity of the Deed of Release and Quitclaim that BARQUIN signed after concluding that he voluntarily signed the same for the reason that the respondent company did not coerce

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or intimidate him into signing and receiving his separation pay, and consequently ruled that he waived his right to reinstatement. The SC said the validity of quitclaims executed by laborers has long been recognized in this jurisdiction. Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement of the claims of the employee, it is binding on the parties and may not later be disowned simply because of a change of mind. Such legitimate waivers resulting from voluntary settlements of laborer’s claims should be treated and upheld as the law between the parties. However, when as in this case, the voluntariness of the execution of the quitclaim or release is put into issue, then the claim of employee may still be given due course. The law looks with disfavor upon quitclaims and releases by employees pressured into signing the same by unscrupulous employers minded to evade legal responsibilities. In the present case, both the Court of Appeals and the voluntary arbitrator erred in concluding that BARQUIN voluntarily signed the Deed of Release and Quitclaim. Records reveal that the respondent company informed BARQUIN that his services were being terminated on the ground of retrenchment as the company was constrained to reduce the number of its personnel “due to the tremendous drop of production output since about the last quarter of 1994 up to the present”. However, this claim was rejected by both the voluntary arbitrator and the Court of Appeals, which ruled that the respondent company failed to prove that it was suffering from actual poor financial condition and that it was “doubtful if the retrenchment of one helper in the production department earning P145.00 a day would avert losses of the company”. Instead, the voluntary arbitrator found that the respondent company had an ulterior motive behind BARQUIN’s dismissal and that only he was singled out and retrenched by the respondent company. The voluntary arbitrator went as far as saying that BARQUIN’s hasty dismissal in the guise of retrenchment was a feeble attempt at circumventing the law. 26 It was shown that BARQUIN was the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

only employee earning P145.00 a day and was qualified to receive the mandated wage increase granted by Wage Order Nos. 4 and 4-A. An increase in his salary would cause a wage distortion in the wage structure of the company, which would necessitate the adjustment of the wages of its other employees. 27 It is therefore reversible error to hold, despite such findings, that BARQUIN voluntarily signed the quitclaim for the only logical conclusion that can be drawn is that the respondent company feigned that it was suffering business losses in order to justify retrenchment and consequently enable it to terminate the services of BARQUIN in order to prevent the wage distortion. Respondent company’s lack of candor and good faith in informing BARQUIN that he was being terminated due to a valid retrenchment and not because it sought to avoid compliance with the mandated wage increases amounted to a deception which led BARQUIN to the mistaken belief that there was legal ground for retrenchment and prompted him to acquiesce to his termination and sign the quitclaim. Verily, had the respondent company not misled BARQUIN into believing that there was a ground to retrench, it is not difficult to believe that he would have thought twice before signing the quitclaim inasmuch there was no reason for the termination of his employment. Contrary to the assumption of both the Court of Appeals and the voluntary arbitrator, the mere fact that BARQUIN was not physically coerced or intimidated does not necessarily imply that he freely or voluntarily consented to the terms of the quitclaim. Moreover, as correctly pointed out by the petitioners, this Court has ruled in Salonga vs. National Labor Relations Commission 32 that it is the employer (respondent company) and not BARQUIN who has the burden of proving that the quitclaim was voluntarily entered into by him. 33 The Court of Appeals therefore erred in ruling that the burden of proof to show that the deed of Release and Quitclaim was signed and executed voluntarily was on BARQUIN. BARQUIN’s consent to the quitclaim cannot be deemed as being voluntarily and freely given inasmuch as his consent was vitiated by mistake or fraud, we have no recourse but to annul the same.

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Lecture on Labor Standards and Dispute Settlement 1. OVERTIME PAY The most common is Overtime pay. The most common benefit on top pf the regular basic salary. What is overtime pay? What is it for? For work beyond 8 hours. You have to be clear on that. Even if the normal hours of work is less than 8 hours, anything beyond that regular hours of work but which is not exceeding 8 hours of work per day is not overtime. Clear about that? a) Ascertain the hourly rate Let us say that an employee had 10 hours of work in a particular day, that means 8 regular plus 2 overtime equals overtime pay. For example, he earns P320/ day. The most common mistake, and I see this year after year after year, is they use the daily rate in computing the hourly overtime rate. It is totally erroneous. Assuming you have 2 hours of overtime, you cannot use this daily rate, kasi kung meron kang ibang claim. The first thing that you should do is divide the daily rate by 8, assuming 8 hours yung regular time n’ya. You’ll get 40. Tama ba? One important tip in taking computation, always identify what you get after the formula, after the computation. b) Determine what rate should be applied So, for example, this. What is this P40? This is the hourly rate for work within 8 hours, right? That the first thing you have. Now, you know that you have to compute the overtime pay for 2 hours of work. How would you do it? P40 per hour multiplied by how much? It depends on the day, diba? There are 2 overtime rates. One is 25% (OT for ordinary day), the other is 30%.(for non-ordinary days) So, before you even start computing overtime, determine first what rate you are concerned with. If it’s a normal day, you can

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

apply 25%. What you can do is multiply immediately by 125%, that’s one way, that’s a short cut. Bakit shortcut? Because the product you have here is the total compensation for that hour. Hindi lang yung overtime premium. Ok, let’s do it the long way. Sometimes the long way is also beneficial because you’re isolating the overtime premium. If you’re asked for overtime pay, then you have to add the basic. P40 multiplied by 25%, that’s 10. What is P10? Again, you have to identify the product. What is that? That’s the overtime premium. That’s not the overtime pay ha. This is the overtime premium per hour. Overtime pay is the basic pay + overtime premium. So you have to add this to P40, so you have P50 - this is the hourly overtime pay. Hindi overtime premium ha, kundi overtime pay, overtime pay. That incorporates the P40 per hour. Kung shinort cut natin, kung P40 x 125%, doon din babagsak sa P50. Shinortcut ko lang, mathematically, process lang ‘yun. Nothing legal about this. c) Multiply by the number of hours of overtime work Now, after getting this, what do you do? You multiply by the number of hours of overtime work. In this case, 2. What do we have? You have P100. This is the total overtime pay for that particular day. For 2 hours of overtime work. Be careful about the question you are answering. If the question asks for overtime pay, then just encircle and just write the overtime pay. Huwag ninyong idagdag kasi kapag idinagdag ninyo, kapag tinignan ng examiner . . . . assuming you have a simple computation . . . . let’s say sa finals, kapag and hinahanap ko ay overtime pay lang, kapag binigyan ninyo ako ng total compensation per day. Then I will simply check the figures against the correct answer then kapag mali yan, mali yan. Be careful about the question. If the question asks for overtime pay, then you have to write this. If the question asks for total compensation for the day, then you add this to P320 then you get P420. That’s the total compensation for 10 hours of work on an ordinary day.

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2. HOLIDAYS AND SPECIAL DAYS Assuming . . . . OK. Lagay natin sa holiday. Wala nang regular holiday and special holiday. We only have holiday and special day. ‘Yun lang ‘yung 2 categories. Bakit parang nagulat kayo? Wala na ‘yung distinction na regular holiday and special holiday, wala. What we have is holiday and special day. Wala nang regular holiday, wala nang special holiday. We only have holidays and special days. We have 10 holidays and we only have 2 special days. Plus the non-annual special days. What do we mean by nonannual special days? Elections, although walang nakalagay sa calendar natin this year, sa 2004. Hindi yan naka-kalendaryo, every year wala yan, pinapasok lang. Like the announced EDSA commemoration day. Hindi ‘yan holiday, that’s a special day. You have to know the 10 holidays pero its easy if you know the 2, kasi what are the holidays that we know that fall under holidays? What are the 2 special days? December 31 and November 1. Last days of the year and All Saints Day, ‘yun lang. All other holidays that we know are properly called holidays, not special days. What is the importance of determining whether a day is a holiday or an important special day? Holiday if unworked, you get the regular pay. So assuming, we are using this P320. For that unworked day, nasa bahay ka lang, natulog ka lang, you still get the P320. But a special day, if unworked you get nothing. Kaya noong panahon ni Presidente Ramos, ang lagi nyang excuse kapag may nagsasabi na dapat may holiday ito para may long weekend for something, sinasabi ni President Ramos, kawawa naman yung mga daily wage earners because daily wage earners do not earn anything. Kapag monthly ka kasi, hindi gaano material yung holidays dahil hindi naman mababago yung monthly pay mo, diba? Kahit ilan pa yung holiday for that given month. Yung sweldo mo ng February which has 28 days will be the same as your salary for January and March, diba? Kahit magkaiba yung number of day. So, for monthly paid employees, wala ngang effect yan. May effect yan sa daily wage

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

workers or sa weekly paid employees because unworked special day will not be compensated. If the holiday is worked, that will be twice the regular wage. So, P320, nagtrabaho ka, P640. What’s the rationale? Kung hindi ka nga nagtrabaho may P320 ka na, e nagtrabaho ka, doble na. Ganoon kasimple lang yun. Kung natulog ka, sumweldo ka na, e bakit ka pa magtratrabaho? Kung pinagtrabaho ka pa, dapat bayaran ka pa ulit of your pay for that day. Special day. Let’s talk about that. Dapat ba twice? Hinde kasi special day lang yan. So apply the OT premium of 30% to the special day if workerd only. overtime pay when worked on a holiday: P640, how much is that in terms of hourly rate? P640 divided by 8 is P80. If you multiply P80 by the overtime premium, not 25% because this is a holiday. The overtime premium is 30% for a holiday. So, P80 by 30%, that means you’ll get P24. What is P24? P24 is the overtime premium for work worked beyond 8 hours on a holiday, in this case. So, to get the overtime pay per hour, you add this, so you have P104. What is that amount? P104 is overtime pay, that is not overtime premium ha. Overtime pay for work performed beyond 8 hours on a holiday. Ok . . . . you have 2 hours of overtime , , , , then you simply multiply this by 2, and you’ll get P208. P208 is the total overtime pay for 2 hours of overtime work on that holiday. And you add that to the holiday pay, to the compensation for work performed on a holiday of P640 to get the daily pay for that day. Any questions? Q: Sir, P80 + P24 = P104 is overtime pay for work performed on a holiday. That’s the hourly rate? A: OO, kasi, hourly lang ang P80 e, diba? One hour lang yan e. 2 hours ang overtime mo. P80 multiply that by 2. Kaya kailangan you have to identify. I receive answers in the examinations, nalilito sila. Minsan nalilimutan nila i-multiply by the number of hours of

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overtime work, kasi nga hindi mo . . . nakakalimutan na kung ano na yung nakuha mo sa dami ng computation. Dapat every step, once you get an amount, identify what that amount is. In rare years, April 9 may fall on a Good Friday or a Holy Thursday. In which case . . . the Department of Labor issued a circular . . . that will be equivalent, if worked, that will be equivalent to 300%. Nagdoble and holiday. Isang beses lang mangyayari yan, sa April 9 lang mangyayari yan. Imposibleng magdoble and pasko at bagong taon diba? Imposibleng mangyari yan sa June 12, Independence day and let’s say, Rizal day. Imposible yan. Kaya lang nangyayari yan kasi Holy Week is movable and April 9 is close to that period. Alam ninyo ba kung paano kumukuha ng holy week? It’s dependent on the moon. It’s not decided by the Pope or the Church pero tinitignan yan sa . . . I’m not sure about the cycle, but it has something to do with the lunar cycle, so movable ‘yan. And April 9 is masyadong close to that period. So, minsan nagpapatong ang April 9 and either Holy Thursday or Good Friday, in which case you have 2 holidays falling on the same day. Sabi ng Department of Labor, dahil dalawang holiday ‘yan, if unworked, twice kaagad ang pay mo. Kapag nagtrabaho ka, e di thrice. Logical. Bihirang-bihira lang mangyari yan. work on a holiday falling on a rest day If the holiday falls on your rest day, what will happen? Start with the holiday pay. Maghoholiday pay ka muna. So, you have P640. The P640 and multiply that by 30% or 130% to get the daily rate for work performed on a holiday which happens to be your rest day. If the holiday is January 1, nagkataon na ang January 1 falls on a Thursdays and Thursday is your scheduled rest day, so again, similar to the principle that we have applied with the overlapping of April 9 and Holy Thursday or Good Friday, nag overlap yung dapat ay non-working days mo. Dapat dalawang pahinga mo na yon, dapat may non-working day ka sa January 1 and non-working day ka for Thursday, nagkataon nag overlap. So, what do you do?

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Magooverlap din ang benefits. You compute the daily rate for the worked holiday first and then you compute the 30% rest day premium. Rest day premium is computed on a daily basis, hindi hourly rest day premium yun. Hindi ka nagcocompute ng hourly rest day premium pay. Any question about that? So ganoon lang yun, magpapatong lang kayo. Unahin lang yung holiday and then compute rest day premium. Q: Sir, would it make a difference if the scheme of payment is monthly? A; It will. Why? Because . . . ano ang . . . . mahihirapan if you have monthly pay? The difficulty is in determining the daily rate, diba? Pinag-aawayan. Kasi in this case, we earn a certain amount of daily rate. What if you are earning let us say P8574. Because of the formula . . . this is by month and this is gross. How will you compute the daily rate? Kasi, walang problema kung regular na overtime, doon sa spread across the whole month kasi 24 and number of hours a day lang yan. E what if, on that particular month, isang araw ka lang nagovertime, 2 oras lang ang overtime mo. So, kailangan mong kunin ang daily rate diba? What will be your daily rate if you are given a monthly pay of P8574? Dito pumapasok ang issue about the divisor. Saan mo ididivide yan? It depends on the company policy. There’s no formula. There’s no legal formula for computation of the daily rate for monthly paid employees. The only requirement is that the monthly pay if divided by the divisor to get the daily rate should not produce an amount lower than minimum wage. So, ano ang divisor mo? Pwedeng 30 days, in which case even unworked days are paid. Ok lang yun. Or pwedeng bawasin yung unworked day. So, you can have 24 days. So, nagiiba-iba yan. The most common formula is to multiply this by 12 and use the divisor: Monthly rate x 12 Divisor

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I don’t think this will be asked in the bar examinations but just so you’d know how to compute overtime pay for monthly paid employees. You apply the divisor which is used by the company, based on company policy. Q: Will that divisor be the actual number of days worked by the employee? A: Not necessarily because some companies are paying their employees even for days that are not worked. In which case, the divisor may include unworked days. Q: Sir, you said that the company can use any divisor . . . . . A: Yes. Q: . . . . .as long as when you divide the salary, you will come up with an amount not less than the minimum wage. Sir, so they can circumvent the law and use, put there like 20? A: Well, hindi naman. Of course the divisor . . . nag-iiba-iba yung divisor because of the days you deduct. So hindi pwedeng magimbento ka. Nagiiba-iba lang kasi yung iba and dinededuct lang lahat ng Sundays and holidays, yung iba idinededuct pati Saturdays. Kaya depende nga on the company policy. Multiply it by 12 atsaka ka gagamit ng divisor na ginagamit ng company. And the divisor is sometimes determined by 365 days minus the holidays minus the special days minus the 52 Sundays. (question was asked but inaudible . . . ) A: No because you are computing the daily rate, iba ang usapan kapag 13th month Q: Sir, iba pa ba yung computation kapag “kinsenas”? A: Kapag “kinsenas”, that’s monthly. You are being paid twice a month because the law requires the employees be paid at least twice a month at intervals not exceeding 15 days.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Q: Sir, so monthly paid ‘yun? A: Monthly paid Q: Sir, so again, of you’re weekly paid, iba na naman siya? A: Mag-iiba na naman, kasi some weekly paid employees are paid according to the number of days worked lang. So kapag nagabsent ka, tatlong araw ka lang nagtrabaho for that week, kinocompute lang yung tatlong araw, similar to daily paid workers. Theoretically, it’s daily, at the end of the day babayaran ka na pero iniipon lang, pero ang computation mo on a daily basis pa rin. Minimum daily wage is P250 but there is and additional COLA. The latest wage order provides for a COLA not for an increase in the minimum wage. Just to make sure that by September you’ll know if a new wage order is issued, I’ll just . . . . Yes? Q: (sorry inaudible ulit but I’m assuming it is a question on a worked holiday falling on a rest day with overtime – based on Atty. Manuel’s answer) A: O, Holiday and rest day. Magkano and holiday pay niya? P640 diba? Multiply by 30%. What do you get? Q: P832 for the day A: Times 130% na yan? Q: Yes, Sir. A: P832. So what is P832? This is your payment for the holiday which is also your rest day. E may overtime ka ng 2 hours. Divide this by 8, diba? Kasi this is the daily rate. Always divide by 8. Always get the hourly rate in computing for overtime. Divide this by 8 so you will get how much? P104. What is P104? This is your hourly rate for work performed on a holiday which is also a rest day. So wala pang overtime. Magcompute ka ngayon. Times overtime premium, which is 30%. P104 multiplied by 30% is P31.20. What is P31.20? This is overtime premium for work performed on a holiday which is also a rest day. Palaging ganoon para di ka magkakamali ng add. You add the P31.20 to the P104, so what do

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you get? You get P135.20. What is P135.20? This is overtime pay for work performed on a holiday which is also a rest day. Per hour, hourly rate. How many hours of overtime do we have? 2. Multiply it by 2 and you get the total pay for 2 hours of overtime for work performed on a holiday which is also a rest day. Just add this to P832 and then you’ll get the daily rate, the daily pay Q: Sir, hindi ba pwedeng gawin ng employer na 10 hours regular working day instead? A: No, yung regular working day mo is 10 hours, ibig sabihin, everyday may 2 hours kang overtime Q: Sir, paano kung P400 per day pero 10 hours a day A: That’s difficult kasi that’s a lump sum (there’s a discussion that was inaudible) A: If that is the case and I were acting as counsel for the worker, I’d say, that is my daily rate and my daily rate for regular hours of work is 8 hours, wala pang overtime yan. Kapag nag-away kayo . . . the ambiguity is caused by the employer and that would be interpreted against him. That should be the pay for normal hours of work Before I proceed, please take note of Art 93 subpar c: work performed on any special day shall be paid an additional compensation of at least 30% of the regular wage of the employee. Special holidays should be read as special day, marami nalilito dyan. Where such holiday, meaning special day, 2nd day. Where such holiday falls on an employee’s scheduled rest day, he shall be entitled to an additional compensation of at least 50% of the regular wage. So rest day = special day. Kapag special day kasi, plus 30% ka, diba? Kapag rest day, plus 30% din. Pero kapag combined sila, ginagawang 50%. Special day + rest day = plus 50%. Hindi 30%30%, plus 50%. Pero kapag holiday, compute the holiday pay first than you apply the overtime rate for the special day (Inaudible question asked by student) A: Assuming wala pang overtime. The question is, how much will an employee earn for work performed on a special day which happens to be an employee’s scheduled rest day. It’s 150%. Huwag

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

kayo malilito so 150%, 130%, 125%. Is it simply a shortcut. Ang overtime pay kasi is 25% , diba? Ginagawa mo yang by 125%. Automatically idinadagdag mo na yung base. Shinortcut mo lang yung procedure, hindi yon magic. HIndii yon mathematical magic. Shinortcut ko lang kasi anyway idinadagdag mo din siya sa base pay. 125% or 130% Q: Sir, if you work and it’s your rest day and special day, time 30% diba? What if it’s a special day plus holiday tapos rest day mo pa? A; That will only happen . . . dalawang holiday ‘yan kapag April 9. April 9 is a holiday. Kapag sinabi mong special day . . . . . . . . . .kasi ang special day dalawa lang, December 31 and November1, diba? Hindi yan papatong sa holiday, on a normal year . . . . . Election mo ay tumapat ng holiday, then cumulative yan, you compute. Multiply it by 2, assuming this rate, multiply it by 30% for the rest day premium, then you get the computation for the day Again, the question is, special day ay tumapat sa holiday, magyayari lang to, again, for declared special days, hindi yung November 1 or December 31 kasi walang kalapit yung November 1 and December 31 na magoovrelap na holiday. Ok, nagdeclare si President Macapagal-Arroyo ng holiday to celebrate something and that happens to be a holiday which is also absurd because why would you declare a special day on a day which is also a holiday. But assuming that happens, assuming ang election ay fixed by law, and election is a holiday. The computation, if it is worked, compute the 1st 8 hours for the holiday then account for the rest day premium, multiply that 200%. After multiplying it by 2, that will be your base for computing the 30% special day premium. Kapag nabuo mo na yung special day and rest day, may 50% na idadagdag mo Basta it’s a step by step process, dagdag lang kayo ng dagdag May base pay ka, holiday times 2, rest day times 30 pa ulit, overtime kung ano yung holiday rate mo multiply by 30%. May night shift differential, times 10% only for the period covered I-compartmentalize ninyo. Nagtrabaho ka ng ordinary day, 100% ang kita mo. Nagtrabaho ka ng holiday, 200% ang kita mo.

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Nagtrabaho ka ng holiday which is also your rest day, 230% ang kita mo. Dagdag lang ng dagdag ng premium. So, ordinary day, idinagdag mo yung holiday rate, idinagdag mo yung rest day rate, or dinagdag mo yung special day rate, kinompute mo yung overtime and then yung night shift differential (inaudible question asked) A: Yes, idadagdag. The 30% will be applied to your base pay. And the base pay for a holiday, assuming it is worked, is 200%. So if the holiday is a rest day, the 30% should be applied to the 200% na. Hindi mo uunahin yung 30% saka mo imumultiply by 2, hinde Q: Sir, paano kung nag-overtime tapos inabot hanggang 10:00, yung 25% pay tapos yung night shift differential . . . . A : 35% ordinarily yun

3. NIGHT SHIFT DIFFERENTIAL Night Shift Differential may complicate the computation. Why? Because the overtime pay will now be computed in phases. So, pwede kang magkaroon ng overtime work from 8 hours from 8 pm until 7 am the following day. In which case, iba yung computation mo from 8 to 10, iba yung computation mo from 10 to 6, iba yung computation mo from 6 to 7. chop chop mo Balik tayo sa P320 ha. Assuming itong 2 hours of work, and schedule ng employee natapos yung 8 hours nya at 9 pm. 9pm natapos and kayang 8 hours, Ok? So the P320, the employee earned that by 9 pm. Nagtrabaho pa siya until 11 pm. 2 hours of overtime. Magiiba na yung computation natin. Bakit? Kasi from 9pm until 10 pm, you compute . . . ano ba yung hourly rate? . . . hourly rate is P40 per hour, multiply by 25%. So P10 + P40 = P50 per hour and since 1 hour lang yan, yung kinita niya plus P50 lang. So, magkano yung kinita niya by 10pm? P320 + P50. Now, 10 pm to 11 pm, meron na naman siyang overtime. So, ito na yung gagamitin mo. P50 na overtime base pay niya + 10% lang, what will you have? P320 + 50 + 55. So if you will now have

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

a difference of P5 for 9-10 overtime and for 10-11 overtime because of 10% night shift (inaudible question) A; Hindi, hindi mo na idagdag tong P320. Sa principal s’ya idadagdag. This accounts for the first 8 hours. Kapag dinagdag mo yan dito tapos dinagdag mo ulit, parang holiday na yon, doble na. P320 is for the first 8 hours, kita mo ng 9 to 10 ay P50, kita mo ng 10-11 ay P55. So P320 + 50 + 55. Remember, 50 is overtime pay not just overtime premium, kasi overtime premium mo dito is P10 lang. . . . Yes? Q: Sir, in that case, yung order you follow the . . . . . statement, it will become . . . .P105 is your total overtime pay with night shift differential? A: That’s correct. Overtime pay with night shift differential. Pero that’s not accurate, that might give the impression that the overtime period is covered by night shift which is not true. Only half of the overtime period is covered by the night shift provision Q: What if the EE worked until 1 am and the next day is April 9? A: O, that’s a complication, and that’s often asked in my classes. What will happen? I think that in the computation of overtime pay, you use the work day. What do I mean by that? The employer cannot say hindi ka overtime kasi once lumampas na tayo ng 12, you are starting a new day. No, as long as there is a continuity of work. Nagsimula ka ng 8 am of one day, ang end of your work day is 7:59am of the following day. So, anything rendered within that period is rendered within one day. And if that exceeds 8 hours of work within that 24 hour work day, that should be considered overtime pay, Kahit na lumampas na siya ng araw na calendar day. However, for holidays, I think it is more beneficial for the employee to consider the holiday pay starting 12mn specially if its Christmas or New Year when you have to be at home by 12 midnight diba? But there’s no legal provision applying to that special case. Q: Sir, so in that case, sir, we are not sure of which base to use?

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A: Yes, that’s the confusion e, Will you use the base pay for April 8 or the base pay for April 9. April 9, holiday yun diba? So, sasabihin mo holiday na yan, e di holiday pay na yan. Holiday rate na Yan Q: Sir so, you can decide in favor of labor A: In that case, I think it can be argued that way Q: Sir, going to the other side, in fact an employee worked on April 9 up to 12 midnight upto the next day which it not a holiday . . . Q: Then you do not use the ___?___computation for the worked performed on April 10 because April 10 is not a holiday. Kaya complicated yan. That can only happen if the company is operating 24 hours a day like hotels for example. But for ordinary factories working under normal circumstances, the work day will fall under, within the calendar day. Q: Sir, what about if there are shifts and there is a change in shifting? For example sir, your ordinary day, your first shift is from 8 to 2. From 8 to 4, and then your supposed to go back, ordinarily you’re supposed to go back the next day pa. Pero sir for that . . . inabutan ka ng change ng shift so instead of 8 ka the next day magshow up for work, you showed up at 2 am, so 2 to 8. Sir so what happens there? It’s within the work day. A: Yung natapos by 4? Natapos ka by 4, nagreport ka ng 2:00. are you saying that will be considered overtime? Kasi yung shift mo nag-start ng 8 e so matatapos yung work day mo at 8 am of the following day. So pag nagtrabaho ka na kaagad at 2 am, I will say that is overtime Q: Sir, pwede bang sabihin naputol yung schedule. Yung work day mo . . . . (blah blah) A: I think you can argue it that way, pwede yung . Pero halimbawa, may emergency lang, pinatrabaho ka pa, dahil wala yung ka-shift mo, wala yung kapalit mo, I think that should be counted as overtime pay. Because the idea is for work performed beyond 8 hours a day to be compensated with a premium because it deprives you of the rest

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

that you should have after working for 8 hours. If that is the rationale, then it should follow that work within the 24 hour work day should be considered overtime. Any questions on the computation? Basta do it step by step and you will not have a hard time. Konting practice lang yan. AS long as you know the rates I will no longer discuss the meal periods no, you can just . . . . . . . . Any questions on the computation? Somebody was asking about wage distortions. We’ll discuss this mamaya, kapag bumalik na yung nagtanong. There’s a question about offsetting, I will discuss this later. Any other question? Q: Sir not related to computation, sir for example, I’m a front desk in a hotel natapos yung shift ko 2-10, tapos 10 hindi pa dumating yung kapalit ko, can I refuse to extend? A: As a general rule, overtime work cannot be compelled. Overtime is not allowed. If you follow the law, it will only be allowed in exceptional circumstances Q: Sir, can you consider that as an exceptional circumstance, hindi dumating yung kapalit mo? A: if it will have an effect on , , , , may requirement yon diba? , , , Pwede siyang . . . . ano yan gas station? Q: Hotel A; Hotel. I don’t think it may qualify. But in most cases, hindi naman ganoon kalaking violation if it can be considered a violation 4. WAGE DISTORTION Q: Sir what about . . . . I don’t understand wage distortion A: Ok, That’s important, you have to understand that. You have employees A, B and C. Employee A is earning P300, employee B is earning P400, employee C is earning P500 per day. Bakit iba-iba ang sweldo nila? Kasi si A, 1 year pa lang, si B 3 years, si C ay 5 years na. So the wage gap between them is accounted for by the gap in their years of service. Between A and B,

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ano ang difference mo? P100. That P100 is supposed to account for the 2 years experience by B ahead of A. Kaya magkaiba. Between B & C, you have a difference of P100 to account for the 2 years difference, It may be dependent on the job and pay scale of the company, assuming they have that. Wage distortion as defined by law will only happen if there is a wage order increasing the minimum wage. And it will not happen if the wage order is applied across the board. Let’s give an example A new wage order, Wage Order No. 1 is issued . . . ok, remember, take not of the gap. The gap here is P100, the gap here is P100. Wage Order No. 1 by the Regional Wage Board giving across the board increases of P50 a day to employees covered. So this means A, B & C are covered by the wage order. What will happen? Si A ay P350, si B ay P450, si C ay P550. na-maintain yung gap na P100? Yes. There’s still wage distortion, walang problem d’yan. Unfortunately, most wage orders that will be issued now, will not be across the board increases but will increase the minimum wage rate. Assuming the minimum wage rate at the time Wage Order No. 2 is issued is P350 per day. In the region where A, B & C are working, A, B & C are employees of the same company ha, employees of the same company. Ang sabi ng wage order, minimum wage is now increased from P350 to P500. Generous, P150 ang increase assuming. Ganyan ang ginawa nila. So what will happen? Is A’s salary below the minimum wage rate? Yes, A’s salary is P350. The new minimum wage rate is P500. P350 is lower than P500, diba? Mag-iincrease ka from P350 to 500 so apektado ba si A? Yes. Should A’s salary be increased? yes. Automatic ‘yan. A will now be increased to 500. Si B? Is this salary below the minimum wage rate? No . But the wage order affects A, B and C’s salary scale. Before P100 and difference ni A and B. Bakit P100? Kasi mas matagal si B kay A. Ngayon pantay na sila, that’s not fair for B na pareho sila ng sweldo. So there’s a wage distortion in this case, the wage gap of 100 is totally eliminated. The wage gap is totally eliminated.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

Between B and C what happened? The wage gap is reduced by half. I would say that this is a wage distortion. I’ll argue that this Is a substantial reduction, a severe contraction of the wage gap. If it’s at least 50%. There’s no clear rule about that. In fact, I would say, that if it is at least 50% then it is a severe contraction of the wage gap. Is there a wage distortion here? Yes, there’s a wage distortion here because there’s an elimination of the wage gap and there’s a wage distortion here because assuming this will be upheld later as the rule, at least 50% of the wage gap is eliminated. Severe contraction, elimination. There is a wage distortion here. Bakit na-distort? Kasi nawala na yung pagitan nila which accounts for the years of service. Nabali wala na yung experience ni B at yung experience ni C which was previously accounted for by the difference in their salary rates. Because of the wage order, nasira lahat yun, nadistort. That’s why you have a wage distortion. Should that distortion be corrected? Yes, It there a way to correct it? The law will not give us any formula. It is supposed to be negotiated by the parties. ‘Yun nga ‘yung magulo sa batas e. Guguluhin mo yung distortion tapos bahala na yung parties to decide. In most cases this becomes the start of major disputes which may in some cases may end up in strikes. Malinaw na ba yun? May wage distortion dyan. Q: Sir, if there’s a wage distortion, the law requires that you do something about it, it just doesn’t give you the outlet right? A: The law says you have to negotiate for it. For the correction Q: Sir, kasi yung wage order regional? So sir, for example, there’s a bank and it has different branches and in one particular region nagkaroon ng wage order so increase yung salary nila doon. For the same position . . . A: The same employer for the same position, will have different rates. That’s OK, according to the Court, there’s no wage distortion intra-region Q: So, sir, there’s no compulsion to compel . . . .

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A: There’s nothing to correct because there is no distortion in the first place. There is no distortion as defined by law. The distortion may be internal to the company. So halimbawa, may Coca-Cola driver, assuming the drivers are regular employees of Coca-Cola. May planta ang Coca-Cola sa Valenzuela, Valenzuela is part of the NCR. May planta ang Coca-Cola sa Meycauayan. Meycauayan is part of Region 3. Magkaiba ang wage orders, magkaiba and regional wage boards n’yan. Magkaiba and rate. Yung driver na naka-assign sa Valenzuela may be earning higher than the driver who is assigned to Maycauayan plant. Kahit pareho ang seniority level nila, magkaiba yung sweldo nila. Is that distortion under the law? No because distortion can only happen within a particular region. Hindi ka pwede magcompare ng wages ng 2 employees even if they are employed by the same employer if they are assigned to different regions because they are covered by different wage orders and that is precisely the rule for the regionalization of the determination of the minimum wage. To account for the regional differences, but it may be absurd na kapitbahay mo lang, Valenzuela and Meycauayan, sabihin mo na 5 minutes away nandun ka na and yet you’re earning differently. But if that will happen, that’s not a wage distortion according to the court. Again, wage distortion as defined by law will only happen if there’s a wage order. So, a wage order triggers the distortion. Assuming the negotiation did not produce settlement. What is the logical next step? Assuming there’s a CBA. No, its not a strikeable issue, it’s a grievance. It’s supposed to be a grievance to be resolved through a grievance machinery in the CBA and if it is not resolved by monetary computation Kaya everytime na mag-iissue ng wage order, pinapadami lang ng gobyerno and labor disputes dahil pinapag-away nila ang mga tao 5. OVERTIME AND UNDERTIME WORK Let’s go back to overtime. There was one question about overtime which I think should be discussed Example, and pasok mo ay 8 am until 12 noon,1 hour lunch break, lunch, again, until 1 pm, so naka ilang oras yun? 4. Diretso ka

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

hanggang 5 pm. Ito yung normal working schedule mo, 8 hours a day. Bawas yung 1 hour, so 1 hour, bawas yan. 4 hours in the morning, 4 hours in the evening or in the afternoon, Late ka na dumating . . . eto yung weekly schedule mo … Monday dumating ka ng 9am, Nahiya ka ngayon, late ako dumating, magtatrabaho ako until 6 pm. Did you perform overtime work? No, 8 hours pa din. Overtime work is not computed on the number of hours that exceeds your work schedule. It is based, it is determined by the number of hours that exceed 8 hours in your work day. Halimbawa, Tuesday late na naman siya, 9am. Sabi niya, hindi naman ako babayaran ng overtime, bakit mag-overtime ako? So kakapalan ko na lang mukha ko, uwi na lang ako ng 5pm, hindi na mahahalata yun, 1 hour. Wednesday, pumasok siya ng maaga, marami siyang ginawa, nag-end s’ya ng 6pm. May overtime work ba? Yes, from 5 to 6, that’s 1 hour overtime work. Noong bayaran na, hindi siya binayaran ng overtime pay, sabi ng employer, e kulang ka naman ng 1 hour dito e noong Tuesday. 1 hour yang undertime. So hindi ka na namin babayaran, quits na lang tayo. That’s not allowed. That’s prohibited. Why is that prohibited? In effect if you will deduct from the employee the equivalent of 1 hour here, the employee will still get something because this is paid with a premium, so this cannot be offset with this one. The off-setting will not apply here because in the first place, you do not have an undertime here. You do not have an overtime. You have a _____?_____ that was compensated. Hindi yun magaapply dito. There’s no undertime here. There’s no overtime. Ang undertime you performed, you worked for less than your regular number of hours. Q: (inaudible) A: Ok, forget about this, set this aside. Your regular work is from 8 am, your regular work is from 10 am to 12 noon, 1 hour lunch break, tapos 1 pm ka ulit mag-resume and you will work until 4 pm. You have 2 hours here in the morning and 3 hours here in the afternoon, For a total of 5 hours. 5 hours ang normal hours of work. Ok lang

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ba yun? Yes because under the law, normal or regular hours or work shall not exceed 8 hours per day, hindi sinabi na should be equivalent to 8 hours per day. What is the effect of this? Kapag nagtrabaho ka beyond 4:00, nagtrabaho ka until 7pm, you exceeded your regular work schedule, but did you perform overtime work? Of course not. No because overtime work should be anything in excess of 8 hours. Ilang oras yun? 5 hours + 3 hours, 8 hours , walang overtime Should you be compensated for the 3 hours? Yes, but not as overtime pay. That is something that you should discuss and negotiate with your employer. 5 hours lang ako dapat, e lagi akong nag-eexceed ng hours, but that is not the statutory overtime work. It’s compensable by the statutory overtime pay. In short, you will not apply the 25% or 30% overtime rate. Q: Sir, yung example na 5 hours, payable ng 320 A: 5 hours, 320 Q: yung 3 hours, divide mo ng 5 yung 320 times 3 A: But that is not statutory. You don’t have any statutory basis for an automatic computation for the hourly rate for the 3 hours. So you have to discuss that with you employer, but that’s a reasonable basis for computing your compensation. Compute your hourly basis then multiply it by 3. But what I’m saying is that it is not overtime and that is not overtime pay (inaudible question) A: I will say there can be no offsetting. You have to pay the full overtime pay. What will you do? Nalulugi ka na dahil lagging late itong taong to? Tardiness can amount to habitual neglect of duties which can amount to a valid ground for termination. Then I will not advice, assuming I were counsel for the employer, I will not advice automatic deductions of the salary that will be received by the employee on account of tardiness, medyo delikado yun. That can be considered as illegal deductions from wages

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

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Q: Sir, for example, yung shift mo, something like 2 to 10 in the evening and then may company policy na kung malate ka, they allow you to make up for it, sir so for example you came in at 3 you go home at 11 . . . A: There should be night differential without overtime pay. That’s clear, any work rendered between 10 and 6 should be compensated by night differential. That’s independent of whether that period is overtime work or regular hours or work. Walang connection. And night differential is given for any work performed by any employee, whether that employee is on permanent night shift work, whether work is performed only for 1 day in a year. Basta’t nagtrabaho ang isang tao between 10 in the evening until 6 the following morning, may night shift differential yan na 10%, kahit hindi yan ang talagang oras nya, nagkataon lang na may ni-rush sya umabot siya ng late. I encountered one employer saying na hindi naman talaga night shift e, wala siyang night shift differential. Of course not, any work performed between 10 and 6 should be given night shift differential.

mag-overtime lang ng overtime dahil nag-iipon ka. Gusto mong bumili ng cellphone, sige mag overtime ako nag mag-overtime. Management can refuse to pay that. If you cannot show that you have been authorized to render overtime.

Q: Sir, clarification, Sir you said kanina na you cannot deduct kapag nalate ka? A: I will not advice it. Why? I will not advice it because I think that employer is exposing itself to a possible charge of illegal deduction of wages. Kung ako ang counsel for the employer, 1 hour, magkano ba ang madededuct mo dyan? Konti lang yan, that would not matter, kung siya i-sanction mo, verbal reprimand, warning, written reprimand, 1 day suspension, then 5 days suspension then possibly 15 days suspension. Tapos naka-establish ka ng pattern, that can be gross and habitual neglect which can be a ground for termination.

(inaudible question) A: that was asked earlier and answered earlier The general rule, if you follow the law, overtime can only be compelled under exceptional circumstances. But some employees would readily do it diba? The Employees would be willing to render overtime work There are some cases concerning the requirements, the evidentiary requirement for claiming ng overtime. If you were the employee and you say that you have not been paid the minimum wage, the burden is on the employer to show that you have been paid the minimum wage. Because it’s a negative statement, it’s a negative claim. You cannot prove a negative claim. Hindi mo pwedeng sabihin hindi n’ya ako binayaran, ipoprove ko na hindi n’ya ako binayaran. Hindi ka nga binayaran e what proof do you have? There employer would now have the burden to prove payment. An in fact, this rule applies to any kind of payment However, if it refers to overtime work, it is not automatic that the employer would have the burden of proving that overtime

Q: (inaudible question) A: The office of the job contractor? . . . .as long as you are working within the region. It’s the place of work not the place of business of the employer , it’s the place of work Another point about overtime work. Overtime work without the consent of the employer is not compensable. Hindi ka pwedeng

Q: Sir, for example, in again, your work is until 5 in the afternoon. However, before leaving, you have to perform certain duties. For example sir, stacking everything. What sir, what if you were able to do that but sir in excess na of 8 hours? A: That should be considered overtime. Some employers would have the policy of paying overtime that will only exceed 30 minutes Q: That’s valid sir? A: I think yes, It’s reasonable, kasi medyo mahirap din e. It may be tedious to compute overtime pay per minute. Nag-exceed ako ng 15 minutes therefore may 15 minutes overtime pay ako, I don’t think that’s reasonable.

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

pay was not paid. Why? Because the employee must first prove that overtime work was rendered. Because it is beyond regular, beyond the normal hours of work. So kailangan mo ipakita na on this date I have rendered 2 hours of work, this is unpaid. Only after you have proved that you have rendered overtime work. Only after you have claimed that you have not been paid that the burden will be shifted to the employer to prove payment. What do you need? You need, if you have daily service reports, if you’re using a Bundy clock, you can show that as evidence. Once you’ve shown your schedule, the employer would now have the burden of proving that payment was made. In one case, there was a dispute about the schedule of the employee. Nag-settle sila na and schedule in employee ay from 5 am until 8 hours after. So ang tanong ngayon, kailangan mo pa bang iprove ng employee and entitlement niya to nigh shift differential? Hindi na, kasi automatic na yun e. Hindi yan kagaya ng overtime naman na you have to prove overtime work. Kasi once you have shown that your schedule is not disputed by the employer, that your regular work will cover work rendered after 10 pm and before 6 am, then automatic na may bight shift differential. So nag-iiba-iba yun. For claim for unpaid wages, employer has the burden. For a claim for unpaid overtime pay, burden is first on the employee to show that overtime work was rendered and only then will the burden be shifted to show payment for the overtime work. But for night shift differential, if it has been established that the employee’s regular work schedule will cover the period between 10 pm and 6am the following day, then the employee need not prove anything for the claim of night shift differential because it’s automatic. Anything rendered between 10 and 6 should be given 10% night shift differential. Q: Sir going back . . . .can the employer compel the employee to render service beyond the 5 hours but not lead to overtime? A: If you look at the law, it is technically not compulsion for overtime work because there is no overtime work. But if you look at it at the point of view of contractual law, of the law on Obligations

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and Contracts, ang pinagusapan natin 5 hours lang ako e, hindi mo ko pwedeng pilitin na dapat 8 hours. Kasi yun yung work schedule na pinagusapan natin e. you are paying me for 5 hours, why do you now force me to work for 8 hours? What is the practical effect of this? The employee can justly refuse and the just refusal will not be a ground for disciplinary action, it is as simple as that. Kapag nagpapilit ka, sorry ka na lang, diba? Ano pang remedy ang mahihingi mo e nagtrabaho ka na? Nagpaplit ka na? But I think the more important question will come in when the employee refuses the order to render overtime work or in this case to render 3 hours of work beyond the regular schedule of the employee, which Is only 5 hours per day. and such refusal is now being used by the employer as a ground for termination. Ibang usapan na yon. I will cite the provision prohibiting compulsion of overtime work, and I will say that the refusal of the employee is justified. And if It is justified, you cannot use that as a ground fro disciplinary action 6. Jurisdiction Q: I’ll ask a question not related to labor standards, Sir, about jurisdiction, When it comes to money claims, Sir, the jurisdiction of the Labor Arbiter and the other person . . . . A: The Regional Director Q: Sir, who has jurisdiction over money claims? A: Over money claims, you have a P5000 limit per employee’s claim. Beyond P5000, the Labor Arbiter . . . . ok, lets start with the basics. A money claim is a simple claim for unpaid benefits. It is not a termination dispute. If it arose out of a termination, the employees are asking for reinstatement not simply asking for unpaid wages and benefits. Yun ang money claim. As a general rule, the Labor Arbiter will only have jurisdiction over termination disputes and not over money claims, However, if the money claim of the employee exceeds P5000, that is per employee and not per complaint, kasi pwedeng 5 employees sa isang complaint, at ang aggregate amount nila is P10,000, you have to know the individual complaint, the

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

individual claim. Per employee, P5000 is the limit, beyond P5000, the Regional Director does not have jurisdiction, jurisdiction is now with the Labor Arbiter. However, if . . . ok, this issue between Art. 128 and Art. 129 of the Labor Code. Art. 128 speaks of the enforcement and visitorial powers of the Secretary of Labor. Art. 129 speaks of the dispute regarding money claims and the jurisdiction of the Regional Director. What is the difference? Art. 128 is visitorial, Art. 129 is adjudicatory. Adjudicatory - you have a case, you have a complaint filed, you have to decide. The P5000 limit applies to the adjudicatory powers under Art 129. It will not apply to the visitorial and enforcement powers under Art 128. What do we mean by that? Nagpa-inspect ka, and inspection is pursuant to the visitorial and enforcement powers of the Secretary of Labor which can be exercised through duly authorized representatives, specifically the Regional Offices, the Regional Director and the representatives of the Regional Director. Nagpadala na ng inspector, a Labor Inspector Officer, sa isang company. Nag-report yung inspector, ah maraming hindi nababayaran ng minimum wage ditto. At ito and computation ng unpaid wage from the start of the effectivity of the new wage order. Noong tiningnan mo, yung claim ng . . . yung unpaid benefits to the employees, ang average nila is P8000. Who has jurisdiction? The Regional Director or the Labor Arbiter? The Regional Director will still retain jurisdiction, even if the claim per employee exceeds P5000. Why? Because this is Art. 128 and not under Art. 129. And Art. 128, the enforcement and visitorial powers of the Secretary of Labor which can be exercised through the Regional Director is not limited by the P5000 limit. Are we clear about that? Kapag nag-inspection ka, kapag visitorialenforcement powers, wala yung P5000 limit, kahit P25,000 yan per employee, Regional Director pa din and may jurisdiction. Is that clear? Read Art 128 and 129. Doon mo makikita how it is worded, P5000 limit is applicable only to the adjudicatory powers, not for visitoriaL and enforcement powers. So, kung may violation ka, may union kayo, ayaw mo sa Labor Arbiter, dahil wala kang tiwala sa NLRC, pa inspect ka. Mag-

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request ka ng inspection, mas madali sa Regional Office. Huwag kang mag-file ng complaint sa Regional Office kasi kapag nagfile ka ng complaint, adjudicatory yan. Magpa-inspect ka, mag-request ka ng inspection at bantayan mo yung inspector, kapag hindi mo binantayan, wala kang makukuha. Are we clear about the distinction? The applicability of the P5000 limit? Once there is a claim for reinstatement, it ceases to be a simple money claim. It becomes a termination dispute. So, regardless of the amount of the money claim involved, it is a termination dispute under the jurisdiction of the Labor Arbiter. The Regional Director does not have any jurisdiction. Pero madalas, kapag merong complaint, nagcoconciliate sila, kapag walang nangyari, atsaka lang nila ipapasa sa Labor Arbiter. 7. BONUSES AND BENEFITS Q: Sir, what is the nature of the Service Incentive Leave? A: The Vacation Leave and Sick Leave we know, are not statutory benefits. They are additional benefits given out of practice in the Phils. Pero wala yun. So if you work in a company which does not give its employees 15 days sick leave ad 15 days vacation leave, the company Is not violating any law. What should be given is just 5 days Service Incentive Leave. Q: Sir, for example you have 15 days vacation leave and 15 days sick leave . . . A: Wala ka nang service incentive leave Q: Sir, after 5 years, binawasan naging 10 . . . A: Ah no, that’s diminution Q: Is that ok, sir? A: No, of course not. Once you have given benefits, you cannot withdraw those benefits. Q: Sir, is it the same, sir, if the company pays 15h month pay, you cannot withhold the . . . . .?

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

A: It depends if the 15th month pay has become a policy of the employer which is not dependent on the amount of profits earned for a year. Q: Sir, if it depends? A: If it depends, then it will be in nature of a bonus and unless you can show a pattern that they make it a clear company policy, giving 15th month pay to the employees, then it will remain a bonus which is given not out of obligation. So, it cannot be demanded as any other benefit. Q: Sir, clarification regarding the bonuses, what happens if you are able to prove a pattern and yet as in this case, there’s a receivership problem, so sir what happens? A: The problem with bonuses is that, in the first place, it is not a statutory right. It is mainly given out of the generosity of the employer. And it is given because of profits, diba? You will not give bonuses if you have not earned profits. Yun yung simula. But if it has become a policy of the employer, meaning you are now expecting that as part of your compensation, then it becomes part of your compensation package, which cannot be withdrawn. However, I think it will be reasonable to say that if the company really cannot afford it, the bonus, then the failure of the company to give the bonus because it is in such a financial state that it cannot give such bonus, I don’t think the company should be penalized for that. I don’t think that will not be reasonable. As long as the company is paying 13th month pay. The 13th month pay, ke-kumita ka or hindi, ke-lubog ka na, kailangan mo magbayad niyan. That’s not based on profit, that’s a statutory benefit. But still the general ruling if it has become a company policy, it cannot be withdrawn Q: Sir, I haven’t read this particular Department Order, D.O. No 18, sir . . . . but does it have any bearing at all? A: I just got D.O. No. 10 last week, I had a copy last . .. . Ok, the only thing here is the new, supposedly the new rules on subcontracting which replaced D.O. No. 10 which repealed D.O. No. 3.

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I had a copy about 2 weeks ago and had a brief time to go over it. I scanned it and my general impression, I might be wrong, I have to read it provision per provision. Somebody in the office is doing the comparison. My impression is that it retained, it simply retained the good provisions of DO 10 and deleted the bad provisions. What are the bad provisions? The enumeration in Sec. 6. Yun yung natanggal, yung requirement of registration, nandoon pa din, coterminous contract requirement and contract of service provision. So, mukhang wala naman gaanong problema. I did not notice any particular provision that makes a new rule, mukhang wala namang ganoon. Konti lang yun, maikli lang, mas maikli sa DO 10, mga 5 pages. I don’t have a copy . . .. next week Q; . . . .does employer have the right to diminish benefits? A: No because, I answered that question, considering the absence of any provision giving such right kasi . . . the question is does the employer have the right? If you say yes, you have to point out a particular provision. But there is no such provision Q: Sir so dapat negotiate that with the employee A; it cannot be negotiated and the employees may waive some benefits. The question of the validity of the waiver will be a different issue Q:(inaudible question again) A: Yes, some employees would prefer o leave. Why? E makukuha nila yung separation pay nila, diba? Another factor, staying in the company will reduce benefits. Some are saying it’s a balance between the right to security of tenure and the right to reasonable benefits. I would think that some employees would prefer to be terminated and in many cases termination of employees with the corresponding payment of the separation pay may be beneficial to the employees rather than stay in the company and receive reduced benefits and be uncertain on what will happen later on, diba? Did I assign the case of PAL, the dispute which happened in 1998, about the referendum by Erap? May referendum sila,

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

nagkaroon ng suspension ng CBA for 10 years. May group of employees na nagcontest niyan, umakyat sa Supreme Court yung petition. Ok, I don’t have a copy of that case right now. The ponente is the dad of former Secretary of Labor Quisumbing, Justice Quisumbing. The Court upheld the validity of the waiver, the validity of the suspension of the CBA for 10 years. Essentially, the Court said that the employees agreed to it and definitely the 10 year suspension should apply. That the last portion of the decision, before the dispositive portion is what is nice because it is totally erroneous. Justice Quisumbing said, in lieu of the 10 year . . . . . there’s one issue, if you uphold the validity of the 10 year suspension of the CBA, ibig sabihin niyan, wala kang freedom period for 10 years. Kasi ang freedom period doon pa towards the end of the CBA, of the 5 year period. E kapag sinuspend mo yang CBA, ibig sabihin, 10 years na walang pwedeng maka-challenge sa status ng incumbent Bargaining Agent. Then that may be used by company unions. Mag-C-CBA sila then mag-strike sila, madedelay yung CBA for 20 years and for 20 years walang pwedeng pumasok na ibang union. That will work for the company. So problema yan. How did Justice Quisumbing answer that? The good Justice said, I’m being sarcastic, Justice Quisumbing said the 5 year representation period is in the meantime held in abeyance. Hindi tumatakbo yung 5 year representation period. Anong kalokohan yan? The law is clear, representation is limited to 5 years. That’s the term of the CBA with regard to representation aspect. Yan ang mahirap sagutin doon sa 10 year suspension kasi the 10 year suspension affects the 5 year representation term. That is an argument against upholding the validity of the suspension. Ginawa nila, binaliktad nila, inupheld nila muna atsaka na lang ginawaan ng paraan yung 5 years. At ang sinabi, held in abeyance. Lokohan yon diba? Held in abeyance. If you’ll suspend the CBA, you’re holding in abeyance the 5 year representation period. In effect, you are prolonging the status of the incumbent bargaining agent. For the period you are suspending the effectivity of the CBA A ___?___ doctrine. and that might be asked in the Bar Examinations. You read that case, that might be asked in

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the Bar Examinations. Do you trust the examiners to abide by that rule on cut-off? 8. EMPLOYER-EMPLOYEE RELATIONSHIP Q: Sir, for example, in hotels, the services in the hotel, diba they should be considered . . . A: Regular, yes. Why? It’s part of he service that the hotel gives to the guests. Q: Sir, what if they are not considered as regular employees? Who will you file the case against? A: One way is to ask the union to do it and for the union . . . it’s difficult kasi for the _____?____ to file the case e. So, one way . .. . of addressing that issue and we have done this, not only for the _____?_____ but also for valet parkers, for example, is for the union to claim that these employees should be covered by the CBA being regular employees. If the company refuses, then the union will file a complaint Q: Sir, what if the union itself doesn’t want to recognize these people as part of the CBA? A: Then the employees should act on their own. They should file a case against the company for non-payment of benefits provided in the CBA Q: Sir, do they file a claim against the union? A: No, of course not. The union is not obliged to give them anything. If they are not members of the union, they cannot demand anything from the union especially since the company is not recognizing them and the union is also not recognizing them as part of the bargaining unit. Q: Sir, yung taxi drivers and jeepney drivers on the boundary system, sir. Are they always considered employees or are there times when they can be considered as mere lessees of the vehicles? A; If you base your answer in Dinglasan, which was reiterated in a 2001 case. May bagong case, 2001. I included that in your case

LABOR LAW REVIEWER Ateneo Law 2003, 2nd Semester Atty. Marlon Manuel

diba? The court will tell you that the drivers should be considered employees, so you can cite that if that is asked in the Bar Examinations, I don’t think however that Dinglasan should be applied s a general rule. I think you still have to examine the relationship between the operator of the taxicabs and jeepneys vis-àvis the work of the employee concerned, of the worker. Kung wala naman talagang control, I don’t think may control, wala naman talaga e, even in Dinglasan, I don’t think may control of the worker over the conduct of the work of the employee. The schedule in itself will not amount to control over the means of work. So I don’t think that’s a good decision but you still have it and it has been reiterated very recently so . .. . I did not include Dinglasan but I think I included something that reiterated Dinglasan . . . that’s why I did not include Dinglasan In fact, hindi ko na nga dinidiscuss yan dati e pero last year may lumabas . . . I believe that . . . . I’ll give you the citation . . . I have it in my 1st year, 1st sem list, so if you get hold of a copy of the 1st year, 1st sem list, then check or you can just read Dinglasan, it just reiterated Dinglasan.

GOOD LUCK!!!

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