LABOR LAW AND SOCIAL LEGISLATION 2017 GOLDEN NOTES FACULTY OF CIVIL LAW UNIVERSITY OF SANTO TOMAS MANILA
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No. ____________ Printed in the Philippines Philippines June 2017.
ACADEMIC YEAR 2017-2018 CIVIL LAW STUDENT COUNCIL JONATHAN SANTOS MA. JASMIN A. LABACO NIÑO JOSEPH B. PIO RODA KARIZZA KAMILLE M. CRUZ
PRESIDENT INTERNAL VICE PRESIDENT EXTERNAL VICE PRESIDENT SECRETARY
UST BAR OPERATIONS NIKKI MEI Q. KO RHOSE AZCELLE L. MAGAOAY JANN PATRICIA M. TORRES JERREMIAH KRIZIAH B. BATALLER NELLE FRANCESE DELA PAZ ALEXANDER MARA J. VINLUAN DENZ CHRISTIAN A. RESENTES CLARICE ANGELINE V. QUESTIN KAIRA MARIE B. CARLOS CLARA LOUISSE J. YUMANG EMMANUEL A. LANDAYAN JOHN AL-NAIR SIMONE L. JUMAMIL PATRICIA MAE D. GUILLERMO NIÑO JOSEPH B. PIO RODA JOCHRIS DANIEL Z. GUADES BERYLL ANDRÉ Y. BARCENAS MON FRANCIS A. TOLENTINO MICHAEL EARVIN R. SABADO
CHAIRPERSON VICE-CHAIRPERSON SECRETARY ASST. SECRETARY ASST. SECRETARY HEAD, PUBLIC RELATIONS OFFICER ASST. HEAD PUBLIC RELATIONS OFFICER HEAD, FINANCE COMMITTEE ASST. HEAD, FINANCE COMMITTEE HEAD, HOTEL ACCOMMODATIONS COMMITTEE ASST. HEAD, HOTEL ACCOMMODATIONS COMMITTEE ASST. HEAD, HOTEL ACCOMMODATIONS COMMITTEE ASST. HEAD, HOTEL ACCOMMODATIONS COMMITTEE LOGISTICS COMMITTEE LOGISTICS COMMITTEE LOGISTICS COMMITTEE LOGISTICS COMMITTEE LOGISTICS COMMITTEE
ATTY. AL CONRAD B. ESPALDON ADVISER
ACADEMICS COMMITTEE CAMILLE ANGELICA B. GONZALES EMNIE VALERIE B. DURAN IRVIN L. PALANCA MARIELLA A. MARASIGAN LARA NICOLE T. GONZALES EMNIE VALERIE B. DURAN CIARI T. MENDOZA
SECRETARY GENERAL DEPUTY SECRETARY GENERAL EXECUTIVE COMMITTEE EXECUTIVE COMMITTEE EXECUTIVE COMMITTEE LAYOUT ARTIST COVER DESIGN ARTIST
LABOR LAW COMMITTEE LOVERLY A. BARQUEZ LABOR LAW COMMITTEE HEAD MERRI GRACE L. SARMIENTO MARIUS D. SUMIRA GENA MYRTLE P. TERRE
ASST. HEAD, LABOR STANDARDS ASST. HEAD, LABOR RELATIONS ASST. HEAD, SOCIAL LEGISLATION
MEMBERS CHARLENE S. ACOSTA JESSAMYN D. DIMALIBOT GINALYNN MARRIEL A. DE TORRES RONE ANNE JOY D. GOMEZ LORD BIEN G. LELAY GEMMA F. TIAMA LABOR ARBITER BENEDICT G. KATO ATTY. MARK KEVIN U. DELLOSA Advisers
FACULTY OF CIVIL LAW
UNIVERSITY OF SANTO TOMAS ACADEMIC OFFICIALS
ATTY. NILO T. DIVINA
REV. FR. ISIDRO C. ABAÑO, O.P.
DEAN
REGENT
ATTY. ARTHUR B. CAPILI FACULTY SECRETARY
ATTY. ELGIN MICHAEL C. PEREZ LEGAL COUNSEL UST CHIEF JUSTICE ROBERTO CONCEPCION LEGAL AID CLINIC
JUDGE PHILIP A. AGUINALDO SWDB COORDINATOR
LENY G. GADANIA, R.G.C. GUIDANCE COUNSELOR
OUR DEEPEST APPRECIATION TO OUR MENTORS AND INSPIRATION
ATTY. SAMSON S. ALCANTARA ATTY. ARNOLD E. CACHO ATTY. JOSELITO G. CHAN ATTY. BENEDICT G. KATO ATTY. ROLAND L. MARQUEZ DEAN SALVADOR A. POQUIZ ATTY. CESAR E. SANTAMARIA, JR. USEC. JOSEPHUS JIMENEZ
For being our guideposts in understanding the intricate sphere of Labor Law and Social Legislation. -Academics Committee 2017
Foreword for 2017 Golden Notes Dean Nilo T. Divina
It is with pleasure that I introduce to you the 2017 Golden Notes - a product of the concerted and dedicated efforts of our students, faculty and staff to ensure that our Bar candidates are armed with the most comprehensive, updated and easy to digest reviewer as their companion in the review process. This will provide key concepts, updated jurisprudence, relevant comparisons and notable changes in the law, if any, right at your fingertips.
With the aid of selected lawyers, Golden Notes remains at the forefront of providing legal insights raised from past bar questions and current events that could be part of the discussion in the bar examinations.
Notably, the editors of this book signified their intention to serve in assisting our aspiring lawyers to develop the kind of mentality needed in justifying answers supported by facts and relevant provisions of laws during the Bar examinations, through the publication’s logical sequence and meticulous presentation of even the most difficult legal concepts.
With the aim of increasing the candidate’s confidence and ensuring the efficient use of his/her time in pouring through all eight (8) Bar subjects, we have enlisted the expertise of some of the most senior practitioners in the different fields of law, including noted jurists and esteemed bar reviewers. The diversity of the publication's roster of consultants and editors ensures that it remains relevant and essential. Indeed, with contributions from different people mentioned above, this issue of the Golden Notes marks an important new step in the direction of the UST Faculty of Civil Law. Let these notes, however, not detract you from the true goal. There is no substitute for hard work, and there is no shortcut to excellence. Persevere. Strive. Keep the faith. You will make it.
“Courage and perseverance have a magical talisman, before which difficulties disappear and obstacles vanish into air.” - John Quincy Adams
TABLE OF CONTENTS *based on 2017 Bar syllabus
I.
Fundamental Principles and Concepts ..................................................................................................................................1 Legal basis .......................................................................................................................................................................................1 1. 1987 Constitution (State policies, Bill o f Rights and Social Justice) ..................................................... 2 2. Article 1700 and 1702, Civil Code ................................................................................................................... 5 B. Construction in favor of labor .................................................................................................................................. 3 C. Social Justice ................................................................................................................................................................... 4 Recruitment and Placement .........................................................................................................................................................9 A. Illegal recruitment ..................................................................................................................................................................... 13 1. Elements................................................................................................................................................................ 16 2. Prohibited activities .......................................................................................................................................... 26 3. Types of illegal recruitment ............................................................................................................................ 13 4. Illegal recruitment versus estafa .................................................................................................................... 19 5. Liability of Local recruitment agency and Foreign employer ............................................................... 19 a. Solidary liability .................................................................................................................................................. 21 b. Theory of Imputed Knowledge....................................................................................................................... 21 6. Termination of contract of migrant worker without just or valid cause ........................................... 22 7. Direct hiring ......................................................................................................................................................... 24 B. Regulation of Recruitment and Placement Activities ............................................................................................... 24 C. Employment of Non-resident Aliens ................................................................................................................................ 10 D. Training and Employment of Special Workers............................................................................................................ 73 1. Apprentices and Learners ................................................................................................................................ 90 2. Disabled workers ............................................................................................................................................... 93 a. Equal opportunity ...................................................................................................................................... 93 b. Discrimination............................................................................................................................................. 94 Labor Standards ................................................................................................................................................................................ 30 A. Conditions of employment .................................................................................................................................................... 30 1. Scope ...................................................................................................................................................................... 30 2. Hours of Work ..................................................................................................................................................... 30 a. Principles in determining hours worked ........................................................................................... 32 b. Normal hours of work .............................................................................................................................. 31 Compressed work week ............................................................................................................... 34 i. Power interruption/brown-out ................................................................................................. ?? ii. c. Meal break ................................................................................................................................................... 35 d. Waiting time ............................................................................................................................................... 36 e. Overtime ...................................................................................................................................................... 36 f. Night Shift Differential ............................................................................................................................. 39 g. Rest Period .................................................................................................................................................. 53 h. Holiday pay, 13th Month Pay .......................................................................................................... 55/64 i. Service Charge ............................................................................................................................................ 63 B. Wages .......................................................................................................................................................................................... 41 1. Wages versus salary ....................................................................................................................................... 42 2. Payment of wages .......................................................................................................................................... 43 3. Facilities versus supplements ..................................................................................................................... 47 4. Non-diminution of benefits ......................................................................................................................... 46 5. Prohibitions regarding wages .................................................................................................................... 49 6. Wage order, Wage Distortion ..................................................................................................................... 50 C. Leave ............................................................................................................................................................................................ 59 1. Service Incentive Leave ................................................................................................................................ 59 2. Maternity Leave .............................................................................................................................................. 61 3. Paternity Leave ............................................................................................................................................... 62 4. Parental Leave for Solo Parents ................................................................................................................. 62 A.
II.
III.
5. Special Leaves for women workers (Magna Carta for Women) ..................................................... 63 Special Group of Employees ............................................................................................................................................. 73 1. Women .............................................................................................................................................................. 73 a. Discrimination ........................................................................................................................................ 73 b. Stipulation against marriage .............................................................................................................. 73 c. Prohibited acts ....................................................................................................................................... 74 d. Sexual Harassment ................................................................................................................................ 75 2. Minors ............................................................................................................................................................... 78 3. Kasambahay .................................................................................................................................................... 82 4. Homeworkers ................................................................................................................................................. 87 5. Night workers ................................................................................................................................................. 89 Post-Employment ............................................................................................................................................................................. 96 A. Employer-employee relationship....................................................................................................................................... 96 1. Test to determine employer-employee relationship .............................................................................. 98 2. Kinds of Employment ..................................................................................................................................... 100 3. Subcontracting versus Labor-only contracting ...................................................................................... 113 a. Elements ..................................................................................................................................................... 113 b. Trilateral relationship ............................................................................................................................ 114 c. Solidary Liability ...................................................................................................................................... 113 Termination of Employment ................................................................................................................................................ 96 B. 1. Termination by employee ............................................................................................................................. 142 a. Resignation versus Constructive Dismissal ..................................................................................... 143 2. Termination of Employer .............................................................................................................................. 115 a. Just Causes ................................................................................................................................................ 115 b. Authorized Causes .................................................................................................................................. 122 c. Due process .............................................................................................................................................. 130 Twin-notice requirement .......................................................................................................... 130 i. Hearing; ample opportunity to be heard ............................................................................. 132 ii. 3. Reliefs for illegal dismissal ........................................................................................................................... 135 4. Preventive Suspension ................................................................................................................................... 142 C. Retirement.................................................................................................................................................................................. 158 Management Prerogative ......................................................................................................................................................... 145 1. Discipline..................................................................................................................................................................................... 147 2. Transfer of employees .......................................................................................................................................................... 147 3. Productivity Standard........................................................................................................................................................... 147 4. Bonus ............................................................................................................................................................................................ 148 5. Change of working hours .................................................................................................................................................... 148 6. Marriage between employees of competitor-employers..................................................................................... 148 7. Post-Employment ban .......................................................................................................................................................... 149 Social Welfare Legislation ....................................................................................................................................................... 151 A. SSS Law ........................................................................................................................................................................................ 151 1. Coverage and Exclusions ............................................................................................................................... 152 2. Dependents, beneficiaries ............................................................................................................................. 164 3. Benefits ............................................................................................................................................................... 154 B. GSIS Law ...................................................................................................................................................................................... 163 1. Coverage and Exclusions ............................................................................................................................... 167 2. Dependents, beneficiaries ............................................................................................................................. 173 3. Benefits ............................................................................................................................................................... 168 C. Portability Law ......................................................................................................................................................................... 174 D. Employee’s compensation-coverage and when compensable .......................................................................... 174 Labor Relations .............................................................................................................................................................................. 181 A. Right to Self-determination................................................................................................................................................ 181 1. Who may/may not exercise the right ........................................................................................................ 182 a. Doctrine of Necessary implication .................................................................................................... 183 2. Commingling/Mixture of membership ..................................................................................................... 184 D.
IV.
V.
VI.
VII.
Rights and conditions of membership ...................................................................................................... 184 a. Nature of relationship ........................................................................................................................... 185 Member-Labor union ................................................................................................................. 185 i. Labor Union-Federation ........................................................................................................... 185 ii. b. Disaffiliation ............................................................................................................................................. 185 c. Substitutionary Doctrine ..................................................................................................................... 185 B. Bargaining Unit .................................................................................................................................................................... 186 C. Bargaining Representative............................................................................................................................................. 186 1. Determination of representation status ............................................................................................... 186 D. Right of Labor Organization .......................................................................................................................................... 186 1. Check-off, Assessment, Agency Fees .................................................................................................... 186 2. Collective Bargaining ................................................................................................................................. 186 a. Duty to bargain collectively ............................................................................................................. 186 b. Collective Bargaining Agreement (CBA) ...................................................................................... 186 3. Mandatory provisions of CBA .................................................................................................................. 186 E. Unfair Labor Practice........................................................................................................................................................ 186 1. Nature, aspects ............................................................................................................................................. 186 2. By employers ................................................................................................................................................ 187 3. By labor organizations ............................................................................................................................... 195 F. Peaceful concerted activities......................................................................................................................................... 197 1. By labor organization ................................................................................................................................. 197 a. Strike ....................................................................................................................................................... 203 Valid versus illegal strike ....................................................................................................... 206 i. b. Picket ...................................................................................................................................................... 200 2. By employer .................................................................................................................................................. 200 a. Lockout ................................................................................................................................................... 203 3. Assumption of Jurisdiction ....................................................................................................................... 211 a. Nature ..................................................................................................................................................... 213 b. Effects of assumption of jurisdiction ............................................................................................. 215 Jurisdiction and Remedies ...................................................................................................................................................... 226 A. Labor Arbiter............................................................................................................................................................................. 226 1. Jurisdiction ........................................................................................................................................................ 226 a. Versus Regional Director ..................................................................................................................... 229 2. Requirements to perfect appeal to NLRC ................................................................................................. 230 3. Reinstatement pending appeal ................................................................................................................... 233 B. National Labor Relations Commission (NLRC)......................................................................................................... 233 1. Jurisdiction ........................................................................................................................................................ 234 C. Court of Appeals ...................................................................................................................................................................... 239 1. Appeal via Rule 65, Rules of Court ............................................................................................................. 239 D. Supreme Court.......................................................................................................................................................................... 240 1. Rule 45, Rules of Court .................................................................................................................................. 240 E. Bureau of Labor Relations (BLR) .................................................................................................................................... 240 1. Jurisdiction ........................................................................................................................................................ 240 F. National Conciliation and Mediation Board ............................................................................................................... 242 1. Conciliation vs. Mediation............................................................................................................................. 243 2. Preventive Mediation ..................................................................................................................................... 244 G. DOLE Regional Directors..................................................................................................................................................... 245 1. Recovery/Adjudicatory ................................................................................................................................. 245 H. DOLE Secretary ........................................................................................................................................................................ 246 1. Visitorial and enforcement powers ........................................................................................................... 246 2. Power to suspend effects of termination ................................................................................................. 247 3. Remedies ............................................................................................................................................................ 249 I. Voluntary Arbitrator.............................................................................................................................................................. 250 1. Jurisdiction ........................................................................................................................................................ 250 2. Remedies ............................................................................................................................................................ 251
3.
VIII.
J.
Prescription of actions.......................................................................................................................................................... 253 1. Money claims ........................................................................................................................................... 253 2. Illegal dismissal ....................................................................................................................................... 253 3. Unfair labor practice .............................................................................................................................. 253 4. Offenses under the Labor Code .......................................................................................................... 253 5. Illegal recruitment .................................................................................................................................. 253
DISCLAIMER THE RISK OF USE OF THIS BAR REVIEW MATERIAL SHALL BE BORNE BY THE USER
Fundamental Principles and Policies LABOR LAW
LEGEND BFOQ
-
BLR CB CBA
-
CE DOLE
-
Ee Er IRR
-
LA LC LLO LOA NCMB
-
NLRC
-
NSD OFW OT PCE
-
POEA
-
-
RAB RD RH RTWPB
-
RW RWD SEBA
-
SEnA SIL SOLE
- -
ULP UT VA VR WD WRD
-
Bona Fide Occupational Qualification Bureau of Labor Relations Collective Bargaining Collective Bargaining Agreement Certification Election Department of Labor Employment Employee Employer Implementing Rules and Regulations
FUNDAMENTAL PRINCIPLES AND POLICIES LABOR LAW Labor
and It is the exertion by human beings of physical or mental efforts, or both, towards the production of goods and services. (Poquiz, 2012) The State affirms labor as a p rimary social economic force. It shall protect the rights of workers and promote their welfare. (1987 Constitution, Art. II, Sec. 18)
Labor Arbiter Labor Code Legitimate Labor Organization Leave of Absence National Conciliation and Mediation Board National Labor Relations Commission Night Shift Differential Overseas Filipino Worker Overtime Petition for Certification Election
The law that defines State policies on labor and employment and governs the rights and duties of the employer (Er) and employees (Ee) with respect to: 1. The terms and conditions of employment, and 2. Labor disputes arising from collective bargaining or other concerted activity respecting such terms and conditions.
Matters that may properly fall under the term
Philippine Overseas Employment Administration Regional Arbitration Branch Regional Director Regular Holiday Regional Tripartite Wages and Productivity Boards Regular Wage Regular Working Days Sole and Exclusive Bargaining Agent
“labor law” The term “labor law” covers the foll owing: 1. Statutes passed by the State to promote the welfare of the workers and Ees and regulate their relations with their Ers. 2. Judicial decisions applying and interpreting the aforesaid statutes. (NCC, Art. 8) 3. Rules and regulations issued by administrative agencies, within their legal competence, to implement labor statutes.
Single Entry Approach Service Incentive Leave Secretary of Labor and Employment
Classification of labor laws 1.
Labor Standards – Prescribes the terms and conditions of employment as affecting wages or monetary benefits, hours of work, cost of living allowances, and occupational health, safety and welfare of the workers. It provides economic benefits to the workers who are actually working. e.g. 13th month pay
Unfair Labor Practice Undertime Voluntary Arbitrator Voluntary Recognition Wage Distortion Weekly Rest Day 2.
Labor Relations – Defines and regulates the status, rights and duties, and the institutional mechanisms, that govern the individual and collective interactions of Ers,
1
Labor Law and Social Legislation Ees or their representatives. It is concerned with the stabilization of relations of Ers and Ees and seeks to forestall and adjust the differences between them by the encouragement of CB and the settlement of labor disputes through conciliation, mediation, and arbitration.
b.
c. d.
e.g. Collective Bargaining Negotiations 3.
e.
Social Legislation – All laws passed by the A:
State to promote public welfare. It includes statutes intended to enhance the welfare of the people even where there is no Er-Ee relationship. It provides economic benefits to workers who are at work because of the hazards of employment.
a. NO, because the arrangement will circumvent worker's right to security of tenure.
--Labor Legislation vs. Social Legislation
e.g. GSIS Law, SSS Law, Philhealth benefits,
Labor Legislation
Agrarian Laws
1.
--Q: How do the provisions of the law on labor relations interrelate, if at all, with the provisions pertaining to labor standards? (2003 Bar)
2.
A: The law on Labor Relations provides for rights and procedures by which workers may obtain from their Er benefits which are over and above the minimum terms and conditions of employment set by labor standards law. Labor Standards law alone does not guarantee lasting industrial peace. It is assured through Labor Relations law which enables workers to obtain better benefits guaranteed by labor standards laws and by providing for a mechanism to settle disputes between the Er and his Ees.
Refers to labor 1. statutes like Labor Relations Law and 2. Labor Standards Focuses on rights of worker in workplace
the the the
Social Legislation Refers to Social Security Laws Those laws that provide particular kinds of protecion or benefits to society or segments thereof in furtherance of social justice
NOTE: All Labor laws are social legislations, but not all social legislations are labor laws. The purpose of labor legislation is 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 Ers. The State shall assure the rights of workers to self-organization, collective bargaining (CB), security of tenure and just and humane conditions of work. Ultimately, the primordial purpose is to promote the welfare of the people based on the latin maxim salus populi est suprema lex. (2006 Bar)
----Q: Mr. Del Carmen, unsure if his foray into business (messengerial service catering purely to law firms) would succeed but intending to go long-term if he hurdles the first year, opted to open his operations with one-year contracts with two law firms although he also accepts messengerial service requests from other firms as their orders come. He started with one permanent secretary and six (6) messengers on a one-year, fixed-term, contract.
Declaration of basic policy It is the policy of the State to: 1. 2. 3.
Is the arrangement legal from the perspective of labor standards? (2013 Bar) a.
No. If allowed, the arrangement will serve as starting point in weakening the security of tenure guarantee. Yes, if the messengers are hired through a contractor. Yes, because the business is temporary and the contracted undertaking is specific and time-bound. No, because the fixed term provided is invalid.
No, because the arrangement will circumvent worker's right to security of tenure.
4. 5.
2
Afford full protection to labor, Promote full employment, Ensure equal work opportunities regardless of sex, race, or creed Regulate the relations between workers and Er. Assure the rights of workers to selforganization, collective bargaining, security of tenure, just and humane conditions of work. (LC, Art. 3)
Fundamental Principles and Policies Protection to labor
balanced by the sympathy and compassion the law must accord the underprivileged worker. This is only fair if he is to be given the opportunity and the right to assert and defend his cause not as a subordinate but as a peer of management, with which he can negotiate on even plane. Labo ris not a mere employee of capital but its active and equal partner. (Eastern Shipping Lines v. POEA, G.R. No. 76633, October 18, 1988)
In affording full protection to la bor, this Court must ensure equal work opportunities regardless of sex, race, or creed. Even as we, in every case, attempt to carefully balance the fragile relationship between Ee and Er, we are mindful of the fact that the policy of the law is to apply the Labor Code to a greater number of employees. This would enable employees to avail of the benefits accorded to them by law, in line with the constitutional mandate giving maximum aid and protection to labor, promoting their welfare and reaffirming it as a primary social economic force in furtherance of social justice and national development. (Angelina Francisco v. NLRC. G.R. No. 170087, August 31, 2006)
It is a well-settled doctrine that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. It is a time-honored rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence, or in the interpretation of agreements and writing, should be resolved in the former’s favor. The policy is to extend the doctrine to a greater number of employees who can avail themselves of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection to labor. (Lepanto Consolidated Mining Co. v. Moreno Dumapis, et. al., G.R. No. 163210, August 13, 2008)
The constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers. The commitment under the fundamental law is that the cause of labor does not prevent us from sustaining the employer when the law is clearly on its side . (Estrellita G. Salazar v. Philippine Duplicators, Inc, G.R. No. 154628, December 6, 2006)
SOURCES OF LABOR LAWS 1. 2. 3. 4. 5.
LC and other related special (including their respective IRR) Contracts CBA Company practices Company policies
Concept of liberal approach in interpreting the LC and its IRR legislation The LC and its IRR, being remedial in character must be accorded the broadest scope and most beneficial interpretation. It is only in this way that their purpose, which is to remedy evils of exploitation, manipulation and oppression, may be achieved. Strict adherence to the letter of labor law is not allowed; the spirit thereof prevails and must be given effect. Under Art. 4 of the LC, all doubts in the implementation and interpretation of the provisions thereof, including its IRR, are to be resolved in favor of labor.
CONSTRUCTION IN FAVOR OF LABOR All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor. (LC, Art. 4)
Compassionate justice Scope of the liberal interpretation of Labor Law 1. 2. 3. 4.
The social justice policy mandates a compassionate attitude toward the working class in its relation to management. In calling for protection to labor, the Constitution does not condone wrong doing by the Ee. However, it urges a moderation of the sanctions that maybe applied to him in the light of the many disadvantages that weigh heavily on him like an albatross on his neck. It is disregarding rigid rules and giving due weight to all equities of the case.(Gandara Mill Supply and Milagros Sy v. NLRC and Silvestre Germano, G.R. No. 126703, December 29, 1998)
Labor Law Implementing Rules Regulations Labor or Employment Contract Evidence in a labor proceeding
In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. (NCC, Art. 1702) In case of doubt in the interpretation or application of laws, it is presumed that the lawmaking body intended right and justice to prevail. (NCC, Art. 10) When the conflicting interests of labor and capital are weighed on the scales of social justice, the heavier influence of the latter must be counter-
Compassion and mercy subordinate to justice for all
3
Labor Law and Social Legislation Before there can be an occasion for compassion, sympathy and mercy, there must be justice for all. Otherwise, Ees will be encouraged to steal and misappropriate in the expectation that eventually, in the name of social justice and compassion, they will not be penalized but instead financially rewarded. These are not the values the society cherishes; these are the habits that it abhors. (SMC v. NLRC, G.R. No. 117055, March 29, 2006)
Social justice is “neither communism, nor despotism, nor atomism, nor anarchy,” but the humanization of laws and the equalization of social and economic force by the State so that justice in its rational and objectively secular conception may at least be approximated. Social Justice means the promotion of the welfare of all the people, the adoption by the government of measures calculated to insure economic stability of all the competent elements of society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of the community, constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through the exercise of powers underlying the existence of all governments on the time-honored principle of salus populi est suprema lex. (Calalang v. Williams, G.R. No. 47800, December 2, 1940)
The Employees Compensation Law (P.D. 626) operates on the principle of social justice, but sympathy to the workers should also be placed in a sensible equilibrium with the stability of the ECC trust fund. (Aquino v. SSS, G.R. No. 149256, July 21, 2006)
e.g. An Ee who was validly dismissed may still be given severance pay.
The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance. (1987 Constitution, Art. XIII, Sec. 2)
--Q: What is the quantum of evidence required in labor case? (2012 Bar) a.
b.
c. d.
Limitations in invoking the principle of social justice
The degree of proof which produces the conclusion that the employee is guilty of the offense charged in an unprejudiced mind; Such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion; That degree of proof which is greater in weight than the opposing party’s evidence; Such evidence which must be highly and substantially more probable to be true than not which convinces the trier of facts of its factuality.
1.
Not to undermine property rights resulting in confiscation. (Guido v. Rural Progress Adm, L 2089, October 31, 1949) It should not tolerate usurpation of property, public or private. 2. May only protect the laborers who come to court with clean hands (Phil. Long Distance Telephone Co. v. NLRC, G.R. No. 80609, August 23, 1988) and their motives blameless (Gustilo v. Wyeth Phils., G.R. No. 149629, October 4, 2004). 3. Never result in an injustice or oppression of the Er. (Phil. Geothermal Inc. v. NLRC, G.R. No. 106370, September 8, 1994) 4. If it is used to shield wrongdoings, it cannot be permitted to be the refuge of scoundrels. (PNCC v. NLRC, G.R. No. 83320, Feb. 9, 1989)
A: c. Such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. (Tancirco v. GSIS, G.R. No. 132916, November 16, 2001)
--Recognition of management prerogative
--Q: May social justice as a guiding principle in labor law be so used by the courts in sympathy with the working man if it collides with the Equal Protection clause of the Constitution? (2003 Bar)
The law also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play. (St. Luke’s Medical Center Ees Ass’n v. NLRC, G.R. No. 162053, March 7, 2007)
SOCIAL JUSTICE A: YES. The State is bound under the Co nstitution to The State shall promote social justice in all phases of national development. (1987 Constitution, Art. II, Sec. 10)
afford full protection to Labor and when conflicting interests collide and they are to be weighed on the scales of social justice, the law should accord more sympathy and compassion to the less privileged workingman. (Fuentes v. NLRC, G.R. No. 110017, January 2, 1997)
The aim of Labor law is social justice
4
Fundamental Principles and Policies However it should be borne in mind that social justice ceases to be an effective instrument for the “equalization of the social and economic forces” by the State when it is used to shield wrongdoing. (Corazon Jamer v. NLRC, G.R. No. 112630, September 5, 1997)
No contract which practically amounts to involuntary servitude, under any guise whatsoever, shall be valid. (NCC, Art. 1703)
---
The CBA is the norm of co nduct between Er and Ees and compliance therewith is mandated by the express policy of the law. (DOLE Philippines, Inc., v. PAMAO-NFL, G.R. No. 146650, January 13, 2003, in citing E. Razon, Inc. v. Secretary of Labor and Employment, G.R. No. 85867, May 13, 1993)
The CBA operating as a source of law
Contract of labor It is a consensual, nominate, principal, and commutative contract whereby one person, called the Er, compensates another, called the laborer, worker or Ee, for the latter’s service. It is a relationship impressed with public interest in keeping with our constitutional policy of social justice.
Requisites before past company practices would be considered as a source of labor law There must be: 1. Voluntarily institution by Er without any legal compulsion 2. Should have been done over a long period of time, and must be shown to have been consistent and deliberate.(American Wire and Cable Daily Rated Employees Union v. American Wire and Cable Co., Inc., G.R. No. 155059, April 29, 2005)
Essential characteristics of a contract of labor 1. 2. 3. 4. 5.
Er freely enters into a contract with the Ee; Er can select who his Ee will be; Er can dismiss the Ee; the Ee in turn can quit his job; Er must give remuneration; and Er can control and supervise the conduct of the Ee.
NOTE: No passage of time is required for a company policy to become a source of labor law.
Contracts are subject to police power of the State OTHER CONSTITUTIONAL PROVISIONS The supremacy of the law over the nomenclature of the contract and the stipulations contained therein is to bring to life the policy enshrined in the Constitution to “afford full protection to labor.” Thus, labor contracts are placed on a higher plane than ordinary contracts; these are imbued with public interest and therefore subject to the police power of the State. (Leyte Geothermal Power Progressive Employees Union-ALU-TUCP v. Philippine National Oil Company-Energy Development Corporation, G.R. No. 170351, March 30, 2011) The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lock outs, closed shop, wages, working conditions, hours of labor and similar subject. (NCC, Art. 1700)
Constitutional mandates on labor law 1.
Sec. 3, Art. XIII – The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.
Prohibitions on contract of labor:
The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.
No law impairing the obligation of co ntracts shall be passed. (1987 Constitution, Art. III, Sec. 10) No involuntary servitude in any form shall exist except as a punishment for a crime whereof the party shall have been duly convicted. [1987 Constitution, Art. III, Sec. 18(2)]
5
Labor Law and Social Legislation 10. Sec. 8, Art. III – The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged. Law: EO No. 180 S. 1987 providing guidelines for the exercise of the right to organize of government employees, creating a Public Sector Labor Management Council and for other purposes
The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth. 2.
Sec. 9, Art. II – The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.
3.
11. Sec. 16, Art. III – All persons shall have the right to a speedy disposition of their cases before all judicial, quasi-judicial or administrative bodies.
Sec. 11, Art II - The State values the dignity
12. Sec. 1, Art. XIII - The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.
of every human person and guarantees full respect for human rights. 4.
Sec. 13, Art. II - The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs.
5.
To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.
Sec. 14, Art. II - The State recognizes the role 13. Sec. 13, Art. XIII – The State shall establish a special agency for disabled persons for their rehabilitation, self-development and selfreliance and their integration into the mainstream of society. Law: RA 7277 Magna Carta for Disabled Person
of women in nation-building, and shall ensure the fundamental equality before the law of women and men. Law: Magna Carta of Women 6.
Sec. 20, Art. II – The State recognizes the indispensable role of the private sector, encourages private enterprise and provide incentives to needed investments.
7.
Sec. 14, Art. XIII – The State shall protect working women by providing safe and healthful working conditions, taking into account their maternal functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation.
Sec. 1, Art. III - No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.
8.
Sec. 4, Art. III - No law shall be passed State policy on labor as found in the constitution
abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances. 9.
1. 2. 3.
Sec. 7, Art. III - The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law.
4.
5.
6
Afford full protection to labor Promote full employment Ensure equal work opportunities regardless of sex, race, or creed Assure the rights of workers to selforganization, security of tenure , just and humane conditions of work, participate in policy and decision-making processes affecting their right and benefits Regulate the relations between Ers and workers. (1987 Constitution, Art. XIII, Sec. 3)
Fundamental Principles and Policies Basic rights of workers guaranteed by the constitution 1. 2. 3. 4. 5. 6. 7. 8. 9.
Security of tenure Living wage Just and humane working conditions Share in the fruits of production Self-organization Collective bargaining Collective negotiations Engage in peaceful concerted activities, including the right to strike Participate in policy and decision making processes. (1987 Constitution, Art. XIII, Sec. 3)
1.
New Civil Code (NCC) a. Art. 19 – Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. b. Art. 1704 - In collective bargaining, the labor union or members of the board or committee signing the contract shall be liable for non-fulfillment thereof. c. Art. 1710 - Dismissal of laborers shall be subject to the supervision of the Government, under special laws.
2.
Revised Penal Code (RPC) Art. 289– Formation, maintenance and prohibition of combination of capital or labor through violence or threats. – Any person who, for the purpose of organizing, maintaining or preventing coalitions or capital or labor, strike of laborers or lockout of employees, shall employ violence or threats in such a degree as to compel or force the laborers or employers in the free and legal exercise of their industry or work, if the act shall not constitute a more serious offense in accordance with the provisions of the RPC.
3.
Special Laws
--Q: Which is not a constitutional right of the workers? (2012 Bar) a. The right to engage in peaceful concerted b. c. d.
activities The right to enjoy security of tenure The right to return on investment The right to receive a living wage.
A: c. The right to return on investment. (1987 Constitution, Art. XIII, Sec. 3)
--Principle of Non-oppression a.
E.O. 180- Providing guidelines for the exercise of the Right to Organize of Government Employees, creating a Public Sector Labor-Management Council, and for other purposes b. R.A. 8291 - Government Service Insurance Act of 1997 c. 13th Month Pay Law d. Retirement Pay Law e. SSS Law f. Paternity Leave Act g. Anti – Child Labor Act h. Anti – Sexual Harassment Act i. Magna Carta for Public Health Workers j. Solo Parents Welfare Act of 2000 k. National Health Insurance Act as amended by R.A. 9241 l. Migrant Workers and Overseas Filipinos Act of 1995 as amended by RA 10022 m. PERA Act of 2008 n. Home Development Mutual Fund Law of 2009 o. The Magna Carta of Women p. Magna Carta for Disabled Person q. Comprehensive Agrarian Reform Law as amended by R.A. 9700 r. Batas Kasambahay (RA No. 10361) s. Working “summer/Christmas” students as amended by RA 9547 expanding the
The principle mandates capital and labor not to act oppressively against each other or impair the interest and convenience of the public. The protection to labor clause in the Constitution is not designed to oppress or destroy capital.(Capili v. NLRC, G.R. No. 117378, March 26, 1997) The law in protecting the rights of the Ees authorizes neither oppression nor self-destruction of the Er. (Pacific Mills Inc. v. Alonzo, G.R. No. 78090, July 26, 1991) It should be made clear that when the law tilts the scale of justice in favo r of labor, it is but a recognition of the inherent economic inequality between labor and management. The intent is to balance the scale of justice; to put the two parties on relatively equal positions. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an injustice to the employer. Justitia nemini neganda est (justice is to be denied to none ). (Philippine Geothermal, Inc. v. NLRC and Edilberto M. Alvarez, G.R. No. 106370, September 8, 1994) Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public. (NCC, Art. 1701)
NEW CIVIL CODE AND OTHER LAWS
7
Labor Law and Social Legislation
t.
coverage of the Special Program for Employment of Students (SPES) Wage Rationalization Act (RA 6727)
Agency that exercises the “rule-making power”
granted by the labor code
LABOR CODE
The DOLE through the SOLE and other Government agencies charged with the administration and enforcement of the LC or any of its parts shall promulgate the necessary IRRs.
Presidential Decree No. 442 otherwise known as th e Labor Code of the Philippines is a decree instituting a labor Code, thereby revising and consolidating labor and social laws to afford protection to labor, promote employment and human resources development and ensure industrial peace based on social justice. It is a charter of human rights and a bill of obligations for every working man.
The Public Sector Labor-Management Council, not the DOLE shall hear the dispute ( E.O. 180, Sec.15, June 1, 1987)
Effectivity date: November 1, 1974
Limitations to the “rule-making power” granted
Labor Dispute between Government Ees
to the SLE and other government agencies Presidential Decree No. 442 was signed into law on May 1, 1974. Article 2 says, the Code was to take effect six months after its promulgation. Therefore, the law took effect on Novemb er 1, 1974.
1. It must be issued under the authority of law 2. It must not be contrary to law and the Constitution 3. Must not go beyond the law itself
Father of Labor Code
Effectivity of rules and regulations
The writing of the labor code began under the leadership of then Minister of Labor, Mr. Blas Ople, who deserves to be regarded as the “Father of the Labor Code”.
Such rules and regulations shall become effective 15 days after announcement of their adoption in newspapers of general circulation.
Applicability of the labor code Extra-territorial application of LC GR: All rights and benefits granted to workers under the LC shall apply alike to all workers, whether agricultural or non-agricultural. (LC, Art. 6)
Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with the basic public 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. For the State assures the basic rights of all workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work (PNB v. Cabansag, G.R. 157010, June 21, 2005)
XPNs: 1. 2. 3. 4. 5.
6. 7.
Government Ees Ees of government corporations created by special or original charter Foreign governments International agencies Corporate officers/ intra-corporate disputes which fall under P.D. 902-A and now fall under the jurisdiction of the regular courts pursuant to the Securities Regulation Code. Local water district except where NLRC’s jurisdiction is invoked. As may otherwise be provided by the LC.
RECRUITMENT AND PLACEMENT
Test to determine the applicability of the LC to GOCC; ‘Original charter or manner of creation test ’
RECRUITMENT OF LOCAL AND MIGRANT WORKERS
When a GOCC is created by a special charter, it is subject to the provisions of the Civil Service Law while those incorporated under the general Corporation law is subject to the provisions of the Labor Code. (PNOC-EDC v. Legardo, GR No. 58494, 5 July 1989)
Worker Any member of the labor force, whether employed or unemployed [LC, Art. 13 (a)].
8
Recruitment and Placement Governing Law 1. 2. 3.
and Overseas Filipinos Act of 1995 as amended by R.A. 10022].
LC RA 8042 (Migrant Workers and Overseas Filipinos Act of 1995) RA 10022 (Migrant Workers and Overseas Filipinos Act of 1995 as amended)
Name hires Individual workers who are able to secure contracts for overseas employment opportunities with Ers without the assistance or participation of any agency (Omnibus Rules and Regulations implementing the Migrant Workers and Overseas Filipinos Act of 1995 as amended by R.A. 10022, Rule II).
Recruitment and placement 1.
2.
Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers; and Includes referrals, contact services, promising or advertising for employment, locally or abroad, whether for profit or not [LC, Art. 13(b)].
NOTE: Name hires should registered under POEA for protection
Private Fee-Charging Employment Agency vs. Private Recruitment Agency
Persons deemed engaged in recruitment and placement Any person or entity which, in any manner, offers o r promises for a fee employment to two (2) or more persons shall be deemed engaged in recruitment and placement [LC, Art. 13(b)].
NOTE: Regardless of the number of persons dealt with, recruitment and placement is still constituted. The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a promise or offer of employment to 2 or more prospective workers, the individual or entity dealing with them shall be deemed to be engaged in the act of recruitment and placement. The words "shall be deemed" create that presumption (People v. Panis, G.R. L-58674-77 July 11, 1990).
employment offices, shall engage in the recruitment and placement of workers.
XPNs:
3. 4. 5. 6. 7. 8. 9.
Any person or entity engaged in the recruitment and placement of workers for a fee which is charged, directly or indirectly, from the workers or Ers or both (LC, Art. 13).
Any person or association engaged in the recruitment and placement of workers, locally or overseas, without charging, directly or indirectly, any fee from the workers or employers [Art. 13(e), LC].
Refers to any person who is employed or engaged in overseas employment in any capacity on board a ship other than a government ship used for military or non-commercial purposes. The definition shall include fishermen, cruise ship personnel and those serving on mobile offshore and drilling units in the high seas [Sec. 1(ss), Rule II, Omnibus Rules and Regulations Implementing Migrant Workers Act as amended by R.A. 10022 (2010)].
GR: No person or entity other thanpublic
2.
PRIVATE RECRUITMENT AGENCY
Seafarer
Persons or entities that may engage in recruitment and placement
1.
PRIVATE FEECHARGING EMPLOYMENT AGENCY
Construction contractors if authorized by the DOLE and Construction Industry Authority Other persons or entities as may be authorized by the SOLE Members of the diplomatic corps (but hiring must go through POEA) Public employment offices Private recruitment offices Private employment agencies POEA Shipping or manning agents or representatives Name hires [Sec. 1(i), Rule II, Omnibus Rules and Regulations implementing the Migrant Workers
Overseas employment Employment of a worker outside the Philippines [LC, Art. 13(h)].
Overseas Filipino Worker (OFW) A person who is to be engaged, is engaged or has been engaged in a remunerated activity in a State of which he or she is not a citizen or on board a vessel navigating the foreign seas other than a government ship used for military or non-commercial purposes
9
Labor Law and Social Legislation or on an installation located offshore or on the high seas [Sec. 1(jj), Rule II, Omnibus Rules and Regulations Implementing Migrant Workers Act as amended by R.A. 10022 (2010)].
3. 4. 5.
The term “OFW” is to be used interchangeably with “migrant worker” as provided in R.A. 10022.
6.
Emigrant
7.
Other persons required to obtain an Alien Employment Permit:
Any person, worker or otherwise, who immigrates to a foreign country by virtue of an immigrant visa or resident permit or its equivalent in the country of destination [Art. 13(i), LC].
1.
EMPLOYMENT OF NON-RESIDENT ALIENS 2. Non-residents alien may be hired if an No n-resident aliens may be hired if an employment permit is issued to a non-resident alien or to the applicant employer after a determination of the nonavailability of a person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired (LC, Art. 40, Title II).
Immigration and Deportation approved Cone’s
application for a change of admission status from temporary visitor to pre-arranged employee. A month later, GMC requested that it be allowed to employ Cone as full-fledged coach. The DOLE Regional Director granted the request. The Basketball Association of the Phils.appealed the issuance of said permit to the SLE who cancelled Cone’s employment permit because GMC failed to show that there is no person in the Philippines who is competent and willing to do the services nor that the hiring of Cone would redound to the national interest. Is the act of the SLE valid?
Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign Er who desires to engage an alien for employment in the Philippines:
2.
3.
Non-resident foreign nationals admitted to the Philippines on non-working visas and who wish to seek employment Missionaries or religious workers who intend to engage in gainful employment
--Q: The DOLE issued an alien employment permit for Earl Cone, a U.S. citizen, as sports consultant and assistant coach for GMC. Later, the Board of Special Inquiry of the Commission on
Requirements in employment of non-resident aliens
1.
Members of governing board who have voting rights only; Those exempted by special laws; Owners and representatives of foreign principals who interview Filipino applicants for employment abroad; Aliens whose purpose is to teach, present and/or conduct research studies; Resident aliens (D.O. 75-06, Series of 2006).
Shall obtain an employment permit from the DOLE The permit may be issued to a non-resident alien or to the applicant Er after a determination of the non-availability of a person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired For an enterprise registered in preferred areas of investments, said permit may be issued upon recommendation of the Government agency charged with the supervision of said registered enterprise (LC, Art. 40, Title II).
A: YES. GMC’s claim that hiring of a foreign coach is an Er’s prerogative has no legal basis. Under Art. 40 of the LC, an Er seeking employment of an alien must first obtain an employment permit from the DOLE. GMC’s right to choose who to employ is limited by the statutory requirement of an employment permit (GMC v. Torres, G.R. No. 93666, April 22, 1991).
---
Persons required to obtain employment permit
PROHIBITION AGAINST TRANSFER OF EMPLOYMENT
GR: All non-resident foreign nationals who intend to Rule as to whether a non-resident alien may transfer employment after issuance of the employment permit
engage in gainful employment in the Philippines.
XPNs: 1. 2.
Diplomatic services and foreign government officials; Officers and staff of international organizations and their legitimate spouses;
After the issuance of an employment permit, the alien shall not transfer to another job or change his Er without prior approval of the SLE [LC, Art. 41(a)].
10
Recruitment and Placement Requirement for immigrants and resident aliens 2. They are required to obtain an Alien Employment Registration Certificate.
Duration of the employment permit GR: Minimum of 1 year XPN: If the employment contract, consultancy services, or other modes of engagement provides otherwise, which in no case shall exceed 5 years [DOLE D.O. 97-09, Revised Rules for the Issuance of Employment Permits to Foreign Nationals (2009)].
authorized capital stock is owned and controlled by Filipino citizens; (LC, Art. 27) Capitalization a. Single proprietorship or partnership A minimum capitalization of P5 million b. Corporation A minimum paid-up capital of P5 million Provided, that those with existing licenses shall, within 4 yrs. from the effectivity hereof, increase their capitalization or paid up capital, as the case may be, to P5 million at the rate of Php 750,000.00 every year (Sec. 2, Rule 1, Part II, Revised POEA Rules of 2016).
NOTE:
Capitalization employment:
Employment of aliens in entities engaged in nationalized activities nationalized activities
XPNs: 2.
3.
Secretary of Justice specifically authorizes the employment of technical personnel; Aliens are elected members of the board of directors or governing body of corporations or associations engaging in partially nationalized activities shall be allowed in proportion to th eir allowable participation or share in the capital of such entities [Sec. 2(A), Anti-Dummy Law, as amended by P.D. 715]; or Enterprises registered under the Omnibus Investment Code in case of technical, supervisory or advisory positions, but for a limited period.
3.
4. 5.
3. 4. 5. 6.
Shipping or manning agents or representatives Private recruitment offices Public employment offices Construction contractors if authorized by the DOLE and Construction Industry Authority. Persons that may be authorized by the SLE Private employment agencies (Sec. 1, Rule VII, Book I, IRR of the LC).
A. NO. Article 27 of the Labor Code mandates that pertinently, for a Corporation to validly engage in recruitment and placement of workers, locally and overseas, at least seventy-five percent (75%) of its authorized and voting capital stock must be owned and controlled by Filipino citizens. Since only 70% of its authorized capital stock is owned by Filipinos, it consequently cannot validly engage in recruitment and placement of workers, locally and overseas.
Qualifications for participation in recruitment and placement of workers 1.
Filipino citizens, corporations with
or partnerships at least 75% of
Not otherwise disqualified by law or other government regulations to engage in the recruitment and placement of workers for overseas employment (Rule 1, Part II, Revised POEA Rules of 2016). Payment of registration fees Posting of surety or cash bonds
--Q: Rocket Corporation is a domestic corporation registered with the SEC, with 30% of its authorized capital stock owned by foreigners and 70% of its authorized capital stock owned by Filipinos. Is Rocket Corporation allowed to engage in the recruitment and placement of workers, locally and overseas? Briefly state the basis for your answer. (2015 Bar Question)
Entities in the private sectors that can participate in recruitment and placement of workers 2.
local
Regulation of the private sector’s participation in the recruitment and overseas placement of workers is made by setting up a licensing and registration system (Sec. 14, R.A. 10022).
PRIVATE SECTOR PARTICIPATION IN THE RECRUITMENT AND PLACEMENT OF WORKERS
1.
for
a. Single proprietorship or partnership - A minimum capitalization of P1 million b. Corporation - A minimum paid-up capital of P1 million (Sec. 4, DOLE DO. 141-14, Series of 2014)
GR: Aliens may not be employed or engaged in
1.
requirement
or the
---
11
Labor Law and Social Legislation Persons and entities disqualified to engage in the business of recruitment and placement of workers 1. 2.
3.
4.
5.
6.
placement activities. It stated in its application that its purpose is not for profit but to help Filipinos find employment abroad. Should the application be approved? (2006 Bar Question)
Travel agencies and sales agencies of airline companies; (LC, Art. 26) Officers or members of the board of any corporation or members in a partnership engaged in the business of a travel agency; Corporations and partnerships, when any of its officers, members of the board or partners, is also an officer, member of the board or partner of a corporation or partnership engaged in the business of a travel agency; Persons, partnerships or corporations which have derogatory records, such as but not limited to those: a. Certified to have derogatory record or information by the NBI or by the AntiIllegal Recruitment Branch of the POEA; b. Against whom probable cause or prima facie finding of guilt for illegal recruitment or other related cases exists; c. Convicted for illegal recruitment or other related cases and/or crimes involving moral turpitude; and d. Agencies whose licenses have been previously revoked or cancelled by the POEA for violation of R.A. 8042, P.D. 442 as amended and their IRRs.
A:No. The application should be disapproved, as it is prohibited by Art. 26 of the LC, to wit: "Art. 26. Travel agencies and sales agencies of airline companies are prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not." Rule I, Part II POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Workers (2002) disqualifies any entity having common director or owner of travel agencies and sales agencies of airlines, including any business entity from the recruitment and placement of Filipino workers overseas, whether they derive profit or not.
--Purpose for prohibiting travel agencies. Travel agencies and sales agencies of airline companies are prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not. This is so, for travel agencies are under the supervisory powers of the Department of Tourism, not the Department of Labor and Employment. Otherwise, confusion may arise to the detriment and disadvantage of an overseas applicant-worker or may lead to exploitation of the applicant-worker who will be at the economic mercy of the travel agency or sales agencies of airline company from the time his papers are processed to the time he departs.
Any official or Ee of the DOLE, POEA, OWWA, DFA and other government agencies directly involved in the implementation of R.A. 8042 and/or any of his/her relatives within the 4 th civil degree of consanguinity or affinity; and Persons or partners, officers and directors of corporations whose licenses have been previously cancelled or revoked for violation of recruitment laws (Sec. 2, Rule I, 2002 Rules and Regulations on the Recruitment and Employment of Land-Based Workers).
It cannot be discounted, however, that travel agencies can facilitate with the airlines for the issuance of the worker's plane ticket. Moreover, illegal recruitment activities can be traced to travel agencies that facilitate papers of job-seekers for overseas. They do dirty job of legalizing the travel on tourist-visas and with the assurance that the same could be converted into work-visas in the country of employment
TRAVEL AGENCIES PROHIBITED FROM RECRUITMENT AND PLACEMENT Prohibition on travel agencies and sales agencies of airline companies to recruit
FEES TO BE PAID BY WORKERS They are prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not du e to conflict of interest.
Instances when a worker may be charged Only when: 1. He has obtained work through recruiter’s efforts, and The worker has actually commenced working 2.
--Q: WTTA is a well-known travel agency and an authorized sales agent of the PAL. Since majority of its passengers are overseas workers, WTTA applied for a license for recruitment and
A land-based agency may charge and collect from its hired workers a placement fee in an amount
12
Recruitment and Placement equivalent to 1 month salary, exclusive of documentation costs (Sec. 3, Rule V, POEA Rules and Regulations).
9.
Authorized payments that may be collected from a hired worker
10. 11.
1. 2.
Placement fee in an amount equivalent to one month’s salary of the worker, and Documentation costs (Sec. 3, Rule V, POEA Rules and Regulations).
12.
ILLEGAL RECRUITMENT, ART. 38 (LOCAL), SEC. 6, MIGRANT WORKERS ACT, R.A. 8042 Types of illegal recruitment 1.
Simple or licensee –committed by a licensee or
13.
holder of authority against one or two persons only. The prescriptive period is five (5) years. 2. Non-licensee –committed by any person who is neither a licensee nor a holder of authority; 3. Syndicated –committed by a syndicate if carried out by a group of three or more persons in conspiracy or confederation with one another; 4. Large scale or qualified –committed against three or more persons individually or as a group (People v. Sadiosa, G.R. No. 107084, 15 May 1998) despite the lack of necessary license from POEA (People v. Alzona, G.R. No. 132029, 30 July 2004). The prescriptive period is twenty (20) years.
Prohibited placement 1.
2. 3.
4.
5. 6. 7.
8.
practices
in
recruitment
14.
15.
16.
or
Furnishing or publishing any falsie notice/information/document related to recruitment/employment Failure to file reports required by SLE Inducing or attempting to induce a worker already employed to quit his employment in order to offer him another unlessthe transfer is designed to liberate a worker from oppressive terms and conditions Recruitment/placement of workers in jobs harmful to public health or morality or to the dignity of the country Engaging directly or indirectly in the management of a travel agency Substituting or altering employment contracts without approval of DOLE Charging or accepting any amount greater than that specified by DOLE or make a worker pay any amount greater than actually received by him Committing any act of misrepresentation to secure a license or authority
Influencing or attempting to influence a person/entity not to employ any worker who has not applied employment through his agency Obstructing or attempting to obstruct inspection by SLE or by his representatives Withholding or denying travel documents from applicant workers before departure for monetary considerations other than authorized by law Granting a loan to an overseas Filipino worker with interest exceeding eight percent (8%) per annum, which will be used for payment of legal and allowable placement fees and make the migrant worker issue, either personally or through a guarantor or accommodation party, postdated checks in relation to the said loan Refusing to condone or renegotiate a loan incurred by an OFW after his employment contract has been prematurely terminated through no fault of his or her own For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the processing of pending worker’s applications; For recruitment/manning agency or a foreign principal/Er to pass on the OFW or deduct from his or her salary the payment of the cause of fees, premium or other insurance related charges, as provided under the compulsory worker’s insurance coverage Imposing a compulsory and exclusive arrangement whereby an OFW is required to: a. Avail a loan only from specifically designated institutions, or entities or persons b. To undergo health examinations only from specifically designated medical, entities or persons, except seafarers whose medical examination cost is shouldered by the ship owner c. To undergo training of any kind only from designated institutions, entities or persons, except for recommendatory trainings mandated by principals/shipowners (Sec. 6, R.A. 8042, Migrant Workers and Overseas Filipino Act, as amended by R.A. 10022).
--Q: A crew agreement was entered into by Nerry Balatongan and Philimare Shipping and Equipment Supply for the employment of the former as a seaman on board the vessel "Santa Cruz” which was approved by the National
Seaman's Board (NSB). While on board said vessel the parties entered into a supplementary contract of employment providing for accident and death benefits. Balatongan met an accident
13
Labor Law and Social Legislation as a result of which he was hospitalized in Egypt, and subsequently at the Makati Medical Center. The medical certificate was issued describing his disability as "permanent in nature." He demanded payment for his claim for total disability as provided for in the contract of employment but his claim was denied. Can the second contract of employment be enforced against Philimare despite the absence of NSB verification or approval?
3.
A: YES. The supplementary contract of employment was entered into between petitioner and private respondent to modify the original contract of employment The reason why the law requires that the POEA should approve and verify a contract under Article 34(i) of the Labor Code is to insure that the employee shall not thereby be placed in a disadvantageous position and that the same are within the minimum standards of the terms and conditions of such employment contract set by the POEA. However, there is no prohibition against stipulating in a contract more benefits to the employee than those required by law. Thus, in this case wherein a "supplementary contract" was entered into affording greater benefits to the employee than the previous one, and although the same was not submitted for the approval of the POEA, the same should still be considered to be valid and enforceable (Seagull Maritime Corp. v. Balatongan, G.R. No. 82252, February 28, 1989).
Prohibited Acts under Art. 34 of the LC It shall be unlawful for any individual, entity, licensee, or holder of authority: 1.
2.
3.
--4.
Difference between the prohibited acts under LCand R.A. 8042 or the Overseas Filipinos and Overseas Migrant Workers Act, as amended by R.A. 10022 LC 1. 2.
Illegal recruitment under Art.38 of LC Prohibited acts under Art.34 of LC
by the worker in connection with his/her documentation and processing for purposes of deployment; To allow a nonFilipino citizen to head or manage a licensed recruitment/ manning agency.
R.A. 8042, as amended by RA 10022
5.
Illegal recruitment under Sec. 6 means any recruitment activity committed by nonlicensees/ non-holders of authority or prohibited acts (same as Art. 34, LC)
6.
7.
8. Added to the following in the list of prohibited acts: 1. Failure to actually deploy without valid reason; 2. Failure to reimburse expenses incurred
9.
14
To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than that actually received by him as a loan or advance; To furnish or publish any false notice or information or document in relation to recruitment or employment; To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under this Code. To induce or attempt to induce a worker already employed to quit his employment in order to offer him to another unless the transfer is designed to liberate the worker from oppressive terms and conditions of employment; To influence or to attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency; To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines; To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives; To fail to file reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor. To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the periods of
Recruitment and Placement expiration of the same without the approval of the Secretary of Labor; 10. To become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel agency; and 11. To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under this Code and its implementing rules and regulations.
1.
Persons prohibited from engaging in the business of recruiting migrant workers
2. It is place-specific. Engaging in recruitment activities in places other than that specified in the license is prohibited. (Sec. 143, II (s), Revised POEA Rules and Regulations Governing the Recruitment and Employment of Landbased Overseas Filipino Workers of 2016)
1.
2.
2.
Nature of a License/Authority 1. Prospective in application (People v. Chua, G.R. No. 128280, 4 April 2001)
It is unlawful for any official or Ee of the following agencies to engage in recruiting migrant workers: a. DOLE b. POEA c. Overseas Workers Welfare Administration (OWWA) d. DFA e. Other Government agencies involved in the implementation of R.A. 8042 The relatives within the 4 th civil degree of consanguinity or affinity of such official or Ee are also prohibited from engaging directly or indirectly in the business of recruiting migrant workers (Sec. 8, R.A. 8042).
XPN: Provincial recruitment pursuant to a special recruitment authority 3. License or authority is non-transferable (Art. 29, LC). License or authority is granted on the basis of personal qualifications of the grantee. Thus, it is beyond the commerce of man.
--Q: A recruitment and placement agency declared voluntary bankruptcy. Among its assets is its license to engage in business. Is the license of the bankrupt agency an asset which can be sold in public auction by the liquidator? (1998 Bar Question)
LICENSE vs. AUTHORITY The business of recruitment and replacement is regulated by law by requiring them to obtain l icense and authority.
LICENSE
AUTHORITY
A document issued by DOLE authorizing a person or entity to operate a private employment agency.
A document issued by the DOLE authorizing a person or association to engage in recruitment and placement activities as a private recruitment entity.
Which has not been issued a valid license or authority to engage in recruitment and placement by the SLE, or Whose license or authority has been suspended, revoked or cancelled by the POEA or the SLE
A: NO, because of the non-transferability of the license to engage in recruitment and placement. The LC ( Art. 29) provides that no license to engage in recruitment and placement shall be used directly or indirectly by any person other than the one in whose favor it was issued nor may such license be transferred, conveyed or assigned to any other person or entity. It may be noted that the grant of a license is a governmental act by the DOLE based on personal qualifications, and citizenship and capitalization requirements (LC, Arts. 27-28).
---
Persons who may be issued license and authority
NOTE: Change of ownership or relationship of a single proprietorship licensed to engage in overseas employment shall cause the automatic revocation of the license.
1. Natural persons – Must be a Filipino 2. Artificial persons – 75% of the capital and voting stock of which is owned and controlled by Filipino.
ESSENTIAL ELEMENTS OF ILLEGAL RECRUITMENT
Non-licensee / Non-holder of authority
Illegal recruitment
Any person, corporation or entity:
15
Labor Law and Social Legislation Illegal recruitment means any recruitment activities, including the prohibited practices enumerated under Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority [LC, Art. 38(a)].
authority required by law to enable him to lawfully engage in recruitment and placement of workers. In the case of illegal recruitment in large scale, a third element is added: that the offender commits any of the acts of recruitment and pl acement against three or more persons, individually or as a group. The presence of all three elements in the case at bar makes Melissa liable for illegal recruitment in large scale (People v. Chua, G.R. No. 187052 September 13, 2012).
Illegal recruitment is defined under Article 38 (a) of the Labor Code, as amended, as any recruitment activities, including the prohibited practices to be undertaken by non-licensees or non-holders of authority (People v. Senoron, G.N. No. 119160, January 30, 1997).
--Persons liable for illegal recruitment
Elements of illegal recruitment 1.
2.
3.
Any person (whether non-licensee, non-holder of authority, licensee or holder of authority) who commits any of the prohibited acts, shall be liable for illegal recruitment (R.A. 8042, as amended by R.A. 10022).
Offender is a non-licensee or non-holder of authority to lawfully engage in the recruitment/placement of workers. Offender undertakes: a. Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether for profit or not [Art. 13(b), R.A. 8042 as amended by R.A. 10022]; or b. Any of prohibited practices under Art. 34 of the LC. For complex illegal recruitment, an additional element the offender commits the act against three or more persons, individually, or as a group (People v. Baytic, G.R. No. 150530, February 20, 2003) or there are three or more offenders.
--Q: A was approached for possible overseas deployment to Dubai by X, an interviewer of job applicants for Alpha Personnel Services, Inc., an overseas recruitment agency. X required A to submit certain documents (passport, NBI clearance, medical certificate) and to pay P25,000 as processing fee. Upon payment of the said amount to the agency cashier, A was advised to wait for his visa. After five months, A visited the office of Alpha Personnel Services, Inc. during which X told him that he could no longer be deployed for employment abroad. A was informed by the Philippine Overseas Employment Administration (POEA) that while Alpha Personnel Services, Inc. was a licensed agency, X was not registered as its employee, contrary to POEA Rules and Regulations. Under POEA Rules and Regulations, the obligation to register personnel with the POEA belongs to the officers of a recruitment agency.
--Q: Melissa represented herself to have the capacity to contract, enlist and transport Filipino workers overseas. Without first having secured the required license from the DOLE, she promised job placements to Rey, Billy, Roylan and Alberto and charged them placement fees greater than that specified in the schedule of allowable fees prescribed by the POEA. Without valid reasons and without the fault of said complainants, she failed to actually deploy them and failed to reimburse expenses incurred in connection with their documentation and processing for purposes of their deployment. If a suit for illegal recruitment in large scale is filed by the complainants against her, will it prosper?
a. May X be held criminally liable for illegal recruitment? Explain. b. May the officers having control, management or direction of Alpha Personnel Services, Inc. be held criminally liable for illegal recruitment? Explain. (2010 Bar Question) A:
A: YES. In order to hold a person liable for illegal
a.
NO. X performed his work with the knowledge that he works for a licensed recruitment agency. He is in no position to know that the officers of said recruitment agency failed to register him as its personnel (People v. Chowdury, G.R. No. 129577-80. February 15, 2000). The fault not being attributable to him, he may be considered
recruitment, the following elements must concur: (1) the offender undertakes any of the activities within the meaning of recruitment and placement under Article 13(b) 20 of the Labor Code, or any of the prohibited practices enumerated under Article 34 of the Labor Code (now Section 6 of RA 8042); and (2) the offender has no valid license or
16
Recruitment and Placement
b.
to have apparent authority to represent Alpha in recruitment for overseas employment. YES. Alpha, being a licensed recruitment agency, still has obligations to A for processing his papers for overseas employment. Under Section 6(m) of R.A. 8042, failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment in cases where the deployment does not actually take place without the worker’s fault, amounts to illegal recruitment.
It is the violation of Arts. 13(b) and 34 of the LC involving at least three recruiters or victims. It may either be: 1. 2.
Committed by a syndicate; or In large scale or qualified
ILLEGAL RECRUITMENT IN LARGE SCALE (SEC. 6, R.A. 10022)
Illegal recruitment in large scale (qualified)
---
Illegal recruitment in large scaleis committed against three or more persons individually or as a group.
Way to prove illegal recruitment
Illegal recruitment committed by a syndicate
There is illegal recruitment when one gives the impression of having the ability to send a worker abroad.It is undisputed that appellant gave complainants the distinct impression that she had the power or ability to send people abroad for work such that the latter were convinced to give her the money she demanded in order to be so employed (People v. Goce, G.R. No. 113161, August 29, 1995) .
Illegal recruitment is committed by a syndicate if it was carried out by a group of three or more persons conspiring or confederating with one another.
“Illegal recruitment in large scale ” pertains to the number of victims while “ syndicated illegal recruitment” pertains to the number of recruiters.
It is important that there must at least be a promise or offer of an employment from the person posing as a recruiter, whether locally or abroad (People v. Laogo, G.R. no. 176264, January 10, 2011).
NOTE: In People v. Navarra, the accused argued that their conviction for illegal recruitment as economic sabotage is erroneous since there are only two offenders, the SC held that Article 38 (b) of the Labor Code, as amended by P. D. No. 2018 provides that illegal recruitment shall be considered an offense involving economic sabotage when: First , illegal recruitment is committed by a syndicate. For purposes of the law, a syndicate exists when three or more persons conspire or confederate with one another in carrying out any unlawful or illegal transaction, enterprise or scheme. Second , illegal recruitment is committed in a large scale, as when it is committed against three or more persons individually or as a group. So even assuming that there was no illegal recruitment committed by a syndicate since there are ony two offenders, the record clearly shows illegal recruitment committed in a large scale, since at least six (6) complainants were victims, which is more than the minimum number of persons required by law to constitute illegal recruitment in a large scale, resulting in economic sabotage.
--Q: Larry Domingo was accused of the crime of illegal recruitment. He argued that he issued no receipt or document in which he acknowledged as having received any money for the promised jobs. Hence, he should be free from liability. Was Larry engaged in recruitment activities? A: YES. Even if at the time Larry was promising employment no cash was given to him, he is still considered as having been engaged in recruitment activities, since Art. 13(b) of the LC states that the act of recruitment may be for profit or not. It suffices that Larry promised or offered employment for a fee to the complaining witnesses to warrant his conviction for illegal recruitment (People v. Domingo, G.R. No. 181475, April 7, 2009).
--SIMPLE ILLEGAL RECRUITMENT
--Q: While her application for renewal of her license to recruit workers for overseas employment was still pending, Maryrose Ganda recruited Alma and her 3 sisters, Ana, Joan, and Mavic, for employment as housemates in Saudi Arabia. Maryrose represented to the sisters that she had a license to recruit workers for overseas employment and demanded and received
Simple illegal recruitment It is the violation of Arts. 13(b) and 34 of the LC involving less than three (3) recruiters or victims.
Complex illegal recruitment
17
Labor Law and Social Legislation P30,000.00 from each of them for her services. Her application for the renewal of her license, however, was denied, and consequently failed to employ the four sisters in Saudi Arabia. The sisters charged Maryrose with large scale illegal recruitment. Testifying in her defense, she declared that she acted in good faith because she believed that her application for the renewal of her license would be approved. She adduced in evidence the Affidavits of Desistance which the four private complainants had executed after the prosecution rested its case. In the said affidavits, they acknowledged receipt of the refund by Maryrose of the total amount of Php 120,000.00 and indicated that they were no longer interested to pursue the case against her. Resolve the case with reasons. (2005 Bar Question) A: Maryrose is guilty of large scale illegal recruitment. It is large scale illegal recruitment when the offense is committed against 3 or more persons, individually or as a group [Art. 38(b), LC]. In view of the above, her defense of good faith and the Affidavit of Desistance as well as the refund given will not save her because R.A. 8042 is a special law, and illegal recruitment is malum prohibitum (People v. Saulo, G.R. No. 125903, November 15, 2000).
ILLEGAL RECRUITMENT
ESTAFA
Malum prohibitum, thus: 1. Criminal intent is not necessary 2. It is a crime which involves moral turpitude It is not required that it be shown that the recruiter wrongfully represented himself as a licensed recruiter
Malum in se, thus: 1. Criminal intent is necessary 2. It is a crime which involves moral turpitude Accused defrauded another by abuse of confidence, or by means of deceit
NOTE: It is enough that
NOTE: It is essential
the victims were deceived as they relied on the misrepresentation and scheme that caused them to entrust their money in exchange of what they later discovered was a vain hope of obtaining employment abroad.
that the false statement or fraudulent representation constitutes the very cause or the only motive which induces the complainant to part with the thing of value.
Illegal recruitment and estafa cases may be filed simultaneously or separately. The filing of charges for illegal recruitment does not bar the filing of estafa, and vice versa. Double jeopardy will not set in.
--Illegal recruitment as Economic Sabotage It is economic sabotage when complex illegal recruitment is committed, such that it is syndicated or done in a large scale. ( Article 38 (b) of LC, as amended by PD 2018)
--Q: Bugo, by means of false pretenses and fraudulent representation, convinced Dado to give the amount of Php 120,000.00 for
--Q: What qualifying circumstances will convert
processing the latter’s papers so that he can be
subjecting its perpetrators to a penalty of life imprisonment and a fine of at least P500,000.00? (Bar 2005)
deployed to Japan. Dado later on found out that Bugo had misappropriated, misapplied and converted the money for her own personal use and benefit. Can Dado file the cases of illegal recruitment and estafa simultaneously?
A: An illegal recruitment is considered to have
A: YES. Illegal recruitment and estafa cases may be
“illegal recruitment” to economic sabotage thus
evolved into economic sabotage when it is committed by a syndicate or committed in large scale. Illegal recruitment is deemed to have been committed by a syndicate when the recruitment is carried out by a group of three or more persons conspiring and/or confederating with one another in carrying out any act under Art. 38. On the other hand, it is deemed committed in large scale if it is committed against three or more persons individually or as a group.
filed simultaneously or separately. The filing of charges for illegal recruitment does not bar the filing of estafa, and vice versa. Bugo’s acquittal in the illegal recruitment case does not prove that she is not guilty of estafa. Illegal recruitment and estafa are entirely different offenses and neither one necessarily includes or is necessarily included in the other. A person who is convicted of illegal recruitment may, in addition, be convicted of estafa under Art. 315, par. 2(a) of the RPC. In the same manner, a person acquitted of illegal recruitment may be held liable for estafa. Double jeopardy will not set in because illegal recruitment is malum
--ILLEGAL RECRUITMENT vs. ESTAFA
18
Recruitment and Placement prohibitum, in which there is no necessity to prove criminal intent, whereas estafa is malum in se, in the prosecution of which, proof of criminal intent is necessary (Sy v. People, G.R. No. 183879, April 14, 2010).
for the claims and damages (Becmen Service Exporter and Promotion v. Cuaresma, G.R. Nos. 182978-79, April 7, 2009).
Remedies under the Migrant Workers Act and how may they be enforced:
--LIABILITIES
CRIMINAL ACTIONS RTC
LOCAL RECRUITMENT AGENCY
Province or city: 1. Where the offense was committed or 2. Where the offended party actually resides at the same time of the commission of the offense
Liability of the local recruitment agency A Local Recruitment Angency shall be jointly and solidarily liable with its principal or foreign-based Er for any violation of the recruitment agreement and violation of contracts of employment [Sec. 10(a)(2), Rule V, Book I, IRR]
MONEY CLAIMS NLRC Original and exclusive jurisdiction to hear and decide claims arising out of an Er-Ee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. The liability of the principal/ Er and the recruitment/ placement agency for any and all claims shall be joint and several. The performance bond to be filed by the recruitment/ placement agency shall be answerable for all money claims or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the claims and damages.
--Q: Santosa Datuman was deployed to Bahrain after paying the required placement fee. However, her employer took her passport and instead of working as a saleslady, she was forced to work as a domestic helper contrary to the agreed salary approved by POEA. She worked without compensation for two years
because of her employers’ continued failure and
refusal to pay her salary despite demand. When she finally returned to the Philippines, she filed a complaint against the local agency that recruited her. Should the suit prosper?
A: YES. Under Section 1 (f), Rule II, Book II of the 1991 POEA Rules and Regulations, the local agency shall assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the contract, including but not limited to payment of wages, health and disability compensation and repatriation. Private employment agencies are held jointly and severally liable with the foreign-based employer for any violation of the recruitment agreement or contract of employment, to assure the aggrieved worker of immediate and sufficient payment of what is due him. This is in line with the policy of the state to protect and alleviate the plight of the working class (Datuman v. First Cosmopolitan Manpower, G.R. No. 156029, November 14, 2008).
ADMINISTRATIVE ACTIONS POEA Original and exclusive jurisdiction to hear and decide: 1. All cases which are administrative in character, involving or arising out of violations of rules and regulations relating to licensing and registration of recruitment and employment agencies or entities and 2. Disciplinary action cases and other special cases which are administrative in character, involving Ers, principals, contracting partners and Filipino migrant workers. a. It may be filed with the POEA Adjudication Office or the DOLE/POEA regional office of the place where the complaint applied or was recruited at the option of the complainant. The office with which the complaint was first filed shall take cognizance of the case.
--Liability of corporate officers, directors or partners if the recruitment/ placement agency is a juridical being If the recruitment/placement agency is a juridical being, the corporate officers, directors or partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership
19
Labor Law and Social Legislation dismissal and for payment of his money claims contending that his overtime and leave pay should form part of the salary basis in the computation of his monetary award, because these are fixed benefits that have been stipulated into his contract. Is he correct?
b. DA cases and other special cases, as mentioned in the preceding Section, shall be filed with POEA Adjudication Office.
A: NO . The word salaries in Section 10(5) does not
Rule as to whether compromise agreement on money claims is allowed
include overtime and leave pay. For seafarers like Serrano, DOLE Department Order No. 33, series 1996, provides a Standard Employment Contract of Seafarers, in which salary is understood as the basic wage, exclusive of overtime, leave pay and other bonuses; whereas overtime pay is compensation for all work "performed" in excess of the regular eight hours, and holiday pay is compensation for any work "performed" on designated rest days and holidays.
Consistent with the policy encouraging amicable settlement of labor disputes, Sec. 10 of R.A. 8042 allows resolution by compromise of cases filed with the NLRC.
Period as to when shall compromise agreements on money claims be paid Any compromise/amicable settlement or voluntary agreement on money claims inclusive of damages shall be paid within four months from the approval of the settlement by the appropriate authority.
By the foregoing definition alone, there is no basis for the automatic inclusion of overtime and holiday pay in the computation of petitioner's monetary award, unless there is evidence that he performed work during those periods. The contract provision guarantees the right to overtime pay but the entitlement to such benefit must first be established. In the same vein, the claim for the day's leave pay for the unexpired portion of the contract is unwarranted since the same is given during the actual service of the seamen (Serrano v. Gallant Maritime Services & Marlow Navigation Co., Inc., G. R. No.167614, March 24, 2009).
Rule as to whether overtime and leave pay are included in the terms which is the basis for the computation of the monetary award The word “salaries” in Sec. 10(5) of the LC does not include OT and leave pay. For seafarers, DO No. 33, series of 1996, provides a Standard Employment Contract of Seafarers, in which salary is understood as the basic wage, exclusive of OT, leave pay and other bonuses; whereas OT pay is compensation for all work “performed” in excess of the regular 8 hours, and holiday pay is compensation for any work “performed” on designated rest days and holidays (Serrano v. Gallant Maritime Services & Marlow Navigation Co., Inc., G.R. No.167614, March 24, 2009).
--FOREIGN EMPLOYER Theory of Imputed Knowledge A rule in insurance law that any information material to the transaction, either possessed by the agent at the time of the transaction or acquired by him before its completion, is deemed to be the knowledge of the principal, at least so far as the transaction is concerned, even though in fact the knowledge is not communicated to the principal at all. (Leonor v. Filipinas Compania, 48 OG 243, January 10, 1950; Rovels Enterprises, Inc. v. Ocampo, G.R. No. 136821, 17 October 2002)
--Q: Antonio Serrano was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., under a POEA-approved contract of employment for 12 months, as Chief Officer, with a monthly salary of US$1,400, and $700 per month overtime pay, and 7 days paid vacation leave per month. On the date of his departure, he was constrained to accept a downgraded employment contract upon the assurance and representation of Gallant that he would be Chief Officer by the end of April 1998. Gallant did not deliver on their promise hence he refused to stay on as second Officer and was repatriated to the Philippines, serving only two months and 7 days, leaving an unexpired portion of nine months and twenty-three days. He filed with the Labor Arbiter a complaint for constructive
--Q: Sunace International Management Services (Sunace), deployed to Taiwan Montehermozo as a domestic helper under a 12-month contract effective Feb. 1, 1997. The deployment was with the assistance of a Taiwanese broker, Edmund Wang, President of Jet Crown International Co., Ltd. After her 12-month contract expired on Feb. 1, 1998, Montehermozo continued working for her Taiwanese employer for two more years,
20
Recruitment and Placement after which she returned to the Philippines on Feb. 4, 2000. Shortly after her return she filed a complaint before the NLRC against Sunace, one Perez, the Taiwanese broker, and the employerforeign principal alleging that she was jailed for three months and that she was underpaid. Should Sunace be held liable for the underpayment for the additional two years that she worked for her Taiwanese employer under the theory of imputed knowledge?
--Q: Serrano, a seafarer, was hired by Gallant Maritime and Marlow Navigation Co. for 12 months as Chief Officer. On the date of his departure, he was constrained to accept a downgraded employment contract for the position of Second Officer, upon the assurance that he would be made Chief Officer after a month. It was not done; hence, he refused to stay on as Second Officer and was repatriated to the Phils. He had served only 2 months & 7 days of his contract, leaving an unexpired portion of 9 months & 23 days.
A: NO, the theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal Taiwanese Er, not the other way around. The knowledge of the principal-foreign Er cannot, therefore, be imputed to its agent Sunace.
Serrano filed with the LA a Complaint against Gallant Maritime and Marlow for constructive dismissal and for payment of his money claims. The LA rendered a favorable decision to Serrano awarding him $8,770.00, representing his salary for 3 months of the unexpired portion of his contract of employment applying R.A. 8042, Sec 10, par. 5:
There being no substantial proof that Sunace knew of and consented to be bound under the 2-year employment contract extension, it cannot be said to be privy thereto. As such, it and its owner cannot be held solidarily liable for and of Montehermozo’s claims arising from the 2-year employment extension (Sunace v. NLRC, G.R. No. 161757, January 25, 2006).
Money Claims. - In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of 12% per annum, plus his salaries for the unexpired portion of his employment contract or for 3 months for every year of the unexpired term, whichever is less.
--SOLIDARY LIABILITY Liability of the private employment agency and the principal or foreign-based employer They are jointly and solidarily liable for any violation of the recruitment agreement and the contracts of employment.
Is the subject clause constitutional? This joint and solidary liability imposed by law against recruitment agencies and foreign Ers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him (Becmen Service Exporter and Promotion v. Cuaresma, G.R. Nos. 182978-79, April 7, 2009).
A: NO. The subject clause contains a suspect classification in that, in the computation of the monetary benefits of fixed-term Ees who are illegally discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on the claims of other OFWs or local workers with fixedterm employment. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage.
Effect of absence of employment contract, special power of attorney and affidavit of responsibility, as required by the POEA rules and regulations to the private employment agency and the principal
The clause is a violation of the right of Serrano and other OFWs to equal protection and right to substantive due process, for it deprives him of property, consisting of monetary benefits, without any existing valid governmental purpose.
Non-compliance with POEA Rules and Regulations cannot be utilized to relieve the agency and its principal from liabitliy. In fact, such non-compliance is a ground for the cancellation or suspension of their license (Hornales v. NLRC, et al., G.R. No. 118934, September 10, 2001).
Furthermore, prior to R.A. 8042, all OFWs, regardless of contract periods or the unexpired portions thereof, were treated alike in terms of the computation of their monetary benefits in case of illegal dismissal. Their claims were subjected to a
PRETERMINATION OF CONTRACT OF MIGRANT WORKER
21
Labor Law and Social Legislation Intermare Maritime Agencies, Inc., G.R. No. 179532, May 30, 2011).
uniform rule of computation: their basic salaries multiplied by the entire unexpired portion of their employment contracts. The same applies local workers with fixed-term employment.
--Q: Joy was deployed to work for Taiwan Wacoal, Co. Ltd. on June 26, 1997 for 1 year. She alleged that Sameer Overseas Agency required her to pay a placement fee of P70, 000.00. On July 14, 1997, Mr. Huwang of Wacoal informed Joy, without prior notice, that she was terminated and was given a salary from June 26 to July 14, 1997 only. Joy filed a complaint for illegal dismissal with the NLRC. She asked for the return of her placement fee, the withheld amount for repatriation costs, payment of her salary for 23 months as well as moral and exemplary damages. The NLRC ruled that Joy was illegally dismissed and awarded her three months’ worth of salary, the reimbursement of
Thus, Serrano is entitled to his salaries for the entire unexpired period of nine months and 23 days of his employment contract, pursuant to law and jurisprudence prior to the enactment of RA 8042 (Serrano v. Gallant Maritime Services & Marlow Navigation Co., Inc., G.R. No.167614, March 24, 2009).
--Basis in computing an employee’s compensation
in case of premature termination of contract A worker dismissed from overseas employment without just, valid or authorized cause as defined by law or contract is entitled to full reimbursement of his placement fee with interest at 12% per annum, plus his salary for the unexpired portion of his employment contract or for three months for every year of the unexpired term, whichever is less . (Sec. 7, R.A. 10020, 2010).
the cost of her repatriation, and attorney’s fees. Should Joy be awarded three months’ worth of
salary and reimbursement of the cost of her repatriation? A: NO. Joy is entitled to her salary for the unexpired portion of her contract, in accordance with Section 10 of Republic Act No. 8042. Since she started working on June 26, 1997 and was terminated on July 14, 1997, Joy is entitled to her salary from July 15, 1997 to June 25, 1998. Furthermore, there is an implied stipulation in contracts between the placement agency and the overseas worker that in case the overseas worker is adjudged as entitled to reimbursement of his or her placement fees, the amount shall be subject to a 12% interest per annum. This implied stipulation has the effect of removing awards for reimbursement of placement fees from Circular No. 799’s coverage. However, if judgment did not become final and executory before July 1, 2013 and there was no stipulation in the contract providing for a different interest rate, other money claims under Section 10 of Republic Act No. 8042 shall be subject to the 6% interest per annum in accordance with Circular No. 799 (Sameer v. Cabiles, G.R. No. 170139, Aug. 05, 2014).
Basis in computing an employee’s compensation
in case of premature termination of contract The Migrant Workers Act provides that salaries for the unexpired portion of the employent contract or three months for every year of the unexpired term, whichever is less, shall be awarded to the overseas Filipino worker, in cases of illegal dismissal. In Serrano v. Gallant Maritime Services (G.R. No. 167614, March 24, 2009) however, the clause “or for three months for every year of the unexpired term, whichever is less” was declared unconstitutional and awarded the entire unexpired portion of the employment contract to the overseas Filipino worker. Nonetheless, Sec. 7 of R.A. 10022 amended Sec. 10 of the Migrant Workers Act, and once again reiterated the provision of awarding the unexpired portion of the employent contract or three months for every year of the unexpired term, whichever is less (Skippers United Pacific, Inc. v. Doza, et. al, G.R. No. 175558, February 8, 2012).
----Q: Peter worked for a Norwegian cargo vessel. He worked as a deckhand, whose primary duty was to assist in cleaning the ship. He signed a five-year contract starting in 2009. In 2011,
The declaration in March 2009 of the unconstitutionality of the clause “or for three months for every year of the unexpired term, whichever is less” in RA 8042 shall be given retroactive effect to the termination that occurred in January 1999 because an unconstitutional clause in the law confers no rights, imposes no duties and affords no protection. The unconstitutional provision is inoperative, as if it was not passed into law at all (Yap v. Thenamaris Ship’s Management and
Peter’s
employers
began
treating
him
differently. He was often maltreated and his salary was not released on time. These were frequently protested to by Peter. Apparently exasperated by his frequent protestations, Peter’s employer, a once top official in China,
suddenly told him that his services would be terminated as soon as the vessel arrived at the
22
Recruitment and Placement next port, in Indonesia. Peter had enough money to go back home, and immediately upon arriving, he filed a money claim with the NLRC
agency, lending institutions, training school or medical clinic
against his former employer’s local agent. Will Peter’s case prosper? (2012 Bar Question)
PERIODS Mandatory Period for Resolution of Illegal Recruitment Cases The preliminary investigations of cases under R.A. 10022 shall be terminated within a period of 30 calendar days from the date of their filing.
A: YES, he is entitled to his salaries for the unexpired portion of his employment contract, plus full reimbursement of his placement fee with interest at 12% per annum [Serrano vs. Gallant Maritime, G.R. No. 167614, March 24, 2009].
--PENALTIES FOR ILLEGAL RECRUITMENT Consequence recruitment:
of
conviction
for
illegal
If the PI is conducted by a prosecution officer and a prima facie case is established
If the PI is conducted by a judge and a prima facie case is found to exist
Information shall be filed in court within 24 hours from the termination of the investigation
Prosecution officer within 48 hours from the date of receipt of the records of the case. (Sec. 11)
PENALTIES (Under R.A. 10022) Offender / Offense Penalty Illegal recruitment as economic sabotage Provided: 1. If person illegally recruited is below 18 years of age or 2. Illegal recruitment is committed by a non-licensee/nonholder Any person found guilty of illegal recruitment Any person found guilty of the prohibited acts Licensee/holder of authority violates provisions Non-licensee/nonholder of authority violates provisions Corporation, partnership, association, or entity
Alien
In every case
Prescriptive Period for Illegal Recruitment Cases Simple Illegal Economic Recruitment Sabotage
Life imprisonment + fine of P2M-P5M
Within 5 yrs. from the time illegal recruitment has happened
Maximum penalty shall be imposed (non-bailable)
Within 20 yrs. from the time illegal recruitment has happened (Sec. 12, R.A. 8042).
DIRECT HIRING 12 yrs. and 1 day - 20 yrs. imprisonment; or Fine: P1M-P2M 6 yrs. and 1 day - 12 yrs. imprisonment; or Fine of P500K - P1M 2-5 yrs. imprisonment; or Fine: P10K - P50K; or both 4-8 yrs. imprisonment; or Fine: P20K - P100K or both Penalty imposed upon officer/s responsible for violation Penalties prescribed under RA 10022, + Deportation without further proceedings Automatic revocation of license or authority and all permits and privileges of the recruitment or manning
It is when an Er hires a Filipino worker for ov erseas employment without going through the POEA or entities authorized by the SLE.
Ban on direct hiring GR: An Er may only hire Filipino worker for overseas employment through POEA or entities authorized by DOLE. ( Art. 18, LC)
XPNs: Direct hiring by: 1. 2. 3. 4.
International organizations Name hires Members of the diplomatic organizations Other Ers as may be allowed by D OLE
Purposes of the prohibition on direct hiring: 1. 2. 3.
To ensure the best possible terms and conditions of employment for the worker. To assure the foreign Er that he hires only qualified Filipino workers. To ensure full regulation of employment in order to avoid exploitation.
REGULATION AND ENFORCEMENT
23
Labor Law and Social Legislation Person who can suspend or cancel license or authority
Upon being alerted by the DFA, the DOLE issued orders cancelling the licenses of XYZ, and imposing an immediate travel ban on its recruits for the Middle East. XYZ appealed t o the Office of the President to reverse and set aside the DOLE orders, citing damages from loss of employment of its recruits, and violations of due process including lack of notice and hearing by the DOLE. The DOLE in its answer claimed the existence of an emergency in the Middle East which required prompt measures to protect the life and limb of OFWs from a clear and present danger posed by the ongoing war against terrorism. Should the DOLE orders be upheld or set aside? (2004 Bar Question)
The Secretary of Labor and Employment is vested with power to suspend or cancel any license or authority to recruit employees for overseas employment.
Grounds for revocation of license: 1.
2. 3. 4.
Incurring an accumulated 3 counts of suspension by an agency based on final and executory orders within the period of validity of its license Violations of the conditions of license Engaging in acts of misrepresentation for the purpose of securing a license or renewal Engaging in the recruitment or placement of workers to jobs harmful to the public health or morality or to the dignity of the country (Sec. 3, Rule I, Book VI, Rules and Regulations Governing Overseas Employment).
A: The DOLE order cancelling the licenses of XYZ is void because a report that an agency is covertly transporting extremists is not a valid ground for cancellation of a Certificate of Registration (Art. 239, LC) and there is failure of due process as no hearing was conducted prior to the cancellation (Art. 238, LC).
Grounds for suspension or cancellation of license 1. 2. 3.
4. 5. 6.
The DOLE order imposing the travel ban is valid because it is a valid exercise of police power to protect the national interest (Sec. 3, Art. XIII, Constitution on full protection to labor safety of workers) and on the rule making authority of the SLE (Art. 5, LC; Phil. Ass’n. of Service Ex porters v. Drilon, G.R. No. 81958, June 30, 1988).
Commission of prohibited acts under Art. 34 of LC Publishing job announcements w/o POEA’s approval Charging a fee which may be in excess of the authorized amount before a worker is employed Deploying workers w/o processing through POEA Recruitment in places outside its authorized area (Sec. 4, Rule II, Book IV, POEA Rules). If the employment agency fails to provide the ticket or PTA within 48 hours from receipt of the notice [R.A. 10022].
--REGULATORY AND VISITORIAL POWERS OF THE DOLE SECRETARY Regulatory Powers 1. 2.
Degree of proof required for suspension of license or authority
Restrict and regulate the recruitment and placement activities of all agencies Issue orders and promulgate rules and regulations
Visitorial Powers Administrative determinations require only substantial proof and not clear and convincing evidence. In proceedings for cancellation or suspension of license or authority, no rule requires that testimonies or complaints be corroborated by documentary evidence, if the charge of unlawful exaction is substantially proven.
1.
2. 3.
--Q: Concerned Filipino contract workers in the Middle East reported to the DFA that XYZ, a private recruitment and placement agency, is covertly transporting extremists to terrorist training camps abroad. Intelligence agencies of the Government allegedly confirmed the report.
Access to Er’s records and premises at any time of the day or night, whenever work is being undertaken To copy from said records Question any Ee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of the LC and of any labor law, wage order, or rules and regulation issued pursuant thereto.
Instances where the visitorial power of the SLE may be exercised under the LC
24
Recruitment and Placement 1.
2.
3. 4.
Inspect books of accounts and records of any person or entity engaged in recruitment and placement; require it to submit reports regularly on prescribed forms and act in violations of any provisions of the LC on recruitment and placement (LC, Art. 37). Have access to Er’s records and premises to determine violations of any provisions of the LC on recruitment and placement (LC, Art. 128). Conduct industrial safety inspections of establishments (LC, Art. 165). Inquire into the financial activities of legitimate labor organizations (LLO) and examine their books of accounts upon the filing of the complaint under oath and duly supported by the written consent of at least 20% of the total membership of the labor organization concerned.
revocation of their licenses or authority to recruit (E.O. 857).
PROHIBITED ACTIVITIES IN RECRUITMENT/PLACEMENT 1.
2. 3.
4.
5.
SLE cannot issue search warrants or warrants of arrest
6.
Under the 1987 Constitution, only a judge may issue search warrants or warrants of arrest. Hence, Art. 38(c) of the LC is unconstitutional inasmuch as it gives the SLE the power to issue search warrants and warrants of arrest. The labor authorities must go through the judicial process (Salazar v. Achacoso, G.R. No. 81510, March 14, 1990) .
7.
8. 9.
REMITTANCE OF FOREIGN EXCHANGE EARNINGS 10.
GR: It shall be mandatory for all OFWs to remit a portion of their foreign exchange earnings to their families, dependents, and/or beneficiaries ranging from 50% - 80% depending on the worker’s kind of job (Rule VIII, Book III, POEA Rules).
11.
12.
XPNs: 1.
2.
3.
The worker’s immediate family members, beneficiaries and dependents are residing with him abroad Immigrants and Filipino professionals and Ees working with the UN agencies or specialized bodies Filipino servicemen working in U.S. military installations (Resolution No. 1-83, Inter-Agency Committee for Implementation of E.O. 857).
13.
14.
15.
Effect of failure to remit 1.
Workers – Shall be suspended or removed
2.
from the list of eligible workers for overseas employment. Employers – Will be excluded from the overseas employment program. Private employment agencies shall face cancellation or
16.
25
Furnishing or publishing any false notice/information/document related to recruitment/employment Failure to file reports required by SLE SLE Inducing or attempting to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions Recruitment/placement of workers in jobs harmful to public health or morality or to the dignity of the country Engaging directly or indirectly in the management of a travel agency Substituting or altering employment contracts without approval of DOLE Charging or accepting any amount greater than that specified by DOLE or make a worker pay any amount greater than actually received by him Committing any act of misrepresentation to secure a license or authority Influencing or attempting to influence any person/entity not to employ any worker who has not applied of employment through his agency Obstructing or attempting to obstruct inspection by SLE or by his representatives Withholding or denying travel documents from applicant workers before departure for monetary considerations other than authorized by law Granting a loan to an OFW which will be used for payment of legal and allowable placement fees Refusing to condone or renegotiate a loan incurred by an OFW after his employment contract has been prematurely terminated through no fault of his or her own For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the processing of pending workers' applications; and For a recruitment/manning agency or a foreign principal/ Er to pass on the OFW or deduct from his or her salary the payment of the cost of insurance fees, premium or other insurance related charges, as provided under the compulsory worker's insurance coverage Imposing a compulsory and exclusive arrangement whereby an OFW is required to: a. Avail a loan only from specifically designated institutions, entities or persons
Labor Law and Social Legislation b.
c.
To undergo health examinations only from specifically designated medical, entities or persons, except seafarers whose medical examination cost is shouldered by the shipowner To undergo training of any kind only from designated institutions, entities or persons, except for recommendatory trainings mandated by principals/shipowners (Sec. 6, R.A. 10022).
2. 3. 4.
c. The Philippines Free transportation to and from the worksite or offsetting benefit Free food and accommodation or offsetting benefit Just/authorized causes of termination of the contract or services of the worker
NOTE: An agreement that diminishes the Ees’ pay and benefits as contained in a POEA-approved contract is void, unless such subsequent agreement is approved by the POEA.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA)
Deployment of OFWs Principal Functions The State shall allow the deployment of OF Ws 1. 2.
3. 4.
5.
6.
Protection of the right of Filipino workers to fair and equitable employment practices Regulation of private sector participation in the recruitment and overseas placement of workers by setting up a licensing and registration system Deployment of Filipino workers through Government to Government hiring Formulation, implementation, and monitoring of overseas employment of Filipino workers taking into consideration their welfare and domestic manpower requirements Shall inform migrant workers not only of their rights as workers but also of their rights as human beings, instruct and guide the workers how to assert their rights and provide the available mechanism to redress violation of their rights (Sec. 14, R.A. 10022). Implementation, in partnership with other law-enforcement agencies, of an intensified program against illegal recruitment activities (Sec. 14, R.A. 10022).
1. 2.
3.
Guarantees of the receiving country for the protection of the rights of OFWs 1.
Power to terminate or impose a ban on employment of migrant workers
2.
The POEA may at any time terminate or impose a ban on employment of migrant workers, to do so, in consultation with the DFA based on the ff. grounds: 1. In pursuit of the national interest; or 2. When public welfare so requires (Sec. 4, R.A. 10022)
3.
It has existing labor and social laws protecting the rights of workers, including migrant workers; It is a signatory to and/or a ratifier of multilateral conventions, declarations or resolutions relating to the protection of workers, including migrant workers; and It has concluded a bilateral agreement or arrangement with the government on the protection of the rights of OFWs (Sec. 3, R.A. 10022 amending R.A. 8042).
Provided, that the receiving country is taking positive, concrete measures to protect the rights of migrant workers in furtherance of any of the guarantees.
Minimum conditions/ provisions of overseas employment contracts 1.
Only in countries where the rights of Filipino migrant workers are protected. To vessels navigating the foreign seas or to installations located offshore or on high seas whose owners/Ers are compliant with international laws and standards that protect the rights of migrant workers. To companies and contractors with international operations: Provided, That they are compliant with standards, conditions and requirements, as embodied in the employment contracts prescribed by the POEA and in accordance with internationally-accepted standards standards (Sec. 3, R.A. 10022 amending R.A. 8042).
Guaranteed wages for regular hours and OT, not lower than the minimum wage prescribed in al l of the following: a. The host country b. Bilateral agreements or international conventions ratified by the host country and the Philippines
NOTE: In the absence of a clear showing that any of the guarantees exists in the country of destination of the migrant workers, no permit for deployment shall be issued by the POEA.
Repatriation of a worker
26
Recruitment and Placement GR: The repatriation of the: 1.
Grounds for disciplinary action of OFWs
Worker and the transport of his personal belongings – shall be the primary
Under R.A. 8042, these are: 1. Prostitution 2. Unjust refusal to depart for the worksite 3. Gunrunning or possession of deadly weapons 4. Vandalism or destroying company property 5. Violation of the laws and sacred practices of the host country and unjustified breach of employment contract 6. Embezzlement of funds of the company or fellow worker entrusted for delivery to relatives in the Phils. 7. Creating trouble at the worksite or in the vessel 8. Gambling 9. Initiating or joining a strike or work stoppage where the laws of the host country prohibits strikes or similar actions 10. Commission of felony punishable by Philippine laws or by the host country 11. Theft or robbery 12. Drunkenness 13. Drug addiction or possession or trafficking of prohibited drugs 14. Desertion or abandonment
responsibility of the agency which recruited or deployed the worker overseas. 2.
Remains and transport of the personal belongings of a deceased worker and all costs attendant thereto – shall be borne by the principal and/or the local agency.
XPNs: 1.
2.
If the termination of employment is due solely to the fault of the worker, the principal/ Er or agency shall not be responsible for the repatriation of the former and/or his belongings. In cases of war, epidemic, disaster or calamities, natural or man-made, and other similar event, and where the principal or recruitment agency cannot be identified, the Overseas Workers Welfare Administration, in coordination with appropriate international agencies, shall take charge of the repatriation (Sec. 15, R.A. 8042).
Mandatory repatriation of underage migrant workers
Jurisdiction of the LA vs. POEA JURISDICTION
Upon discovery or being informed of the presence of migrant workers whose ages fall below the minimum age requirement for overseas deployment, the responsible officers in the foreign service shall without delay repatriate said workers and advise the DFA through the fastest means of communication available of such discovery and other relevant information. The license of a recruitment/manning agency which recruited or deployed an underage migrant worker shall be automatically revoked and shall be imposed a fine of not less than P500,000 but not more than P1,000,000 (Sec. 9, R.A. 10022).
Labor Arbiter Original and exclusive jurisdiction over all claims arising out of Er-Ee relationship or by virtue of any law or contract involving OFWs including claims for:
Regulatory and adjudicatory functions of the POEA 1.
1. Actual 2. Moral 3. Exemplary 4. Other forms of damages (Sec. 10, R.A. 8042).
Regulatory– It regulates the private sector participation in the recruitment and overseas placement of workers through its licensing and registration system.
2. Adjudicatory a.
b.
Administrative cases involving violations of licensing rules and regulations and registration of recruitment and employment agencies or entities Disciplinary action cases and other special cases which are administrative in character involving employers, principals, contracting partners and Filipino migrants.
POEA Original and exclusive jurisdiction over: 1. All cases which are administrative in character relating to licensing and registration of recruitment and employment agencies 2. Disciplinary Action cases and other special cases, which are administrative in character, involving Ees, principals, contracting partners and Filipino migrant workers (Rule VII, Book VII, POEA Rules).
--Q: A seafarer was prevented from leaving the port of Manila and refused deployment without valid reason. His POEA-approved employment contract provides that the employer-employee relationship shall commence only upon the seafarer’s actual departure from the port in the
point of hire. Is the seafarer entitled to relief
27
Labor Law and Social Legislation under the Migrant Workers’ Act, in the absence
substantial evidence, the burden now rests on Apolinario to overcome the employer’s defense. In other words, the burden of evidence now shifts to the seafarer’s heirs. Since the POEA -SEC requires the employer to prove not only that the death is directly attributable to the seafarer himself but also that the seafarer 28ilfully caused his death, evidence of insanity or mental sickness may be presented to negate the requirement of 28ilfully28s as a matter of counter-defense. In this case, Agile sufficiently established that Dennis 28ilfully caused his death while Siador’s evidence fell short of substantial evidence to establish its counter-defense of insanity (Agile v. Siador, G.R. No. 191034, 1 October 2014)
of an employer-employee relationship? A: YES. Despite the absence of an Er-Ee relationship, the NLRC has jurisdiction over the seafarer’s complaint. The jurisdiction of LAs is not limited to claims arising from Er-Ee relationships. Sec. 10 of the Migrant Workers Act provides that the LAs shall have jurisdiction over claims arising out of an Er-Ee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. Since the present case involves the employment contract entered into by petitioner for overseas employment, his claims are cognizable by the LAs of the NLRC (Santiago v. CF Sharp Crew Management,G.R. No. 162419, 10 July 2007).
---
LABOR STANDARDS
--Matters that fall outside the jurisdiction of the POEA 1.
2.
HOURS OF WORK
Foreign judgments– such claim must be brought before regular courts. POEA is not a court; it is an administrative agency, exercising adjudicatory or quasi-judicial functions. Torts – falls under the provisions of the Civil Code.
COVERAGE/EXCLUSIONS Title I, Book III of the Labor Code dealing with hours of work, weekly rest periods, holidays, service incentive leaves and service charges, covers all employees in all establishments, whether for profit or not (LC, (LC, Art. 82)
--Q: Apolinario Siador was claiming death benefits from a local manning agent, Agile Maritime Resources (Agile) for allegedly, his son, Dennis, fell from the vessel and died in the high seas. Siador claims that Dennis was suffering with mental disability days prior to the incident. Agile claimed that Dennis 28ilfully took his life by jumping overboard. A life ring was immediately thrown into the water by the
XPN: (GF-MOM-WPD) 1. 2. 3. 4. 5. 6.
vessel’s crew but Dennis floated on his back and
made no efforts to swim towards the life ring. Under the Philippine Overseas Employment Administration Standard Employment Contract (POEA-SEC), the employer is not liable for the compensation if the death is directly attributable to the seafarer. If Agile is able to prove by substantial evidence that Dennis 28ilfully took his life by jumping overboard, does the burden of proof shift to Apolinario who must prove by substantial evidence that Dennis was insane at the time of the incident?
7. 8.
Government employees Field personnel Managerial employees Officers and members of the managerial staff Members of the family of the employer who are dependent on him for support Workers paid by results (Secs. ( Secs. 1 and 2, Rule I, Book III, Rules Implementing the Labor Code.) Persons in the personal service of another; and Domestic helpers
The aforementioned employees are not entitled to overtime pay, premium pay for rest days and holidays, night shift differential pay, holiday pay, service incentive leave and s ervice charges. (Poquiz, page 171)
Government Employees The terms and conditions of their employment are governed by the Civil Service Law.
A: YES. Unarguably, Apolinario has discharged his burden of proof. Since Apolinario has initially discharged his burden of proof, Agile, in order to avoid liability, must similarly establish their defense. If they are able to establish their defense by
In case of government-owned or controlled corporations with original charters, terms and
28
Labor Standards
Conditions of Employment
–
conditions of employment may be governed by such legislated charters.
Officers and members of a managerial staff (such as project engineers) are considered managerial employees for they customarily and regularly exercise discretion and independent judgment, that is, their powers are not subject to evaluation, review and final action by the department heads and other higher executives of the company (Franklin Baker Co. of the Philippines vs. Trajano, G.R. No. 75039, 28 January 1988)
Government-owned or controlled corporations without original charters are governed by the Labor Code. (Poquiz, page 172)
Managerial employees a.
b. c.
Their primary duty consists of the management of the establishment in which they are employed or of a department or sub-division thereof. They customarily and regularly direct the work of two or more employees therein. They have the authority to hire or fire employees of lower rank; or their suggestions and recommendations as to hiring and firing and as to the promotion or any other change of status of other employees, are given particular weight. (Sec. 2[b], Rule I, Book III, Rules Implementing the Labor Code.)
Domestic servants/ persons in the personal service of another These are those who perform such services in the employer's home which are usually necessary or desirable for the maintenance and enjoyment thereof, or minister to the personal comfort, convenience, or safety of the employer as well as the members of his employer's household. (Sec. 2[d], Rule I, Book III, Rules Implementing the Labor C ode) ode ) A laundrywoman in staff houses of a company or within the premises of the business of the employer, not actually serving the family of the employer, is a regular employee. She is not included in the definition of domestic servants. (Apex Mining Co. Inc. v NLRC, G.R. No. 94951, 22, April 1991)
They are employed as such by virtue of their special training or expertise, experience or knowledge and for positions which require the exercise of independent judgment and discretion. They are not subject to the rigid observance of regular office hours, as the true worth of their services do not depend so much on the time they sp end in office but more on the results of their accomplishments. For these type of workers, it is not feasible to provide fixed hourly rate of pay or maximum hours of labor. (NAWASA v. NWSA Consolidated Union, G.R. No. L18939, 31 August 1964; UPSU v. Laguesma, G.R. No. 122226, 25 March 1998)
Field personnel Field personnel refers to non-agricultural employees who regularly perform their duties away from the principal place of b usiness or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. (Sec. 27, Rule II, Book III, Rules Implementing the Labor Code.)
Officers or members of managerial staff They are exempted from the coverage due to the nature of their functions which requires performance of service away from the principal place of business. Hence, they are free from the personal supervision of the employer and the latter cannot determine with reasonable certainty the actual number of hours of work expended for the employer's interest.
a.
Their primary duty consists of the performance of work directly related to m anagement policies of their employer; b. They customarily and regularly exercise discretion and independent judgment; and c. They regularly and directly assist a proprietor or -- a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; or execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or execute, under general supervision, special assignments and tasks; and d. They do not devote more than 20 percent of their hours worked in a work week to activities which are not directly and closely related to the performance of the work described above. (Sec. 2[c], Rule I, Book III, Rules Implementing the Labor Code.)
e.g. outside sales personnel, agents on commission basis, or insurance field agents. (San Miguel Brewery vs Democratic Labor Union, G.R. No. L-18353, 31 July 1963)
Members of the Family They are exempted from the coverage, for the support given by the employer may exceed the benefit for which an employee is entitled under appropriate labor provisions. To cover them under Art.82, may create labor problems that would
29
Labor Law and Social Legislation eventually break-up the family, which is the evil sought to be prevented. (Poquiz, page 175)
It is enacted not only to safeguard the health and welfare of the Ee or laborer, but also in a way to minimize unemployment by forcing Ers, in cases where more than 8-hour operation is necessary, to utilize different shifts of laborers or Ees working only for 8 hours each. (Manila Terminal Co. Inc vs The Court of Industrial Relations, G.R. No. L-4148, 16 July 1952)
Workers paid by results Workers who are paid by results include those who are paid on piece-work, "takay," "pakiao," or task basis.
Compensable hours worked
Payment of this type of worker is determined by the results of the work performed or the number of units produced, not the number of hours used in the completion of the job or the time spent in production. (Poquiz, page 175)
It shall include: a.
Tailors and similar workers hired in the tailoring establishment, although paid weekly wages on piece-work basis, are employees and not independent contractors, and accordingly, as regular employees paid on piece-rate basis, they are not entitled to overtime pay, holiday pay, premium pay for holiday/rest day and service incentive leave pay. (Villaga v. NLRC, G.R. No. 75038, 23 August 1993)
b.
all time during which an employee is required to be on duty or to be at the employer's premises or to be at a prescribed workplace, all time during which an employee is suffered or permitted to work (Art. 84, infra)
The law provides that rest periods of short duration during working hours shall be counted as hours worked, such as coffee or snack time.
XPNs:
In its simple concept, working time is one during which an employee is actually working. Broadly, it may include an instance when an employee is not actually working but he is required to be present in the employer's premises. Thus, the fact that he is required to be present although not actually doing any work, is still deemed working time. (Poquiz, page 179)
1. 2.
Principles in determining hours worked
NORMAL HOURS OF WORK GR: The normal hours of work of any Ee shall not exceed 8 hours a day (LC, Art. 83). Health personnel Compressed workweek
Normal hours of work may be shortened or compressed. Neither does it follow that a person who does not observe normal hours of work cannot be deemed an employee. In Cosmopolitan Funeral Homes, Inc. v. Maalat , the employer similarly denied the existence of an Er-Ee relationship, as the claimant according to it, was a "supervisor on commission basis" who did not observe normal hours of work. This Court declared that there was an Er-Ee relationship, noting that "the supervisor, although compensated on a commission basis, [is] exempt from the observance of normal hours of work for his compensation is measured by the number of sales he makes" (Lazaro v. SSS, G.R. No. 138254, 30, July 2004).
1.
2.
3.
The eight-hour work requirement does not, however, preclude the employer in the exercise of its management prerogatives to reduce the number of working hours, provided that there is no diminution of existing benefits. (Poquiz, page 176)
Rationale behind the law on eight-hour labor
4.
30
All hours which the Ee is required to give to his Er regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion. Rest period is excluded from hours worked, even if Ee does not leave h is workplace, it being enough that: He stops working a. b. May rest completely c. May leave his workplace, to go elsewhere, whether within or outside the premises of the workplace All time spent for work is considered hours worked if: The work performed was necessary a. b. If it benefited the Er c. Or the Ee could not abandon his work at the end of his normal working hours because he had no replacement d. Provided, the work was with the knowledge of his Er or immediate supervisor The time during which an Ee is inactive by reason of interruptions in his work beyond his control shall be considered working time:
Labor Standards a.
b.
4.
(Sec. 5, Rule I, Book III, Rules Implementing the Labor Code.)
If the imminence of the resumption of the work requires the Ees presence at the place of work; or If the interval is too brief to be utilized effectively and gainfully in the Ees own interest (IRR, Book III, Rule I, Sec. 4).
Instances when compensable 1. 2. 3.
Conditions of Employment
–
hours
of
worked
Where the nature of the job of the employee requires him to wait, the waiting time during the eight-hour period is compensable working time. An example is a driver who delivers company products to different outlets; time spent in waiting for the loading of the goods to his delivery van is compensable working time.
are
Ee is required to be on duty Ee is suffered or permitted to work Rest periods of short duration during working hours Travel time, when beneficial to the Er (Rada v. NLRC, G.R. No. 96078, 9 January 1992)
However, a thirty-minute assembly time long practiced and institutionalized by mutual consent of the parties under the collective bargaining agreement cannot be considered waiting time of the employees if they are not subject to the absolute control of the company during this period. Otherwise, their failure to report in the assembly time would justify the company to impose disciplinary measures. ( Arica v. NLRC, G.R. No. 78210 28 February 1989)
Instances of working time The following shall be considered as working time: (Poquiz, page 180) a.
b.
c.
d.
e.
Time spent by the employee for the benefit of the employer whether such service is necessary or not such as serving coffee to visitors. Time spent by the office messenger in playing chess when not yet summoned by his superior (compensable idle time). Travel time which is in connection with the work of the employee; if not, it is not considered as working time. Time spent during which an employee is inactive by reason of interruptions beyond his control is working time, such as twenty-minute electric power failure or machine breakdowns. The pay for this non-productive time is known as idle-time pay. Where the work is broken or is not continuous, the idle time that an employee may spend for rest is not counted as working time (NDC vs CIR, G.R. No. L-53961, 30 June 1987) Waiting time spent by an employee shall be considered as working time if waiting is an integral part of this work or the employee is required or engaged by the employer to wait. In effect, he is under the absolute control of the employer such that the employee is effectively deprived of the time to attend other personal pursuits. ( Arica v. NLRC, 170 SCRA 776)
f.
g.
h.
i.
Sleeping time is compensable working time if the nature of the employee's work allows sleeping without interrupting or prejudicing the performance of his work. Time spent by the Union's officers in the collective bargaining table is not compensable working time, unless it is as provided in the CBA. Attendance at lectures, meetings, training programs, and other similar activities shall not be counted as working time if all of the following conditions are met: 1. Attendance is outside of the employee's regular working hours; 2. Attendance is in fact voluntary; 3. The employee does not perform any productive work during such attendance. (Sec. 6, Rule I, Book III, Rules Implementing the Labor Code.)
Preliminary (before work) and postliminary (after actual work) activities deemed performed during working hours, where such activities are controlled or required by the employer and are pursued necessarily and primarily for the employer's benefit (31 Am. Jur. 882-883). Employees are the entitled to portal pay for time spent on incidental activities before or after the regular working period. (CCHI, Labor Law Course, 318) j. Rest periods running from five to twenty minutes is considered as compensable hours worked (Sec. 7, Rule I, Book III, Rules Implementing the Labor Code.) k. Semestral break of teachers is considered as compensable hours worked for it is a form of an interruption beyond their control (University of
An employee who is required to remain on call in the employer's premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call . An employee who is not required to leave work at his home or with company officials where he may be reached is not working while on call.
31
Labor Law and Social Legislation Health personnel covered by the 40-hour workweek
Pangasinan Faculty Union v. University of Pangasinan, G.R. Nos. 64821-23, 29 January 1993)
1.
In the Philippines, the Department of Labor Manual states the principles which apply in determining whether or not time spent in travel is working time depend upon the kind of travel involved. (Azucena, page 207)
2.
Those in cities and municipalities with a population of at least 1 million; or Those in hospitals and clinics with a bed capacity of at least 100.
NOTE: Art. 83(2) of the LC does not require hospitals to pay the Ees a full weekly salary with paid 2 days off (San Juan de Dios Ees Assoc.-AFW et al. v. NLRC, G.R. No. 126383, November 28, 1997).
a. Travel from home to work GR: Normal travel from home to work is not working time.
Resident physicians to be on duty beyond the 40-hour workweek limitation
XPNs: i.
ii. iii. iv.
Emergency call outside his regular working hours where he is required to travel to his regular place of business or some other work site. Done through a conveyance provided by the Er. Done under the supervision and control of the Er. Done under vexing and dangerous circumstance.
GR: The customary practice of requiring resident physicians beyond the 40 hours of work per week is not permissible and violates the limitation under Art. 83.
XPN: If there is a training agreement between the resident physician and the hospital and th e training program is duly accredited or approved by appropriate government agency.
b. Travel that is all in a day’s work – time spent
COMPRESSED WORKWEEK
in travel as part of the Ees principal activity It is a scheme where the normal workweek is reduced to less than 6 days but the total number of work-hours of 48 hours per week shall remain. The normal workday is increased to more than 8 hours but not to exceed 12 hours, without corresponding overtime premium. The concept can be adjusted accordingly depending on the normal workweek of the company. (Department Advisory Order No. 2, Series of 2004).
E.g. travel from job site to job site during the work day, must be counted as working hours.
c.
Travel away from home GR: a.
b.
Travel that requires an overnight stay on the part of the Ee when it cuts across the Ees workday is clearly working time. The time is not only hours worked on regular workdays but also during corresponding working hours on nonworking days. Outside of these regular working hours, travel away from home is not considered working time.
This scheme was originally conceived for establishments wishing to save on energy costs, promote greater work efficiency and lower the rate of employee absenteeism, among others. Workers favor the scheme considering that it would mean savings on the increasing cost of transportation fares for at least one day a week; savings on meal and snack expenses; longer weekends or an additional 52 off-days a year that can be devoted to rest leisure, family responsibilities, studies and other personal matters, and that it will spare them for at least another day in a week from certain inconveniences that are the normal incidents of employment, such as commuting to and from the workplace, travel time spent, exposure to dust and motor vehicl fumes, dressing up for work, etc. (Bisig Manggagawa sa Tryco v. NLRC, G.R. No. 151309, October 15, 2008).
XPN: During meal period or when Ee is permitted to sleep in adequate facilities furnished by the Er.
Hours of work of health personnel GR: 8 hours for 5 days (40-hour workweek), exclusive of time for meals.
XPN: Where the exigencies of the service require that such personnel work for 6 days or 48 hours, they shall be entitled to an additional compensation of at least 30% of their regular wage for work on the 6th day (LC, Art. 83).
Requisites
32
Labor Standards 1.
2.
3.
4.
Conditions of Employment
–
The scheme is expressly and voluntarily
2.
supported by majority of the Ees The Er shall notify the DOLE through the Regional Office which has jurisdiction over the workplace, of the adoption of compressed workweek. The notice shall be in Report Form attached to the advisory. The Regional Office shall conduct an ocular visit to validate whether the adoption of the flexible work arrangements is in accordance with this issuance (Department Advisory Order No. 2, Series of 2009). In firms using substances, or operating in conditions that are hazardous to health, a certification is needed from an accredited safety organization or the firm’s safety committee that work beyond 8 hours is within the limit or levels of exposure set by DOLE’s occupational safety and health standards.
3.
4.
5. 6.
There is no diminution in their weekly or monthly take home pay or fringe benefits The benefits are more than or at least commensurate or equal to what is due to the Ees without the compressed work week OT pay will be due and demandable when they are required to work on those days which should have ceased to be working days because of the compressed work week schedule. No strenuous physical exertion or that they are given adequate rest periods. It must be for a temporary duration as determined by the DOLE.
Types of Flexible Working Arrangements 1.
2.
Reduction of workdays - where the normal workdays per week are reduced but should not last for more than six (6) months Rotation of workers- where the Ees are rotated or alternately provided work within the workweek Forced leave- where the Ee are required to go on leave for several days or weeks, utilizing their leave credits if there are any. Broken-time schedule - where the work schedule is not continuous but the number of work hours within the day or week is not reduced. Flexi-holiday schedule- where the Ees agree to avail themselves of the holidays at some other days, provided that there is no diminution of existing benefits as a result of such arrangement.
Instances when a compressed workweek is considered valid
3.
The validity of the reduction of working hours can be upheld when the arrangement is: 1. Temporary 2. It is a more humane solution instead of a retrenchment of personnel 3. There is notice and consultations with the workers and supervisors 4. A consensus is reached on how to deal with deteriorating economic conditions; and 5. It is sufficiently proven that the company was suffering from losses.
4.
NOTE: Under the Bureau of Working Conditions’
Duration
5.
MEAL BREAK
bulletin, a reduction of the number of regular working days (RWD) is valid where the arrangement is resorted to by the Er to prevent serious losses due to causes beyond his control, such as when there is a substantial slump in the demand for his goods or services or when there is a lack of raw materials. There is one main consideration in determining the validity of reduction of working hours – that the company was suffering from losses. A year of financial losses would not justify a reduced workweek (Linton Commercial v. Hellera, G.R. No. 163147, October 10, 2007).
Every Er shall give his Ees not less than 60 minutes or 1 hour time-off for regular meals. As a general rule, employees are entitled to at least one hour time-off for regular meals which can be taken inside or outside company premises. For a full one-hour undisturbed lunch break, the employees can freely and effectively use this hour not only for eating but also for their rest and comfort which are conducive to more efficiency and better performance in their work. Since the employees are no longer required to work during this one-hour lunch break, there is no more need for them to be compensated for this period. (Sime Darby Pilipinas, Inc. v. NLRC, G.R. No. 119205)
Conditions where a "compressed workweek" schedule may be legally authorized as an exception to the "8-hour a day" requirement under the LC (2005 Bar Question) 1.
Non- compensability of the meal period
The Ee voluntarily agrees to it
It is not compensable during a time-off. Ee must be completely relieved from duty.
33
Labor Law and Social Legislation When meal period is compensable
a.
It is compensable where the lunch period or meal time: Is predominantly spent for the Er ’s benefit; or 1. 2. Where it is less than 20 min. It will be considered only as a coffee break.
b.
c.
NOTE: Where during a meal period, the laborers are required to stand by for emergency work, or where the meal hour is not one of complete rest, such is considered overtime(Pan Am v. Pan Am Ees Association, G.R. No. L-16275, (1961).Rest periods or coffee breaks running from 5 to 20 mins shall be considered as compensable working time (IRR, Book III, Rule, Sec. 7).
d.
Compensability of meal periods provided during overtime work
e. f.
Meal periods provided during overtime work are compensable, since the 1 hour meal period (noncompensable) is not given during OT work because the latter is usually for a short period and to deduct from the same would reduce to nothing the Ees’ OT work. Thus, the 1 hour break for meals during OT should be treated as compensable.
Where meal periods are compensable or not compensable 1.
b. c. d.
e. f. g.
2.
NOTE: The implementing rules allow the meal time to be less than 60 minutes, under specified cases and in no case shorter than 20 minutes (IRR, Book III, Rule 1, Sec. 7).
If the so called “meal time” is less than 20 minutes, it becomes only a rest period and under the same section 7, is considered working time. (Azucena, page 213)
shortened:
Compensable – At the instance of Er, when: a.
Ees voluntarily agree in writing and are willing to waive OT pay for the shortened meal period; No diminution in the salary and other fringe benefits of the Ees which are existing before the effectivity of the shortened meal period; Work of the Ees does not involve strenuous physical exertion and they are provided with adequate coffee breaks in the morning and afternoon; Value of the benefits derived by the Ees from the proposed work arrangements is equal to or commensurate with the compensation due them for the shortened meal period as well as the OT pay for 30 min. as determined by the Ees concerned; OT pay will become due and demandable after the new time schedule Arrangement is of temporary duration.
WAITING TIME
Work is non-manual in nature or does not involve strenuous physical exertion; Establishment regularly operates less than 16 hours a day; Work is necessary to prevent serious loss of perishable goods. Actual or impending emergency or there is urgent work to be performed on machineries and equipment to avoid serious loss which the Er would otherwise suffer (Sec. 7, Rule I, Book III, IRR). Establishment regularly operates less than 16 hours a day; Work is necessary to prevent serious loss of perishable goods. Actual or impending emergency or there is urgent work to be performed on machineries and equipment to avoid serious loss which the Er would otherwise suffer (Sec. 7, Rule I, Book III, IRR).
1. 2.
It is considered working time if waiting is an integral part of his work, or The Ee is required or engaged by the Er to wait (engaged to wait). (Azucena, page 84)
The controlling factor is whether waiting time spent in idleness is so spent predominantly for the Er’s benefit or for the Ee’s.
Waiting time not considered as working time It is not considered working time when the Ee is waiting to be engaged; idle time is not working time. Hence, it is not compensable (waiting to be engaged).
NOTE: Under the law, the idle time that an Ee may spend for resting and during which he may leave the spot or place of work though not the premises of his Er, is not counted as working time only where the work is broken or is not continuous (National Development Co. v. CIR, 6 SCRA 763).
Not Compensable – Ee requested for the shorter meal time so that he can leave work earlier than the previously established schedule. Requisites:
Idle time considered as working time
34
Labor Standards
Conditions of Employment
–
It is when the Ee is idle or inactive by reason of interruptions beyond his control.
spiritual needs. They may have more hours to devote to reading, amusement, and other recreational activities necessary for their wellbeing. Moreover, they could share longer hours in the company of their family, attending to spiritual or religious needs. Law on overtime will surely ease unemployment problem, for employers will be constrained to employ additional employees to work in other shifts necessary for the operation of the business. (Shell Co. v. NLU, G.R. No. L-1309, July 26, 1948)
OVERTIME WORK, OVERTIME PAY Work day Work day is the 24-hour period which commences from the time the Ee regularly starts to work Illustration: If the worker starts to work 8 am today, the workday is from 8 am today up to 8 am tomorrow. (Azucena, page 221)
Condition for entitlement to overtime pay Entitlement to overtime pay must first be filed by sufficient proof that said overtime work was actually performed, before an employee may avail of said benefit (Cagampan v NLRC, 195 SCRA 633)
Minimum normal working hours fixed by law need not be continuous to constitute the legal working day.
Overtime work
Is an employee entitled to overtime pay for work rendered in excess of eight hours, despite the fact that his employment contract specifies a 12-hour workday at a fixed monthly salary rate that is a bove the legal minimum rate? The answer should be in the affirmative. The contract in question could have been deemed in violation of pertinent labor laws. And the provisions of the latter prevail over the terms of the contract. (Pesala v. NLRC, G.R. No. 105963, 22 August 1996)
Service rendered in excess of and in addition to eight hours on ordinary working days, which are the prescribed daily work period, is overtime work. (Caltex Regular Employees at Mla. Office v Caltex Phils., Inc., 247 SCRA 398)
NOTE: Express instruction from the Er to the Ee to render OT work is not required for the Ee to be entitled to OT pay; it is sufficient that the Ee is permitted or suffered to work. (Azucena, page 222) However, written authority after office hours during rest days and holidays are required for entitlement to compensation.
Overtime pay vs. Premium pay
Overtime pay Any employee who is permitted or required to work beyond eight hours on ordinary working days shall be paid an additional compensation for the overtime work in an amount equivalent to his regular wage plus at least 25% thereof. It is the amount obtained by multiplying the overtime hourly rate by the number of hours worked in excess of eight hours. (Poquiz, page 186)
Rationale behind the overtime pay
OVERTIME PAY
PREMIUM PAY
Additional compensation for work performed beyond 8 hours on ordinary days (within the worker’s 24hour workday)
Additional compensation for work performed within 8 hours on days when normally he should not be working (on non-working days, such as rest days and special days.) But additional compensation for work rendered in excess of 8 hours during these days is also considered OT pay.
Overtime pay rates
Ee is made to work longer than what is commensurate with his agreed compensation for the statutory fixed or voluntarily agreed hours of labor he is supposed to do (PNB v. PEMA and CIR, G.R. No. L-30279, July 30, 1982). The reason behind the law requiring additional compensation for work beyond the normal working day is to encourage employers to dispense with such work thus providing employees an opportunity to satisfy their mental, moral and
35
OVERTIME
PAY RATES
During a regular working day
Additional compensation of 25% of the regular wage
Labor Law and Social Legislation informed that he would frequently be working overtime as he would have to drive for the company's executives even beyond the ordinary 8-hour work day. He was provided with a contract of employment wherein he would be paid a monthly rate equivalent to 35 times his daily wage, regular sick and vacation leaves, 5 day-leave with pay every month and time off with pay when the company's executives using the cars do not need Danilo's service for more than eight hours a day, in lieu of overtime. Are the above provisions of the contract of employment in conformity with, or violative of, the law?
Rate of the first 8 hours worked on plus at least 30% of the regular wage (RW): During a holiday or rest day
If done on a special holiday OR rest day: 30% of 130% of RW If done on a special holiday AND rest day: 30% of 150% of RW If done on a regular holiday: 30% of 200% of RW
A: Except for the provision that Danilo shall have
Basis of computing the overtime pay and additional remuneration
time off with pay when the company's executives using the cars do not need Danilo's service for more than 8 hours a day, in lieu of OT, the provisions of the contract of employment of Danilo are not violative of any labor law because they instead improve upon the present provisions of pertinent labor laws.
Regular wage which includes the cash wage only, without deduction on account of the facilities provided by the Er (LC, Art. 90).
---
--Q: In lieu of overtime pay, the employee was given permission to go on leave on some other day, is that valid?
Instances where an Ee may or may not be compelled to render OT work
A: NO. Permission given to the Ee to go on leave on
GR: An Ee may not be compelled to render OT work;
some other day of the week shall not exempt the Er from paying the additional compensation required because it would prejudice the Ee, for he will be deprived of the additional pay for the OT work he has rendered and which is utilized to offset the undertime he may have incurred. Undertime could be charged against the Ees accrued leave.
OT work is voluntary.
XPNs: Compulsory OT work in any of the following situations: 1. Urgent work to be performed on machines and installations in order to avoid serious loss or damage to the Er or some other cause of similar nature 2. Work is necessary to prevent loss or damage to perishable goods 3. In case of imminent danger to the public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity 4. Country is at war 5. Completion or continuation of the work started before the 8th hour is necessary to prevent serious obstruction or prejudice to the business operations of the Er 6. Any other national or local emergency has been declared 7. Necessary to prevent loss of life or property. (LC, Art. 89)
----Q: Socorro is a clerk-typist in Hospicio de San Jose, a charitable institution dependent for its existence on contributions and donations from well wishers. She renders work 11 hours a day but has not been given OT pay since her place of work is a charitable institution. Is Socorro entitled to overtime pay? Explain briefly. (2002 Bar Question) A: YES. Socorro is entitled to OT pay. She does not fall under any of the exceptions to the coverage of Art. 82, under the provisions of hours of work. The LC is equally applicable to non-profit institutions. A covered Ee who works beyond 8 hours is entitled to OT compensation.
----Q: Danilo Flores applied for the position of driver in the motor-pool of Gold Company, a multinational corporation. Danilo was
NOTE: There should be payment of additional compensation. Ees’ refusal to obey the order of the Er constitutes insubordination for which he may be subjected to disciplinary action.
36
Labor Standards
Conditions of Employment
–
--Q: The employment contract requires work for more than 8 hours a day with a fixed wage inclusive of OT pay. Is that valid?
that they could not have expressly waived it. (Manila Terminal Co., Inc. v CIR, 48 Off. Gazette 7, p. 2725; Mercader v Manila Polo Club, G.R. No. L-8373, 28 September 1956).
A: It depends.
XPNs:
1.
1.
When the contract of employment requires work for more than 8 hours at specific wages per day, without providing for a fixed hourly rate or that the daily wages include OT pay, said wages cannot be considered as including OT compensation (Manila Terminal Co. v. CIR, et al ., 91 Phil., 625). 2. The employment contractprovides for a “built in” OT pay. Non-payment of OT pay by the employer is valid (Engineering Equipment v. Minister of Labor, G.R. No. L-64967, September 23, 1985).
2.
When the alleged waiver of overtime pay is in consideration of benefits and privileges which may be more than what will accrue to them in overtime pay, the waiver may be permitted. (Azucena, page 228) Compressed workweek
Night differential and overtime pay When the tour of duty of an employee falls at night time, the receipt of overtime pay will not preclude the right to night differential pay. The latter is payment for work done during the night and the other is payment for the excess of the regular eighthour work. (NARIC v NARIC Workers Union, 105 Phil. 891)
--Undertime cannot offset overtime (LC, Art. 88) Where a worker incurs undertime hours during his regular daily work, said undertime hours should no t be offset against the overtime hours on the same day or on any other day (Azucena, page 233) Offsetting the overtime with undertime and at the same time charging said undertime to the accrued leave is unfair and cannot be done. (NAWASA v NWSA Consolidated Union, 11 SCRA 766, 778)
Overload work distinguished
and
overtime
work
Where a teacher is engaged to undertake actual additional teaching work after completing his regular teaching load, such additional work is referred to as overload.
It will exempt him from paying additional pay for overtime work. It has been held the proper remedy should be to deduct undertime or absences against the employee's accrued leave but pay him the overtime to which he is rightfully entitled. Lastly, the rule will prevent the anomalous situation whereby an employee could schedule his working hours at will thereby destroying the regular working schedules. (Detective and Protective Bureau, Inc. v. United Employees Welfare Association, G.R. No. L-4337, 29 December 1951)
When the overload is performed within eight hours normal working day, such overload pay is considered part of the basic pay for the purpose of computing 13th month pay. "Overload work" is sometimes misunderstood as synonymous to "overtime work." The two terms are not the same. Overtime work is work rendered in excess of the normal working hours of eight in a day. On the other hand, since overload work may be performed either within or outside eight hours in a day, overload work may or may not be overtime work. (DOLE's Explanatory Bulletin on Inclusion of Teacher's Overload in Computing 13th Month Pay)
Right to OT pay cannot be waived GR: The right to overtime pay cannot be waived.
OT rate may be subject to stipulation of the Er and Ee
The right is intended for the benefit of the laborers and employees. Any stipulation in the contract that the laborer shall work beyond eight hours without additional compensation for the extra hours is contrary to law and null and void. (Azucena, page 225)
GR: The premium for work performed on the Ee’s rest days or on special days or regular holidays are included as part of the regular rate of the Ee in the computation of OT pay for any OT work rendered on said days especially if the Er pays only the minimum OT rates prescribed by law.
The right cannot be waived, because while the workers did not claim overtime pay until the commencement of the litigation, still the law gives them the right to claim overtime compensation and they could not be held to have impliedly waived such extra compensation for the obvious reason
XPN: Ees and Er may stipulate in their collective agreement the payment of OT rates higher than those provided by law and exclude the premium rates in the computation of OT pay. Such agreement
37
Labor Law and Social Legislation Purpose
may be considered valid only if the stipulated OT pay rates will yield to the Ees not less than the minimum prescribed by law.
The philosophy behind the provision is to give premium to night work when an employee is supposed to be sleeping. Working at night is violative of the law of nature for it is the period for rest and sleep. An employee who works at night has less stamina and vigor; thus, he can easily contract a disease.
OT pay in a compressed workweek scheme Any work performed beyond 12 hours a day or 48 hours a week shall be subject to OT premium (Department Advisory No. 02, s. of 2004).
--Q: LKG Garments Inc. makes baby clothes for export. As part of its measures to meet its orders, LKG requires its employees to work beyond eight (8) hours everyday, from Monday to Saturday. It pays its employees an additional 35% of their regular hourly wage for work rendered in excess of eight (8) hours per day. Because of additional orders, LKG now requires two (2) shifts of workers with both shifts working beyond eight (8) hours but only up to a maximum of four (4) hours. Carding is an employee who used to render up to six (6) hours of overtime work before the change in schedule. He complains that the change adversely affected him because now he can only earn up to a maximum of four (4) hours worth of overtime pay. Does Carding have a cause of action against the company? (2015 Bar Question)
Work done at night places has a greater burden on the worker. It is more strenuous and onerous than work done during the day; therefore it deserves greater or extra compensation. (Shell Co. vs. NLU, 81 Phil. 315)
Non-waivability GR: Waiver of NSD is against public policy (Mercury Drug Co., Inc. v. Dayao, et al., G.R. No. L-30452, September 30, 1982).
XPN: Waiver is allowed if this will result to higher or better benefits to Ees.
PART-TIME WORK Non-prohibition of part-time work Considering the purpose of the law, it is not prohibited to have “normal hours of work” of less than eight hours a day. What the law regulates is work hours exceeding eight. It prescribes a maximum but not a minimum. Article 83 does not say that the normal hours of work is or should be eight hours but it shall not exceed eight. Therefore, part-time work, or a day’s work of less than eight hours but that shall not exceed eight. (Azucena, page 200)
A: NO. A change in work schedule is a management prerogative of LKG. Thus, Carding has no cause of action against LKG if, as a result of its change to two (2) shifts, he now can only expect a maximum of four (4) hours overtime work. Besides, Art. 97 of the Labor Code does not guarantee Carding a certain number of hours of overtime work. In Manila Jockey Employees’ Unionv. Manila Jockey Club (517 SCRA 707), the Supreme Court held that the basis of overtime claim is an employee’s having been “permitted to work”. Otherwise, as in this case, such is not demandable.
NOTE: Under Art. 124, as amended by R.A. 6727, wage proportionate to part-time work is recognized. The wage and benefits of a part-time worker are in proportion to the number of hours worked. For example, if an Ee earns P300.00 for an 8-hour work, he shall then get P150.00 for work done in 4 hours.
--NIGHT SHIFT DIFFERENTIAL (R.A. 10151) An employee shall be paid night shift differential of no less than ten percent (10%) of his regular wage for each hour of work performed between ten o'clock in the evening and six o'clock in the mo rning (Sec. 2, Rule II, Book III, Rules Implementing the Labor Code).
CONTRACT FOR A PIECE OF WORK Contract for a piece of work It is a contract whereby the contractor binds himself to execute a piece of work for the Er, in price or consideration of a certain compensation. The contractor may employ his labor, skill or also furnish the material.
Where the night-time work of an employee ove rlaps with overtime work, the receipt of overtime pay does not preclude the receipt of night differential pay. The latter is night pay; the former is payment beyond eight-hour work. (Poquiz, page 185)
38
Labor Standards
Conditions of Employment
–
NOTE: All workers paid on piece-work shall be
1.
entitled to receive not less than the prescribed daily minimum wage or a proportion thereof f or working less than 8 hours.
2.
Contract for piece of work vs. Lease of services CONTRACT FOR PIECE OF WORK
--Q: A asked B to make a radio cabinet. B bound himself to furnish the material. Before the radio cabinet could be delivered, it was destroyed by a fortuitous event.
LEASE OF SERVICES
The object is the work done or the result of the said work.
The object is services.
The risk is borne by the worker before delivery.
The risk is generally borne by the Er, not by the worker unless the latter is guilty of fault or negligence.
In the absence of fraud, the agreement would ordinarily be valid. In the absence of prohibitory statute, the validity of a limitation is generally upheld, with a view of obtaining compensation commensurate to the risk assumed.
a. Who suffers the loss? b. Is the contract extinguished? A: a.
Contractor b.
The worker is also called a contractor. He in turn may obtain the services of others, who will work under him.
Test to determine if one is an Ee or an independent contractor
B suffers the loss of both the materials and the work, unless there was mora accipiendi. If there was mora accipiendi, it is evident that A suffers the loss. NO. Therefore B may be required to do the work all over again, unless there had been a prior stipulation to the contrary or unless a remaking is possible (NCC, Art. 1717).
NOTE: The law merely refers to the burden of the loss, and not to the extinguishment of the contract.
---
The “right of control” test is used. If the person for whom services are to be performed controls only the end to be achieved, the worker is a contractor; if the former controls not only the end but also the manner and means to be used, the latter is an Ee.
Effects when the Er accepts the work 1. 2.
Things that the contractor can furnish 1. 2.
The contractor is generally relieved of liability. If the acceptance is made without objection, the Er may still sue for hidden defects.
Place of payment
Both material and labor, or Only labor
1. 2.
Duties of a contractor who furnishes both work and the material
Where stipulated If no stipulation, then at the time and place of delivery.
Mechanic’s lien
This is equivalent to sale; therefore, these are the duties: 1. To deliver 2. To transfer ownership 3. To warrant against eviction and hidden defects
One who executed a work on a movable property has a right to retain it by way of pledge until he is paid.
Remedies of the ER in case of defects WAGES 1. 2.
Ask the contractor to remove the defect or to execute another work. If the contractor fails or refuses, the Er can ask another at the contractor’s expense. If a building is involved, expenses for correction and completion may be recovered.
It is the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, payable by an Er to an Ee
Rule on agreements waiving or limiting the contractor’s liability
39
Labor Law and Social Legislation under a written employment:
or
unwritten
contract
of
4.
For work done or to be done, or for services rendered or to be rendered; and includes Fair and reasonable value of board, lodging, or other facilities customarily furnished by the Er to the Ee as determined by SLE.
1. 2.
5. 6.
Workers in any duly registered cooperatives when so recommended by the Bureau of Cooperative Development and upon approval of the SLE; Workers of a barangay micro business enterprise (R.A. 9178); Retail and service establishments regularly employing not more than 10 workers (RA 6727, Sec. 4);
NOTE: Fair and reasonable value means it shall not NOTE: Retail and service establishments must file
include any profit to the Er or to any person affiliated with the Er. (Art. 97, LC)
an application for exemption with the duly appropriate Regional Board.
In a broader sense, the term "wages" has twin attributes: the cash wage and facilities. The cash wage takes the form of ready money paid by the employer for services rendered by the employee. On the other hand, facilities are articles or services customarily given for the benefit of the employee and are voluntarily accepted by him.
Note: Barangay Micro Business Enterprise refers to any business entity or enterprise engaged in the production, processing or manufacturing of products or commodities, including agroprocessing, trading and services, whose total assets including those arising from loans but exclusive of the land on which the particular business entity's office, plant and equipment are situated, shall not be more than Three Million Pesos. (RA 9178)
The term "wages" also covers all benefits of the employee under the CBA such as severance pay, educational allowance, accrued vacation leave earned but not enjoyed, as well as workmen's compensation awards and unpaid salaries for services rendered (PNB v Cruz, 180 SCRA 206)
“Equal pay for equal work” Principle Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries (International School Alliance of Educators v. Quisumbing, G.R. No. 128845, June 01, 2000).
“No Work, No Pay” Principle (Fair day’s wage for a fair day’s labor)
GR: If there is no work performed by the Ee, without WAGE vs. SALARY
the fault of the Er, there can be no wage or pay. Burden of economic loss suffered by Ee shall not be shifted to the Er.
WAGE
XPNs: The laborer was able, willing and ready to work but was: 1. Prevented by management; 2. Illegally locked out; 3. Illegally suspended; 4. Illegally dismissed 5. Illegally prevented from working (Aklan Electric Coop. v. NLRC, G.R. No. 129246, January 10, 2000).
Applicability of the term wages GR: It applies to all Ees. XPNs: 1. 2.
3.
SALARY
(Gaa v.CA, G.R. No. 44169, Dec. 3, 1985) Compensation for manual labor (skilled Paid to “white collared or unskilled) also workers” and denotes a higher degree of known as “blue employment or a collared workers,” paid at stated times superior grade of and measured by the services and implies a day, week, month or position in the office. season. Suggestive of a larger Considerable pay for a and more permanent lower and less or fixed compensation responsible character for more important of employment. service. GR: Not subject to execution
Farm tenancy or leasehold; Household or domestic helpers, including family drivers and persons working in the personal service of another; Home workers engaged in needlework or in any cottage industry duly registered in accordance with law;
XPN: Debts incurred for food, shelter, clothing and medical attendance.
40
Subject to execution.
Labor Standards Our Supreme Court reached the same conclusion, the words “wages” and “salary” are in essence synonymous. (Azucena, page 268)
Wages
–
inducement for efficiency, a prize therefor, not a part of the wage. (Poquiz, 2012)
Productivity bonus vs. Sales commission The distinction between salary and wage in Gaa v. Court of Appeals, 140 SCRA 304, was only for the purpose of Art. 1708 of the Civil Code which mandates that "laborer's wages shall not be subject to execution or attachment except for debts incurred for food, shelter, clothing and medical attendance." In labor law, the distinction is only a matter of semantics. It is settled that wage and salary are synonymous. Likewise, the term "pay" is also synonymous with wage and salary. (Equitable PCI v Sadac, G.R. No. 164772, 8 June 2006)
Refers to the payment in excess of regular or guaranteed wages. It is granted to an employee for his tangible contribution to the success of the employer’s business, without which the employer may not realize bigger profits. The contribution may be in the form of an employee’s commitment to the job, his industry and loyalty. (Metro Transit Org., Inc. v. NLRC, G.R. No. 116008, July 11, 1995)
Intimately related to or directly proportional to the extent or energy of an employee’s endeavors A percentage of the sales closed by a salesman and operates as an integral part of such salesman’s basic pay
PAYMENT OF WAGES Forms of Payment
XPN: Bonuses can be demanded as a matter of right
d.
Paid upon the specific results achieved by a salesman-employee
credited for the purpose of determining liability for the 13th month pay. The employer who acceded and is already bound to give bonuses to his employees, the additional burden of 13 th month pay would amount to a penalty for his munificence or liberality. (NSFW v. Ovejera, et al., G.R. No. 59743, May 31, 1982)
function, not a demandable and enforceable obligation, which cannot be enforced upon the employer who may not be obliged to assume the onerous burden of granting bonuses or other benefits aside from the employee’s basic salaries or wages. (Philippine National Construction Corporation v. NLRC, G.R. No. 128345, May 18, 1999)
c.
Generally tied to the productivity or profit generation of the employer corporation Not directly dependent on the extent an individual employee exerts himself
NOTE: Voluntary and contractual bonuses can be
GR: The payment of bonus is a management
b.
Sales Commission
Something extra for which no specific additional services are rendered by a particular employee; hence, not legally demandable, absent a contractual undertaking to pay it
Bonus
if: a.
Productivity Bonus
The laborer’s wages shall be paid in legal currency (Art. 1705, NCC)
given without any condition; hence, part of the wage or salary (Atok Big Wedge Mining Co., Inc. v. Atok Big Wedge Mutual Benefit Assn., 92 Phil. 754) grant thereof is a result of an agreement such as the CBA (Gery v. Insular Lumber, 93 Phil. 807) given on account of company policy or practice (Claparols v. CIR, 65 SCRA 613) grant is mandated by law
No employer shall pay the wages of an employee by means of promissory notes, vouchers, coupons, tokens, tickets, chits, or any object other than legal tender, even when expressly requested by the employee Payment of wages by check or m oney order shall be allowed if it is customary on the date of the effectivity of the Code or necessary because of special circumstances as specified in the regulation issued by the SLE. (Art. 102, Labor Code)
Bonus treated as not part of wages Bonus is not considered part of wages if it is paid only upon realization of profits or amount of production or output. (Atok Big Wedge Mining Co., Inc. v. Atok Big Wedge Mutual Benefit Assn., 92 Phil. 754)
Place of Payment 1. 2.
Where the bonus is not payable to all but only to some employees and only when their labor becomes more efficient or more productive, it is only an
41
Near the place of undertaking Place provided by regulations of SLE to ensure greater protection of wages
Labor Law and Social Legislation XPN: RA 6727 thru banks
4. No Er shall pay his Ees in any bar, night or day club, drinking establishments, massage clinics, dance hall, or other similar places or in places where games are played with stakes of money or things representing money except when Ees are employed in such places
Payment through Automated Teller Machine (ATM) (DOLE Labor Advisory, Series of 1996) Requisites: 1. The ATM system of payment is with the written consent of the Ees concerned 2. The Ees are given reasonable time to withdraw their wages from the bank facility which time, if done during working hours, shall be considered compensable hours worked 3. The system shall allow workers to receive their wages within the period or frequency and in the amount prescribed under the Labor Code, as amended; 4. There is a bank or ATM facility within a radius of one (1) kilometre to the place of work; 5. Upon request of the concerned Ees, the Er shall issue a record of payment of wages, benefits and deductions for a particular period; 6. There shall be an additional expenses and no diminution of benefits and privileges as a result of the ATM system of payment 7. The Er shall assume responsibility in case the wage protection provisions of law and regulations are not complied with under the arrangement
Time of Payment Wages shall be paid atleast once every two (2) weeks or twice a month at intervals not exceeding (16) days.
XPN: Force Majeure - the Er shall pay the wages immediately after such Force Majeure or circumstances have ceased.
Payment of Wages of Ees engaged in task which cannot be completed in two (2) weeks shall be subject to the following conditions in the absence of CBA or arbitration award 1. That payments are made at intervals not exceeding sixteen (16) days, in proportion to the amount of work completed 2. That final settlement is made upon completion of work
Payee MINIMUM WAGE Wages shall be paid directly to the workers to whom they are due
Statutory minimum wage is the lowest wage rate fixed by law that an Er can pay his workers.
XPN: 1. Force majeure which renders the payment impossible 2. Special Circumstances determined by the SLE 3. Where worker died, the Er may pay the wages to the heirs without the necessity of intestate proceedings. Heirs shall: a. Execute affidavit attesting their relationship to the deceased and the fact that they are his heirs b. If minor, affidavit shall be executed on his behalf by his guardian or next-of-kin
Purpose
Payment in place other than the workplace shall be permissible under the following circumstances:
Standards or criteria for minimum wage setting
The purpose of minimum wage law is “to set barrier below which wages may not fall, in order to develop competition on a high level of efficient rather than competition on a low level of wages.” The establishment of a minimum wage encourages competition above the lower limits set by the law. The minimum wage law discourages the sweatshop operators from exploiting their workers. (Poquiz, Vol. I)
In the determination of such regional minimum wages, the Regional Board shall, among other relevant factors consider the following:
1. By reason of deterioration of peace and other conditions, or by reason of actual or impending emergencies caused by fire, flood, epidemic or other calamity 2. Er provides free transportation back and forth 3. Under any analogous circumstances; provided that the time spent by the Ees in collecting their wages shall be considered compensable hours worked.
1. 2. 3. 4.
42
The demand for living wages Wage adjustment vis-a-vis the consumer price index The cost of living and changes or increases therein The needs of workers and their families
Labor Standards 5. 6. 7. 8. 9. 10.
The need to induce industries to invest in the countryside Improvements in standards of living The prevailing wage levels Fair return on the capital invested and capacity to pay by Ers Effects on employment generation and family income The equitable distribution of income and wealth along the imperatives of economic and social development (LC, Art. 124).
It involves the fixing of a determinate amount to be added to the prevailing statutory minimum wage rates.
Two basic methods of payment 1.
2.
Persons exempted from the coverage of fixing a minimum wage 1.
2. 3.
4.
5.
Household or domestic helpers, including family drivers and persons in the personal service of another; Homeworkers engaged in needle-work; Workers employed in any establishment duly registered with the National Cottage Industries and Development Authority, provided that such workers perform the work in their respective homes; Workers in a duly registered cooperative when so recommended by the Bureau of Cooperative Development and upon approval of the SLE (IRR of LC, Book III, Rule VII, Sec. 2). Workers of a barangay micro business enterprise (R.A. 9178).
b.
Time wages – refer to pay by the hour, day or month, without specifying the amount of work to be done Production wages – refer to pay related to the amount of work the individual or group performs regardless of the time involved in its performance. This applies to workers paid by result (Beal and Wickersham, The Practice of Collective Bargaining; Poquiz, Vol. I).
Minimum wage non-negotiable; non waivable The minimum wage fixed by law is mandatory; thus it is non-waivable and non-negotiable. The enactment is compulsory in nature in order to ensure decent living conditions (PAM Co. v, PAMEAFFW, 51 SCRA 98)
--Q: The Regional Wage Board of Region II issued a Wage Order granting all Ees in the private sector throughout the region an across-theboard increase of P15.00 daily. Is this Wage Order valid? A: It depends. The Wage Order is valid insofar as
Economically feasible a.
Wages
–
the mandated increase applies to Ees earning the prevailing minimum wage rate at the time of the passage of the Wage Order and void with respect to its application to Ees receiving more than the prevailing minimum wage rate at the time of the passage of the Wage Order. The Regional Wage granted an across-the-board wage increase of P15.00 to all Ees in the region. It did not set a wage level nor a range to which a wage adjustment or increase shall be added. In doing so, the Regional Wage Board exceeded its authority by extending the coverage of the Wage Order to wage earners receiving more than the prevailing minimum wage rate, without a denominated salary ceiling. The Wage Order granted additional benefits not contemplated by R.A. No. 6727 (MBTC v. NWPC Commission, G.R. No. 144322, February 06, 2007).
From Er’s standpoint – a minimum wage is economically feasible if it will not prevent the industry from operating efficiently and prosperously over the long run (Dir. Harry Kantor’s analysis of Senate Bill No. 202 and House Bill No. 1732); From Ee’s standpoint – an economically feasible minimum wage should be as nearly adequate to maintain the minimum standard of living necessary for the health, efficiency and general well-being of employees.
METHODS OF MINIMUN WAGE ADJUSTMENT Salary Ceiling Method
----Q: Since the Wage Order was declared void with respect to its application to employees receiving more than the prevailing minimum wage rate at the time of the passage of the Wage Order, should these Ees refund the wage increase received by them?
A method of minimum wage adjustment whereby the wage adjustment is applied to Ees receiving a certain denominated salary ceiling. In other words, workers already being paid more than the existing minimum wage are also to be given a wage increase (ECOP v. NWCP, G.R. No. 96169, September 24, 1991).
Floor Wage Method
43
Labor Law and Social Legislation A: NO. The Es should not refund the wage increase
APPRENTICES/LEARNERS/PERSONS WITH DISABILITY
provided they received it in good faith, in the honest belief that they are entitled to such wage increase and without any knowledge that there was no legal basis for the same (MBTC v. NWPC Commission, G.R. NO.144322, February 06, 2007).
Minimum wage applicable The wage or salary rate shall not be less than 75% of the applicable minimum wage.
--MINIMUM WAGE OF WORKERS PAID BY RESULTS
COMMISSIONS A fee paid based on a percentage of the sale made by an Ee or agent, as distinguished from regular payments of wages or salary.
Workers paid by results including those who are paid on piece work, “takay” or task basis, shall be entitled to receive not less than the prescribed statutory minimum wage for an eight-hour work or a proportion thereof for less than eight hours work (Art. 124, infra.)
Commissions included or not included in the computation of the basic salary 1.
Purpose of the law It is to ensure the payment of fair and reasonable wage rates to "worker paid by results" who should be protected from unjust and unfair employers whose only concern is their interest. (Poquiz, page 231)
2.
Included in the basic salary – If the commission is comprised of a pre-determined percentage of the selling price of the goods. Excluded from basic salary – If the commission were paid as productivity bonuses or closely resemble profit-sharing, or when it has no clear, direct or necessary relation to the amount of work actually done by each individual employee.
WORKERS PAID BY RESULTS NON-DIMINUTION OF BENEFITS They are: 1. Paid based on the work completed; and 2. Not on the time spent in working
GR: Benefits being given to Ees cannot be taken back or reduced unilaterally by the Er because the benefit has become part of the employment contract, whether written or unwritten.
Including those who are paid on p iecework, “takay”, “pakiaw”, or task basis if their output rates are in accordance with the standards prescribed (Sec. 2[e], Rule I, Book III, Rules Implementing the Labor Co de.)
XPN: 1.
Minimum wage of workers paid by results 1.
2.
Those who are paid piece rates which are prescribed in Piece Rate Orders issued by DOLE – Wages or earnings are determined by
NOTE: If the error is not corrected in a reasonable
simply multiplying the number of pieces produced by the rate per piece. 2.
time, it ripens into a company policy and Ees can demand it as a matter of right.
Those who are paid output rates which are prescribed by the Er and are not yet approved by the DOLE – The number of pieces
Instances when non-diminution of benefits is applicable
produced is multiplied by the rate per piece as determined by the Er. a. If resulting amount is equivalent to or
It is applicable if it is shown that the grant of benefit: 1. Is based on an express policy of the law; or 2. Has ripened into practice over a long period of time and the practice is consistent and deliberate and is not due to an error in the construction/ application of a doubtful or difficult question of law. 3. Practice is consistent and deliberate and
more than the applicable statutory minimum rate in relation to the number of hours worked– Worker will receive such amount b.
When diminution of benefits is done to correct an error. If the benefit being claimed is a contingent or conditional benefit, whose demandability depends on a certain pre-conditions. (E.g. Bonus)
If the amount is less than the applicable legal rate – Er is required by law to pay the difference between the resulting amount and the applicable legal minimum rate. (Azucena, page 318)
44
Labor Standards 4.
5.
Practice is not due to an error in the construction/ application of a doubtful or difficult question of law. Done unilaterally by the Er
Wages
–
and conditions of employment. Employee benefits derived from law are exclusive of benefits arrived at through negotiation and agreement unless otherwise provided by the agreement itself or by law. (Meycauayan College v. Hon. Drilon, 185 SCRA 50)
Purpose of non-diminution of benefits The philosophy behind the law is to prohibit employers from reducing benefits already enjoyed by employees. A contrary rule will corrupt the employer's mind to abuse and exploit employees, prostituting the social justice and protection to labor clauses enshrined in the fundamental charter.
Any allowance/wage granted under the collective bargaining agreement cannot be credited to similar form of benefit that may thereafter be ordained by the government through legislation. Such portion of the contract is the "stoplock" gate or known in its technical term as the "non-chargeability" clause (Marcopper Mining Corp. v. NLRC, G.R. No. 103525, 29 March 1996)
Thus, a change of method of payment of wages from monthly to daily will not be allowed if it would result in reduction of pay. However, if the method introduced would, augment the worker's pay it will be valid. Reclassification of position of employees pursuant to reorganization, without affecting their compensation is not covered by the proscription. (Opinion of the Secretary of Labor, 7 October 1975)
This doctrine was resounded in this manner: the CBA provides "It is hereby agreed that these salary increases shall be exclusive of any wage increase that may be provided by the law as a result of any economic change." The Supreme Court ruled that the above provision in the CBA is clear that the salary increases shall not include any wage increase that may be provided by law as a result of economic change. The CBA needs no interpretation as it is not ambiguous. Thus, the wage increase granted by the petitioner to its employees under the CBA cannot be considered as creditable benefit. (Mindanao Steel Corp. v Minsteel Free Workers Organization, G.R. No. 130693, 4 March 2004; UKCEU-PTGWO v. Kimberly Clark Phils, G.R. No. 162957, 6 March 2006)
An agreement reducing certain labor standards benefits such as overtime and premium pay violates Art. 100. Provisions of existing laws are deemed part of a contract. (Republic Planters Bank v. NLRC, 266 SCRA 142). However, if there is an impelling reasonable justification of the diminution or reduction because of an emergency or exigency, or business losses, such diminution or reduction would be valid, provided it is duly approved by the Secretary of Labor and Employment or his duly authorized representative pursuant to Art. 233. ( Poquiz, page 229)
Benefit acquired through company practice An employee can demand as a matter of right benefits granted by the employer for a considerable, long period of time as the same may ripen into a company practice (Globe Mackay v. NLRC, 163 SCRA 71)
Meaning of facilities The term "facilities" shall include articles or services for the benefit of the employee or his family but shall not include tools of trade or articles or service primarily for the benefit of the employer or necessary to the conduct of the employ er's business. The fair and reasonable value of the facilities can be deducted from the employee's cash wage without violating the principle of non-diminution of benefits (Sec. 5 Rule VII, Book III, Rules Implementing the Labor Code; Atok Big Wedge Mining Co., Inc. v Atok Big Wedge Mutual Benefit Assn., 97 Phil. 294)
Thus, enjoyment of the privilege of commutation of sick leave benefits into cash equivalent as a company practice (Davao Integrated Port Stevedoring Services v Abarquez, 220 SCRA 197), grant of resignation benefits to a Branch Manager on the basis of company practice of applying expired CBA concluded by the supervisory union (Republic Planters Bank, v, NLRC, 166 SCRA 197), and the giving of special bonus as the company's long and regular practice, the same can no longer be withdrawn as they would amount to diminution of employee's existing benefits (Meralco v. Quisimbing, 302 SCRA 173) violative of the proscription under Art. 100.
Stoplock gate or nonchargeability clause Having entered into an agreement with its employees, an employer may not be allowed to renege on its obligation under a collective bargaining agreement should, at the same time, the law grants the employees the same or better terms
FACILITIES vs. SUPPLEMENTS
45
Labor Law and Social Legislation BASIS
Definition
FACILITIES Items of expenses necessary for the laborer’s and his family’s existence and subsistence
NOTE: Does
Inclusion Deduction
To whose benefit
not include tools of trade or articles / services primarily for the benefit of the Er or necessary to the conduct of the Er’s business. Forms part of the wage Deductible from wage For the benefit of the worker and his family.
Voluntary acceptance of facilities
SUPPLEMENT Extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages (Atok Big Wedge Mining Co. v. Atok Big Wedge Mutual Benefit Assoc., G.R. No. L7349, July 19, 1955).
Acceptance of facilities is voluntary, for to compel the employee to accept such facilities against his will would be violative of the fundamental right of employee to the free disposal of his wage guaranteed under Art. 112. (Mabeza v NLRC, G.R. No. 118506, 18 April 1997)
Facilities exclude profit The value of facilities should not be more than the actual cost to the employer of the board, lodging, or other facilities customarily furnished by him to his employees. The "fair and reasonable value" does not include any profit to the employer or to any persons affiliated with the Er.
Customarily furnished facilities It is important to determine when facilities are customarily furnished or not, for the fair and reasonable value of facilities not customarily furnished cannot be charged against the cash wage. For example, a messenger who slept in the office cannot be charged by the employer for housing allowance because the office is not a regular sleeping quarter. On the other hand, housing quarters are common in a mining industry; hence, the latter can charge its employees for housing quarter (Mabeza v NLRC, G.R. No. 118506, 18 April 1997).
Independent of wage Not wage deductible Granted for the convenience of the Er.
Facilities as part of wages
Tips not part of wages; element of compulsion in tipping
The term "wage" includes the fair and reasonable value of facilities customarily furnished by the employer to an employee ( Art. 97). Facilities have been defined to include those articles or services of benefit to the employee and his family such as rice ration, housing, recreational facilities, medical treatment to dependents, school facilities, cost of light, water, fuel, meals or snacks. ( Atok Big Wedge Mutual Benefit Assn. v Atok Big Wedge Mining Co., 97 Phil. 294; Mayon Hotel v. Adana, G.R. No. 157634, 16 May 2005).
Determination of facilities employer or employee
beneficial
Wage is the remuneration directly paid by the employer to an employee. On the other hand, tips are paid directly to an employee by the customer; hence, they fall short of the definition provided in Art. 97. Although a tip denotes a voluntary act, it lacks the essential element of a gift, that is, the free bestowing of a gratuity without consideration. Despite its apparent voluntariness, there is an element of compulsion in tipping ( Ace Navigation Co., Inc. v. C.A., 338 SCRA 70).
to
Supplements not part of wages
It is significant to determine when articles or services are beneficial to an employee because those articles or services which are not of benefit to the employee cannot be charged against the cash wage of an employee. Articles or tools of the trade that are primarily for the benefit of the employer or necessary to the conduct of his business cannot be deducted from the employer's wages because they are not considered as facilities. (Sec. 5, Rule VII, Book III, Rules Implementing the Labor Code).
Supplements are extra remunerations or benefits given to an employee such as vacation leave pay, overtime pay in excess of the legal rate, profitsharing benefits, sick pension, retirement and death benefits, family allowances, Christmas bonus, warrisk or cost-of-living bonuses or other bonuses other than those paid as reward for extra output or time spent on the jobs ( Atok Big Wedge Mining Co., 97 Phil. 294). Since they are not considered as part
46
Labor Standards
company-provided board and lodging are added to the employees' P350 cash daily wage, the employees' effective daily rate would be way above the minimum pay required by law. The company counsel further points out that the employees are aware that their food and lodging form part of their salary, and have long accepted the arrangement.
of wages, their value cannot be deducted from the cash wage of an employee.
Criterion in determining whether an item is a supplement or facility The criterion is not so much with the kind of the benefit or item (food, lodging, bonus or sick leave) given, but its purpose (State Marine v. Cebu Seamen’s Ass’n., G.R. No. L-12444, February 28, 1963).
Is the company's position legally correct? (2013 Bar Questions)
Cost of facilities furnished by the Er may be charged against an Ee
A: NO . The following requisites were not complied with: a. proof that such facilities are customarily furnished by the trade b. the provision of deductible facilities is voluntarily accepted by the employee c. the facilities are charged at the fair and reasonable value. Mere availment is not sufficient to allow deduction from employee’s wages. (Mayon Hotel & Restaurant v. Adarna, 485 SCRA 609 [2005])
In order that the cost be charged against the Ee, his/her acceptance of such facilities must be voluntary.
Requirements for deducting values for facilities 1. 2. 3.
Wages
–
Proof must be shown that such facilities are customarily furnished by the trade The provision of deductible Facilities must be voluntarily accepted in writing The Facilities must be charged at fair and reasonable value (Mabeza v. NLRC, G.R. No.
--PROHIBITIONS REGARDING WAGES Wage deduction prohibited
118506, April 18, 1997).
Status of food and lodging, or the electricity and water consumed by a hotel worker
The law prohibits the employer from making deductions from the wages of an employee. The evil sought to be prevented is to forestall the commission of unwarranted practices of employers by making unnecessary deductions without employee's knowledge or authorization (Galvadores v Trajano, 144 SCRA 138)
These are supplements. Considering, therefore, that hotel workers are required to work different shifts and are expected to be available at various odd hours, their ready availability is a necessary matter in the operations of a small hotel. Furthermore, granting that meals and lodging were provided and indeed constituted facilities, such facilities could not be deducted without the Er complying first with certain legal requirements (Mabeza v. NLRC, G.R. No. 118506, April 18, 1997).
Wage deductions GR: No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees (LC, Art. 113).
--Q: Gamma Company pays its regular employees P350.00 a day, and houses them in a dormitory inside its factory compound in Manila. Gamma Company also provides them with three full meals a day.
XPNs: 1. 2.
In the course of a routine inspection, a Department of Labor and Employment (DOLE) Inspector noted that the workers' pay is below the prescribed minimum wage of P426.00 plus P30.00 allowance, and thus required Gamma Company to pay wage differentials.
Deductions under Art. 113 of the LC for insurance premiums. Union dues in cases where the right of the worker or his union to check off has been recognized by the Er or authorized in writing by the individual worker concerned (LC, Art. 113).
NOTE: Art. 241(o) of the LC provides that
3.
Gamma Company denies any liability, explaining that after the market value of the
4.
47
special assessments may be validly checked-off provided that there is an individual written authorization duly signed by every Ee. Deductions for SSS, PhilHealth and Pag-ibig premiums Taxes withheld pursuant to the Tax Code
Labor Law and Social Legislation 5.
Deductions under Art. 114 of the LC for loss or damage to tools, materials or equipment supplied by the employer when the latter is engaged in such trades, occupations or businesses where the practice of making deductions or requiring deposits is a recognized one or is necessary or desirable as determined by SLE 6. Deductions made with the written authorization of the Ee for payment to a third person (IRR, Book III, Rule VIII, Sec 13). 7. Deductions as disciplinary measures for habitual tardiness (Opinion dated March 10, 1975 of the Labor Secretary). 8. Agency fees under Art. 248(e)of the LC 9. Deductions for value of meals and facilities freely agreed upon 10. In case where the Ee is indebted to the Er where such indebtedness has become due and demandable (NCC, Art. 1706). 11. In court awards, wages may be subject of execution or attachment, but only for debts incurred for food, shelter, clothing, and medical attendance (NCC, Art. 1703). 12. Salary deduction of a member of a legally established cooperative (R.A. 6938; LC, Art. 59).
Deductions for absences and (Principle of No-work No-pay)
Check-off may be enforced with the consent of the employer or by authority in writing by the employees. When the union and the employer agree, the attitude of the employees is immaterial. When the employees duly authorize the check-off, the employer's consent is unnecessary and its recognition of the right is obligatory. (A.L. Ammen Trans. Co. v BITEMAA, 91 Phil 649)
Legal Deduction The employment contract provides for 2-5% deduction from employee's salary representing the employer's share in procuring job placement for him. The provision in the contract was contested, but the employer argued that the employee was already estopped in complaining about the deduction. The Supreme Court declared the employment contract illegal and iniquitous; thus null and void. (Commando Security Agency v NLRC, 211 SCRA 645)
Non-Interference in Disposal of Wages Er shall not limit or interfere with the freedom of any Ee to dispose his wages. He shall not force, compel or oblige his Ees to purchase merchandise, commodities or other property from any other person, or otherwise make use of any store services of such Er or any other person
tardiness
An employer will not be liable for violation of the prohibition against wage deduction for absences or tardiness incurred by the employee.
Deposit for Loss or Damage Check-off Er shall not require his worker to make deposits from which deductions shall be made for the reimbursement of loss of or damage to tools, materials, or equipment supplied by the Er.
Check-off is a system by which union dues and other assessments are deducted from the employee's wage by the employer upon authorization from the worker or by mandate of the law. (Poquiz, page 259)
XPN: Duration of check-off
Er is engaged in such trade or business where the practice of making deductions or requiring deposits is a recognized one, or is necessary or desirable as determined by the SLE.
The employees' check-off authorization even if declared irrevocable, is good only as the employees remain members of the union concerned, because as such members they were obliged to pay the corresponding dues and assessments to their union. The moment they are separated from and left the union and joined another labor organization, they were no longer obliged to pay said dues and assessments. There would be no longer any reason or occasion for the company to continue making deductions. (Phil. Federation of Petroleum Workers v. CIR, L-26346, 27 February 1971, 37 SCRA 711)
Other Prohibitions: 1. Withholding of wages from a worker through inducement, force, stealth, intimidation, threat or by any other means without his consent 2. To make deductions from wages for the benefit of the Er or his representative as consideration of a promise of Employment or retention in employment 3. Refusal by Er to pay or reduce wages or benefits in discrimination of any Ee who has filed any complaint or instituted any proceedings under the code or has testified or about to testify
Compulsory check-off
48
Labor Standards 4. Unlawful for any person to make any statement, report, or record filed or kept pursuant to the Code knowing such statement, report or record to be false in any material aspect.
4.
Wages
–
The re-establishment of a significant difference in wage rates may be the result of the resort to grievance procedures or CB negotiations. (National Federation of Labor vs National Labor Relations Commission, 234 SCRA 311)
WAGE DISTORTION/RECTIFICATION In mandating an adjustment, the law did not require that there be an elimination or total abrogation of quantitative wage or salary differences; a severe contraction is enough (Metrobank v. NLRC, G.R. No. 102636, September 10, 1993).
Concept A situation where an increase in wage results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among- the Ee-groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service or other logical bases of differentiation (LC, Art. 124).
Wage distortion does not arise when a wage order gives employees in one branch of a bank higher compensation than that given to their counterparts in other regions occupying the same pay scale who are not covered by said wage order. In short, the implementation of wage orders in one region but not in others does not in itself necessarily result in wage distortion (Prubankers Association v. Prudential Bank & Trust Company, G.R. No. 131247, January 25, 1999).
It is the disappearance or virtual disappearance of pay differentials between lower and higher positions in an enterprise because of compliance with a wage order (P.I. Manufacturing v. P.I. Manufacturing Supervisors and Foreman, G.R. No. 167217, February 4, 2008).
Causes
Elements of Wage Distortion 1. 2.
3. 4.
Wage distortions have often been the result of:
An existing hierarchy of positions with corresponding salary rates. A significant change or increase in the salary rate of a lower pay class without a corresponding increase in the salary rate of a higher one; The elimination of the distinction between the 2 groups or classes; and The WD exists in the same region of the country (Alliance Trade Unions v. NLRC, G.R. No. 140689, February 17, 2004).
1. 2.
3.
Government decreed increases in minimum wages Merger of two companies (with differing classifications of employees and different wage rates) where the surviving company absorbs all the employees of the dissolved corporation, Wage distortion arose because the effectivity dates of wage increases given to each of the two classes of employees (rank-and-file and supervisory) had not been synchronized in their respective CBAs (Metro Transit Org., Inc. v NLRC, 67 SCRA 477)
Basic principles in Wage Distortion 1.
2. 3.
Where a significant change occurs at the lowest level of positions in terms of basic wage without a corresponding change in the other level in the hierarchy of positions, negating as a result thereof the distinction between one level of position from the next higher level, and resulting in a parity between the lowest level and the next higher level or rank, between new entrants and old hires, there exists a wage distortion (Prubankers Association v Prudential Bank & Trust Company, 302 SCRA 74)
The concept of WD assumes an existing group or classification of Ees which establishes distinctions among such Ees on some relevant or legitimate basis. This classification is reflected in a differing wage rate for each of the classes of Ees. Often results from Government decreed increases in minimum wages. Should a WD exist, there is no legal requirement that, in the rectification of that distortion by a re-adjustment of the wage rates of the differing classes of Ees, the gap which had previously or historically existed be restored in precisely the same amount. In other words, correction of a WD may be done by re-establishing a substantial or significant gap (as distinguished from the historical gap) -between the wage rates of the differing classes of Ees.
Cases not representative of wage distortion 1.
49
Where the hierarchy of positions based on skills, length of service and other logical bases of differentiation was preserved (Prubankers Association v Prudential Bank & Trust Company, 302 SCRA 74)
Labor Law and Social Legislation 2.
3.
4.
5. 6.
Negotiated wage increases to correct wage distortion; its interest and validity
A disparity in wages between employees holding similar positions but in different regions Where the disparity was simply due to the fact that the employees had been hired on different dates and were thus receiving different salaries (Manila Mandarin Employees Union v NLRC, G.R. No. 108556, 19 November 1996) That an employee was initially hired at a position level carrying a hiring rate higher than the rates of others That an employee failed to meet the cut-off date in the grant of yearly CBA increase; or That the employee had been promoted while the others were not
The law recognizes the validity of negotiated wage increases to correct wage distortion. The legislative intent is to encourage the parties to solve the problem of wage distortion through voluntary negotiations or arbitration, rather than strikes, lockouts, or other concerted activities. Unilateral grant of wage increase on the part of an employer is recognized as a means of correcting wage distortions including wage adjustments under a collective bargaining agreement. Recognition and validation of wage increases given by employers after unilaterally or as a result of collective bargaining negotiations for the purpose of correcting wage distortions are in keeping with the public policy of encouraging employers to grant wage and allowance increases to their employees which are higher than the minimum rates of increases prescribed by statute or administrative regulation ( ALU v NLRC, 235 SCRA 395)
--Q: Bankard, Inc. approved a New Salary Scale which increased the hiring rates of new employees. The Bankard Employees Union pressed the company for the increase in the salary of its old, regular employees. The company refused to do so. The union filed a Notice of Strike on the ground of discrimination for it claimed that a wage distortion exists and the company refused to negotiate to correct the distortions. Is there a wage distortion brought about by the New Salary Scale?
To compel employers simply to add on legislated increases in salaries or allowances without regard to what is already being paid would be to penalize employers who grant their workers more than the statutory prescribed minimum rates of increases. Clearly, this would be counter-productive so far as securing the interest of labor is concerned ( Metro Bank & Trust Co. Employees Union v NLRC, G.R. No. 102636, 10 September 1993)
A: NO. The union cannot legally obligate the Bankard to correct the alleged “wage distortion” as the increase in the wages and salaries of the newlyhired was not due to a prescribed law or wage order. If the compulsory mandate under Art. 124 to correct wage distortion is applied to voluntary and unilateral increases by the employer in fixing hiring rates which is inherently a business judgment prerogative, then the hands of the employer would be completely tied even in cases where an increase in wages of a particular group is justified due to a reevaluation of the high productivity of a particular group or the need to increase the competitiveness of Bankard’s hiring rate. An employer would be discouraged from adjusting the salary rates of a particular group of employees for fear that it would result to a demand by all employees for a similar increase, especially if the financial conditions of the business cannot address an across-the-board increase (Bankard Employees Union-WTU v. NLRC, G.R. No. 140689, February 17, 2004).
Settlement of wage distortion The application of wage increases brought about by Wage Orders issued by the Board may result in distortions in the wage structure within the establishment. The employer and the workers are mandated by law to resolve such wage distortion problems in the following manner:
ORGANIZED ESTABLISHMENT (with union) The Er and the union shall negotiate to correct distortion. Any dispute shall be resolved through a grievance procedure under the CBA. If it remains unresolved, it shall be dealt with through voluntary arbitration. The dispute will be resolved within 10
--Duty of the Er and the union/worker if there is WD The Er and the union shall negotiate to correct the distortions. If there is no union, the Er and the workers shall endeavor to correct such distinctions.
50
UNORGANIZED ESTABLISHMENT (without union) The Er and the workers shall endeavor to correct the distortion. Any dispute shall be settled through the NCMB. If it remains unresolved within 10 days it shall be referred to the NLRC. The NLRC shall conduct continuous
Labor Standards days from the time the dispute was referred to voluntary arbitration.
Wages
–
= 12 regular holidays; and = 3 special holidays
hearings and decide the dispute within 20 days from the time the same was referred.
REST PERIODS
The pendency of the dispute arising from a wage distortion shall not in any way delay the applicability of any wage increase prescribed pursuant to the provisions of law or Wage order. (Sec. 7, Chapter III, Rules Implementing R.A. 6727)
Right to weekly rest day (WRD)
NOTE: Correction of wage distortion may be done
Rest day not necessarily Sunday or holiday
Every Er shall give his Ees a rest period of not less than 24 consecutive hours after every 6 consecutive normal work days (IRR, Book III, Rule III, Sec. 3).
by re-establishing a substantial or significant gap (not precisely the same amount) between the wage rates of the differing classes of Ees ( Azucena, Vol. I )
All establishments and enterprises may operate or open for business on Sundays and holidays provided that the employees are given the weekly rest day and the benefits provided under the law (Sec. 2, Rule III, Book III)
Non-strikeablity of WD WD is non-strikeable (Ilaw at Buklod ng Manggagawa v. NLRC, G.R. No. 91980, June 27, 1991). WD is neither a deadlock in collective bargaining nor ULP.
Scope of WRD It shall apply to all Ers whether operating for profit or not, including public utilities operated by private persons(IRR, Book III, Rule III, Sec. 1).
DIVISOR TO DETERMINE DAILY RATE
Person who determines the WRD
Ways for the computation of the estimated equivalent monthly rate (EEMR) of daily-paid Ees
GR: Er shall determine and schedule the WRD of his Ee.
1.
For those who are required to work every day including Sundays or rest days, special days and regular holidays.
XPNs: 1. 2. 3.
EEMR = (Applicable daily rate x 393.50 days)/12 Where 393.50: = 298 ordinary working days = 24 for 12 regular holidays x 200% = 67.60 for 52 rest days x 130%; and = 3.90 for 3 special days x 130% 2.
XPNs to XPN no. 3: Er may schedule the WRD of his choice for at least 2 days in a month if the preference of the Ee will inevitably result in: a. serious prejudice to the operations of the undertaking and b. the Er cannot normally be expected to resort to other remedial measures [IRR, Book III, Rule III, Sec. 4(2)].
For those who do not work and are not considered paid on Sundays or rest days. EEMR = (Applicable daily rate x 313 days)/12 Where 313: = 298 ordinary working days = 12 regular holidays; and = 3 special holidays
3.
CBA Rules and regulations as the SLE provides Preference of Ee based on religious grounds – Ee shall make known his preference in writing at least 7 days before the desired effectivity of the initial rest day so preferred [IRR, Book III, Rule III, Sec. 4(1)].
The employer is mandated to respect the choice of its employee as to their rest day based on religion. He cannot compel the employee to work on Saturday as it is the day declared by his religion as Sabbath day. On the other hand, the employee cannot compel the employer to open on Sunday in lieu of Saturday for it would prejudice the employer's interest and disrupt his regular work schedule. A fair remedial solution is to allow the employee to go on leave on Saturday and charge the same as his rest day. (Poquiz, page 194)
For those who do not work and are not considered paid on Saturdays and Sundays or rest days EEMR = (Applicable daily rate x 261 days)/12 Where 261: = 246 ordinary working days
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Labor Law and Social Legislation Right of the Ee to know the schedule of their WRDs
the Ees under existing laws, agreements and voluntary Er practices (IRR, Book III, Rule III, Sec. 9).
Er shall make known rest period by means of Written notice 1. 2. Posted conspicuously in the workplace 3. At least 1 week before it becomes effective (IRR, Book III, Rule III, Sec. 5).
Rates of compensation for rest day, Sunday or holiday work INSTANCES
EMERGENCY REST DAY WORK
Work on a scheduled rest day
Ee to work on his rest day GR: The Ee cannot be compelled by the Er to work
Work performed on Sundays and Holidays by an Ee who has no regular workdays and rest days Work on a Sunday (If Ee’s scheduled rest day)
on his rest day.
XPNs: 1.
2.
3.
4. 5. 6. 7.
Urgent work to be performed on the machinery, equipment or installation, to avoid serious loss which the Er would otherwise suffer; Nature of work requires continuous operations for 7 days in a week or more and stoppage of the work may result in irreparable injury or loss to the Er; Abnormal pressure of work due to special circumstances, where the Er cannot be ordinarily expected to resort to other measures; Actual or impending emergencies (serious accident, fire, flood, typhoon, earthquake, etc.) Prevent loss or damage to perishable goods; Analogous or similar circumstances as determined by the SLE; Work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. (LC, Art. 92)
Work performed on any Special Holiday
Work performed on a Special Holiday and same day is the scheduled rest day
RATES OF ADDITIONAL COMPENSATION + 30% premium pay of 100% RW (IRR, Book III, Rule III, Sec. 7)
+ 30% premium pay of 100% RW (IRR, Book III, Rule III, Sec. 7)
+ 30% premium pay of 100% RW (IRR, Book III, Rule III, Sec. 7) 1st 8 hrs: + 30% PP of 100% RW Excess of 8 hrs: + 30% of hourly rate on said date (M.C. No. 10, Series of 2004). 1st 8 hrs: + 50% PP of 100% RW Excess of 8 hrs:+ 30% of hourly rate on said date (M.C. No. 10, Series of 2004).
Ee is only entitled to his basic rate. No PP is required. Work performed on a Special Working Holiday
Ee volunteers to work on his rest day under other circumstances He shall express it in writing subject to additional compensation [IRR, Book III, Rule III, Sec. 6(2)].
Premium pay
Reason: Work performed is considered work on ordinary working days (IRR, Book III, Rule III, Sec. 7)
NOTE: Holiday work provided under Art. 93
It is the additional compensation for work rendered by the Ee on days when normally he should not be working such as special holidays and WRDs.
pertains to special holidays or special days.
--Q: Jose applied with Mercury Drug Company for the position of Sales Clerk. Mercury Drug Company maintains a chain of drug stores that are open every day till late at night. Jose was informed that he had to work on Sundays and holidays at night as part of the regular course of employment. He was presented with a contract of employment setting forth his compensation
Er and Ee can agree on the rate of premium pay other than that provided by law Nothing shall prevent the Er and his Ee or their representatives from entering into any agreement with terms more favorable to the Ees; Provided , it shall not be used to diminish any benefit granted to
52
Labor Standards on an annual basis with an express waiver of extra compensation for work on Sundays and holidays, which Jose signed. Is such a waiver binding on Jose? Explain. (1996 Bar Question)
It is a premium given to Ees pursuant to the law even if he has not been suffered to work on a regular holiday. It is limited to the 12 regular holidays, also called legal holidays listed by law. The Ee should not have been absent without pay on the working day preceding the regular holiday.
A: NO. The waiver is not binding on Jose. Rights may be waived, unless the waiver is contrary to law, public order, public policy, morals and customs. The waiver in this case is void.
Purpose of holiday pay
---
To secure the payment of undiminished monthly income undisturbed by any work interruption (JRC v. NLRC, G.R. No. 65482, Dec. 1, 1987).
HOLIDAY PAY/PREMIUM PAY Persons entitled to holiday pay
Holiday pay is primarily aimed at benefiting the daily-paid workers whose income is circumscribed by the principle of "no-work, no pay." Prior to the enactment of the Labor Code, daily paid workers were not paid for unworked regular holidays. On the other hand, monthly-paid employees do not suffer any reductions in pay for not working during such holidays. The law on holiday pay is thus conceived to be the countervailing measure to partially offset the disadvantages inherent in the daily compensation system of employment. (Poquiz, 199)
GR: All Ees are entitled (IRR, Book III, Rule IV, Sec.1). XPNs: 1.
2. 3. 4. 5. 6. 7. 8.
Wages
–
Government Ees and any of its political subdivisions, including GOCCs (with original charter) Retail and service establishments regularly employing less than 10 workers Domestic helpers and persons in the personal service of another Ee engaged on task or contract basis or purely commission basis Members of the Family of the Er who are dependent on him for support Managerial Ee and other members of the managerial staff Field personnel and other Ee whose time and performance are unsupervised by the Er Ee paid fixed amount for performing work irrespective of the time consumed in the performance thereof (IRR, Book III, Rule IV, Sec.1).
REGULAR HOLIDAYS New Year’s Day Araw ng Kagitingan Maundy Thursday Good Friday Labor Day Independence Day
Retail establishments
National Heroes Day
They are engaged in the sale of goods to end users for personal or household use. e.g. Grocery
Eidl Fitr
Service establishments Eidl Adha They are engaged in the sale of services to individuals for their own or household use. (e.g . TV repair shop)
Bonifacio Day
Legal holiday
Christmas Day Rizal Day
It is a day designated or set apart by the legislature, for a purpose within the meaning of the term "holiday" (29 C.J. 762), in order to commemorate an important event.
DATE January 1 Monday nearest April 9 Movable date (March 24, 2016) Movable date (March 25, 2016) Monday nearest May 1 Monday nearest June 12 Last Monday of August First day following the 30-day fasting period of Ramadan 10th day in the month of Hajj or Islamic Pilgrimage to Mecca Monday nearest November 30 December 25 Monday nearest December 30
SPECIAL (NON-WORKING) HOLIDAYS Ninoy Aquino Day
Holiday pay
53
August 21
All Saints Day
November 1
Last day of the year
December 31
Labor Law and Social Legislation Regular holidays (RH)
Rule as to payment of regular Muslim holidays
They are compensable whether worked or unworked subject to certain conditions. They are also called legal holidays. The following are considered regular holidays:
There is no distinction between Muslims and non– Muslims as regards payment of benefits for Muslim holidays. Muslims throughout the Philippines are also entitled to holiday pay on Christian holidays declared by law as regular holidays. Wages and other emoluments granted by law are determined on the basis of the criteria laid down by laws and certainly not on the basis of the worker's faith or religion (SMC v C.A., G.R. No. 146775, 30 January 2002). The law on holiday pay knows no religion.
NOTE: RH falling within temporary or periodic shutdown and temporary cessation of work are compensable. However, if the temporary or periodic shutdown and cessation of work is due to business reverses, the Er may not pay the Ees during such period.
Regular holiday and special day distinguished Muslim holidays (MH) The distinctions are the following: Muslim holidays are those observed in specified Muslim areas. All private corporations, offices, agencies and entities or establishments operating within the designated Muslim provinces and cities are required to observe Muslim holidays.
a.
Determination of eid’l fitr and/or eid’l adha The proclamation declaring a national holiday for the observance of Eid’l Fitr and/or Eid’l Adha shall be issued: 1. After the approximate date of the Islamic holiday has been determined in accordance with the: a. Islamic Calendar (Hijra) or b. Lunar Calendar or c. Upon astronomical calculations d. Whichever is possible or convenient 2. The Office of Muslim Affairs shall inform the Office of the President on which day th e holiday shall fall (Proclamation 295, s. 2011 by President Benigno Aquino III).
b.
A covered employee who does not report for work during regular holidays is paid 100% of his regular wage. On the other hand, a covered employee who fails to report for work on a special day (special holiday) is not entitled to any compensation under the principle of "no work, no-pay." A covered employee who reports for work on regular holidays is entitled to 200% of his regular wage. While, a covered employee who works on special days (special holidays) is paid an additional compensation of not less than 30% of his basic pay or a total of 130%. If the worker has suffered to work on special days (special holidays) which falls on his scheduled rest day, he is entitled to an additional pay equivalent to at least 50% over his basic pay or a total of 150%. (Poquiz, 2013)
Regular holiday vs. Special holiday
A Christian Ee working within the Muslim area cannot be compelled to work during Muslim holiday
REGULAR HOLIDAY
BASIS If unworked
All workers, Muslims and Christians, working within the Muslim area are entitled to holiday pay on Muslim holidays (SMC v. CA, G.R. 146775, January 30, 2002).
If worked
Muslim Ee working outside the Muslim area cannot be compelled to work during the observance of the MH
SPECIAL HOLIDAY
Regular pay (subject to certain conditions for daily paid Ee’s)
No Pay
2x regular pay (200)
+ 30% premium pay of 100% RW
Rates of compensation for RH on Ee’s regular
workday and rest day
GR: Muslim Ees shall be excused from work during MH without diminution of salary or wages.
FORMULAS TO COMPUTE WAGES ON REGULAR HOLIDAYS
XPN: Those who are permitted or suffered to work
(M.C.No.10, Series of 2004)
on MH are entitled to at least 100% basic pay + 100% as premium of their basic pay (SMC v. CA, G.R. 146775, January 30, 2002).
54
Labor Standards RH on Ee’s Basis
If unworked
rest day 100%
100%
e.g. Php 300 RW 200% + 30% of 200%
e.g. Php 300 RW
200% If worked (1st 8 hours)
The divisor assumes an important role in determining whether or not holiday pay is already included in the monthly paid employee’s salary and in the computation of his daily rate (Chartered Bank Employees Association v. Ople, G.R. No. L-44717, August 28, 1985).
RH on Ee’s
regular workday
e.g. 300(RW) + 300 600 = Total Wage (TW)
e.g (200% RW) X 0.3 180
Wages
–
If the divisor used is: 365 (days in a year)
600 of
313 (365 – 52 = 313) 261 (313 – 52 = 261)
600 + 180 = 780 (TW) 249 (261 – 12 = 249)
230% If worked (OT)(excess of 8 hours)
200% + 30% of hourly rate on said date
230% + 30% of hourly rate on said date
Significance of the divisor in determining payment of holiday pay for monthly paid employees
Important condition that should be met in order to avail/receive the single holiday pay
The divisor is significant in determining whether or not holiday pay has already been included in the salary of the monthly paid employees. Where the company undertakes a six-day working schedule, the divisor 314 indicates that the ten (10) now eleven (11) legal holidays have already been included in the salary of monthly paid employees (Producers Bank v. NLRC, 355 SCRA 489)
The Ee should not have been absent without pay on the working day immediately preceding the RH.
Monthly paid vs. Daily paid Ees Monthly Paid Ees
All the 12 holidays, 52 Sundays and 52 Saturdays are paid. 12 holidays and 52 Sundays (or Saturdays) are paid. All the 12 holidays are paid excluding the Saturdays and Sundays. The 12 holidays are not paid.
Daily Paid Ees
One whose wage or salary is being paid everyday of the month, including rest days, Sundays, regular or special days, although he does not regularly work on these days.
One whose wage or salary is being paid only on those days he actually worked, except in cases of regular or special days, although he does Not excluded from benefit not regularly work of holiday pay. on these days. (In re United South Dockhandlers, Inc., Opinion of the Bureau of Working Conditions, November 23, 1987)
On the other hand, where the company provides for a five-day working period, the divisor 261 indicates that the holiday pay has already been included in the monthly salary of the employee.
CONCEPT OF ABSENCES Effects of absences on holiday pay; successive regular holiday a. b.
Effect if a legal holiday falls on a Sunday c.
A legal holiday falling on a Sunday creates no legal obligation for the Er to pay extra to the Ee who does not work on that day, aside from the usual holiday pay to its monthly paid Ee (Wellington v.Trajano, G.R. 114698, July 03, 1995).
DIVISOR
d.
55
If an employee is on leave of absence with pay, he is entitled to holiday pay If an employee is on leave of absence without pay on the day immediately preceding the regular holiday, he is not entitled to holiday pay. If the day immediately preceding the holiday is a non-working day or the scheduled rest day of an employee, he is not considered to be on leave of absence on that day, in which case he shall be entitled to holiday pay if the employee should work on the day immediately preceding the non-working day or rest day. If there are two successive regular holidays like Holy Thursday and Good Friday, an employee is not entitled to holiday pay for both holidays if
Labor Law and Social Legislation he absents himself from work without pay on the day immediately preceding the first regular holiday. But if he works on the first holiday, he is entitled to holiday pay on the second holiday (Secs. 6 and 10, Rule IV, Book III, Rules Implementing the Labor Code)
Seasonal Workers
May not be paid the required Holiday pay during offseason where they are not at work. (Sec. 8, Rule IV, Book III)
Effects of business closure on holiday pay a.
b.
In case of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair or cleaning of machineries and equipment is undertaken, the regular holidays falling within the period shall be compensated. The regular holiday during the cessation of operation of an enterprise due to business reverses as authorized by the Secretary of Labor may not be paid by the employer (Sec. 7, Rule IV, Book III, Rules Implementing the Labor Code)
Workers having no regular work days
Seafarers
A:
Holiday pays of certain Ees
Private school teachers (Faculty members of colleges and universities)
Hourly-paid teachers
Ee paid by: 1. results or 2. output (Piece work payment)
(Sec. 8, Rule IV, Book III) Shall be entitled to holiday pay
--Q: Are the school faculty who according to their contracts are paid per lecture hour entitled to unworked holiday pay?
TEACHERS, PIECE WORKERS, TAKAY , SEAFARERS, SEASONAL WORKERS
EMPLOYEES
Shall be entitled to holiday pay
1. If during RH – No. Art. 94 of the LC is silent with respect to faculty members paid by the hour who because of their teaching contracts are obliged to work and consent to be paid only for work actually done (except when an emergency or a fortuitous event or a national need calls for the declaration of special holidays). Regular holiday specified as such by law are known to both school and faculty members as "no class days" certainly the latter do not expect payment for said unworked days, and this was clearly in their minds when they entered into the teaching contracts (Jose Rizal College v. NLRC, G.R. No. 65482, December 01, 1987).
RULE RH during semestral vacations - Not entitled to holiday pay 2. RH during Christmas vacation - Entitled to holiday pay 1. No pay on regular holidays including Christmas and semestral vacations 2. But with pay on special public holidays and other no-class days when classes are called off or shortened on account of floods, typhoons, rallies and the like (Jose Rizal College v. NLRC, G.R. No. 65482, Dec. 1, 1987). Holiday pay shall not be less than his average daily earnings for the last 7 actual work days preceding the Regular holiday. Provided: Holiday pay shall not be less than the statutory minimum wage rate. 1.
2.
(Sec. 8, Rule IV, Book III)
56
If during special public holidays – Yes. The law and the IRR governing holiday pay are silent as to payment on Special Public Holidays. It is readily apparent that the declared purpose of the holiday pay which is the prevention of diminution of the monthly income of the Ees on account of work interruptions is defeated when a regular class day is cancelled on account of a special public holiday and class hours are held on another working day to make up for time lost in the school calendar. Otherwise stated, the faculty member, although forced to take a rest, does not earn what he should earn for that day. Be it noted that when a special public holiday is declared, the faculty member paid by the hour is deprived of expected income, and it does not matter that the school calendar is extended in view of the days or hours lost, for their income that could be earned from other sources is lost during the
Labor Standards extended days. Similarly, when classes are called off or shortened on account of typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whether or not extensions are ordered (Jose Rizal College v. NLRC, G.R. No. 65482, December 01, 1987).
1. 2.
Leave
–
Present (worked), or On LOA with pay (IRR, Book III, Rule IV, Sec. 10).
If the above stated conditions are not met He must work on the 1st RH to be entitled to holiday pay on the 2nd RH (IRR, Book III, Rule IV, Sec. 10).
--Rule on two regular holidays falling on the same day (Double holiday pay)
___________________________________________________________ LEAVE ___________________________________________________________
If two regular holidays fall on th e same day (such as Good Friday falling on Araw ng Kagitingan (April 9), the employees should be paid 400% of the basic wage for both holidays provided he worked on that day or was on leave of absence with pay or was on authorized absence on the day prior to the regular holiday
Service Incentive Leave (SIL) It is 5-days leave with pay for every Ee who has rendered at least 1 year of service. It is commutable to its money equivalent if not used or exhausted at the end of the year.
Double holiday pay Purpose of the law There are 2 RHs falling on the same day.
WED
MAUNDY THURSDAY & ARAW NG KAGITINGAN
Present LOA w/pay
Unworked Unworked
LOA w/ pay
Worked
Authorized absence
Worked
Authorized absence
Worked and day is Rest Day
The purpose of the law in providing service incentive leave, in the form of vacation leave; is to afford to a laborer a chance to get a much needed rest to replenish his worn out energies and acquire a new vitality to enable him to efficiently perform his duties, and not merely to give him additional salary or bounty. The stipulation in the contract for the allowance of a vacation to employees is merely a recognition by management and labor that a short interval of complete rest and relaxation from daily routine with the benefit of full pay is essential to the mental and physical well-being of the workmen (Bencio v. Joseph Bouder, Inc., 24 So. 2d 398; A.L.R. 2d 352; Sunripe Coconut Products v. NLU, 97 Phil. 691).
RATE 200% 200% 300% (at least) 300% (at least) 390% (+30% of each 3 100%)
Right to service incentive leave; vacation leave not mandated by law
Concept of successive regular holidays
WED Worked LOA w/pay LOA w/o pay LOA w/o pay
MAUNDY THURS
GOOD FRIDAY
ENTITLED TO HOLIDAY PAY
RH
RH
Yes. Both
RH
RH
Yes. Both
RH
RH
No. Both
RH
Yes. Only to holiday pay on Friday
Worked
The Labor Code provides a five-day service incentive leave with pay for employees who have rendered at least one year one year of service which may be used as vacation or sickleave. If unused at the end of the year, this benefit is convertible to its cash equivalent based on the salary rate at the date of commutation. This provision is without prejudice to the provisions of collective or individual agreement or employer policy or practice granting higher and more favorable benefits to the workers. Where the leave benefit is other than service incentive leave and is a result of an individual/ collective agreement or employer practice or policy, it is equivalent if unused shall be computed as stipulated in the agreement or policy (In re Maxim's Tea House, Opinion of the Bureau of Working Conditions, 8 March 1988)
Conditions so that an Ee may be entitled to 2 successive holiday pays On the day immediately preceding the 1st RH, he must be:
57
Labor Law and Social Legislation There is no law which makes the grant of vacation leave and its benefits mandatory on the part of management. The claim for vacation pay can only be availed of through an agreement or through a voluntary unilateral grant by the employer. In the absence of any contract or company policy providing for such benefit, it is unavailing (Foz, 1 NLRC Reports 91)
contract basis" should, however, be related to "field personnel" applying the rule on ejusdem generis that those general and unlimited terms are restrained and limited by the particular terms that they follow. Clearly, Cebu Institute of Technology teaching personnel cannot be deemed as field personnel which refers "to non-agricultural Ees who regularly perform their duties away from the principal place of business or branch office of the Er and whose actual hours of work in the field cannot be determined with reasonable certainty” (Par. 3, Art. 82, LC); (CIT v. Ople, G.R. No. 70203, December 18, 1987).
Vacation and sick leaves when accorded by the employer become a matter of right and not a mere privilege on the part of the employees. Commutation of such leaves to cash equivalent can be demanded as a matter of right for "to hold otherwise would be to undermine an employee's morale and dedication to his job and would be no different from robbing him of his savings in his thrifty deposit box" (Foz, 2 NLRC Reports, 19-20)
Part-time workers are entitled to the full benefit of the yearly 5-day service incentive leave A part-time worker is entitled to service incentive leave whether the service within 12 months is continuous or broken or where the working days in the employment contract as a matter of practice or policy is less than 12 months. The availment and commutation of the same ca13thn be proportionate to the daily work rendered and the regular daily salary. (DOLE’s explanatory Bulletin on Part -time Employment, January 2, 1996).
“At least 1 year of service” Service for not less than 12 months, whether continuous or broken reckoned from the date the Ee 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 contract is less than 12 months, in which case said period shall be considered as one year (Sec. 3, Rule V, Book III, IRR).
Entitlement of piece-rate workers to SIL Piece-rate workers are entitled to the full benefit of the yearly 5-day service incentive leave. Under P.D. 851 or the SIL Law, the exclusion from its coverage of workers who are paid on a purely commission basis is only with respect to field personnel. Ees engaged on task or contract basis or paid on purely commission basis are not automatically exempted from the grant of SIL, unless, they fall under the classification of field personnel (Serrano v. Severino Santos, G.R. No. 187698, August 09, 2010).
Persons entitled to SIL GR: Applies to every Ee who has rendered at least 1 year of service (LC, Art. 95[a]).
XPNs: 1. 2. 3. 4. 5. 6. 7. 8. 9.
Government Ees and any of its political subdivisions including GOCCs Those already enjoying the benefit Domestic helpers and persons in the personal services of another Those already enjoying vacation leave with pay of at least 5 days Managerial Ees Field personnel and other Ees whose performance is unsupervised by the Er Employed in establishments regularly employing less than 10 workers Exempt establishments Engaged with atask or contract basis, purely commission basis, or those who are paid in a fixed amount of performing work irrespective of the time consumed in the performance thereof [LC, Art. 95(b)].
NOTE: “Field personnel” shall refer to nonagricultural Ees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty (Ibid.)
Entitlement of Ees with salaries above minimum wage to SIL Ees with salaries above minimum wage are entitled to service incentive leave. The difference between the minimum wage and the actual salary received by the Ees cannot be deemed as their 13 th month pay and SIL pay as such difference is not equivalent to or of the same import as the said benefits contemplated by law (JPL Marketing Promotions v. CA, G.R. No. 151966, July 08,2005).
Teachers of private schools on contract basis are entitled to service incentive leave The phrase "those who are engaged on task or
58
Labor Standards
Leave
–
Entitlement of terminated Ees to SIL 1.
Illegally dismissed Ees- entitled to SIL until actual reinstatement (Integrated Contractor and Plumbing Works, Inc. v. NLRC, G.R. No. August 09, 2005). 2. Legally dismissed Ees – the Ee who had not been paid of SIL from the outset of employment is entitled only of such pay after a year from commencement of service until termination of employment or contract (JPL Marketing Promotions v. CA, G.R. No. 151966, July 08, 2005). 1.
2.
3. 4.
Commutability of SIL to monetary equivalent 5. It is commutable if not used at the end of the year. It is aimed primarily at encouraging workers to work continuously and with dedication to the company.
6.
Basis for cash conversion The basis shall be the salary rate at the date of commutation. The availment and commutation of the SIL may be on a pro-rata basis [No. VI(c), DOLE Handbook on Worker’s Statutory Monetary Benefit, No.VI(c)].
7.
Establishments exempt from the application of the SIL Law Establishments employing less than 10 Ees are exempted by the LC and the Implementing Rules from paying SIL. The clear policy of the LC is to include all establishments, except a few classes, under the coverage of the provision granting SIL to workers (Murillo v. Sun Valley Realty, Inc., G.R. No. L67272 June 30, 1988).
The Ee shall have notified her Er of her pregnancy and the probable date of her childbirth which notice shall be transmitted to the SSS; The payment shall be advanced by the Er in 2 equal installments within 30 days from the filing of the maternity leave application; In case of caesarean delivery, the Ee shall be paid the daily maternity benefit for 78 days; Payment of daily maternity benefits shall be a bar to the recovery of sickness benefits for the same compensable period of 60 days for the same childbirth, abortion, or miscarriage; The maternity benefits provided under Sec. 14A shall be paid only for the first four deliveries; The SSS shall immediately reimburse the Er of 100% of the amount of maternity benefits advanced to the Ee by the Er upon receipt of satisfactory proof of such payment and legality thereof; and If an Ee should give birth or suffer abortion or miscarriage without the required contributions having been remitted for her by her Er to the SSS, or without the latter having been previously notified by the Er of the time of the pregnancy, the Er shall pay to the SSS damages equivalent to the benefits which said Ee would otherwise have been entitled to, and the SSS shall in turn pay such amount to the Ee concerned.
Requirements in order that maternity benefits may be claimed 1. 2.
There is childbirth, abortion or miscarriage She has paid at least three monthly contributions
MATERNITY LEAVE Maternity leave benefits excluded in the computation of 13th month pay
Maternity leave benefit A covered female Ee, regardless of her civil status, is entitled to a daily maternity benefit equivalent to 100% of her present basic salary, allowances and other benefits or the cash equivalent of such benefits for 60 days or 78 days in case of caesarean delivery.
Maternity leave benefits and other benefits provided by Social Security Act are granted to employees in lieu of wages. Thus, the same are excluded in computing the employee's 13th month pay for the calendar year.
Every pregnant woman is entitled to maternity leave benefits regardless off her civil status, whether married or unmarried. Being an unmarried woman is not an obstacle for the grant of such benefits provided she is a covered employee. Her plight should be the moving spirit of the law to grant such benefits to the less fortunate. (Poquiz, page 300)
Self-employed members not entitled maternity leave benefits; exception
to
Voluntary or self-employed members of the SSS are not entitled to maternity leave benefits because the law requires the corresponding maternity contributions to be paid by the employers. Voluntary or self-employed members have no employers to remit such contributions (Sec. 14-A, R.A. 8282). However, under Circular 36-V issued by
Conditions:
59
Labor Law and Social Legislation ----Q: Because of the stress in caring for her four (4) growing children, Tammy suffered a miscarriage late in her pregnancy and had to undergo an operation. In the course of the operation, her obstetrician further discovered a suspicious-looking mass that required the subsequent removal of her uterus (hysterectomy). After surgery, her physician advised Tammy to be on full bed rest for six (6) weeks. Meanwhile, the biopsy of the sample tissue taken from the mass in Tammy's uterus showed a beginning malignancy that required an immediate series of chemotherapy once a week for four (4) weeks.
the SSS dated 24 May 1997, if they have qualifying contributions using the new contribution schedule, they shall be entitled to maternity benefits.
PATERNITY LEAVE Paternity leave It refers to the benefits granted to a mar ried male Ee allowing him not to report for work for 7 days but continues to earn the compensation therefore, on the condition that his spouse has delivered a child or suffered a miscarriage for purposes of enabling him to effectively lend support to his wife in her period of recovery and/or in the nursing of the newly-born child. In the event it is not availed of, such leave is not convertible to cash. (RA 8187)
(B) What can Roger-Tammy's 2nd husband and the father of her two (2) younger children -claim as benefits under the circumstances? (2013 Bar Questions)
Concept of paternity leave benefits Every married male Ee in the private and public sectors shall be entitled to a paternity leave of 7 days with full pay for the first 4 deliveries of the legitimate spouse with whom he is cohabiting.
A: Under RA 8187 or the Paternity Leave Act of 1996, Roger can claim paternity leave of seven (7) days with full pay if he is lawfully married to Tammy and cohabiting with her at the time of the miscarriage.
Conditions for entitlement to paternity leave
---
The male Ee is: 1. Legally married to, and is cohabiting with the woman who delivers the baby; 2. Ee of private or public sector; Maybe availed of only for the first 4 deliveries 3. of the legitimate spouse with whom he is cohabiting; and 4. Notify his Er of the pregnancy of his legitimate spouse and the expected date of such delivery
PARENTAL LEAVE Leave benefits granted to a solo parent to enable him/her to perform parental duties and responsibilities - where physical presence is required. In addition to leave privileges under existing laws, parental leave of not more than 7 working days every year shall be granted to any solo parent Ee who has rendered service of at least 1 year. (Sec. 8, RA 8972)
NOTE: Delivery shall include childbirth or any miscarriage.
--Q: Ron is a bank employee of BPI. He is cohabiting with Michelle for five straight years with whom he has four children. In the fifth year of their cohabitation, Michelle had her miscarriage. Ron is availing himself of his paternity leave. Is he entitled to paternity leave?
Conditions for entitlement of parental leave 1.
2.
A: NO. Ron is not entitled to paternity leave because 3.
the facts of the case only show that he is only cohabiting with Michelle. The law (RA 8187) expressly provides that the male must be legally married to the woman with whom he is cohabiting as a condition for entitlement of paternity leave. Even assuming that Ron is legally married to Michelle, he cannot avail also of the paternity leave because the law limits the deliveries only to four which include childbirth or miscarriage. Based on the facts, it is already the 5 th delivery of the woman.
4.
He or she must fall among those referred to as a solo parent Must have the actual and physical custody of the child or children Must have at least rendered service of one year to his or her employer He or she must remain a solo parent
Persons considered a solo parent entitled to parental leave Any individual who falls under any of the ff. categories:
60
Labor Standards 1.
2.
3.
A woman who gives birth as a result of rape and other crimes against chastity even without a final conviction of the offender; Provided, That the mother keeps and raises the child; Parent left solo or alone with the responsibility of parenthood due to: a. Death of spouse; b. Detention or service of sentence of spouse for a criminal conviction for at least 1 yr; c. Physical and/or mental incapacity of spouse d. Legal separation or de facto separation from spouse for at least 1 year as long as he/she is entrusted with the custody of the children; e. Nullity or annulment of marriage as decreed by a court or by a church as long as he/she is entrusted with the custody of the children; f. Abandonment of spouse for at least 1 yr;
Leave
–
monthly compensation following surgery caused by gynaecological disorders (Sec. 18, R.A. 9710, Magna Carta of Women).
--Q: Because of the stress in caring for her four (4) growing children, Tammy suffered a miscarriage late in her pregnancy and had to undergo an operation. In the course of the operation, her obstetrician further discovered a suspicious-looking mass that required the subsequent removal of her uterus (hysterectomy). After surgery, her physician advised Tammy to be on full bed rest for six (6) weeks. Meanwhile, the biopsy of the sample tissue taken from the mass in Tammy's uterus showed a beginning malignancy that required an immediate series of chemotherapy once a week for four (4) weeks. What benefits can Tammy claim under existing social legislation? (2013 Bar Questions)
Unmarried mother/father who has preferred to keep and rear his or her child/children instead of : a. having others care for them or b. give them up to a welfare institution;
A: Assuming she is employed, Tammy is entitled to a special leave benefit of two months with full pay (Gynecological Leave) pursuant to RA 9710 or the Magna Carta of Women. She can also claim Sickness Leave Benefit in accordance with the SSS Law.
4. Any other person who solely provides: a. parental care and b. support to a child or children;
--SERVICE CHARGES
5. Any family member who assumes the responsibility of head of family as a result of the: a. death, b. abandonment, c. disappearance or d. prolonged absence of the parents or solo parent.
These are charges collected by hotels, restaurants and similar establishments at the rate of 85% for covered Ees equally distributed among them, and 15% for the management to answer for losses and breakages.
Covered employees NOTE: A change in the status or circumstance of the GR: All Ees are covered, regardless of their position,
parent claiming benefits under this Act, such that he/she is no longer left alone with the responsibility of parenthood, shall terminate his/her eligibility for these benefits. (Sec. 3, RA 8972)
designation, and employment status, irrespective of the method by which their wages are paid.
NOTE: Applies only to hotels, restaurants and LEAVES FOR VICTIMS OF VIOLENCE AGAINST WOMEN and their CHILDREN (R.A. 9262)
similar establishment collecting service charges.
XPN: Managerial Ees (IRR, Book III, Rule VI, Sec. 2) A female Ee who is a victim of violence (physical, sexual, or psychological) is entitled to a paid leave of 10 days in addition to other paid leaves (R.A. 9262, Anti- VAWC Act). This is known as the battered woman leave
Period to distribute the share of Ee The period is not less than once every 2 weeks or twice a month at intervals not exceeding 16 days.
SPECIAL LEAVE BENEFIT FOR WOMEN
Service charge vs. Tips
A woman Ee having rendered continuous aggregate employment service of at least 6 months for the last 12 months shall be entitled to a special leave benefit of 2 months with full pay based on her gross
61
SERVICE CHARGE
TIPS
Collected by the management from the customers.
Voluntary payments made by the customers
Labor Law and Social Legislation grant, compliance with the same is mandatory and is deemed incorporated in the CBA.
to the Ees for excellent service.
Rule if service charge is abolished
Nature of 13th month pay
If it is abolished, the share of the covered Ees shall be considered integrated in their wages on the basis of the average monthly share of each Ees for the past 12 months immediately preceding the abolition. (Sec. 5, Rule V, Book III, Rules Implementing the Labor Code.)
Such is in the nature of additional income granted to employees who are not receiving the same.(Agabon v. NLRC, G.R. No. 158693, November 17, 2004) It is based on wage but not part of wage. (Central Azucarera de Tarlac v. Central Azucarera de Tarlac Labor Union-NLU, G.R. No. 188949, July 26, 2010)
NOTE: Service charges form part of the award in illegal dismissal cases .
Minimum Period of Service Required
13th MONTH PAY
It is imposed as a ‘minimum service requirement’ that the employee should have worked for atleast one month during a calendar year. (No. X[A], DOLE Handbook on Workers Statutory Monetary Benefits)
13th month pay or its equivalent Additional income based on wage required by P.D. 851 requiring all Ers to pay their Ees a 13 th month pay which is equivalent to 1/12 of the total basic salary earned by an Ee within a calendar year.
Persons covered by P.D. 851 1. Employees GR: All rank-and-file Ees are covered by P.D. 851
Basic Salary
regardless of the amount of basic salary that they receive in a month, if their Ers are not otherwise exempted from paying the 13th month pay. Such Ees are entitled to the 13th month pay regardless of said designation of employment status, and irrespective of the method by which their wages are paid.
Includes all remunerations or earnings paid by the employer to an employee for services rendered including cost-of-living allowances. It does not include all allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary such as: 1. 2. 3. 4. 5. 6.
Provided, that they have worked for at least 1 month, during a calendar year (Revised Guidelines on the Implementation of the 13th Month Pay Law).
Cash equivalent of unused vacation and sick leave credits; Overtime pay; Premium pay; Night Shift Differential; Holiday pay; Commissions, if it is not an integral part of the basic salary.(Philippine Duplicators, Inc. v. NLRC, G.R. No. 110068, Febuary 15, 1995)
XPN: 1. Government Ees; 2. Ees paid purely on commission basis; 3. Ees already receiving 13th month pay 4. Managers 5. Seafarers
These salary-related benefits should be included in the computation of the 13 th moth pay if by individual or collective agreement, company practice or policy, the same are treated as part of the basic salary of the employees.
NOTE: Managerial employees may receive 13th
Absence of CBA provision not a bar in giving 13th month pay
GR: All Ers are covered by PD 581.
The absence of an express provision in the CBA obligating the Er to pay the members of a union 13 th month pay is immaterial. Notwithstanding therefore the absence of any contractual agreement, the payment of a 13th month pay being a statutory
a.
month pay, if such payment has been a company practice.
2. Employers
XPN: The Government and any of its political subdivisions, including GOCCs;
XPN
to
XPN: Corporations
operating essentially as privated subsidiaries of the Government
62
Labor Standards
Leave
–
b.
Ers already paying their Ees 13th month pay or more in a calendar year in its equivalent at the time of the issuance of the Revised Guidelines;
Government Ees working as part-time in private sector or those with multiple employers entitled to 13th month pay
c.
Ers of those who are paid on purely basis of: i. Commission;
Such includes private educational institutions, as well as employees working in two or more private firms, whether in full or part-time basis, regardless of their total earnings from each on all their employers (Revised Guidelines on the th Implementation of 13 Month Pay Law)
NOTE: Bus drivers and conductors who are paid a fixed or guaranteed minimum wage in case their commission be less than the statutory minimum are entitled to a 13th-month pay equivalent to onetwelfth of their total earnings during the calendar year. (Philippine Agricultural Commercial and Industrial Workers Union v. NLRC, GR No. 107994, 14 August 1995) ii. iii. iv.
Dismissed or resigned employee entitled to 13th month pay An Ee who has resigned or was terminated at any time before the payment of the 13th month is due, his monetary benefit shall be computed in proportion to the length of time he worked during the year, reckoned in proportionto the length of time he worked during the calendar year up to his resignation or termination or 1/12 of his total basic pay earned during the period (Section 6, DOLE Revised Guidelines on 13 th Month Pay)
Boundary; or Task; and Fixed amount for performing a specific work
Irrespective of the performance thereof.
time
consumed
in
the
Other types of employment entitled to 13 th month pay
XPN: where the workers are paid on a piece-rate basis, in which case, the employer shall be covered by the Revised Guidelines insofar as the workers are concerned.
1. 2. 3. 4.
Note: ‘Piece-Rate Workers’ refers to 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. d.
--Q: What would be your advice to your client, a manufacturing company, who asks for your legal opinion on whether or not the 13th Month Pay Law covers a casual Ee who is paid a daily wage? (1998 Bar Question)
Distressed Ers: a. Currently incurring substantial losses; or b. In the case of non-profit institutions and organizations, where their income, whether from donations, contributions, grants and other earnings from any source, has consistently declined by more than 40% of their normal income for the last 2 years, subject to the provision of Sec. 7 of P.D. 851
A: I will advise the manufacturing company to pay the casual Ee 13th Month Pay if such casual Ee has worked for at least 1 month during a calendar year. The law on the 13th Month Pay provides that Ees are entitled to the benefit of said law regardless of their designation or employment status. The SC interpreted P.D.851, as follows: Ees are entitled to the 13th month pay benefits regardless of their designation and irrespective of the method by which their wages are paid (Jackson BuildingCondominium Corp. v. NLRC, G.R. No. 112546, March 14, 1996).
Options of covered Ers 1.
2.
Part-time Employee(Item 5[b], Revised Guidelines of PD 851); Extras; Casual Employee; and Seasonal Employee(BWC Opinion, December 19, 1987)
Pay 1/2 of the 13th month pay required before the opening of the regular school year and the other half on or before the 24th day of December of every year. In any establishment where a union has been recognized or certified as the CB agent of the Ee, the periodicity or frequency of payment of the 13th month pay may be the subject of agreement.
--NOTE: An Er may give to his Ees ½ of the required 13th Month pay before the opening of the regular school year and the other half on or before Dec. 24.
63
Labor Law and Social Legislation Equivalent forms of the 13 th month pay 1. 2. 3. 4.
-- Adjudicated claims
Christmas Bonus Midyear Bonus Profit Sharing Scheme Other Cash bonuses amounting to not less than 1/12 of its basic salary
Non-payment of the 13th month pay provided by P.D. 851 and the rules of NLRC shall be treated as money claims cases.
NOTE: It must always be in the form of a legal
NOTE: Difference of opinion on how to compute the
tender.
13th month pay is non-strikeable and a strike held on that ground is illegal. (Isalama Machine Works Corp. v. NLRC, G.R. No. 10016, March 2 1995.)
Things not proper substitutes for 13 th month pay 1. 2. 3. 4.
The following Ees may or may not be entitled to 13th month pay
Free rice Electricity Cash and stock dividends Cost-of-living Allowance (P.D. 851, Sec. 3)
1.
Ee paid by results – Entitled to 13th month pay. NOTE: Ees paid a fixed or guaranteed wage plus
--Q: Concepcion Textile Co. included the OT pay, night-shift differential pay, and the like in the computation of its Ees’ 13th month pay. Subsequently, with the promulgation of the decision of the SC in the case of SMC v. Inciong (103 SCRA 139) holding that these other monetary claims should not be included in the computation of the 13th Month Pay, Concepcion Textile Co. sought to recover under the principle
commission are also entitled to the mandated 13thmonth pay, based on their total earnings during the calendar year, i.e. on both their fixed or guaranteed wage and commission. 2.
working part time in a private enterprise, including private educational institutions, as well as Ees working in 2 or more private firms, whether full or part time basis, are entitled to the required 13 th month pay from all their private Ers regardless of their total earnings from each or all their Ers.
of solutio indebiti the overpayment of the Ees’
13th month pay, by debiting against future 13th month payments whatever excess amounts it had previously made. 3. a. b.
Is the Company's action tenable? With respect to the payment of the 13 th month pay after the SMC ruling, what arrangement, if any, must the Company make in order to exclude from the 13 th month pay all earnings and remunerations other than the basic pay? (1994 Bar Question)
b.
Private School Teachers, including faculty members of universities and colleges – Entitled regardless of the number of months they teach or are paid within a year, if they have rendered service for at least 1 month within a year.
4.
Resigned or Separated Ees - If resigned or separated from work before the time of payment of 13th month pay, entitled to monetary benefits in proportion to the length of time he started working during the calendar year up to the time of resignation or termination of service (Pro-rated 13th month pay).
A: a.
Those with Multiple Ers – Government Ees
The Company's action is not tenable. The principle of solutio indebiti which is a civil law concept is not applicable in labor law (Davao Fruits Corp. v. NLRC, et al., G.R. No. 85073, August 24, 1993). After the 1981 SMC ruling, the Supreme Court decided the case of Philippine Duplicators Inc. v. NLRC, GR 110068, November 15, 1995. Accordingly, management may undertake to exclude sick leave, vacation leave, maternity leave, premium pay for regular holiday, night differential pay and cost of living allowance. The company shall include sales commissions based on the settled rule. (Songco v. NLRC, G.R. No. L-50999, March 23, 1990).
Application of pro-ration of 13th month pay GR: Pro-ration of 13 th month pay applies only in cases of resignation or separation from work; computation should be based on length of service and not on the actual wage earned by the worker (Honda Phils. v. Samahan ng Manggagawasa Honda, G.R. No. 145561, June 15, 2005).
64
Labor Standards XPN: Ees who are paid a guaranteed minimum wage
Leave
–
related to the profitability of business operations. Verily, by virtue of its incorporation in the CBA Side Agreements, the grant of 14 th, 15th and 16th month bonuses has become more than just an act of generosity on the part of ETPI but a contractual obligation it has undertaken (ETPI v. ETEU, G.R. No. 185665, Feb. 8, 2012).
13 th Month
or commissions earned are entitled to Pay based on total earnings (Philippine Agricultural Commercial and Industrial Workers Union v. NLRC, G.R. No. 107994, August 14, 1995).
14th month pay not legally demandable
--14th month
The granting of pay is a management prerogative and is not legally demandable. It is basically a bonus and is gratuitous in nature (Kamaya Point Hotel v. NLRC, G.R. No. 75289, August 31, 1989).
Commission in relation to 13 th month pay 1.
XPN: A bonus, however, becomes a demandable or enforceable obligation when it is made part of the wage or salary or compensation of the employee. If it is additional compensation which the employer promised and agreed to give without any conditions imposed for its payment, such as success of business or greater production or output, then it is pa rt of the wage. But if it is paid only if profits are realized or if a certain level of productivity is achieved, it cannot be considered part of the wage. Where it is not payable to all but only to some employees and only when their labor becomes more efficient or more productive, it is only an inducement for efficiency, a prize therefore, not a part of the wage. (Metro Transit Organization, Inc. v. NLRC, G.R. No. 116008, July 11, 1995)
2.
3.
--Q: ETPI (company) entered into a collective bargaining agreement with ETEU (union). A side agreement of the said CBA provided that company confirms that the 14 th, 15th and 16th month bonuses (other than 13 th month pay) are granted. The company then planned to defer the payment of the 14th, 15th and 16th month bonuses due continuing deterioration of company’s
financial
position.
The
The salesman’s commissions , comprising a predetermined percent of the selling price of the goods sold by each salesman, were properly included in the term basic salary for purposes of computing their 13th month pay. (Philippine Duplicators, Inc. v. NLRC, G.R. No. 110068, February 15, 1995). The so-called commission paid to or received by medical representatives of BoieTakeda Chemicals or by the rank-and-file Ees of Phil. Fuji Xerox were excluded from the term basic salary because these were paid as productivity bonuses. Such bonuses closely resemble profit sharing, payments and have no clear, direct, necessary relation to the amount of work actually done by each individual Ee.(Boie-Takeda Chemicals, Inc. v. Dela Serna, G.R. No. 92174, December 10, 1993) Earnings and remuneration which are closely akin to fringe benefits, overtime pay or profitsharing payments are excluded in computing 13th month pay. However, sales commissions which are effectively an integral portion of the basic salary structure of an employee shall be included in determining his 13 th month pay.
RETIREMENT PAY Retirement
union
opposed and filed a preventive mediation complaint before the NCMB. May the company validly postpone the payment of said bonuses?
It is the result of a bilateral act of the parties, a voluntary agreement between the Er and the Ee whereby the latter after reaching a certain age agrees and/or consents to sever his employment with the former (Ariola v. Philex Mining Corp,G.R. No. 147756. August 9, 2005).
A: NO. A reading of the provision reveals that the same provides for the giving of 14 th, 15th and 16th month bonuses without qualification. There were no conditions specified in the CBA Side Agreements for the grant of the benefits contrary to the claim of ETPI that the same is justified only when there are profits earned by the company. Terse and clear, the said provision does not state that the subject bonuses shall be made to depend on the ETPI’s financial standing or that their payment was contingent upon the realization of profits. Neither does it state that if the company derives no profits, no bonuses are to be given to the employees. In fine, the payment of these bonuses was not
Persons covered by retirement benefit All Ees in the private sector: 1. Regardless of their position, designation or status; and 2. Irrespective of the method by which their wages are paid (IRR, Book VI, Rule II, Sec.1); 3. Part-time Ees; 4. Ees of service and other job contractors;
65
Labor Law and Social Legislation 5.
6. 7.
Corporation v. NLRC, G.R. No. 138826, October 30, 2000).
Domestic Helpers or Persons in the personal service of another(Department Order 20, May 31, 1994); Underground mine workers(R.A. 8558); Ees of GOCCs organized under the Corporation Code (without original charters) (Postigo, et al. v. Philippine Tubercolosis Society, Inc., G.R. No. 155146, January 24, 2006)
ELIGIBILITY Retirement age It is the age of retirement that is specified in the 1. CBA; 2. Employment contract; 3. Retirement plan (IRR, Book VI, Rule II, Sec. 3); or 4. Optional retirement age for underground mining Ees
Persons not covered by retirement benefits 1.
2.
Ees of the National Government and its political subdivisions, including GOCCs (if they are covered by the Civil Service Law); Ees of retail, service, and agricultural establishments or operations employing not more than 10 Ees (IRR, Book VI, Rule II, Sec.2).
Retirement age in the absence of a retirement plan or other applicable agreement 1.
Kinds of retirement schemes 1. 2.
3.
provided that Ee has rendered 5 years of service.
Compulsory and contributory in nature; One set up by the agreement between the Er and Ees in the CBA or other agreements between them (other applicable employment contract); One that is voluntarily given by the Er, expressly as announced company policy or impliedly as in the failure to contest the Ee’s claim for retirement benefits (Marilyn Odchimar Gertach v. Reuters Limited Phils., G.R. No. 14854, January 17, 2005).
The option to retire upon reaching the age of 60 years or more but not beyond 65 is the exclusive prerogative of the Ee if there is no provision on retirement in a CBA or any other agreement or if the Er has no retirement plan (Capili v. NLRC, G.R. No. 117378, March 26, 1997). 2.
Retirement benefits, where not mandated by law, may be granted by agreement of the Ees and their Er or as a voluntary act on the part of the Er. Retirement benefits are intended to help the Ee enjoy the remaining years of his life, lessening the burden of worrying for his financial support, and are a form of reward for his loyalty and service to the Er (Aquino v. NLRC, G.R. No. 87653, February 11, 1992).
Art. 287 of the LC as amended by R.A. 7641 can be applied retroactively, provided that;
2.
Compulsory – 65 years old, regardless of years of service (IRR, Book VI, Rule II, Sec. 4).
Retroactive application of Art. 287 of the LC (on retirement) as amended by R.A. 7641
1.
Optional – Upon reaching 60 years old
The claimant for retirement benefits was still the Ee of the Er at the time the statute took effect; and The claimant was in compliance with the requirements for eligibility under the statute for such retirement benefits (PSVSIA v. NLRC, G.R. No. 115019, April 14, 1997).
5 year service requirement only applies to absence of retirement plan Being in a nature of ‘minimum requirement’, the parties cannot stipulate a period higher that five years since this will run counter to the law.(Chan, 2014)
Provisions of the retirement plan binding as part of the employment contract The retirement plan forms part of the employment contract since it is made known to the Ees and accepted by them, and such plan has an express provision that the company has the choice to retire an Ee regardless of age, with 20 years of s ervice, said policy is within the bounds contemplated by the LC. Moreover, the manner of computation of retirement benefits depends on the stipulation provided in the company retirement plan (Progressive Dev’t
The minimum length of service includes authorized absences and vacations, regular holidays, and mandatory fulfillment of a military or civic duty. (Section 4.4, Rule II, IRR of the Retirement pay Law)
Employee must have met the conditions of eligibility as condition precedent
66
Labor Standards
Leave
–
rate, but without the allowances that he used to enjoy.
Although retirement plan forms part of the employment contract, before a right to retirement benefits or pension vests in an Ee, he must have met the stated conditions of eligibility with respect to the nature of employment, age, and length of service. This is a condition precedent to his acquisition of rights thereunder. (Brion v. South Phil. Union Mission of the Seventh Day Adventist Church, G.R. No. 135136 May 19, 1999).
After five (5) years under this arrangement, the company finally severed all employment relations with Albert; he was declared fully retired in a fitting ceremony but the company did not give him any further retirement benefits. Albert thought this treatment unfair as he had rendered full service at his usual hours in the past five (5) years. Thus, he filed a complaint for the allowances that were not paid to him, and for retirement benefits for hisadditional five (5) working years, based either on the company's Retirement Plan or the Retirement Pay Law, whichever is applicable.
NOTE: SC ruled that the conditions of eligibility for retirement must be met at the time of retirement at which juncture the right to retirement benefits or pension, if the Ee is eligible, vests in him.(Ibid.)
Compulsory retirement age below 60 allowed by mutual agreement
a. After Albert's retirement at age 65, should he be considered a regular employee entitled to all his previous salaries and benefits when the company allowed him to continue working? b. Is he entitled to additional retirement benefits for the additional service he rendered after age 65? (2013 Bar Question)
Art. 287 permits Er and Ee to fix the applicable retirement age at below 60. The same is legal and enforceable so long as the parties agree to be governed by such CBA (Pantranco North Express v. NLRC, G.R. No. 95940, July 24, 1996).
NOTE: In order for retirement at an earlier age to be A:
valid, it must be shown that the Ee’s participation in the plan is voluntary. (Jaculbe v. Siliman University, G.R. No. 156934, March 16, 2007)
a.
Different Retirement Age for mine workers under RA 8558 The optional retirement age of underground mine workers is fifty (50) years of age; while the compulsory retirement age is sixty (60) years old. (Section 2.2, Department Order No. 09, Series of 1998)
He would be considered a contractual employee, not a regular employee. His salaries and benefits will be in accordance with the stipulations of the contract he signed with the company. The present case is similar to a case decided by the Supreme Court in Januaria Rivera v. United Laboratories, G.R. No. 155639, where the Court held that the company, in employing a retired employee whose knowledge, experience and expertise the company recognized, as an employee or as a consultant, is not an illegality; on the contrary, it is a recognized practice in this country.
Rule for extension of service of retiree upon reaching the compulsory retirement age Upon the compulsory retirement of an Ee or official in the public or private service, his employment is deemed terminated. The matter of extension of service of such Ee or official is addressed to the sound discretion of the Er (UST Faculty Union v. NLRC, G.R. No. 89885, August 6, 1990).
b.
NO. He cannot be compulsorily retired twice in the same company.
--Retirement Pay Separation Pay Distinctions
--Q: After thirty (30) years of service, Beta Company compulsorily retired Albert at age 65 pursuant to the company's Retirement Plan. Albert was duly paid his full retirement benefits of one (1) month pay for every year of service under the Plan. Thereafter, out of compassion, the company allowed Albert to continue working and paid him his old monthly salary
Paid by reason of retirement
Purpose is to held the Ee enjoy the remaining years of his life thereby lessening the burden of
67
Required in cases enumerated under Article 283 and 284 and as a substitute where reinstatement is not possible Wherewithal during the period that an employee is looking for
Labor Law and Social Legislation worrying for financial support
his
Article 287 becomes relevant only in the matter of ensuring that the retirement benefits are not less than whose provided therein.(Elegir v. PAL, Inc., G.R. No. 181995, July 16, 2012)
another employment after his termination
When both must be paid Payment of retrenchment embodied in the CBA as well as retirement pay provided under a separate Retirement Plan due to the demand of the Ee of their right under the CBA which was result of negotiations between the company and Ees.(Aquino v. NLRC, G.R. No. 87653, Feb 11, 1992)
Q:
The
instant
--labor
dispute
between
petitioners (PAL) stemmed from petitioner’s act
of unilaterally retiring airline pilot Captain Albino Collantes under PAL-ALPAP Retirement
When Ees are entitled to only one form of benefit
Plan. The SLE assailed the order of PAL’s action
of unilaterally retiring Captain Collantes andfurther ordered that the basis of the computation of Captain Coll antes’ retirement benefits should be Art. 287 of the LC the PAL ALPAP Retirement Plan. But PAL contends that the retirement plan should prevail as it is the agreement between the parties. What should be the basis of the computation of Captain Collantes’ retirement benefits?
When the CBA provisions are considered an effective bar to the availment if retirement benefits once the Ees have chosen separation pay or vice versa. Such when the CBA enunciates express prohibition against ‘double recovery.’(Zuelig Pharma Corp. v. Sibal, G.R. No. 173587, July 15, 2013)
AMOUNT
A: The basis of computation of Collantes’ retirement
Computation of retirement benefits in the absence of an applicable agreement or retirement plan
benefits should be Art. 287 of the LC. The given retirement benefits under the retirement plan is low compared to the retirement benefits provided under Art. 287 of the LC.Applying the second paragraph of Art. 287 ofthe LC, an Ee’s retirement benefits under any collective bargaining and other agreement shall not be less than those provided in the LC. Hence, Art. 287 of the LC and not the PALALPAP Retirement Plan, should govern the computation of the benefits to be awarded to Captain Collantes. Moreover, a pilot who retires after twenty years of service or after flying 20,000 hours would still be in the prime of his l ife and at the peak of his career, compared to one who retires at the age of 60 years old. Based on this peculiar circumstance that PAL pilots are in, the parties provided for a special scheme of retirement different from that contemplated in the LC.Conversely, the provisions of Art. 287 of the LC could not have contemplated the situation of PAL’s pilots. Rather, it was intended for those who have no more plans of employment after retirement, and are thus in need of financial assistance and reward for the years that they have rendered service. (Philippine Airlines, Inc. v. Airline Pilots Association of the Philippines, G.R. No. 143686, January 15, 2002).
A retiree is entitled to a retirement pay equivalent to at least ½ month salary for every year of service, a fraction of at least 6 months being considered as 1 whole year (R.A. 7641).
Composition of ½ month salary or retirement pay Unless parties provide for broader inclusions, retirement pay is comprised of: 1. 15 days salary based on latest salary rate; 2. Cash equivalent of not more than 5 days of service incentive leaves (22.5/year of service) 3. 1/12 of the 13th month pay 4. All other benefits as may be agreed upon by the Er and Ee (IRR, Book VI, Rule II, Sec.5.2).
NOTE: Under Sec. 26 of R.A. 4670, otherwise known as “Magna Carta for Public School Teachers”, public school teachers having fulfilled the age and service requirements of the applicable retirement laws shall be given one range salary raise upon the retirement, which shall be the basis of the computation of the lump sum of the retirement pay and monthly benefit thereafter.
--Gratuity Pay vs. Retirement Benefits
Superiority of Benefits Rule Once the Ee retires, it is not Article 287 that is controlling but the retirement plan under the CBA or other applicable employment contract. (Chan, 2014)
68
GRATUITY PAY
RETIREMENT BENEFITS
It is paid to the beneficiary for the past services or favor rendered purely out of the generosity of the giver or grantor. It is
Are intended to help the Ee enjoy the remaining years of his life, releasing him from the burden of worrying for his financial
Labor Standards not intended to pay a worker for actual services rendered or for actual performance. It is a money benefit or bounty given to the worker, the purpose of which is to reward Ee’s who have rendered satisfactory service to the company.
support, and are a form of reward for his loyalty to the Er (Sta. Catalina College and Sr. Loreta Oranza, v. NLRC and Hilaria Tercera, G.R. No. 144483, November 19, 2003).
Leave
–
not over 60 permanent years of age and Ees below 60 their Ers. years of age upon 1. Filipinos appointment recruited in the of permanent Philippines by status, and foreign-based for all elective Ers for officials for employment the duration abroad may be of their covered by the tenure. SSS on a voluntary basis. NOTE: Any person, 2. Compulsory whether upon all selfelected or employed appointed, in persons the service of earning Php 1, an Er is a 800 or more covered Ee if per annum. he receives compensation for such service.
--Q: In 1955, Hilaria was hired as a grade school teacher at the Sta. Catalina College. In 1970, she applied for and was granted a 1 year leave of absence (LOA) without pay due to the illness of her mother. After the expiration in 1971 of her LOA, she had not been heard from by Sta. Catalina. In the meantime, she was employed as a teacher at the San Pedro Parochial School during SY ‘80-‘81 and at the Liceo de San Pedro, during SY 1981-1982. In 1982, she applied anew at Sta. Catalina which hired her. On Mar 22, 1997, during the 51st Commencement Exercises of Sta. Catalina, Hilaria was awarded a Plaque of Appreciation for 30 yrs. of service and Php 12,000 as gratuity pay. On May 31, 1997, Hilaria reached the compulsory retirement age of 65. Sta. Catalina pegged her retirement benefits at Php 59,038.35. However, amount of Php 12,000 representing the gratuity pay, which was given to her, was deducted from her retirement benefits.
and their Ees not over 60years of age; Provided, that an Ee who is over 60 years of age and paying contributions to qualify for the retirement or life insurance benefit administered by the System shall be subject to compulsory coverage.
Right to contributory retirement plan Where both Er and Ee contribute to a retirement fund in accordance with the CBA or other applicable employment contract, the Er’s total contribution thereto should not be less than the total retirement benefits to which the Ee would have been entitled had there been no such retirement fund. In case the Er’s contribution is less than the retirement benefits provided under the law, the Er should pay the deficiency.(Section 3.3, Rule II, IRR or the Retirement Pay Law)
Should the gratuity pay be deducted from the retirement benefits? A: YES. Gratuity pay is separate and distinct from
Right to non-contributory retirement plan
retirement benefits. It is paid purely out of generosity.
---
The Ee have a vested and demandable right to a noncontributory retirement plan. It is an existing benefit voluntarily granted to them by their Er. The latter may not unilaterally withdraw, eliminate or diminish such benefits.(Nestle Philippines, Inc. v. NLRC, G.R. No. 91231, February 4, 1991)
RETIREMENT PAY UNDER RA 7641 VIS-À-VIS RETIREMENT BENEFITS UNDER SSS AND GSIS LAWS Retirement pay under the LC in relation to retirement benefits under SSS and GSIS laws (1997 Bar Question)
Social Security Law Compulsory upon all Ee s
Revised Governme nt Service Insurance Act Compulsory for all
RETIREMENT BENEFITS OF WORKERS PAID BY RESULTS/ RETIREMENT BENEFITS OF PART-TIME WORKERS/SEASONAL EMPLOYEE
Employees’
Determination of the amount of retirement benefits of workers paid by results and parttime workers
Compensatio n Act Compulsory upon all Ers
69
Labor Law and Social Legislation The 15-day salary of workers paid by results and part-time workers shall be determined from their average daily salary (ADS), which is the average daily salary for the last 12 months reckoned from the date of their retirement, divided by the number of actual working days in that particular period (Rules Implementing the New Retirement Law, Sec. 5.2 and 5.3).
2. 3. 4.
Note: The rule mentioned is the same for
RA 8424, the Tax Reform Act of 1997, which amended the NIRC, expressly excludes retirement benefits from gross income based on the same four (4) conditions enumerated above. Non-compliance with any of the requirements would subject the benefits to tax. (Santos v. Servier Philippines, Inc. G.R. No. 166377, November 28, 2008)
underground mine Ees. (Section 4.3, Rule II-A, Department Order No. 09, Series of 1998) Determination of the amount of retirement benefits of a seasonal employee 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. (Paz v. Northern Tobacco Redrying Co., Inc, G.R. No. 199554, 18 February 2015 )
Exemption of retirement pay of underground mine workers from tax The retirement pay provided in RA 8558 may be exempted from tax consistent with the BIR as discussed above.
SPECIAL GROUP OF EMPLOYEES WOMEN WORKERS
TAXABILITY
State policy on non-discrimination against women
Non-taxability of retirement benefits under R.A. 7641
The State condemns discrimination against women in all its forms and pursues by all appropriate means and without delay the policy of eliminating discrimination against women in keeping with the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) and other international instruments consistent with Philippine law. The State shall accord women the rights, protection, and opportunities available to every member of society (R.A. 9710 or the Magna Carta of Women, Sec. 2).
Retirement benefits under R.A 7641 are tax exempt provided that such benefits provided by the retirement plan be equal or less than the minimum requirement provided by law.
Requirements for tax exemption under R.A. 7641 1.
2.
That there be no CBA or other applicable employment contract providing for retirement benefits for an Ee; or Even if there is a CBA or other applicable employment contract providing for retirement benefits for an Ee, that the same is below the requirements set forth by law.
The State shall take steps to review and, when necessary, amend and/or repeal existing laws that are discriminatory to women within 3 years from the effectivity of this Act (R.A. 9710, Sec. 12).
Discriminatory acts against women Ee
Retirement benefits if private firms shall not be subject to any tax
1.
The following conditions must be complied with: 1.
corporate, is in accordance with a reasonable private benefit plan maintained by the Er. The retiring official or Ee has been in the service of the same Er for at least ten (10) years; He/She is not less than fifty (50) years of age at the time of his/her retirement; and The benefits shall be availed of by an official or employee only once.(RA 4971)
The retirement benefits received by the officials and Ees of private firms, whether individual or
70
Discrimination with respect to the terms and conditions of employment solely on account of sex a. Discrimination in pay – Payment of a lesser compensation including wage, salary or
Labor Standards
b.
c.
d.
2.
3.
Special Group of Employees
–
other forms of remuneration and fringe benefits, to a female Ee as against a male Ee; Discrimination in employment opportunity – favoring a male Ee over a female Ee with respect to promotion, assignment, transfer, training opportunities, study and scholarship grants solely in account or their sexes; Discrimination in hiring – favoring a male applicant with respect to hiring where the particular job can equally be handled by a woman; Discrimination in dismissal – favoring a male Ee over a female Ee with respect to dismissal of personnel or the application of the last in / first out principle or other retrenchment policy of the Er.(Poquiz, 2012)
Sexual Harassment. Instead, the Er is guilty of discrimination against women Ees which is declared to be unlawful by the LC. For an Er to commit Sexual Harassment, he – as a person of authority, influence or moral ascendancy – should have demanded, requested or otherwise required a sexual favor from his Ee whether the demand, request or requirement for submission is accepted by the object of said act.
--STIPULATION AGAINST MARRIAGE (LC, ART. 136) No-spouse employment policy It is a policy banning spouses from working in the same company.
Stipulating, whether as a condition for employment or continuation of employment: That a woman Ee shall not get married, or a. b. That upon marriage, such woman Ee shall be deemed resigned or separated (LC, Art. 136).
No-spouse employment policy may or may not violate provisions of the LC GR: It may not facially violate Art. 136 of the LC but it creates a disproportionate effect and the only way it could pass judicial scrutiny is by showing that it is reasonable despite the discriminatory and disproportionate effect.
Dismissing, discriminating or otherwise prejudice a woman Ee by reason of her being married (LC, Art. 136).
XPN: Bona fide occupational qualification rule NOTE: Discrimination in any form from pre-
(BFOQR)
employment to post employment, including hiring, promotion or assignment, based on the actual, perceived or suspected HIV status of an individual is unlawful (Philippine AIDS Prevention and Control Act of 1998, R.A. 8504).
Bona
fide occupational
qualification rule
(BFOQR) There must be a finding of any BFOQ to justify an Er’s no spouse employment rule. There must be a compelling business necessity for which no alternative exists other than the discriminating practice. To justify a BFOQ, the Er must prove two factors:
Standard of reasonable test Under the standard reasonable test which is parallel to the concept of a bona-fide occupational qualification test in American jurisdictions, the Er has the burden of proof to prove the existence of a reasonable business necessity that would justify an employment policy (Star Paper Corp. v. Simbol, G.R. No. 164774, April 12, 2006).
1.
2.
--Q: Can an individual, the sole proprietor of a business enterprise, be said to have violated the Anti-Sexual Harassment Act of 1995 if he clearly discriminates against women in the adoption of policy standards for employment and promotions in the enterprise? Explain . (2003 Bar Question)
That the employment qualification is reasonably related to the essential operation of the job involved; and That there is a factual basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job (Star Paper v. Simbol, G.R. No. 164774, April 12, 2006).
Importance of the BFOQR 1. 2.
A: When an Er discriminates against women in the adoption of policy standards for employment and promotion in his enterprise, he is not guilty of
To ensure that the Ee can effectively perform his work So that the no-spouse employment rule will not impose any danger to business.
---
71
Labor Law and Social Legislation Q: Glaxo, a company which has a policy against employees having relationships with the employees of its competitors, employed Tecson as a medical representative. Tecson married
4.
Bettsy, a Branch coordinator in one of Glaxo’s
Persons covered under the classification of certain women workers
competitors. Tecson was then transferred to another area but he did not accept such transfer.
Discharge or refuse the admission of such woman upon returning to her work for f ear that she may again be pregnant.
Any women who is permitted or suffered to work:
Is the policy of Glaxo valid and reasonable so as to constitute the act of Tecson as willful disobedience?
1.
A: YES. The prohibition against personal or marital
3.
2.
relationships with Ees of competitor companies upon Glaxo’s Ees is reasonable under the circumstances because relationships of that nature might compromise the interest of the company. Glaxo does not impose an absolute prohibition against relationships between its Ees and those of competitor companies. Its Ees are free to cultivate relationships with and marry persons of their own choosing. What the company merely seeks to avoid is a conflict of interest between the Ee and the company that may arise out of such relationships. Furthermore, the prohibition forms part of the employment contract and Tecson was aware of such restrictions when he entered into a relationship with Bettsy (Duncan Assoc. of Detailman-PTGWO v. Glaxo Wellcome Phil. Inc., G.R. No. 162994, September 17, 2004).
4.
With or without compensation; In any night club, cocktail lounge, massage clinic, bar or similar establishment; Under the effective control or supervision of the Er for a substantial period of time; and Shall be considered as an Ee of such establishment for purposes of labor and social legislation.
Discharging a woman due to pregnancy Article 137 contemplates the following prohibited acts in connection with the pregnancy of a woman employee: 1. 2. 3.
----Q: May a woman worker be dismissed on the
4. 5.
ground of dishonesty for having written ‘’single”
on the space for civil status on the application sheet, contrary to the fact that she was married? A: Art. 136 of the LC, explicitly prohibits
To discharge her on account of her pregnancy ; or To discharge her while she is on leave due to her pregnancy; or To discharge her while she is in confinement due to her pregnancy; or To discharge her upon returning to her work for fear that she may again be p regnant; or To refuse her admission upon returning to her work for fear that she may again be pregnant.(Section 13, Rule XII, Book III, Rules to Implement the LC)
Series of absences due to pregnancy and its related ailments not a ground to dismiss Ee
discrimination merely by reason of marriage of a female Ee. The policy of not accepting or disqualifying from work any woman worker who contracts marriage is afoul of the right against discrimination provided to all women workers by our labor laws and by our Constitution (PT&T Co. v. NLRC, G.R. No. 118978, May 23, 1997)
The court agreed that in concluding that respondent’s sickness was pregnancy -related and therefore, the petitioner cannot terminate respondent’s services because in doing so, petitioner will be violating the Article 137 of the LC.(Del Monte Philippines, Inc. v. Velasco, G.R. No. 153477, March 6, 2007 )
--PROHIBITED ACTS
--Q: Can an Er dismiss an Ee on the ground of deliberately concealing her pregnancy and incurring absences without official leave?
It shall be unlawful for any Er to: ( Art. 137, LC) 1. 2.
3.
Deny any woman Ee benefits provided by law. Discharge any woman for the purpose of preventing her from enjoying any of the benefits provided by law. Discharge such woman on account of her pregnancy, or while on leave or in confinement due to her pregnancy.
A: NO. Her absencewas justified considering that she had just delivered a child, which can hardly be considered a forbidden act, a dereliction of duty; much less does it imply wrongful intent on the part of the Ee. (Lakpue Drug, Inc. v. Belga, G.R. No . 166379, October 20, 2005.)
72
Labor Standards
Special Group of Employees
–
---
The definition of sexual harassment does not require a categorical demand or request for sexual favor
Discharging a woman Ee for having filed a case or for testifying or being about to testify in a case
While the provision states that there must be a “demand, request or requirement of a sexual favor.” It is not necessary that the demand, request or requirement of a sexual favor be articulated in a categorical manner. It may be discerned, with equal certitude, from the acts of the offender.
Of relevance to Article 118 and 248(f) of the LC, this is the only ULP act of the Er which need not be related to the exercise by the Ee of his right to selforganization and collective bargaining.(Bisig Manggagawa sa Tryco v. NLRC, G. R. No. 151309, October 15, 2008.)
Likewise, it is not essential that the demand, request or requirement be made as a condition for continued employment or for promotion to a higher position. It is enough that the respondent’s acts result in creating an intimidating, hostile or offensive environment for the employee (Domingo v.Rayala, G.R. No. 155831, February 18, 2008).
Penalty for commission of the prohibited acts mentioned The offender would be subject to the penalties provided under Article 288 of the LC, the general penalty clause under said code.
ANTI-SEXUAL HARASSMENT ACT (R.A. 7877)
Places where sexual harassment are committed Specifically:
State policy in enacting the Anti-Sexual Harassment Law
1.
The State shall: 1. Value the dignity of every individual 2. Enhance the development of its human resources 3. Guarantee full respect for human rights, and 4. Uphold the dignity of workers, Ees, applicants for employment, students or those undergoing training, instruction or education (R.A. 7877, Sec. 2).
In a work-related or employment environment : a.
Persons who may be held liable for sexual harassment b.
In a work, education or training-related environment Sexual Harassment may be committed by an: 1. 2. 3. 4. 5. 6. 7.
c.
Er Manager Supervisor Agent of the Er Teacher, instructor, professor Coach, trainer, or Any other person who, having authority, influence or moral ascendancy over another in a work or training or education environment: a. Demands b. Requests or c. Requires any sexual favor from the other, regardless of whether the demand, request or requirement for submission is accepted by the object of R.A. 7877 (R.A. 7877, Sec. 3).
2.
In an education or training environment sexual harassment is employed: a. b.
c.
d.
73
The sexual favor is made as a condition in the hiring or in the employment, reemployment or continued employment of said individual, or in granting said individual favorable compensation, terms, conditions, promotions, or privileges; or the refusal to grant the sexual favor results in limiting, segregating or classifying the Ee which in a way would discriminate, deprive or diminish employment opportunities or otherwise adversely affect said Ee (Quid Pro Quo Sexual Harassment); The above acts would impair the Ees’ rights or privileges under existing labor laws; or The above acts would result in an intimidating, hostile, or offensive environment for the Ee (Hostile Environment Harassment).
Against one who is under the care, custody or supervision of the offender; Against one whose education, training, apprenticeship or tutorship is entrusted to the offender; When sexual favor is made a condition to the giving of a passing grade, or the granting of honors and scholarships, or the payment of a stipend, allowance or other benefits, privileges, or considerations; or When sexual advances result in an intimidating, hostile or offensive
Labor Law and Social Legislation environment for the student, trainee or apprentice.
independent action for affirmative relief (Sec. 6).
damages
and
other
Duties of the Er or head of office in a workrelated, education or training environment
Three-fold liability rule in sexual harassment cases
Prevent or deter the commission of acts of Sexual Harassment, and Provide the procedures for the resolution, settlement or prosecution of acts of Sexual Harassment.
An act of Sexual Harassment may give rise to civil, criminal and administrative liability on the part of the offender, each proceeding independently of the others.
1. 2.
Prescription of action
Duty of the Er or Head of Office towards these end 1.
The civil, criminal and administrative action shall prescribe in 3 years.
Promulgate appropriate rules and regulations in consultation with and jointly approved by the Ees or students or trainees, through their duly designated representatives, prescribing the procedure for the investigation or Sexual Harassment cases and the administrative sanctions therefore (Sec. 4, R.A. 7877).
--Q: A Personnel Manager, while interviewing an attractive female applicant for employment, stared directly at her for prolonged periods, albeit in a friendly manner. After the interview, the manager accompanied the applicant to the door, shook her hand and patted her on the shoulder. He also asked the applicant if he could invite her for dinner and dancing at some future time. Did the Personnel Manager, by the above acts, commit Sexual Harassment? Reason. (2000 Bar Question)
NOTE: Administrative sanctions shall not be a bar to prosecution in the proper courts for unlawful acts of Sexual Harassment. The said rules and regulations issued shall include, among others, guidelines on proper decorum in the workplace and educational or training institutions. 2. 3.
A: YES. The Personnel Manager, is in a position to grant or not to grant a favor (a job) to the applicant. Under the circumstances, inviting the applicant for dinner or dancing creates a situation hostile or unfriendly to the applicant's chances for a job if she turns down the invitation [R.A. No. 7877, Anti-Sexual Harassment Act, Sec. 3 (a) (3)].
Create a committee on decorum and investigation of cases on Sexual Harassment. The Er or head of office, education or training institution shall disseminate or post a copy of this R.A. 7877 for the information of all concerned
----Q: In the course of an interview, another female applicant inquired from the same Personnel Manager if she had the physical attributes required for the position she applied for. The Personnel Manager replied: "You will be more attractive if you will wear micro-mini dresses without the undergarments that ladies normally wear." Did the Personnel Manager, by the above reply, commit an act of sexual harassment? Reason.
Liability of the Er, head of office, educational or training institution Er shall be solidarily liable for damages arising from the acts of Sexual Harassment committed in the employment, education or training environment provided: 1.
2.
The Er or head of office, educational or training institution is informed of such acts by the offended party; and No immediate action is taken thereon (R.A. 7877, Sec. 5).
A: YES. The remarks would result in an offensive o r hostile environment for the Ee. Moreover, the remarks did not give due regard to the applicant’s feelings and it is a chauvinistic disdain of her honor, justifying the finding of Sexual Harassment (Villarama v. NLRC, G.R. No. 106341, September 02, 1994).
An independent action for damages may be filed Nothing under R.A. 7877 shall preclude the victim of work, education or training-related Sexual Harassment from instituting a separate and
-----
74
Labor Standards
Special Group of Employees
–
Q: Pedrito Masculado, a college graduate from the province, tried his luck in the city and landed a job as a utility/maintenance man at the warehouse of a big shopping mall. After working as a casual employee for 6 months, he signed a contract for probationary employment for 6 months. Being well-built and physically attractive, his supervisor, Mr. Hercules Barak, took special interest to befriend him. When his probationary period was about to expire, he was surprised when one afternoon after working
Rules on employment of minor workers
hours, Mr. Barak followed him to the men’s
2.
parent employee, provided he/she had served atleast 1 year.
EMPLOYMENT OF MINORS
GR: 1.
comfort room. After seeing that no one else was around, Mr. Barak placed his arm over Pedrito’s
No person under 18 years of age will be allowed to be employed in an undertaking which is hazardous or deleterious in nature. No Er shall discriminate against any person in respect to terms and conditions of employment on account of his age.
shoulder and softly said: “You have great
potential to become a regular Ee and I think I can give you a favorable recommendation. Can you come over to my condo unit on Saturday evening
XPNs: A. Below 15 yrs. Old
so we can have a little drink? I’m alone, and I’m sure you want to stay longer with the company.”
1.
The child works directly under the sole responsibility of his parents or legal guardian and where only members of the family are employed, subject to the following conditions: a. Employment does not endanger the child’s safety, health and morals b. Employment does not impair the child’s normal development c. Er-parent or legal guardian provides the child with the primary and/or secondary education prescribed by the Department of Education
2.
The child’s employment or participation in public entertainment or information through cinema, theater, radio or television is essential provided:
Is Mr. Barak liable for Sexual Harassment committed in a work-related or employment environment? (2000 Bar Question) A: YES. The elements of Sexual Harassment are all present. The act of Mr. Barak was committed in a workplace. Mr. Barak, as supervisor of Pedrito Masculado, has authority, influence and moral ascendancy over Masculado. Given the specific circumstances mentioned in the question like Mr. Barak following Masculado to the comfort room, etc. Mr. Barak was requesting a sexual favor from Masculado for a favorable recommendation regarding the latter's employment. It is not impossible for a male, who is a homosexual, to ask for a sexual favor from another male.
a.
Employment contract is concluded by the child’s parents or lega l guardian, b. With the express agreement of the child concerned, if possible, and c. The approval of DOLE, the following must be complied with: i. The employment does not involve advertisement or commercials promoting alcoholic beverages, intoxicating drinks, tobacco and its by-products or exhibiting violence ii. There is a written contract approved by DOLE iii. The conditions provided in the first instance are met
--MATERNITY LEAVE UNDER SSS LAW A female member who has paid atleast three monthly contributions in the 12 th month period immediately preceding the semester of her birth or miscarriage shall be paid a daily maternity leave benefit equivalent to 100% of her average daily salary credit for: i. ii.
60 days for Normal delivery 78 days for Caesarian delivery
Other leaves pertaining to Women Ees 1. 2. 3.
B. Above 15 but below 18 – May be employed in any non-hazardous work
Battered Woman Leave Magna Carta for Women (RA 9710) Solo Parents Leave- Consists of not more than 7 working days every year to be granted to a solo
C. Above 18 – No prohibition
75
Labor Law and Social Legislation Employment Conditions
Regulation of Working Hours of a child
Such conditions must be strictly followed:
It includes: a. All time during which a child is required to be at a prescribed workplace; and b. All time during which a child is suffered or permitted to work.
a.
b.
The total number of hours worked shall be in accordance with Section 15 of Department Order No. 65-04; The employment does not endanger the child’s life, safety, health and morals, nor impair the child’s normal development;
Rest periods of short duration during working hours shall be counted as hours worked. (Section 3, Chapter 1, Ibid.)
‘Normal Development of the child’ refers to physical, emotional, mental, and spiritual growth of a child within a safe and nurturing environment where he/she is given adequate nourishment, care and protection and the opportunity to perform tasks appropriate at each stage of development.(Section 3, Chapter 1, Department Order No. 65-04) c.
d.
Age Bracket
Hours of Work Not be more that twenty (20) hours per week
Below 15
The child is provided with at least the mandatory elementary or secondary education; and The employer secures a work permit for the child.(Section 8 to 12, Ibid.)
--Q: A spinster school teacher took pity on one of her pupils, a robust and precocious 12-year old boy whose poor family could barely afford the cost of his schooling. She lives alone at her house near the school after her housemaid left. In the afternoon, she lets the boy do various chores as cleaning, fetching water and all kinds of errands after school hours. She gives him rice and Php 30.00 before the boy goes home at 7 every night. The school principal learned about it and charged her with violating the law which prohibits the employment of children below 15 years of age. In her defense, the teacher stated that the work performed by her pupil is not hazardous, and she invoked the exception provided in the Department Order of DOLE for the engagement of persons in domestic and household service. Is her defense tenable? (2004 Bar Question)
15 years of age but below 18 years
Provided, the work shall not be more than four (4) hours at any given day Not be more than eight (8) hours a day In no case beyond forty (40) hours a week
Time not allowed to work Between eight o’clock in the evening (8:00pm) and six o’clock in the morning (6:00am) of the following day
Between ten o’clock in the evening (10:00pm) and six o’clock in the morning (6:00am) of the following day(Section 15, Chapter 5, Ibid.)
Duty of the Er before engaging a minor into employment The Er shall first secure a work permit from the DOLE which shall ensure observance of the requirements (R.A. 7160, Sec. 12).
Rule in the issuance of work certificates/ permits to children at least 15 but below 18 years of age
A: NO. Under Art. 139 of the LC on “minimum
The issuance of a DOLE Certificate to youth aged 15 to below 18 years of age is not required by law. No Er shall deny opportunity to any such youth applying for employment merely on the basis of lack of work permit or certificate of eligibility for employment. Any young person aged 15 to below 18 years of age may present copy of this DOLE advisory to any Er, job provider, government authority, or his/her representative when seeking employment or anytime during employment (DOLE Department Advisory No. 01-08).
employable age,” no child below 15 years of age shall be employed except when he works directly under the sole responsibility of his parents or guardian, the provisions of the alleged department order of DOLE to the contrary notwithstanding. A mere department order cannot prevail over the express prohibitory provisions of the LC.
---
76
Labor Standards
Special Group of Employees
–
Non-hazardous work
statements is the most accurate? (2012 Bar Question)
It is any work or activity in which the Ee is not exposed to any risk which constitutes an imminent danger to his safety and health.
a) Working permit for Iya’s employment is not required because the job is nit hazardous; b) Her work period exceeds the required working hours for children aged 15 years old; c) TO require a 15-year old to work without obtaining the requisites working permit is a form of child labor; d) Iya, who was engaged in a work that is not child labor, is a working child.
Hazardous workplaces 1.
2.
3.
4.
Nature of work exposes the workers to dangerous environmental elements, contaminants or work conditions Workers are engaged in construction work, logging, fire-fighting, mining, quarrying, blasting, stevedoring, dock work, deep-sea fishing, and mechanized farming Workers are engaged in the manufacture or handling of explosives and other pyrotechnic products Workers use or are exposed to heavy or powerdriven tools
A: d). Iya, who was engaged in a work that is not child labor, is a working child [Sec. 12-A, 8 hours but not beyond 40 hours].
----Q: Determine whether the following minors should be prohibited from being hired and from performing their respective duties indicated hereunder: (2006 Bar Question)
--Q: You were asked by a paint manufacturing company regarding the possible employment as a mixer of a person aged 17, who shall be directly under the care of the section supervisor. What advice would you give? Explain briefly. (2002 Bar Question)
a. A 17-year old boy working as miner at the Walwadi Mining Corporation. b. An 11-year old boy who is an accomplished singer and performer in different parts of the country. c. A 15-year old girl working as a library assistant in a girls' high school. d. A 16-year old girl working as model promoting alcoholic beverages. e. A 17-year old boy working as a dealer in a casino. (2006 Bar Question)
A: The paint manufacturing company cannot hire a person who is aged 17. Art. 139(c) of the LC provides that a person below 18 years of age shall not be allowed to work in an undertaking which is hazardous or deleterious in nature as determined by the SLE. Paint manufacturing has been classified by the SLE as a hazardous work.
-- A: Prohibitions on the employment of children in certain advertisements
a.
and from performing the duties of a miner because such constitutes hazardous work under D.O. No. 04 Series of 1999. Art. 139(c) of LC expressly prohibits the employment of persons below 18 years of age in an undertaking which is hazardous or deleterious in nature as determined by the SLE.
Employment of child models in all commercial advertisements promoting the following shall be prohibited: 1. 2. 3. 4. 5. 6.
YES. He should be prohibited from being hired
Alcoholic beverage Intoxicating drinks Tobacco and its by products Gambling Violence Pornography
b.
NO. He should not be prohibited from being hired and from performing as a singer. Under Art. VIII Sec. 12(2) of R.A. 7619 as amended by R.A. 7658, this constitutes an exception to the general prohibition against the employment of children below 15 years of age, provided that the following requirements are strictly complied with:
--Q: Iya, 15 years old, signed up to model a clothing brand. She worked from 9am to 4 pm on weekdays and 1pm to 6pm on Saturdays for two (2) weeks. She was issued a child working permit under RA 9231. Which of the following
1.
77
The Er shall ensure the protection, health safety and morals of the child
Labor Law and Social Legislation 2.
3.
c.
The Er shall institute measures to prevent the child’s exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time; and The Er shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skill acquisition of the child. Moreover, the child must be directly under the sole responsibility of his parents or guardian and his employment should not in any way interfere with his schooling.
1.
2.
Instances when the state can intervene in behalf of the child 1.
NO. She should not be prohibited from working as a library assistant because the prohibition in the LC against employment of persons below 18 years of age merely pertains to employment in an undertaking which is hazardous or deleterious in nature as identified in the guidelines issued by the SLE. Working as a library assistant is not one of undertakings identified to be hazardous under D.O. No 04 Series of 1999.
d.
2.
When the parent, guardian, teacher or person having care or custody of the child fails or is unable to protect the child against abuse, exploitation and discrimination; or When such acts are committed against the child by the said parent, guardian, teacher or person having care and custody over the child.
Worst forms of labor 1.
YES. She should be prohibited from working as a model promoting alcoholic beverages. R.A. 7610 categorically prohibits the employment of child models in all commercials or advertisements promoting alcoholic beverages and intoxicating drinks, among other things.
2.
3. e.
When the child is below 18 years of age in a work or economic activity that is not child labor; or When the child is below 15 years of age: a. In work where he/she is directly under the responsibility of his/her parents or legal guardian and where only members of the child’s family are employed; or b. In public entertainment or information
YES. He should be prohibited from working as a dealer in casino, because Art. 140 of the LC prohibits the employment of persons below 18 years of age in an undertaking which is hazardous or deleterious in nature identified in the guidelines issued by the SLE. Working as a dealer in a casino is classified as hazardous under D.O. No. 04 Series of 1999 as it exposes children to physical, psychological or sexual abuses.
4.
5.
-- ACT AGAINST CHILD LABOR (R.A. 9231) AND CHILD ABUSE LAW (R.A. 7610)
All forms of slavery (Anti-Trafficking of Persons Act of 2003) or practices similar to slavery such as sale and trafficking of children, debt bondage and serfdom and forced or compulsory labor, including recruitment of children for use in armed conflict; The use, procuring, offering of a child for prostitution, for the production of pornography or for pornographic performances; The use, procuring, offering or exposing of a child for illegal or illicit activities, including the production and trafficking of dangerous drugs and volatile substances prohibited under existing laws; Employing child models in all commercials or advertisements promoting alcoholic beverages, intoxicating drinks, tobacco and its byproducts and violence; and Work which, by its nature or circumstances in which it is carried out, is hazardous or likely to be harmful to the health, safety or morals of children.
Persons who can file a complaint for unlawful acts committed against children
Child labor 1. 2. 3.
Any work or economic activity performed by a child that subjects him or her to any form of exploitation or is harmful to his or her health and safety or physical, mental or psychosocial development.
4.
Working child
5. 6.
Any child engaged as follows:
78
Offended party Parents or guardians Ascendants or collateral relatives within the 3 rd degree of consanguinity Officer, social worker or representative of a licensed child-caring institution Officer or social worker of DSWD Barangay chairman of the place where the violation occurred, where the child is residing or employed
Labor Standards
Special Group of Employees
–
At least 3 concerned, responsible citizens where the violation occurred
Persons covered by R.A. 10361 otherwise known as “Batas kasambahay”
Jurisdiction over offenses punishable under R.A. 9231
All kasambahay engaged in domestic work, whether on a live-in or live-out arrangement, such as, but not limited to, the following:
7.
The Family Courts shall have original jurisdiction over all cases involving offenses punishable under this Act.
1. 2. 3. 4. 5. 6.
ANTI- AGE DISCRIMINATION IN EMPLOYMENT ACT (RA 10911) The State shall promote equal opportunities in employment to everyone.
7.
Prohibition of Discrimination in Employment on Account of Age
General househelp Nursemaid or Yaya Cook Gardener Laundry person Working children or domestic workers 15 years and above but below 18 years of age; or Any person who regularly performs domestic work in one household on an occupational basis (live-out arrangement) [Sec. 3(d), R.A. 10361].
Persons not covered by the batas kasambahay It shall be unlawful for employer to 1.
2. 3. 4.
5. 6. 7.
1. 2. 3. 4.
Print or publish in any form of media any notice of advertisement relating to employment suggesting references, limitations, specificationsand discrimination based on age. Require the declaration of age or birth date during the application process. Decline any employment application because of the individual’s age Discriminate against an individual in terms of compensation, terms and conditions and privileges of employment on account of the individual’s age Deny any employee’s or worker’s promotion or opportunity for training because of age Forcibly lay-off an employee or worker because of old age Impose early retirement on the basis of the employee’s age.
Children under foster family arrangement Children under foster family arrangement are those who are living with a family or household of relative/s and are provided access to education and given an allowance incidental to education, i.e., “baon,” transportation, school projects, and school activities; provided, that the foster family and foster care arrangements are in compliance with the procedures and requirements as prescribed by R.A. 10165 or Foster Care Act of 2012.
--Q: Soledad, a widowed school teacher, takes under her wing one of her students, Kiko, 13 years old, who was abandoned by his parents and has to do odd jobs in order to study. She allows Kiko to live in her house, provides him with clean clothes, food, and a daily allowance of 200 pesos. In exchange, Kiko does routine housework, consisting of cleaning the house and doing errands for Soledad. One day, a representative of the DOLE and the DSWD came to Soledad's house and charged her with violating the law that prohibits work by minors. Soledad objects and offers as a defense that she was not requiring Kiko to work as the chores were not hazardous. Further, she did not give him chores regularly but only intermittently as the need may arise. Is Soledad's defense meritorious? (2015 Bar Question)
XPNs: It is lawful for an employer to set age limitations in employment if 1. 2.
3.
Service providers Family drivers Children under foster family arrangement; and Any other person who performs work occasionally or sporadically and not on an occupational and regular basis.
BFOQ The intent is to observe the terms of bona fide seniority system or retirement plan, provided that such retirement plan is in accordance with the LC The action is duly certified by the Secretary of DOLE
EMPLOYMENT OF HOUSEHELPERS NOTE: The prescribed references mentioned in the syllabus, namely: ‘LC as amended by RA 7655’ as well as ‘Household service under the Civil Code’ are no longer accurate by reason of the passage of RA 10361.
79
Labor Law and Social Legislation A: Soledad’s defense is meritorious. Sec. 4 (d) of the
hired directly or through POEA, shall shoulder the expenses for hiring. The kasambahay shall not be charged of any cost of the recruitment, placement, or finder’s fee.
Kasambahay Law (RA 10361) provides that the term “Domestic Worker” shall not include children who are under foster family arrangement, and are provided access to education and given an allowance incidental to education, i.e. “baon”, transportation, school projects and school activities.
NOTE: The Er shall pay the expenses that are directly used for the transfer of the kasambahay from place of origin to the place of work. An Er can be reimbursed of the deployment expenses when the kasambahay unreasonably leaves the Er within 6 months from the time he/she started work.
--Examples of persons performing work occasionally or sporadically and not on an occupational basis 1. 2. 3.
If a kasambahay is hired thru a Private Employment Agency, the agency is allowed to collect Service Fee from the Er.
A janitress doing irregular laundry work for a household during rest day; A construction worker doing casual gardening job for a household; or A hospital nurse or a student doing baby-sitting job.
Pre-employment requirements Before entering into an employment contract, the Er has the option to require the following from a kasambahay:
Employable age for a kasambahay The employable age for a kasambahay is 15 years old and above.
1. 2. 3. 4.
NOTE: The employment of children 15 but below 18 years of age may be made under the following conditions: 1.
2. 3. 4.
They shall not be allowed to work for more than 8 hours a day, and in no case beyond 40 hours a week; They shall not be allowed to work between 10 p.m. to 6 a.m. of the following day; They shall not be allowed to do hazardous work; and They shall not be denied access to education and training.
Medical certificate or health certificate issued by a local government health officer; Barangay and police clearance; NBI clearance; and Duly authenticated birth certificate or, if not available, voter’s identification card, baptismal record, or passport showing the kasambahay’s age.
NOTE: Requirements are mandatory when the employment of the kasambahay is facilitated through a private employment agency. It is not a requirement for a kasambahay to be trained and certified by TESDA prior to employment. However, the kasambahay is encouraged to undergo competency assessment and be certified by TESDA. Training is not a requirement for competency assessment.
The consent of the parent/guardian of working children is required in the employment contract.
Er of a kasambahay
Contract between the Er and kasambahay should be written and should contain conditions set by law
An Er is any person who engages and controls the services of a kasambahay and is party to the employment contract.
The Er and the kasambahay shall enter into a contract of employment written in a language or dialect understood by them.
Er’s household
NOTE: The contract need not be notarized. The
Household refers to the immediate family members or other occupants of the house who are directly and regularly provided services by the kasambahay.
Punong Barangay or his/her designated officer may attest to the contract and serve as witness to its execution.
Modes of hiring a kasambahay Contents of the employment contract An Er can hire directly or through private employment agencies registered with the DOLE regional offices. The Er, whether the kasambahay is
1. 2.
80
Duties and responsibilities of the kasambahay ; Period of employment;
Labor Standards
Special Group of Employees
–
3. 4. 5.
Compensation; Authorized deductions; Hours of work and proportionate additional payment; 6. Rest days and allowable leaves; 7. Board, lodging and medical attention; 8. Agreements on deployment expenses, if any; 9. Loan agreement; 10. Termination of employment; and 11. Any other lawful condition agreed upon by both parties.
exclusively to the personal comfort and enjoyment of the employer’s family. The Supreme Court already held that the mere fact that the househelper is working in relation to or in connection with its business warrants the conclusion that such househelper or domestic servant is and should be considered as a regular employee. (Apex Mining Co., Inc. v. NLRC, G.R. No. 94951, April 22, 1991). Here, Linda was hired not to minister to the personal comfort and enjoyment of her employer's family but to attend to other employees who teach and live inside the campus.
Registration of the kasambahay
--Mandatory benefits of a kasambahay
The Er is required to register the kasambahay in the Registry of Domestic Workers in the barangay where the Er resides. For this purpose, the DILG, in coordination with the DOLE, shall formulate a registration system.
1. 2. 3. 4. 5. 6. 7. 8.
NOTE: The registration of the kasambahay is free of charge.
Domestic workers cannot acquire regularity of employment under RA 10361
Monthly minimum wage; Daily rest period of 8 (total) hours; Weekly rest period of 24 (uninterrupted) hours 5 days annual service incentive leave with pay; 13th month pay; SSS benefit; PhilHealth benefit; and Pag-IBIG benefit
Other rights and privileges of a kasambahay All the indicia of regularity of employment remain absent in the employment of domestic helpers.(Chan, 2014)
1.
Freedom from Er’s interference in wage disposal; 2. Standard of treatment; 3. Board, lodging, and medical attendance; 4. Right to privacy; 5. Access to outside communication; 6. Access to education and training; 7. Right to be provided a copy of the employment contract; 8. Right to Certificate of Employment; 9. Right to form, join, or assist labor organization; 10. Right to terminate employment based on just cause; and 11. Right to exercise religious beliefs and cultural practices.
XPN: Mere fact that the househelper is working within the premises of the business of the employer and in relation to or in co nnection with the business, as in staffhouses for its guest or even for its officers and Ees, warrants the conclusion that such househelper is and should be considered as a regular employee. (Remington Industrial Sales Corp. v. Castaneda, G.R. 169295-96, November 20, 2006)
NOTE: Such case must be based as to its factual antecedents.
--Q: Linda was employed by Sectarian University (SU) to cook for the members of a religious order who teach and live inside the campus. While performing her assigned task, Linda accidentally burned herself. Because of the extent of her injuries, she went on medical leave. Meanwhile, SU engaged a replacement cook. Linda filed a complaint for illegal dismissal, but her employer SU contended that Linda was not a regular employee but a domestic househelp. Decide. (2014 Bar Question)
Basic necessities of a kasambahay 1.
2. 3.
At least 3 adequate meals a day, taking into consideration the kasambahay’s religious beliefs and cultural practices; Humane sleeping condition; and Appropriate rest and basic medical assistance.
NOTE: Though not part of the “basic necessities” required to be provided by the Er to the kasambahay , shampoo, soap, toothpaste etc. may be provided gratuitously.
A: The employer's argument that Linda was not a Monthly minimum wage of a kasambahay
regular employee has no merit. The definition of domestic servant or househelper contemplates one who is employed in the employer’s home to minister
Employed In
81
Amount
Labor Law and Social Legislation National Capital Region Cities and 1st Class Municipalities Other Municipalities
NOTE: If the kasambahay fails to avail of any of
Php 2, 500
his/her annual SIL, it shall be forfeited and cannot be converted to cash.
Php 2, 000
Other
Php 1, 500(Section
agreement
that
the
Er
and
the
kasambahay can enter into relative to the kasambahay’s weekly rest day and service
24, RA 10361)
incentive leave
The law provides a mechanism for increasing the minimum wage of the kasambahay . Initially, one year from 4 June 2013, the Regional Tripartite Wages and Productivity Boards (RTWPB) may review, and if proper, determine and adjust the minimum wage (Sec. 24, Ibid).The RTWPB shall coordinate with TESDA on the wage review and adjustment based on the kasambahay’ s competency level, in line with the thrust to professionalize the domestic service sector.
1. 2. 3. 4. 5.
Payment of Wage
Offsetting a day of absence with a particular rest day; Waiving a particular rest day in return for an equivalent daily rate of pay; Accumulating rest days not exceeding 5 days; Adding the accumulated rest days (maximum of 5 days) to the five-day SIL; and Waiving a particular SIL in return for an equivalent daily rate of pay.
13th month pay
Wage shall be in cash and at least be paid once a month.
The kasambahay is entitled to 13 th month pay after 1 month of service.
NOTE: The Er shall at all times provide the
Computation of the 13thmonth pay
kasambahay with a copy of the pay slip every pay day containing the amount paid and all deductions made, if any. The copies of the pay slip shall be kept by the Er for a period of 3 years (Sec. 26, Ibid.).
In computing the 13thmonth pay, the total basic wage received in a given calendar year shall be divided by 12. The amount derived shall be paid not later than December 24.
Payment of wages by means of promissory, voucher, coupon, token, ticket, chit, or anything other than the cash wage is prohibited.
SSS, PHILHEALTH, and PAG-IBIG
Daily rest period
The kasambahay is covered by SSS, PhilHealth and
The kasambahay is entitled to a total daily rest period of at least 8 hours.
Pag-IBIG after 1 month of service.
Er’s obligation to register the kasambahay in
Prohibition of work beyond 16 hours
SSS, PHILHEALTH, and PAG-IBIG
The Er cannot require the kasambahay to work beyond 16 hours at any given workday in return fo r an equivalent hourly rate. The eight-hour rest period must be observed.
Under the SSS, PhilHealth, and PAG-IBIG laws, the Er has the obligation to register the kasambahay and deduct and remit the required premiums and contributions. The Er shall incur certain liabilities, including criminal prosecution, if he fails or refuses to comply with his/her obligations.
NOTE: Kasambahays are also entitled to at least 24 consecutive hours of rest in a week. The Er and the kasambahay may determine the schedule of the weekly rest period. The Er shall respect the preferred weekly rest day of the kasambahay on religious grounds (Sec. 21 Ibid.).
Employer’s liability in case the kasambahay
refuses to be a member of SSS, PHILHEALTH, and PAG-IBIG The employer is still liable under the SSS, PHILHEALTH, and PAG-IBIG laws in case the kasambahay refuses membership with those agencies, because it is mandatory and nonnegotiable.
Five-day annual service incentive leave The kasambahay can avail the five day annual service incentive leave after 1 year of service.
82
Labor Standards
Special Group of Employees
–
Person liable to pay the SSS premium, PHILHEALTH and PAG-IBIG contributions of the
5.
kasambahay 6.
GR: The Er shall pay the SSS premium, and PHILHEALTH and PAG-IBIG contributions of the kasambahay
7.
Violation by the kasambahay of the terms and conditions of the employment contract and other standards set forth under the law; Any disease prejudicial to the health of the kasambahay , the Er, or member/s of the household; and Other causes analogous to the foregoing (Sec. 34, Ibid.).
XPN: If the wage of the kasambahay is Php 5,000.00 NOTE: Neither the domestic worker nor the E r may
or more, the kasambahay will pay his/her share in the premiums/contributions.
terminate the contract before the expiration of the term except for grounds provided for in Secs. 33 and 34 of the Batas Kasambahay.
Provisions protecting Ers of a kasambahay 1. 2.
Prohibition against privileged information; Er may require certain pre-employment documents prior to engagement; 3. Ers are assured of quality services through DOLE-TESDA training, assessment, and certification of kasambahay ; 4. Forfeiture of 15-day unpaid salary should the kasambahay leave the residence of the Er without any justifiable reason; and 5. Right to terminate the employment on justifiable grounds.
The domestic worker and the Er may mutually agree upon written notice to pre-terminate the contract of employment to end the employment relationship (Sec. 32, Ibid.).
Termination of contract if the duration of service is not determined in the contract The kasambahay or the Er may terminate the contract anytime if the duration of service is not determined in the contract. Either the Er or the kasambahay may give notice to end the working relationship 5 days before the intended date of the termination of service.
Grounds for termination of contract by the kasambahay 1. 2.
3.
4.
5.
6.
Effect of unjust dismissal by the Er
Verbal or emotional abuse of the kasambahay by the Er or any member of the household; In human treatment including physical abuse of the kasambahay by the Er or any member of the household; Commission of a crime or offense against the kasambahay by the Er or any member of the household; Violation by the Er of the terms and conditions of the employment contract and other standards set forth under the law; Any disease prejudicial to the health of the kasambahay , the Er, or member/s of the household; and Other causes analogous to the foregoing (Sec. 33, R.A. 10361).
The kasambahay shall receive the following if he\she is unjustly dismissed by the Er: 1. Outright payment of earned wage; and 2. Indemnity benefit in the form of wage equivalent to 15 days work.
Liabilities of a kasambahay who leaves his/her Er without justifiable reason 1. 2.
Forfeiture of wage equivalent to 15 days work; and Reimbursement of the deployment expenses, if the employment contract is terminated within 6 months from employment.
Grounds for termination of contract by the Er
Right against inspection of his belongings
1.
The Er cannot inspect the belongings of the kasambahay . However, the Er and the kasambahay can agree in their employment contract that an inspection can be made before he/she leaves the household.
2. 3. 4.
Misconduct or willful disobedience by the kasambahay of the lawful order of the Er in connection with the former’s work; Gross or habitual neglect or inefficiency by the kasambahay in the performance of duties; Fraud or willful breach of the trust reposed by the Er on the kasambahay ; Commission of a crime or offense by the kasambahay against the person of the Er or any immediate member of the Er’s family;
Kasambahay desk officer In case of non-payment or underpayment of wage and other labor-related concerns, the kasambahay can seek assistance to the Kasambahay Desk Officer
83
Labor Law and Social Legislation situated in their respective barangays or the nearest DOLE field/provincial/regional office.
8.
Replacement of a kasambahay from a private employment
9.
The Er can demand from a private employment agency the replacement of a kasambahay within 1 month from the day the kasambahay reported for work on the following cases: 1.
2.
3.
Unlawful acts under the Batas Kasambahay 1. 2. 3.
The kasambahay is found to be suffering from an incurable or contagious disease, or mental illness as certified by a competent or government physician; The kasambahay abandons the job without justifiable cause, voluntarily resigns, commits theft or any other analogous acts prejudicial to the Er or his/her family; or The kasambahay is physically or mentally incapable of discharging the minimum requirements of the job, as specified in the employment contract.
4. 5. 6.
administrative fine ranging from Php 10,000 to Php 40,000 to be imposed by the DOLE Regional Offices.
Remedies for unlawful acts The aggrieved party may file the appropriate civil or criminal action before the regular courts.
After one month from receipt of the Er’s request and the private employment agency failed to provide a qualified replacement, the Er shall be entitled to a refund of 75% of the fees paid to the private employment agency.
Remedy for abused or exploited kasambahay The law mandates the conduct of immediate rescue of abused or exploited kasambahay by the municipal or city social welfare officer or a social welfare officer from DSWD, in coordination with the concerned barangay officials. The law sets out that crimes or offenses committed under the Penal Code and other criminal laws shall be filed with the regular courts.
Responsibilities of the private employment agency under the law
2. 3.
4.
5.
6.
7.
Employment of children below 15 years of age; Withholding of the kasambahay’s wages; Interference in the disposal of the kasambahay’s wages; Requiring kasambahay to make deposits for loss or damage; Placing the kasambahay under debt bondage; and Charging another household for temporarily performed tasks.
NOTE: Unlawful acts are punishable with an
Effect of failure of the private employment agency to provide a qualified replacement
1.
Cooperate with government agencies in rescue operations involving abused or exploited kasambahay ; and Assume joint and solidary liability with the Er for payment of wages, wage-related and other benefits, including monthly contribution for SSS, PhilHealth, and Pag-IBIG membership.
Ensure that the kasambahay is qualified as required by the Er; Secure the best terms and conditions of employment for the kasambahay ; Ensure that the employment agreement between the kasambahay and the employer stipulates the terms and conditions of employment and all the benefits in accordance with the IRR; Provide a pre-employment orientation briefing to the kasambahay and the Er about their rights and responsibilities in accordance with this IRR; Ensure that the kasambahay is not changed or required to pay any recruitment or placement fees; Keep copies of employment contracts and agreements pertaining to recruited kasambahay which shall be made available during inspections or whenever required by the DOLE or local government officials; Assist the kasambahay in filing his/her complaints or grievances against the Ers;
--Q: Albert, a 40-year old Er, asked his domestic helper, Inday, to give him a private massage. When Inday refused, Albert showed her Art. 141 of the Labor Code, which says that one of the duties of a domestic helper is to minister to the Er’s personal comfort and convenience. Is Inday’s refusal tenable? (2009 Bar Question)
A: YES. Inday’s refusal to give her Er a “private massage” is in accordance with law because the nature of the work of a domestic worker must be in connection with household chores. Massaging is not a domestic work.
----Q: NBC has a rest house and recreational facility in the highlands of Tagaytay City for the use of
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Labor Standards
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its top executives and corporate clients. The rest house staff includes a caretaker, two cooks and a laundrywoman. All of them are reported to the SSS as domestic or household Ees of the resthouse and recreational facility and not of NBC. Can NBC legally consider the caretaker, cooks and laundrywoman as domestic Ees of the rest house and not of NBC? (2000 Bar Question)
sold thereafter to the latter.
Er of a homeworker Includes any person, natural or artificial who, for his account or benefit, or on behalf of any person residing outside the country, directly or indirectly, or through an Ee, agent contractor, subcontractor or any other person:
A: NO , they are not domestic Ees. They are the Ees of NBC because the rest house and recreational facility are business facilities which are for use of NBC’s top executives and clients (Traders Royal Bank v. NLRC, G.R. No. 127864, December 22, 1999).
1.
--NOTE: A househelp, a laundrywoman, a driver, houseboy or gardener working in staffhouses of a company who attends to the needs of the company’s guests is not ahousehelper or domestic servant. He is an industrial worker who must be paid the industrial rate.
Duty of the Er in case he contracts with another in the performance of his work
EMPLOYMENT OF HOMEWORKERS Homeworkers
It shall be the duty of the Er to provide in such contract that the Ees or homeworkers of the contractor and the latter’s subcontractor shall be paid in accordance with the LC.
They are those who perform in or about his own home any processing or fabrication of goods or materials, in whole or in part, which have been furnished directly or indirectly, by an Er and sold thereafter to the latter.
Liability of the Er if the contractor or subcontractor fails to pay the wages or earnings of his Ees
NOTE: DO No. 05-92, DOLE (February 4, 1992) amended Rule XIV of the IRR.
Er shall be jointly and severally liable with the contractor or sub-contractor to the workers of the latter to the extent that such work is performed under such contract, in the same manner as if the Ees or homeworkers were directly engaged by the Er.
Industrial homework It is a system of production under which work for an employer or contractor is carried out by a homeworker at his/her home. Materials may or may not be furnished by the employer or contractor.
Right of industrial homeworkers to form labor organizations
It differs from regular factory production principally in that, it is a decentralized form of production where there is ordinarily very little supervision or regulation of methods of work.
DO No. 5(February 4, 1992), replacing Rule XIV of the IRR Book III of the LC, authorizes the formation and registration of labor organization of industrial homeworkers. It also makes explicit the Ers duty to pay and remit SSS, PHILHEALTH and ECC premiums (DO No. 05-92, Sec. 3)
Househelpers vs. Homeworkers HOUSEHELPERS
HOMEWORKERS
Minister to the personal needs and comfort of his Er in the latter’s home
Performs in or about his own home any processing or fabrication of goods or materials, in whole or in part, which have been furnished directly or indirectly, by an Er and
Delivers or causes to be delivered, any goods, articles or materials to be processed or fabricated in or about a home and thereafter to be returned or to be disposed of or distributed in accordance with his directions. Sells any goods, articles or materials to be processed or fabricated in or abut a home and then rebuys them after such processing or fabrication, either by himself or through some other person. (DO No. 05-92, Sec. 2[d])
Payment for Homework Immediately upon receipt of the finished goods and articles, the employer is required to pay the homeworker (DO No. 05-92, Sec. 6).
Conditions for payment of work
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The employer may require the homeworker to redo the work which has been improperly executed without having to pay the stipulated rate again.
NIGHT WORK (R.A. 10151) NOTE: RA No. 10151 inserted Chapter V (Art. 154-
An employer, contractor, or subcontractor need not pay the homeworker for any work which has been done on goods and articles which have been returned for reasons attributable to the fault of the homeworker(DO No. 05-92, Sec. 9).
161) under Book 3, Title III of the LC.
Night work
Prohibitions for homework
Any and all work rendered between 6 pm and 6 am (National Rice & Corn Corp. v. NARIC, 105 Phil 891).
The following shall be prohibited as homework:
Night worker
1. 2. 3.
Any employed person whose work requires performance of a substantial number of hours of night work which exceeds a specified limit. This limit shall be fixed by the SLE after consulting the workers’ representatives/labor organizations and Ers (LC, Chapter V, Art. 154 as amended by R.A. 10151).
Explosives, fireworks and similar articles; Drugs and poisons; and Other articles, the processing of which requires exposure to toxic substances (DO No. 05-92, Sec. 13).
Conditions for deduction from homeworker’s
earnings Persons covered by the provisions on night work under R.A. 10151
GR: The Er, contractor or subcontractor shall not make any deduction from the homeworker’s earnings for the value of materials which have been lost, destroyed, soiled or otherwise damage.
GR: All persons who shall be employed o r permitted
XPNs: Unless the following conditions are met:
XPN: Those employed in agriculture, stock raising,
1. 2. 3.
4.
or suffered to work at night.
fishing, maritime transport and inland navigation, during a period of not less than 7 consecutive hours, including the interval from midnight to 5 in the morning, to be determined by the SLE after consulting the workers’ representatives/labor organizations and Ers.
The homeworker is clearly shown to be responsible for the loss or damage; The Ee is given reasonable opportunity to show cause why deductions should not be made; The amount of such deduction is fair and reasonable and shall not exceed the actual loss or damages; and The deduction is made at such rate that the amount deducted does not exceed 20% of the homeworker’s earnings in a week (DO No. 0592, Sec. 8).
Right of the workers to health assessment At their request, workers shall have the right to undergo health assessment without charge and to receive advice on how to reduce or avoid health problems associated with their work:
--Q: Josie is the confidential secretary of the Chairman of the Board of the bank. She is presently on maternity leave. In an arrangement where the Chairman of the Board can still have access to her services, the bank allows her to work in her residence during her leave. For this purpose, the bank installed a fax machine in her residence, and gave her a cellphone and a beeper. Is Josie a homeworker under the law? Explain. (2000 Bar Question)
1. 2. 3.
Before taking up an assignment as a night worker; At regular intervals during such an assignment; and If they experience health problems during such an assignment which are not caused by factors other than the performance of night work.
Night workers who are certified as unfit for night work, due to health reasons, shall be transferred, whenever practicable, to a similar job for which they are fit to work. If such transfer to a similar job is not practicable, these workers shall be granted the same benefits as other workers who are unable to work, or to secure employment during such period (LC, Art. 155 ).
A: NO, she is actually an office worker. She is not an industrial homeworker who accepts work to be fabricated or processed at home for a contractor, which work, when finished, will be returned to or repurchased by said contractor (LC, Art. 155).
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Employability of women for night work
It is practical training on the job supplemented by related theoretical instruction involving a contract between an apprentice and an Er on an approved apprenticeable occupation
Measures shall be taken to ensure that an alternative to night work is available to women workers who would otherwise be called upon to perform such work: 1.
2.
Apprentice
Before and after childbirth, for a period of at least 16 weeks, which shall be d ivided between the time before and after childbirth; For additional periods, in respect of which a medical certificate is produced stating that said additional periods are necessary for the health of the mother or child: a. During pregnancy; b. During a specified time beyond the period, after childbirth is fixed pursuant to number 1, the length of which shall be determined by the DOLE after consulting the labor organizations and Ers.
Any worker who is covered by a written apprenticeship agreement with an individual Er or any of the entities recognized under the LC.
GR: Apprenticeship programs shall be primarily voluntary.
XPNs: Compulsory Apprenticeship: 1.
National security or economic development so demand, the President may require compulsory training; 2. Services of foreign technicians are utilized by private companies in apprenticeable trades (LC, Art. 70).
During the periods referred in Art. 158:
Apprenticeable occupation a.
b.
A woman worker shall not be dismissed or given notice of dismissal, except for just or authorized causes provided for in the Code that are not connected with pregnancy, childbirth and childcare responsibilities. A woman worker shall not lose the benefits regarding her status, seniority, and access to promotion which may attach to her regular night work position (LC, Art. 158).
Any trade, form of employment or occupation which requires more than three (3) months of practical training with theoretical instruction officially endorsed by the tripartite body and approved for apprenticeship by the TESDA.
On the job training (OJT) It is practical work experience through actual participation in productive activities given to or acquired by an apprentice (IRR, Book II, Rule VI, Sec. 2[h]).
Pregnant women and nursing mothers may be allowed to work at night
Highly technical industries
They are allowed if a competent physician, other than the company physician, shall certify their fitness to render night work, and specify, in the case of pregnant Ees, the period of the pregnancy that they can safely work (LC,Art. 158).
Highly technical industry refers to a trade, business, enterprise, industry, or other activity which utilizes the application of advanced technology (IRR, Book II, Rule VI, Sec. 2[j]).
Mandatory Facilities NOTE: Prior approval by TESDA (formerly DOLE) of 1.
2.
the proposed apprenticeship program is a condition sine qua non. Otherwise, an apprentice becomes a regular Ee (Nitto Enterprises v. NLRC, 248 SCRA 654).
Suitable first-aid facilities, including arrangements where such workers, where necessary, can be taken immediately to a place for appropriate treatment. Safe and healthful working conditions and adequate or reasonable facilities, i.e. sleeping or resting quarters in the establishment, and transportation from the work premises to the nearest point of their residence subject to exceptions and guidelines to be provided by the DOLE (LC, Art. 156).
Qualifications of an apprentice 1.
At least 15 years of age Those below 18 years of age may be eligible for apprenticeship only in non-hazardous occupations;
APPRENTICES AND LEARNERS
2. 3. 4.
Apprenticeship
87
Physically fit for the occupation Possess vocational aptitude and capacity Possess:
Labor Law and Social Legislation The ability to comprehend, and b. Follow oral and written instructions The company must have an apprenticeship program duly approved by the DOLE.
Apprenticeship must not exceed 6 months.
a.
5.
NOTE: 1.
NOTE: Trade and industry associations may recommend to the SLE appropriate educational requirements for different occupations.
2.
2 months/400 hours: Trades or occupations which normally require 1 year or more for proficiency 1 month/200 hours: Occupations and jobs which require more than 3 months but less than 1 year for proficiency (IRR, Book II, Rule VI, Sec. 19).
When occupation deemed hazardous 1.
2.
3.
4.
Status of an apprentice after the lapse of the period of apprenticeship
Nature of work exposes worker to dangerous environmental elemental contaminants or work conditions Workers are engaged in construction work, logging, fire fighting, mining, quarrying, blasting, stevedoring, deep-sea fishing, and mechanized farming Workers are engaged in the manufacture or handling of explosives and other pyrotechnic products Workers use, or are exposed to heavy or pow erdriven machinery or equipment.
He is deemed a regular Ee. He cannot be hired as a probationary Ee since the apprenticeship is deemed the probationary period.
Compensation of an apprentice GR: It starts at not less than 75% of the statutory minimum wage for the 1st 6 months (except OJT); thereafter, shall be paid in full minimum wage, including the full COLA.
XPN: Art. 72 of the LC provides that the SLE may
Ers of apprentices 1. 2.
authorize the hiring of apprentices without compensation whose training on the job is required: 1. By the school or; 2. By a training program curriculum or; 3. As requisite for graduation or 4. As requisite for board examination.
Only Ers in highly technical industries and Only in apprenticeable occupations approved by SLE
Employment status of apprentices They are contractual workers whose service depends on the term provided apprenticeship agreement. Thus, the obliged to employ the apprentice completion of his training.
Rules regarding apprenticeship agreements
length of for in the Er is not after the
Apprenticeship agreements, including the wage rates of apprentices, shall: 1.
Conditions for employment of an apprentice
2.
1.
3.
Should be an apprenticeable trade as determined by TESDA 2. Prior approval by the DOLE of the proposed apprenticeship program is a condition sine qua non before an apprenticeship agreement can be validly entered into (Nitto Enterprises v. NLRC, 248 SCRA 654).
4.
NOTE: One of the objectives of Title II (Training and Employment of Special Workers) of the LC is to establish apprenticeship standards for the protection of apprentices. An apprenticeship program should first be approved by the DOLE before an apprentice may be hired, otherwise a person hired will be considered a regular Ee. (Century Canning Corp. v. CA, G.R. No. 152894, August 17, 2007)
Conform to the rules issued by SLE. The period of Apprenticeship shall not exceed 6 months. Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no case shall start below 75% of the applicable minimum wage, may be entered into only in accordance with Apprenticeship programs duly approved by the SLE. The DOLE shall develop standard model programs of Apprenticeship (IRR, Book II, Rule VI, Sec. 18).
Person to sign the apprenticeship agreement 1. 2.
3.
Period of apprenticeship
The Er or his agent, or An authorized representative of any of the recognized organizations, associations or groups, and The apprentice.
Apprenticeship agreement with a minor
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Labor Standards
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An apprenticeship agreement with a minor shall be signed in his behalf by:
1.
1.
2.
2.
His parent or guardian, or if the latter is not available, An authorized representative of the DOLE.
Either party may terminate an agreement after the apprenticeship period but only for a valid cause. It may be initiated by either party upon filing a complaint or upon DOLE’s own initiative.
Party which appeal the decision of the authorized agency of the DOLE
Rules on working scholars There is no Er-Ee relationship between students on one hand, and schools, where there is written agreement between them under which the former agree to work for the latter in exchange for the privilege to study free of charge. (IRR, Book III, Rule X, Sec. 14).
It may be appealed by any aggrieved person to the SLE within 5 days from receipt of the decision.
NOTE: The decision of the SLE shall be final and executory.
Principle of Exhaustion of Administrative Remedies applied in case of breach of apprenticeship agreement
NOTE: The student is not considered an Ee. --Q: Padilla entered into a written agreement with Gomburza College to work for the latter in exchange for the privilege of studying in said institution. His work was confined to keeping clean the lavatory facilities of the school. One school day, he got into a fist fight with a classmate, Monteverde, as a result of which the latter sustained a fractured arm. Monteverdefiled a civil case for damages against him, impleading Gomburza College due to the latter's alleged liability as his Er. Under the circumstances, could Gomburza College be held
Exhaustion of Administrative Remedies is a condition precedent to the institution of an action for enforcing application of agreement.
Duty of the plant apprenticeship committee The plant apprenticeship committee shall have the initial responsibility for settling differences arising out of Apprenticeship agreement [IRR, Book II, Rule VI, Sec. 32(b)].
Learners
liable by Monteverde as Padilla’s employer?
(1997 Bar Question)
1.
A: NO. Gomburza College is not liable for the acts of
2.
Padilla because there is no Er-Ee relationship between them. As provided in the IRR of the LC, "there is no Er-Ee relationship between students on one hand, and schools, colleges, or universities on the other, where students work with the latter in exchange for the privilege to study free of charge, provided the students are given real opportunity, including such facilities as may be reasonable and necessary to finish their chosen courses under such arrangement."
3.
4. 5.
They are persons hired as trainees in semiskilled and other industrial occupations Which are non-apprenticeable and Which may be learned through practical training on the job in a relatively short period of time Which shall not exceed 3 months Whether or not such practical training is supplemented by theoretical instructions [IRR, Book II, Rule VII, Sec. 1(a)].
Employment of learners
---
Learners may be employed when: 1. No experienced worker is available 2. It is necessary to prevent curtailment of employment opportunities; and 3. Employment does not create unfair competition in terms of labor costs or impair or lower working standards.
Procedure for the termination of apprenticeship The party terminating shall: 1. Serve a written notice on the other at least 5 days before actual termination, Stating the reason for such decision; and 2. 3. A copy of said notice shall be furnished to the Apprenticeship Division concerned.
Contents of a learnership agreement Any Er desiring to employ learners shall enter into a learnership agreement with them, which agreement shall include:
Party who can terminate an apprenticeship agreement
89
Labor Law and Social Legislation 1. 2. 3.
4.
The names and addresses of the learners; The duration of the learnership period, which shall not exceed 3 months; The wages or salary rates of the learners which shall begin at not less than 75% of the applicable minimum wage; and A commitment to employ the learners if they so desire, as regular Ees upon completion of the Learnership.
Considered a regular Ee if preIn case termination of preoccurs after2 terminat months of ion of training and the contract dismissal is without fault of the Learner.
Employment of minors as learners
Coverage
A learner must be at least 15 years of age.
NOTE: Those below 18 years of age shall not work
List
in hazardous occupations. Written agreement
Persons who may employ learners Only Ers in semi-skilled and other industrial occupations which are non-apprenticeable may employ learners.
Pre-termination of regular employment
Learnership
contract;
Nature
Duration of training
Commitment to employ
Learnership
Apprenticeship Training in trades which are apprenticeable, that is, practical training on the job supplemented by related theoretical instruction for more than 3 months.
Max: 3 months
Min: 3 months Max: 6 months
With commitment to employ the learner as a regular Ee if he desires upon completion of learnership
No list Requires apprenticeship agreement
DEFINITION Persons with disability (PWD) Those whose earning capacity is impaired by: 1. Physical deficiency 2. Age 3. Injury 4. Disease 5. Mental deficiency Illness 6.
Learnership vs. Apprenticeship Training on the job in semi-skilled and other industrial occupation or trades which are nonapprenticeable and which may be learned thru practical training on the job in a relatively short period of time.
There is a list of learnable trades by TESDA Requires learnership agreement
Highly technical industries and only in industrial occupation
PERSONS WITH DISABILITY (R.A. 7277 as amended by R.A. 9442)
If training is terminated by the Er before the end of the stipulated period through no fault of the Learners, they are deemed regular Ees (IRR, Book II, Rule VII, Sec. 4). Provided, they have already been trained for 2 months.
BASIS
Semiskilled/Industrial occupations
Worker not considered as regular Ee.
Employment of PWD 1. 2.
When their employment is necessary to prevent curtailment of employment opportunities; and When it will not create unfair competition in labor costs or lower working standards (LC, Art. 79).
Employment period of PWD There is no minimum or maximum duration. It depends on the agreement but it is necessary that there is a specific duration stated .
Persons with disability can be a regular Ee Persons with disability can be a regular Ee if work is usually or necessarily desirable to the business (Bernardo v. NLRC, G.R No. 122917, July 12, 1999).
No commitment to hire
Persons who may employ persons with disability
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XPN: if the PWD, however is hired as a
Ers in all industries: Provided, the disability is not such as to effectively impede the performance of job operations in the particular occupations for which they are hired.
learner and employed in piece or incentiverate jobs during the training period, he shall be paid one hundred percent (100%) of the applicable minimum wage. (Chan, 2014)
Not all workers with a disability are considered disabled workers
PROHIBITIONS ON DISCRIMINATION AGAINST PERSONS WITH DISABILITY
The mere fact that a worker has a disability does not make him a disabled worker because his disability may not impair his efficiency or the quality of his work. If despite his disability he can still efficiently perform his work, he would be considered a qualified disabled worker entitled to the same treatment as qualified able-bodied workers (Bernardo v. NLRC, G.R. No. 122917, July 12, 1999).
The following constitutes acts of discrimination: 1.
2.
Limiting, segregating, or classifying a job applicant with disability in such a manner that adversely affects his work opportunities; GR: Using qualification standards, employment tests or other selection criteria that screen out or tend to screen out a PWD;
RIGHTS OF PERSONS WITH DISABILITY XPN: Such standards, tests or other selection Rights and privileges of PWD 1.
2.
3.
4.
5.
criteria are shown to be job-related for the position in question and are consistent with business necessity
Equal opportunity for employment - No PWD shall be denied access to opportunities for suitable employment. Five percent (5%) of all casual emergency and contractual positions in the DSWD, Health, Education and other government agencies, offices or corporations engaged in social development shall be reserved for PWDs. (Section 5, Chapter 1, Title II, RA 7277) Sheltered employment - The Government shall endeavour to provide them work if suitable employment for disabled persons cannot be found through open employment Apprenticeship - PWD may be hired as apprentices or learners if their disability is not such as to effectively impede the performance of job operations in the particular occupations for which they are hired (LC, Art. 81). Vocational rehabilitation - To develop the skills and potentials of disabled workers and enable them to compete in the labor market Vocational guidance and counselling
3.
Utilizing standards, criteria, or methods of administration that: a. Have the effect of discrimination on the basis of disability; or b. Perpetuate the discrimination of others who are subject to common administrative control
4.
Providing less compensation, by reason of his disability, that the amount to which a nondisabled person performing the same work is entitled; Favoring a non-disabled Ee over a qualified Ee with disabilty with respect to promotion, training opportunities, study and scholarship grants, solely on account of the latter’s disability; GR: Dismissing or terminating the services of an Ee with disability by reason of his disability
5.
6.
Wage Rate (2013 Bar)
XPN: the Er can prove that he impairs the satisfactory performance of the work involved to the prejudice of the business entity; provided, however, that the Er first sought to provide reasonable accommodations for persons with disability;
GR: Handicapped workers are entitled to not less than seventy-five percent (75%) of the applicable adjusted minimum wage. (Article 80, LC)
XPN: All qualified handicapped workers shall receive the full amount of the minimum wage rate prescribed herein pursuant to RA 7277 (Wage Order No. NCR-18, Effective October 4, 2013)
7.
If a PWD is hired as an apprentice or learner, he shall be paid not less than seventy-five percent (75%) of the applicable minimum wage.
91
Failing to select or administer in the most effective manner employment tests which accurately reflect the skills, aptitude or other factor of the applicant or employee with disabilty that such test purports to measure, rather than the impaired sensory manual or speaking skills of such applicant or employee, in any; and
Labor Law and Social Legislation 8.
Excluding PWD from membership in labor unions or similar organizations. (Section 32, Chapter I, Title III, RA 7277)
Loss due to injury or physical or mental defect or age.
INCENTIVES FOR EMPLOYERS
If hired, entitled to 75% of minimum wage.
Incentives of Er who are employing disabled workers 1.
Subject to definite periods of employment.
Entitled to an additional deduction, from their gross income, equivalent to 25% of the total amount paid as salaries and wages to disabled persons
Employable only when necessary to prevent curtailment of employment opportunity.
Provided , however, that such entities present proof as certified by the DOLE that disabled persons are under their employ Provided further, that the disabled Ee is accredited with the DOLE and the Department of Health as to his disability, skills and qualifications. 2.
Must get equal opportunity and no unfair competition.
undertakings whether for profit or not. (Art. 284, Labor Code)
Termination – broader concept that is used to denote dismissal or lay-off. May also imply complete severance of employer-employee relationship.
Dismissal – a form of ending an employeremployee relationship initiated either by the employee or employer.
e.g. just cause or authorized cause dismissal. Lay-off - termination initiated by the employer without prejudice to reinstatement or recall of an employee who has been temporarily separated brought about by adverse economic conditions.
Persons with Disability vs. Differently Abled
Covers only workers. Basis: loss/impairment of earning capacity.
No restrictions on employment.
Coverage: Applies to all establishments or
The financial incentive, if any, granted by law to SPQ Garments whose cutters and sewers in its garments-for-export operations are 80% staffed by deaf and deaf-mute workers is additional deduction from its gross income equivalent to 25% of amount paid as salaries to persons with disability. (2013 Bar) Basis: Magna Carta for Disabled Persons.
Earning capacity is impaired by age, or physical or mental deficiency or injury.
If qualified, entitled to all terms and conditions as qualified able-bodied person.
TERMINATION OF EMPLOYMENT
Private entities that improve or modify their physical facilities in order to provide reasonable accommodation for disabled persons shall also be entitled to an additional deduction from their net taxable income, equivalent to 50% of the direct costs of the improvements or modifications (R.A. 7277, Sec. 8).
Persons with Disability
Restriction due to impairment of mental/physical/ sensory defect.
EMPLOYER-EMPLOYEE RELATIONSHIP
Differently Abled
Existence of an employment relationship
Refers to all suffering from restriction of different abilities as a result of mental, physical or sensory impairment to perform an activity in the manner or within range considered normal for a human being. Covers all activities or endeavors. Basis: range of activity which is normal for a human being.
Employment relationship is determined by law and not by contract (Insular Life Assurance Co. Ltd. v. NLRC, G.R. No. 119930, March 12, 1998).
NOTE: Taxi or jeepney drivers under the “boundary” system are Ee’s of the taxi or jeepney owners/operators; also the passenger bus drivers and conductors (Jardin v. NLRC and Goodman Taxi, G.R. No. 119268, February 23, 2000).
Er-Ee relation is a question of law
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–
An employment contract which stipulates that there is no Er-Ee relationship between the parties is invalid. The existence of an Er-Ee relation is a question of law and being such, it cannot be made the subject of agreement (Tabas v. California Manufacturing Co., G.R. No. L-80680, January 26, 1989).
determined by facts and law and not by stipulation of the parties. It is axiomatic that the existence of an Er-Ee relationship cannot be negated by expressly repudiating it in the management contract and providing therein that the Ee is an independent contractor when the terms of the agreement clearly show otherwise. For the employment status of a person is defined and prescribed by law and not by what the parties say it should be. In determining the status of the management contract, the "four-fold test" on employment has to be applied (Insular Life Assurance Co.. Ltd. v. NLRC, G.R. No. 119930, March 12, 1998).
--Q: Romel is working as a pianist to in the restaurant of a hotel for almost 7 years. During his employment, he was given a time for his performance fixed at 7-10pm for 3-6x a week, the manager requires him to conform with the venue’s motif and is subjected to the rules and regulations of the employees of the hotel. His salary was given every night. His services were terminated as a cost-cutting measure. He filed for illegal dismissal. As a defense, the hotel management alleged that there can be no illegal dismissal as er-ee relationship is absent. Is the defense of the hotel tenable?
----Q: ASIA executed a 1-year contract with the Baron Hotel for the former to provide the latter with 20 security guards to safeguard the persons and belongings of hotel guests, among others. The security guards filled up Baron application form and submitted the executed forms directly to the Security Department of Baron. The pay slips of the security guards bore Baron's logo and showed that Baron deducted the amounts for SSS premiums, medicare contributions and withholding taxes from the wages of the secutiry guards. The assignments of security guards, who should be on duty or on call, promotions, suspensions, dismissals and award citations for meritorious services were all done upon approval by Baron's chief security officer. After the expiration of the contract with ASIA, Baron did not renew the same and instead executed another contract for security services with another agency. ASIA placed the affected security guards on "floating status" on "no work no pay" basis. Having been displaced from work, the ASIA security guards filed a case against Baron for illegal dismissal, OT pay, minimum wage differentials, vacation leave and sick leave benefits, and 13thmonth pay. Baron denied liability alleging that ASIA is the Er of the security guards and therefore, their complaint for illegal dismissal and payment of money claims should be directed against ASIA. Nevertheless, Baron filed a Third Party Complaint against ASIA.
A: YES. Romel is an employee of the hotel. The issue of whether or not an employer-employee relationship existed between petitioner and respondent is essentially a question of fact. The factors that determine the issue include who has the power to select the employee, who pays the employee’s wages, who has the po wer to dismiss the employee, and who exercises control of the methods and results by which the work of the employee is accomplished. Although no particular form of evidence is required to prove the existence of the relationship, and any competent and relevant evidence to prove the relationship may be admitted, a finding that the relationship exists must nonetheless rest on substantial evidence, which is that amount of relevant evidence that a reasonable mind might accept as adequate to justify a conclusion. (Legend Hotel v. Realuyo G.R. No. 153511 July 18, 2012).
----Q: Banco de Manila and the Ang Husay Janitorial and Pest Control Agency entered into an Independent Contractor Agreement with the usual stipulations specifically, the absence of ErEe relationship, and the relief from liability clauses. Can the bank, as a client, and the agency, as an independent contractor, stipulate that no Er-Ee relationship exists between the bank and the employees of the Agency who may be assigned to work in the Bank? Reason.
Is there an Er-Ee relationship between the Baron, on one hand, and the ASIA security guards, on the other hand? Explain briefly. (1999 Bar Question)
A: YES, they can stipulate provided that the A: YES. As a general rule, the security guards of a
relationship is job contracting. However the stipulation cannot prevail over the facts and the laws. The existence of Er-Ee relationship is
private security guard agency are the Ees of the latter and not of the establishment that has entered
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Labor Law and Social Legislation into a contract with the private security guard agency for security services. But under the facts in the question, Baron Hotel appear to have hired the security guards, paid their wages, have the power to promote, suspend or dismiss the security guards and the power of control over th em, in other words, the security guards were under orders of Baron Hotel as regard their employment. Because of the above-mentioned circumstances, Baron Hotel is the Er of the security guards.
these corporations were separate juridical entities. Thus, only the LBM Construction Corporation is the Er of Teofilo Lacson. The other corporation do not have any Er-Ee relations with Lacson. The case in question does not include any fact that would justify piercing the veil of corporate fiction of the other corporations in order to protect the rights of workers. In a case (Concept Builders, Inc. v. NLRC, G.R. No. 108734, May 29,1996) the SC ruled that it is a fundamental principle of corporation law that a corporation is an entity separate and distinct from its stockholders and from other corporations to which it may be connected. But this separate and distinct personality of a corporation is merely a fiction created by law for convenience and to promote justice. So, when the notion of separate juridical personality is used to defeat public convenience, justify wrong, protect fraud or defend crime, or is used as a device to defeat the labor laws, this separate personality of the corporation maybe disregarded or the veil of corporate fiction pierced.
----Q: Assuming that ASIA is the Er, is the act of ASIA in placing the security guards on "floating status" lawful? Why? A: YES. It is lawful for a private security guard agency to place its security guard on a "floating status" if it has no assignment to give to said security guards. But if the security guards are placed on a "floating status" for more than 6 months, the security guards may consider themselves as having been dismissed.
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----Q: Lacson was one of more than 100 Ees who were terminated from employment due to the closure of LBM Construction Corporation. LBM was a sister company of Lastimoso Construction,
FOUR- FOLD TEST Factors determining the existence of an employer-employee relationship The four – fold test (indicia of determination): 1. Selection and engagement of the employee; 2. Payment of wages; 3. Power of dismissal; and 4. Power of control (Azucena, Vol. I).
Inc. and RL Realty & Dev’t Corp. All th ree entities
formed what came to be known as the Lastimoso Group of Companies. The three corporations were owned and controlled by members of the Lastimoso family; their incorporators and directors all belonged to the Lastimoso family. The three corporations were engaged in the same line of business, under one management, and used the same equipment including manpower services. Lacson and his co-Ees filed a complaint with the Labor Arbiter against LBM, RL Realty and Lastimoso Construction to hold them jointly and severally liable for back wages and separation pay. Lastimoso Construction, Inc. RL Realty & Development Corporation interposed a Motion to Dismiss contending that they are juridical entitles with distinct and separate personalities from LBM Construction Corporation and therefore, they cannot be held jointly and severally liable for the money claims of workers who are not their employees. Rule on the motion to dismiss. Should it be granted or denied? Why? (1999 Bar Question)
Control test The control test assumes primacy in the overall consideration. There is an Er-Ee relationship when the person for whom the services are performed reserves the right to control not only the end achieved but also the manner and means used to achieve that end (Television and Production Exponents Inc. v. Servana, 542 SCRA 578).
Kinds of control exercised by an Er Not every form of control establishes employeremployee relationship. A demarcation line should be drawn between: (a) rules that merely serve as guidelines which only promote the result , and (b) rues that fix the methodology and bind or restrict the party hired to the use of such means or methods. Under the first category, there exists no employeremployee relationship. In the second category, it has the effect of establishing employer-employee relationship (Insular life v. NLRC, 179 SCRA 439; Consulta v. CA, G.R. No. 145443, March 18, 2005).
A: It is very clear that even if LBM Construction company, Lastimoso Construction Company, Inc. and RL Realty & Dev’t Corp. all belong to the Lastimoso family and are engaged in the same line of business under one management and used the same equipment including manpower services,
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NOTE: However, in certain cases the control test is
b.
not sufficient to give a complete picture of the relationship between the parties, owing to the complexity of such a relationship where several positions have been held by the worker. The better approach is to adopt the two-tiered test (Francisco v. NLRC, G.R. No. 170087, August 31, 2006). This two-tiered test would provide us with a framework of analysis, which would take into consideration the totality of circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate in this case where there is no written agreement or terms of reference to base the relationship on and due to the complexity of the relationship based on the various positions and responsibilities given to the worker over the period of the latter’s employment (Francisco v. NLRC, G.R. No. 170087, August 31, 2006).
----Q: Genesis entered into a Career’s Agent
Agreement with EmoLife Insurance Company, a domestic corporation engaged in insurance business. In the Agreement, it provides that the agent is an independent contractor and nothing therein shall be construed or interpreted as creating an Er-Ee relationship. It further provides that the agent must comply with three requirements: (1) compliance with the regulations and requirements of the company; (2) maintenance of a level of knowledge of the company's products that is satisfactory to the company; and (3) compliance with a quota of new businesses. However, EmoLife insurance company terminat ed Genesis’ services. Genesis filed an illegal dismissal complaint alleging therein that an Er-Ee relationship exists and that he was illegally dismissed. Is he an employee of the Insurance Company?
--Q: The Pizza Corporation (PizCorp) and Ready Supply Cooperative (RSC) entered into a "service agreement" where RSC in consideration of service fees to be paid by PizCorp's will exclusively supply PizCorp with a group of RSC motorcycle-owning cooperative members who will henceforth perform PizCorp's pizza delivery service. RSC assumes under the agreement --- full obligation for the payment of the salaries and other statutory monetary benefits of its members deployed to PizCorp. The parties also stipulated that there shall be no Er-Ee relationship between PizCorp and the RSC members. However, if PizCorp is materially prejudiced by any act of the delivery crew that violates
PizCorp’s
directives
and
Using the control test, the Er of the RSC members is PizCorp. According to the facts, the RSC members are supposed to make their deliveries in accordance with PizCorp directives and orders. In addition, the PizCorp can directly impose disciplinary sanction, including the power to dismiss the RSC members.
A: NO. Genesis is not an Ee of EmoLife Insurance Company. Generally, the determinative element is the control exercised over the one rendering the service. The concept of “control” in LC has to be compared and distinguished with “control” that must necessarily exist in a principal-agent relationship. The Er controls the Ee both in the results and in the means and manner of achieving this result. The principal in an agency relationship, e.g. insurance agent, on the other hand, also has the prerogative to exercise control over the agent in undertaking the assigned task based on the parameters outlined in the pertinent laws. In the present case, the Agreement fully serves as grant of authority to Genesis as EmoLife’s insurance agent. This agreement is supplemented by the company’s agency practices and usages, duly accepted by the agent in carrying out the agency. Foremost among these are the directives that the principal may impose on the agent to achieve the assigned tasks, to the extent that they do not involve the means and manner of undertaking these tasks. The law likewise obligates the agent to render an account; in this sense, the principal may impose on the agent specific instructions on how an account shall be made, particularly on the matter of expenses and reimbursements. To these extents, control can be imposed through rules and regulations without
orders,
PizCorp can directly impose disciplinary actions on, including the power to dismiss, the erring RSC member/s. a. Is the contractual stipulation that there is no Er-Ee relationship binding on labor officials? b. Based on the test/s for Er-Ee relationship, determine the issue of who is the Er of the RSC members. (2008 Bar Question) A: a. NO. The contractual stipulation that there is no Er-Ee relationship between PizCorp and the RSC members is not binding on labor officials because what determines the existence or nonexistence of employer-employee relationship is the actual factual situation between PizCorp and RSC members and not what is stipulated in the contract.
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Labor Law and Social Legislation the payrolls (Sevilla v. CA, G.R. Nos. 44182-3, April 15, 1988), submission of his name with the SSS, PAGIBIG, PhilHealth, otherwise known as the economic test, are also applied in determining Er-Ee relationship (Poquiz, Vol. I).
intruding into the labor law concept of control for purposes of employment (Gregorio Tongko v. ManuLife Insurance Company, G.R. No. 167622, June 29, 2010).
----Q: Ador is a student working on his master's degree in horticulture. To make ends meet, he takes on jobs to come up with flower arrangements for friends. His neighbor, Nico, is about to get married to Lucia and needs a floral arranger. Ador offers his services and Nico agrees. They shake hands on it, agreeing that Nico will pay Ador: P20,000.00 for his services but that Ador will take care of everything. As Ador sets about to decorate the venue, Nico changes all of Ador's plans and ends up designing the arrangements himself with Ador simply executing Nico's instructions. Is there an employer-employee relationship between Nico and Ador? (2015 Bar Question)
Proper standard for economic dependence The proper standard is whether the worker is dependent on the alleged Er for his continued employment in that line of business. The determination of the relationship between Er and Ee depends upon the circumstances of the whole economic activity, such as: 1. The extent to which the services performed are an integral part of the Er’s business 2. The extent of the worker’s investment in equipment and facilities; 3. The nature and degree of control exercised by the Er; 4. The worker’s opportunity for profit and loss; 5. The amount of initiative, skill, judgment, or foresight required for the success of the claimed independent enterprise; 6. The permanency and duration of the relationship between the worker and Er; and 7. The degree of dependency of the worker upon the Er for his continued employment in that line of business (Francisco v. NLRC, G.R. No. 170087, August 31, 2006).
A: YES.
With Ador’s simply executing Nico’s instruction, Nico, who now has control over Ador’s work, has become the employer of Ador. In Royale Homes Marketing Corp. v. Fidel Alcantara (G.R. No. 195190, July 28, 2014) the Supreme Court held that control is the most important determinant of employer-employee relationship.
--Two-tiered test 1.
2.
Application of the four-fold test and the twotiered test
The putative Er’s power to control the Ee with respect to the means and methods by which the work is to be accomplished (Four-fold test); The underlying economic realities of the activity or relationship (economic reality test).
Present Philippine law recognizes a two-tiered test. The first tier of the test is the four-fold test. The second tier is the economics of the relationship test. But the latter test is used if and only if the re is going to be harshness in the results because of the strict application of the four-fold test (Francisco v. NLRC, G.R. No. 170087, August 31, 2006).
The existence or non-existence of the Er-Ee relationship is commonly determined by examination of certain factors or aspects of the relationship, as follows:
KINDS OF EMPLOYMENT 1. 2. 3. 4.
The manner of selection and engagement of the putative employee; The mode of payment of wages; The presence or absence of the power of dismissal; and The presence or absence of a power to control the putative employee’s conduct (Hijos De F. Escano, Inc. v. NLRC, G.R. No. 59229. April 22, 1991I, i.e., the power to control the employee with respect to the means and methods by which the work is to be accomplished.
1. 2. 3. 4. 5. 6.
Probationary Regular Project Seasonal Casual Fixed-term
PROBATIONARY EMPLOYMENT Probationary employment
To bolster the payment of wages and control test, the existing economic conditions prevailing between the parties, like the inclusion of the Ee in
Employment where the Ee, upon his engagement: 1. Is made to undergo a trial period
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Labor Standards 2. 3.
Termination of Employment
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Sec.6(b)]. Probationary Ees may be dismissed for cause before end of the proba tionary period.
During which the Er determines his fitness to qualify for regular employment, Based on reasonable standards made known to the Ee at the time of engagement (IRR, Book VI, Rule I, Sec 6).
After the lapse of the probationary period (6 months), Ee becomes regular.
Characteristics of probationary employment
Purpose of the probation period
1. 2.
The purpose of the probation period is to aff ord the Er an opportunity to observe the fitness of a probationary Ee at work.
3.
It is an employment for a trial period; It is a temporary employment status prior to regular employment; It arises through a contract with the following elements: a. The Ee must learn and work at a particular type of work b. Such work calls for certain qualifications c. The probation is fixed d. The Er reserves the power to terminate during or at the end of the trial period e. And if the Ee has learned the job to the satisfaction of the Er, he becomes a regular Ee.
Extension of the probationary period beyond six months
Rules on probationary employment
The Er and Ee may validly agree to extend the probationary period beyond six months. Such an extension may be lawfully agreed upon, despite the restrictive language of Art. 281. A voluntary agreement extending the original probationary period to give the Ee a second chance to pass the probation standards constitutes a lawful exception to the statutory limit (Mariwasa Manufacturing, Inc. v. Leogardo, Jr., G.R. No. 74246 , January 26, 1989).
1.
NOTE: By voluntarily agreeing to such an extension,
2.
3.
Er shall make known to the Ee at the time he is hired, the standards by which he will qualify as a regular Ee; An Ee allowed to continue work after the probationary period shall be considered a regular Ee; During the probationary period, the Ee enjoys security of tenure; his services can only be terminated for just or authorized causes.
the Ee waived any benefit attaching to the completion of the period if he still failed to make the grade during the period of extension (Mariwasa Mfg. Inc. v. Hon. Leogardo, G.R. No. 74246, Januar y 26, 1989).
Instances when extension of probationary period is allowed
Period of probationary employment
Extension is allowed only when:
GR: It shall not exceed 6 months.
1. 2.
XPNs: 1. 2.
3.
4.
5.
Covered by an Apprenticeship or Learnership agreement stipulating a different period Voluntary agreement of parties (especially when the nature of work requires a longer period) The Er gives the Ee a second chance to pass the standards set (Mariwasa Manufacturing, Inc. v. Leogardo, Jr., G.R. No. 74246, January 26, 1989). When the same is required by the nature of the work, e.g. the probationary period set for professors, instructors and teachers is 3 consecutive years of satisfactory service pursuant to DOLE Manual of Regulations for Private Schools. When the same is established by company policy.
Nature of the job requires extensive training, or If it is a company policy that the period of probationary employment should be an extended period
NOTE: The extension of period should always be reasonable; Such that, the nature of the work so requires and that it is the amount of time required for an ordinary worker to learn the job.
Essence of the prohibition on double or successive probation The evil sought to be prevented is to discourage scheming Ers from using the system of double or successive probation to circumvent the mandate of the law on regularization and make it easier for them to dismiss their Ees (Holiday Inn Manila v. NLRC, G.R. No. 109114, September 14, 2003).
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Period of probation shall be reckoned from the date the Ee actually started working [IRR, Book VI, Rule I,
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Labor Law and Social Legislation Q: Michelle Miclat was employed on a probationary basis as marketing assistant by Clarion Printing House but during her employment she was not informed of the standards that would qualify her as a regular Ee. 30 days after, Clarion informed Miclat that her employment contract had been terminated without any reason. Miclat was informed that her termination was part of Clarion’s cost cutting measures. Is Miclat considered as a regular Ee and hence entitled to its benefits?
NOTE: In Mitsubishi Motors v. Chrysler Phils. Labor Union, G.R. No. 148738, June 29, 2004, the SC ruled in this wise:
“Applying Art. 13 of the NCC, the probationary period of 6-months consists of 180 days. This is in conformity with Art. 13(1) of the NCC. The number of months in the probationary period, 6, should then be multiplied by the number of days within a month, 30; hence, the period of 180 days. As clearly provided for the in last par. of Art. 13, in computing a period, the first day shall be excluded and the last day included. Thus, the 180 days commenced on May 27, 1996, and ended on Nov. 23, 1996. The termination letter dated Nov. 25, 1996 was served on Paras only on Nov. 26, 1996. He was, by then already a regular Ee of the company under Art. 281 of the LC.”
A: YES. In all cases of probationary employment, the Er shall make known to the Ee the standards under which he will qualify as a regular Ee at the time of his engagement. Where no standards are made known to the Ee at that time, he shall be deemed a regular Ee. In the case at bar, she was deemed to have been hired from day one as a regular Ee (Clarion Printing House Inc., v. NLRC, G.R. No. 148372, June 27, 2005).
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How to resolve the conflict between the Alcira and Mitsubishi Motors case:
Obligation of the Er to his probationary Ees 1. There is obligation on the part of Er to inform standards for regularization at the time of engagement. The failure to inform has the effect that upon the expiry of the probationary employment, with or without the period provided for in the contract, the worker is deemed to be regular.
2.
Statutory Construction – The latter case prevails (Mitsubishi Motors); or Rule more favorable to the Ee – Use the computation which would amount to granting the subject Ee regular employment status ( based on Constitutional and statutory provisions for the liberal interpretation of labor laws)
--Q: Middleby Phils. Corp. hired Alcira as engineering support services supervisor on a probationary basis for six months. Apparently
Instances when a probationary Ee is deemed to be a regular Ee
unhappy with Alcira’s performance, Middleby
1.
terminated his services. Alcira contends that he was already a regular Ee when his employment was terminat ed. According to Alcira’s computation, since Art. 13 of the NCC provides that 1 month is composed of 30 days, 6 months totaling 180 days, then his 180th day would fall on Nov. 16, 1996 making him a regular Ee before his termination. Is the contention of the petitioner in the computation of six months correct?
2.
If he is allowed to work after a probationary period (LC, Art. 281). If no standards, under which he will qualify as a regular Ee, are made known to him at the time of his engagement [IRR, Book VI, Rule I, Sec. 6(d)].
Grounds for employment 1. 2.
A:
NO, the computation of the 6-month probationary period is reckoned from the date of appointment up to the same calendar date of the 6 th month following. In short, since the number of days in each particular month was irrelevant, Alcira was still a probationary Ee when Middleby opted not to “regularize” him on Nov. 20, 1996 (Alcira v. NLRC, G.R. No. 149859, June 9, 2004).
terminating
a
probationary
Just/authorized causes When he fails to qualify as a regular Ee in accordance with reasonable standards made known by the Er to the Ee at the time of his engagement (ICMC v. NLRC, G.R. No. 72222, January 30, 1989; LC, Art. 281).
NOTE: If Pre-termination of probationary contract is due to the valid causes, the Er is not liable to pay the monetary value of the unexpired portion of the employment.
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While probationary Ees do not enjoy permanent status, they are afforded the security of tenure protection of the Constitution. Consequently, they cannot be removed from their positions unless for cause. Such constitutional protection, however, ends upon the expiration of the period stated in their probationary contract of employment. Thereafter, the parties are free to renew the contract or not (CSA v. NLRC, G.R. No. 87333, September 6, 1991).
probationary appointment, the hotel deprived Cruz of qualifying as a regular Ee with its concomitant rights and privileges (Manila Hotel Corp. v. NLRC, G.R. No. L-53453, January 22, 1986).
--Period of probationary employment of private school teachers The probationary employment of academic teaching personnel shall not be more than a period of 6 consecutive semesters or 9 consecutive trimesters of satisfactory service, as the case may be (The Manual of Regulations for Private Higher Education, Sec. 117).
Limitations on the Er’s power t o terminate a
probationary employment contract 1. 2.
The power must be exercised in accordance with the specific requirements of the contract; If a particular time is prescribed, the termination must be within such time and if formal notice is required, then that form must be used; The Er’s dissatisfaction must be real and in good faith, not feigned so as to circumvent the contract or the law; and There must be no unlawful discrimination in the dismissal.
NOTE: An academic teaching personnel, who does
NOTE: The probationary Ee is entitled to
not possess the minimum academic qualifications under Section 35 and 36 of the Manual of Regulations for Private Higher Education shall be considered as a part-time Ee, and therefore can not avail of the status and privileges of a probationary employment. A part-time Ee cannot acquire a regular permanent status, and hence, may be terminated when a qualified teacher becomes available (Manual of Regulations for Private Higher Education).
procedural due process prior to dismissal from service.
Full-time Teacher
3.
4.
--Q: Ron Cruz was employed as gardener by
One whose total working day is devoted to school, no other regular remunerative employment and is paid on a regular monthly basis regardless of the number of teaching hours.
Manila Hotel on “probation status” effective
Sept. 22, 1976. The appointment signed by Cruz provided for a 6-month probationary period. On Mar. 20, 1977, or a day before the expiration of the probationary period, Cruz was promoted to
In college, the normal teaching load of a full-time instructor shall be eighteen (18) hours a month.
lead gardener position. On the same day, Cruz’ position was “abolished” by Manila Hotel
The legal requisites for acquisition by a teacher of permanent employment
allegedly due to economic reverses or business recession, and to salvage the enterprise from imminent danger of collapse. Was Cruz illegally dismissed?
1. The teacher is a full-time teacher 2. Must have rendered 3 consecutive years of service 3. Such service must be satisfactory
A: Yes. There is no dispute that as a probationary Ee, Cruz had but limited tenure. Although on probationary basis, however, Cruz still enjoys the constitutional protection on security of tenure. During his tenure of employment, therefore, or before his contract expires, Cruz cannot be removed except for cause as provided for by law.
--Q: Colegio de San Agustin (CSA) hired Gela Jose as a grade school classroom teacher on a probationary basis for SY ‘84 – ‘85. Her contract was renewed for SY’s ‘85-‘86 and ‘86-‘87. On Mar. 24, ‘87, the CSA wrote the Gela that "it
would be in the best interest of the students and their families that she seeks employment in another school or business concern for next school year." Notwithstanding the said notice, the CSA still paid Gela her salary for April 15 to
What makes Cruz’ dismissal highly suspicious is that it took place at a time when he needs only but a day to be eligible as a regular Ee. That he is competent finds support in his being promoted to a lead gardener in so short span of less than 6 months. By terminating his employment or abolishing his position with but only one day remaining in his
May 15, 1987. On April 6, ‘87, Gela wrote the CSA
and sought reconsideration but she received no
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Labor Law and Social Legislation reply. Thereafter, she filed a complaint for illegal dismissal. Was Gela illegally dismissed?
Types of regular employment 1.
A: NO . The Faculty Manual of CSA underscores the completion of three years of continuous service at CSA before a probationary teacher acquires tenure. Hence, Gela cannot claim any vested right to a permanent appointment since she had not yet achieved the prerequisite 3-year period under the Manual of Regulation for Private Schools and the Faculty Manual of CSA.
2.
In the instant case where the CSA did not wish to renew the contract of employment for the next school year, Gela has no ground to protest. She was not illegally dismissed. Her contract merely expired (CSA v. NLRC, G.R No. 87333, September 6, 1991).
----Q: During their probationary employment, eight employees were berated and insulted by their supervisor. In protest, they walked out. The supervisor shouted at them to go home and never to report back to work. Later, the personnel manager required them to explain why they should not be dismissed from employment for abandonment and failure to qualify for the positions applied for. They filed a complaint for illegal dismissal against their Er. As the Labor Arbiter, how will you resolve the case? (2006 Bar Question)
An employment shall be deemed to be regular where the Ee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the Er, the provisions of written agreements to the contrary notwithstanding and regardless of the oral agreements of the parties [IRR, Book VI, Rule I, Sec. 5 (a)]. (Nature of work) Any Ee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular Ee with respect to the activity in which he is employed and his employment shall continue while such activity exists [IRR, Book VI, Rule I, Sec. 5 (b)]. (Years of service)
Regularization is not a management prerogative; rather, it is the nature of employment that determines it. It is a mandate of the law (PAL v. Pascua, G.R. No. 143258, August 15, 2003). Regular employment does not mean permanent employment. A probationary Ee becomes a regular Ee after 6 months. The service of a regular Ee may only be terminated for just/authorized causes. The practice of entering into employment contracts which would prevent the workers from becoming regular should be struck down as contrary to public policy and morals (Universal Robina Corp. v. Catapang, G.R. No. 164736, October 14, 2005).
A: As the LA, I will resolve the case in favor of the 8 probationary Ees due to the following: 1. Probationary Ees also enjoy security of tenure ( Biboso v. Victoria Milling, G.R.No. L-44360, March 31, 1977). 2. In all cases involving Ees on probationary status, the Er shall make known to the Ee at the time he is hired, the standards by which he will qualify for the positions applied for. 3. The filing of the complaint for illegal dismissal effectively negates the Er’s theory of abandonment (Rizada v. NLRC, G.R. No. 96982, September 21, 1999). 4. The order to go home and not to return to work constitutes dismissal from employment. 5. The 8 probationary Ees employment were terminated without just cause and without due process.
Tests to determine regular employment 1.
The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the Ee to the usual trade or business of the Er. The test is whether the former is usually necessary or desirable in the usual business or trade of the Er (De Leon v. NLRC, G.R. No. 70705, August 21, 1989).
NOTE: 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 (Highway Copra Traders v. NLRC, G.R. No. 108889, July 30, 1998).
In view of the foregoing, I will order reinstatement to their former positions without loss of seniority rights with full back wages, plus damages and attorney’s fees.
2.
--REGULAR EMPLOYMENT
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Also, the performance of a job for at least a year is sufficient evidence of the job’s necessity if not indispensability to the business. This is the rule even if its performance is not continuous and merely intermittent. The employment is considered regular, but only with respect to such activity and while such activity exists
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(Universal Robina Corp. v. Catapang, G.R. No. 164736, October 14, 2005).
La Tondeña’s business of manufac turing liquors; otherwise, there would be no need for the regular maintenance section of the company’s engineering department (De Leon v. NLRC, August 21, G.R. No. 70705, 1989).
The status of regular employment attaches to the casual Ee on the day immediately after the end of his first year of service. The law does not provide the qualification that the Ee must first be issued a regular appointment or must first be formally declared as such before he can acquire a regular status (Aurora Land Projects Corp. v. NLRC, G.R. No. 114733, January 2, 1997).
----Q: Honorio Dagui was hired by Doña Aurora Suntay Tanjangco in 1953 to take charge of the maintenance and repair of the Tanjangco apartments and residential bldgs. He was to perform carpentry, plumbing, electrical and masonry work. Upon the death of Doña Aurora Tanjangco in 1982, her daughter, Teresita Tanjangco Quazon, took over the administration of all the Tanjangco properties, and dismissed Dagui. Is Honorio Dagui a regular Ee?
Mode of compensation is not determinative of regular employment While the Ees mode of compensation was on a “per piece basis” the status and nature of their employment was that of regular Ees (Labor Congress of the Phils v. NLRC, G.R. No. 123938, May 21, 1998).
A: YES . The jobs assigned to Dagui as maintenance man, carpenter, plumber, electrician, and mason were directly related to the business of the Tanjangco’s as lessors of residential and a partment bldgs. Moreover, such a continuing need for his services by the Tanjangcos is sufficient evidence of the necessity and indispensability of his services to their business or trade.
NOTE: Seafarers cannot be considered as regular Ees. The contract which they sign every time they are hired governs their employment. Their employment is terminated when the contract expires. Their employment is fixed for a certain period of time, (Ravago v. Esso Eastern Maritime Ltd., G.R. No. 158324, March 15, 2005).
Dagui should likewise be considered a regular Ee by the mere fact that he rendered service for the Tanjangcos for more than one year, that is, beginning 1953 until 1982, under Doña Aurora; and then from 1982 up to June 8, 1991 under the daughter, for a total of 29 and 9 years respectively. Owing to Dagui's length of service, he became a regular Ee, by operation of law, one year after he was employed in 1953 and subsequently in 1982 (Aurora Land Projects Corp. v. NLRC, G.R. No. 114733, January 2, 1997).
In case of OFWs, Art280 of t he LC does not apply.
--Q: Moises was employed by La Tondeña at the maintenance section of its Engineering Department paid on a daily basis through petty cash vouchers. His work consisted mainly of painting company building and equipment and other odd jobs relating to maintenance. After a service of more than 1 year, Moises requested that he be included in the payroll of regular workers, instead of being paid through petty cash vouchers. Instead, La Tondeña dismissed Moises and claimed that Moises was contracted on a casual basis specifically to paint certain company buildings and that its completion
----Q: A total of 43 Ees who are deaf-mutes were hired and re-hired on various periods by Far East Bank and Trust Co. as money sorters and counters through a uniformly worded agreement called “Employment Contract for Handicapped Workers.” The company
terminated Moises’ employment. Can Moises be
considered as a regular Ee?
disclaimed that these Ees were regular Ees and maintained among others that they are a special class of workers, who were hired temporarily under a special employment arrangement which was a result of overtures made by some civic and political personalities to the Bank. Should the deaf-mute Ees be considered as regular Ees?
A: YES. The law demands that the nature and entirety of the activities performed by the Ee be considered. Here, the painting and maintenance work given to Moises manifests a treatment consistent with a maintenance man and not just a painter, for if his job was only to paint a building there would be no basis for giving him other work assignments in-between painting activities.
A: YES. The renewal of the contracts of the
It is not tenable to argue that the painting and maintenance work of Moises are not necessary in
handicapped workers and the hiring of others leads to the conclusion that their tasks were beneficial and necessary to the bank. It also shows that they
101
Labor Law and Social Legislation this agreement. This agreement cannot be amended or modified in any way except with the duly authorized consent in writing of both
were qualified to perform the responsibilities of their positions; their disability did not render them unqualified or unfit for the tasks assigned to them.
parties.” Is Efren Paguio a regular Ee of
Metromedia Times Corporation?
The Magna Carta for Disabled Persons mandates that a qualified disabled Ee should be given the same terms and conditions of employment as a qualified able-bodied person. The fact that the Ees were qualified disabled persons necessarily removes the employment contracts from the ambit of Art. 80. Since the Magna Carta accords them the rights of qualified able-bodied persons, hence, they are covered by Art. 280 of the LC. (Bernardo v. NLRC, G.R. No. 122917, July 12, 1999).
A: YES. He performed activities which were necessary and desirable to the business of the Er, and that the same went on for more than a year. He was an account executive in soliciting advertisements, clearly necessary and desirable, for the survival and continued operation of the business of the corp.
----Q: Coca-Cola Bottlers Phils, Inc., (CCBPI)
The corporation cannot seek refuge under the terms of the agreement it has entered with Efren Paguio. The law, in defining their contractual relationship, does so, not necessarily or exclusively upon the terms of their written or oral contract, but also based on the nature of the work of Efren has been called upon to perform. A stipulation in an agreement can be ignored as and when it is utilized to deprive the Ee of his security of tenure (Paguio v. NLRC, G.R. No. 147816, May 9, 2003)
engaged the services of the workers as “sales route helpers” for a period of 5 months. After 5
months, the workers were employed by the company on a day-to-day basis. According to the company, the workers were hired to substitute for regular route helpers whenever the latter would be unavailable or when there would be an unexpected shortage of manpower in any of its work places or an unusually high volume of work. The practice was for the workers to wait every morning outside the gates of the sales office of the company, if thus hired, the workers would then be paid their wages at the end of the day. Should the workers be considered as regular Ees of CCBPI?
----Q: Super Comfort Hotel employed a regular pool of “extra waiters” who are asked to report for duty when the Hotel’s volume of business is
beyond the capacity of the regularly employed waiters to undertake. Pedro has been an “extra waiter” for more than 10 years. He is also called
upon to work on weekends, on holidays and when there are big affairs at the hotel. What is
A: YES, the repeated rehiring of the workers and the
Pedro’s status as an Ee under the LC? (2008 Bar
continuing need for their services clearly attest to the necessity or desirability of their services in the regular conduct of the business or trade of the company. The fact that the workers have agreed to be employed on such basis and to forego the protection given to them on their security of tenure, demonstrate nothing more than the serious problem of impoverishment of so many of our people and the resulting unevenness between labor and capital (Magsalin & Coca-Cola v. N.O.W.M., G.R. No. 148492, May 9, 2003).
Question) A: Pedro has acquired the status of a regular Ee. Pedro was engaged to perform activities which are necessary or desirable in the usual business or trade of the Er. Moreover, Pedro has been “extra waiter” for more than 10 years. Under the law, any Ee who has rendered service for at least one year, whether such service is continuous or broken, shall be considered a regular Ee with respect to the activity in which he is employed and his employment shall continue while such activity exists ( LC, Art. 280).
----Q: Metromedia Times Corp. entered, for the fifth time, into an agreement with Efren Paguio, appointing him to be an account executive of the
----Q: Linda was employed by Sectarian University ( SU ) to cook for the members of a religious order who teach and live inside the campus. While performing her assigned task, Linda accidentally burned herself. Because of the extent of her injuries, she went on medical leave. Meanwhile, SU engaged a replacement cook. Linda filed a complaint for illegal dismissal, but her employer SU contended that Linda was not a
firm. He was to solicit advertisements for “The Manila Times.” The written contract between the parties provided that, “You are not an
employee of the Metromedia Times Corp. nor does the company have neither any obligations towards anyone you may employ, nor any responsibility for your operating expenses or for any liability you may incur. The only rights and obligations between us are those set forth in
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Labor Standards
Termination of Employment
–
regular employee but a domestic househelp. Decide. (2014 Bar Question)
Project employment Project employment is employment that has been fixed for a specific project or undertaking the completion for which has been determined at the time of engagement of the Ee [IRR, Book VI, Rule I, Sec. 5(a)]. The period is not the determining factor, so that even if the period is more than 1 year, the Ee does not necessarily become regular.
A: The employer's argument that Linda was not a regular employee has no merit. The definition of domestic servant or househelper contemplates one who is employed in the employer’s home to minister exclusively to the personal comfort and enjoyment of the employer’s family. The Supreme Court already held that the mere fact that the househelper is working in relation to or in connection with its business warrants the conclusion that such househelper or domestic servant is and should be considered as a regular employee. ( Apex Mining Co., Inc. v. NLRC, G.R. No. 94951, April 22, 1991). Here, Linda was hired not to minister to the personal comfort and enjoyment of her employer's family but to attend to other employees who teach and live inside the campus.
NOTE: Where the employment of a project Ee is extended long after the supposed project has been finished, the Ees are removed from the scope of project Ees and considered as regular Ees. Repeated hiring on a project-to-project basis is considered necessary and desirable to the business of the Er. The Ee is deemed regular (Maraguinot v. NLRC, G.R. No. 120969, July 22, 1998).
----Q: Don Don is hired as a contractual employee of CALLHELP, a call center. His contract is expressly for a term of 4 months. Don Don is hired for 3 straight contracts of 4 months each but at 2-week intervals between contracts. After the third contract ended, Don Don is told that he will no longer be given another contract because of "poor performance." Don Don files a suit for "regularization" and for illegal dismissal, claiming that he is a regular employee of CALLHELP and that he was dismissed without cause. You are the Labor Arbiter. How would you decide the case? (2015 Bar Question)
Indicators of project employment Either one or more of the following circumstances, among others, may be considered as indicators that an Ee is a project Ee (Hanjin v. Ibañez, G.R. No. 170181, June 26, 2008). a.
b.
The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable; Such duration, as well as the specific work/service to be performed, is defined in an employment agreement, and is made clear to the Ee at the time of hiring;
A: As Labor Arbiter, I will de cide the case in favor of
NOTE: Absent any other proof that the project
Don Don. Given the nature of Don Don’s work, which consist of activities usually or desirable in the usual business of CALLHELP, Don Don should be considered a regular employee. CALLHELP’s termination of Don Don’s service in the guise of “poor performance” is not valid. Whether for a probationary or regular employee, the requisites of dismissal on that ground do not appear to have been complied with by the employer here.
Ees were informed of their status as such, it will be presumed that they are regular Ees. c.
d.
e.
--PROJECT EMPLOYMENT Project A "project" has reference to a particular job or undertaking that may or may not be within the regular or usual business of the Er. In either case, the project must be distinct, separate and identifiable from the main business of the Er, and its duration must be determined or determinable (PAL v. NLRC, G.R. No. 125792, November 9, 1998).
f.
The work/service performed by the Ee is in connection with the particular project/ undertaking for which he is engaged; The Ee, while not employed and awaiting engagement, is free to offer his services to any other Er; The termination of his employment in the particular project/undertaking is reported to the DOLE Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed form on Ee’s termination, dismissal or suspensions; An undertaking in the employment contract by the Er to pay completion bonus to the project Ee as practiced by most construction companies.
Requisites in determining whether an Ee is a project Ee
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Labor Law and Social Legislation 1. 2.
Designation of named Ees as “Project Ees” The project Ee was assigned to carry out a specific project or undertaking, and 3. The duration and scope of which were specified at the time the Ee was engaged for that project (Imbuido v. NLRC, G.R. No. 114734, May 31, 2000). 4. The Ee must have been dismissed every after completion of his project or phase 5. Report to the DOLE of Ee’s dismissal on account of completion of contract [Policy Inst. No. 20; D.O. 19 (1997)].
specifically hired as project Ees for Leyte Geothermal Power Project. Consequently, upon the completion of the project or substantial phase thereof, the officers and the members of the Union could be validly terminated (Leyte Geothermal Power Progressive Employees Union v. Philippine National Oil Company, G.R. No. 170351, March 30, 2011).
--Q: Diosdado, a carpenter, was hired by Building Industries Corporation (BIC), and assigned to build a small house in Alabang. His contract of employment specifically referred to him as a "project employee," although it did not provide any particular date of completion of the project. Is the completion of the house a valid cause for
The following must concur to acquire a status of a regular Ee status:
--Requisites to acquire regular Ee status of project Ee or a member of work pool
1. 2.
the termination of Diosdado’s employment?
There is a continuous rehiring of project Ee’s even after cessation of a project; and The tasks performed by the alleged “project Ee” are vital, necessary and indispensable to the usual business or trade of the Er (D.M. Consunji, Inc. v. JAMIN, G.R. No. 192514, April 18, 2012).
(2009 Bar Question) The length of time during which the Ee was continuously re-hired is not controlling, but merely serves as a badge of regular employment. Enero and Maraguinot have been employed for a period of not less than 2 years and have been involved in at least 18 projects. These facts are the basis in considering them as regular Ees of the company.
A: YES. The completion of the house should be a valid cause for termination of Diosdado’s employment. Although the employment contract may not state a particular date, but if it did not specify that the termination of the parties’ employment relationship was to be on a “day certain” – the day when the phase of work would be completed – the Ee cannot be considered to have been a regular Ee (Filipinas Pre-Fabricated Building Systems, v. Puente, 453 SRA 820).
A work pool may exist although the workers in the pool do not receive salaries and are free to seek other employment during temporary breaks in the business, provided that the worker shall be available when called to report for a project. Although primarily applicable to regular seasonal workers, this set-up can likewise be applied to project workers insofar as the effect of temporary cessation of work is concerned. This is beneficial to both the Er and Ee for it prevents the unjust situation of “coddling labor at the expense of capital” and at the same time enables the workers to attain the status of regular Ees (Maraguinot v.
To satisfy due process requirements, under DOLE Department Order No. 19, Series of 1993, the employer is required to report to the relevant DOLE Regional Office the fact of termination of project Ees as a result of the completion of the project or any phase thereof in which one is employed.
----Q: The Er hires the Ees whereby their employment would automatically expire upon the completion of a project. When the employer Er proceeded to serve notices of termination of employment when the project was about to be completed, the Ees filed a notice of strike for mass termination. Is the action of the Ees correct?
NLRC, G.R. No. 120969, January 22, 1998).
“Day certain” rule It states that a project employment that ends on a certain date does not end on an exact date but upon the completion of the project.
A: NO. The litmus test to determine whether an Entitlement to separation pay
individual is a project Ee lies in setting a fixed period of employment involving a specific undertaking which completion or termination has been determined at the time of the particular Ee’s engagement. In this case, as previously adverted to, the officers and the members of the Union were
GR: Project Ees are not entitled to separation pay if their services are terminated as a result of the completion of project.
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XPN: If the projects they are working on have not
NOTE: For Seasonal Ees, their employment legally
yet been completed when their services are terminated; project Ees also enjoy security of tenure during the limited time of their employment (De Ocampo v. NLRC, G.R. No. 81077, June 6, 1990).
ends upon completion of the project or the season. The termination of their employment cannot and should not constitute an illegal dismissal (Mercado v. NLRC, G.R. No. 79869, September 5, 1991).
--Q: Roger Puente was hired by Filsystems, Inc., initially as an installer and eventually promoted to mobile crane operator, and was stationed at
One year duration on the job is pertinent in deciding whether a casual Ee has become regular or not, but it is not pertinent to a Seasonal or Project Ee. Passage of time does not make a seasonal worker regular or permanent (Mercado v. NLRC, G.R. No. 78969, September 5, 1991).
the company’s premises. Puente claimed in his
complaint for illegal dismissal, that his work was continuous and without interruption for 10 years, and that he was dismissed from his employment without any cause. Filsystems on its part averred that Puente was a project Ee in
During off-season, the relationship of Er-Ee is not severed; the Seasonal Ee is merely considered on LOA without pay. Seasonal workers who are repeatedly engaged from season to season performing the same tasks are deemed to have acquired regular employment (Hacienda Fatima v. National Federation of Sugarcane Workers-Food and General Trade, G.R. No. 149440, January 28, 2003).
the company’s various projects, and that after
the completion of each project, his employment was terminated, and such was reported to the DOLE. Is Roger Puente a regular Ee? A: NO. Puente is a project Ee. The contracts of
Seasonal Ees as regular Ees
employment of Puente attest to the fact that he was hired for specific projects. His employment was coterminous with the completion of the projects for which he had been hired. Those contracts expressly provided that his tenure of employment depended on the duration of any phase of the p roject or on the completion of the construction projects. Furthermore, the company regularly submitted to the labor dep’t reports of the termination of services of project workers. Such compliance with the reportorial requirement confirms that Puente was a project Ee.
Seasonal Ees can be considered regular Ees. The fact that Seasonal Ees do not work continuously for one whole year but only for the duration of the season does not detract from considering them in regular employment. Seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not separated from service in that period, but merely considered on leave until reemployed. If the Ee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems 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 considered regular, but only with respect to such activity and while such activity exists (Benares v. Pancho, G.R. No. 151827, April 29, 2005).
The mere rehiring of Puente on a project-to-project basis did not confer upon him regular employment status. “The practice was dictated by the practical consideration that experienced construction workers are more preferred.” It did not change his status as a project Ee [Filipinas Pre-Fabricated Building Systems (FILSYSTEMS), Inc. v. Puente, G.R. No. 153832, March 18, 2005].
--But one year duration on the job is pertinent in deciding whether a casual Ee has become regular or not, but it is not pertinent to a Seasonal or Project Ee. Passage of time does not make a seasonal worker regular or permanent (Mercado v. NLRC, G.R. No. 78969, September 5, 1991).
SEASONAL EMPLOYMENT Seasonal employment Employment where the job, work or service to be performed is seasonal in nature and the employment is for the duration of the season [IRR, Book VI, Rule I, Sec.5 (a)].
--Q: Carlito Codilan and Maximo Docena had been working for the rice mill for 25 years, while Eugenio Go, Teofilo Trangria and Reynaldo Tulin have been working for 22, 15, and 6 years respectively. The operations of the rice mill continue to operate and do business throughout the year even if there are only two or three
An employment arrangement where an Ee is engaged to work during a particular season on an activity that is usually necessary or desirable in the usual business or trade of the Er.
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Labor Law and Social Legislation harvest seasons within the year. This seasonal harvesting is the reason why the company considers the workers as seasonal employees. Is the company correct in considering the Ees as seasonal Ees?
A casual Ee is only casual for 1 year, and it is the passage of time that gives him a regular status (KASAMMA-CCO v. CA, G.R. No. 159828, April 19, 2006). The purpose is to give meaning to the constitutional guarantee of security of tenure and right to selforganization (Mercado v. NLRC, G.R. No. 79868, September 5, 1991).
A: NO. The fact is that big rice mills such as the one owned by the company continue to operate and do business throughout the year even if there are only two or three harvest seasons within the year. It is a common practice among farmers and rice dealers to store their palay and to have the same milled as the need arises. Thus, the milling operations are not seasonal. Finally, considering the number of years that they have worked, the lowest being 6 years, the workers have long attained the status of regular Ees as defined under Art. 280 (Tacloban Sagkahan Rice Mill v. NLRC, G.R. No. 73806, March 21, 1990).
--Q: Yakult Phils. is engaged in the manufacture of cultured milk. The workers were hired to cut cogon grass and weeds at the back of the factory building used by Yakult. They were not required to work on fixed schedule and they worked on any day of the week on their own discretion and convenience. The services of the workers were terminated by Yakult before the expiration of the 1 year period. May casual or temporary Ees be dismissed by the Er before the expiration of the 1-year period of employment?
--Entitlement to separation pay When the business establishment is sold which effectively terminates the employment of the seasonal Ees, the latter would be entitled to separation pay.
A: YES. The usual business or trade of Yakult Phils.is the manufacture of cultured milk. The cutting of the cogon grasses in the premises of its factory is hardly necessary or desirable in the usual business of the Yakult.
CASUAL EMPLOYMENT Casual employment It is an employment where the Ee is engaged in an activity which is not usually necessary or desirable in the usual business or trade of the Er, provided: such employment is neither Project nor Seasonal (LC, Art. 281). He performs only an incidental job in relation to the principal activity of the Er.
The workers are casual Ees. Nevertheless, they may be considered regular Ees if they have rendered services for at least 1 year. When, as in this case, they were dismissed from their employment before the expiration of the 1-year period they cannot lawfully claim that their dismissal was illegal (Capule, et al. v. NLRC, G.R. No. 90653, November 12, 1990).
NOTE: But despite the distinction between regular
---
and casual employment, every Ee shall be entitled to the same rights and privileges, and shall be subject to the same duties as may be granted by law to regular Ees during the period of their actual employment.
Project Ee vs. Casual Ee
An Ee is engaged to perform a job, work or service which is merely incidental to the business of the Er, and such job, work or service is for a definite period made known to the Ee at the time of engagement [IRR, Book Vi, Rule I, Sec. 5 (b)].
PROJECT EE
CASUAL EE
Employed for a specific project or undertaking the completion or termination of which is determined at the time of his engagement.
Engaged to perform a job, work or service which is incidental to the business of the Er and the definite period of his employment is made known to him at the time of his engagement. His continued employment after the lapse one year makes him a regular Ee.
Casual Ee becoming a regular Ee His work need not be incidental to the business of the Er and his employment may exceed one year without necessarily making him a regular Ee.
If he has rendered at least 1 year of service, whether such service is continuous or broken, he is considered as regular Ee with respect to the activity in which he is employed and his employment shall continue while such activity exists.
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Labor Standards Job is coterminous with a specific project or phase thereof. It is required that a termination report be submitted at the nearest employment office upon completion of the project or phase.
Termination of Employment
–
a.
No termination report required.
NO. Darrell was not a regular Ee but an Ee under
a fixed- term contract. While it can be said that the services he rendered were usually necessary and desirable to the business of the school, it cannot also be denied that his employment was for a fixed term of five years. The decisive determinant in fixed- term employment should not be the activities that the employee is called upon to p erform, but the day certain agreed upon by the parties for the commencement and termination of their employment relation (Brent School Inc. v. Zamora, G.R. No. 48494, February 5, 1990). b. NO. The decisive determinant in term employment is the day certain agreed upon by the parties for the commencement and termination of their employment relationship, a day certain being understood to be that which must necessarily come, although it may not be known when and not whether the work is usually necessary and desirable to the business of the Er.
FIXED TERM EMPLOYMENT Term employment A contract of employment for a definite period terminates by its own terms at the end of such period (Brent School v. Zamora, G.R. No. L-48494, February 5, 1990). Term employment is not a circumvention of the law on security of tenure if it follows the requisites laid down by the Brent ruling (Romares v. NLRC, G.R. No. 122327, August 19, 1998).
-----
Decisive determinant in term employment
Q: Does the “Reasonable Connection Rule” apply
It is the day certain agreed upon by the parties for the commencement and the termination of their employment relation.
A: NO. It should be apparent that this settled and
in fixed term employment for a fixed-term Ee to be eventually classified as a regular Ee? familiar notion of a period, in the context of a contract of employment, takes no account at all of the nature of the duties of the Ee; it has absolutely no relevance to the character of his duties as being usually necessary and desirable to the usual business of the Er, or not.
Fixed term employment It is an employment where a fixed period of employment was agreed upon: 1. 2.
----Q: Dean Jose and other Ees are holding
Knowingly and voluntarily by the parties, Without any force, duress or improper pressure being brought to bear upon the Ee and business of Er (Philips Semiconductor v. Fadriquela, G.R. No. 141717, April 14, 2004).
administrative positions as dean, dep’t heads
and institute secretaries. In the implementation of the Reorganization, Retrenchment and Restructuring program effective Jan. 1, 1984, Dean Jose and other Ees were retired but subsequently rehired. Their appointment to
--Q: Darrell was hired as an athletic director in Amorita School for a period of five years. As such, he oversees the work of coaches and related staff involved in intercollegiate or interscholastic athletic programs. However, he was not rehired upon the expiration of said period. Darrell questions his termination alleging that he was a regular Ee and could not be dismissed without valid cause.
their administrative positions as dean, dep’t
heads and institute secretaries had been extended by the company from time to time until the expiration of their last appointment on May 31, 1988. Were Dean Jose and other Ees illegally dismissed? A: NO. Petitioners were dismissed by reason of the
a. Is he a regular Ee? b. Will Rene automatically become a regular Ee if he is rehired by the school for another definite period of employment?
expiration of their contracts of employment. Petitioners' appointments as dean, dep’t heads and institute secretaries were for fixed terms of definite periods as shown by their respective contracts of employment, which all expired on the same date, May 31, 1988. The validity of employment for a fixed period has been acknowledged and affirmed
A:
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Labor Law and Social Legislation by the SC (Blancaflor v. NLRC, G.R. No. 101013, February 2, 1993).
either of the two is complied with (Neri v. NLRC, G.R. Nos. 97008-09, July 23, 1993).
----Q: Lina has been working as a steward with a Miami, U.S.A.-based Loyal Cruise Lines for the past 15 years. She was recruited by a local manning agency, Macapagal Shipping, and was made to sign a 10-month employment contract everytime she left for Miami. Macapagal Shipping paid for Lina’s round-trip travel expenses from Manila to Miami. Because of a food poisoning incident which happened during her last cruise assignment, Lina was not rehired. Lina claims she has been illegally terminated and seeks separation pay. If you were the Labor Arbiter handling the case, how would you decide? (2014 Bar Question)
Burden of proof to prove that he/it has substantial capital or investment rests on the contractor himself (Guarin v. NLRC, G.R. No. 86010, October 3, 1989) c.
d.
A: I will dismiss Lina's complaint. Lina is a contractual employee and the length of her employment is determined by the contracts she entered into. Here, her employment was terminated at the the expiration of the contract (Millares, et al. v. NLRC, 385 SCRA 306, 318 [2002]).
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There is no Er-Ee relationship exists between the owner of the project and the employees of the independent contractor (Baguio v. NLRC, G.R. Nos. 79004-08, October 4, 1991). The principal employer is considered only an indirect employer (PCI Automation Center, Inc. v. NLRC, G.R. No. 115920, January 29, 1996).
JOB CONTRACTING
Indirect or Statutory Employer is one who enters into a contract with an independent contractor for the performance of any work, task, job, or project not directly related to the employer’s business (Baguio v. NLRC, G.R. Nos. 79004-08, October 4, 1991).
Governing law: 1. Article 106-109, Labor Code 2. DOLE D.O. No. 18-A, s. 2011 3. DOLE D.O. No. 174, s. 2017 4. DOLE D.O. No. 01, s. 2017 (Clarifying D.O. No. 174)
Independent Contractor those who undertake “job-contracting.” They exercise independent employment, contracting to do a piece of work according to their own methods and without being subject to control of their employer except as to the result of their work (Villuga v. NLRC, G.R. No. 75038, August 23, 1993).
Contracting or subcontracting shall only be allowed if all the following circumstance concur: a.
b.
In performing the work farmed out, the contractor or subcontractor is free from the control and/or direction of the principal in all matters connected with the performance of the work except as to the result thereof; and The Seervice Agreement ensures compliance with all the rights and benefits for all the employees of the contractor or subcontractor under the labor laws. (Sec. 8, D.O. No. 174, s. 2017)
The contractor or subcontractor is engaged in a distinct and independent business and undertakes to perform the job or work on its own responsibility, acoording to its own manner and method; The contractor or subcontractor has substantial capital to carry out the job farmed out by the principal on his account, manner and method, investment in the form of tools, equipment, machineries, and supervision;
An employer or indirect employer may require the contractor or subcontractor to furnish a bond equal to the cost of labor under contract, on the condition that the bond will answer for the wages due the employees should the contractor or subcontractor, as the case may be, fail to pay the same (LC, Art 107).
NOTE: Where the employer fails to require the Substantial Capital refers to paid-up capital
posting of the bond, he must be liable for whatever the contractor may have incurred to his employees, without prejudice to its right of reimbursement from the contractor for whatever amount paid (Baguio v NLRC, G.R. Nos. 79004-08, Oct ober 4, 1991).
stocks/shares of at least PHP 5 Million in the case of corporations, partnerships and cooperatives. PHP 5 Million net worth in the case of a single proprietorship (Sec. 3, [L], DOLE D.O. No. 174 S. 2017).
In legitimate Job Contracting, the principal is jointly and severally liable with the contractor for the payment of unpaid wages (Arts. 106, 107 & 109, LC)
The law does not require both substantial capital and investments, it is sufficient that
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“Labor-only” contracting
b.
Labor-only contracting exists where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such persons are performing activities which a re directly related to the principal business of such employer (LC, Art. 106).
Contracting out a job, work or service through an inhouse agency is contrary to law or public policy (DOLE D.O. No. 174 s. 2017)
Job Contracting vs. Labor-only Contracting Job Contracting
The law prohibits “labor -only” contracting and creates an er-ee relationship between the er and the contractor’s workers for the protection of laborers (Poquiz, Labor Standards book, Vol. 1, 2012 edition; DOLE Department Order No. 18-A, S. 2011; DOLE Department Order No. 174, s. 2017).
“Activities necessary
directly related to the or desirable in the principal business of usual business or the employer” Governed by Art. 106 Refers to the standard used whether or not labor-only contracting exists
Labor-only Contracting
The er/principal is The er/principal is treated merely an indirect as direct employer of the by contractor’s employees in employer, operation of law, of all instances. (contractor = his contractor’s agent of the employer) employees. the law creates an the statute creates an erer-ee relationship ee relationship for a for a limited comprehensive purpose. purpose. The principal The principal becomes becomes solidarily solidarily liable with the liable. The liability contractor not only for however does not unpaid wages but also for extend to the all the rightful claims of payment of the employees under the backwages or Labor Code and ancillary separation pay of laws. employees who are illegally dismissed. Allowed by law Prohibited by law of Absence of substantial Presence substantial capital capital or investment. or investment.
A finding that a contractor is a “labor -only” contractor is equivalent to declaring that there is an ER-EE relationship between the principal and the employees of the “labor-only” contractor. (San Miguel Corp. vs. MAERC Integrated Systems. G.R. No. 144672; July 10, 2003).
“Activities which are
operates solely for the principal owning, managing or controlling it.
trade” Governed by Art. 280 Used to determine regular or casual employee
While the services may be considered directly related to the principal business of the employer; nevertheless, they are not necessary in the conduct of the principal business of the employer. (Neri v NLRC, G.R. Nos. 97008-09, July 23, 1993)
DOLE D.O. No. 174 s. 2017
“Labor-only” contractor is considered merely as an agent of the employer and is responsible to the employees of the “labor-only” contractor as if they had been directly employed by the employer. (LC, Art. 106)
Non-applicability of D.O. No. 174 s. 2017
The law in effect holds both the employer and the “labor-only” contractor responsible to the latter’s employees for the more effective safeguarding of the employee’s rights under the Labor Code. (Ecal v. NLRC, G.R. Nos. 92777-78, March 13, 1991; SMC v Aballa G.R. No. 149011, June 28, 2005)
1.
Issued by the Secretary of Labor and Employment implementing and interpreting Articles 106 to 109 of the LC. Effective 16 March 2017
D.O. 174, Series of 2017 is not applicable to trilateral relationship which characterizes contracting or subcontracting arrangement. Including:
2.
In-house agency refers to a contractor or subcontractor engaged in the supply of labor which: a. is owned, managed or controlled by the principal; and
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BPO/KPO. It does not contemplate to cover information-technology enabled services involving an entire or specific business process such as Business Process Outsourcing (BPO) o r Knowledge Process Outsourcing (KPO). (DOLE D.O. No. 01, s. 2017) Construction Industry. Licensing and exercise of regulatory powers over the construction industry is lodged with the Philippine Constructors Accreditation Board (PCAB) of the Construction Industry Authority of the
Labor Law and Social Legislation --Q: Luningning Foods engaged the services of Lamitan Manpower, Inc., a bona fide
Philippines (CIAP). 3.
4.
Private Security Agency. Except for the registration requirement as provided in DO No. 174, s. 2017, contracting or subcontracting arrangement in the private security industry shall be governed by DO No. 150, s. 2016. Other Contractual Relationships. DO No. 174. S. 2016 does not contemplate to cover contractual relationship such as in contract of sale or purchase, contract of lease, contract of carriage, contract growing/growership agreement, toll manufacturing, contract of management, operation and maintenance and such other contracts governed by the Civil Code and special laws.
independent contractor, to provide “tasters”
that will check onfood quality. Subsequently, these “tasters” joined the union of rank -and-file employees of Luningning and demanded that they be made regular employees of the latter as they are performing functions necessary and desirable to operate the company’s business. Luningning rejected the demand for regularization. On behalf of the “tasters”, the
union then filed a notice of strike with the Department of Labor and Employment ( DOLE ). In response, Luningning sought a restraining order from the Regional Trial Court ( RTC ) arguing that the DOLE does not have jurisdiction over the case since it does not have an employeremployee relationship with the employees of an independent contractor. If you were the RTC judge, would you issue a restraining order against the union? (2014 Bar Question)
Effect of Failure to Register by the Independent Contractor with DOLE: A Certificate of Registration is good for 3 years. Failure to register shall give rise to the presumption that the contractor is engaged in labor-only contracting (Section 14, D.O. No. 174, Series 2017).
A: YES. There is no labor dispute in the instant case. Since Lamitan Manpower is a bona fide independent contractor, there is no employee-employer relationship between the Luningning and the tasters.
Trilateral
relationship- relationship in a contracting or subcontracting arrangement where there is a contract for a specific job, work or service between the principal and the contractor, and a contract of employment between the contractor and its workers (DOLE D.O. No 18-A, S. 2011).
----Q: Linis Manpower, Inc. (LMI ) had provided janitorial services to thePhilippine Overseas Employment Administration ( POEA) since March 2009. Its service contract was renewed every three months. However, in the bidding held in June 2012, LMI was disqualified and excluded. In 2013, six janitors of LMI formerly assigned at POEA filed a complaint for underpayment of wages. Both LMI and POEA were impleaded as respondents. Should POEA, a government agency subject to budgetary appropriations from Congress, be held liable solidarily with LMI for the payment of salary differentials due to the complainant? Cite the legal basis of your answer. (2014 Bar Question)
Parties involved: 1.
Principal – any employer who puts out or farms out a job.
2.
3.
Contractor/Subcontractor – any person or entity engaged in a legitimate contracting or subcontracting arrangement. Contractual Employee - employed by a contractor or a subcontractor to perform or complete a job pursuant to the agreement between the latter and the principal.
Rights of Contractor’s Employees 1. 2.
3.
4. 5. 6.
Safe and healthful working conditions; Labor standards such as but not limited to service incentive leave, rest days, overtime pay, holiday pay, 13th month pay, and separation pay as may be provided in the Service Agreement or under the Labor Code; Retirement benefits under the SSS or retirement plans of the contractor, if there is any; Social security and welfare benefits; Self-organization, collective bargaining and peaceful concerted activities; and Security of tenure.
A: YES, but only to the extent of work performed under the contract. As what the s econd paragraph of Article 106 of the Labor Code provides. The fact that POEA is a government agency is of no moment. In U.S.A v. Ruiz (G.R. No. L-35645, May 22, 1985), the Supreme Court ruled that the State may be sued if the contract it entered into is pursuant to its proprietary functions.
----Q: Star Crafts is a lantern maker based in Pampanga. It supplies Christmas lanterns to
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stores in Luzon, Metro Manila, and parts of Visayas, within the months of August to November being the busiest months. Its factory employs a workforce of 2,000 workers who make different lanterns daily for the whole year. Because of increased demand, Star Crafts entered into a contractual arrangement with People Plus, a service contractor, to supply the former with I00 workers for only 4 months, August to November, at a rate different from what they pay their regular employees. The contract with People Plus stipulates that all equipment and raw materials will be supplied by Star Crafts with the express condition that the workers cannot take any of the designs home and must complete their tasks within the premises of Star Crafts. Is there an employeremployee relationship between Star Crafts and the 100 workers from People Plus? Explain. (2015 Bar Question)
The law does not require that Separation pay be paid. Non-compliance of due process; indemnity: PHP 30,000
Non-compliance of due process; indemnity: PHP 50,000
In case of regular employment, the requirement of substantive due process (Security of Tenure) is satisfied when the Er does not terminate the services of an Ee unless it is for a just cause or when authorized by the LC on Termination of Employment (LC, Art. 279).
JUST CAUSES Termination initiated by the Ee. Exercise of management prerogative, however must not be exercised with abuse of discretion.
A: YES. People Plus is a labor-only-contractor
Procedural requirements:
because it is not substantially capitalized. Neither does it carry on an independent business in which it uses its own investment in the form of tools, equipment, machineries, or work premises. Hence, it is just an agent or recruiter of workers who perform work directly related to the trade of Star Crafts. Since both the essential element and the conforming element of labor-only contracting are present, Star Crafts becomes the employer of the supplied worker. As principal, Star Crafts will always be an employer in relation to the workers supplied by its contractor. Its status as employer is either direct or indirect depending on whether the contractor is legitimate or not. Thus, even if People Plus were a legitimate job contractor, still Star Crafts will be treated as a statutory employer for purposes of paying the workers’ unpaid wages and benefits.
1. 2. 3.
Notice (two-notice rule) Hearing Judgment
Where the employer had a valid reason to dismiss the employee but has failed to comply with the due process requirement, the dismissal may be upheld but the employer will be penalized to pay an indemnity to the employee (Wenphil Corp. v. NLRC, G.R. No. 80587, February 8, 1989).
Just causes for termination 1.
---
2.
DISMISSAL FROM EMPLOYMENT
3.
No worker shall be dismissed except for a just or authorized cause provided by law and after due process (Both substantive and procedural due process must be afforded to the employee).
4.
Just Cause vs. Authorized Cause
5.
Just Cause Those initiated by the employee
The law requires that the Separation pay be paid.
Authorized Cause
Serious misconduct or willful disobedience by the Ee of the lawful orders of his Er or representative in connection with his work; Gross and habitual neglect by the Ee of his duties; Fraud or willful breach by the Ee of the trust reposed in him by his Er or duly organized representative; Commission of a crime or offense by the Ee against the person of his Er or any immediate member of his family or his duly authorized representative; Other causes analogous to the foregoing (LC, Art. 282).
NOTE: The burden of proving that the termination
Those initiated by the employer in the exercise of Management prerogative.
was for a valid or authorized cause shall rest on the Er [LC, Art. 277(b)].
1st cause: Serious misconduct
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Labor Law and Social Legislation It is an improper or wrong conduct; 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. To be serious within the meaning and intendment of the law, the misconduct must be of such grave and aggravated character and not merely trivial or unimportant (Villamor Golf Club v. Pehid, G.R. No. 166152, October 4, 2005).
this kind of gatherings, where tongues are more often than not loosened by liquor of other alcoholic beverages, that Ees freely express their grievances and gripes against their Ers. Ees should be allowed wider latitude to freely express their grievances and gripes against their Er. Ees should be allowed wider latitude to freely express their sentiments during these kinds of occasions which are beyond the disciplinary authority of the Er (Samson v. NLRC, G.R. No. 121035, April 12, 2000).
Elements of serious misconduct
----Q: Cheryll Leus was a non-teaching personnel employed in St. Scholastica’s College Westgrove (SSCW). Cheryll and her boyfriend conceived a child out of wedlock. SSCW dismissed her on the ground that her pregnancy out of wedlock constitutes disgraceful and immoral conduct and ran counter to the moral principles that SSCW stands for and teaches its students. Does pregnancy out of wedlock (without a legal impediment to marry) constitutes immoral conduct as a ground for dismissal contemplated by law?
1. 2. 3.
It must be serious or of such a grave and aggravated character; Must relate to the performance of the Ees’ duties; Ee has become unfit to continue working for the Er (Philippine Aeolus Automotive United Corp. v. NLRC, G.R. No. 124617, April 28, 2000).
Examples of serious misconduct: 1. 2. 3. 4. 5.
Sexual Harassment Fighting within the company premises Uttering obscene, insulting, or offensive words against a superior Falsification of time records Gross immorality
A: NO. It is an immoral conduct if such does not conform to what society generally views as respectable or moral. Substantial evidence must be presented to prove that such conduct is considered immoral. The two-step process to determine whether or not the conduct is immoral: 1) Consideration of the totality of the circumstances surrounding it; 2) assessment of said circumstances based on the prevailing norms of conduct. Premarital sexual relations between two consenting adults who have no impediment to marry each other, and, consequently, conceiving a child out of wedlock, does not amount to a disgraceful or immoral conduct (Leus v. SSCW, G.R. No. 187226, January 28, 2015).
--Q: Escando, upset at his transfer to the washer section, repeatedly uttered “gago ka” and threatened bodily harm to his superior Mr. Andres. Is the utterance of the obscene words and threats of bodily harm gross and willful misconduct? A: YES. The repeated utterances by Escando of obscene, insulting, or offensive words against a superior were not only destructive of the morals of his co-Ees and a violation of the company rules and regulations, but also constitute gross misconduct which is one of the grounds provided by law to terminate the services of an Ee (Autobus Workers Union v. NLRC, G.R. No. 117453, June 26, 1998).
A teacher engaging in an extra-marital affair with another married person is a serious misconduct, if not an immoral act. But a teacher falling in love with her pupil and, subsequently, contracting a lawful marriage with him, though there is a disparity in their ages and academic level cannot be considered as a defiance of contemporary social mores. (ChuaQua vs. Clave. G.R. No. 49549; August 30, 1990)
----Q: Samson made insulting and obscene utterances towards the General Manager saying,
----Q: Jose and Erica, former sweethearts, both worked as sales representatives for Magna, a multinational firm engaged in the manufacture and sale of pharmaceutical products. Although the couple had already broken off their relationship, Jose continued to have special feelings for Erica. One afternoon, Jose chanced upon Erica riding in the car of Paolo, a co-
“Si EDT bullshit yan, sabihin mo kay EDT yan”
among others during the Christmas party. Are the utterances towards the General Manager gross misconduct? A: The alleged misconduct of Samson when viewed in its context is not of such serious and grave character as to warrant his dismissal. Samson made the utterances and obscene gestures at an informal Christmas gathering and it is to be expected during
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employee and Erica's ardent suitor; the two were on their way back to the office from a sales call on Silver Drug, a major drug retailer. In a fit of extreme jealousy, Jose rammed Paolo's car, causing severe injuries to Paolo and Erica. Jose's flare up also caused heavy damage to the two company-owned cars they were driving. As lawyer for Magna, advise the company on whether just and valid grounds exist to dismiss Jose. (2013 Bar Question)
2.
--Q. Is refusal to a promotion by an Ee an act of insubordination or willful disobedience?
A: Jose can be dismissed for serious misconduct, violation of company rules and regulations, and commission of a crime against the employer’s representatives. For misconduct to be serious and therefore a valid ground for dismissal, it must be: of grave and aggravated character and not merely trivial or unimportant and connected with the work of the employee.
A. NO. There is no law that compels an Ee to accept a promotion for the reason that a promotion is in the nature of a gift or reward, which a person has the right to refuse. The exercise of the Ee of the right to refuse a promotion cannot be considered in law as insubordination or willful disobedience (PT&T disobedience (PT&T Corp. v. CA, G.R. No. 152057, September 29, 2003).
----Q: Assuming this time that Magna dismissed Jose J ose from employment for cause and you are the lawyer of Jose, how would you argue the position that Jose's dismissal was illegal? (2013 Bar Question)
----Q: A company vehicle was brought twice out of the company premises without authorization. In the first instance, the company opted not to implement any action against Homer and instead issued a memorandum reminding Homer as well as the security guards of the proper procedure. However, in the second instance the vehicle met an accident. Is Homer guilty of willful disobedience even though he was not the one who personally brought the company vehicle out of the company premises and was merely a passenger in the second incident?
A: The offense committed by Jose did not relate to the performance of his duties.For misconduct or improper behavior to be a just cause for dismissal, it (a) must be serious; (b) must relate to the performance of the employee’s duties; and (c) must show that the employee has become unfit to continue working for the employer.On the basis of the forgoing guidelines, it can be concluded that Paolo was not guilty of serious misconduct: Paolo was not performing official work at the time of the incident. (Lagrosas v. Bristol Myers Squibb, G.R. No. 168637/170684 [2008]) Additionally, there was no compliance with the rudimentary requirements of due process.
A: YES. A rule prohibiting Ees from using company vehicles for private purpose without authority from management is a reasonable one. When Homer rode the company vehicle, he was undoubtedly aware of the possible consequences of his act and taking into consideration his moral ascendancy over the security guards it was incumbent upon him not only to admonish them but also to refrain from using the company car himself. Homer is responsible for the unauthorized release of the vehicle of the company which is a violation of the rules and regulations of the company. Homer was already reminded of the proper procedure of the company (Family Planning Org. of the Phil. v. NLRC, G.R. No. 75907, May 23, 1992).
--Willful disobedience The employee’s disobedience must relate to substantial matters, not merely to trivial or unimportant matters. Disobedience to be considered willful must be resorted to without regard to its consequences. (DOLE Manual; BLTB Co. v CA 71 SCRA 470; Family Planning Org. of the Phil. Inc. v. NLRC, G.R. No. 75907, March 23, 1992)
Requisites that must concur in order that willful
The refusal to obey a valid transfer order constitutes willful disobedience of a lawful order of an employer. Employees may object to, negotiate and seek redress against employers for rules or orders that they regard as unjust or illegal. However, until and unless these rules or orders are
disobedience of the Er’s lawful orders are
considered just cause for termination: 1.
characterized by a wrongful and perverse attitude. The disobeyed orders, regulations, or instructions of the Er must be: Reasonable and lawful a. b. Sufficiently known to the Ee c. In connection with the duties which the Ee has been engaged to discharge (Cosep v. NLRC, G.R. No. 124966, June 16, 1998).
The Ees assailed conduct must have been willful or intentional, the willfulness being
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Labor Law and Social Legislation declared illegal or improper by competent authority, the employees ignore or disobey them at their peril. But transfer should not result to demotion of rank, which is tantamount to constructive dismissal. (Manila Pavilion Hotel vs.
Imply repeated failure to perform one’s duties over a period of time, depending upon the circumstance (JGB and Associates v. NLRC, GR No. 10939, March 7, 1996).
--Q: Antiola, as assorter of baby infant dress for Judy Phils., erroneously assorted and packaged 2,680 dozens of infant wears. Antiola was dismissed from employment for this infraction . Does the single act of misassortment constitute gross negligence?
Henry Delada. G.R. No. 189947; January 25, 2012).
----Q: Escobin’s group were security guards based
in Basilan. They were placed in floating status and were asked to report for reassignment in Metro Manila by PISI. Upon failure to report or respond to such directives they were ordered dismissed from employment by PISI for willful disobedience. Did the failure to report to Manila amount to willful disobedience?
A: NO. Such neglect must not only be gross but also habitual in character. Hence, the penalty of dismissal is quite severe considering that Antiola committed the infraction for the first time (Judy Phils. v. NLRC, G.R. No. 111934, April 29, 1998).
A: NO. The reasonableness of the rule pertains to
----Q: Does the failure in performance evaluations amount to gross and habitual neglect of duties?
the kind of character of directives and commands and to the manner in which they are made. In this case, the order to report to the Manila office fails to meet this standard. The order to report to Manila was inconvenient, unreasonable, and prejudicial to Escobin’s group since they are heads of families residing in Basilan and they were not given transportation money or assurance of availability of work in Manila (Escobin v. NLRC, G.R. No. 118159, April 15, 1998).
A: As a general concept “poor performance” is equivalent to inefficiency and incompetence in the performance of official duties. The fact that an Ee’s performance is found to be poor or unsatisfactory does not necessarily mean that the Ee is grossly and habitually negligent of his duties. Gross negligence implies a want or absence of or failure to exercise slight care of diligence or the entire absence or care. He evinces a thoughtless disregard of consequences without exerting any effort to avoid them (Eastern Overseas Employment Center Inc. v. Bea, G.R. 143023, November 29, 2005).
2nd cause: Gross negligence It implies a want or absence of or failure to exercise diligence that an ordinary prudent man would use in his own affairs. However, such neglect must not only be gross but must also be habitual in character (DOLE Manual)
----Q: Is inefficiency a just cause for dismissal?
It has been defined as the want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. (NBS vs. Court of Appeals. G.R. No. 146741; February 27, 2002)
A: YES. Failure to observe prescribed standards of work or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete the same within the allotted reasonable period, or by producing unsatisfactory results (Buiser v. Leogardo, G.R. No. L-63316, 1984). This ground is considered analogous to those enumerated under Art. 282. (Skippers United Pacific v. Magud, G.R. No. 166363, August 15, 2006).
--Degree of negligence as a just cause for termination: Gross and habitual negligence. An employee who was grossly negligent in the performance of his duty, though such negligence committed was not habitual, may be dismissed especially if the grossly negligent act resulted in substantial damage to the company. (LBC Express vs. Mateo. G.R. No. 168215; June 9, 2009).
----Q: Gamido was a quality control inspector of VH Manufacturing. Gamido was allegedly caught by the company Pres. Dy Juanco of sleeping and was dismissed from employment. Did Gamido’s act
Habitual neglect of duties
of sleeping on the job constitute a valid cause of dismissal?
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A: NO. Sleeping on the job as a valid ground for
Manese v. Jollibee Foods Corporation, G.R. No. 170454, October 11, 2012).
dismissal only applies to security guards whose duty necessitates that they be awake and watchful at all times. Gamido’s single act of sleeping further shows that the alleged negligence or neglect of duty was neither gross nor habitual (VH Manufacturing v. NLRC, G.R. No. 130957, January 19, 2000).
b.
custody of the Er’s money or property – To this 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 (Mabeza v. NLRC, G.R. No. 118506, April 18, 1997).
--Some forms of neglect of duty 1. 2.
Habitual tardiness and absenteeism Abandonment: a. Failure to report for work or absence without justifiable reason b. Clear intention to sever Er-Ee relationship manifested by some overt acts (Labor et. al v. NLRC, GR No. 110388, September 14, 1995).
2.
The act constituting the breach must be “work related” such as would show the Ee concerned to be unfit to continue working for the Er (Gonzales v. NLRC, G.R. No. 131653, March 26, 2001). 4. It must be substantial and founded on clearly established facts sufficient to warrant the Ee’s separation from employment (Sulpicio Lines Inc. v. Gulde, G.R. No. 149930, February 22, 2002). 5. Fraud must be committed against the Er or his representatives, e.g.: a. Falsification of time cards b. Theft of company property c. Unauthorized use of company vehicle
Any act, omission, or concealment which involves a breach of legal duty, trust, or confidence justly reposed and is injurious to another. Fraud must be committed against the employer or representative and in connection with the employee’s work. (Poquiz, 2012)
3.
Loss of trust and confidence as a just cause for termination: It applies only to cases involving: a. Ees occupying positions of trust and
confidence
(confidential
The loss of trust and confidence must be based on willful breach. A breach is willful if it is done intentionally, knowingly, and purposely without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly, or inadvertently (De la Cruz v. NLRC, G.R. No. 119536, February 17, 1997).
3rd cause: Fraud
1.
Ees routinely charged with the care and
and
managerial Ee’s)– Ee’s)– To this class belong managerial Ees, i.e., 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 Ees or effectively recommend such managerial actions
NOTE: The treatment of rank and file personnel and managerial Ees in so far as the application of the doctrine of loss of trust and confidence is concerned is different. As regards managerial Ees, such as Caoile, mere existence of a basis for believing that such Ee has breached the trust of his Er would suffice for his dismissal (Caoile v. NLRC, G.R. No. 115491, November 24, 1998).
Position of trust and confidence Is one where a person is entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employer’s property (Pandoy v. NLRC, G.R. No. 67664, May 20, 1992) and/or funds(Gonzales funds(Gonzales v NLRC, 355 SCRA 197)
Guidelines for the Doctrine of Loss of Confidence to apply 1.
NOTE: The mere existence of a basis for the loss of trust and confidence justifies the dismissal of the managerial Ee because when an Ee accepts a promotion to a managerial position or to an office requiring full trust and confidence, such Ee gives up some of the rigid guaranties available to ordinary workers (Cecilia T.
2. 3. 4.
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Loss of confidence should not be simulated (reasonable basis for loss of trust and confidence); Not used for subterfuge for causes which are improper and/or illegal and unjustified; Not arbitrarily asserted in the face of overwhelming evidence to the contrary; Must be genuine, not a mere afterthought to justify earlier action taken in bad faith; and
Labor Law and Social Legislation 5.
A: NO. Loss of confidence as a just cause for
The Ee involved holds a position of trust and confidence.
dismissal was never intended to provide Ers with a blank check for terminating their Ees. 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 bed sheet utilized by the hotel's guests at the end of her shift would not fall under any of these two classes of Ees for which loss of confidence, if ably supported by evidence, would normally apply (Mabeza v. NLRC, G.R. No. 118506, April 18, 1997).
NOTE: The breach of trust must rest on substantial grounds and not on the Er’s arbitrariness, whims, caprices, or suspicion; otherwise, the Ee would eternally remain at the mercy of the Er. I t should be genuine and not simulated, nor should it appear as a mere afterthought to justify earlier action taken in bad faith of a subterfuge for causes which are improper, illegal, or unjustified. It has never been intended to afford and occasion for abuse because of its subjective nature. There must, therefore, be an actual breach of duty committed by the Ee which must be established by substantial evidence (Dela Cruz v. NLRC, G.R. No. 119536, February 17, 1997).
----Q: Abelardo Abel was first hired by Philex Mining Corp. in January 1988. He was later assigned to the company’s Legal Department as a Contract Claims Asst., and held the position for 5 yrs. prior to his transfer to the Mine Engineering and Draw Control Department wherein he was appointed Unit Head. In 2002, he was implicated in an irregularity occurring in the subsidence area of the company’s mine site at Benguet. His co-worker Lupega, executed an
--Q: Rico has a temper and, in his work as Division Manager of Mata tag Insurance, frequently loses his temper with his staff. One day, he physically assaults his staff member by slapping slapping him. The staff member sues him for physical injuries. Matatag Insurance decides to terminate Rico, after notice and hearing, on the ground of loss of trust and confidence. Rico claims that he is entitled to the presumption of innocence because he has not yet been convicted. Comment on Matatag's action in relation to Rico's argument. (2015 Bar Question)
affidavit known as the “Subsidence Area Anomaly.” The incidents in Lupega’s affidavit
supposedly took place when Abel was still a Contract Claims Asst. at the company’s legal dep’t. The company’s officers promptly
launched an investigation. Abel attended the meetings but claimed that he was neither asked if he needed the assistance of counsel nor allowed to properly present his side. By memo, the company found Abel guilty of (1) fraud resulting in loss of trust and confidence and (2) gross neglect of duty, and was meted out the penalty of dismissal from employment. Was Abel validly dismissed for any of the causes provided for in Art.282 of the LC?
A: Matatag Insurance does not have to await the result of the criminal case before exercising its prerogative to dismiss. dismiss. Dismissal is not affected by a criminal case. Under the Three-fold Liability Rule, a single act may result in three liabilities, two of which are criminal criminal and administrative. To establish them, the evidence of the crime must amount to proof beyond reasonable doubt; whereas, the evidence of the ground for dismissal is substantial evidence only. In this regard, the company company has some basis already for withholding the trust it has reposed on its manager. Hence, Rico’s conviction need not precede the employee’s dismissal.
A: NO. The 1st requisite for dismissal on the ground of loss of trust and confidence is that the Ee concerned must be holding a position of trust and confidence. Abel was a contract claims assistant at the time he allegedly committed the acts which led to its loss of trust and confidence. It is not the job title but the actual work that the Ee performs. It was part of Abel’s responsibilities to monitor the performance of the company’s contractors in relation to the scope of work contracted out to them.
----Q: Mabeza, a chambermaid at Hotel Supreme was terminated from employment because of her refusal to sign an affidavit attesting to their Er’s compliance with minimum wage and other
labor standards. Mabeza filed a complaint for illegal dismissal against Hotel Supreme. As a defense, Hotel Supreme claimed that she abandoned her work and belatedly claimed loss of confidence as the ground for the dismissal of Mabeza because she stole some of the properties of her Er. Is loss of confidence a valid ground g round for dismissal of a hotel chambermaid?
The 2nd requisite is that there must be an act that would justify the the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary. The company’s evidence against Abel
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fails to meet this standard. Its lone witness, Lupega, did not support his affidavit and testimony during the company investigation with any piece of evidence at all. It could hardly be considered substantial evidence (Abel v. Philex Mining Corp., G.R. No. 178976, July 31, 2009).
intention to work. The law, however, does not enumerate what specific overt acts can be considered as strong evidence of the intention to sever the Ee-Er relationship (Sta. Catalina College v. NLRC, G.R. No. 144483, November 19, 2003).
----Q: Is failure to reach the monthly sales quota a valid ground for dismissal based on loss of trust and confidence?
--Q: Mejila, a barber at Windfield Barber Shop, had an altercation with a fellow barber which resulted in his subsequent turning over the duplicate keys of the shop to the cashier and took away all his belongings there from and worked at different barbershop. Mejila then filed an illegal dismissal case but did not seek reinstatement as a relief. Did Mejila commit abandonment?
in Art. 282 of the LC that loss of of A: NO. It is stated in trust and confidence is a ground for termination of an employee. However, it requires that such breach of trust be willful – whether it be done intentionally, knowingly, and purposely, without justifiable excuse. The court finds that failure to reach the monthly sales quota is not valid ground for loss of trust and confidence as this is not what has been contemplated in Art. 282(c) of the LC.
A: YES. Mejila’s acts such as surrendering the shop’s keys, not reporting to the shop anymore without any justifiable reason, his employment in another barber shop, and the filing of a complaint for illegal dismissal without praying for reinstatement clearly show that there was a concurrence of the intention to abandon and some overt acts from which it may be inferred that the Ee concerned has no more interest in working (Jo v. NLRC, G.R. No. 121605, February 2, 2000).
Several factors can be attributed to the low sales performance, which may not be compelled by the respondent. It being involuntary on his part the factors cannot be taken as a valid ground as they are not to be considered willful breach of trust, for they were not done intentionally, knowingly and purposely, without justifiable excuse (Norkis ( Norkis Distributors, Inc and Alex D. Buat v. Delfin S. Descallar, G.R. No. 185255, March 14, 2012) .
Two (2) factors must be present:
----Q: The Ees averred that they were underpaid and filed a complaint for money claims against the Er before the LA. As a result of their complaint, they were relieved from their posts and were not given new assignments despite the lapse of six months. months. On the other hand, hand, the Er maintains that the Ees were not dismissed but were merely transferred to a new post and voluntarily abandoned their jobs when they failed to report for duty in the new location. Upon termination, the Ee moved to file a joint complaint for illegal dismissal. Is there a valid indication of abandonment from work?
1.
A. NO. For abandonment of work to fall under Art.
-- Abandonment as a just cause for termination It means deliberate and unjustified refusal of an employee to resume his employment.
Requirements abandonment
for
a
valid
finding
of
The failure to report for work, or absence without valid or justifiable reason; and A clear intention to sever Er-Ee relationship, with the 2nd element as the more determinative factor, being manifested by some overt acts(Sta. acts(Sta. Catalina College v. NLRC, G.R. No. 144483, November 19, 2003).
How to prove abandonment
282 of the LC, as amended, as gross and habitual neglect of duties there must be the occurrence of two elements: first, there should be a failure of the Ee to report for works without a valid or justifiable reason and second, there should be a showing that the Ee intended to sever the Er-Ee relationship, the second element being the more determinative factor as manifested by overt acts.
Abandonment is proven when the Er must show that the Ee deliberately and unjustifiably refused to resume his employment without any intention of returning. There must be a concurrence of the intention to abandon and some overt acts from which an Ee may be deduced as having no more
The Er cannot simply conclude knowledge that an facto notified of a transfer when there is Ee is ipso facto notified no evidence to indicate that the Ee had knowledge of the transfer order. Hence, the failure of an Ee to report for work at the new location cannot be taken against him as an element of abandonment.
2.
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Labor Law and Social Legislation Past offenses
In addition to these tests for valid transfer, there should be proper and effective notice to the Ee concerned. It is the Er’s burden to show that the Ee was duly notified of the transfer. Verily, a n Er cannot reasonably expect an Ee to report for wo rk in a new location without first informing said Ee of the transfer. Alert security’s insistence on the sufficiency of mere issuance of the transfer order is indicative of bad faith on their part (Alert Security and Investigation Agency, Inc. et al v. Saidali Pasawilan, et al., G.R. No. 182397, September 14, 2011).
Previous offenses may be so used as a valid justification for dismissal from work ONLY if the infractions are related to the subsequent offense upon which the basis the termination of employment is decreed (Stellar Industrial Service Inc. v. NLRC, G.R. No. 117418. Jan. 24, 1996). The school failed to show that Chua took advantage of her position to court her student Chua. If the two eventually fell in love, despite the disparity in their ages and academic levels, this only lends substance to the truism that the heart has reasons of its own which reason does not know. But, yielding to this gentle and universal emotion is not to be so casually equated with immorality. The deviation of the circumstances of their marriage from the usual social pattern cannot be considered as a defiance of contemporary social mores (Chua-Qua v. Clave, G.R. No. L-49549 August 30, 1990).
--Guidelines to determine the validity of termination: Validity of termination per se is determined by compliance with two-notice rule, hearing, just or authorized cause. This is more or propriety of dismissal as penalty as oppose to reprimand, suspension, etc.
Doctrine of Incompatibility 4th cause: Commission of a crime or offense Where the Ee has done something that is contrary or incompatible with the faithful performance of his duties, his Er has a just cause for terminating his employment (Manila Chauffeur’s League v. Bachrach Motor Co., G.R. No. L-47071, June 29, 1940).
When an offense committed by the Ee against the person of his Er or any immediate member of his family or his duly authorized representative and thus, conviction of a crime involving moral turpitude is not analogous thereto as the element of relation to his work or to his Er is lacking.
AUTHORIZED CAUSES
NOTE: A criminal case need not be actually filed.
Authorized causes – initiated by the employer’s
Commission of acts constituting a crime itself is sufficient.
exercise of management prerogative, who shall be liable to pay separation pay as mandated by law. Does not usually require delinquency or culpability on the part of the employee.
5th cause: Analogous cases For an act to be included in analogous cases of just causes of termination, it must be due to the voluntary and/or willful act or omission of the Ee (Nadura v. Benguet Consolidated, G.R. No. L-17780, August 24, 1962).
Authorized causes of termination by the Er: 1. 2. 3.
Installation of labor-saving devices Redundancy Reorganization
e.g.: Violation of company rules and regulations 1.
4. 5.
Retrenchment Closing or cessation of operation of the establishment or undertaking Disease
2. 3. 4. 5. 6.
Drunkenness Gross inefficiency Illegally diverting Er’s products Failure to heed an order not to join an illegal picket Violation of safety rules and code of discipline
6.
1st cause: Installation of labor-saving devices Robotics is theSwitch from ‘men’ employment to ‘mechanical’ employment. Reduction of the number of workers in a company’s factory made necessary by the introduction of machinery in the manufacture of its products is justified. There can be no question as to
To fall within the ambit of “analogous cases” the act or omission must have an element similar to those found in the specific Just cause enumerated under Art. 282. (International Rice Research Institute v. NLRC, G.R. No. 97239, May 12, 1993).
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operation of its business (Wiltshire File Co., Inc. v. NLRC, G.R. No. 82249, February 7, 1991).
the right of the manufacturer to use new laborsaving devices with a view to affecting more economy and efficiency in its method of production. (Philippine Sheet Metal Workers’ Union vs. CIR. G.R. No. L-2028; April 28, 1949).
--NOTE: The losses which the company may suffer or is suffering may be proved by financial statements audited by independent auditors (Asian Alcohol Corporation v. NLRC, G.R. No. 131108, March 25, 1999).
2nd cause: Redundancy It is the superfluity in the performance of a particular work. It exists where the services of an Ee are in excess of what is reasonably demanded by the actual requirements of the enterprise (Wiltshire File Co., Inc. v. NLRC, G.R. No. 82249, February 7, 1991).
3rd cause: Reorganization An Er is not precluded from adopting a new policy conducive to a more economical and effective management, and the law does not require that the Er should be suffering financial losses before h e can terminate the services of the Ee on the ground of redundancy (DOLE Phil., Inc. v. NLRC, G.R. No. L55413, July 25, 1983).
The redundancy should not have been created by the Er.
Requisites of a valid redundancy: 1.
2.
3. 4.
Written notice served on both the Ees and the DOLE at least 1 month prior to separation from work Payment of separation pay equivalent to at least 1 month pay or at least 1 month pay for every year of service, whichever is higher Good faith in abolishing redundant position Fair and reasonable criteria in ascertaining what positions are to be declared redundant: a. Less preferred status, e.g. temporary Ee b. Efficiency and c. Seniority (DAP v. Court of Appeals. G.R. No. 165811; December 14, 2005).
4th cause: Retrenchment Cutting of expenses and includes the reduction of personnel; It is a management prerogative, a means to protect and preserve the Er’s viability and ensure his survival. To be an authorized cause it must be effected in good faith and for the retrenchment, which is after all a drastic recourse with serious consequences for the livelihood of the Ee’s or otherwise laid-off.
Causes of Retrenchment
--Q: Ong, a Sales Manager of Wiltshire File Co., Inc., was informed of the termination of his employment due to redundancy upon returning from a trip abroad. Ong maintains that there can be no redundancy since he was the only person occupying his position in the company.
1. 2. 3. 4.
Lack of Work Business Recession Fire Conservatorship
Requisites of a valid retrenchment: 1.
Is there redundancy even though Ong was the only one occupying his position? 2.
A: YES. Redundancy in an Er’s personnel does not necessarily or even ordinarily refer to duplication of work. The characterization of Ong’s services as no longer necessary or sustainable and therefore properly terminable, was an exercise of business judgment on the part of Wiltshire. Furthermore, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as over hiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. The Er has no legal obligation to keep in its payroll more Ees that are necessary for the
3. 4. 5.
Written notice served on both the Ee and the DOLE at least 1 month prior to the intended date of retrenchment Payment of separation pay equivalent to at least one month pay or at least 1/2 month pay for every year of service, whichever is higher Good faith Proof of expected or actual losses The Er used fair and reasonable criteria in ascertaining who would be retained among the Ees, such as status, efficiency, seniority, physical fitness, age, and financial hardship of certain workers (FASAP v. PAL, G.R. No. 178083, October 2, 2009).
Criteria in selecting Ees to be retrenched: There must be fair and reasonable criteria to be used in selecting Ees to be dismissed such as:
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Labor Law and Social Legislation 1. 2. 3.
Less preferred status; Efficiency rating; Seniority (Phil. Tuberculosis Society, Inc. v. National Labor Union, G.R. No. 115414, August 25, 1998).
burden of proving the contrary rests on the Society (Phil. Tuberculosis Society, Inc. v. National Labor Union, G.R. No. 115414, August 25, 1998).
----Q: Due to mounting losses, the former owners of Asian Alcohol Corporation sold its stake in the company to Prior Holdings. Upon taking control of the company and to prevent losses, Prior Holdings implemented a reorganization plan and other cost-saving measures including the retrenchment of 117 Ees some of which are members of the union and the majority held by non-union members. Some retrenched workers filed a complaint for illegal dismissal alleging that the retrenchment was a subterfuge for union busting activities.
“Last In First Out” (LIFO) Rule It applies in the termination of employment in the line of work. What is contemplated in the LIFO rule is that when there are two or more Ees occupying the same position in the company affected by the retrenchment program, the last one employed will necessarily be the first one to go (Maya Farms Ees’ Organization v. NLRC, G.R. No. 106256, December 28, 1994).
--Q: Is the seniority rule or "last in first out" policy to be strictly followed in effecting a retrenchment or redundancy program? (2001 Bar Question)
Was the retrenchment made by Asian Alcohol valid and justified? A: YES. Even though the bulk of the losses were suffered under the old management and continued only under the new management, ultimately the new management of Prior Holdings will absorb such losses. The law gives the new management every right to undertake measures to save the company from bankruptcy (Asian Alcohol Corp. v. NLRC, G.R. No. 131108, March 25, 1999).
A: NO. In Asian Alcohol Corp., the SC stated that with regard the policy of "first in, last out" in choosing which positions to declare as redundant or whom to retrench to prevent further business losses, there is no law that mandates such a policy. The reason is simple enough. A host of relevant factors come into play in determining cost efficient measures and in choosing the Ees who will be retained or separated to save the company from closing shop. In determining these issues, management plays a pre-eminent role. The characterization of positions as redundant is an exercise of business judgment on the part of the Er. It will be upheld as long as it passes the test of arbitrariness.
--Redundancy vs. Retrenchment REDUNDANCY Does not involve losses or the closing or cessation of operations of the establishment.
----Q: Philippine Tuberculosis Society, Inc. retrenched 116 Ees after incurring deficits amounting to 9.1 million pesos. Aside from retrenching its Ees, the company also implemented cost cutting measures to prevent such losses for increasing and minimizing it. The NLRC ruled that the retrenchment was not valid on the ground that the Society did not take the seniority rule into account in the selection of the retrenchment. Was the retrenchment done by the Society not valid for its failure to follow the criteria laid down by law?
RETRENCHMENT Involves losses, closures or cessation of operations of establishment or undertaking due to serious business losses or financial reverses.
Standards to Justify Retrenchment: 1. 2.
3.
A: NO. The Society terminated the employment of
4.
several workers who have worked with the Society for great number of years without consideration for the number of years of service and their seniority indicates that they had been retained for such a long time because of loyal and efficient service. The
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The losses expected should be substantial and not merely de minimis in extent; The substantial loss apprehended must be reasonably imminent. It must be reasonably necessary and likely to effectively prevent the expected losses; The employer should have taken other measures prior or parallel to retrenchment to forestall losses; The alleged losses if already realized, and the expected imminent losses must be proved by sufficient and convincing evidence. (Oriental Petroleum & Minerals Corp. vs. Fuentes. G.R. No. 151818. October 14, 2005)
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Termination of Employment
–
which case, it shall be based on the rate before its deduction. (Sec. 10, Rule 1, Book IV, Rules and Regulations Implementing the Labor Code)
NOTE: The phrase “to prevent losses” means that retrenchment or termination from the service of some Ees is authorized to be undertaken by the Er sometime before the anticipated losses are actually sustained or realized. Evidently, actual losses need not set in prior to retrenchment (Cajucom VII v. TP Phils Cement Corp., et al, G.R. No. 149090, February 11, 2005).
There is no obligation to pay separation pay: a. b.
5th cause: Closure Must be done in good faith and not for the purpose of circumventing pertinent labor laws.
When the closure of the business is due to serious business loss Where closure of business is by compulsion of law because closure of business is not attributed to Er’s will. (e.g.: the land where the building is situated was declared covered by the Comprehensive Agrarian Reform Law)
--Q: Galaxie Steel Corp. decided to close down because of serious business loses. It filed a written notice with the DOLE informing its intended closure and the termination of employment. It posted the notice of closure on the corporate bulletin board.
A change of business ownership does not create an obligation on the part of the new owner to absorb the employees of the previous owner, unless expressly assumed. Labor contracts being in personam, are not enforceable against a transferee. (Fernando v. Angat Labor Unit, 5 SCRA 248)
a. Does the written notice posted by Galaxie on the bulletin board sufficiently comply with the notice requirement under Art. 283 of the LC? b. Are Galaxie Ees entitled to separation pay?
Closure contemplated is a unilateral and voluntary act on the part of the Er to close the business establishment.
Requisites: 1.
2.
3. 4. 5.
A:
Written notice served on both the Ees and the DOLE at least 1 month prior to the intended date of closure Payment of separation pay equivalent to at least one month pay or at least 1/2 month pay for every year of service, whichever is higher, except when closure is due to serious business losses Good faith No circumvention of the law No other option available to the Er
a.
b.
Test for the validity of closure or cessation of establishment or undertaking
c.
The ultimate test of the validity of closure or cessation of establishment or undertaking is that it must be bona fide in character. And the burden of proving such falls upon the Er (Capitol Medical Center, Inc. v. Dr. Meris, G.R. No. 155098, September 16, 2005).
Payment of separation pay in case of closure Payment of separation pay is required only where closure is neither due to serious business losses nor due to an act of Government (North Davao Mining Corp v. NLRC, G.R. No. 112546, Mar. 13, 1996; NFL v. NLRC, G.R. No. 127718, March 2, 2000). Basis for computation: latest salary rate, unless reduced by the employer to circumvent the law, in
NO. In order to meet the purpose, service of the written notice must be made individually upon each and every Ee of the company. However, the Court held that where the dismissal is for an authorized cause, non-compliance with statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. Still, the Er should indemnify the Ee, in the f orm of nominal damages, for the violation of his right to statutory due process (Galaxie Steel Workers Union v. NLRC, G.R. No. 165757, October 17, 2006). NO. Galaxie had been experiencing serious financial losses at the time it closed business operations. Art. 283 of the LC governs the grant of separation benefits "in case of closures or cessation of operation" of business establishments "not due to serious business losses or financial reverses." Where, the closure then is due to serious business losses, the LC does not impose any obligation upon the Er to pay separation benefits (Galaxie Steel Workers Union v. NLRC, G.R. No. 165757, October 17, 2006).
----Q: Rank-and-file workers of SIMEX filed a petition for direct certification and affiliated with Union of Filipino Workers (UFW).
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Labor Law and Social Legislation Subsequently, 36 workers of the company’s “lumpia” department and 16 other workers
call for the closure of the company (Carmelcraft Corp. v. NLRC, G.R. No. 90634-35, June 6, 1990).
from other departments were effectively locked out when their working areas were cleaned out. The workers through UFW filed a complaint for unfair labor practices against the company. SIMEX then filed a notice of permanent shutdown/total closure of all units of operation in the establishment with the DOLE allegedly due to business reverses brought about by the enormous rejection of their products for export to the United States.
----Q: Is the transferee of the closed corporation required to absorb the Ees of the old corporation? A: GR: There is no law requiring a bona fide purchaser
Was the closure warranted by the alleged business reverses?
of assets of an on-going concern to absorb in its employ the Ee’s of the latter except when the transaction between the parties is colored or clothed with bad faith (Sundowner Dev’t Corp. v. Drilon, G.R. No. 82341, December 6, 1989).
A: NO. The closure of a business establishment is a
XPNs:
ground for the termination of the services of any Ee unless the closing is for the purpose of circumventing the provisions of the law. But, while business reverses can be a just cause for terminating Ees, they must be sufficiently proved. In this case, the audited financial statement of SIMEX clearly indicates that they actually derived earnings. Although the rejections may have reduced their earnings they were not suffering losses. There is no question that an Er may reduce its work force to prevent losses but it must be serious, actual and real otherwise this ground for termination would be susceptible to abuse by scheming Ers who might be merely feigning business losses or reverses in their business ventures to ease out Ees (Union of Filipino Workers v. NLRC, G.R. No. 90519, March 23, 1992).
1.
2.
Where the transferee was found to be merely an alter ego of the different merging firms (Filipinas Port Services, Inc. v. NLRC, G.R. No. 97237, August 16, 1991). Where the transferee voluntarily agrees to do so (Marina Port Services, Inc. v. Iniego, G.R. No. 77853, January 22, 1990).
----Q: Marikina Dairy Industries, Inc. decided to sell its assets and close operations on the ground of heavy losses. The unions alleged that the financial losses were imaginary and the dissolution was a scheme maliciously designed to evade its legal and social obligations to its Ees. The unions want the buyers of the corporation’s assets restrained to operate unless the members of the unions are hired to operate the plant under the terms and conditions specified in the collective bargaining agreements.
----Q: Carmelcraft Corporation closed its business operations allegedly due to losses of Php 1, 603.88 after the Carmelcraft Employees Union filed a petition for certification election. Carmelcraft Union filed a complaint for illegal lockout and ULP with damages and claim for employment benefits. Were the losses incurred by the company enough to justify closure of its operations?
Is the buyer of a company’s assets required to
absorb the Ees of the seller? A: NO. There is no law requiring that the purchaser of a company’s assets should absorb its Ees and the most that can be done for reasons of public policy and social justice was to direct that buyers of such assets to give preference to the qualified separated Ees in the filling up of vacancies in the facilities of the buyer (MDII Supervisors & Confidential Ees Ass’n (FFW) v. residential Assistant on Legal Affairs, G.R. Nos. L-45421-23, September 9, 1977).
A: NO. The determination to cease operations is a prerogative of management that is usually not interfered with by the State as no business can be required to continue operating at a loss simply to maintain the workers in employment. That would be a taking of property without due process of law which the Er has a right to resist. But where it is manifest that the closure is motivated not by a desire to avoid further losses but to discourage the workers from organizing themselves into a union for more effective negotiations with management, the State is bound to intervene. The losses of less than Php 2,000 for a corporation capitalized at Php 3 million cannot be considered serious enough to
--Closure vs. Retrenchment CLOSURE It is the fortune whereby complete
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RETRENCHMENT
reversal of Is the reduction of of the Er personnel for the there is a purpose of cutting down cessation of on costs of operations in
Labor Standards business operations to prevent further financial drain upon an Er who cannot pay anymore his Ees since business has already stopped.
One of the prerogatives of management is the decision to close the entire establishment or to close or abolish a department or section thereof for economic reasons, such as to minimize expenses and reduce capitalization.
Does not obligate the Er for the payment of separation package if there is closure of business due to serious losses.
Termination of Employment
–
NOTE: The requirement for a medical certification
terms of salaries and wages resorted to by an Er because of losses in operation of a business occasioned by lack of work and considerable reduction in the volume of business.
cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the Er of the gravity or extent of the Ee’s illness and thus defeat the public policy on the protection of labor (Manly Express v. Payong, G.R. No. 167462, October 25, 2005).
Procedure in terminating an Ee’s employment on the ground of disease
In the case of retrenchment, however, for the closure of a business or a department due to serious business losses to be regarded as an authorized cause for terminating Ees, it must be proven that the losses incurred are substantial and actual or reasonably imminent; that the same increased through a period of time; and that the condition of the company is not likely to improve in the near future. LC provides for the payment of separation package in case of retrenchment to prevent losses.
1.
The Er shall not terminate his employment unless: a. There is a certification by a competent public health authority b. That the disease is of such nature or at such a stage that it cannot be cured within a period of 6 months even with proper medical treatment.
2.
If the disease or ailment can be cured within the period, the Er shall not terminate the Ee’s employment but shall ask the Ee to take a leave. The Er shall reinstate such Ee to his former position immediately upon the restoration of his normal health (IRR, Book VI, Rule I, Sec.8).
Entitlement to reinstatement An Ee suffering from a disease is entitled to a reinstatement. Provided he presents a certification by a competent public health authority that he is fit to return to work (Cebu Royal Plant v. Deputy Minister, G.R. No. L-58639, August 12, 1987).
Medical Certificate as mandatory requirement The requirements of a medical certificate are mandatory. Only where there is a prior certification from a competent public authority that the disease afflicting the Ee sought to be dismissed is of such nature or at such stage that it cannot be cured within 6 months even with proper medical treatment that the latter could be validly terminated from his job (Tan v. NLRC, G. R. No. 116807, April 14, 1997).
6th cause: Disease Must be incurable within 6 months and the continued employment is prohibited by law or prejudicial to his health as well as to the health of his co-Ees with a certification from the public health officer that the disease is incurable within 6 months despite due to medication and treatment
NOTE: Termination from work on the sole basis of
Disease as a ground for dismissal
actual perceived or suspected HIV status is deemed unlawful (R.A. 8504 HIV/AIDS Law, Sec. 35).
When the Ee suffers from a disease, and: 1. His continued employment is prohibited by law or prejudicial to his health or to the health of his co-Ees (IRR, Book VI, Rule I, Sec.8). 2. With a certification by competent public health authority that the disease is incurable within 6 months despite due medication and treatment (Solis v. NLRC, GR No. 116175, October 28, 1996).
--Q: Anna Ferrer has been working as a bookkeeper at Great Foods, Inc., which operates a chain of high-end restaurants throughout the country, since 1970 when it was still a small eatery at Binondo. In the early part of the year 2003, Anna, who was already 50 years old, reported for work after a week-long
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Labor Law and Social Legislation vacation in her province. It was the height of the SARS scare, and management learned that the first confirmed SARS death case in the Phils, a “balikbayan” nurse from Canada, is a townmate of Anna. Immediately, a memorandum was issued by management terminating the services of Anna on the ground that she is a probable carrier of SARS virus and that her continued employment is prejudicial to the health of her co-Ees. Is the action taken by the Er justified? (2004 Bar Question)
Separation pay Separation pay refers to the amount due to the Ee who has been terminated from service for causes authorized by law such as the installation of laborsaving losses or the closing or cessation of operation of the establishment or undertaking.
Purpose for providing separation pay Separation pay intendeds to provide the Ee with the wherewithal during the period he is looking for another employment (Gabuay v. Oversea Paper Supply, G.R. No. 148837, August 13, 2004).
A: The Er’s act of terminat ing the employment of Anna is not justified. There is no showing that said Ee is sick with SARS, or that she associated or had contact with the deceased nurse. They are merely town mates. Furthermore, there is no certification by a competent public health authority that the disease is of such a nature or such a stage that it cannot be cured within a period of 6 months even with proper medical treatment (IRR, Book VI, Rule 1, Sec. 8).
Instances when Ee is entitled to separation pay 1. 2.
--Other authorized causes 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Total and permanent disability of Ee Valid application of union security clause Expiration of period in term of employment Completion of project in project employment Failure in probation Relocation of business to a distant place Defiance of return-to work-order Commission of Illegal acts in strike Violation of contractual agreement Retirement
3.
4.
5.
When the termination of employment is due to causes authorized by law (Art. 284, LC). When the severance of employment is caused by a disease, particularly when the Ee is found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health and of his co -Ees (LC, Art. 284). When the termination from service has been declared illegal, but his reinstatement to his former position is no longer feasible for some valid reason (Gabuay v. Oversea Paper Supply, G.R. No. 148837, August 13, 2004). In case of pre-termination of employment contract in job-contracting arrangement (D.O 18-02, Rules Implementing Art. 106 – 109, LC). Where separation pay is awarded as a measure of social or compassionate justice (PLDT v. NLRC, G.R. No. L-80609, August 23, 1988).
Steps required in termination of an Ee’s
employment for authorized causes: 1.
2. 3.
Rules on separation pay with regard to each cause of termination:
Written Notice to DOLE 30 days prior to the intended day of termination. Purpose: To enable it to ascertain the veracity of the cause of termination. Written notice to Ee concerned 30 days prior the intended date of termination. Payment of separation pay – Serious business losses do not excuse the Er from complying with the clearance or report required in Art. 283 of the LC and its IRR before terminating the employment of its workers. In the absence of justifying circumstances, the failure of the Er to observe the procedural requirements under Art. 284 of the LC taints their actuations with bad faith if the lay-off was temporary but then serious business losses prevented the reinstatement of respondents, the Er’s should have complied with the requirements of written notice.
CAUSE OF TERMINATION Automation
Redundancy
Retrenchment Closures or cessation of operation not due to serious
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SEPARATION PAY Equivalent to at least 1 month pay or at least 1 month pay for every year of service, whichever is higher Equivalent to at least 1 month pay or at least 1 month pay for every year of service, whichever is higher Equivalent to 1 month pay or at least ½ month pay for every year or service Equivalent to at least 1 month pay or at least 1 month pay for every year of service (if due to severe
Labor Standards business losses/financial reverses
Disease
financial losses, separation pay
Termination of Employment
–
necessary arrangements. In this case, notwithstanding the Ees knowledge of the cancellation of the distributorship agreement, they remained uncertain about the status of their employment when DAP failed to formally inform them about the redundancy (DAP Corp. v. CA, G.R. No. 165811, December 14, 2005).
no
Equivalent to at least 1 month pay or at least ½ month pay for every year of service, whichever is higher
---
NOTE: A fraction of at least 6 months shall be
SEPARATION PAY
considered 1 whole year.
Separation Pay prescribed under the Labor Code
There is no separation pay when the closure is due to an act of the Government.
1.
Purpose of the two notices served to the Ee and the DOLE 1 month prior to termination
When termination is due to authorized causes: a.
1.
2.
To give the Ees some time to prepare for the eventual loss of their jobs and their corresponding income, look for other employment and ease the impact of the loss of their jobs. To give the DOLE the opportunity to ascertain the veracity of the alleged cause of termination (Phil. Telegraph & Telephone Corp. v. NLRC, G.R. No. 147002, August 15, 2005).
Under Article 283 (Closure Establishment and Reduction of
of
Personnel), such as: i. Installation of labor-saving devices; ii. Redundancy; iii. Retrenchment; iv. Closing or cessation of business operations; and b. Under Article 284 (Disease as ground for Termination), when termination is due to the disease of an employee and his continued employent is prejudicial to himself or his co-Ees.
NOTE: Notice to both the Ees concerned and the DOLE are mandatory and must be written and given at least 1 month before the intended date of retrenchment – and the fact that the Ees were already on temporary lay-off at the time notice should have been given to them is not an excuse to forego the 1-month written notice (Sebuguero v. NLRC, G.R. No.115394, September 27, 1995).
2.
Under Article 286 (When Employment Not Deemed Terminated) - after the lapse of six (6) months in cases involving bona-fide suspension of the operation of business or undertaking or after the lapse of ‘floating status.’
--Q: DAP Corp. ceased its operation due to the termination of its distribution agreement with
3.
Int’l Distributors Corp. which resulted in its
need to cease its business operations and to terminate the employment of its Ees. Marcial et al. filed a complaint for illegal dismissal and for failure to give the Ees written notices regarding the termination of their employment. On the other hand, DAP claims that their Ees actually knew of the termination therefore the written notices were no longer required. Are written notices dispensed with when the Ees have actual knowledge of the redundancy?
Under Article 149 when the Er terminates without just cause - the services of a househelper prior to the expiration of the fixedterm employment. (Composite Enterprises, Inc. v. Caparoso. G.R. No. 159919, August 8, 2007)
NOTE: Under Batas Kasambahay, if the domestic worker is unjustly dismissed, the domestic worker shall be paid the compensation already earned plus the equivalent of fifteen (15) days work by way of indemnity. (Chan, 2014)
Separation Pay prescribed under RA 7610
A: The Ees’ actual knowledge of the termination of a company’s distributorship agreement with another company is not sufficient to replace the formal and written notice required by law. In the written notice, the Ees are informed of the specific date of the termination, at least a month prior to the date of effectivity, to give them sufficient time to make
That in case of violation its provisions has resulted in the death, insanity or serious physical injury to a child employed in such establishment or that the firm or establishment has employed a child for prostitution or obscene or lewd shows or if there is imminent danger to the life and limb of the working
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Labor Law and Social Legislation child in accordance with the occupational health and safety and health standards, the employer shall pay all employees affected by the closure their separation pay and other monetary benefits provided by law.(Section 21, Chapter, Department Order No. 65-04; Section 16, R.A . 7610, as amended by Section 6, R.A. No. 9231)
in accordance with Article 283 of the LC. That is all what the law requires. (Chan, 2014)
DUE PROCESS TWIN NOTICE REQUIREMENT Two-fold requirements of a valid dismissal for a just cause
Other prescription of Separation Pay by the Supreme Court 1. 2.
1. 2.
In lieu of reinstatement; and As ‘Financial Assistance’
hearing.
Twin requirements of procedural due process
When pronounced: A. Granted by the Er unilaterally by way of a voluntary policy or practice or through negotiated agreement such as CBA; B.
C.
(Art. 277(b), LC)
PLDT Doctrine - Separation Pay as a measure of Social Justice shall be allowed only if the Ee is validly dismissed: i. For causes other than serious misconduct; or ii. For causes that do not reflect on his moral character. (PLDT v. NLRC and Marilyn Abucay, G.R. No. L-80609, August 23, 1988) Toyota Doctrine – the commission of any of the grounds under Article 282 of the LC, would merit payment of financial assistance. (Toyota Motor Phils. Corp Workers Association v. NLRC, G.R. No. 158786, October 19, 2007)
XPN: All of the causes under Article 282
Notice – “Twin-notice rule” a. First notice – Necessity of first notice to inform the worker of the violation and preparation for the defense (Pre-notice) b. Last notice – To give the worker a notice of the Er’s final decision (Post notice)
2.
Hearing – Two fundamental rules: a. Hearing means ample opportunity to be heard b. What the law prohibits is total absence of opportunity to be heard i. If ample opportunity to be heard is given, there is no violation. ii. Position paper – A position paper is a valid alternative because not all cases are of litigation concerns. It should suffice in matters that only involve a question of law.
PDLT If the termination is based on all of the authorized causes, notices should be given to all Ees affected and the DOLE at least one month before the intended date of termination.
The grant of separation pay as a matter of equity to a valid dismissed Ee is not contingent on whether the ground relied upon is akin to serious misconduct or invokes willful or wrongful intent on the part of the Ee. (PAL, Inc. v. NLRC, G.R. No. 123294, October 20, 2010) E.
1.
When termination is based on just cause, notice should be given to the Ee applying the “twin notice rule”
applies, except analogous causes. (Ibid.) D. PAL Doctrine – Reversion to doctrine’s social justice exception.
Substantive – It must be for a just cause. Procedural – There must be notice and
Purpose of notice and hearing The requirement of notice is intended to inform the Ee concerned of the Er’s int ent to dismiss him and the reason for the proposed dismissal.
Solidbank Doctrine – Ees terminated due to authorized cause are not entitled to be paid additional separation pay by way of financial assistance. (Solidbank Corp. v. NLRC, G.R. No. 165951, March 30, 2010)
On the other hand, the requirement of Hearing affords the Ee the opportunity to answer his Er’s charges against him and accordingly to defend himself there from before dismissal is effected (Salaw v. NLRC, G.R. No. 90786, September 27, 1991).
The reason is that the Er is only required under the law to pay his Ees separation pay
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Co., Inc. v. Honeyline Tomboc, G.R. No. 147633, July 28, 2008).
Failure to comply with the requirement of the 2 notices makes the dismissal illegal. The procedure is mandatory (Loadstar Shipping Co. Inc. v. Mesano, G.R. No. 138956, August 7, 2003). And for noncompliance with the due process requirements in the termination of a person’s employment, a company is sanctioned to pay a certain amount as damages (King of Kings v. Mamac, G.R. No. 166208, June 29, 2007).
--Q: Caong, Tresquio and Daluyon were employed by Regualos under a boundary agreement, as drivers of his jeepneys. Later on, the three were barred by Regualos from driving the vehicles due to deficiencies in their boundary payments. Is the policy of suspending jeepney drivers pending payment of arrears in their boundary obligations reasonable?
--Q: Should there exist a valid and just cause, may the Er depart from giving theEe the right to be heard?
A: YES. The policy of suspending drivers who fail to remit the full amount of the boundary was fair and reasonable under the circumstances. Notice was given to the drivers who were getting lax in remitting their boundary payments. In fact, Regualos incurred a considerable amount of arrears. He had to put a stop to it as he also relied on these boundary payments to raise the full amount of his monthly amortizations on the jeepneys.
A: NO. Art. 277(b) of the LC mandates that an Er who seeks to dismiss an Ee must “afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires.” Expounding on this provision, the SC held that “ample opportunity” connotes every kind of assistance that management must accord the Ee to enable him to prepare adequately for his defense including legal representation (U-BIX Corp. v. Bravo, G.R. No. 177647, October 31, 2008).
Caong, Tresquio and Daluyon were not denied due process. Due process is not a matter of strict, rigid or formulaic process. The essence of due process is simply the opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one’s side or an opportunity to seek a reconsideration of the action or ruling complained of. A formal or trial-type hearing is not at all times and in all instances essential, as the due process requirements are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand (Caong v. Regualos, G.R. No. 179428, January 26, 2011).
--Procedure to be observed by the Er for the termination of employment based on any of the just causes for termination 1.
2.
A written noticeshould be served to the Ee specifying the ground/s for termination and giving the said Ee reasonable opportunity to explain. This first written notice must apprise the Ee that his termination is being considered due to the acts stated in the notice (Phil. Pizza Inc. v. Bungabong, G.R. No. 154315, May 9, 2005).
--HEARING; MEANING OF OPPORTUNITY TO BE HEARD
A hearing or conferenceshould be held during which the Ee concerned, with the assistance of counsel, if the Ee so desires, is given the opportunity to respond to the charge, providefor his evidence and present the evidence offered against him.
Coverage of opportunity to be heard The first written notice to be served on the Ees should contain the specific causes or grounds for termination against them, and a directive that the Ees are given the opportunity to submit their written explanation within a reasonable period. Under the Omnibus Rules, reasonable opportunity means every kind of assistance that management must accord to the Ees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the Ees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. To enable the Ees to intelligently prepare their explanation and
The “ample opportunity to be heard” under the LC is paramount over the “hearing or conference” standard in the IRR of LC 3.
A written notice of termination – If termination is the decision of the Er, it should be served on the Ee indicating that upon due consideration of all the circumstance, grounds have been established to justify his termination. Single notice of termination does not comply with the requirements of the law (Aldeguer &
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Labor Law and Social Legislation defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the Ees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the Ees.
proceedings, an opportunity to explain one’s side or an opportunity to seek a reconsideration of the action or ruling complained of (PLDT v. Bolso, 530 SCRA 550).
The burden of proof in termination cases The burden of proof rest upon the Er to show that the dismissal of the Ee is for a just cause, and failure to do so would necessarily mean that the dismissal is not justified, consonant with the constitutional guarantee of security of tenure.
After serving the first notice, the Ers should schedule and conduct a hearing or conference wherein the Ees will be given the opportunity to: 1. explain and clarify their defenses to the charge against them; 2. present evidence in support of their defenses; and 3. rebut the evidence presented against them by the management. During the hearing or conference, the Ees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement (King of Kings v. Mamac, G.R. No. 166208, June 29, 2007).
Due process refers to the process to be followed; burden of proof refers to the amount of proof to be adduced. In money claims, the burden of proof as to the amount to be paid the Ees rests upon the Er since he is in custody of documents that would be able to prove the amount due, such as the payroll.
Degree of proof required In illegal dismissal cases, the Er is burdened to prove just cause for terminating the employment of its Ee with clear and convincing evidence to give flesh and blood to the guaranty of s ecurity of tenure granted by the Constitution to Ees under the LC (Duty Free Phils. Services, Inc. v. Tria, G.R. No. 174809, June 27, 2012).
--Q: The illegal dismissal case was referred to the LA. Is a formal hearing or trial required to satisfy the requirement of due process?
--Q: Perez and Doria were employed by PT&T. After investigation, Perez and Doria were placed on preventive suspension for 30 days for their alleged involvement in anomalous transactions in the shipping section. PT&T dismissed Perez and Doria from service for falsifying documents. They filed a complaint for illegal suspension and illegal dismissal. The LA found that the suspension and the subsequent dismissal were
A: NO. Trial-type hearings are not required in labor cases and these may be decided on verified position papers, with supporting documents and their affidavits. The holding of a formal hearing or trial is discretionary with the labor arbiter and is something that the parties cannot demand as a matter of right. It is entirely within his authority to decide a labor case before him, based on the position papers and supporting documents of the parties, without a trial or formal hearing. The requirements of due process are satisfied when the parties are given the opportunity to submit position papers wherein they are supposed to attach all the documents that would prove their claim in case it be decided that no hearing should be conducted or was necessary (Shoppes Manila v. NLRC, 419 SCRA 354).
both illegal. The NLRC reversed the LA’s
decision, it ruled that Perez and Doria were dismissed for just cause, that they were accorded due process and that they were illegally suspended for only 15 days (without stating the reason for the reduction of the period of petitioners’ illegal suspension). On appeal,
the CA held that they were dismissed without due process. Were petitioners illegally dismissed?
NOTE: It is not necessary for the affiants to appear and testify and be cross-examined by the counsel for the adverse party. It is sufficient that the documents submitted by the parties have a bearing on the issue at hand and support the positions taken by them (C.F. Sharp & Co. v. Zialcita, 495 SCRA 387).
A: YES. The Er must establish that the dismissal is for cause in view of the security of tenure that Ees enjoy under the Constitution and the LC. PT&T failed to discharge this burden. PT&T’s illegal act o f dismissing Perez and Doria was aggravated by their failure to observe due process. To meet the requirements of due process in the dismissal of an Ee, an Er must furnish the worker with 2 written
--The essence of due process is simply an opportunity to be heard, or as applied to administrative
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–
notices: (1) a written notice specifying the grounds for termination and giving to said Ee a reasonable opportunity to explain his side and (2) another written notice indicating that, upon due consideration of all circumstances, grounds have been established to justify the Er's decision to dismiss the Ee (Perez. v. Phil. Telegraph and Telephone Company, G.R. No. 152048, April 29,
interpreted as extensive enough to cover actual hearing or conference. To this extent, Sec. 2(d), Rule I of the IRR of Book VI of the LC requiring a hearing and conference during which the Ee concerned is given the opportunity to respond to the charge is in conformity with Art. 277(b). Significantly, Sec. 2(d), Rule I of the IRR of Book VI of the LC itself provides that the so-called standards of due process outlined therein shall be observed “substantially,” not strictly. This is a recognition that while a formal hearing or conference is ideal, it is not an absolute, mandatory or exclusive avenue of due process (Perez v. PT&T, G.R. No. 152048, April 29, 2009).
2009).
--Guidelines in determining whether the penalty imposed on Ee is proper 1. 2. 3. 4. 5.
--Q: If the dismissal is for just or authorized cause but the requirement of notice and hearing were not complied with, should the dismissal be held illegal?
Gravity of the offense Position occupied by the Ee Degree of damage to the Er Previous infractions of the same offense Length of service (ALU-TUCP v. NLRC, G.R. No. 120450, February 10, 1999); PAL v. PALEA, G.R. No .L-24626, June 28, 1974)
A: NO. In Agabon v. NLRC, G.R. No. 158693, November 17, 2004, it was held that when dismissal is for just or authorized cause but due process was not observed, the dismissal should be upheld.
--Q: Felizardo was dismissed from Republic Flour Mills-Selecta Ice Cream Corporation for dishonesty and theft of company property for bringing out a pair of boots, 1 piece aluminum container and 15 pieces of hamburger patties. Is the penalty of dismissal commensurate with the offense committed?
The Er, however, should be held liable for noncompliance with the procedural requirements of due process in the form of damages.
--Procedural Due Process under Art. 282-284 of the LC as applied in the Agabon Case Art. 282 Art. 283 Art. 284
A: There is no question that the Er has the inherent right to discipline its Ees which includes the right to dismiss. However, this right is subject to the police power of the State. As such, the Court finds that the penalty imposed upon Felizardo was not commensurate with the offense committed considering the value of the articles he pilfered and the fact that he had no previous derogatory record during his 2 years of employment in the company. Moreover, Felizardo was not a managerial or confidential Ee in whom greater trust is reposed by management and from whom greater fidelity to duty is correspondingly expected (ALU-TUCP v. NLRC, G.R. No. 120450, February 10, 1999).
The Er must give the Ee a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss. The requirement under Art. 277 (b) of notice and hearing applies only in Art. 282 because the Er is accusing the
--Hearing is not an indispensable part of due process Art. 277(b) of the LC provides that, in cases of termination for a just cause, an Ee must be given “ample opportunity to be heard and to defend himself.” Thus, the opportunity to be heard afforded by law to the Ee is qualified b y the word “ample” which ordinarily means “considerably more than adequate or sufficient.” In this regard, the phrase “ample opportunity to be heard” can be reasonably
129
The Er must give the Ee and the DOLE written notices 30 days prior to the effectivity of his separation.
Er may terminate the services of his Ee.
Worker is an inactive party in the cause for termination. Only notice with dole and notice to worker is
There is no hearing requirement in diseases but there is notice requirement to worker, but no notice to DOLE.
Labor Law and Social Legislation worker that the latter committed an act or omission constituting a cause for termination of his employment.
required. No need for a hearing because due process is found in LC (Art. 283) not in Constitution according to Agabon.
Authorized Cause b.) Without Due Process
NOTE: Separation Pay if for Authorized Cause
NOTE: The Agabon ruling was modified by JAKA Food Processing v. Pacot G.R. No. 151378, March 28, 2005 where it was held that:
NOTE: in Art. 277 (b) in relation to Art. 283, if the closure of business will result in a mass layoff and serious labor dispute, the SLE can enjoin the Er as regards mass termination
Possible Situations
Effect of termination
1.
2.
VALID
a.) Without Just or Authorized Cause b.) With Due Process
INVALID
Liability of ER
a.) With Just or
VALID
or
NOTE: Circumstances affecting validity of dismissal: 1. 2. 3. 4. 5. 6. 7. 8.
NOTE: If Reinstatement not possible — Separation Pay Reinstatement + Full Backwages INVALID
penalty
Employer’s directives must always be fair and reasonable, and the corresponding penalties, when prescribed must be commensurate to the offense involved and to the degree of the infraction (Moreno v San Sebastian College-Recoletos, Manila, 550 SCRA 414)
Separation Pay if for Authorized Cause Reinstatement + Full Backwages
a.) Without Just or Authorized Cause b.) Without Due Process
If based on just cause (LC, Art. 282) but the Er failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act imputable to the Ee; and If based on authorized causes (LC, Art. 283) but the Er failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by Er’s exercise of his management prerogative.
Principle of Commensurate proportionality rule:
NO Liability
a.) With Just or Authorized Cause b.) With Due Process
With procedural requirements
Gravity of the offense Employment position Length of service Totality of infractions Nature of the business First-offense rule Principle of equity Principle of compassion and understanding
RELIEFS FOR ILLEGAL DISMISSAL Remedies of Ee in case of illegal dismissal In case where the worker is illegally terminated, his remedies are:
NOTE: If
Reinstatement without loss of seniority rights – Actual reinstatement or payroll reinstatement 2. Full backwages – Full backwages means no deduction 3. Separation pay in lieu of reinstatement 4. Damages, including Attorney’s fees 1.
Reinstatement not possible— Separation Pay Liable for noncompliance
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elsewhere by the concerned Ee during the period of his illegal dismissal (Buenviaje v. CA, G.R. 147806, November 12, 2002).
--Q: Does the offer to reinstate the illegally dismissed Ee affect the liability of the erring Er?
Separation pay in lieu of reinstatement when: A: NO. At any rate, sincere or not, the offer of reinstatement could not correct the earlier illegal dismissal of the Ee. The Er incurred liability under the LC from the moment an Ee was illegally dismissed, and the liability did not abate as a result of the Er's repentance (Ranara v. NLRC, 212 SCRA 631).
1.
----Q: PAL dismissed strike leader Capt. Gaston as a result of which the Union resolved to undertake the grounding of all PAL planes and the filing of
awarded.
applications
An action for reinstatement by reason of illegal dismissal is one based on an injury which may be brought within 4 years from the time of dismissal pursuant to Art. 1146 of the NCC (Azcor Manufacturing v. NLRC, 303 SCRA 26).
for
“protest
retirement”
2.
Doctrine of Strained Relations (applies to confidential and managerial Ees only) In case the position has been abolished (applies to both managerial and rank and file Ees)
NOTE: Moral and exemplary damages may also be Prescriptive period for filing an action for illegal dismissal
of
members who had completed 5 years of continuous service, and “protest resignation” for those who had rendered less than 5 years of service in the company. PAL acknowledged receipt of said letters and among the pilots
REINSTATEMENT PENDING APPEAL (ART. 223, LC)
whose “protest resignation or retirement” was
accepted by PAL were Enriquez and Ecarma. Before their readmission, PAL required Enriquez and Ecarma to accept 2 conditions,
Reinstatement
namely: that they sign conformity to PAL’s letter
It is the restoration of the Ee to the state from which he has been unjustly removed or separated without loss of seniority rights and other privileges.
of acceptance of their retirement and or resignation and that they submit an application for employment as new Ees without protest or reservation. As a result of this, their seniority rights were lost.
Forms of reinstatement 1. Actual or physical –The Ee is admitted back to work 2. Payroll – The Ee is merely reinstated in the payroll
Are the pilots entitled to the restoration of their seniority rights? A: NO . An Ee has no inherent right to seniority. He
NOTE: An order of reinstatement by the LA is not
has only such rights as may be based on a contract, statute, or an administrative regulation relative thereto. Seniority rights which are acquired by an Ee through long-time employment are contractual and not constitutional. The discharge of an Ee thereby terminating such rights would not violate the Constitution. When the pilots tendered their respective retirement or resignation and PAL immediately accepted them, both parties mutually terminated the contractual employment relationship between them thereby curtailing whatever seniority rights and privileges the pilots had earned through the years.
Full backwages
the same as actual reinstatement of a dismissed or separated Ee, however it is immediately executory even pending appeal. Thus, until the Er continuously fails to actually implement the reinstatement aspect of the decision of the LA, their obligation to the illegally dismissed Ee, insofar as accrued backwages and other benefits are concerned, continues to accumulate. It is only when the illegally dismissed Ee receives the separation pay (in case of strained relations) that it could be claimed with certainty that the Er-Ee relationship has formally ceased thereby precluding the possibility of reinstatement (Triad Security & Allied Services, Inc. et al v. Ortega, G.R. No. 160871, February 6, 2006).
The LC as amended by R.A. 6715 points to "full backwages" as meaning exactly that, i.e., without deducting from backwages the earnings derived
--Q: Is an illegally dismissed Ee entitled to reinstatement as a matter of right?
---
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Labor Law and Social Legislation reinstatement. It may be availed of even pending appeal
A: GR: YES.
except the execution thereof.
XPNs: NOTE: An award or order for reinstatement is self-
Proceeds from an illegal dismissal wherein reinstatement is ordered but cannot be carried out as in the following cases: 1. Reinstatement cannot be effected in view of the long passage of time or because of the realities of the situation. 2. It would be inimical to the Ers’ interest. 3. When reinstatement is no longer feasible. 4. When it will not serve the best interest of the parties involved. 5. Company will be prejudiced by reinstatement.
executory. It does not require the issuance of a writ of execution (Pioneer Texturizing Corp. v. NLRC, G.R. No. 118651, October 6, 1997).
Rule on wages during reinstatement pending appeal Dismissed Ee whose case was favorably decided by the LA is entitled to receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a restraining order, it is ministerial upon the LA to implement the order of reinstatement and it is mandatory on the Er to comply therewith.
6. When it will not serve a prudent purpose. 7. When there is resultant strained relation (applies to both confidential and managerial Ees only). 8. When the position has been abolished (applies to managerial, supervisory and rank-and-file Ees).
After the LA’s decision is reversed by a higher tribunal, the Ee may be barred from collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the Er.
NOTE: In such cases, it would be more prudent to order payment of separation pay instead of reinstatement (Quijano v. Mercury Drug Corporation, G.R. No. 126561, July 8, 1998).
The test is two-fold: (1) there must be actual delay or the fact that the order of reinstatement pending appeal was not executed prior to its reversal; and (2) the delay must not be due to the Er’s unjustified act or omission. If the delay is due to the Er’s Er’s unjustified refusal, the Er may still be required to pay the salaries notwithstanding the reversal of the LA’s decision (Garcia v. PAL, G.R. No. 164856, August 29, 2009).
--Order of reinstatement It means restoration to a state or condition from which one had been removed or separated. The person reinstated assumes the position he had occupied prior to his dismissal. Reinstatement presupposes that the previous position from which one had been removed still exists, or that there is an unfilled position which is substantially equivalent or of similar nature as the one previously occupied by the Ee.
--Q: PAL dismissed Garcia, for violating PAL’s
Code of Discipline for allegedly sniffing shabu in PAL’s Technical Center Tool Room Section. Garcia then filed for illegal dismissal and damages where the LA ordered PAL to immediately reinstate Garcia . On appeal, the NLRC reversed the decision and dismissed
An order for reinstatement entitles an Ee to receive his accrued backwages from the moment the reinstatement order was issued up to the date when the same was reversed by a higher court without fear of refunding what he had received (Pfizer v. Velasco, G.R. 177467, March 9, 2011).
Garcia’s complaint for lack of merit. Garcia’s
motion for reconsideration was denied by the NLRC. It affirmed the validity of the writ and the notice issued by the LA but suspended and referred the action to the Rehabilitation Receiver for appropriate action. May Garcia collect wages during the period between the LA’s order of reinstatement pending appeal and the NLRC decision overturning that of the LA?
Arts. 223 vs. 279 of the LC Art. 223
Art. 279
May be availed of as soon as the LA renders a judgment declaring that the dismissal of the Ee is illegal and ordering said
Presupposes that the judgment has already become final and executory. Consequently, there is nothing left to be done
A: Art. 223(3) of the LC provides that the decision of the LA reinstating a dismissed or separated Ee, as far as the reinstatement aspect is concerned, shall immediately be executory, pending appeal.
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opted payroll reinstatement pending appeal. The NLRC reversed the decision of the LA ruled that the dismissal was valid. The Er stopped the payroll reinstatement. The Ee elevated the case to the CA, and eventually to the SC. The SC upheld the dismissal. Is the Ee entitled to continued payroll reinstatement after the NLRC decision?
Even if the order of reinstatement of the LA is reversed on appeal, it is obligatory on the part of the Er to reinstate and pay the wages of the dismissed Ee during the period of appeal until reversal by the higher court. On the other hand, if the Ee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the Ee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period.
A: NO. The Ee is not entitled to continued payroll reinstatement. The decision of the NLRC on appeals from decisions of the LA shall become final and executory after 10 calendar days from receipt thereof by the parties. That the CA may take cognizance of and resolve a petition for certiorar i for the nullification of the decisions of the NLRC on jurisdictional and due process considerations does not affect the statutory finality of the NLRC decision. Since the NLRC decision which upheld the dismissal became final, the Er was correct in stopping the payroll reinstatement of the Ee (Bago v. NLRC, G.R. No. 170001, April 4, 2007).
In Genuino v. NLRC, 539 SCRA 342, the Ee reinstated should refund the salaries he received while the case was pending appeal for he should not enrich himself at the expense of the Er. However, in Garcia v. PAL, 576 SCRA 479, the Supreme Court ruled that the principle of social justice renders inapplicable the civil law doctrine of unjust enrichment.
----Q: May the Court order the reinstatement of a dismissed employee even if the prayer of the complaint did not include such relief?
----Q: Can the Er demand that the Ee reimburse the amount that had been paid under the period of payroll reinstatement?
A: YES. So long as there is a finding that the Ee was illegally dismissed, the court can order the reinstatement of an Ee even if the complaint does not include a prayer for reinstatement, unless, of course the Ee has waived his right to reinstatement. By law, an Ee who is unjustly dismissed is entitled to reinstatement among others. The mere fact that the complaint did not pray for reinstatement will not prejudice the Ee, because technicalities of law and procedure are frowned upon in labor proceedings (Pheschem Industrial Corp. v. Moldez, G.R. No. 116158, May 9, 2005).
A: NO. Even if the order of reinstatement of the LA is reversed on appeal, it is obligatory on the part of the Er to reinstate and pay the wages of the dismissed Ee during the period of appeal until reversal by the higher court. If the Ee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the Ee is not required to reimburse whatever salary he received for he is entitled to such, more so if he rendered services during the period (Garcia v. PAL, G.R. No. 164856, June 20, 2009).
In any case, Sec.2(c), Rule 7 of the Rules of Court provides that a pleading shall specify the relief sought, but may add a general prayer for such further or other reliefs as may be deemed just and equitable. Under this rule, a court can grant the relief warranted by the allegation and the proof even if the injured party does not specifically seek it; the inclusion of a general prayer may justify the grant of a remedy different from or together with the specific remedy sought, if the facts alleged in the complaint and the evidence introduced so warrant. The prayer in the complaint for other reliefs equitable and just in the premises justifies the grant of a relief not otherwise specifically prayed for (Prince Transport, Inc. v. Garcia et.al, G.R. No. 167291, January 12, 2011).
----Q: What happens if there is an Order of Reinstatement but the position is no longer available? A: The Ee should be given a substantially equivalent position. If no substantially equivalent position is available, reinstatement should not be ordered because that would in effect compel the Er to do the impossible. In such a situation, the Ee should merely be given a separation pay consisting of 1-month salary for every year of service (Grolier ( Grolier
--Int’l Inc. v. ELA, G.R. No. 83523, August 31, 1989).
--Q: A complaining Ee obtained a favorable decision in an illegal dismissal case. The LA ordered her immediate reinstatement. The Er
----Q: Can the order of reinstatement be immediately enforced in the absence of a motion
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A: NO. The rule should be applied on a case to case basis, based on each case’s peculiar conditions and not universally. Otherwise, reinstatement can never be possible simply because some hostility is invariably engendered between the parties as a result of litigation. That is human nature (Anscor Transport v. NLRC, G.R. No. 85894, September 28, 1990).
A: YES. In Pioneer Texturizing Corp. v. NLRC , the Court held that an award or order of reinstatement is self-executory and does not require a writ of execution to implement and enforce it. To require the application for and issuance of a writ of execution as a prerequisite for the execution of a reinstatement award would certainly betray and run counter to the very objective and intent of Art. 223 of the Labor Code (on the immediate execution of a reinstatement order).
Besides, no strained relations should arise from a valid and legal act of asserting one's right; otherwise an Ee who shall assert his right could be easily separated from the service, by merely paying his separation pay on the pretext that his relationship with his Er had already become strained (Globe Mackay Cable & Wire Corp. v. NLRC, G.R. No. 82511, March 3, 1992).
Alternative Answer: The decision to reinstate pending appeal is not selfexecutory. A motion for a writ of execution is mandatory before an order of reinstatement can be enforced because an Ee needs, the assistance of the NLRC Sheriff to enforce the order.
--SEPARATION PAY IN LIEU OF REINSTATEMENT
---
Separation pay can be viewed
“Strained relations” rule
Under present laws and jurisprudence, separation pay may be viewed in 4 ways: 1. In lieu of reinstatement in illegal dismissal cases, where Ee is ordered reinstated but reinstatement is not feasible. 2. As Er’s statutory obligation in cases of legal termination due to authorized causes under Arts. 283 and 284 of the LC. 3. As financial assistance, as an act of social justice and even in case of legal dismissal under Art. 282 of the LC. 4. As employment benefit granted in CBA or company policy (Poquiz, 2005).
It is when the Er can no longer trust the Ee and vice versa or there were imputations of bad faith to each other, reinstatement could not effectively serve as a remedy. This rule applies only to positions which require trust and confidence (Globe Mackay v. NLRC, G.R. No. 82511, March 3, 1992).
NOTE: Under the circumstances where the employment relationship has become so strained to preclude a harmonious working relationship and that all hopes at reconciliation are naught after reinstatement, it would be more beneficial to accord the Ee backwages and separation pay.
--Q: Delfin and Luisito are licensed drivers of public utility jeepneys owned by Moises Capili. When Capili assumed ownership and operation of the jeepneys, the drivers were required to sign individual contracts of lease of the jeepneys. The drivers gathered the impression that signing the contract was a condition precedent before they could continue driving. The drivers stopped plying their assigned routes and a week later filed with the LA a complaint for illegal dismissal praying not for reinstatement but for separation pay. Are the respondents entitled to separation pay?
The following must be proven before the strained relations rule can be applied to a particular case 1. 2.
The Ee concerned occupies a position where he enjoys the trust and confidence of his Er; and That it is likely if the Ee is reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect the efficiency and productivity of the Ee concerned (Globe Mackay Cable & Wire Corp. v. NLRC G.R. No. 82511, March 3, 1992).
A: NO. When the drivers voluntarily chose not to
--Q: Does the strained relations rule always bar reinstatement in all cases?
return to work anymore, they must be considered as having resigned from their employment. The common denominator of those instances where payment of separation pay is warranted is that the
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year of service, provided that the employee worked at least 1 month in a given year. Is the separation pay granted to an illegally dismissed Ee the same as that provided under Art.283 of the LC in case of retrenchment to prevent losses?
employee was dismissed by the Er (Capili v. NLRC, G.R. 117378, March 26, 1997).
----Q: Romeo has been an Ee of AAA Company from 1993 to 1999 but was unable to report to work due to some illness. Romeo claimed that he was offered by AAA of Php 15,000 separation pay, on the contrary AAA claimed Romeo was never terminated and even told the latter that Romeo could go back to work anytime but Romeo clearly manifested that he was no longer interested in returning to work and instead asked for separation pay. Is Romeo terminated or considered resigned? Is Romeo entitled to separation pay?
A: NO. The separation pay awarded to Ees due to illegal dismissal is different from the amount of separation pay provided for in Art. 283 of the LC. Preceding from the above, Phil. Tobacco is liable for illegal dismissal and should be responsible for the reinstatement of the first group and the payment of their backwages. However, since reinstatement is no longer possible as Phil. Tobacco have already closed its Balintawak plant, 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 month pay for every year of service, whichever is higher. It must be stressed that the separation pay being awarded to the first group is due to illegal dismissal; hence, it is different from the amount of separation pay provided for in Art. 283 in case of retrenchment to prevent losses or in case of closure or cessation of the Er’s business, in either of which the separation pay is equivalent to at least one (1) month or onehalf (1/2) month pay for every year of service, whichever is higher higher (Phil. Tobacco Flue-Curing & Redrying Corp. v. NLRC, G.R. No. 127395, December 10, 1998).
A: Romeo is considered resigned. Romeo’s various pleadings support his intention of not returning to work on the ground that his health is failing. Moreover, Romeo did not ask for reinstatement and rejected AAA Company’s offer for him to return to work. This is tantamount to resignation. Resignation is defined as the voluntary act of an Ee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has no other choice but to disassociate himself from his employment.
----Q: Does separation pay apply in cases of legal dismissal?
Romeo is not entitled to separation pay. There is no provision in the LC which grants separation pay to voluntarily resigning Ees. In fact, the rule is that an Ee who voluntarily resigns from employment is not entitled to separation pay, except when it is stipulated in the employment contract or CBA, or it is sanctioned by established Er practice or policy. Hence, Romeo is not entitled to separation pay in the absence of a Labor provision and a stipulation in his employment contract or CBA (Romeo Villaruel v. Yeo Han Guan, G.R. No. 169191, June 1, 2011).
A: It depends. dep ends. As Er’s statutory obligation in c ases of legal termination due to authorized causes under Arts. 283 and 284 of the LC. As financial assistance, as an act of social justice and even in case of legal dismissal under Art.282 of the LC. Art. 223 of the LC concerns itself with an interim relief, granted to a dismissed or separated Ee while the case for illegal dismissal is pending appeal. It does not apply where there is no finding of illegal dismissal. On the other hand, an Ee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement (Lansangan v. Amkor Technology Philippines, Inc., G.R. No. 177026, (2009).
----Q: Two groups of seasonal workers claimed separation benefits after the closure of Phil. Tobacco processing plant in Balintawak and the transfer of its tobacco operations to Candon, Ilocos Sur. Phil. Tobacco refused to grant separation pay to the workers belonging to the first batch, because they had not been given work during the preceding year and, hence, were no longer in its employ at the time it closed its Balintawak plant. Likewise, it claims exemption from awarding separation pay to the second batch, because the closure of its plant was due to "serious business losses," as defined in Art. 283 of the LC. Both labor agencies held that the two groups were entitled to separation pay equivalent to 1/2 month salary for every
--BACKWAGES Backwages
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dismissed Ee flows from law. Even if he does not ask for it, it may be given. The failure to claim backwages in the complaint for illegal dismissal is a mere procedural lapse which cannot defeat a right granted under substantive law (St. Michael’s Institute v. Santos, G.R. No. 145280, December 4,
--Q: Baldo was dismissed from employment for having been absent without leave (AWOL) for eight (8) months. It turned out that the reason for his absence was his incarceration after he was mistaken as his neighbo r’s killer. Eventually acquitted and released from jail, Baldo returned to his Er and demanded reinstatement and full backwages. Is Baldo entitled to reinstatement and backwages? Explain your answer. (2009 BAR QUESTION)
2001).
A: YES, Baldo is entitled to reinstatement. Although
--Q: What is the basis of awarding backwages to an illegally dismissed employee?
he shall not be entitled to backwages during the period of his detention, but only from the time the company refused to reinstate him. (Magtoto v. NLRC, 140 SCRA 58).
It refers to the relief given to an Ee to compensate him for the lost earnings during the period of his dismissal. It presupposes illegal termination.
NOTE: Entitlement to backwages of the illegally
-- A: The payment of backwages is generally granted COMPUTATION
on the ground of equity. It is a form of relief that restores the income that was lost by reason of the unlawful dismissal; the grant thereof is intended to restore the earnings that would have accrued to the dismissed Ee during the period of dismissal until it is determined that the termination of employment is for a just cause. It is not private compensation or damages but is awarded in furtherance and effectuation of the public objective of the LC. Nor is it a redress of a private right but rather in the nature of a command to the Er to make public reparation for dismissing an Ee either due to the former’s unlawful act or bad faith (Tomas Claudio Memorial College Inc., v. CA, G.R. No. 152568, February 16, 2004).
The following are included in the computation of backwages 1. 2. 3.
Transportation and emergency allowances Vacation or SIL and sick leave 13th month pay
NOTE: Facilities such as uniforms, shoes, helmets and ponchos should not be included in the computation of backwages because said items are given for free, to be use only during official tour of duty not for private or personal use.
----Q: What is the period covered by the payment of backwages?
The award of backwages is computed on the basis of 30-day month (JAM Trans Co. v. Flores, G.R. No. 82829, March 19, 1993).
--Q: How are the backwages of a probationary Ee who fails to qualify as a regular Ee computed?
A: The backwages shall, from the time that wages are unlawfully withheld until the time of actual reinstatement or, if reinstatement is no longer feasible, until the finality of judgment awarding backwages, cover the period from the date of dismissal of the Ee up to the date of: 1. Actual reinstatement, or if reinstatement is no longer feasible 2. Finality of judgment awarding backwages (Buhain v. CA, G.R. 143709, July 2, 2002).
A: The backwages that should be awarded to respondent shall be reckoned from the time of her constructive dismissal until the date of the termination of her employment. The computation should not cover the entire period from the time her compensation was withheld up to the time of her actual reinstatement. This is because as a probationary Ee, the lapse of probationary employment without appointment as a regular Ee of effectively severed the Er-Ee relationship between the parties (Robinsons Galleria v. Ranchez, G.R. No. 177937, January 9, 2011).
The backwages to be awarded should not be diminished or reduced by earnings elsewhere during the period of his illegal dismissal. The reason is that the Ee while litigating the illegality of his dismissal must earn a living to support himself and his family (Bustamante v. NLRC, G.R. No. 111651, Mar. 15, 1996; Buenviaje v. CA, G.R. No. 147806, November 12, 2002).
----Q: Is an Ee entitled to backwages even after the closure of the business?
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A: NO. The closure of the business rendered the
XPN: Award of backwages to a separated Ee may be
reinstatement of complainant to an Ees previous position impossible but she is still entitled to the payment of backwages up to the date of dissolution or closure. An Er found guilty of ULP in dismissing his Ee may not be ordered to pay backwages beyond the date of closure of business where such closure was due to legitimate business reasons and not merely an attempt to defeat the order of reinstatement (Pizza Inn v. NLRC, G.R. No. 74531, June 28, 1988).
limited for a certain number of years considering good faith on the part of the Er in terminating the Ee, which period shall depend on the attending circumstances of the case (Victory Liner, Inc. v. Race, G.R. No. 164820 March 28, 2007).
NOTE: The rule providing for the entitlement of an illegally dismissed Ee to only three years backwages “without deduction or qualification” to obviate the need for further proceedings in the course of execution, otherwise known as the “Mercury Drug Rule,” has long been abandoned since March 21, 1989 (BPI Employees Union & Uy v. BPI, et al., G.R. No. 137863, March 31, 2005) .
--Circumstances that prevent award of backwages 1. 2. 3. 4.
Dismissal for cause Death, physical or mental incapacity of the employee Business reverses Detention in prison
PREVENTIVE SUSPENSION Preventive suspension It means that during the pendency of the investigation, the Er may place the Ee under preventive suspension leading to termination when there is an imminent threat or a reasonable possibility of a threat to the lives and properties of the Er, his family and representatives as well as the offender’s co-workers by the continued service of the Ee.
LIMITED BACKWAGES Rule on backwages for dismissed employees GR: In the case of Osmalik Bustamante, et al. v. NLRC and Evergreen Farms, Inc., the SC held that the passing of R.A. 6715, particularly Sec. 34, which took effect on March 21, 1989, amended Art. 279 of the LC, which now states in part:
Duration of preventive suspension
ART. 279. Security of Tenure. - An Ee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
It should not last for more than 30 days. The Ee should be made to resume his work after 30 days. It can be extended provided the Ee’s wages are paid after the 30-day period. This period is intended only for the purpose of investigating the offense to determine whether he is to be dismissed or not. It is not a penalty.
NOTE: The Er may continue the period of Verily, the evident legislative intent as expressed in R.A. 6715, is that the backwages to be awarded to an illegally dismissed Ee, should not, as a 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 Ee, while litigating the legality (illegality) of his dismissal, must still earn a living to support himself and his family. Corollary thereto, full backwages have to be paid by the Er as part of the price or penalty he has to pay for illegally dismissing his Ee. Thus, the provision calling for “full backwages” to illegally dismissed Ees is clear, plain and free from ambiguity and, therefore, must be applied without attempted or strained interpretation.
preventive suspension provided that he pays the salary of the Ee. If more than 1 month, the Ee must actually be reinstated or reinstated in the payroll. Officers are liable only for the offense committed if done with malice.
--Q: Cantor and Pepito were preventively suspended pending application for their dismissal by Manila Doctor’s Hospital after
being implicated by one Macatubal when they refused to help him when he was caught stealing x-ray films from the hospital. Was the preventive suspension of Cantor and Pepito proper? A: NO. Where the continued employment of an Ee poses a serious and imminent threat to the life and
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property of the Er or on his co-Ees, the Ees’ preventive suspension is proper. In this case, no such threat to the life and property of the Er or of their co-Ee’s is present and they were merely implicated by Macatubal (Manila Doctors Hospital v. NLRC, G.R. No L-64897, February 28, 1985).
The employee who is complaining of constructive dismissal has the burden of proof “to prove that her resignation was not voluntary, but was actually a case of constructive dismissal, with clear, positive, and convincing evidence.” (Hechanova v.
---
Atty. Matorre, GR No. 198261, October 16, 2013)
--Q: Karina Santos is a famous news anchor appearing nightly in the country's most watched newscast. She is surprised, after one newscast, to receive a notice of hearing before the station's Vice-President for Human Resources and calls the VP immediately to ask what was wrong. Karina is told over the phone that one of her crew filed a complaint against her for verbal abuse and that management is duty bound to investigate and give her a chance to air her side. Karina objects and denies that she had ever verbally assaulted her crew. The VP then informed her that pending the investigation she will be placed on a 30-day preventive suspension without pay and that she will not be allowed to appear in the newscast during this time. Is the preventive suspension of Karina valid? Discuss the reasons for your answer. (2015 Bar Question)
Shortening the resignation’s 30-day period of effectivity does not prove forced resignation The 30-day notice requirement for an employee’s resignation is actually for the benefit of the employer who has the discretion to waive such period. Its purpose is to afford the employer enough time to hire another employee if needed and to see to it that there is proper turn-over of the tasks which the resigning employee may be handling.” (Hechanova v. Atty. Matorre, GR No. 198261, October 16, 2013)
Relief entitled to illegally or constructively dismissed Ees Anillegally or constructively dismissed Ee is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no longer viable; and (2) backwages. These two reliefs are separate and distinct from each other and are awarded conjunctively (Robinsons Galleria v. Ranchez, G.R. No. 177937, January 9, 2011).
A: NO. The preventive suspension of Karina is not valid.The employer may place an employee under preventive suspension if his/her continued employment would pose a serious and imminent threat to the life or property of the employer or of his/her co-employees. These requirements are not present here.
Resignation vs. Constructive Dismissal RESIGNATION
--RESIGNATION Defined as the voluntary act of an employee who “finds himself in a situation in which he believes that personal reasons cannot be sacrified in favour of the exigency of the service; thus, he has no other choice but to disassociate himself form his employment.” (Alfaro v. CA, GR No. 140812, August 28, 2001)
CONSTRUCTIVE DISMISSAL It occurs when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or diminution in pay or when a clear discrimination, insensibility, or disdain by an Er becomes unbearable to the Ee leaving the latter with no other option but to quit (The University of Immaculate Conception v. NLRC, G.R. No. 181146, January 26, 2011).
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CONSTRUCTIVE DISMISSAL
1. Voluntary
1. Involuntary or forced resignation
2. Not entitled to separation pay, unless it is a company practice or provided in the CBA. (Hanford Philippines Inc. vs. Shirley Joseph, GR No. 158251, March 31, 2005) 3. Burden of proving voluntariness is on the employee
2. Entitled to either reinstatement or separation pay and backwages.
3. Burden of proving constructive dismissal is on the
Labor Standards
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----Q: Quinanola was transferred from the position of Executive Secretary to the Executive Vice President and General Manager to the Production Dep’t as Production Secretary. Quinanola rejected the assignment and filed a complaint for illegal dismissal due to constructive dismissal. Did the transfer of Quinanola amount to constructive dismissal?
employee
--Q: Reynaldo was hired by Geminilou Trucking Service (GTS) as a truck driver to haul and deliver products of San Miguel Pure Foods Company, Inc. He was paid Php 400 per trip and made 4 trips a day. He claimed that GTS requested him to sign a contract entitled “Kasunduan Sa Pag-upa ng Serbisyo” which he refused as he found it to alter his status as a regular Ee to merely contractual. He averred
A: NO. Quinanola’s transfer was reasonable since it did not involve a demotion in rank or a change in her place of work nor a diminution in pay, benefits and privileges. It did not constitute constructive dismissal. Furthermore, an Ee’s security of tenure does not give him a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful (Philippine Japan Active Carbon Corp. v. NLRC, G.R. No. 83239, March 8, 1989).
that on account of his refusal to sign the Kasunduan, his services were terminated prompting him to file a complaint before the NLRC for constructive dismissal against the GTS. Would Reynaldo’s refusal to sign the Kasunduan adequately support his allegation of constructive dismissal? A: NO. The test of constructive dismissal is whether a reasonable person in the Ee’s p osition would have felt compelled to give up his job under the circumstances. In the present case, the records show that the lone piece of evidence submitted by Reynaldo to substantiate his claim of constructive dismissal is an unsigned copy of the Kasunduan. This falls way short of the required quantum of proof which is substantial evidence, or such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Reynaldo was not dismissed, but that he simply failed to report for work after an altercation with a fellow driver (Madrigalejos v. Geminilou Trucking Service, G.R. No. 179174, December 24, 2008).
----Q: Sangil was a utility man/assistant steward of the passenger cruise vessel Crown odyssey under a one-year contract. Sangil suffered head injuries after an altercation with a Greek member of the crew. He informed the captain that he no longer intends to return aboard the vessel for fear that further trouble may erupt between him and the other Greek crewmembers of the ship. Was Sangil constructively dismissed? A: YES. There is constructive dismissal where the
----Q: Flores, a conductor of JAM Transportation Co., Inc., had an accident where he had to be hospitalized for a number of days. Upon reporting back to the company, he was told to wait. For several days, this continued and he was promised a route assignment which did not materialize. Upon speaking to Personnel Manager Medrano, he was told that he will be accepted back to work but as a new Ee. Flores rejected the offer because it would mean forfeiture of his 18 years of service to the company. Is the offer for reinstatement as a new Ee a constructive dismissal?
act of a seaman in leaving ship was not voluntary but was impelled by a legitimate desire for selfpreservation or because of fear for his life. Constructive dismissal does not always involve diminution in pay or rank but may be inferred from an act of clear discrimination, insensibility, or disdain by an Er may become unbearable on the part of the Ee that it could foreclose any choice by him except to forego his continued employment (Sunga Ship Management Phil., Inc. v. NLRC, G.R. No. 119080, April 14, 1998).
A: YES. Flores’ re-employment as a new Ee would be
A: NO. The validity of its act of suspending its
very prejudicial to him as it would mean a demotion in rank and privileges and the retirement benefits for his previous 18 years of service with the company would simply be considered as nonexistent. It amounts to constructive dismissal (JAM Transportation Co., Inc. v. Flores, G.R. No. 82829, March 19, 1993).
operations does not excuse it from paying separation pay. Art. 283 of the LC is emphatic that an Ee, who was dismissed due to cessation of business operation, is entitled to the separation pay equivalent to one month pay or at least 1/2 month pay for every year of service, whichever is higher. And it is jurisprudential that separation pay should
----Q: Does the validity of suspending operation excuse the Er from paying separation pay?
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Labor Law and Social Legislation also be paid to Ees even if the closure or cessation of operations is not due to losses (Manila Minings Corp. Employees Assn. v. Manila Mining Corp., G.R. Nos. 178222-23, September 29, 2010).
fire that gutted its factory. Article 286 of the Labor Code states that an employer may bona fide suspend the operation of its business for a period not exceeding six (6) months. In such a case, there would be no termination of the employment of the employees, but only a temporary displacement. Since, the suspension of work lasted more than six months, there is now constructive dismissal (Sebuguero v. NLRC, 245 SCRA 532 [1995]).
--Circumstances where financial assistance are proper
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The general rule is that financial assistance is allowed only in instances where the Ee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Nonetheless, financial assistance may be allowed as a measure of social justice and exceptional circumstances, and as an equitable concession for balancing the interests of the Er with those of the worker. Where there is neither a dismissal nor abandonment, it has been previously held that separation pay may be awarded under appropriate circumstances. Also, in cases where there is no dismissal, the status quo between the Ee and Er should be maintained; and in lieu of reinstatement thegrant of separation pay to Ee is proper (Luna v. Allado Construction Co., Inc., G.R. No. 175251, May 30, 2011).
MANAGEMENT PREROGATIVE
This prerogative flow from the established rule that labor laws do not authorize the substitution of judgment of the employer in the conduct of his business. The employer can exercise this prerogative without fear of liability as long as it is done in good faith for the advancement of his interests, and not for the purpose of defeating or circumventing the rights of the employees under special laws or valid agreements. It is valid as long as it is not performed in a malicious, harsh, oppressive, vindictive or wanton manner, or out of malice or spite. (Great Pacific Employees Union vs. Great Pacific Life Assurance, G.R. No. 126717, February 11, 1999)
--Q: What is a floating status? When is an Ee in a floating status considered to be constructively dismissed?
As long as the company’s exercise of the same is exercised in good faith for the advancement of the employer’s interest, and not for the purpose of defeating or circumventing the rights of the employees under special laws or valid agreements, the courts will uphold them [San Miguel Brewery Sales Force Union (PTGWO) vs. Ople, G.R. No. L53515; February 8, 1989], (Capitol Medical Center, Inc. v. Meris, G.R. No. 155098, September 16, 2005)
A: Pursuant to Art. 286 of the LC, the bona fide suspension of the operation of a business undertaking for a period not exceeding 6 months, or the fulfillment by the Ee of a civic duty shall not terminate employment. In all such cases the Er shall reinstate the Ee 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 Er or from his relief from the military or civic duty.Only when such a "floating status" lasts for more than 6 months that the Ee may be considered to have been constructively dismissed (Nippon Housing Phil. Inc., v. Leynes, G.R. No. 177816, August 3, 2011).
GR: It is the right of an Er to regulate, according to his own discretion and judgment, all aspects of employment, including: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.
----Q: An accidental fire gutted the JKL factory in Caloocan. JKL decided to suspend operations and requested its employees to stop reporting for work. After six (6) months, JKL resumed operations but hired a new set of employees. The old set of employees filed a case for illegal dismissal. If you were the Labor Arbiter, how would you decide the case? (2014 Bar Question) A: I will rule in favor of the employees. JKL factory merely suspended its operations as a result of the
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Hiring Work assignments Working methods Time, place and manner of work Tools to be used Processes to be followed Supervision of workers Working regulations Transfer of Ees Work supervision Lay-off of workers Discipline Dismissal Recall of workers
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–
XPN: Otherwise limited by law, contract, and
not exercised in a malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite (PAL v. NLRC, G.R. No. 85985, August 13, 1993; San Miguel Brewery Sales v. Ople, G.R. No. 53515, February 8, 1989; Punzal v. ETSI Technologies Inc, 518 SCRA 66).
principles of fair play and justice.
NOTE: So long as a company’s prerogatives are exercised in good faith for the advancement of the Er’s interest and not for the purpose of defeating or circumventing the rights of the Ees under special laws or under valid agreements, the Supreme Court will uphold them.
NOTE: It must be established that the prerogative being invoked is clearly a managerial one.
--Q: Little Hands Garment Company, an unorganized manufacturer of children's apparel with around 1,000 workers, suffered losses for the 1st first time in history when its US and European customers shifted their huge orders to China and Bangladesh. The management informed its Ees that it could no longer afford to provide transportation shuttle services. Consequently, it announced that a normal fare would be charged depending on the distance traveled by the workers availing of the service.
--Q: Is withholding an Ee’s salary a valid exercise
of management prerogative? A: NO. Any withholding of an Ee’s wages by an Er may only be allowed in the form of wage deductions under the circumstances provided in Art. 113 of the LC: 1) the worker is insured; 2) for union dues; 3) in cases authorized by law or regulation issued by the SLE. In the absence of the following circumstances, withholding thereof is thus unlawful (SHS Perforated Materials, Inc. v. Diaz, G.R. 185814, October 13, 2010).
Was the Little Hands Garments Company within its rights to withdraw this benefit which it had unilaterally been providing its Ees? (2005 Bar Question)
----Q: May a MERALCO Ee invoke the remedy of writ of habeas data available where his Er decides to transfer her workplace on the basis of copies of an anonymous letter posted therein, imputing to her disloyalty to the company and calling for her to leave, which imputation it investigated but fails to inform her of the details thereof?
A: YES . This is a management prerogative which is not due any legal or contractual obligation. The facts of the case do not state the circumstances through which the shuttle service may be considered as a benefit that ripened into a demandable right. There is no showing that the benefit has been deliberately and consistently granted, i.e. with the Er’s full consciousness that despite its not being bound by law or contract to grant it, it just the same granted the benefit.
A: NO. The writs of amparo and habeas data will not issue to protect purely property or commercial concerns nor when the grounds invoked in support of the petitions therefore are vague or doubtful. Employment constitutes a property right under the context of the due process clause of the Constitution. The writ of habeas data directs the issuance of the writ only against public officials or Ees, or private individuals or entities engaged in the gathering, collecting or storing of data or informat ion regarding an aggrieved party’s person, family or home; and that MERALCO (or its officers) is clearly not engaged in such activities (MERALCO v. Lim, G.R. No. 184769, October 5, 2010).
--Limitations on management prerogative It is circumscribed by limitations found in: 1. 2. 3.
Law, CBA, or General principles of fair play and justice
--Furthermore, a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of Ees. In treating the latter, management should see to it that its Ees are at least properly informed of its decisions and modes of actions. Such management prerogative may be availed of without fear of any liability so long as it is exercised in good faith for the advancement of the Er’s interest and not for the purpose of defeating or circumventing the rights of Ees under special laws or valid agreement and are
RIGHT TO HIRE It is both a right and a prerogative.
Legal limitations and prohibitions prior to hiring Stipulation against marriage. It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a
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Labor Law and Social Legislation woman employee shall not get married, or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage (LC, Art. 136).
regulations, however, such management prerogative must be exercised in good faith for the advancement of the Er’s interest and not for the purpose of defeating or circumventing the rights of the Ees under special laws and valid agreements. (PLDT v. Teves, G.R. No. 143511, November 15, 2010).
TRANSFER OF EMPLOYEES To require as a condition of employment that a person or an employee shall not join a labor organization or shall withdraw from one to which he belongs [LC, Art. 248 (2)].
Employer’s right to transfer and reassign Ees In the pursuit of its legitimate business interests, especially during adverse business conditions, management has the prerogative to transfer or assign Ees from one office or area of operation to another provided there is no demotion in rank or diminution of salary, benefits and other privileges and the action is not motivated by discrimination, bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is inherent in the right of Ers to control and manage their enterprises effectively.
Minimum employable age 1.
2.
3.
No child below fifteen (15) years of age shall be employed, except when he works directly under the sole responsibility of his parents or guardian, and his employment does not in any way interfere with his schooling. Any person between fifteen (15) and eighteen (18) years of age may be employed for such number of hours and such periods of the day as determined by the Secretary of Labor and Employment in appropriate regulations. The foregoing provisions shall in no case allow the employment of a person below eighteen (18) years of age in an undertaking which is hazardous or deleterious in nature as determined by the Secretary of Labor and Employment (LC, Art. 139).
NOTE: The right of Ees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them ( Endico v. Quantum Foods Distribution Center, G.R. No. 161615, January 30, 2009).
--Q: May the Er exercise his right to transfer an Ee and compel the latter to accept the same if said transfer is coupled with or is in the nature of promotion?
DISCIPLINE Er's right to discipline his Ees
A: NO. There is no law that compels an Ee to accept
The Er has the prerogative t o instill discipline in his Ees and to impose reasonable penalties, including dismissal, on erring Ees pursuant to company rules and regulations (San Miguel Corporation v. NLRC, G.R. No. 87277, May 12, 1989).
promotion. Promotion is in the nature of a gift or a reward which a person has a right to refuse. When an Ee refused to accept his promotion, he was exercising his right and cannot be punished for it. While it may be true that the right to transfer or reassign an Ee is an Er’s exclusive right and the prerogative of management, such right is not absolute (Dosch v. NLRC and Northwest Airlines, G.R. No. 51182, July 5, 1983).
An Er has the prerogative to prescribe reasonable rules and regulations necessary for the proper conduct of its business, to provide certain disciplinary measures in order to implement said rules and to assure that the same would be complied with. An Er enjoys a wide latitude of discretion in the promulgation of policies, rules and regulations on work-related activities of the Ees. This is inherent in its right to control and manage its business effectively (San Miguel Corp. v. NLRC, 551 SCRA 410).
--Burden of proving that the transfer was reasonable The Er must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the Ee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the Er fail to overcome this burden of proof, the Ee’s transfer shall be tantamount to constructive dismissal (Blue Dairy Corporation v. NLRC, 314 SCRA 401).
Limitation on the Er’s power to discipline While management has the prerogative to d iscipline its Ees and to impose appropriate penalties on erring workers, pursuant to company rules and
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–
Limitations on management prerogatives 1. 2.
may be availed of so long as they are exercised in good faith for the advancement of the employer’s interest. (Buiser vs. Leogardo, G.R. No. L-63316, July 31, 1984)
Such that the Er must be motivated by good faith The contracting out should not be resorted to circumvent the law or must not have been the result of malicious or arbitrary actions (MERALCO v. Quisumbing, G.R. no. 127598. February 22, 2000).
--GRANT OF BONUS Bonus
It is the inherent prerogative of an employer to transfer and reassign its employees to meet the requirements of its business. Be that as it may, the prerogative of the management to transfer its employees must be exercised without grave abuse of discretion. The exercise of the prerogative should not defeat an employee's right to security of tenure. The employer’s privilege to transfer its employees to different workstations cannot be used as a subterfuge to rid itself of an undesirable worker. (Veterans Security Agency v. Vargas, G.R. No. 159293, December 16, 2005)
It is an amount granted and paid to an Ee for his industry and loyalty which contributed to the success of the Er’s business and made possible the realization of profits.
--Q: Can bonus be demanded? A: GR: NO. Bonus is not demandable as a matter of right. It is a management prerogative given in addition to what is ordinarily received by or strictly due to recipient (Producers Bank of the Phil. v. NLRC, G.R. No. 100701, March 28, 2001).
PRODUCTIVITY STANDARD --Q: May an Er impose productivity standards for its workers?
XPNs: Given for a long period of time, provided that: 1.
A: YES. An Er is entitled to impose productivity standards for its workers. In fact, non-compliance may be visited with a penalty even more severe than demotion. The practice of a company in laying off workers because they failed to make the work quota has been recognized in this jurisdiction. Failure to meet the sales quota assigned to each of them constitute a just cause of their dismissal, regardless of the permanent or probationary status of their employment. Likewise, failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete the same within the allotted reasonable period, or by producing unsatisfactory results. This management prerogative of requiring standards may be availed of so long as they are exercised in good faith for the advancement of the Er’s interest. (Leonardo v. NLRC, G.R. No. 125303, 2000)
2. 3. 4. 5.
6.
Consistent and deliberate – Er continued giving benefit without any condition imposed for its payment; Er knew he was not required to give benefit; Nature of benefit is not dependent on profit; Made part of the wage or compensation agreed and stated in the employment contract; It was promised to be given without any conditions imposed for its payment in which case it is deemed part of the wage; It has ripened into practice. (Marcos v. NLRC, G.R. No. 111744, September 8, 1995)
--Please see discussion on Bonus under WAGES
--Q: The projected bonus for the Ees of Suerte Co. was 50% of their monthly compensation. Unfortunately, due to the slump in the business, the president reduced the bonus to 5% of their compensation. Can the company unilaterally reduce the amount of bonus? (2002 Bar Question)
Failure to observe prescribed standards of work; or to fulfill reasonable work assignments due to insufficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete the same within the allotted reasonable period, or by producing unsatisfactory results. This management prerogative of requiring standards
A: YES. The granting of a bonus is a management prerogative, something given in addition to what is ordinarily received by or strictly due the recipient. An Er cannot be forced to distribute bonuses when it can no longer afford to pay. To hold otherwise would be to penalize the Er for his past generosity
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Labor Law and Social Legislation (Producers Bank of the Phil. v. NLRC, G.R. No. 100701, March 28, 2001).
service so require, to change the working hours its employees. So long as such prerogative is exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating and circumventing the rights of the employees under special laws or under valid agreements, this court will uphold such exercise (Sime Darby Pilipinas v. NLRC, G.R. No. 119205, April 15, 1998).
--CHANGE OF WORKING HOURS Er’s right to change working hours
---
The working hours may be changed, at the discretion of the company, should such change be necessary for its operations, and that employees shall observe such rules as have been laid down by the company. (Interphil Laboratories Union-FFW vs. Interphil Laboratories, Inc., G.R. No. 142824, December 19, 2001)
RULE ON MARRIAGE BETWEEN EMPLOYEES OF COMPETITOR-EMPLOYEES --Q: Is the stipulation in the employment contract prohibiting an Ee from marrying another Ee of a competitor company a valid exercise of management prerogative?
--Q: May the normal hours fixed in Art. 83 of the LC be reduced by the Er? Explain.
A: YES. The policy is not aimed at restricting a A: It depends. Art. 83 provides that the normal
personal prerogative that belongs only to the individual. However, an Ee’s personal decision does not detract the Er from exercising management prerogatives to ensure maximum profit and business success. It does not impose an absolute prohibition against relationships between its Ees and those of competitor companies. Its Ees are free to cultivate relationships with and marry persons of their own choosing. What the company merely seeks to avoid is a conflict of interest between the employee and the company that may arise out of such relationships. It is also not violative of the equal protection clause because it is a settled principle that the commands of the equal protection clause are addressed only to the State or those acting under color of its authority. Corollarily, it has been held in a long array of U.S. Supreme Court decisions that the equal protection clause erects no shield against merely private conduct, however, discriminatory or wrongful. The only exception occurs when the State in any of its manifestations or actions has been found to have become entwined or involved in the wrongful private conduct (Duncan Association of Detailman-PTGWO and Pedro A. Tecson v. Glaxo Wellcome Philippines, Inc., G.R. No. 162994, September 17, 2004).
hours of work of an Ee shall not exceed 8 hours a day. This implies that the Er, in the exercise of its management prerogatives, may schedule a work shift consisting of less than 8 hours. And following the principle of “a fair day’s wage for a fair day’s labor,” the Er is not obliged to pay an Ee, working for less than 8 hours a day, the wages due for 8 hours. Nonetheless, if by voluntary practice or policy, the Ee for a considerable period of time has been paying his Ees’ wages due for 8 hours work although the work shift less than 8 hours (e.g. seven) it cannot later on increase the working hours without an increase in the pay of the Ees affected. An Er is not allowed to withdraw a benefit which he has voluntarily given.
----Q: Sime Darby Pilipinas issued a memorandum implementing a new work schedule. It eliminated the 30-minute paid “on call” lunch break of its monthly salaried employees and instead provided for a 10 minute break time and one hour lunch break. The employees felt adversely affected by the memorandum and filed before the Labor Arbiter a complaint for unfair labor practice. The LA dismissed the complaint on the ground that the change in the work schedule constituted a valid exercise of management prerogative. Is changing the work schedule of the employees a valid exercise of management prerogative?
The failure of the employer to prove legitimate business concern in imposing the questioned policy cannot prejudice the employee’s right to be free from arbitrary discrimination based upon stereotypes of married persons working together in one company. Thus, for failure of the employer to present undisputed proof of a reasonable business necessity, we rule that the questioned policy is an invalid exercise of management prerogative. (Star Paper Corp. vs. Simbol, G.R. No. 164774, April 12, 2006)
A: YES. The right to fix the work schedules of the employee rests principally on their employer. The petitioner, as the employer, cites as reason for the adjustment the efficient conduct of its business operations and improved production. Management retains the prerogative, whenever exigencies of the
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–
POST-EMPLOYMENT BAN
allow her to engage in a rival business soon after she leaves would make respondent’s trade secrets vulnerable especially in a highly competitive marketing environment. In sum, we find the noninvolvement clause not contrary to public welfare and not greater than is necessary to afford a fair and reasonable protection to respondent. (Daisy Tiu vs. Platinum Plans, G.R. No. 163512, February 28, 2007).
--Q: Genesis Fulgencio had been working for Solidbank Corporation since 1977. He later on applied for retirement. Solidbank required Genesis to sign an undated Undertaking where he promised that "[he] will not seek employment with a competitor bank or financial institution within one (1) year from February 28, 1995, and that any breach of the Undertaking or the provisions of the Release, Waiver and Quitclaim would entitle Solidbank to a cause of action against him before the
TYPES OF RESTRICTIVE COVENANTS Non-compete clause When the employee is prevented from directly competing or working for acompetitor of his former employer, or when the employee is prevented from setting up a competing business.
appropriate courts of law.” Equitable Banking
Corporation (Equitable) employed Genesis. Is the post-retirement employment ban incorporated in the Undertaking which Genesis executed upon his retirement unreasonable, oppressive, hence, contrary to public policy?
Non-solicitation clause When a duty is imposed on the employee not to approach his former employer’s customers or prospective customers, or when the employee is prevented from taking customers/clients of his former employer;
A: NO. There is a distinction between restrictive covenants barring an Ee to accept a postemployment competitive employment or restraint on trade in employment contracts and restraints on post-retirement competitive employment in pension and retirement plans either incorporated in employment contracts or in CBAs between the Er and the union of Ees, or separate from said contracts or CBAs which provide that an Ee who accepts post retirement competitive employment will forfeit retirement and other benefits or will be obliged to reinstitute the same to the Er. The strong weight of authority is that forfeituresfor engaging in subsequent competitiveemployment included in pension and retirement plans are valid even though unrestricted in time or geography. A postretirement competitive employment
Non-poaching clause When the employee is prevented from enticing his former employer’s staff away from the business, the aim is to prevent the employee from taking key employees with him to his new employment or business.
Factors to consider to enforce a restrictive covenant 1.
Restriction is designed to protect the Er against competition by former Ee who may retire and obtain retirement or pension benefits and, at the same time, engage in competitive employment (Rivera v. Solidbank, G.R. No. 163269, April 19, 2006).
2. 3. 4.
---
5.
Non-involvement Clause A non-involvement clause is not necessarily void for being in restraint of trade as long as there are reasonable limitations as to time, trade, and place. It was also stated in this case that the Labor Law validity of a non-involvement clause depends upon the nature of work of the subject employee. Since petitioner was the Senior Assistant Vice-President and Territorial Operations Head in charge of respondent’s Hong Kong and ASEAN operations, she had been privy to confidential and highly sensitive marketing strategies of respondent’s business. To
145
Whether the covenant protects a legitimate business interest of the employer; Whether the covenant creates an undue burden on the employee; Whether the covenant is injurious to the public welfare; Whether the time and territorial limitations contained in the covenant are reasonable; Whether the restraint is reasonable from the standpoint of public policy. (Rivera v. Solidbank Corporation, G.R. No. 163269, April 19, 2006).
Labor Law and Social Legislation exercise of the police power. It affords protection to labor and is in full accord with the constitutional mandate on the promotion of social justice. [Roman Catholic Archbishop of Manila vs. SSS, G.R. No. 15045, (1961)]
SOCIAL AND WELFARE LEGISLATION
Social Legislation It consists of statutes, regulations and jurisprudence that afford protection to labor, especially to working women and minors, and is in full accord with the constitutional provisions on the promotion of social justice to insure the well-being and economic security of all the people.
Definitions 1.
Employer - Any person, natural or juridical, domestic, or foreign, who carries into the Philippines any trade, business, industry, undertaking or activity of any kind and uses the services of another person who is under his orders as regards the employment
--Q: Is there any distinction between labor legislation and social legislation? Explain. (1995 Bar)
XPN: The Government and any of its A: Labor legislation is sometimes distinguished
political subdivisions, branches, or instrumentalities, including corporations owned or controlled by the Government. [Sec 8(c), R.A. 8282]
from social legislation by the former referring to labor statutes, like Labor Relations Law and Labor Standards, and the latter to Social Security Laws. Labor legislation focuses on the rights of the worker in the workplace. Social legislation is a broad term and may include not only laws that give social security protection, but also those that help the worker secure housing and basic necessities. The Comprehensive Agrarian Reform Law could also be considered a social legislation.
2.
Employee – Any person who: a.
b. c.
Labor Legislation is limited in scope, and deals basically with the rights and duties of employees and employers. Social Legislation is more encompassing and includes such subjects as agrarian relations, housing and human settlement, protection of women and children, etc. All labor laws are social legislation, but not all social legislation is labor law.
3.
Performs services for an Er which either or both mental and physical efforts are used Who receives compensation for such services There is an Er-Ee relationship. [Sec. 8(d), R.A. 8282]
Employment – Any service performed by an Ee for his Er.
4.
Contingency - The retirement, death, disability, injury or sickness and maternity of the member. [Sec.8(l), RA 8282]
---
5.
Monthly pension – The monthly pension shall be the highest of the following amounts: a. The sum of the following: i. Php 300.00; plus ii. 20% of the average monthly salary credit; plus iii. 2% of the average monthly salary credit for each credited year of service in excess of 10 years; or b. 40% of the average monthly salary credit; or c. Php 1,000.00, provided that the monthly pension shall in no case be paid for an aggregate amount of less than sixty (60) months. [Sec. 12 (a), R.A. 8282]
SOCIAL SECURITY SYSTEM LAW (R.A. 8282) Policy objective in the enactment of the Social Security Law To establish, develop, promote, and perfect a sound and viable tax-exempt social security service suitable to the needs of the people throughout the Philippines, which shall promote social justice and provide meaningful protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden (R.A. 8282, Sec. 2).
Minimum Pension a. Php 2,200.00 - members with at least
NOTE: The enactment of SSS law is a legitimate
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Social and Welfare Legislation
b.
right, whenever the hazards provided by the law occur [CMS Estate, Inc., vs. SSS, G.R. No. 26298, September 28, 1984].
10 credited years of service (P1,000 increase effective January 2017 as per a memorandum order issued by the Office of the President) Php 2, 400.00 for those with 20 credited years of service [R.A. 8282, Sec. 12(b)].
Benefits received under SSS law are not part of the estate of a member Benefits receivable under the SSS Law are in the nature of a special privilege or an arrangement secured by the law pursuant to the policy of the State to provide social security to the workingman. The benefits are specifically declared not transferable and exempt from tax, legal processes and liens. [SSS vs. Davac, et. al., G.R. No.21642, July 30, 1966]
NOTE: The monthly dependents’ pension shall be suspended: 1. Upon the reemployment or resumption of self-employment; 2. Recovery of the disabled member from his permanent total disability 3. Failure to present himself for examination at least once a year upon notice by the SSS. [RA 8282, Sec. 13-A (b)]
COVERAGE 1.
Compulsory Coverage a.
6. Average monthly credit – The result obtained by: a. Dividing the sum of the last 60 monthly salary credits immediately preceding the semester of contingency by 60; or b. Dividing the sum of all the monthly salary credits paid prior to the semester of contingency by the number of monthly contributions paid in the same period, whichever is greater.
b.
Limitations: i. Any benefit earned by the Ees under private benefit plans existing at the time of the approval of the Act shall not be discontinued, reduced, or otherwise impaired; ii. Existing private plans shall be integrated with the SSS but if the Er under such plan is contributing more than what is required by this Act, he shall pay to the SSS the amount required to him, and he shall continue with his contributions less the amount paid to SSS; iii. Any changes, adjustments, modifications, eliminations, or improvements in the benefits of the remaining private plan after the integration shall be subject to agreements between the Ers and the Ees concerned; and iv. The private benefit plan which the Er shall continue for his Ees shall remain under the Ers management and control unless there is an existing agreement to the contrary
Provided , that the injury or sickness which caused the disability shall be deemed as the permanent disability for the purpose of computing the average monthly salary credit. [Sec. 8(m), RA 8282] 7. Average daily salary credit – The result obtained by dividing the sum of the 6 highest monthly salary credits in the 12month period immediately preceding the semester of contingency by 180. [Sec. 8(n), RA 8282] 8.
All Ees not over 60 years of age and their Ers; Domestic helpers whose income is not less than P 1000/month and not over 60 years of age and their Ers;
Compensation – all actual remuneration for employment, including the mandated cost of living allowance, as well as the cash value of any remuneration paid in any medium other than cash except that part of the remuneration received during the month in excess of the maximum salary credit as provided under section eighteen of this Act. [Sec. 8(f), RA 8282]
c.
All self-employed – considered both an Er and Ee
SSS premiums are not taxes
NOTE: A self-employed person is one
The funds contributed to the System belong to the members who will receive benefits, as a matter of
whose income is not derived from employment as well as those mentioned in Sec. 9-A of the law [Sec. 8(s), RA 8282].
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Labor Law and Social Legislation
d. e. f.
g. h.
All self-employed professionals; Partners and single proprietors of business; Actors and actresses, directors, scriptwriters, and news correspondents who do not fall within the definition of the term “Ee”; Professional athletes, coaches, trainers, and jockeys; and Individual farmers and fisherman. [Sec. 9, R.A. 8282].
As to the self-employed
1.
2.
3.
2. Voluntary a.
Upon his registration with the SSS
His Er’s obligation to contribute arising from that employment shall cease at the end of the month of separation. But said Ee shall be credited with all contributions paid on his behalf and entitled to benefits according to the provisions of R.A. 9282. He may, however, continue to pay the total contributions to maintain his right to full benefit. (R.A. 8282, Sec. 11)
Spouses who devote full time to managing the household and family affairs.
The above provision recognizes the “once a member, always a member” rule.
XPN: They are also engaged in other
Effect of the interruption of business or professional income
vocation or employment which is subject to mandatory coverage; [Sec. 9(b), R.A. 8282]
If the self-employed member realizes no income in any given month: 1. He shall not be required to pay contributions for that month. 2. He may, however, be allowed to continue paying contributions under the same rules and regulations applicable to a separated Ee member 3. Provided, that no retroactive payment of contributions shall be allowed other than as prescribed under Sec.22-A. [R.A. 8282, Sec. 11(a)]
b.
Filipinos recruited by foreign-based Ers for employment abroad; [Sec. 9(c), R.A. 8282] c. Ee separated from employment to maintain his right to full benefits; and d. Self-employed who realizes no income for a certain month.
3. By agreement Any foreign government, international organization, or their wholly-owned instrumentality employing workers in the Philippines
Determination of the contributions of the selfemployed
XPN: Those already covered by their respective civil service retirement systems.
The contribution shall be determined in accordance with Sec. 18 of the SSS Law, provided that: 1. The monthly earnings declared at the time of registration shall be considered as his monthly compensation and he shall pay for both Er and Ee contributions 2. The monthly earnings declared at the time of registration shall remain the basis of his monthly salary credit, unless another declaration of his monthly earnings was made, the latter becomes the new basis of his monthly salary credits. [Sec. 19(a), R.A. No. 8282]
NOTE: Seafarers are also covered by the SSS Law – The Social Security Commission's Resolution No. 437, dated July 14, 1988 states that the extension of the coverage of the SSS to Filipino seafarers arises by virtue of the assent given in the contract of employment signed by Er and seafarer. This merely gives effect to the constitutional mandate to the State to afford protection to labor whether "local or overseas". (Ben Sta. Rita v. Court of Appeals, G.R. No. 11989)
NOTE: A 1.5-percentage increase in members’
Effectivity of compulsory coverage As to the employer
On the operation
first
As to the employee
On the first day of his employment
contributions was approved, effective May 2017, along with the pension hike. The maximum monthly salary credit was also increased to P20,000, on which the monthly premium is based.
of
Reportorial requirements of the Er and selfemployed
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Social and Welfare Legislation 1.
2.
other day looking for work. He contacted Lando
Employer – Report immediately to SSS the names, ages, civil status, occupations, salaries and dependents of all his covered Ees. Self-employed – Report to SSS within 30 days from the first day of his operation, his name, age, civil status, occupation, average monthly net income and his dependents.
who immediately attended to Don Luis’s garden
and finished the job in three days. (2013 Bar) (A) Is there an employer-employee relationship between Don Luis and Lando? (B) Does Don Luis need to register Lando with the Social Security System (SSS)?
EXCLUSIONS FROM COVERAGE Employment which are excluded compulsory coverage under the SSS Law 1. 2.
3.
4.
from A:
Employment purely casual and not for the purpose of occupation or business of the Er; Service performed on or in connection with an alien vessel by an employee if he is employed when such vessel is outside the Philippines; Service performed in the employ of the Philippine Government or instrumentality or agency thereof; and Service performed in the employ of a foreign government or international organization, or their wholly-owned instrumentality:
(B) NO. Don Luis does not need to register Lando with the SSS because he is a purely casual employee, hence outside SSS coverage (RA 8282). Neither should he report Lando for SSS coverage under the Kasambahay Act because, although a gardener, he is an occasional if not sporadic employee. Therefore, he is not a kasambahay who is entitled to SSS coverage (RA 10361).
--BENEFITS Benefits under the SSS Law
Such other services performed by temporary and other Ees which may be excluded by regulation of the Commission. Ees of bona fide independent contractors shall not be deemed Ees of the Er engaging the service of said contractors. [Sec. 8(j), R.A. 1161, as amended]
1. 2. 3. 4. 5.
by
typhoon
“Bening.”
Are
Sickness Benefits Permanent Disability Benefits Maternity Leave Benefit Retirement Benefit Death and funeral Benefits
Non-transferability of the benefits provided for in the SSS law
--Q: A textile company hires 10 carpenters to repair the roof of its factory which was destroyed
YES.
There is employer-employee relationship between Don Luis and Lando. Firstly, Lando who was looking for work finally rendered personal services for Don Luis. Secondly, Lando could not have been the master of his time, means and methods under the circumstances (Sec. 8, RA 8282).
Provided, that such institutions employing workers in the Philippines or employing Filipinos outside of the Philippines, may enter into an agreement with the Philippine Government for the inclusion of such Ees in the SSS except those already covered by their respective civil service retirement systems. 5.
(A)
Benefits provided for in the SSS Law are not transferable and no power of attorney or other document executed by those entitled thereto in favor of any agent, attorney, or any other person for the collection thereof on their behalf shall be recognized, except when they are physically unable to collect personally such benefits. (R.A. 1161 as amended, Sec. 15)
the
carpenters subject to compulsory coverage under the SSS Law? Why? A: NO. The employment is purely casual and not for the purpose of the occupation or business of the Er. Their engagement is occasioned by the passage of the typhoon; they are not hired on a regular basis.
--Q: On her way home from work, Mikaela, a machine operator in a sash factory, decided to watch a movie in a movie house. However, she is stabbed by an unknown assailant. When she filed a claim for benefits under the SSS Law, it was denied on the ground that her injury is not work-connected. Is the denial legal? Why?
----Q: Don Luis, a widower, lived alone in a house with a large garden. One day, he noticed that the plants in his garden needed trimming. He remembered that Lando, a 17-year old out-ofschool youth, had contacted him in church the
149
Labor Law and Social Legislation A: NO. It is not necessary, for the enjoyment of
immediately preceding the date of notification (Sec. 14[b], R.A. 8282).
benefits under the SSS Law that the injury is workconnected. What is important is membership in the SSS and not the causal connection of the work of the Ee to his injury or sickness.
Compensable confinement
---
1. 2.
NOTE: Claims based on work-connected injuries or occupational diseases are covered by the State Insurance Fund.
SICKNESS BENEFITS
It begins on the 1st day of sickness Payment of such allowances shall be promptly made by the Er: a. Every regular payday or on the 15 th and last day of each month, b. In case of direct payment by the SSS - as long as such allowances are due and payable. (Sec. 14[b], R.A. 8282)
Sickness benefit Payment of sickness benefit It is a daily allowance paid to a covered Ee who becomes sick and is confined in a hospital for more than 3 days or elsewhere with the Commission’s approval.
1. The Er shall pay the Ee for each compensable confinement or fraction thereof. 2. The SSS shall pay the member who is unemployed, self-employed or voluntary members with a daily sickness benefit equivalent to 90% of his average daily salary credit.
Requisites: 1.
2.
3.
4. 5.
6.
Payment of at least 3 monthly contributions in the 12-month period immediately preceding the semester of sickness; Sickness or injury and confinement for more than 3 days in a hospital or elsewhere with the Commission’s approval; Notice of the fact of sickness by the Ee to the Er (or to the SSS in case the member is unemployed) within 5 calendar days after the start of his confinement; and Exhaustion of sick leaves of absence with full pay to the credit of the Ee. (Sec. 14, RA 8282) In no case shall the daily sickness benefit be paid longer than 120 days in 1 calendar year, nor shall any unused portion of the 120 days of sickness benefit granted be carried forward and added to the total number of compensable days allowable in the subsequent year; No employee shall be paid any sickness benefit for more than 240 days on account of the same confinement;
Requirements for an Er to claim reimbursement of the sickness benefit
The requirement of notification is not necessary when:
1.
100% of daily benefits shall be reimbursed by SSS if the following requirements are satisfied: a. Receipt of SSS of satisfactory proof of such payment and legality thereof; b. The Er has notified the SSS of the confinement within 5 calendar days after receipt of the notification from the Ee member.
2.
Er shall be reimbursed only for each day of confinement starting from the 10th calendar day immediately preceding the date of notification to the SSS if the notification to the SSS is made beyond 5 calendar days after receipt of the notification from the Ee member. [Sec. 14 (c), R.A. 8282]
Reimbursement by SSS GR: SSS shall reimburse the Er or pay the
1. 2.
Confinement is in a hospital; or The employee became sick or was injured while working or within the premises of the employer.
unemployed member only for confinement within 1 year immediately preceding the date the claim for benefit or reimbursement is received by the SSS.
XPN: Confinement in a hospital, in which case the NOTE: If the member is unemployed or self-
claim for benefit or reimbursement must be filed within 1 year from the last day of confinement. [Sec. 14(c), R.A. 8282)
employed, he shall directly notify the SSS of his confinement within 5 calendar days after the start thereof unless such confinement is in a hospital in which case notification is also not necessary. Where notification is necessary, confinement shall be deemed to have started not earlier than the 5th day
Instances when the employer or the unemployed member is not entitled to reimbursement
150
Social and Welfare Legislation benefits
1. Where the Er failed to notify the SSS of the confinement; 2. In the case of the unemployed, where he failed to send the notice directly to the SSS except when the confinement is in a hospital; and 3. Where the claim for reimbursement is made after 1 year from the date of confinement.
Death
Requisite
Death benefits
Permanent total disability benefits DISABILITTS
At least 36 monthly contributions Primary Beneficiaries
At least monthly contributions Member
36
Benefits shall be in lump sum equivalent to the monthly pension times the number of monthly contributions paid to SSS or 12 times the monthly pension, whichever is higher.
Benefits shall be in lump sum equivalent to the monthly pension times the number of monthly contributions paid to SSS or 12 times the monthly pension, whichever is higher.
--Q: Because of the stress in caring for her four (4) growing children, Tammy suffered a miscarriage late in her pregnancy and had to undergo an operation. In the course of the operation, her obstetrician further discovered a suspicious-looking mass that required the subsequent removal of her uterus (hysterectomy). After surgery, her physician advised Tammy to be on full bed rest for six (6) weeks. Meanwhile, the biopsy of the sample tissue taken from the mass in Tammy's uterus showed a beginning malignancy that required an immediate series of chemotherapy once a week for four (4) weeks. What benefits can Tammy claim under existing social legislation? (2013 Bar)
Benefits payable to whom
A: Assuming she is employed, Tammy is entitled to
Effect of the death of a pensioner with permanent total disability
Failure to make 36 monthly payments
a special leave benefit of two months with full pay (Gynecological Leave) pursuant to R.A. No. 9710 or the Magna Carta of Women. She can a lso claim
1.
Primary beneficiaries are entitled to receive monthly pension as of the date of disability.
Sickness Leave benefit in accordance with the SSS Law.
2. If there are no primary beneficiaries and the pensioner dies within 60 months from the start of his monthly pension –
--PERMANENT DISABILITY BENEFITS
secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the 5-year guaranteed period excluding the dependents’ pension. [Sec. 13-A (c), RA 8282]
Permanent disability benefit It is a cash benefit paid to a member who becomes permanently disabled, either partially or totally.
Permanent total disability
Effect of retirement or death of a pensioner with a partial disability
The following are deemed permanent total disabilities: 1. Complete loss of sight of both eyes; 2. Loss of two limbs at or above the ankle or wrists; 3. Permanent complete paralysis of two limbs; 4. Brain injury resulting to incurable imbecility or insanity; and 5. Such cases as determined and approved by the SSS. [Sec. 13-A (d), RA 8282]
If the pensioner with partial disability retires or dies, the disability pension shall cease upon his retirement or death. [Sec. 13-A (j), RA 8282]
MATERNITY LEAVE BENEFIT Maternity benefit The maternity benefit is a daily cash allowance granted to a female member who was unable to work due to childbirth or miscarriage.
Death benefits vs. Permanent total disability
151
Labor Law and Social Legislation Qualifications for entitlement to maternity benefit
under the law. Since A gave birth through C-section, she is entitled to one hundred percent (100%) of her average salary credit for seventy-eight (78) days, provided she notifies her employer of her pregnancy and the probable date of her childbirth, among others (See Section 14-A, Rep. Act No. 8282). The same maternity benefits are ensured by Sec. 22 (b)(2) of the Magna Carta of Women (Rep. Act No. 9710).
1. She has paid at least 3 monthly contributions within the 12-month period immediately preceding the semester of her childbirth or miscarriage. 2. She has given the required notification of her pregnancy through her Er if employed, or to the SSS if separated, voluntary or self-employed member.
----Q: Luisa is an unwed mother with 3 children from different fathers. In 2004, she became a member of the Social Security System (SSS). That same year, she suffered a miscarriage of a baby out of wedlock from the father of her third child. She wants to claim maternity benefits under the SSS Act. Is she entitled to claim? (2015 Bar)
NOTE: A voluntary or a self-employed member is entitled to the maternity benefit provided that she meets the aforementioned qualifying conditions.
Guidelines 1.
2.
Circular No. 15-V – Pursuant to RA No. 7322 increasing the maternity benefits provided for under Sec. 14-A of the SS Law a. The daily maternity benefit shall be paid for compensable period of 60 days in case of normal delivery, abortion or miscarriage, or 78 days in case of caesarean delivery. b. The payment of daily maternity benefit shall bar the recovery of sickness benefits for the same compensable period c. The daily maternity benefit shall be equivalent to 100% of the average daily salary credit as defined under the SSS Law d. These guidelines shall be observed for child deliveries, abortions and miscarriages occurring on or after April 23, 1991. Circular No. 22-V – Circular No. 103-T on Maternity Leave Benefits has been amended to 10 years instead of 1 year prescriptive period for the employers to file their reimbursement for maternity benefits claims from the date said advances were made in line with Arts. 1 144 and 1150 of the NCC. (Alcantara, Vol. II)
A: YES. Provided Luisa has reported to her employer her pregnancy and date of expected delivery and paid at least three monthly contributions during the 12-month period immediately preceding her miscarriage then she is entitled to maternity benefits up to four deliveries. As to the fact that she got pregnant outside wedlock, as in her past three pregnancies, this will not bar her claim because the SSS is non-discriminatory.
--RETIREMENT BENEFIT Retirement benefit It is a cash benefit paid to a member who can no longer work due to old age.
Types of retirement benefit 1.
--Q: A, single, has been an active member of the Social Security System for the past 20 months. She became pregnant out of wedlock and on her 7th month of pregnancy, she was informed that she would have to deliver the baby through caesarean section because of some complications. Can A claim maternity benefits? If yes, how many days can she go on maternity leave? If not, why is she not entitled? (2010 Bar)
2.
Monthly Pension– Lifetime cash benefit paid to a retiree who has paid at least 120 monthly contributions to the SSS prior to the semester of retirement. Lump Sum Amount – Granted to a retiree who has not paid the required 120 monthly contributions.
Members entitled to retirement benefits 1.
A: YES. The SSS Law does not discriminate based on the civil status of a female member-employee. As long as said female employee has paid at least three (3) monthly contributions in the 12-month period immediately preceding the semester of her childbirth, she can avail of the maternity benefits
2.
152
A member who a. Is at least 60 years old b. Has paid at least 120 monthly contributions prior to the semester of retirement; and c. Already separated from employment or has ceased to be self-employed, A member who has reached the age of 65 years old, shall be entitled for as long as he lives to the monthly pension [Sec 12-B (a) R.A. 8282];
Social and Welfare Legislation 3.
A member who a. At least 60 years old at retirement; and b. Does not qualify for pension benefits under paragraph a of Sec. 12-B – entitled to a lump sum benefit equal to the total contributions paid by him and on his behalf; c. Must be separated from employment and is not continuing payment of contributions to the SSS on his own. [Sec. 12-B (b), R.A. 8282]
Consequence of the re-employment resumption to work of a retired pensioner
b.
the SSS: or 12 times the monthly pension, whichever is higher. (Sec 13, R.A. 8282)
Funeral benefit A funeral grant equivalent to Php 12, 000.00 shall be paid, in cash or in kind, to help defray the cost of expenses upon the death of a member or retiree (Sec. 13-B, R.A. 8282).
or NOTE: Upon representations made by the SSS, and subject to existing laws, rules, and regulations, please be informed that the P1,000 increase in benefits of qualified SSS retirees, survivors, and permanently disabled pensioners effective January 2017, has been approved. (Memorandum order from the Office of the Executive Secretary, authorized by the President, February 22, 2017)
The monthly pension of a retired member who resumes employment and is less than 65 years old will be suspended. He and his Er will again be subject to compulsory coverage. [Sec. 13-A (c), RA 8282]
Children of the retiree member who are entitled
BENEFICIARIES
to dependent’s pension
Primary beneficiaries
Only 5 minor children, beginning from the youngest, are entitled to the dependent’s pension. No substitution is allowed. Where there are more than 5 legitimate and illegitimate children, the legitimate ones will be preferred [Sec. 12-A RA 8282]
1. 2.
The dependent spouse until he or she remarries. The dependent legitimate, legitimated, or legally adopted, and illegitimate children:
NOTE: The dependent child will receive the pension until the child reaches (1) 21 years of age, (2) gets married, (3) gets employed and earns Php 300 a month or more, or (4) dies.
Provided, that the dependent illegitimate children shall be entitled to 50% of the share of the legitimate, legitimated, or legally adopted children.
However, the dependent's pension is granted for life to children who are over 21 years old, provided they are incapacitated and incapable of self-support due to physical or mental defect which is congenital or acquired during minority.
In their absence, the dependent illegitimate children shall be entitled to 100% of the benefits.
Secondary beneficiaries
DEATH AND FUNERAL BENEFITS 1.
Entitlement to death benefits 2. 1.
2.
Upon death of a member, if he has paid at least 36 monthly contributions prior to the semester of death: a. Primary beneficiaries shall be entitled to the monthly pension; or b. If there are no primary beneficiaries, secondary beneficiaries shall be entitled to a lump sum benefit equivalent to 36 times the monthly pension. Upon death of a member if he has not paid the required 36 monthly contributions prior to the semester of death: a. Primary or secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the monthly pension multiplied by the number of monthly contributions paid to
In the absence of primary beneficiaries, the dependent parents of the member. In the absence of the foregoing, any other person designated by the covered employee as secondary beneficiary. [R.A. 8282, Sec. 8(k)]
Dependents 1. 2.
153
The legal spouse entitled by law to receive support from the member; The legitimate, legitimated, or legally adopted, and illegitimate child who: a. Is unmarried, b. Not gainfully employed, and c. Has not reached 21 years of age, or if over 21 years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally.
Labor Law and Social Legislation d. 3.
The parent who is receiving regular support from the member. The parent who is receiving regular support from the member. [Sec. 8(e), RA 8282]
another. Meaning, relying on, or subject to, someone else for support; not able to exist or sustain oneself, or to perform anything without the will, power, or aid of someone else. It should be noted that the GSIS law likewise defines a dependent spouse as the legitimate spouse dependent for support upon the member or pensioner. If a wife is already separated de facto from her husband, she cannot be said to be "dependent for support" upon the husband, absent any showing to the contrary. Conversely, if it is proved that the husband and wife were still living together at the time of his death, it would be safe to presume that she was dependent on the husband f or support, unless it is shown that she is capable of providing for herself. (SSS vs. Aguas, G.R. No. 165546, Feb. 27, 2006)
--Q: John died in an accident while in the performance of his duties as an electrician at a vessel. At the time of his demise, he was childless and unmarried, predeceased by his adoptive parent Cornelio during his minority, and survived only by his biological parent Bernardina. Bernardina filed a claim for death benefits, but the SSS rejected her claim because she is no longer considered a primary beneficiary, because she is no longer John’s
legitimate parent due to his legal adoption by Cornelio. Is the SSS correct?
--Q: Bonifacio and Elena Dycaico lived together as husband and wife without the benefit of marriage. In June 1989, Bonifacio was considered retired and began receiving his monthly pension from the SSS. Bonifacio married Elena on January 6, 1997. He continued to receive the monthly pension until he passed away on June 19, 1997. Elena filed with the SSS an application for survivors pension but it was denied on the ground that under Section 12-B(d) of the SSS Law, the primary beneficiaries who are entitled to survivors pension are those who qualify as such as of the date of retirement of the deceased member. Hence, Elena, who was not then the legitimate spouse of Bonifacio as of the date of his retirement, could not be considered his primary beneficiary. Is Elena entitled to claim survivors pension?
A: NO. The term "parents" in the phrase "dependent parents" ought to be taken in its general sense and cannot be unduly limited to "legitimate parents”. The phrase "dependent parents" should, therefore, include all parents, whether legitimate or illegitimate and whether by nature or by adoption. When the law does not distinguish, one should not distinguish. Plainly, "dependent parents" are parents, whether legitimate or illegitimate, biological or by adoption, who are in need of support or assistance. The biological parent has the right to the benefits stemming from John’s death as a dependent parent given the adoptive parent’s untimely demise during John’s minority. It is true that adoption decree severed the relation between John and his biological parent, effectively divesting the latter’s status of a legitimate parent, and consequently, that of being a secondary beneficiary. However, it should be noted that parental authority should be deemed to have reverted in favor of the biological parent upon death of the adoptive parent during the adoptee’s minority. Thus, the death benefits under the Employees Compensation Program shall accrue solely to the surviving biological parent, John’s sole remaining beneficiary. (Bartolome vs. SSS, G.R. No. 192531, 12 November 2014)
A: YES. The proviso as of the date of his retirement in Section 12-B (d) of Rep. Act No. 8282, which qualifies the term primary beneficiaries, is unconstitutional for it violates the due process and equal protection clauses of the Constitution. The classification of dependent spouses on the basis of whether their respective marriages to the SSS member were contracted prior to or after the latter’s retirement for the purpose of entitlement to survivors pension does not rest on real and substantial distinctions. It is too sweeping because the proviso effectively disqualifies the dependent spouses whose respective marriages to the retired SSS member were contracted after the latter’s retirement as primary beneficiaries and unfairly lumps all these marriages as sham relationships or were contracted solely for the purpose of acquiring benefits accruing upon the death of the other spouse. The proviso runs afoul of the due process clause as it out rightly deprives the surviving spouses whose respective marriages to the retired SSS members were contracted after the latter’s
--Dependent for support The entitlement to benefits as a primary beneficiary requires not only legitimacy but also dependence upon the member Ee. (Gil v. SSC CA- GR SP. 37150, May 8, 1996)
NOTE: The Court defined a dependent as one who derives
his
or
her
main
support
from
154
Social and Welfare Legislation States. In 1986, she filed for divorce against
retirement of their survivors benefits. There is outright confiscation of benefits due such surviving spouses without giving them an opportunity to be heard. (Dycaico v. SSS, G.R. No. 161357, Nov. 30, 2005)
Antonio in California. The divorce was granted. In 1987, Antonio married Cirila de los Santos. On her part, Gloria married Larry Thomas Constant, an American citizen, in the US. In 1999, Antonio died of respiratory failure. Cirila applied for and began receiving his SSS pension benefit. On December 21, 1999, Gloria filed a claim for Antonio’s death benefits with the SSS. Her claim was denied on the ground that she was not a qualified beneficiary of Antonio. She contended that her marriage to Larry Constant was not the subsequent marriage contemplated under SSS Law that would disqualify her as a beneficiary; that the decree of divorce issued by a foreign state involving Filipino citizens has no validity and effect under Philippine law. Is Gloria still qualified as a primary beneficiary of Antonio under the SS Law?
--NOTE: The reckoning point in determining the beneficiaries of the deceased should be the time of the latter’s death. (SSS v. De Los Santos, G.R. No. 164790, Aug. 29, 2008)
QUALIFICATION OF SPOUSE-BENEFICIARY To insure a uniform implementation of the Dycaico case, the SSS issued the following guidelines: 1.
Spouse a. Must have been legally married to the retiree-pensioner at the time of death. If the marriage was celebrated after the retirement of the member, any of the following circumstances is present: i. The spouses were living together as husband and wife without legal impediment to marry each other prior to the retirement of the member; or ii. The surviving spouse was reported as beneficiary-spouse in the SSS Forms prior to the retirement of the member; or iii. A child was born during the existence of the marriage between the retiree-pensioner and the surviving spouse; or iv. Before marriage, a child was born during the time the spouses were living together as husband and wife without legal impediment to marry each other; or v. The marriage between the surviving spouse and retireepensioner is established to have been contracted not for any fraudulent purpose. In this regard, the SSS Branch concerned shall conduct an appropriate investigation to satisfy this requirement. b. Must have been dependent for support upon the retiree-pensioner during the existence of marriage. (SSS Office Order No. 2010-025)
A: YES. The divorce obtained by Gloria against the deceased Antonio was not binding in this jurisdiction. Under Philippine law, only aliens may obtain divorces abroad, provided they are valid according to their national law. The divorce was obtained by Gloria while she was still a Filipino citizen and thus covered by the policy against absolute divorces. It did not sever her marriage ties with Antonio. Although Gloria was the legal spouse of the deceased, the Court finds that she is still disqualified to be his primary beneficiary under the SS Law. She fails to fulfill the requirement of dependency upon her deceased husband Antonio. (SSS v. De Los Santos, G.R. No. 164790, Aug. 29, 2008)
----Q: Rodolfo, an SSS member, was survived by the following: his legal wife Editha, who was now cohabiting with another man; another wife Yolanda, whom Rodolfo married and had four illegitimate children now over 21 years old; and another common-law wife, Gina, with whom he had two illegitimate minor children. All wives filed a claim before the SSS for death benefits. Who among the claimants are qualified and/or disqualified as beneficiaries? A: Yolanda is disqualified, because the marriage between her and Rodolfo was null and void because of a prior subsisting marriage contracted with Editha.
--Q: Antonio and Gloria de los Santos, both Filipinos, got married in 1964. In 1983, Gloria left Antonio and went to the United
Editha is disqualified, that even if she was the legal wife, she was not qualified to the death benefits since she herself admitted that she was not dependent on her deceased husband for support
155
Labor Law and Social Legislation --SETTLEMENT OF DISPUTES
inasmuch as she was cohabiting with another man. Gina is disqualified, being a common-law wife.
DISPUTE SETTLEMENT
Since the wives are disqualified and because the deceased has no legitimate child, it follows that the dependent illegitimate minor children of the deceased shall be entitled to the death benefits as primary beneficiaries. The SSS Law is clear that for a minor child to qualify as a “dependent,” the only requirements are that he/she must be below 21 years of age, not married nor gainfully employed.
Disputes involving: 1. Coverage 2. Benefits 3. Contributions 4. Penalties 5. Any other matter related thereto. Social Security Commission (SSC)
Yolanda’s children are disqualified for being over 21 years old. In this case, the minor illegitimate children of Gina are the only qualified beneficiaries of Rodolfo. (Signey vs. SSS, G.R. No. 173582, 28 January 2008)
--Compensation All actual remuneration for employment, including the mandated cost of living allowance, as well as the cash value of any remuneration paid in any medium other than cash except that part of the remuneration received during the month in excess of the maximum salary.
CA / SC
--Q: The owners of FALCON Factory, a company engaged in the assembling of automotive components, decided to have their building renovated. Fifty (50) persons, composed of engineers, architects, and other construction workers, were hired by the company for this purpose. The work was estimated to be completed in 3 years. The workers contended that since the work would be completed after more than 1 year, they should be subject to compulsory coverage under the Social Security Law. Do you agree with their contention? Explain your answer fully. (2002 Bar Question)
Execution of decision
Note: Disputes within the mandatory period of 20 days after the submission of evidence [R.A. 8282, Sec. 5(a)]. Decision, in the absence of appeal, shall be final and executory 15 days after date of notification [R.A. 8282, Sec. 5(b)]. Decisions of SSC shall be appealable to: 1. CA – questions of law and fact [R.A. 8282, Sec. 5(c); Rule 43, 1997 Rules of Court] 2. SC – questions of law. [ R.A. 8282, Sec. 5(c); Rule 45, 1997 Rules of Court] SSC may, motu proprio or on motion of any interested party, issue a writ of execution to enforce any of its decisions or awards, after it has become final and executory [Sec. 5d¸ R.A. 8282, Sec. 5(d)].
--Q: Can the SSC validly re-evaluate the findings of the RTC, and on its own, declare the latter’s
decision to be bereft of any basis?
A: NO. Under Sec. 8 (j) of R.A.1161, as amended,
A: NO. It cannot review, much less reverse,
employment of purely casual and not for the purpose of the occupation or business of the Er is excepted from compulsory coverage. An employment is purely casual if it is not for the purpose of occupation or business of the Er. In the problem given, Falcon Factory is a company engaged in the assembly of automotive components. The 50 persons (engineers, architects, and construction workers) were hired by Falcon Factory to renovate its building. The work to be performed by these 50 people is not in connection with the purpose of the business of the factory. Hence, the employment of these 50 persons is purely casual. They are, therefore, excepted from the compulsory coverage of the SSS law.
decisions rendered by courts of law as it did in the case at bar when it declared that the CFI Order was obtained through fraud and subsequently disregarded the same. In interfering with and passing upon the CFI Order, the SSC virtually acted as an appellate court. The law does not give the SSC unfettered discretion to trifle with o rders of regular courts in the exercise of its authority to determine the beneficiaries of the SSS. (SSS vs. Teresita Jarque Vda. De Bailon, G.R. No. 165545, March 24, 2006)
----Q: Due to the delinquency incurred by ABC Co. on its premium and loan amortizations, SSS
156
Social and Welfare Legislation suggested settling its obligation either through installment or through dacion en pago. ABC chose dacion en pago and offered its property situated in Baguio City. It was approved by the SSS. However, SSS refused to accept the payment unless the interest and charges will be paid. ABC then filed a suit in court. SSS moved for dismissal contending that the SSC, and not regular courts, has the jurisdiction to entertain controversies arising from the non-implementation of dacion en pago agreed upon by the parties as a means
Purpose for the enactment of the GSIS law
of settlement of ABC’s liabilities. Resolve.
Definitions
To provide and administer the following social security benefits for government Ees: 1. Compulsory life insurance; 2. Optional life insurance; 3. Retirement benefits; 4. Disability benefits to work-related contingencies; and 5. Death benefits.
A: The law clearly vests upon the Commission
1.
jurisdiction over “disputes arising under this Act with respect to coverage, benefits, contributions and penalties thereon or any matter related thereto...” Dispute is defined as “a conflict or controversy.”From the allegations of the complaint, it readily appears that there is no longer any dispute with respect to ABC’s accountability to the SSS. It had, in fact, admitted their delinquency and offered to settle them by way of dacion en pago subsequently approved by the SSS in Resolution No. 270-s. 2001. The controversy, instead, lies in the non-implementation of the approved and agreed dacion en pago on the part of the SSS. As such, ABC filed a suit to obtain its enforcement which is, doubtless, a suit for specific performance and one incapable of pecuniary estimation beyond the competence of the Commission. [SSS vs. Atlantic Gulf and Pacific Company of Manila, Inc. and Semirara Coal Corp . , G.R. No. 175952, (2008)]
Employer a. b. c. d.
2.
National Government Its political subdivisions, branches, agencies, instrumentalities GOCCs, and financial institutions with original charters Constitutional Commissions and the Judiciary. [Sec. 2 (c), R.A. 8291]
Employee or member – Any person, receiving compensation while in the service of an Er, whether by election or appointment, irrespective of status of appointment, including barangay and sanggunian officials. [Sec. 2(d), R.A. 8291]
3.
Compensation – The basic pay or salary received by an Ee, pursuant to his or her election or appointment, excluding per diems, bonuses, OT pay, honoraria, allowances, and any other emoluments received in addition to the basic pay which are not integrated into the basic pay under existing laws. [Sec. 2(i), R.A. 8291]
--Prescriptive period to claim the benefits GR: 10 years from the date of contingency.
--Q: Baradero is a member of the Sangguniang Bayan of the Municipality of La Castellana, Negros Occ. and is paid on a per diem basis. On the other hand, Belo a Vice-Governor of Capiz is in a hold over capacity and is paid on a per diem basis. Are the services rendered by Baradero and Belo on a per diem basis creditable in computing the length of service for retirement purposes?
XPNs: Life insurance and retirement. (SSS Office Order Number 2015-005)
NOTE: Pursuant to SSC Resolution Number 1019279-10, the reckoning point for the 10-year prescriptive period depends on when the claim was originally settled. For claims settled before March 1, 2006, the 10-year prescriptive period will start on the said date. For claims settled on or after March 1, 2006, the prescriptive period will start on the initial settlement date of the retirement, disability or death claim.
A: YES. The traditional meaning of per diem is a reimbursement for extra expenses incurred by the public official in the performance of his duties. Under this definition, the per diem is intended to cover the cost of lodging and subsistence of officers and employees when the latter are on a duty outside of their permanent station. On the other hand, a per diem could rightfully be considered a compensation or remuneration attached to an office.
GSIS LAW (R.A. 8291)
157
Labor Law and Social Legislation The per diems paid to Baradero and Belo were in the nature of compensation or remuneration for their services as Sangguniang Bayan and Vice-Governor, respectively, rather than a reimbursement for incidental expenses incurred while away from their home base.
The unremitted contributions shall be charged interests as prescribed by the GSIS Board of Trustees but shall not be less than 2% simple interest per month from due date to the date of payment by the employers concerned. (Sec. 7, R.A. 8291)
If the remuneration received by a public official in the performance of his duties does not constitute a mere “allowance for expenses” but appears to be his actual base pay, then no amount of categorizing the salary as a “ per diem” would take the allowances received from the term service with compensation for the purpose of computing the number o f years of service in government. (GSIS v. CSC, G. R. Nos. 98395 and 102449, June 19, 1995)
--Q: May a member enjoy the benefits provided for in the Revised GSIS Act simultaneous with similar benefits provided under other laws for the same contingency? A: Whenever other laws provide similar benefits for the same contingencies covered by this Act, the member who qualifies to the benefits shall have the option to choose which benefits will be paid to him. However, if the benefits provided by the law chosen are less than the benefits provided under this Act, the GSIS shall pay only the difference. (Sec. 55, R.A. 8291)
--Reportorial requirements of the Er Er must report to GSIS the names, employment status, positions, salaries of the Ee and such other matter as determined by the GSIS.
---
Penalty in case of delayed remittance or nonremittance of contributions Similarities between the SSS law and the GSIS law Basis
Dependents
Funding Exemption from tax, legal processes, lien
Social Security Act of 1997 (RA 8282)
Government Service Insurance Act of 1997 (RA 8291)
1. Legal spouse entitled for support; 2. Child, whether legitimate, legitimated, legally adopted or illegitimate; 3. Parents dependent for support 1. Er’s contribution 2. Ee’s / member’s contribution Property, assets, revenues of SSS and GSIS are all exempt from taxes, and all benefits paid by SSS or GSIS shall likewise be exempt from taxes, assessments, fees, charges and duties of all kinds.
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Social and Welfare Legislation SSS law vs. GSIS law Basis
Social Security Act of 1997 (RA 8282) 1. Employer – Any person, natural or judicial, domestic, or foreign who carries on in the Philippines any trade, business, industry, undertaking or activity of any kind and uses the services of another person who is under his orders as regards employment
Who are covered
Exempt employer – Government and any of its political subdivisions, branches and instrumentality, including GOCCs, i.e. those under GSIS
Government Service Insurance Act of 1997 (RA 8291) 1. Employer – the National Government, its political subdivisions, branches, agencies, or instrumentalities, including GOCCs, and financial institutions with original charters, the Constitutional Commissions, and the Judiciary 2. Employee – any person receiving compensation while in service of an Er as defined herein, whether by election or appointment, regardless of the status of employment, including Barangay and Sanggunian Members
2. Employee – any person who performs services for an employer who receives compensation for such services, where there is an Er-Ee relationship
Conditions for child to be considered dependent
3. Self-employed – considered both Er and Ee 1. Unmarried; 2. Not gainfully employed; 3. Has not reached 21 years of age; OR 4. Incapable of supporting himself either physically or mentally prior to 21 years of age or age of majority, as the case may be 1. Primary a. Dependent Spouse until remarriage AND
b. Dependent Legitimate or Legitimated or Legally Adopted and Illegitimate Children Beneficiaries 2. Secondary a. Dependent Parents b. Absent any primary and secondary
Benefits
beneficiaries, any other person designated by member as secondary beneficiary 1. Sickness Benefits 2. Permanent Disability Benefits 3. Maternity Benefits 4. Retirement Benefits 5. Death Benefits 6. Funeral Benefits 7. Loan Grant
1. Compulsory a. All Ees not over sixty (60) years of age and their Ers; compulsory coverage of the Ers shall take effect on the first day o f his
159
1. Unmarried; 2. Not gainfully employed; 3. Not over the age of majority; OR 4. Incapable of supporting himself either physically or mentally prior to 21 years of age or age of majority, as the case may be 1. Primary a. Legal dependent spouse until remarriage AND
b. Dependent Children 2. Secondary a. Dependent parents AND b. Legitimate descendants, subject to restrictions on dependent children, legitimate descendants
1. Separation Benefits 2. Retirement Benefits 3. Permanent Disability Benefits 4. Temporary Disability Benefits 5. Survivorship Benefits 6. Funeral Benefits 7. Life Insurance Benefits XPN: The members of the Judiciary and Constitutional Commissions shall have life insurance only. Compulsory for all employees receiving compensation who have not reached compulsory retirement age, irrespective of employment status
Labor Law and Social Legislation operation and that of the Ee on the day of his employment b. Self-employed persons as may be determined by the Commission, including but not limited to: all self-employed professionals; partners and singleproprietors of business; actors and actresses, directors, scriptwriters, and news correspondents not employees; professional athletes, coaches, trainers and jockeys, and individual farmers and fishermen, upon their registration with the SSS. Coverage c. Domestic helpers sixty years of age and below with a monthly income of not less than P1000 on the date of their employment. d. Individual farmers and fishermen under SSS rules and regulation.
2. Voluntary a. Filipinos recruited by foreign-based Ers for employment abroad b. Ees separated from employment to maintain his right to full benefits c. Self-employed who realizes no income for a certain month d. Spouses who devote full time to managing household and family affairs unless specifically mandatorily covered 1. Employment purely casual and not for purpose, occupation, or business of the Er.
1. Members of the AFP 2. Members of the PNP
Exceptions from coverage
2. Services performed on or in connection with alien vessel, if employed when such vessel is outside of the Philippines.
3. Contractual Ees, who have no Er-Ee relationship with the agency they serve
3. Ees of Philippine Government or instrumentality or agency thereof.
4. Members of Judiciary and Constitutional Commissions covered by life insurance only
4. Service performed in the employ of a foreign government, or international organizations, or wholly owned instrumentality employing workers in the Philippines or employing Filipinos outside of the Philippines. 5. Services performed by temporary Ees and other Ees excluded by SSS regulation; Ees of bona fide independent contractors shall not be deemed Ees of the Er engaging the services of an independent contractor
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Social and Welfare Legislation
Compensation
Effects of separation from employment
All actual remuneration for employment, including the mandated COLA, as well as the cash value of any remuneration paid in any medium other than cash EXCEPT that part of the remuneration in excess of the maximum salary credit 1. Er’s contribution on his account ceases;
2. Ee’s obligation to contribute also ceases at the end of the month of separation;
The basic pay or salary received by an Ee, pursuant to his election/appointment, EXCLUDING per diems, bonuses, overtime pay, honoraria, allowances and any other emoluments received in addition to the basic pay A member separated from the service shall continue to be a member, and shall be entitled to whatever benefits he has qualified to in the event of any contingency compensable under the GSIS Act.
3. Ee
shall be credited with all contributions paid on his behalf and entitled to benefits according to the provisions of the SSS Act.
XPNs: All members of the Armed Forces of the COVERAGE
Philippines (AFP) and the Philippine National Police (PNP).
Compulsory coverage of the GSIS (2009 Bar) NOTE: An employee who is already beyond the The following are compulsorily covered by the GSIS: 1. All Ees receiving compensation who have not reached the compulsory retirement age, irrespective of employment status.
mandatory retirement age of 65 shall be compulsorily covered and be required to pay both the life and retirement premiums under the following situations:
XPNs: 1.
2.
2.
An elective official who at the time of election to public office is below 65 years of age and will be 65 years or more at the end of his term of office, including the period/s of his re-election to public office thereafter without interruption. b. Appointive officials who, before reaching the mandatory age of 65, are appointed to government position by the President of the Republic of the Philippines and shall remain in government service at age beyond 65. c. Contractual employees including casuals and other employees with an employeegovernment agency relationship are also compulsorily covered, provided they are receiving fixed monthly compensation and rendering the required number of working hours for the month. (Chan, Bar Reviewer on Labor Law 2014 Edition) a.
Uniformed members of the: a. AFP; and b. PNP Contractual Ees who have no Er and Ee relationship with the agencies they serve.
Members of the Judiciary and Constitutional Commissions for life insurance policy. (Sec. 3, RA 8291)
Coverage of life insurance, retirement and other social security protection GR: All members of the GSIS shall have life insurance, retirement, and all other social security protections such as disability, survivorship, separation, and unemployment benefits. (Sec. 3, R.A. 8291)
Classification of members for the purpose of benefit entitlement
XPNs: The members of the following shall have life insurance only: 1. The Judiciary; and 2. Constitutional Commissions
1. Active members a.
Compulsory coverage of life insurance GR: All Ees receiving compensation who have not reached the compulsory retirement irrespective of employment status
Still in the service and are paying integrated premiums; Covered for the entire package benefits and privileges being extended by GSIS
2. Policyholders
age,
a. b.
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Covered for life insurance only Can avail of policy loan privilege only
Labor Law and Social Legislation c. d.
the time she stopped working because of her illness in line of duty, Atty. CLM was only sixty years old but she had been an active member of the GSIS for thirty years without any break in her service record. What benefits could she claim from the GSIS? Cite at least five benefits. (2004 Bar)
May also apply for housing loans Judiciary and Constitutional Commissions
3. Retired Members a.
b.
Former active members who have retired from the service and are already enjoying the corresponding retirement benefits applied for; Not entitled to any loan privilege, except stock purchase loan. (Sec. 2.2, Rule II, IRR, R.A. 8291)
A: 1. 2. 3.
NOTE: A member separated from the service shall continue to be a member, and shall be entitled to whatever benefits he has qualified to in the event of any contingency compensable under the GSIS Law.
4.
EXCLUSIONS FROM COVERAGE
6. 7.
5.
Persons excluded from the coverage of the GSIS law 1.
2. 3.
4.
Separation Benefit (Sec. 11-12, GSIS Act of 1997) Retirement Benefits (Sec. 13-14, GSIS Act of 1997) Permanent Disability Benefits (Sec. 15-17, GSIS Act of 1997) Temporary Disability Benefits (Sec. 18-19, GSIS Act of 1997) Survivorship Benefits (Sec. 20-22, GSIS Act of 1997) Funeral Benefits (Sec. 23, GSIS Act of 1997) Life Insurance Benefits (Sec.24-27, GSIS Act of 1997)
--SEPARATION BENEFITS
Ees who have separate retirement schemes (members of the Judiciary, Constitutional Commissions and others who are similarly situated) Contractual Ees who have no Er-Ee with the agencies they serve Uniformed members of the AFP, BJMP, whose coverage by the GSIS have ceased, effective June 24, 1997 Uniformed members of the PNP whose coverage by the GSIS has ceased, effective February 1, 1996. (Sec. 2.4, Rule II, R.A. 8291, IRR)
Entitlement of a member to separation benefits A member who has rendered a minimum of 3 years of creditable service shall be entitled to separation benefit upon resignation or separation under the following terms: 1.
A member with at least 3 years but less than 15 years – Cash payment equivalent to 100% of the average monthly compensation for every year of service the member has paid contributions: a. Not less than Php 12,000.00 b. Payable upon reaching 60 years of age or upon separation, whichever comes later.
BENEFITS Benefits under the GSIS Act Separation Unemployment or involuntary separation Retirement Permanent disability Temporary disability Survivorship Funeral Life Insurance Such other benefits and protection as may be extended to them by the GSIS such as loans.
2. A member with less than 15 years of
--Q: Atty. CLM, a dedicated and efficient public official, was the top executive of a government owned and controlled corporation (GOCC). While inspecting an ongoing project in a remote village in Mindanao, she suffered a stroke and since then had been confined to a wheelchair. At
Effects of separation from service with regard to membership
1. 2. 3. 4. 5. 6. 7. 8. 9.
service and less than 60 years of age at the time of resignation or separation: a.
b.
Cash payment equivalent to 18 times the basic monthly pension (BMP), payable at the time of resignation or separation An old-age pension benefit equal to the BMP, payable monthly for life upon reaching the age of 60.
A member separated from the service shall continue to be a member and shall be entitled to whatever benefits he has qualified to (once a member is always a member).
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Social and Welfare Legislation NOTE: A member separated for a valid cause shall
NOTE: Where the employee retires and meets the
automatically forfeit his benefits, unless the terms of resignation or separation provide otherwise. In case of forfeiture, the separated employee shall be entitled to receive only ½ of the cash surrender value of his insurance.
eligibility requirements, he acquires a vested right to benefits that is protected by the due process clause. Retirees enjoy a protected property interest whenever they acquire a right to immediate payment under pre-existing law. Thus, a pensioner acquires a vested right to benefits that have become due as provided under the terms of the public employees’ pension statute. No law can deprive such person of his pension rights without due process of law, that is, without notice and opportunity to be heard. (GSIS vs. De Leon. G.R. No. 186560; November 17, 2010)
UNEMPLOYMENT BENEFITS Unemployment benefits It will consist of cash payment equivalent to 50% of the average monthly compensation.
Options of the retiree with regard to his or her retirement benefits
A member who has rendered at least 15 years of service will be entitled to separation benefits instead of unemployment benefits.
The retiree may get either of the following: 1. Lump sum equivalent to 6 months of the basic monthly pension (BMP) payable at the time of retirement and an old-age pension benefit equal to BMP payable for life, starting upon the expiration of the 5 years covered by the lump sum; or 2. Cash payment equivalent to 18 times his BMP and monthly pension for life payable immediately. [R.A. 8291, Sec. 13(a)]
Conditions for entitlement to unemployment benefits 1. 2.
3.
The recipient must be a permanent Ee at the time of separation; His separation was involuntary due to the abolition of his office or position resulting from reorganization; and He has been paying the contribution for at least 1 year prior to separation.
Rule in case of extension of service in order to be entitled for retirement benefits
RETIREMENT BENEFITS Reason for compulsory retirement
The Supreme Court held that the head of the government agency concerned is vested with discretionary authority to allow or disallow extension of the service of an official or Ee who has reached 65 years old without completing the 15 years of government service. However, this discretion is to be exercise conformably with the provisions of Civil Service Memorandum Circular No. 27, series of 1990 which provides that the extension shall not exceed 1 year. (Rabor v. CSC, G.R. No. 111812, May 31, 1995)
The compulsory retirement of government officials and Ees upon reaching the age of 65 years is founded on public policy which aims to maintain efficiency in the government service and at the same time give the retiring public servants the opportunity to enjoy during the remainder of their lives the recompense, for their long service and devotion to the government, in the form of a comparatively easier life, freed from the rigors of civil service discipline and the exacting demands that the nature of their work and their relations with their superiors as well as the public would impose upon them. [Beronilla vs. GSIS, G.R. No. 21723, November 26, 1970)
PERMANENT DISABILITY BENEFITS Disability Any loss or impairment of the normal functions of the physical and/or mental faculty of a member, which reduces or eliminates his/her capacity to continue with his/her current gainful occupation or engage in any other gainful occupation.
Conditions in order to be entitled to retirement benefits 1. 2. 3.
A member has rendered at least 15 years of service; He is at least 60 years of age at the time of retirement; and He is not receiving a monthly pension benefit from permanent total disability (R.A. 8291, Sec. 13-A).
Total disability Complete incapacity to continue with present employment or engage in any gainful occupation due to the loss or impairment of the normal
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Labor Law and Social Legislation functions of the physical and/or mental faculties of the member.
2.
Loss of two (2) limbs at or above the ankle or wrist Permanent complete paralysis of two (2) limbs Brain injury resulting in incurable imbecility or insanity Such other cases as may be determined by the GSIS. [RA 8291, Sec. 6(d)]
3.
Types of permanent disability 4.
Permanent Total Disability (PTD) – Accrues
1.
or arises when recovery from any loss or impairment of the normal functions of the physical and/or mental faculty of a member which reduces or eliminates his capacity to continue with his current gainful occupation or engage in any other gainful occupation is medically remote. [R.A. 8291, Sec. 2(q) and (s)] 2. Permanent Partial Disability (PPD) – Accrues or arises upon the irrevocable loss or impairment of certain portion/s of the physical faculties, despite which the member is able to pursue a gainful occupation. [R.A. 8291, Sec. 2(u)]
5.
Benefits for permanent partial disability A member is entitled to cash payment in accordance with the schedule of disabilities to be prescribed by GSIS, if he satisfies the given conditions of either (1) or (2) of Sec. 16(a).
The following disabilities shall be deemed permanent partial 1.
Complete and permanent loss of the use of:
Benefits for permanent total disability 1.
a. b. c. d. e. f. g. h. i.
A member is entitled to the monthly income benefit for life equivalent to the BMP when: a. He is in the service at the time of the disability or b. If separated from service i. He has paid at least 36 monthly contributions within 5 years immediately preceding his disability ii. He has paid a total of at least 180 monthly contribution prior his disability iii. He is not receiving old-age retirement pension benefits [RA 8291, Sec. 16(a)].
2.
Any finger Any toe One arm One hand One foot One leg One or both ears Hearing of one or both ears Sight of one eye
Such other cases as may be determined by the GSIS. [RA 8291, Sec. 17(b)]
Suspension of payment of benefits 1. 2.
NOTE: A member cannot enjoy the
3.
monthly income benefit for permanent disability and the old-age retirement simultaneously.
In case a member is re-employed; or Member recovers from disability as determined by the GSIS; or Fails to present himself for medical examination when required by the GSIS. [R.A. 8291, Sec. 16(c)]
Instances when recovery is precluded 2.
If the member does not satisfy the conditions above but has rendered at least 3 years of service, he shall be advanced the cash payment equivalent to 100% of his average monthly compensation for each year of service he has pad contributions but not less than Php 12,000.00 which should have been his separation benefit. [RA 8291, Sec. 16(b)]
If the permanent disability was due to the following acts of the subject Ee: 1. 2. 3. 4.
TEMPORARY DISABILITY BENEFITS Temporary total disability
The following disabilities shall be deemed total and permanent 1.
Grave misconduct Notorious negligence Habitual intoxication Willful intention to kill himself or another
It accrues or arises when the impaired physical and/or mental faculties can be rehabilitated and/or
Complete loss of sight of both eyes
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Social and Welfare Legislation restored to their normal functions. [R.A. 8291, Sec. 2(t)]
the time of his death and has paid 36 monthly contributions within the fiveyear period immediately preceding his death; or has paid a total of at least 180 monthly contributions prior to his death; or
NOTE: A member cannot enjoy the temporary total disability benefit and sick leave pay simultaneously.
Benefits for temporary disability 1.
2.
2.
Member is entitled to 75% of his current daily compensation for each day or fraction thereof of total disability benefit, to start at the 4 th day but not exceeding 120 days in one calendar year when: a. He has exhausted all sick leaves b. CBA sick leave benefits Provided, that: i. He was in the service at time of disability; or ii. If separated, he has rendered at least 3 years of service and has paid at least 6 monthly contributions in the year preceding his disability The temporary total disability benefits shall in no case be less than P70 a day.
deceased was in the service at the time of his death with at least 3 years of service; or 3. A cash payment equivalent to 100% of
his average monthly compensation for each year of service he paid contributions, but not less than Php 12,000.00 – Provided , that the deceased has rendered at least 3 years of service prior to his death but does not qualify for the benefits under item (1) or (2) of this paragraph. [R.A. 8291, Sec. 21(a)]
Secondary beneficiaries In the absence of primary beneficiaries, the secondary beneficiaries shall be entitled to: 1. The cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than Php 12,000.00 – Provided, That the member is in the service at the time of his death and has at least 3 years of service; or 2. In the absence of secondary beneficiaries, the benefits under this paragraph shall be paid to his legal heir. [R.A. 8291, Sec. 21(c)]
NOTE: An application for disability must be filed with the GSIS within 4 years from the date of the occurrence of the contingency.
SURVIVORSHIP BENEFITS Persons entitled to survivorship benefits Upon the death of a member or pensioner, his beneficiaries shall be entitled to survivorship benefits. Such benefit shall consist of: 1. The basic survivorship pension which is 50% of the basic monthly pension; and 2. The dependent children’s pension not exceeding 50% of the basic monthly pension.
Payment of survivorship pension After the end of the guaranteed 30 months, the beneficiaries are still entitled to survivorship benefits. The survivorship pension shall be paid as follows:
NOTE: The dependent children shall be entitled to the survivorship pension as long as there are dependent children and, thereafter, the surviving spouse shall receive the basic survivorship pension for life or until he or she rema rries.
1.
Conditions for the primary beneficiaries to be entitled to basic monthly pension
2.
Upon the death of a member, the primary beneficiaries shall be entitled to: 1.
The survivorship pension plus a cash payment equivalent to 100% of his average monthly compensation for every year of service – Provided, that the
Survivorship pension – Provided , that the deceased: a. Was in the service at the time of his death; or b. If separated from the service, has rendered at least 3 years of service at
3.
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When the dependent spouse is the only survivor, he/she shall receive the basic survivorship pension for life or until he or she remarries; When only dependent children are the survivors, they shall be entitled to the basic survivorship pension for as long as they are qualified, plus the dependent children’s pension equivalent to 10% of the basic monthly pension for every dependent child not exceeding 5, counted from the youngest and without substitution; When the survivors are the dependent spouse and the dependent children, the dependent spouse shall receive the basic survivorship
Labor Law and Social Legislation pension for life or until he/she remarries, and the dependent children shall receive the dependent children’s pension. [R.A. 8291, Sec. 21(b)]
death need not be work-connected.
----Q: Odeck, a policeman, was on leave for a month. While resting in their house, he heard two of his neighbors fighting with each other. Odeck rushed to the scene intending to pacify the protagonists. However, he was shot to death by one of the protagonists. Zhop, a housemaid, was Odeck's surviving spouse whom he had abandoned for another woman years back. When she learned of Odeck's death, Zhop filed a claim with the GSIS for death benefits. However, her claim was denied because: (a) when Odeck was killed, he was on leave; and (b) she was not the dependent spouse of Odeck when he died.
Benefits that the beneficiaries are entitled to upon the death of the pensioner 1.
2.
Upon the death of an old-age pensioner or a member receiving the monthly income benefit for permanent disability, the qualified beneficiaries shall be entitled to the survivorship pension. When the pensioner dies within the period covered by the lump sum, the survivorship pension shall be paid only after the expiration of such period.
Resolve with reasons whether GSIS is correct in denying the claim. (2005 Bar)
--Q: Gary Leseng was employed as a public school teacher at the Marinduque High School. On April 27, 1997, a memorandum was issued by the school principal designating Gary to prepare the model dam project, which will be the official entry of the school in the search for Outstanding Improvised Secondary Science Equipment for Teachers. Gary complied with his superior's instruction and took home the project to enable him to finish before the deadline. While working on the model dam project, he came to contact with a live wire and was electrocuted. The death certificate showed that he died of cardiac arrest due to accidental electrocution.
A: YES. Under the law, a dependent is one who is a legitimate spouse living with the employee (Art. 167 [i], Labor Code). In the problem given, Zhop had been abandoned by Odeck who was then living already with another woman at the time of his death. Moreover, Odeck was on leave when he was killed. The 24-hour duty rule does not apply when the policeman is on vacation leave. (Employees’ Compensation Commission v. CA, G.R. No. 121545, November 14, 1996). Taking together jurisprudence and the pertinent guidelines of the ECC with respect to claim for death benefits, namely: a. That the employee must be at the place where his work requires him to be; b. That the employee must have been performing his official functions; and c. That the injury is sustained elsewhere, the employee must have been executing an order for the employer.
Bella (Gary’s common-law wife) and Jobo (his
only son) filed a claim for death benefits with the GSIS which was denied on the ground that Gary’s death did not arise out of and in the course of employment and therefore not compensable because the accident occurred in his house and not in the school premises. Is Bella entitled to file a claim for death benefits with the GSIS? Why? (1991 Bar)
It is not difficult to understand then why Zhop’s claim was denied by the GSIS (Tancinco v. GSIS, G.R. No. 132916, November 16, 2001). In the present case, Odeck was resting at his house when the incident happened; thus, he was not at a place where his work requires him to be. Although at the time of his death Odeck was performing a police function, it cannot be said that his death occurred elsewhere other than the place where he was supposed to be because he was executing an order for his employer.
A: NO. Not being a beneficiary, Bella is not entitled to receive survivorship benefits. She is not a beneficiary because she is a common-law wife and not a legal dependent spouse. The beneficiaries of a member of the GSIS are entitled to the benefits arising from the death of said member. Death benefits are called survivorship benefits under the GSIS Law.
----Q: Luis, a PNP officer, was off duty and resting at home when he heard a scuffle outside his house. He saw two of his neighbors fighting and he rushed out to pacify them. One of the neighbors shot Luis by mistake, which resulted in Luis's death. Marian, Luis's widow, filed a claim with the GSIS seeking death benefits. The GSIS denied
----Q: Is the cause of death of Gary (cardiac arrest due to accidental electrocution in his house) compensable? Why? A: YES. To be compensable under the GSIS Law, the
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Social and Welfare Legislation the claim on the ground that the death of Luis was not service related as he was off duty when the incident happened. Is the GSIS correct? (2015 Bar)
3. 4.
A: NO. The GSIS is not correct. Luis, a pol iceman, just like a soldier, is covered by the 24-Hour Duty Rule. He is deemed on round-the-clock duty unless on official leave, in which case his death outside performance of official peace-keeping mission will bar death claim. In this case, Luis was not on official leave and he died in the performance of a peacekeeping mission. Therefore, his death is compensable.
A member who is a pensioner (excluding survivorship pensioners) A retiree who is at the time of his retirement was of pensionable age, at least 60 years old, who opted to retire under RA 1616 ( An act further amending Sec.12, C.A. 186, as amended, by prescribing two other modes of retirement and for other purposes).
LIFE INSURANCE Classes of life insurance coverage under the GSIS law
---
1. 2.
Compulsory Life Insurance Optional Life Insurance
No presumption of Sham Marriages The plans may be endowment or ordinary life. The present GSIS law does not presume that marriages contracted within three years before retirement or death of a member are sham marriages contracted to avail of survivorship benefits. The law acknowledges that whether the surviving spouse contracted the marriage mainly to receive survivorship benefits is a matter of evidence. It no longer prescribes a sweeping classification that unduly prejudices the legitimate surviving spouse and defeats the purpose for which Congress enacted the social legislation (Alcantara, Book II; GSIS v. Montesclaros, G.R. No. 146494, July 14, 2004).
Compulsory life insurance coverage All Ees including the members of the Judiciary and the Constitutional Commissioners except for Members of the AFP, the PNP, BFP and BJMP, shall, under such terms and conditions as may be promulgated by the GSIS, be compulsorily covered with life insurance, which shall automatically take effect as follows: 1. Those employed after the effectivity of this Act, their insurance shall take effect on the date of their employment; 2. For those whose insurance will mature after the effectivity of this Act, their insurance shall be deemed renewed on the day following the maturity or expiry date of their insurance; 3. For those without any life insurance as of the effectivity of this Act, their insurance shall take effect following said effectivity.
FUNERAL BENEFITS Funeral benefits The funeral benefit is in the amount Php 20,000. It is intended to defray the expenses incident to the burial and funeral of the deceased member, pensioner, or retiree under R.A. 660, R.A. 1616, P .D. 1146, and R.A. 8291. It is payable to th e members of the family of the deceased, in the order which they appear: 1. 2. 3.
Optional life insurance coverage 1.
Legitimate spouse Legitimate child who spent for the funeral services, or Any other person who can show unquestionable proof that he has borne the funeral expenses of the deceased. 2.
Payment of funeral benefits
A member may at any time apply for himself and/or his dependents an insurance and/or pre-need coverage embracing: a. Life b. Memorial plans c. Health d. Education e. Hospitalization f. Other plans as maybe designed by GSIS Any Er may apply for group insurance coverage for its Ees.
BENEFICIARIES
Funeral benefits will be paid upon th e death of : 1. An active member 2. A member who has been separated from the service but is entitled to future separation or retirement benefits
1.
Primary beneficiaries a.
Legal dependent spouse until he/she remarries b. Dependent children (Sec. 2[g], R.A. 8291)
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Labor Law and Social Legislation 2.
Secondary beneficiaries a. b.
Lima Land had made to the Social Security System (SSS) can be transferred or credited to the Government Service Insurance System (GSIS). What would you advice? (2014 Bar)
Dependent parents Legitimate descendants, subject to restrictions on dependent children. [RA 8291, Sec. 2(h)]
A: YES. Under RA 7699, otherwise known as the Portability Law, one may combine his years of service in the private sector represented by his contributions to the Social Security System (SSS) with his government service and contributions to the GSIS. The contributions shall be totalized for purposes of old-age, disability, survivorship and other benefits in case the covered member does not qualify for such benefits in either or both Systems without totalization.
Dependents 1. 2. 3.
Legitimate spouse dependent for support upon the member or pensioner; Legitimate, legitimated, legally adopted child, including the illegitimate child; An Ee over 60 years of age if he had been paying contributions to the System prior to age 60 and has not been compulsory retired.
EMPLOYEES’ COMPENSATION
Prescriptive period to claim the benefits GR: 4 years from the date of contingency.
Employees’ compensation program
XPNs: Life insurance and retirement. (R.A. 8291, Sec.
It is the program provided for in Arts. 172 to 215 of the LC whereby a fund known as the State Insurance Fund is established through premium payments exacted from Ers and from which the Ees and their dependents in the event of work-connected injury, disability, or death, may promptly secure adequate income benefit, and medical or related benefits.
28)
LIMITED PORTABILITY LAW (R.A. 7699) Limited portability rule
NOTE: The claimant under the Employee’s
A covered worker who transfers employment from one sector to another or is employed on both sectors, shall have creditable services or contributions on both Systems credited to his service or contribution record in each of the Systems and shall be totalized for purposes of oldage, disability, survivorship, and other benefits in either or both Systems. (R.A. 7699, Sec. 3)
Compensation Program is required to present proof of casual relation or aggravation, if the cause or origin of the disease is still unknown. The law, however, does not require a direct casual relation. It is enough that the hypothesis on which the workman’s claim is based is PROBABLE.
Contributions to the State Insurance Fund All contributions paid by such member personally, and those that were paid by his employers to both Systems shall be considered in the processing of benefits which he can claim from either or both Systems. (R.A. 7699, Sec. 4)
Contributions under this Title shall be paid in their entirety by the Er and any contract or device for the deduction of any portion thereof from the wages or salaries of the Ees shall be null and void. [LC, Art.183(c)]
This is advantageous to the SSS and GSIS members for purposes of death, disability or retirement benefits. In the event the Ees transfer from the private sector to the public sector, or vice-versa, their creditable employment services and contributions are carried over and transferred as well.
COVERAGE Coverage 1. Every Er. a. Public sector covered by the GSIS, comprising the National Government, including GOCCs, Philippine Tuberculosis Society, the Philippine National Red Cross, and the Philippine Veterans Bank; and b. Private sector covered by the SSS, comprising all Ers other than those defined in the
--Q: Luisito has been working with Lima Land for 20 years. Wanting to work in the public sector, Luisito applied with and was offered a job at Livecor. Before accepting the offer, he wanted to consult you whether the payments that he and
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Social and Welfare Legislation immediately preceding paragraph. 2. Every Ee not over 60 years of age. 3. An Ee over 60 years of age if he had been paying contributions to the System prior to age 60 and has not been compulsory retired.
distressed citizen to assist in maintaining the peace and security of the community. (Employees’ Compensation Commission v. CA, G.R. No. 115858. June 28, 1996)
“Street Peril” or “Going to/ Coming from work” The Ee may belong to either the: a. Public sector comprising the employed workers who are covered by the GSIS, including the members of the AFP, elective officials who are receiving regular salary and any person employed as casual emergency, temporary, substitute or contractual; b. Private sector comprising the employed workers who are covered by the SSS.
GR: In the absence of special circumstances, an Ee injured while going to or coming from his place of work is excluded from the benefits of Workmen’s Compensation Act.
XPNs: 1. 2.
Effectivity of the compulsory coverage 1. 2.
Employer – On the first day of operation Employee – On the day of his employment
3.
WHEN COMPENSABLE In general 1.
4.
Injury and the resulting disability or death must be the result of an employment accident satisfying all the following grounds: a. b. c.
2.
Where the Ee is proceeding to or from his work on the premises of the Er; Proximity Rule—where the Ee is about to enter or about to leave the premises of his Er by way of exclusive or customary means of ingress and egress; Ee is charged, while on his way to or from his place of employment or at his home, or during this employment with some duty or special errand connected with his employment; and Where the Er as an incident of the employment provides the means of transportation to and from the place of employment.
NOTE: 1.
Ee must have been injured at the place where his work requires him to be; Ee must have been performing his official functions; and If injury is sustained elsewhere, the Ee must have been executing an order for the Er. [Amended Rules on EC, Rule III, Sec. 1(a)]
2.
For sickness and the resulting disability or death, the sickness must be the result of an occupational disease listed under the IR with the conditions set therein satisfied, otherwise, proof must be shown that the risk of contracting the disease is increased by the working conditions. [Amended Rules on EC, Rule III, Sec. 1(b)]
The act of going to or coming from the workplace must be a continuing act; Ee had no t beend diverted therefrom; Ee did not deviate or departed from his usual route to or from his workplace; and With regard to an Ee on a special errand, the latter must have been official and in connection with his work. (Azucena, 2013)
Acts of ministration/Personal comfort doctrine Acts performed by an Ee within the time and space limits of his employment, to minister personal comfort, such as satisfaction of his thirst, hunger, or other physical demands, or to protect him from excessive cold, shall be deemed incidental to his employment and injuries suffered in the performance of such act shall be considered compensable and arising out of and in the course of employment.
Injury Any harmful change in the human organism from any accident arising out of and in the course of employment. [Art. 173 (k), LC]
Rest or refreshment
24-Hour Doctrine
GR: Injuries of Ee during a break for rest or refreshment are compensable.
Members of the national police are, by the nature of the their functions, technically on duty 24 hours a day because policemen are subject to call at any time and may be asked by their superiors or by any
XPN: When the nature of Ee’s work requires him to remain awake. (Azucena, 2013)
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Labor Law and Social Legislation Lunch period
3.
GR: Injuries of an Ee is compensable although they occurred during lunch period where eating of lunch was within Er’s consent or knowledge, express or implied.
If not actively engaged, whether Ee was at the place where he was authorized or required by such contract to be. (Azucena, 2013)
NOTE: Authorized deviation from route, schedule, or travel is compensable. (Azucena, 2013)
XPN: Not work connected and occurred in a place
Dual Purpose Doctrine
where he had no right to be. (Azucena, 2013)
This doctrine considers as compensable the injury that an Ee sustains while on a trip undertaken for the benefit of the Er even if in the course of such business trip the Ee pursues a personal purpose. (Azucena, 2013)
Union meeting Injuries suffered at a union meeting during lunch period are not compensable if not recognized by the Er in the CBA. (Azucena, 2013)
Er sponsored activities
Extra-premises / Shuttle Bus Rule Injuries suffered by the Ee, while on board a means of transportation provided by the Er in going to or coming from work, are compensable. (Azucena, 2013)
Injuries suffered by an Ee during recreational activities and other Er sponsored activities are compensable if such activities were for the Er’s exclusive benefit or when the Er had some interest in those activities.
While living, boarding or lodging on Er’s
Acts of force majeure
premises or at the workplace
GR: Not compensable when the Ee has not been exposed to a greater danger than usual.
GR: Injuries suffered, while living, boarding or lodging on Er’s premises or at the workplace a. pursuant to an express or implied requirement contract of hiring; or b. reasonably attributable or incidental to the nature of employment or conditions under which he lives in the performance of his duties, are to be considered as having arisen out of and in the course of employment.
XPN: “Positional and local risks doctrine” whereby the Ee, because of his duties, was exposed to a special or peculiar danger from the elements, that is, one which is greater t han that to which other persons in the community are exposed. The unexpected injury sustained by reason of such elements is considered as arising out of and in the course of employment. (Azucena, 2013)
Presumptive compensability
XPNs: 1.
When the residence of Ee in Er’s premises is merely permissive and not required.
2.
Injury suffered results from a risk or danger which is not reasonably incidental to the employment. (Azucena, 2013)
Applicable when the victims are police officers and military men. Their injuries and death are compensable under the doctrine of “presumptive compensability”. It has been observed lately that policemen and military personnel were killed for no other reason than the fact that they are military personnel and policemen. (Quebec v. GSIS, ECC Case No. 4310, November 9, 1988)
While travelling Compensability depends on: 1. Whether the injury results from a risk which is inherent in the nature of employment or reasonably incidental thereto or to which the Ee is specially exposed; and 2. Whether the Ee was engaged in the exercise of some functions or duties reasonably necessary or incidental to the performance of the contract of his employment; or
Defenses that may be interposed by the state insurance fund against a claim for compensation made by a covered Ee or his dependents The following defenses may be set up: 1. Injury is not work-connected or the sickness is not occupational
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Social and Welfare Legislation 2.
3. 4.
the ECP. (ECC Rules, Rule 1, Section 5; LC, Art.169)
Disability or death was occasioned by the Ee’s intoxication, willful intention to injure or kill himself or another, or his notorious negligence. (LC, Art. 172). No notice of sickness, injury or death was given to the Er. (LC, Art. 206). Claim was filed beyond 3 years from the time the cause of action accrued. (LC, Art. 201 as amended by P.D. 1921)
--Sickness Any illness ccepted as an occupational disease. [Art. 173 (l), LC]
Occupational Disease
NOTE: Notorious negligence is equivalent to gross negligence; it is something more than mere carelessness or lack of foresight.
One which results from the nature of the employment, and by nature is meant conditions which all Ees of a class are subject and which produce the disease as a natural incident of a particular occupation, and attach to that occupation a hazard which distinguishes it from the usual run of occupations and is in excess of the hazard attending the employment in general. To be occupational, the disease must be wholly due to causes and conditions which are normal and constantly present and characteristic of the particular occupation.
--Q: Abraham Dino works as a delivery man in a construction supply establishment owned by Abraham Julius. One day, while Dino was making reports on his delivery, he had an altercation with Julius; irked by the disrespectful attitude of Dino, Julius pulled out his gun and shot Dino, hitting him in the spinal column and paralyzing him completely. Julius was prosecuted for the act.
Theory of increased risk
a
Is the disability suffered by Abraham Dino compensable? b If Abraham Dino recovers compensation from the SIF, can he still recover from Abraham Julius damages in the criminal case? Why?
The term “sickness” as defined in Art. 167(l) of the LC is recognition of the theory of increased risk. To establish compensability under the same, the claimant must show substantial proof of workconnection, but what is required is merely a reasonable work-connection and not a direct causal relation. Proof of actual cause of the ailment is not necessary. The test of evidence of relation of the disease with the employment is probability and not certainty. (Jimenez v. Employees’ Compensation Commission, G.R. No. L-58176, Mar. 23, 1984; Panotes vs. ECC, G.R. No. L-64802, Sept. 23, 1985)
A: a. YES. The injury was sustained by Abraham Dino in his place of work and while in the performance of his official functions. b. NO. Under Art. 173 of the LC, as amended by P.D. 1921, the liability of the State Insurance Fund under the Employees’ Compensation Program shall be exclusive and in place of all other liabilities of the Er to the Ee or his dependents or anyone otherwise entitled to recover damages on behalf of the Ee or his dependents.
NOTE: An illness not listed by the Employees’ Compensation Commission as an occupational disease is compensable provided that it is established that the risk of contracting the same is increased by working conditions.
----Q: Wilfredo, a truck driver employed by a local construction company, was injured in an accident while on assignment in one of his
Brain tumor/ Cancer of the brain requires proof The law, as it now stands requires the claimant to prove a positive thing – the illness was caused by employment and the risk of contracting the disease is increased by the working conditions. To say that since the proof is not available, therefore, the trust fund has the obligation to pay is contrary to the legal requirement that proof must be adduced. The existence of otherwise non-existent proof cannot be presumed. xxx this Court recognized the fact that cancer is a disease of still unknown origin which strikes; people in all walks of life, employed or unemployed. Unless it be shown that a particular
employer’s project in Iraq. Considering that his
injury was sustained in a foreign country, is Wilfredo entitled to benefits under the Employees’ Compensation Program?
A: YES. Filipinos working abroad in the service of an Er, domestic or foreign, who carries on in the Philippines any trade, business, industry, undertaking or activity of any kind, are covered by
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Labor Law and Social Legislation form of cancer is caused by specific working conditions (e. g. chemical fumes, nuclear radiation, asbestos dust, etc.) we cannot conclude that it was the employment which increased the risk of contracting the disease. (Raro v. ECC, G.R. No. 58445, April 27, 1989)
The right to compensation or benefit for loss or impairment of an employee’s earning capacity due to work-related illness or injury arises or accrues upon, and not before, the happening of the contingency. Hence, an Ee acquires no vested right to a program of compensation benefits simply because it was operative at the time he became employed. (San Miguel Corporation vs. NLRC, G.R. No. 57473, Aug. 15, 1988)
BENEFITS Benefits under the State Insurance Fund 1. 2. 3. 4.
Recovery from the State Insurance Fund does not bar a claim for benefits under the SSS Law
Medical Benefits Disability Benefits Death Benefits Funeral Benefits
Persons
entitled
to
benefits
under
As expressly provided for in Art. 173 of the LC, payment of compensation under the State Insurance Fund shall not bar the recovery of benefits under the SSS Law. Benefits under the State Insurance Fund accrue to the Ees concerned due to hazards involved and are made a burden on the employment itself. On the other hand, social security benefits are paid to SSS members by reason of their membership therein for which they contribute their money to a general fund. (Ma-ao Sugar Central Co., Inc. vs. CA, G.R. No. 83491, Aug. 27, 1990)
the
Employees’ Compensation Program The covered Ee, his dependents, and in case of his death, his beneficiaries.
Dependents of the employee 1. Legitimate, legitimated, legally adopted or acknowledged natural child who is unmarried, not gainfully employed, and not over 21 years of age or over 21 years of age provided he is incapacitated and incapable of self-support due to a physical or mental defect which is congenital or acquired during minority; 2. Legitimate spouse living with the Ee; 3. Parents of said Ee wholly dependent upon him for regular support. [LC as amended by P.D. 1921, Art.167 (i)]
MEDICAL BENEFIT (MEDICAL SERVICES) Conditions for the entitlement to medical services For an Ee to be entitled to medical services, the following conditions must be satisfied: 1. He has been duly reported to the System (SSS o r GSIS); 2. He sustains a permanent disability as a result of an injury or sickness; and 3. The System has been notified of the injury or sickness which caused his disability.
BENEFICIARIES Primary beneficiaries
DISABILITY BENEFIT
1. Dependent spouse until he remarries 2. Dependent children
Disability benefits Secondary beneficiaries They are income benefits in case of temporary total disability, permanent total disability and permanent partial disability.
1. In absence of primary beneficiaries, the dependent parents 2. Subject to the restrictions imposed on dependent children, the illegitimate children, and legitimate descendants. Provided , that the dependent acknowledged natural child shall be considered as a primary beneficiary when there are no other dependent children who are qualified and eligible for monthly income benefit. (LC, Art. 167, as amended by Sec. I, P.D. 1921)
Permanent and total disabilities The following disabilities shall be deemed permanent and total: 1. Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided for in the Rules; 2. Complete loss of sight of both eyes; 3. Loss of two limbs at or above the ankle or wrist;
Accrual of the right to compensation or benefit under the Employee’s Compensation Program
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Social and Welfare Legislation 4. 5. 6.
Permanent complete paralysis of two limbs; Brain injury resulting in incurable imbecility or insanity; and Such cases as determined by the Medical Director of the System and approved by the Commission. [LC, Art.192(c)]
3.
Er’s liability in case of death or injury of the Ee 1. If the cause of the death or personal injury arose out of and in the course of employm ent, the Er is liable. 2. If the cause was due to the Ee’s own notorious negligence, or voluntary act or drunkenness, the Er shall not be liable. 3. If the cause was partly due to the Ee’s lack of due care, the compensation shall be inequitably reduced. 4. If the cause was due to the negligence of a fellow Ee, the Er and the guilty Ee shall be liable solidarily. 5. If the cause was due to the intentional or malicious act of fellow Ee, the fellow Ee and Er are liable unless the Er exercised due diligence in selecting and supervising his Ees.
NOTE: Permanent total disability may arise although the employee does not lose the use of any part of his body. Where the Ee is unable, by reason of the injury or sickness, to perform his customary job for more than 120 days, permanent total disability arises. (Ijares vs. CA, G.R. No. 105854, August 26, 1999)
Conversion of a permanent partial disability to permanent total disability A permanent partial disability is converted to permanent total disability after the employee’s retirement. This is in line with the social justice provision in the Constitution. A person’s disability may not manifest itself fully at one precise moment in time but rather over a period of time. Disability should not be understood more on its medical significance but on the loss of earning capacity.
FUNERAL BENEFIT Funeral benefit A funeral benefit of Php 10, 000.00 shall be paid upon the death of a covered Ee or permanently totally disabled pensione
DEATH BENEFITS Conditions for entitlement to death benefits The beneficiaries of a deceased Ee shall be entitled to an income benefit if all of the following conditions are satisfied: 1.
The Ee has been duly reported to the System;
NOTE: If an employee suffers disability or dies before he is duly reported for coverage to the System (SSS or GSIS), the Er shall be liable for the benefits. (Rule X, Sec. 1; Rule XI, Sec. 1; Rule XII, Sec. 1; Rule XIII, Sec. 1; ECC Rules) 2. 3.
He died as a result of an injury or sickness; and The System has been duly notified of his death, as well as the injury or sickness which caused his death.
Length of time the primary beneficiaries are entitled to death benefits 1. 2.
Dependent Child suffering from physical or mental defect — until such defect disappears.
Dependent Spouse — until he or she remarries. Dependent Children — until they get married, or find gainful employment, or reach 21 years of age.
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Labor Law and Social Legislation Leave benefits under social legislation Service Incentive Leave (LC)
Paternity Leave (Paternity Leave Act)
Parental Leave (Solo
VAWC Leave
5 days
7 days with full pay
7 days
10 days
2 months/60 days with full pay
Male/female employee Yes
Male
Male/female
Female
Female
a. 60 days with pay – normal delivery or miscarriage b. 78 days – for Csection Female
No
No
No
Yes
Yes
a. Leave b. Monetary commutation c. Equivalent of accumulated leaves after retirement Has rendered at least 1 year of service
Leave; can be availed of before, during, or after childbirth
Leave
Leave
Leave
Leave
First four deliveries of the legitimate spouse with whom he is cohabiting
Solo parent who has rendered at least 1 year of service
Must be a victim
a. Employment service of at least 6 months b. Must have had surgery caused by gynecological disorders
See discussion on SSS
Parents’
Welfare Act)
Gynecological Leave (Magna Carta for Women)
Period
Who is entitled Is commutation allowed?
Ways of enjoying
Requirements
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Maternity (SSS)
Labor Relations __________________________________________________________
freedom of association with others, including the right to form and join trade unions for the protection of his interests.
LABOR RELATIONS LAW ___________________________________________________________
Constitutional provisions that protect the right to self-organization
DECLARATION OF POLICY The State aims to promote: 1.
2. 3. 4.
5.
6. 7.
8.
1.
Free CB and negotiations, including voluntary arbitration, mediation and conciliation as modes of settling labor or industrial disputes; Free trade unionism; Free and voluntary organization of a strong and united labor movement; Enlightenment of workers concerning their rights and obligations as union members and as Ees; Adequate administrative machinery for the expeditious settlement of labor or industrial disputes; Stable but dynamic and just industrial peace; Participation of workers in the decision-making processes affecting their rights, duties and welfare; Truly democratic method of regulating the relations between the Ers and Ees by means of agreements freely entered into through CB, no court or administrative agency or official shall have the power to set or f ix wages, rates of pay, hours of work or other terms and conditions of employment, except as otherwise provided under the LC. (LC , Art. 211)
2.
3.
4.
The State affirms labor as a primary social economic force. It shall protect the rights of the workers and promote their welfare. (Art. II, Sec. 18) The State is required to guarantee the rights of all workers to self-organization, CB and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. (Art. XIII, Sec. 3) The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law, shall not be abridged. (Art. III, Sec. 8) The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charters. [Art. IX-B, Sec. 2(1)]
Extent of the Right to Self-Organization It includes the following rights: 1. To form, join and assist labor organizations for the purpose of CB through representatives of their own choosing; and 2. To engage in lawful and concerted activities for the purpose of CB or for their mutual aid and protection .(Art. 253, LC)
A. RIGHT TO SELF ORGANIZATION Right to Self-Organization
--Q: At what particular point does a labor organization acquire a legal personality? (2012 Bar Question)
It is the right of workers and Ees to form, join or assist unions, organizations or associations for purposes of CB and negotiation and for mutual aid and protection. It also refers to the right to engage in peaceful concerted activities or to participate in policy and decision-making processes affecting their rights and benefits.
A: On the date the Certificate of Registration is actually issued (LC, Art. 240)
----Q: A, an employee of XYZ Cooperative, owns 500 shares in the cooperative. He has been asked to join the XYZ Cooperative Employees Association. He seeks your advice on whether he can join the association. What advice will you give him? (2010 Bar Question)
NOTE: The LC incorporated the policy laid down in the International Labor Organization Convention No. 87: Freedom of Association and Protection of the Right to Organization which provides that workers and Ers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organization concerned, to join organizations of their own choosing without previous authorization.
A: A cannot join XYZ Cooperative Employees Association because owning shares makes him a coowner thereof. An Ee-member of a cooperative cannot join a union and bargain collectively with his cooperative for an owner cannot bargain with
Also, under the International Covenant on Civil and Political Rights , - Everyone shall have the right to
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Labor Law and Social Legislation himself and his co-owners. (Cooperative Rural Bank of Davao City, Inc. v. Calleja, 165 SCRA 725)
the same establishment may join the same federation or national union. (LC, Art. 255 )
--Effect of inclusion as members of employees outside the bargaining unit
EMPLOYEES UNDER LABOR RELATIONS Managerial employee
The inclusion as union members of employees outside the bargaining unit shall not be a ground for the cancellation of the registration of the union. Said employees are automatically deemed removed from the list of membership of said union ( LC, Art. 256; RA No. 9481).
The person who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline Ees.
NOTE: The exercise of independent judgment and
Ees eligible to join a labor organization for mutual aid and protection
discretion primarily belongs to managerial Ees.
Supervisory employee
The following enjoy the right to self-organization for mutual aid and protection (Am In It Se R) 1. Ambulant workers 2. Intermittent workers 3. Itinerant workers 4. Self-employed people 5. Rural workers 6. Those without definite Ers (LC, Art. 253).
The person who effectively recommends such managerial actions; provided, that the recommendation is not merely routinary or clerical in nature but requires the use of independent judgment. ( Azucena, 2013)
Rank-and-file employees NOTE: The reason for this rule is that the Those persons who are neither managerial nor supervisory Ees are considered rank-and-file. [Art. 219(m), LC] They perform job that is routinary or clerical in nature.
abovementioned workers collectively bargain with.
have
no
Ers
to
When Ee are eligible to join a labor organization
WHO MAY UNIONIZE FOR PURPOSES OF COLLECTIVE BARGAINING
Any Ee, whether employed for a definite period or not, shall, beginning on his first day of service, be considered as an employee for purposes of membership in any labor union. [LC, Art. 292(c) as amended by Sec. 33, R.A. No. 6715]
1.
All persons employed in commercial, industrial and agricultural enterprises; 2. Employees of government-owned and/or controlled corporation, without original charters established under the Corporation Code; 3. Workers in religious, charitable, medical, or educational institutions, whether operating for profit or not; 4. Supervisors; 5. Alien employees; 6. Working children; 7. Homeworkers; 8. Security Guards; 9. Workers of Cooperatives; and 10. Employees of legitimate contractors not with the principal but with the contractors
--Q: What is the rule on the "equity of the incumbent"? (2015 Bar Question) A: The Equity of the Incumbent rule states that all existing federations or national unions, possessing all qualifications of an LLO and none of the grounds for CR cancellation, shall continue to maintain their existing affiliates regardless of their location or industry to which they belong. In case of dissociation, affiliates are not required to observe the one union-one industry rule.
--NOTE: Organizations of workers and Ers shall have
Right of supervisory Ees in self-organization
the right to establish and join federations and confederations, and any such organization, federation or confederation shall have the right to affiliate with international organizations of workers and Ers (ILO Convention No. 87, Art. 5).
Supervisory Ees shall not be eligible for membership in a labor organization of the rankand-file Ees but may join, assist or form separate labor organizations of their own. The rank and file union and the supervisors’ union operating within
WHO CANNOT FORM, JOIN, AND ASSIST
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Labor Relations LABOR ORGANIZATIONS
2.
Exceptions to Article 253, notwithstanding the all-inclusive coverage of “all persons” 1. 2. 3.
Formulate, determine, and effectuate management policies in the field of labor relations.
The two (2) criteria are cumulative, and both must be met if an employee is to be considered a confidential employee – that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. (Tunay na Pagkakaisa ng Manggawa sa Asia Brewery vs. Asia Brewer, Inc., G.R . No. 162025, August 3, 2010)
High level or Managerial Government Ees. (E.O. 180, Sec. 3) Ees of International organizations with functional immunities Managerial Ees – vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline Ees. [LC, Art. 219 (m)]
NOTE: An important element of the “confidential Ee NOTE: The mere fact that an Ee is designated
rule” is the Ee’s access to confidential labor relations information. An Ee may not be excluded from the appropriate bargaining unit merely because he has access to confidential information concerning the Er’s internal business which is not related to the field of labor relations and has no relevance to negotiations and settlement of grievances wherein the interests of a union and the management are invariably adversarial. (San Miguel Corp. Supervisors v. Laguesma, G.R. 110399, August 15, 1997)
as “manager” does not ipso facto make him one. Job description determines the nature of his employment 4.
5. 6. 7. 8.
Members of the AFP including the police officers, policemen, firemen, and jail guards (E.O. 180, Sec. 4). Confidential Ees who have access to confidential labor relations information. Ees of cooperatives who are its members. However they may form workers’ association. Non-Ees Government Ees, including GOCC’s with original charters
Rationale behind the exclusion of confidential employees from the rank-and-file bargaining unit The rationale for their separate category and disqualification to join any labor organization is similar to the inhibition for managerial Ees, because if allowed to be affiliated with a union, the latter might not be assured of their loyalty in view of evident conflict of interests and the union can also become company-dominated with the presence of managerial Ees in the union membership. Having access to confidential information, confidential Ees may also become the source of undue advantage. Said Ees may act as a spy or spies of either party to a CBA. (San Miguel Foods Inc., vs. San Miguel Corporation Supervisors and Exempt Union, G.R. No. 146206, August 1, 2011)
NOTE: Government Ees are governed by the Civil Service Commission. 9.
Aliens without a valid working permit or aliens with working permits but are nationals of a country which do not allow Filipinos to exercise their right of self-organization and to join or assist labor organizations. [LC, Art. 284; D.O. No. 9, Rule II, Sec. 2 (1997)]
Doctrine of necessary implication This doctrine states that what is implied in a statute is as much a part thereof as t hat which is expressed. While Art. 245 of the Labor Code singles out managerial employees as ineligible to join, assist or form any labor organization, under the doctrine of necessary implication, confidential employees are similarly disqualified..(National Association of Trade Unions (NATU) – Republic Planters Bank Supervisors Chapter v. Torres, G.R. No. 93468, Dec. 29, 1994)
Examples of Confidential Ees who could not unionize 1. 2. 3. 4.
CONFIDENTIAL EMPLOYEES Confidential Ees are defined as those who: 1. Assist or act in a confidential capacity,
Bank cashiers Accounting personnel, Radio and telegraph operators who, having access to confidential information Personnel staff (Standard Chartered Bank Employees Union v. Standard Chartered Bank, G.R. No. 161933, April 22, 2008)
Human Resource Assistant and Personnel Assistant are considered confidential Ees
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Labor Law and Social Legislation effectivity of Republic Act No. 6715, shall remain in that unit.”
As Human Resource Assistant, the scope of one’s work necessarily involves labor relations, recruitment and selection of employees, access to Ees' personal files and compensation package, and human resource management. As regards a Personnel Assistant, one's work includes the recording of minutes for management during CB negotiations, assistance to management during grievance meetings and administrative investigations, and securing legal advice for labor issues from the petitioner’s team of lawyers, and implementation of company programs. Therefore, in the discharge of their functions, both gain access to vital labor relations information which outrightly disqualifies them from union membership.
Mingling does not affect the legitimacy of a labor organization and its right to file a petition for certification election --Q: May an organization which carries a mixture of rank-and-file and supervisory employees possess any of the rights of a legitimate labor organization, including the right to file a petition for certification election for the purpose of collective bargaining? A: YES. While there is a prohibition against the
Payroll master is not a Confidential Ee
mingling of supervisory and rank-and-file employees in one labor organization, the Labor Code does not provide for the effects thereof. Thus, the Court held that after a labor organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article 239 of the Labor Code. (Republic vs. Kawashima Textile, G.R. No. 160352, July 23, 2008)
A confidential employee is one entrusted with confidence on delicate, or with the custody, handling or care and protection of the employer’s property. Confidential employees, such as accounting personnel, should be excluded from the bargaining unit, as their access to confidential information may become the source of undue advantage. However, such fact does not apply to the position of Payroll Master and the whole gamut of employees who has access to salary and compensation data. The position of Payroll Master does not involve dealing with confidential labor relations information in the course of the performance of his functions. Since the nature of his work does not pertain to company rules and regulations and confidential labor relations, it follows that he cannot be excluded from the subject bargaining unit. (San Miguel Foods Inc. v. San Miguel Corporation Supervisors and Exempt Union, G.R. No. 146206, August 1, 2011)
--RIGHTS AND CONDITIONS OF MEMBERSHIP Article 241 of the Labor Code enumerates the rights and conditions of membership in a union and they may be summarized as follows: 1.
COMINGLING OR MIXTURE OF MEMBERSHIP Prohibition on mingling or mixture of rank-and-file and supervisory ees:
2.
Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. (Sec. 18.Article 245, LC)
3.
The Section 1 of the IRR of R.A. No. 6715 under Rule II, as amended further provides that:
“Supervisory employees and security guards
shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own; Provided, that those
4.
supervisory employees who are included in an existing rank-and-file bargaining unit, upon the
178
Political rights- the member’s right to vote and be voted for, subject to lawful provisions on qualification and disqualifications. Deliberate and decision-making rights - the member’s right to participate in deliberations on major policy question and decide them by secret ballot. Rights over money matters- the member’s rights against excessive fees; the right against unauthorized disbursement; the right to require adequate record of income and expenses and the right to access to financial records; the right to vote on officer’s compensation; the right to vote on proposed special assessments and be deducted a special assessment only with the member’s written authorization Right to information- the member’s right to be informed about the organization’s constitution and by-laws and the collective bargaining
Labor Relations agreement and about labor laws (Azucena, 2007)
Disaffiliation is not prohibited but the terms of the contract of affiliation have to be observed. In the absence of enforceable provisions in the federation’s constitution preventing disaffiliation of a local union, a local may sever its relationship with its parents. (People’s Industrial and Commercial Employees, March 15, 1982)
Nature of Relationship 1. Member - Labor Union The union may be considered the agent of its members for the purpose of them fair and just wages and good working conditions and is subject to the obligation of giving the members as its principals all information relevant to union and matters entrusted to it. (Heir of Teodolo M. Cruz v. Court of Industrial Relations)
Disaffiliation may also be done even while there is a pending protest filed by the federation against the election of the officers of the local union. (Phil. Skylanders, Inc., January 31, 2002)
Effect of Disaffiliation The relationship of the members and the labor union is governed by their mutual agreement, the terms and conditions of which are set forth in the union constitution and by-laws and binding on the members, as well as the organization itself, provided that it is not against the law, morals, good customs, public order and public policy. (Manggagawa sa Ang Tibay v. Ang Tibay )
When a local union disaffiliates from a national union or federation, the latter ceases to be entitled to check-off dues. (Volkschel Labor Union, 1985 )
b. Substitutionary Doctrine This doctrine holds that the employees cannot revoke the validly executed collective bargaining contract with their employer by the simple expedient of changing their bargaining agent. The new agent must respect the contract. The employees, thru their new bargaining agent, cannot renege on the collective bargaining contract, except to negotiate with the management for the shortening thereof. (Elisco-Elirol Labor Union, December 29, 1977)
2. Labor Union – Federation Similarly the federation may be considered the agent of a labor union. A federation or national union is organized for collective bargaining purposes or for dealing with employers concerning the terms and conditions of employment of its memberunions or for participating in the formulation of social and employment policies, standards, and programs for and in behalf of its member-unions.
The CBA continues to bind the members of the new or disaffiliated and independent union up to the CBA’s expiration date. ( Associated Workers Union, July 30, 1990)
a. Affiliation/Disaffiliation
B. BARGAINING UNIT
An affirmative vote by the majority of the members of the independent union which is embodied in a resolution or request is required to affiliate to the chosen federation or national union. If the latter accepts, a contract of affiliation binds the parties; hence the relationship between the “mother” and “daughter” union is therefore contractual.
Bargaining unit is a group of employees sharing mutual interest within a given employer unit, comprised of all or less that all of the entire body of employees in the employer unit or any specific occupational or geographical grouping within such employer unit.
Tests to determine the appropriate bargaining unit
Affiliation by a duly registered union with a national union or federation does not cause the local union to lose its legal personality. Despite affiliation, the local union remains the basic unit free to serve the common interest of all its members. ( Adamson and Adamson, 1984)
1. Community Doctrine
or
Mutuality
of
Interest
Under this doctrine, the employees sought to be represented by the collective bargaining agent must
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Labor Law and Social Legislation have community or mutuality of interest in the terms of employment and working conditions as evinced by the type of work they perform. It is characterized by similarity of employment status, same duties and responsibilities and substantially similar compensation and working conditions.
A legitimate labor organization shall have the right: 1. 2.
2. Globe Doctrine/Globe Election Doctrine or will of the members
3.
This doctrine was first enunciated in United States case of Globe Machine and Stamping Co., where it was ruled that, in defining the appropriate bargaining unit, that in case where the company’s production workers can be considered either as a single bargaining unit appropriate for the purpose of collective bargaining or as three (3) separate and distinct bargaining unit, the determining factor is the desire of the workers themselves. Consequently, a certification election should be held separately to choose which representative union will be chosen by the workers.
4.
3. Collective Bargaining History Doctrine
5. 6.
This doctrine puts premium to the prior collective bargaining history or affinity of the employees in determining the appropriate bargaining unit. However, the existence of a prior collective bargaining is neither decisive nor conclusive in the determination of what constitute an appropriate bargaining unit.
E. UNFAIR LABOR PRACTICE (ULP) NATURE OF ULP
4. Employment Status Doctrine The determination of the appropriate bargaining unit is based on the employment status of the employees. (Philippine Land-Air-Sea Labor Union v. CIR)
ILO Convention No. 98, Right to Organize and Collective Bargaining Convention, frowns upon anti-union discrimination and interference.
Article 2.1 states “Workers' and Employers' organizations shall enjoy adequate protection against any acts of interference by each other or each other's agents or members in their establishment, functioning or administration.”
C. BARGAINING REPRESENTATIVE Bargaining Representative means a legitimate labor organization or any duly authorized officer or agent of such organization whether or not employed by the employer. (Rule 1, Sec. 1, (l) ORI of the LC,)
Acts considered as ULP The act complained of must have a proximate and causal connection with:
Modes of determining the Sole and Exclusive Bargaining agent
1.
1. 2. 3. 4. 5.
To act as the representative of its members for the purpose of collective bargaining; To be certified as the exclusive representative of all the employees in an appropriate bargaining unit for purposes of collective bargaining; To be furnished by the employer, upon written request, with its annual audited financial statements, including the balance sheet and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the union has been duly recognized by the employer or certified as the sole and exclusive bargaining representative of the employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective bargaining negotiation; To own property, real or personal, for the use and benefit of the labor organization and its members; To sue and be sued in its registered name; and To undertake all other activities designed to benefit the organization and its members,including cooperative, housing, welfare and other projects not contrary to law.
Voluntary Recognition Certification Election Consent Election Run-off Election Re-run Election
2. 3.
Exercise of the Right to Self-organization Exercise of the Right to CB Compliance with CBA
Not all illegal acts are ULP; only those enumerated in the LC are ULP.
--Q: The Collective Bargaining Agreement (CBA) between Libra Films and its union, Libra Films
D. RIGHTS OF LEGITIMATE LABOR ORGANIZATION
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Labor Relations 1st ULP: Interference
Employee’s Union (LFEU), contains the following
standard clauses: It is the act of Er to interfere with, restrain or coerce Ees in the exercise of their right to self-organization.
1. Maintenance of membership; 2. Check off for union dues and agency fees; and 3. No strike, no lock-out.
Test of interference Whether the Er has engaged in a conduct which, it may reasonably be said, tends to interfere with the free exercise of the Ees right to self-organization.
While Libra Films and LFEU are in renegotiations for an extension of the CBA, LFEU discovers that some of its members have resigned from the union, citing their constitutional right to organize (which includes the right NOT to organize). LFEU demands that Libra Films institute administrative proceedings to terminate those union members who resigned in violation of the CBA's maintenance of membership clause. Libra Films refuses, citing its obligation to remain a neutral party. As a result, LFEU declares a strike and after filing a notice of strike and taking a strike vote, goes on strike. The union claims that Libra Films grossly violated the terms of the CBA and engaged in unfair labor practice.
It is not necessary that there be a direct evidence that an Ee was in fact intimidated or coerced by statement of threats of the Er if there is a reasonable inference that anti-union conduct of the Er does have an adverse effect on self-organization and CB (The Insular Life Assurance-NATU v. The Insular Life Co. Ltd, G.R. No.L-25291, January 30, 1971).
Interference
in
the
Ee’s
right
to
self -
organization a.
Interference is always ULP. The judicial dictum is that any act of interference by the Er in the exercise by Ees of their right to self-organization constitutes ULP.
Are LFEU's claims correct? Explain. (2015 Bar Question) A: NO. LFEU’s claim that Libra Films committed ULP
In Hacienda Fatima v. National Federation of Sugarcane Workers – Food and General Trade, the SC upheld the factual findings of the NLRC and CA that from the Er’s refusal to bargain to its acts of economic inducements resulting in the promotion of those who withdrew from the union, the use of armed guards to prevent the organizer to come in, and the dismissal of union officials and members, once cannot but conclude that the Er did not want a union in its hacienda – a clear interference in the right of the workers to self- organization; hence, the Er was held guilty of ULP
based on its violation of the CBA is not correct. For violation of a CBA to constitute ULP, the violation must be violation of its economic provisions. Moreover, said violation must be gross and flagrant. Based on the allegation of the union, what was violated was the maintenance of mem bership clause which was a political or representational provision; hence, no ULP was committed (BPI Employees Union-Davao City v. BPI, 702 SCRA 42).
--ULP OF EMPLOYERS ULP committed by employers
b.
Only the officers and agents of corporations, associations or partnerships who have actually participated in or authorized or ratified ULPs are criminally liable.
c.
1. 2. 3. 4. 5.
The culpability of Er’s remarks is to be evaluated not only on the basis of their implications, but against the background of and in con junction with collateral circumstances.
6. 7. 8. 9.
Formation of union is never a valid ground to dismiss. It is ULP to dismiss a union officer or an Ee for his union activities.
Totality of Conduct Doctrine
Interference, restraint, coercion Yellow dog condition Contracting out of services Company unionism or captive unionism Discrimination for or against union membership Discrimination because of testimony Violation of duty to bargain Payment by the Er of negotiation fees Gross violation of CBA
Under this doctrine, expressions of opinion by an Er, though innocent in themselves, frequently were held to be culpable because of:
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Labor Law and Social Legislation 1. 2. 3.
Philippine Marine Officers Guild, G.R. Nos. L-20667 and L-20669, October 29, 1965).
The circumstances under which they were uttered; The history of the particular Er’s la bor relations or anti-union bias, and; Their connection with an established collateral plan of coercion or interference (The Insular Life Assurance-NATU v. The Insular Life Co. Ltd, G.R. No.L-25291, January 30, 1971).
--NOTE: Interrogating an Ee as to his union affiliation is not per se ULP, but circumstances may make it as such.
Other examples of acts of interference An expression which might be permissibly uttered by one Er, might, in the mouth of a more hostile Er, be deemed improper and consequently actionable as a ULP.
1. 2. 3.
--Q: Phil. Marine Officers Guild (PMOG) is a union representing some of Philsteam’s officers and Cebu Seamen’s Association (CSA) is another union representing some of Philsteam’s officers.
Outright and unconcealed intimidation; Intimidating expressions of opinion by Er, and; An Er who interfered with the right to selforganization before a union is registered can be held guilty of ULP (Samahan ng mga Manggagawa sa Bandolino-LMLC v. NLRC, G.R. No. 125195, July 17, 1997).
NOTE: It is the prerogative of the company to
PMOG sent a letter to Philsteam requesting for CB but the company asked the former to first prove that it represents the majority. Simultaneously, Philsteam interrogated its captains, deck officers and engineers while CSA likewise sent its demands to Philsteam. The company recognized CSA as representing the majority and entered into a CBA, hence PMOG declared a strike. PMOG was subjected to vilification. Philsteam’s purchasing agent made a statement that PMOG was a “money-asking” union and that CSA is a good union. Philsteam's pier superintendent did not disavow the statements. Is the company guilty of ULP?
promote, transfer or even demote its Ees to other positions when the interests of the company reasonably demands it, unless there are circumstances which directly point to interference by the company with the Ees right to selforganization, the transfer of an Ee should be considered as within the bounds allowed by law (Rubberworld Phils. v. NLRC, G.R. No. 75704, July 19, 1989).
A: YES. An Er is not denied of the privilege from
b. c. d.
In order that interrogation would not be deemed coercive: a.
interrogating its Ees as to their union affiliation, provided: a. b.
The same is for a legitimate purpose, and; Assurance is given by the Er that no reprisals would be taken against unionists.
e.
The Er must communicate to the Ee the purpose of questioning; Assure him that no reprisal would take place Obtain Ee participation voluntarily; Must be free from Er hostility to union organization, and; Must not be coercive in nature
2nd ULP: Yellow dog condition
Nonetheless, any Er who engages in interrogation does so with notice that he risks a finding of unfair labor practice if the circumstances are such that his interrogation restrains or interferes with Ees in the exercise of their rights to self-organization.
It is to require, as a condition of employment, that a person or an Ee shall not join a labor organization attempt to organize one during their period of employment nor shall withdraw from one to which he belongs.
Moreover, the pier superintendent participated in the solicitation of membership for CSA when he did nothing to show that the statement “money -asking” union is not intended to represent PHILSTEAM’s opinion. Thus, the company, through its supervisory official, made it appear to the Ees that the purchasing agent was speaking for or on behalf of the company, when he made the remarks derogatory to PMOG and favorable to CSA. PHILSTEAM thereby interfered with the Ees’ right to self-organization (Philsteam and Navigation v.
Yellow dog contract It is a promise exacted from workers as condition of employment that they are not to belong to or attempts to foster a union during their period of employment. Once employed, he promises that he will never join a union.
Validity of yellow dog contract Yellow dog contracts are null and void because:
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Labor Relations 1. 2. 3.
It is contrary to public policy for it is tantamount to involuntary servitude. It is entered into without consideration for Ees in waiving their right to self- organization. Ees are coerced to sign contracts disadvantageous to their family.
payroll; a waiver of labor standards including minimum wages and social or welfare benefits; or a quitclaim releasing the principal, contractor or from any liability as to payment of future claims
This is one of the cases of ULP that may be committed in the absence of an Er-Ee relationship.
4. 5.
Three usual provisions under a yellow dog contract 1. 2. 3.
A representation by the Ee that he is not a member of a labor union A promise by the Ee not to join a labor union A promise by the Ee that upon joining a labor union, he will quit his employment
6.
3rd ULP: “Contracting out” as a form of ULP 7. It is to contract out services or functions being performed by union members when such act will interfere with, restrain or coerce Ees in the exercise of their rights to self-organization.
Contracting out services
Code provisions on Security of Tenure 8. Requiring Ees under a subcontracting arrangement to sign a contract fixing the period of employment to a term shorter than the term of the Service Agreement, unless the contract is divisible into phases for which substantially different skills are required and this is made known to the Ees at the time of engagement 9. Refusal to provide a copy of the Service Agreement and the employment contracts between the contractor and the Ees deployed to work in the bargaining unit of the principal’s certified bargaining agent to the sole and exclusive bargaining agent (SEBA) 10. Engaging or maintaining by the principal of subcontracted Ees in excess of those provided for in the applicable Collective Bargaining Agreement (CBA) or as set by the Industry Tripartite Council (ITC)
GR: Contracting out services by the ER is not ULP per se.
XPNs: The following are prohibited for being contrary to law or public policy: A.
Contracting out of jobs, works or services when not done in good faith and not justified by the exigencies of the business such as the following: 1.
2. 3.
Contracting out of jobs, works or services when the same results in the termination or reduction of regular Ees and reduction of work hours or reduction or splitting of the bargaining unit Contracting out of work with a “Cabo” Taking undue advantage of the economic situation or lack of bargaining strength of the contractor’s Ees, or undermining their security of tenure or basic rights, or circumventing the provisions of regular employment, in any of the following instances: I.
II.
Contracting out of a job, work or service through an in-house agency Contracting out of a job, work or service that is necessary or desirable or directly related to the business or operation of the principal by reason of a strike or lockout whether actual or imminent Contracting out of a job, work or service being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to self-organization as provided in Art. 248 (c) of the LC, as amended Repeated hiring of Ees under an employment contract of short duration or under a Service Agreement of short duration with the same or different contractors, which circumvents the Labor
B.
Requiring them to perform functions which are currently being performed by the regular Ees of the principal Requiring them to sign, as a precondition to employment or continued employment, an antedated resignation letter; a blank
Contracting out of jobs, works or services analogous to the above when not done in good faith and not justified by the exigencies of the business (D.O. 18-A, Sec. 7 )
NOTE: Consistent with the authority of the Secretary of Labor and Employment to restrict or prohibit the contracting out of labor to protect the rights of workers, it shall be mandatory for all persons or entities, including cooperatives, acting as contractors, to register with the Regional Office
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Labor Law and Social Legislation Electric Company v. Quisumbing and MEWA, G.R. No. 127598, January, 27, 1999).
of DOLE where it principally operates. Failure to register shall give rise to the presumption that the contractor is engaged in labor-only contracting (D.O. 18-A, Sec. 14).
--Run-away shop
--Q: Company "A" contracts out its clerical and janitorial services. In the negotiations of its CBA, the union insisted that the company may no longer engage in contracting out these types of services, which services the union claims to be necessary in the company's business, without prior consultation. Is the union's stand valid or not? For what reasons? (2001 Bar Question)
It is an industrial plant moved by its owners from one location to another to escape labor regulations or State laws, but the term is also used to describe a plant removed to a new location in order to discriminate against Ees at the old plant because of their union activities (Complex Electronics Employees Association v. NLRC, G.R. No. 121315, July 19, 1999).
A: The union's stand is not valid. It is part of
It may also be the place where the Er transferred his business in case of strike.
management prerogative to contract out any work, task, job, or project except that it is ULP to contract out services or functions performed by union members when such will interfere with, restrain or coerce Ees in the exercise of their rights to selforganization [LC, Art. 248 (c)].
Resorting to run-away shop is ULP Where a plant removal is for business reasons but the relocation is hastened by anti-union motivation, the early removal is ULP. It is immaterial when the relocation is accompanied by a transfer of title to a new Er who is an alter ego of the original Er.
--Examples when an Er’s contracting out of work
are itself a ULP 4th ULP: Company-domination of union a.
b. c.
Motivated by a desire to prevent his Ees from organizing and selecting a collective bargaining representative Rid himself of union men Escape his statutory duty to bargain collectively with his employee’s bargaining representative
Par. (d) of Art. 248 considers it ULP to initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to it or its organizers or supporters. Such union is called “company union” as its formation, function or administration has been assisted by any act defined as ULP under LC Labor organization in which, in whole or in part, is Ercontrolled or Er-dominated.
When Er’s contracting out is not ULP a.
For business reasons such as decline in business, the inadequacy of his equipment, or the need to reduce cost, even if the Er’s estimate of his cost is based on a projected increase attributable to unionization.
Forms of company unionism 1.
Initiation of the company union idea by: a. Outright formation by Er or his representatives b. Ees formation on outright demand or influence by Er c. Managerially motivated formation by Ees
2.
Financial support to the union by: a. Er defrays union expenses b. Er pays attorney's fees to the attorney who drafted the Constitution or by-laws of the union
3.
Er encouragement assistance – Immediately granting of exclusive recognition as bargaining agent without determining whether the union represents the majority of the employees
--Q: The Secretary of Labor imposed upon the management the duty to consult the union before implementing a job contracting out that would last for six months or more. Is this valid? A: NO. A balance already exists in the parties’ relationship with respect to contracting out. The company has its legally defined and protected management prerogatives while the workers are guaranteed their own protection through labor provisions and recognition of limits to the exercise of management prerogatives. The Secretary’s added requirement only introduces an imbalance in the parties’ collective bargaining relationship. (Manila
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Labor Relations 4.
Supervisory assistance – Soliciting membership, permitting union activities during work time or coercing Ees to join the union by threats of dismissal or demotion
(Phil. Metal Foundries Inc. v. CIR, G.R. Nos. L-3494849, May 15, 1979). Even assuming that business conditions justify the dismissal Ees, it is ULP of Er to dismiss permanently only union members and not non-unionists. (Manila Pencil Co. Inc. v. CIR, G.R. No. L-16903, August 31, 1965).
Act of company-domination of union This is to initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization including giving of financial or other support to it or its organizers or supporters.
Reason why company unionism is a form of ULP
The non-regularization of long-time Ees because of their affiliation with the union while new Ees were immediately regularized was declared an act of discrimination (Manila Railroad Co. v. Kapisanan ng mga Manggagawa sa Manila Railroad Co., G.R. No. L 25316, February 28, 1979)
unionism/captive
--Q: Jobo has 3 hotels, the Taal Vista Lodge, Manila Hotel and the Pines Hotel. Among the 3, Pines Hotel had more Ees and the only one with a labor organization. When the bonus was distributed among the 3 hotels, Pines Hotel employees received the least amount compared to the Ees of Manila Hotel and Taal Vista Lodge. Did the company commit ULP?
It is considered ULP because the officers will be beholden to the Ers and they will not look after the interest of whom they represent.
5th ULP: Discrimination as a form of ULP It is to discriminate in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization.
A: YES. In this case, Pines Hotel Ees who were the Discrimination occurs when a union member, involved in union activity, is treated differently from a non-union worker. Antiunion animus is found when the Er’s conduct is not motivated, or at least is not entirely motivated by legitimate and substantial business reasons but by a desire to penalize or reward Ees for union activity or lack of it.
most numerous "would receive, a lesser bonus than the Ees of the Manila Hotel and Taal Vista Lodge where neither is there any existing labor organization nor the complainant union has any member." The fact that management granted Christmas bonus to its Ees, the same should have been distributed pro rata among all its Ees regardless of their place of work (Manila Hotel Co. v. Pines Hotel Employees’ Association, G.R. No.L -30139, September 28, 1972).
Discrimination, not the same as Differentiation or Classification
----Q: Can an Er discriminate against an Ee without committing ULP?
It is a common management practice to classify jobs and grant them varying levels of pay or benefits package. These are valid differentiations that recognize differences in job requirements or contributions. They are not necessarily discrimination classifiable as ULP.
A: YES. The Er is not guilty of ULP if it merely complies in good faith with the request of the certified union for the dismissal of Ees expelled from the union pursuant to the union security clause in the CBA (Soriano v. Atienza, G.R. No. L68619, March 16, 1989).
Discriminatory discharge of an employee The underlying reason for the discharge must be established in order to determine whether such act is discriminatory or not.
----Q: A profit sharing scheme was introduced by the company for its managers and supervisors, who are not members of the union, and hence do not enjoy the benefits of the CBA. The respondent union wanted to participate with the scheme but was denied by the company due to the CBA. Subsequently the company distributed the profit sharing to the manager, supervisors and other non-union member
The fact that a lawful cause for discharge is available is not a defense where the Ee is actually discharged because of his union activities. If the discharge is actually motivated by lawful reason, the fact that the Ee is engaged in union activities at the time will not lie against the Er and prevent him f rom the exercise of business judgment to discharge an Ee for cause
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Labor Law and Social Legislation employees. As a result the union filed a notice of strike alleging ULP. Is the non-extension of the profit sharing scheme to union members discriminatory and an ULP?
clauses which is the sanctity and inviolability of contracts cannot erode one’s right to due process. Notwithstanding the fact that the dismissal was at the instance of the federation and that it undertook to hold the company free from any liability resulting from such dismissal, the company may still be held liable if it was remiss in its duty to accord the wouldbe dismissed Ees their right to be heard on the matter.
A: NO. There can be no discrimination when the Ees are not similarly situated. The situation of union members is different and distinct from non-union members because only union members enjoy the benefit under the CBA. The profit sharing scheme was extended to those who do not enjoy the b enefits of the CBA. Hence, there is no discrimination and ULP is not committed (Wise and Co., Inc. v. NLRC, G.R. No. L-87672, October 13, 1989).
--Indirect Discrimination
---
What is prohibited to be done directly shall not be allowed to be accomplished indirectly. It is ULP for an Er to dismiss or discriminate against an Ee for having filed charges or for having given or being about to give testimony. Although it seems that it refers only to the one who filed the charges, the legislative intent is to assure absolute freedom of employee to establish labor organizations and unions, thus, in addition, dismissal of a laborer on account of union activities of his brother, wife or husband, is considered ULP.
Valid Discrimination: Union Security Clause There is a form of encouragement of union membership which is not considered ULP. This is where the Management and Union enter into a CBA containing a union security clause, which essentially requires membership in the union so that an employee may retain his job and the union’s existence is assured. In a sense, there is discrimination when certain employees are obliged to join a particular union. However, it is discrimination favoring unionism, thus it is valid.
6th ULP: Discrimination because of testimony Under par. (f) of Art. 245 of LC, it is ULP for an Er to dismiss, discarge or otherwise prejudice or discriminate against an Ee for having given or about to give testimony under the LC.
--Q: Is dismissal of an Ee pursuant to a union security clause a form of ULP? A: NO. Union security clauses in the CBA, if freely
The law protects not only the Ee’s right to form, join, or assist labor organizations but also their right to testify on matters covered by the Code. It shields the Ee’s rights from indirect assaul t from the Er.
and voluntarily entered into, are valid and binding; thus, the dismissal of an Ee by the company pursuant to a labor union’s demand in accordance with a union security agreement does not constitute ULP (Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos, G.R. No. 113907, February 28, 2000).
Er’s reprisal against a testifying Ee is ULP because, furthermore, it violates the right to engage in concerted activity, a right included in the right to self-organize.
A union member who is employed under an agreement between the union and his Er is bound by the provisions thereof since it is a joint and several contract of the members of the union entered into by the union as their agent (Manalang v. Artex Dev’t., G.R. No. L-20432, October 30, 1967).
It must be underscored that Art. 248(f) is the only ULP that need not be related to the exercised by the Ees of their right to self-organization and collective bargaining.
----Q: Is notice and hearing required in case an Ee is dismissed pursuant to a union security clause?
ULP was committed by Er when it dismissed the worker who had testified in the hearing of a certification election case despite its prior request for the Ee not to testify in the said proceeding accompanied with a promise of being reinstated if he followed said request (Itogon-Suyoc Mines, Inc. v. Baldo, G.R. No. L-17739, December 24, 1964) .
A: YES. Although a union security clause in a CBA may be validly enforced and dismissal pursuant thereto may likewise be valid, this does not erode the fundamental requirement of due process. The reason behind the enforcement of union security
--Q: Mabeza and her co-employees were asked by the company to sign an affidavit attesting to the
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Labor Relations Q: Balmar Farms Employees Association (BFEA) is affiliated with Associated Labor Union (ALU). ALU won in the certification election held in the company; thus, ALU sent its proposal for a CBA, but the company refused to act on it alleging that BFEA is the sole and exclusive bargaining representative and that BFEA through its president had sent a letter informing the company of its disaffiliation with ALU. Is the company guilty of ULP for refusing to bargain collectively?
latter’s compliance with pertinent labor laws.
Mabeza signed the affidavit but refused to swear to its veracity before the City prosecutor. Mabeza then filed a LOA which was denied by management. After sometime, she attempted to return to work but the company informed her not to report for work and continue with her unofficial leave. Did the company commit ULP? A: YES. The act of compelling an Ee to sign an instrument indicating the Er’s compliance with Labor laws which the company might have violated together with the act of terminating or coercing those Ees to cooperate is an act of ULP. This is analogous with Art. 248(f) of th e LC which provides “to dismiss, discharge or otherwise prejudice or discriminate against an Ee for having given or being about to give testimony under this Code.” For in not giving a positive testimony in 187avour of the Er, Mabeza reserved not only her right to dispute the claim but also to work for better terms and conditions of employment (Mabeza v. NLRC, G.R No. 118506, April 18, 1997).
A: YES. ALU is the certified exclusive bargaining representative after winning the certification election. The company merely relied on the letter of disaffiliation by BFEA’s president without proof and consequently refusing to bargain collectively constitutes ULP. Such refusal by the company to bargain collectively with the certified exclusive bargaining representative is a violation of its duty to collectively bargain which constitutes ULP (Balmar Farms v. NLRC, G.R. No.73504, October 15, 1991).
----Q: The Kilusang Kabisig, a newly-formed labor union claiming to represent a majority of the workers in the Microchip Corp., proceeded to present a list of demands to the management for purposes of Collective Bargaining. The Microchips Corp., a multinational corp. engaged in the production of computer chips for export, declined total with the union leaders, alleging that they had not as yet presented any proof of majority status. The Kilusang Kabisig then charged Microchip Corp. with ULP, and declared a "wildcat" strike wherein means of ingress and egress were blocked and remote and isolated acts of destruction and violence were committed. Is the company guilty of an ULP when it refused to negotiate with the Kilusang Kabisig? (1997 Bar Question)
--7th ULP: Violation of the Duty to Bargain When the act constitutes violation of the duty to bargain collectively as prescribed in the LC it is considered ULP in bargaining. Art. 248 enunciates three (3) CBA-related ULP, to wit: 1. To violate the duty to bargain collectively as prescribed in the LC; 2. To pay negotiation or attorney’s fees to the union or its officers or agents as part of the settlement of any issue in collective bargaining or any other dispute; and 3. To violate a collective bargaining agreement
NOTE: A company’s refusal to make counter A: NO. It is not ULP to refuse to bargain with a union
proposal, if considered in relation to the entire bargaining process, may indicate bad faith and this is especially true where the union’s request for a counter proposal is left unanswered (Kiok Loy v. NLRC, G.R. No. L-54334, January 22, 1986).
which has not presented any proof of its majority status. Only the labor organization designated or selected by the majority of the employees in an appropriate CB unit is the exclusive representative of the Ees in such unit for the purpose of collective bargaining. It is not a ULP for an Er to ask a union requesting to bargain collectively that such union first show proof of its being a majority union [Philippine Diamond Hotel and Resort, Inc. (Manila Diamond Hotel) v. Manila Diamond Hotel Employees Union, G.R. No. 158075, June 30, 2006].
Examples of ULP in bargaining 1. 2. 3. 4. 5.
Delaying negotiations by discussing unrelated matters Refusal to accept request to bargain Rejecting a union’s offer to prove its majority claim Shutdown to avoid bargaining Engaging in surface bargaining
--8th ULP: Paid negotiation
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Labor Law and Social Legislation It is the act of the Er to pay negotiation or attorney’s fees to the union or its officers or agents as part of the settlement of any issue in CB or any other dispute.
No criminal prosecution under this Title may be instituted without a final judgment finding that a ULP was committed (LC, Art. 247 ). 3.
It is also prohibited for union officers or agents from asking for or accepting such payments.
Cease and desist order To support such order, the record must show that: a. The restrained misconduct was an issue in the case; b. That there was a finding of fact of said misconduct; and c. Such finding of fact was supported by evidence.
9th ULP: Violation of the CBA Only when the violation is gross – There must be a flagrant and/or malicious refusal to comply with the economic provision of the CBA. All the ULP acts must have a relation to the Ees exercise of their right to self-organization. Antiunion or anti-organization motive must be proved because it is a definitional element of ULP.
A cease and desist order will not be justified if the act complained of happened so long a time that there is no longer any threat or probability of recurrence.
If violation is not gross, it is not ULP but a grievance under CBA. The “grossly violate” phrase is an amendment by R.A. 6715.
4.
Affirmative order The order may usually direct the full reinstatement of the discharged employees to their substantially equivalent position without prejudice to their seniority and other rights and privileges.
--Q: A complaint for ULP was filed by a prosecutor of the CIR against Alhambra company, upon the charges of the union that 15 of its members employed as drivers and helpers are discriminated for being deprived of the benefits under the CBA with no justifiable reason other than union membership. Is the company guilty of ULP?
5. 6. 7.
Court may order the Er to bargain CBA may be imposed upon an Er who refused to bargain with the union of its Ees Strike by union members
NOTE: ULP cases are not subject to compromise in A: YES. The refusal to extend the benefits and privileges under the CBA to Ees constitutes ULP. Failure on the part of the company to live up in good faith to the terms of the CBA is a serious violation of the duty to collectively bargain which again amounts to ULP. The 15 drivers and helpers are found to be Ees of the company, hence, the benefit and privileges under the CBA should be extended to them (Alhambra Industries v. CIR, G.R. No. L-25984, October 30, 1970).
view of the public interest involve. The relation between capital and labor is not merely contractual. They are impressed with public interest that labor contracts must yield to common good.
--Q: Is the commission of ULP by an Er subject to criminal prosecution? (2005 Bar Question) A: YES. ULPs are not only violations of the civil
---
rights of both labor and management but are also criminal offenses against the State which shall be subject to prosecution and punishment (LC, Art.247; See also B.P.Blg.386 as amended by R.A. 6715). However, the criminal aspect can only be filed when the decision of the labor tribunals, finding the existence of ULP, shall have become final and executory.
Reliefs available in ULP cases The following reliefs may be availed of: 1.
Civil liability
---
Recovery of civil liability in the administrative proceedings shall bar recovery under the Civil Code (LC, Art. 247 ). 2.
Furnishing financial report by the Er
Criminal liability
Upon written request of an LLO, the Er should furnish the Ee its annual audited financial statements, including the balance sheet and the
188
Labor Relations profit and loss statement, within 30 calendar days from the date of receipt of the request, after the union has been duly recognized by the Er or certified as the sole and exclusive bargaining representative of the Ees in the bargaining unit, or within 60 calendar days before the expiration of the existing CBA, or during the CB negotiation.
5.
Instance when Er’s refusal to furnish financial information is NOT ULP
6.
other things of value, in the nature of an exaction, for services which are not performed or not to be performed, including the demand for fee for union negotiations To ask for or accept negotiations or attorney's fees from Ers as part of the settlement of any issue in Collective Bargaining or any other dispute To violate a CBA (LC, Art. 248)
Interference by a labor organization not ULP While the refusal to furnish the requested information is in itself an unfair labor practice and also supports the interference of surface bargaining, however, if the union failed to put its request in writing, management cannot be held liable for ULP (Standard Chartered Bank Employees Union v. Confesor, G.R. No. 114974, June 16, 2004).
Interference by a labor organization in the exercise of the right to organize is not considered ULP because it is in itself a function of self-organizing.
Examples of interference which does not amount to ULP
Instance when violation of the CBA is constitutive of ULP
1. 2.
When there is gross violation of the CBA it is considered as ULP. Gross violation shall be understood as the flagrant and malicious refusal to comply with economic provisions of the CBA.
3.
ULP OF LABOR ORGANIZATIONS
4.
ULP of labor organizations
Union campaigns for membership even among members of another union Filing by a union of a petition, at the appropriate time, to dislodge an incumbent bargaining union A bargaining union, through a union security clause, requires an incoming employee to join the union When the occasion arises, a bargaining union persuades a non-striking employee to join a strike.
NOTE: These are acts of interference but not ULP.
Only the officers, members of governing boards, representatives or agents or member of labor associations or organizations who have actaully participated in or authorized or ratified the ULPs are crminally liable.
They are instead manifestations of union dynamics and democracy whose ultimate beneficiaries will be the workers themselves.
Union cannot coerce Ees to join a strike It shall be ULP for labor organizations, its officers, agents or representatives: 1.
2.
3.
4.
A union violates the law when, to restrain or coerce non-strikers from working during the strike, it:
To restrain or coerce Ees in the exercise of their rights to self-organization; however, a labor organization shall have the right to prescribe its own rules with respect to the acquisition or retention of membership To cause or attempt to cause an Er to discriminate against an Ee, including discrimination against an Ee with respect to whom membership in such organization has been denied or to terminate an Ee on any ground other than the usual terms and conditions under which membership or continuation of membership is made available to other members To violate the duty, or refuse to bargain collectively with the Er, provided it is the representative of the Ees To cause or attempt to cause an Er to pay or deliver or agree to pay or deliver any money or
1. 2. 3. 4. 5. 6.
7.
8. 9.
Assaults or threatens to assault them Threatens them with the loss of their jobs Blocks their ingress to or egress from the plant Damages non-strikers’ automobiles or forces them off the highway Physically preventing them from working Sabotages the Er’s property in their pre sence, thereby creating an atmosphere of fear or violence Demonstrates loudly in front of a non-striker’s residence with signs and shouts accusing the non-striker of “scabbing” Holding the non-striker up to ridicule Seeking public condemnation of the non-striker
Union-induced discrimination
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Labor Law and Social Legislation This pertains to the arbitrary use of union security clause. A union member may not be expelled from the union, and consequently from his job, for personal and impetuous reasons or for causes foreign to the closed shop agreement (Manila Mandarin Employees Union v. NLRC, G.R. No. 76989, September 29, 1987).
enough that the union believed that the Er committed acts of unfair labor practice when the circumstances clearly negate even a prima facie showing to warrant such a belief.
Duty of Union to Bargain Collectively It is ULP for a duly certified sole and exclusive bargaining union, its officers, agents or representatives to refuse or violate the duty to bargain collectively with the Er. This is the counterpart provision of Art. 248 (g) respecting the violation by the Er of its duty to bargain collectively.
The broad rule is that the union has the right to determine its membership and to prescribe the conditions for the acquisition and retention thereof. Consequently, admission to membership may not be compelled. However, this rule is qualified. Thus, labor unions are not entitled to arbitrarily exclude qualified applicants for membership and a closed-shop applicant’s provision will not justify the employer in discharging, or a union in insisting upon the discharge of an Ee whom the union thus refuses to admit to membership without any reasonable ground thereof (Salunga v. CIR, G.R. No. L-22456, September 27, 1967).
This is to ensure that the union will negotiate with management in good faith and for the purpose of concluding a mutally beneficial agreement regarding the terms and conditions of their employment relationship.
Anti-featherbedding Doctrine Art. 249(d) it is ULP for a labor organization, its officers, agents or representatives to cause or attempt to cause an Er to pay or deliver or agree to pay or deliver any money or other things of value, in the nature of an exaction, for services which are not performed or not be performed, including the demand for fee or union negotiation.
Aspects of ULP Under the Labor Code, ULP has two aspects: 1. 2.
Civil aspect Criminal aspect
NOTE: Civil aspect – LA together with claim for damages arising reinstatement)
from
termination
This practice of the union is commonly known as “featherbedding” as it unduly and unncessarily maintains or increases the number of Ees used or the amount of the consumed work on a specific job. This is done by the Ees to unduly secure their jobs in the face of technological advances or as required by minimum health and safety standards, among other justifications. These featherbedding practices have been found to be wasteful and without legtimate justifications.
(ex:
Criminal aspect – Regular courts.Commenced only upon final decision by LA that party commits ULP. No simultaneous filing is allowed. There must be a final decision first by the Labor Arbiter.
Persons who may be criminally liable for ULP 1.
2.
A union commits ULP under this provision by causing or attempting to cause an Er to pay or agree to pay for standby services. Payments for “standingby” or for the substantial equivalent of “standingby” are not payments for “services performed” within the meaning of the law. When an Er received a bona-fide offer of competent performance of relevant services, it remains for the Er, through free and fair negotiation, to determine whether such offer should be accepted and what compensation should be paid for the work done.
On the part of the employer – Only the officers and agents of corporations, associations or partnerships who have actually participated in, authorized or ratified unfair labor practices, shall be held criminally liable. On the part of the union – Only officers, members of governing boards, representatives or agents or members of labor associations or organizations who have actually participated in, authorized or ratified the unfair labor practices shall be held criminally liable.
Demand or Acceptance of Negotation fees or Burden of proof in ULP cases
Attorney’s fees
In ULP cases, it is the union which has the burden of proof to present substantial evidence to support its allegations of ULP committed by the Er. It is not
Under Art. 249 (e), it is ULP for a labor organization, its officers, agents or representatives to ask for or accept negotiation fees or attorney’s fees from Ers
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Labor Relations as part of the settlement of any issue in collective bargaining or any other dispute.
A strike in contrast is always a group action accompanied by work stoppage.
Violation of CBA
--Q: Union X staged a strike in front of Company B because of a CBA deadlock. During the strike, Company hired replacement workers. Upon resuming their employment, the strikers found that Company B obliged to reinstate the returning workers? (2012 Bar Question)
Under 249 (f), it is ULP for a labor organization, its officers, agents or representatives to violate CBA.
NOTE: Under Art. 261 of LC, violation of CBA is generally considered merely as a grievable issue. It becomes ULP only if the violation is gross in character which means that there is flagrant and/or malicious refusal to comply with the economic stipulations in CBA. This principle applies not only to the Er but to the labor organization as well.
A: YES, because workers are entitled to such retention every time during a valid strike.
----Q: As a result of a bargaining deadlock between Lazo Corporation and Lazo Employees Union, the latter staged a strike. During the strike, several employees committed illegal acts. Eventually, its members informed the company of their intention to return to work. (2014 Bar Question)
Criminal Liability for ULPs of Labor Organizaton Art. 249 is explicit in its provision on who should be held liable for ULPs committed by labor organizations. It states that only the officers, members of governing boards, representatives or agents or members of labor association or organizations who have actually participated in authorized or ratified ULP shall be held criminally liable.
a. Can Lazo Corporation refuse to admit the strikers? b. Assuming the company admits the strikers, can it later on dismiss those employees who committed illegal acts? c. If due to prolonged strike, Lazo Corporation hired replacements, can it refuse to admit the replaced strikers?
F. RIGHT TO PEACEFUL CONCERTED ACTIVITIES Constitutional basis of strikes, lockouts and other concerted activities
A: The State shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law (1987 Constitution, Art. XIII, Sec. 3).
a.
NO. The Commission of illegal acts during a
strike does not automatically bring about loss of employment status. Due process must be observed by the employer before any dismissal can be made. (Stanford Marketing Corp. v. Julian, 423 SCRA 633) b. NO. The employer may be considered as having waived its right to dismiss employees who committed illegal acts during the strike (Reformist Union of R.B. Liner v. NLRC, 266 SCRA 713). c. NO. Sec. 3, Art. XIII of the Constitution guarantees workers the right to strike in accordance with law, and prolonged strike is not prohibited by law. With Art. 212 (o) defining strike as “any temporary stoppage of work as a result of an industrial or labor dispute, it is the prerogative of strikers to cut short or prolong a strike. By striking, the employees have not abandoned their employment. Rather, they have only ceased temporarily from rendering work. The striking employees have not lost their right to go back to their positions, because the declaration of a strike is not a renunciation of their
NOTE: The law does not look with 191avour upon strikes and lockouts because of their disturbing and pernicious effects upon the social order and the public interests; to prevent or avert them and to implement Sec. 6, Art. XIV of the Constitution, the law has created several agencies, namely: the BLR, the DOLE, the Labor Management Advisory Board, and the CIR (Luzon Marine Dev’t Union v. Roldan, G.R. No. L-2660, May 30, 1950).
Concerted action It is an activity undertaken by two or more employees or by one on behalf of others.
Not all concerted actions are strikes They may only be protest actions – they do not necessarily cause work stoppage by the protesters.
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Labor Law and Social Legislation employment, much less employer relationship.
their
employee-
membership in the bargaining unit. Devoid of a notice of strike and a strike vote, AILU’s strike is therefore illegal.
--Q: The Alliance of Independent Labor Unions (AILU) is a legitimate labor federation which represents a majority of the appropriate bargaining unit at the Lumens Brewery (LB). While negotiations were ongoing for a renewal of the collective bargaining agreement (CBA), LB handed down a decision in a disciplinary case that was pending which resulted in the termination of the AILU's treasurer and two other members for cause. AILU protested the decision, claiming that LB acted in bad faith and asked that LB reconsider. LB refused to reconsider. AILU then walked out of the negotiation and declared a strike without a notice of strike or a vote. AILU members locked in the LB management panel by barricading the doors and possible exits (including windows and fire escapes). LB requested the DOLE to assume jurisdiction over the dispute and to certify it for compulsory arbitration.
b.
The refusal of the Secretary to assume jurisdiction is valid. Art. 263 (g) (old) of the Labor Code entrusts it to his sound discretion to determine if national interest is involved. Assumption power is full and complete. It is also plenary and discretionary. Thus, if in his opinion national interest is not involved, then the company cannot insist that he assume jurisdiction.(Philtranco Service Enterprises, Inc. v. Philtranco Workers Union-AGLO, G.R. No. 180962, February 26, 2014)
c.
If dismissal is based on illegal strike: The company has to file a complaint for illegal strike first. Once the strike is declared by final judgment to be illegal, it can dismiss the union officers. As to members, their dismissal must be based on their having committed illegalities on the occasion of their illegal strike. Since the company prematurely and indiscriminately dismissed the AILU members then their dismissal is illegal.
The Secretary of Labor declined to assume jurisdiction, finding that the dispute was not one that involved national interest. LB then proceeds to terminate all of the members of the bargaining agent on the ground that it was unlawful to: (1) barricade the management panel in the building, and (2) participate in an illegal strike.
If dismissal is based on the unlawful acts of barricading to lock the AILU members: Yes. Article 264 (a) of the Labor Code authorizes the employer to declare the loss of employment status of “ANY WORKER” or union officer who knowingly participates in the commission of illegal acts during a strike.
a. Was AILU justified in declaring a strike without a strike vote and a notice of strike? Why or why not? b. Was the Secretary of Labor correct in declining to assume jurisdiction over the dispute? c. Was LB justified in terminating all those who were members of AILU on the two grounds cited? (2015 Bar Question)
--FORMS OF CONCERTED ACTIVITIES Forms of concerted activities 1. 2. 3. 4. 5.
A: a. NO. Firstly, a Notice of Strike is always required by Art. 263(c) of the Labor Code before a strike may be staged – be it grounded on bargaining deadlock or unfair Labor Practice. Secondly, the Supreme Court already held in Sukothai that while AILU may not exhaust the 15-day cooling-off period in case of dismissal from employment of its officers who were duly elected in accordance with the Union constitution and by-laws and the dismissal constitutes union bus ting and a threat to AILU’s existence, still, Art. 263 (f) requires that a strike vote be undertaken through a secret ballot and approved by a majority of the total union
Strike Lockout Picketing Boycott Other Concerted Activities a. Collective Letter b. Publicity c. Placards and Banners d. Speeches Music and Broadcasts
BOYCOTT It is an attempt, by arousing a fear of loss, to coerce others, against their will to withhold from one denominated “unfriendly to labor” their beneficial business intercourse.
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Labor Relations A boycott may be said to include any activity on the part of a labor organization whereby it is sought through concerted action, other than by reason of lawful competition, to obtain withdrawal of public patronage from one in business (Burke v. Adams Dairy, Inc., 352 U.S. 969).
relation to a labor dispute; as an activity by which workers, without a complete stoppage of work, retard production or their performance of duties and functions to compel management to grant their demands. Such a slowdown is generally condemned as inherently illicit and unjustifiable, because while the Ees "continue to work and remain at their positions and accept the wages paid to them," they at the same time "select what part of their allotted tasks they care to perform of their own volition or refuse openly or secretly, to the Er's damage, to do other work;" in other words, they "work on their own terms" (Interphil Laboratories Employees Union-FFW v. Interphil Laboratories, Inc., G.R. No. 142824, December 19, 2001).
Lawfulness of boycott Ees may lawfully exert economic pressure on their Er by means of a boycott, provided they act peaceably and honestly. They have a right to persuade the public by any lawful means to refuse to patronize the Er. Union members are entitled to advise the public of the existence of their controversy with the Er and may request their friends and the public generally to assist them by not patronizing the Er. In so doing, there is no element of threat or coercion or unlawful interference with another’s business (51A, C.J.S. Sec. 286).
----Q: The Ees wrote and published a letter to the bank president, demanding his resignation on the grounds of immorality, nepotism, favoritism and discrimination in the appointment and promotion of bank Ees. The bank dismissed the Ees for the alleged libelous letter. Are the Ees engaged in a concerted activity?
Boycott may be lawful or u nlawful depending on the means and methods employed, and the ends intended to be accomplished.
Kinds of Boycott A: YES. Assuming that they acted in their individual Primary boycott – applied directly and alone to the
capacities when they wrote the letter, they were nonetheless protected, for they were engaged in a concerted activity, in their right of self-organization that includes concerted activity for mutual aid and protection. Any interference made by the company will constitute as ULP.
offending person by withdrawing from him, all business relations on the part of the organization that initiated the boycott.
Secondary Boycott – is a combination not merely to refrain from dealing with a person, or to advise or by peaceable means persuade his customers to refrain, but to exercise coercive pressure upon such customers, actual or prospective, in order to cause them to withhold or withdraw patronage from him through fear of loss or damage to themselves should they deal with him.
The joining in protests or demands, even by a small group of Ees, if in furtherance of their interests as such is a concerted activity protected by the Industrial Peace Act. It is not necessary that union activity be involved or that Collective Bargaining be contemplated (Republic Savings Bank v. CIR, G.R. No. L-20303, September 27, 1967).
Slowdown
----Q: May the grievances of the Ees be published in newspapers and on placards and banners?
It is a method by which one’s Ees, without seeking a complete stoppage of work, retard production and distribution in an effort to compel compliance by the Er with the labor demands made upon him.
A: Members of a labor union may, without authorization by statute, make known the facts of a labor dispute, for freedom of speech is guaranteed by the Constitution. Striking Ees, too, have a right to acquaint the public with the fact of the existence of the strike setting forth their claims in a controversy over terms and conditions of employment by sign, handbill or newspaper, advertisement as a legitimate means of economic coercion (31 Am. Jur., Sec. 274).
--Q: Does an “overtime boycott” or “work slowdown” by the Ees constitute a strike and hence a violation of the CBA’s “No strike, no lockout” clause?
A: YES. The concept of a slowdown is a "strike on the installment plan." It is a willful reduction in the rate of work by concerted action of workers for the purpose of restricting the output of the Er, in
193
Labor Law and Social Legislation It is generally conceded that a striker having the right to apprise the public of the fact of the strike and solicit its support may inscribe his grievances upon placards and banners to be seen at a distance and to be read by many at the same time and that he may carry such placards or banners upon a public street, provided the inscription is not libelous or otherwise unlawful (31 Am. Jur., Sec. 278).
to the labor dispute, including those with related interests, and to insulate establishments or persons with no industrial connection or having interest totally foreign to the context of the dispute (Liwayway Pub., Inc. v. Permanent Concrete Workers Union, G.R. No. L-25003, October 23, 1981).
Moving Picket
--The right granted to striking workers is merely a pedestrian right. It does not create the additional rights of squatting or assembly on the portion of Er’s land. Any such squatting or assembly would exceed the scope of the public’s easement and would constitute enjoinable trespass.
PICKETING It is the act of marching to and fro the Ers premises which is usually accompanied by the display of placard and other signs, making known the facts involved in a labor dispute, in the hope of being able to persuade peacefully other workers not to work in the establishment, and customers not to do business there.
Untruthful Picketing Such act is tantamount to unlawful picketing which is enjoinable even though the purpose is valid. It is the act of employing false statements, falsehood, defamation and other misrepresentations.
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. Picketing if peacefully carried out, cannot be curtailed even in the absence of Er-Ee relationship (PAFLU v. Cloribel, G.R. No. L-25878, March 28, 1969).
Other unlawful Picketing acts 1. Use of abusive and threatening language towards patrons of the place or business 2. Use of violence and intimidation 3. Vandalisms and other acts of a less terroristic nature which causes physical discomfort to the Er’s customers
Constitutional provisions protect the right to picket The right to picket is guaranteed under the freedom of speech and of expression and to peaceably assemble to air grievances under Sec. 4, Art. III.
Right to picket is protected by the Constitution and the law
Requisites for lawful picketing Unlike a strike which is guaranteed under the Constitutional provision on the right of workers to conduct peaceful concerted activities under Sec. 3, Art. XIII thereof, the right to picket is guaranteed under the freedom of speech and of expression and to peaceably assemble to air grievances under Sec. 4, Art. III (Bill of Rights) thereof.
The following are the requisites 1. 2. 3.
4.
It should be peacefully carried out; There should be no act of violence, coercion or intimidation; The ingress to (entrance) or egress from (exit) the company premises should not be obstructed; Public thoroughfares should not be impeded.
Effect of the use of foul language during the conduct of the picket
Effect of the absence of Employee-Employer relationship on picketing
In the event the picketers employ discourteous and impolite language in their picket, such may NOT result in, or give rise to libel or action for damages.
If peacefully carried out, picketing cannot be prohibited even in the absence of Ee-Er relationship (PAFLU v. CFl, G.R.L-49580, January 17, 1983).
Strike vs. Picketing
Right to picket not an absolute right While peaceful picketing is entitled to p rotection as an exercise of free speech, the courts are not without power to confine or localize the sphere of communication or the demonstration to the parties
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STRIKE
PICKETING
To withhold or to stop work by concerted action of Ees as a result of an industrial or labor dispute. The work stoppage may be
To march to and from the employer’s premises, usually accompanied by the display of placards and other signs making
Labor Relations accompanied by picketing by the striking employees outside of the company compound.
known the facts involved in a labor dispute. It is a strike activity separate and different from actual stoppage of work.
Focuses on stoppage of work
Focuses on publicizing the labor dispute and its incidents to inform the public of what Is happening in the company struck against.
such as: “YES KAMI SA STRIKE, PROTESTA KAMI, SAHOD, KARAPATAN NG MANGGAGAWA IPAGLABAN, CBA-WAG BABOYIN, STOP UNION BUSTING.” They marched to and fro in front of the company’s premises during working hours. Thus, petitioners engaged in a concerted activity which already affected the company’s operations. The mass concerted activity obviously constitutes a strike. Moreover, the bare fact that petitioners were given a Mayor’s permit is not conclusive evidence that their action/activity did not amount to a strike. The Mayor’s description of what activities petitioners were allowed to conduct is inconsequential. To repeat, what is definite of whether the action staged by petitioners is a strike and not merely a picket is the totality of the circumstances surrounding the situation.
While the right of employees to publicize their dispute falls within the protection of freedom of expression and the right to peaceably assemble to air grievances, these rights are by no means absolute. Protected picketing does not extend to blocking ingress to and egress from the company premises. That the picket was moving, was peaceful and was not attended by actual violence may not free it from taints of illegality if the picket effectively blocked entry to and exit from the company premises [PHIMCO Industries, Inc. vs. PHIMCO Industries Labor Association (PILA), G.R. No. 170830, August 11, 2010]
Petitioner Union in the 2011 case of Leyte Geothermal Power Progressive Employees Union – ALU-TUCP vs. Philippine National Oil Company – Energy Development Corporation [G.R. No. 170351, March 30, 2011] contends that there was no stoppage of work; hence, they did not strike. Euphemistically, petitioner union avers that it “only engaged in picketing,” and maintains that “without any work stoppage, [its officers and members] only engaged in protest activity.” The SC, however, ruled that it was a strike and not picketing or protest activity that petitioner union staged. It found the following circumstances in support of such finding:
NOTE: A strike conducted by a union which acquired its legal personality after the filing of its notice of strike and the conduct of the strike vote is illegal.
1.
Petitioner union filed a Notice of Strike on December 28, 1998 with the DOLE grounded on respondent’s purported ULP, i.e., “refusal to bargain collectively, union-busting and mass termination.” On even date, petitioner union declared and staged a strike.
2.
The SOLE intervened and issued a Return-towork Order dated January 4, 1999, certifying the labor dispute to the NLRC for compulsory arbitration. The Order indicated the following facts: (1) filing of notice of strike; (2) staging of the strike and taking control over the respondent’s facilities of its Leyte Geothermal Project on the same day petitioner union filed the notice of strike; (3) attempts by the NCMB to forge a mutually acceptable solution proved futile; (4) in the meantime, the strike continued with no settlement in sight placing in jeopardy the supply of much needed power supply in the Luzon and Visayas grids.
3.
Petitioner union itself, in its pleadings, used the word “strike.” Petitioner union’s assertions are belied by the factual findings of the NLRC, as affirmed by the
When picket considered a strike In distinguishing between a picket and a strike, the totality of the circumstances obtaining in a case should be taken into account. Petitioners contend that what they conducted was mere picketing and not a strike. In disagreeing with this contention, the High Court emphasized that it is not an issue in this case that there was a labor dispute between the parties as petitioners had notified the respondent of their intention to stage a strike, and not merely to picket. Petitioners’ insistence to stage a strike is evident in the fact that an amended notice of strike was filed even as respondent moved to dismiss the first notice. The basic elements of a strike are present in this case: 106 members of petitioner Union, whose respective applications for leave of absence on September 21, 1999 were disapproved, opted not to report for work on said date, and gathered in front of the company premises to hold mass protest action. Petitioners deliberately absented themselves and wore red ribbons and carried placards with slogans
4.
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Labor Law and Social Legislation plant equipment and facilities and similar activities. Thus, the fact that the conventional term “strike” was not used by the striking employees to describe their common course of action is inconsequential, since the substance of the situation and not its appearance, will be deemed to be controlling.
CA thus: “The failure to comply with the mandatory requisites for the conduct of strike is both admitted and clearly shown on record. Hence, it is undisputed that no strike vote was conducted; likewise, the cooling-off period was not observed and that the 7-day strike ban after the submission of the strike vote was not complied with since there was no strike vote taken.”
The right to strike, while constitutionally recognized, is not without legal constrictions. Art. 264(a) of the LC, as amended, provides that 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. The court has consistently ruled that once the Secretary of Labor assumes jurisdiction over a labor dispute, such jurisdiction should not be interfered with by the application of the coercive processes of a strike or l ockout. A strike that is undertaken despite the issuance by the Secretary of Labor of an assumption order and/or certification is a prohibited activity and thus illegal (Solidbank Corporation v. Ernesto U. Gamier/ Solid Bank Union, G.R. No. 159460, November 15, 2010).
In fine, petitioner union’s bare contention that it did not hold a strike cannot trump the factual findings of the NLRC that petitioner union indeed struck against respondent. In fact, and more importantly, petitioner union failed to comply with the requirements set by law prior to holding a strike. [Santa Rosa Coca-Cola Plant EmployeesUnion vs. Coca-Cola Bottlers Phils., Inc.G.R. Nos. 164302-03, January 24, 2007]
--Q: PHIMCO argues that the strike staged by its employees was illegal as they committed the prohibited acts under Art.264(e) of the LC such as blocking the ingress and egress of the company premises. The employees, on the other hand, submit that the picket was peaceful and no human barricade blocked the company premises. May a peaceful picketing of employees be held illegal?
NOTE: The fact tha t the conventional term “strike” was not used by the striking employees to describe their common course of action is inconsequential, since the substance of the situation and not its appearance will be deemed controlling (Toyota Motor Phils. Corp. Workers Association v. NLRC, 537 SCRA 174). It shall comprise not only concerted work stoppages, but also slowdowns, mass leaves, sit downs, attempt to damage, destroy or sabotage plant equipment and facilities, and similar activities (Samahang Manggagawa sa Sulpicio Lines v. Sulpicio Lines, Inc., G.R. No. 140992, March 25, 2004).
A: YES. Despite the validity of the purpose of a strike and compliance with the procedural requirements, a strike may still be held illegal where the means employed are illegal. The means become illegal when they come within the prohibitions under Art.264(e)of the Labor Code. Protected picketing does not extend to blocking ingress to and egress from the company premises, and, the fact that the picket was moving, was peaceful and was not attended by actual violence may not free it from taints of illegality if the picket effectively blocked entry to and exit from the company premises (PHIMCO Industries, Inc. v. PHIMCO Industries Labor Association, G.R. No. 170830, August 11, 2010).
Purpose of a strike A strike is a coercive measure resorted to by laborers to enforce their demands. The idea behind a strike is that a company engaged in a profitable business cannot afford to have its production or activities interrupted, much less, paralyzed (Phil. Can Co. v. CIR, G.R. No. L-3021, July 13, 1950).
--STRIKE AND LOCKOUT
Elements of strike
Strike
1.
It means any temporary stoppage of work by the concerted action of Ees as a result of an industrial or labor dispute [IRR, Book V, Rule I, Sec. 1(uu)].
2. 3.
The term strike shall comprise not only concerted work stoppages, but also slowdowns, mass leaves, sit-downs, attempts to damage, destroy or sabotage
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Existence of established relationship between the strikers and the person or persons against whom the strike is called Existence of an Er-Ee relationship Existence of a labor dispute and the utilization by labor of the weapon of concerted refusal to work as a means of persuading, or coercing compliance with the working men’s demands
Labor Relations 4. 5. 6. 7.
Employment relation is deemed to continue although in a state of belligerent suspension Temporary work stoppage Work stoppage is done through concerted action The striking group is a legitimate labor organization; in case of a bargaining deadlock, it must be the Ees’ sole bargaining representative
10.
concerted refusal to patronize an Er’s goods and services and to persuade others to a like refusal.
Strike-breaker Any person who obstructs, impedes, or interferes with by force, violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours or conditions of work or in the exercise of the right of self-organization or CB (LC, Art. 212 ).
Different forms of strike 1. 2.
3.
4.
5.
6.
7.
8. 9.
Legal Strike– One called for a valid purpose
No Er shall employ any strike-breaker that shall interfere with any peaceful picketing by Ees during any labor controversy (LC, Art. 264)
and conducted through means allowed by law. Illegal Strike– One staged for a purpose not recognized by law, or if for a valid purpose, conducted through means not sanctioned by law. Economic Strike/Bargaining Strike – One staged by workers to force wage or other economic concessions from the employer which he is not required by law to grant (Consolidated Labor Association of the Phil. vs. Marsman, G.R. No. L-17038, July 31, 1964). ULP Strike– One called to protest against the employer’s acts of unfair practice enumerated in Art. 248 of the LC, as amended, including gross violation of the CBA and union busting. Slow Down Strike – One staged without the workers quitting their work but by merely slackening or by reducing their normal work output. Mass leaves – One whom the Ees simultaneously filed leaves of absence based on various reasons such as, inter alia, vacation a nd sick leaves. Wild-Cat Strike – One declared and staged without filing the required notice of strike and without the majority approval of the total union membership. Sit Down Strike – One where the workers stop working but do not leave their place of work. Overtime boycott – One involving the act of workers in refusing to render overtime work in violation of the CBA resorted to as it means to coerce the Er to yield to their demands.
Strike area It means the establishment, warehouses, depots, plants or offices, including the sites or premises used as runaway shops, of the Er 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 [Sec. 1 (vv), Rule I, Book V, IRR].
Role of the Police It provides that the involvement of the police during strikes, lockouts or labor disputes in general shall be limited to the maintenance of the peace and order, enforcement of laws and legal orders of duly constituted authorities and the performance of specific functions as may be provided by law.
Requisites 1. 2. 3. 4.
EXAMPLE OF STRIKE 1.
Should be in uniform with proper namecloth at all times Shall observe strict neutrality in dealings with both parties Shall not be stationed in the picket/confrontation line Shall maintain themselves outside a 50 meter radius from the picket/confrontation or in such public thoroughfare for the purpose of insuring free flow of traffic
REASON FOR ITS ILLEGALITY
Sit-down strike– Characterized by a temporary work stoppage of workers who seize or occupy property of the Er or refuse to vacate the premises of the Er.
2.
Boycott of Products – On which involves the
Wildcat strike – A work stoppage that violates the labor contract and is not authorized by the union membership.
Amounts to a criminal act because of the Ees trespass on the premises of the Er.
It fails to comply with certain requirements of the law, to wit: notice of strike, vote and report on strike vote.
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Labor Law and Social Legislation 3.
4.
Slowdown – Strike on an installment plan; an Ees work on their own terms; while the Ees continue to activity by which workers, without complete stoppage of work, retard production or their performance of duties and functions to compel management to grant their demands.
work and remain in their positions and accept wages paid to them, they at the same time select what part of their allotted tasks they care to perform on their own volition or refuse openly or secretly.
Sympathetic strike – Work stoppages of workers
There is no labor dispute between the workers who are joining the strikers and the latter’s Er.
of one company to make common cause with other strikers or other companies without demands or grievances of their own against the Er 5.
Secondary strike – Work stoppages of workers
There is no labor dispute involved.
of one company to exert pressure on their Er so that the latter will in turn bring pressure upon the Er of another company with whom another union has a labor dispute. 6.
General strike (cause oriented strike) – A type of It is a political rally. political sympathetic strike and therefore there is neither a bargaining deadlock nor any ULP. e.g. Welga ng bayan.
7.
Quickie strike – Brief and unannounced Failure to comply with notice requirements and etc. temporary work stoppage.
Tests in determining the legality of strike
A lockout, actual or threatened, as a means of dissuading the Ees from exercising their rights is clearly an ULP. However, to hold an Er guilty, the evidence must establish that the purpose was to interfere with the Ees exercise of their rights.
The following must concur: 1. 2.
3.
Purpose test – The strike must be due to either bargaining deadlock and/or the ULP Compliance with the procedural and substantive requirements of the law. (See requisites of a valid strike) Means employed test – It states that a strike may be legal at its inception but eventually be declared illegal if the strike is accompanied by violence which is widespread, pervasive and adopted as a matter of policy and not mere violence which is sporadic and which normally occurs in a strike area.
Express statutory recognition of the workers’ right to strike and the employer’s right to
lockout TheLC provides that workers shall have the right to engage in concerted activities for purposes of CB for their mutual benefit and protection. The right of LLOs to strike and picket and of Ers to lockout, consistent with the national interest, shall continue to be recognized and respected. However, no labor union may strike and no Er may declare a lockout on grounds involving inter-union and intra-union disputes.
Lockout It means any temporary refusal of an Er to furnish work as a result of an industrial or labor dispute [LC, Art. 212 (p)]. It is an Er’s act of excluding Ees who are union members from the plant.
Right to strike or lockout not absolute The exercise of these rights is subject to reasonable restrictions pursuant to the police power of the State. It has been held that the right to strike, because of the more serious impact upon the public interest, is more vulnerable to regulation that the right to organize and select representatives for purposes of CB [National Federation of Sugar Workers (NFSW) v. Ovejera, et al. G.R. No. L-59743, May 31, 1982].
Lockout consists of the following: 1. 2. 3.
Shutdowns Mass Retrenchment and dismissals initiated by the Er Er’s act of excluding Ees who are union members
Lockout amounting to ULP
Strike cannot be converted into a lockout
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Labor Relations A strike cannot be converted into a pure and simple lockout by the mere expedient of filing before the trial court a notice of offer to return to work during the pendency of the labor dispute between the union and the Er (Rizal Cement Workers Union v. CIR, G.R. No. L-18442, November 30, 1962).
The following may declare a strike or lockout: 1. Any certified or duly recognized bargaining representative may declare a strike in cases of bargaining deadlocks and ULP. The Er may declare a lockout in the same cases.
Instances where a strike or lockout CANNOT be declared
2.
Violations of CBAs, except flagrant and/or malicious refusal to comply with economic provisions 2. Inter-union disputes 3. Intra-union disputes 4. Failure to file a notice of strike or lockout or lack of necessary strike or lockout vote obtained and reported to the Board. 5. After assumption of jurisdiction by the Secretary has been declared 6. After certification or submission of the dispute to compulsory or voluntary arbitration 7. There is already a pending case involving the same grounds for the strike or lockout 8. Execution and enforcement of final orders, decisions, resolutions or awards in no. 7 9. Labor standards cases such as wage orders (IRR, as amended by D.O. 40-03, Book V, Rule XXII, Sec. 5) 10. Any issue covered by a no strike commitment in a duly executed CBA 1.
In the absence of a certified or duly recognized bargaining representative, any LLO in the establishment may declare a strike but only on grounds of ULP [IRR as amended by D.O. 40-03, Book V, Rule XXII, Sec. 6].
A strike conducted by a minority union is patently illegal because no labor dispute which will justify the conduct of a strike may exist between the employer and a minority union.
Grounds for declaration of strike or lockout 1. 2.
Collective Bargaining Deadlock – economic ULP act – political
NOTE: It is possible to change an economic strike into a ULP strike (Consolidated Labor Ass’n of the Phils. v. Marsman and Co., G.R. No. L-17038, July 31, 1964).
Conversion Doctrine It is when a strike starts as economic and later, as it progresses, it becomes a ULP, or vice versa.
Declaration of a strike or lockout Economic strike vs. ULP strike BASIS
As to nature
Who will initiate As to the cooling-off period
ECONOMIC STRIKE Voluntary strike, because the employee will declare a strike to compel management to grant its demands The CB agent of the appropriate bargaining unit can declare an economic strike 30 days from the filing of the notice of strike before the intended date of actual strike subject to the 7-day strike ban
No exception - mandatory As to the exception to the cooling-off period
NOTE: Notice of strike and strike vote may be dispensed with; they may strike immediately
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ULP STRIKE Involuntary strike, the LO is forced to go on strike because of the ULP committed against them by the Er. It is an act of self-defense since the Ees are being pushed to the wall and their only remedy is to stage a strike. Either the CB agent or the LLO in behalf of its members 15 days from the filing of the notice of strike The cooling-off period may be dispensed with, and the union may take immediate action in case of dismissal from employment of their officers duly elected in accordance with the union’s constitution and by laws, which may constitute unionbusting where the existence of the union is threatened. It must still
Labor Law and Social Legislation observe the mandatory 7-day strike ban period before it can stage a valid strike
placards.
Q: Does a strike staged by resigned employees fall under the ambit of concerted actions protected by law?
They
demanded
(deleted
“a”)
resumption of work and 13 th month
pay. The company filed a petition to declare the strike illegal. The union argues that they did not stage a strike; for considering that the dyeing and finishing division of the company was shutdown, it could not have caused a work stoppage. Was the action of the union a strike?
A: NO. Resigned employees’ mass action is not a strike because Ees who go on strike do not quit their employment. Ordinarily, the relationship of Er and Ee continues until one of the parties’ acts to sever the relationship or they mutually act to accomplish that purpose. As they did not assume the status of strikers, their “protest retirement/resignation” was not a concerted activity which was protected by law (Enrique v. Zamora, G.R. No. L-51382, December 29, 1986).
A: YES. The concerted efforts of the members of the union and its supporters caused a temporary work stoppage. The allegation that there can be no work stoppage because the operation in the division had been shut down is of no consequence. It bears stressing that the other divisions were fully operational (Bukluran ng Manggagawa sa Clothman Knitting Corp. v. CA, G.R. No. 158158, January 17, 2005).
NOTE: Even if the purpose of a strike is valid, the strike may still be held illegal where the means employed are illegal. Thus, the employment of violence, intimidation, restraint or coercion in carrying out concerted activities which are injurious to the right to property renders a strike illegal. And so is picketing or the obstruction to the free use of property or the comfortable enjoyment of life or property, when accompanied by intimidation, threats, violence, and coercion as to constitute nuisance (Soriano Aviation v. Employees Association of A. Soriano Aviation, G.R. No. 166879, August 14, 2009).
--PROCEDURAL REQUIREMENT FOR STRIKE/LOCKOUT Requisites of a lawful strike/lockout The requirements for a valid strike or lockout are as follows: 1.
It must be based on a valid and factual ground;
2.
A strike or lockout notice shall be filed with the NCMB at least 15 days before the intended date of the strike or lockout if the issues raised are unfair labor practices, or at least 30 days before the intended date thereof if the issue involves bargaining deadlock.
--Penalty of outright dismissal against the striking employees too severe for a one-day absence from work The penalty of dismissal against the striking Ees, who only staged a one-day walkout, is too severe. It is not in accordance with settled and authoritative doctrine and legal principles that a mere finding of the illegality of a strike does not automatically warrant a wholesale dismissal of the strikers from their employment and that a premature or improvident strike should not be visited with a consequence so severe as dismissal where a penalty less punitive would suffice (Automotive Engine Rebuilders, Inc. v. Progresibong Unyon ng mga Manggagawa ng AER, G.R. No. 160138, July 13, 2011).
NOTE: The failure of the union to serve the company a copy of the notice of strike is a clear violation of Section 3, Rule XXII, Book V of the Rules Implementing the LC. The Constitutional precepts of due process mandate that the other party be notified of the adverse action of the opposing party (Filipino Pipe and Foundry Corp. v. NLRC, G.R. No. 115180, November 16, 1999). 3.
--Q: Because of financial problems, the company decided to temporarily shutdown its operations at the dyeing and finishing division. It notified the DOLE of the shutdown. Raymund Tomaroy, with 16 members of the union, staged a picket in front of the company’s compound, carrying
200
In cases 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
Labor Relations action immediately after the strike vote is conducted and the result thereof submitted to the DOLE. 4.
5.
It is the period of time given by the NCMB to mediate and conciliate the parties. It is the span of time allotted by law for parties to settle their disputes in a peaceful manner before staging a strike or lockout. The principles of improved offer and reduced offer balloting apply during the cooling-off period.
Notice of conduct of strike vote 24 hours before the intended strike vote is filed with the DOLE (compliance with the 24-hour prior notice rule). A strike must be approved by a majority vote of the members of the union and a lockout must be approved by a majority vote of the members 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.
6.
A strike or lockout vote shall be reported to the NCMB-DOLE Regional Branch at least 7 days before the intended strike or lockout subject to the cooling-off period.
7.
In the event the result of the strike/lockout ballot is filed within the cooling-off period, the 7-day requirement shall be counted from the day following the expiration of the cooling-off period (NSFW vs. Ovejera, G.R. No. 59743, May 31, 1982).
Cooling-off and waiting period may be done simultaneously.
--Q: Johnny is the duly elected President and principal union organizer of the Nagkakaisang Manggagawa ng Manila Restaurant (NMMR), a legitimate labor organization. He was unceremoniously dismissed by management for spending virtually 95% of his working hours in union activities. On the same day Johnny received the notice of termination, the labor union went on strike. Management filed an action to declare the strike illegal, contending that: 1. The Union did not observe the “cooling-off period” mandated by the LC; and 2.
In case of dismissal from employment of union officers which may constitute union-busting, the time requirement of 15 days for the filing of the Notice of Strike shall be dispensed with but the strike vote requirement, being mandatory in character, shall “in every case” be complied with. Simply stated, the 7-day strike ban cannot be dispensed with.
Rule on the foregoing contentions with reasons. (2009 Bar Question) A: 1.
It will be adding insult to injury to ask the unionists to cool off while their union is being busted. The purpose of the 7-day strike ban is to give the DOLE an opportunity to verify whether the projected strike really carries the imprimatur of the majority of the union members in addition to the cooling-off period before the actual strike (Lapanday Workers’ Union, et.al. v. NLRC, G.R. Nos. 95494-97, September 7, 1995). 8.
The Union went on strike without complying with the strike-vote requirement under the LC.
2.
The dispute must not be the subject of an assumption of jurisdiction by the President or the SLE, a certification for compulsory arbitration, or submission to compulsory or voluntary arbitration or a subject of a pending case involving the same grounds for the strike or lockout.
YES. The conduct of a strike action without observing the cooling-off period is a violation of one of the requirements of law. (delete “which must be observed.”) The cooling-off periods required by Art. 263 (c) and (f) of the LC are to enable the DOLE to exert efforts to amicably settle the controversy and for the parties to review and reconsider their respective positions during the cooling-off periods. But the LC also provides that if the dismissal constitutes union busting, the union may strike immediately. YES. The conduct of the strike action without a strike vote violates Art. 263 (f) – “In every case, the union or the Er shall furnish the DOLE the results of the voting at least 7_days before the intended strike” to enable the DOLE and the parties to exert the last effort to settle the dispute without strike action.
----Q: NFSW, the bargaining agent of Central Azucarera de la Carlota (CAC) rank and file employees, filed a notice of strike based on nonpayment of the 13th month pay and 6 days thereafter they held the strike. A day after the
Cooling-off period
201
Labor Law and Social Legislation commencement of the strike, a report of the strike-vote was filed by NFSW with DOLE. CAC filed a petition to declare the strike illegal due to non-compliance with the 15-day cooling off period and the strike was held before the lapse of 7 days from the submission to the DOLE of the result of the strike vote. Was the strike held by NFSW legal?
Preventive mediation case It involves labor disputes which are the subject of a formal or informal request for conciliation and mediation assistance sought by either or both parties or upon the initiative of the NCMB [IRR, Book V, Rule I, Sec. 1 (mm)].
NOTE: The regional branch may treat the notice as A: NO. The cooling-off period in Art. 264(c), LC and
a preventive mediation case upon agreement of the parties.
the 7-day strike ban after the strike-vote report prescribed in Art. 264(f) of the LC were meant to be mandatory. The law provides that “the labor union may strike” should the dispute “remain unsettled until the lapse of the requisite number of days from the filing of the not ice”, this clearly implies that the union may not strike before the lapse of the coolingoff period. The cooling-off period is for the MOLE to exert all efforts at mediation and conciliation to effect a voluntary settlement.
Legal basis for the conversion of a notice of strike to preventive mediation It is in pursuance of the NCMB’s duty under the Rules Implementing the Labor Code to exert “all efforts at mediation and conciliation to enable the parties t o settle the dispute amicably” and in line with the state policy of favoring voluntary modes of settling labor disputes. And a strike mounted by the union after the NCMB dropped the notice of strike from its docket of notice of strikes and during the pendency of preventive mediation proceedings would be illegal (San Miguel Corporation v. NLRC et al., G.R. No. 119293, June 10 ,2003).
The mandatory character of the 7-day strike ban is manifest in the provision that “in every case” the union shall furnish the DOLE with the results of the voting “at least 7 days before the intended strike.” This period is to give time to verify that a strike vote was actually held (NFSW v. Ovejera, G.R. No. L-59743, May 31, 1982).
Duty to declare that the notice of strike or lockout has been converted into preventive mediation case
--Purpose of giving notice of the conduct of a strike vote to the NCMB at least 24 hours before the meeting for the said notice 1. 2.
3.
Upon the recommendation of the conciliator or mediator handling the labor dispute, the Director of the Regional Branch of the NCMB which has jurisdiction over the labor dispute has the duty to declare and inform the parties that the issues raised or the actual issues involved are not proper subjects of a Notice of Strike or Lockout has been converted into a Preventive Mediation Case without prejudice to further conciliation or upon the request of either or both parties.
Inform the NCMB of the intent of the union to conduct a strike vote; Give the NCMB ample time to decide on whether or not there is a need to supervise the conduct of the strike vote to prevent any acts of violence and/or irregularities; Ample time to prepare for the deployment of the requisite personnel (Capitol Medical Center v. NLRC, G.R. No. 147080, April 26, 2005).
Contents of the notice of strike or lockout
Legality of no strike/lockout clause
1. 2.
A no strike/lockout clause is legal but it is applicable only to economic strikes, not ULP strikes. As a provision in the CBA, it is a valid stipulation although the clause may be invoked by an Er only when the strike is economic in nature or one which is conducted to force wage or other concessions from the Er that are not mandated to be granted by the law itself. It would be inapplicable to prevent a strike which is grounded on ULP (Panay Electric Co. v. NLRC, G.R. No. 102672, October 4, 1995); (Malayang Samahan ng mga Manggagawa sa Greenfield v. Ramos, G.R. No. 113907, February 28, 2000).
3. 4. 5. 6. 7.
8.
Name and addresses of Er Union involved Nature of the industry to which the Er belongs Number of union members Workers in the bargaining unit Other relevant date In case of bargaining deadlocks:unresolved issues, written proposals of the union, counterproposals of the Er and proof of request for conference to settle differences In case of ULP: The acts complained of, and the efforts taken to resolve the dispute
NOTE: NCMB shall inform the concerned party in case notice does not conform to the requirements.
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Labor Relations Action taken by the NCMB on the notice of strike of strike or lockout 1.
2.
3.
4.
should have been reported to the DOLE (First City Interlink Transportation Co., Inc. v. Confessor, G.R. No. 106316, May 5, 1997).
---
Upon receipt of notice, the regional branch of the NCMB shall exert all efforts at mediation and conciliation to enable the parties to settle the dispute amicably. It shall a lso encourage the parties to submit the dispute to voluntary arbitration. The regional branch of the NCMB may, upon agreement of the parties, treat a notice as a preventive mediation case. 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 conciliation meetings called by the regional branch of the NCMB. A notice, upon agreement of the parties, may be referred to alternative modes of dispute resolution, including voluntary arbitration.
Effect of non-compliance with the requisites of a strike The strike may be declared illegal.
--Q: A is a member of the labor union duly recognized as the sole bargaining representative of his company. Due to a bargaining deadlock, 245 members of the 500strong union voted on March 13, 2010 to stage a strike. A notice of strike was submitted to the NCMB on March 16, 2010. Seven days later the workers staged a strike. In the course of which, A had to leave to attend to his wife who just gave birth. The union members later intimidated and barred other employees from entering the work premises, thus paralyzing the business operations of the company. A was dismissed from employment as a consequence of the strike.
--Q: Was the strike held by the union legal based on the fact that the notice of strike only contained general allegations of ULP?
a. Was the strike legal? Explain. b. Was A’s dismissal valid? Why or why not? (2010 Bar Question)
A: NO. In cases of ULP, the notice of strike shall as far as practicable, state the acts complained of and the efforts to resolve the dispute amicably (Tiu v. NLRC, G.R. No. 123276, August 18, 1997).
A:
----Q: Fil Transit Employees Union filed a notice of strike with the Bureau of Labor Relations because of alleged ULP of the company. Because of failure to reach an agreement the union went on strike. Several employees were dismissed because of the strike. The union filed another notice of strike alleging ULP, massive dismissal of officers and members, coercion of employees and violation of workers’ rights to self organization. The DOLE after assuming jurisdiction over the dispute, ordered all striking employees including those who were dismissed to return to work. The company however countered that no strike vote had been obtained before the strike was called and the result of the strike vote was not reported to DOLE . Was the strike held by the union illegal for failure to hold a strike vote?
a.
NO. First, the union failed to satisfy the required
majority vote of the union membership approving the conduct of a strike [LC, Art. 263 (f); D.O. No. 40-03, Rule XII, Sec. 10]. Second, the strike was illegal due to the non-observance of the 30-day cooling off period by the union [LC, Art. 263 ©]. b. NO. A, as an ordinary striking worker, may not be declared to have lost his employment status by mere participation in an ill egal strike, unless there is proof that he knowingly participated in the commission of illegal acts during the strike (LC, Art. 264; Arellano University Employees and Workers Union v. Court of Appeals, 502 SCRA 219).
----Q: Two unions, joined a welga ng bayan. The unions, led by their officers, staged a work stoppage which lasted for several days, prompting FILFLEX and BIFLEX Corporations to file a petition to declare the work stoppage illegal for failure to comply with procedural requirements. Did the employees commit an illegal work stoppage?
A: YES. There is no evidence to show that a strike vote had in fact been taken before a strike was called. Even if there was a strike vote held, the strike called by the union was illegal because of nonobservance by the union of the mandatory 7-day strike ban counted from the date the strike vote
203
Labor Law and Social Legislation A: YES. Ees, who have no labor dispute with their Er
dispute in the said industry or certify it to the NLRC for compulsory arbitration.
but who, on a day they are scheduled to work, refuse to work and instead join a welga ng bayan commit an illegal work stoppage. There being no showing that the two unions notified the corporations of their intention, or that they were allowed by the corporations, to join the welga ng bayan, their work stoppage is beyond legal protection [BIFLEX Phils. Inc. Labor Union (NAFLU) vs. FILFLEX Industrial and Manufacturing Corp., G.R. No. 155679, December 19, 2006].
Past issuances of the DOLE Secretary have not made nor attempted to mention specifically what the industries indispensable to the national interest are. It was only in Department Order No. 40-H-13 s. 2013, that certain industries were specifically named, thus:
“Section 16. Industries Indispensable to the National Interest – For the guidance of the workers and employers in the filing of petition for assumption of jurisdiction, the following industries/services are hereby recognized as deemed indispensable to the national interest:
--Enjoinment of strike GR: No strikes arising from a labor dispute may be enjoined.
a) Hospital sector; b) Electric power industry; c) Water supply services, to exclude small water supply services such as bottling and refilling stations; d) Air traffic control; and e) Such other industries as may be recommended by the National Tripartite Industrial Peace Council (TIPC).”
XPNs: 1. Assumption order by SLE [LC, Art. 263(g)]. Enjoining or restraining any actual or threatened commission of any unlawful act in any labor dispute [LC, Art. 218(e)].
ASSUMPTION OF JURISDICTION BY THE DOLE SECRETARY CERTIFICATION OF THE LABOR DISPUTE TO THE NLRC FOR COMPULSORY ARBITRATION
Obviously, the above enumerated industries are NOT exclusive as other industries may be considered indispensable to the national interest based on the appreciation and discretion of the DOLE Secretary or as may be recommended by TIPC.
When DOLE Secretary may assume or certify a labor dispute Art. 278(g) of the Labor Code provides that when in the opinion of the DOLE Secretary, the labor dispute causes or will likely cause a strike or lockout in an industry indispensable to the national interest, he is empowered to either: 1. 2.
Industries considered as indispensable to the national interest 1. 2.
Assume jurisdiction over the labor dispute and decide it himself; or Certify it to the NLRC for compulsory arbitration, in which case, it will be the NLRC which shall hear and decide it.
3. 4. 5. 6.
Public utilities Companies engaged in the generation or distribution of energy Banks Schools Hospitals; and Export-oriented industries
Extent of the power of the President or the Secretary of Labor and Employment to issue assumption and certification orders
This power may be exercised by the DOLE Secretary even before the actual staging of a strike or lockout since Art. 278(g) does not require the existence of a strike or lockout but only of a labor dispute involving national interest.
The power to issue assumption and certification orders is an extraordinary authority strictly limited to national interest cases and granted to the President or to the SOLE, “which can justifiably rest on his own consideration of the exigency of the situation in relation to the national interest.”
What constitutes a national interest case? The LC vests in the DOLE Secretary the discretion to determine what industries are indispensable to the national interest. Accordingly, upon the determination by the DOLE Secretary that such industry is indispensable to the national interest, he has authority to assume jurisdiction over the labor
The SOLE is vested with the discretionary power to decide not only the question of whether to assume jurisdiction over a given labor dispute or certify the
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Labor Relations same to the NLRC, but also the determination of the industry indispensable to national interest.
same or certify it to the NLRC for compulsory arbitration.
The President shall not be precluded from intervening at any time and assuming jurisdiction over any labor dispute involving industries indispensable to national interest in order to settle or terminate the same.
Issues that the SOLE may resolve when he assumes jurisdiction over a labor dispute 1.
The SOLE 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 DOLE before whom such dispute is pending that the termination may cause a serious labor dispute or is an implementation of a mass layoff.
2.
When a dispute is assumed by the President or SOLE, or certified to the NLRC for compulsory arbitration
Issues submitted to the SLE for resolution and such issues involved in the labor dispute itself. (St. Scholastica’s College v. Torres, G.R. No. 100158, June 2, 1992) SLE may subsume pending labor cases before LAs which are involved in the dispute and decide even issues falling under the exclusive and original jurisdiction of LAs such as the declaration of legality or illegality of strike. (Int’l. Pharmaceuticals v. SLE, G.R . Nos. 9298183, January 9, 1992)
Power of SOLE is plenary and discretionary. (St. Luke’s Medical Center v. Torres, G.R. No. 99395, June 29, 1993)
The assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout.
Some principles on assumption/certification power of the DOLE Secretary:
Extent of the powers of the President during strikes/lockouts
a.
1.
b.
May determine the industries, which are in his opinion indispensable to national interest 2. May intervene at any time and assume jurisdiction over any such labor dispute in order to settle or terminate the same. [LC, Art. 278(g)]
Prior notice and hearing are NOT required in the issuance of the assumption or certification order The DOLE Secretary may seek the assistance of law enforcement agencies like the Philippine National Police to ensure compliance with the provision thereof as well as with such orders as he may issue to enforce the same
Return-to-work order NOTE: The decision of the President or SOLE is final and executory after receipt thereof by the parties.
It is always part of the assumption or certification order even if not expressly stated therein.
Different rule on strikes and lockouts in hospitals, clinics and medical institutions
The moment the DOLE Secretary assumes jurisdiction over a labor dispute involving national interest or certifies it to the NLRC for compulsory arbitration, such assumption/certification has the effect of automatically enjoining the intended or impending strike or, if one has already been commenced, of automatically prohibiting its continuation. The mere issuance of an assumption/certification order automatically carries with it a return-to-work order, even if the directive to return to work is not expressly stated therein. It is thus not necessary for the DOLE Secretary to issue another order directing the strikers to return to work.
As a general rule, strikes and lockouts in hospitals, clinics and similar medical institutions should be avoided. In case a strike or lockout is staged, 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 in emergency cases, for the duration of the srike or lockout.
It is errors for striking workers to continue with their strike aleeging absence of a return-to-work order since Art 278(g) is clear that once an assumption/certification order is issued, strikes are
The DOLE Secretary may immediately assume, within 24 hours from knowledge of the occurrence of such a strike or lockout, jurisdiction over the
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Labor Law and Social Legislation enjoined or, if one has already taken place, all strikers should immediately return to work.
servitude. It must be discharged as a duty even against the worker’s will. The worker must return to his job together with his co-workers so that the operation of the company can be resumed and it can continue serving the public and promoting its interest. It is executory in character and should be strictly complied with by the parties even during the pendency of any petition questioning its validity in order to maintain the status quo while the determination is being made.
No necessity for the SOLE to issue a return-towork order in an assumption order It is not necessary for the SOLE to issue a return-towork order in an assumption order. The mere issuance of an assumption order automatically carries with it a return-to-work order although not expressly stated therein. (TSEU-FFW v. CA, G.R. Nos. 143013-14, December 18, 2000)
Some principles on return-to-work order
Nature of a return-to-work order
a.
A return-to-work order is a valid statutory part and parcel of the assumption of jurisdiction and certification orders given the predictable prejudice the strike could cause not only to the parties but more especially to the national interest. Stated otherwise, the assumption of jurisdiction and the certification to the NLRC has the effect of automatically enjoining the strike or lockout, whether actual or intended, even if the same has not been categorically stated or does not appear in the assumption or certification order. It is not a matter of option or voluntariness but of obligation. It must be discharged as a duty even against the worker’s will. The worker must return to his job together with his co-workers so that the operation of the company can be resumed and it can continue serving the public and promoting its interest. It is executory in character and shall be strictly complied with by the parties even during the pendency of any petition questioning their validity precisely to maintain the status quo while the determination is being made. (Union of Filipro Employees vs. Nestle Philippines, Inc., GR No. 88710-13, December 19, 1990)
b.
c.
The issue of legality of strike is immaterial in enforcing the return-to-work order Upon assumption/certification, the parties should revert to the status quo ante litem which refers to the state of things as it was before the labor dispute or the state of affairs existing at the time of filing of the case. It is the last actual, peaceful and uncontested status that preceded the actual controversy To implement the return-to-work order, the norm is actual reinstatement. However, payroll reinstatement in lieu of actual reinstatement may properly be resorted to when special circumstances exist that render actual reinstatement impracticable or otherwise not conducive to attaining the purposes of the law.
e.g. Where the teachers ordered to return to work could not be given back their academic assignments since the return-to-work order of the DOLE Secretary was issued in the middle of the first semester of the academic year. The SC affirmed the validity of the payroll reinstatement order of the NLRC and ruled that the NLRC did not commit grave abuse of discretion in providing for the alternative remedy of payroll reinstatement. It observed that the NLRC was only trying its best to work out a satisfactory ad hoc solution to a serious problem. (University of Santo Tomas vs. NLRC, G.R. No. 89920, October 18, 1990)
A return-to-work order may be validly issued pending determination of the legality of the strike
NATURE OF ASSUMPTION ORDER OR CERTIFICATION ORDER
Where the return-to-work order is issued pending the determination of the legality of the strike, it is not correct to say that it may be enforced only if th e strike is legal and may be disregarded if illegal. Precisely, the purpose of the return to work order is to maintain the status quo while the determination is being made. (Sarmiento v. Tuico, G.R. Nos. 7527173, June 27, 1988)
Police Power Measure The power to issue assumption/certification orders is an extraordinary authority granted to the President and to his alter ego, the DOLE Secretary, the exercise of which should be strictly limited to national interest cases. It is in the nature of a police power measure. This is done for the promotion of the common good considering that a prolonged strike or lockout can be inimical to the national economy.
Return-to-work order does not violate the constitutional provision against involuntary servitude A return-to-work order is not offensive to the constitutional provision against involuntary
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Labor Relations Nature of the power of the SOLE in assuming jurisdiction
A: a.
labor dispute adversely affected the national interest, affecting as it did 9,000 students. He is authorized by law to assume jurisdiction over the labor dispute, after finding that it adversely affected the national interest. This power is expressly granted by Art. 278(g) of the LC, as amended by B.P. Blg. 227.
The assumption of jurisdiction is in the nature of a police power measure. This is done for the promotion of the common good considering that a prolonged strike or lockout can be inimical to the national economy. The SOLE acts to maintain industrial peace. Thus, his certification for compulsory arbitration is not intended to impede the worker’s right to strike but to obtain a speedy settlement of the dispute. (Philtread Workers Union v. Confesor, G.R. No. 117169, March 12, 1997)
b.
----Q: Members of the union learned that a redundancy program would be implemented by PLDT. They thus filed a notice of strike on the ground of ULP. However, the Secretary of Labor,
NOTE: The underlying principle embodied in Art. 278(g), LC on the settlement of labor disputes is that assumption and certification orders are executory in character and are strictly complied with by the parties even during the pendency of any petition questioning their validity. This extraordinary authority given to the Secretary of Labor is aimed at arriving at a peaceful and speedy solution to labor disputes, without jeopardizing national interests.
recognizing that PLDT’s operations is impressed
with public and national interest as communication plays a vital role in furtherance of trade, commerce, and industry specially at this time of globalized economy where information is vital to economic survival,
--Q: A notice of strike was filed by the PSBA Employees Union-FFW, alleging union-busting, coercion of Employees and harassment on the part of PSBA. The conciliation being ineffective, the strike pushed through. A complaint for ULP and for a declaration of illegality of the strike with a prayer for preliminary injunction was filed by PSBA against the union.
enjoined the strike and issued a “qualified”
return-to-work order where all striking employees except those who were terminated due to redundancy were ordered to return to work. Was the “qualified” return-to-work order valid? A: NO. When the SLE exercises the powers granted by Art. 278(g) of the LC, he is, indeed, granted great breadth of discretion. However, the application of this power is not without limitation, lest the SLE would be above the law. As Art. 278(g) is clear and unequivocal in stating that all striking or locked out Ees shall immediately return to work and the Er shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout, then the unmistakable mandate must be followed by the SOLE. (PLDT v. Manggagawa ng Komunikasyon sa Pilipinas, G.R. No. 162783, July 14, 2005)
While the cases were pending, a complaint was filed in the RTC of Manila by some PSBA students against PSBA and the union, seeking to enjoin the union and its members from picketing and from barricading themselves in front of the school’s main gate. A TRO was then issued by the
RTC, which the union opposed on the ground that the case involves a labor dispute over which the RTC had no jurisdiction. The Acting SOLE later on assumed jurisdiction over the labor dispute and ordered the striking Employees to return to work.
b.
NO. The RTC was without jurisdiction over the subject matter of the case filed by some PSBA students. It is a labor dispute which the labor agencies have exclusive jurisdiction. The rule that regular courts have no jurisdiction over labor disputes and to issue injunctions against strikes is well-settled. (PSBA v. Noriel, G.R. No. 80648, August 1, 1988)
The provision under the LC does not interfere with the workers right to strike but merely regulates it, when in the exercise of such right national interest will be affected. The LC vests upon the SOLE the discretion to determine what industries are indispensable to national interest.
a.
YES. In the opinion of the Acting SLE, the
--EFFECT OF DEFIANCE OF ASSUMPTION OR CERTIFICATION ORDERS
Was the SOLE correct in ordering the striking Employees to return to work? Does the RTC have jurisdiction to decide the case filed by the PSBA students?
Effect of defiance to the return to work order
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Labor Law and Social Legislation It shall be considered an illegal act committed in the course of the strike or lockout and shall authorize the SOLE or the NLRC, as the case may be, to enforce the same under pain or loss of employment status or entitlement to full employment benefits from the locking-out Er or backwages, damages and/or other positive and/or affirmative reliefs, even to criminal prosecution against the liable parties. (New Rules of Procedure of the NLRC, Rule IX, Sec. 6; St. Scholastica’s College v. Torres, G.R. No. 100158, June 2, 1992)
All defiant strikers, regardless of whether they are officers or ordinary members, are deemed dismissed
Effect of a defiance of assumption certification orders of the SOLE
or
Period of defiance of the return-to-work order, not material
The defiance by the union, its officers and m embers of the SOLE’s assumption of jurisdiction or certification order constitutes a valid ground for dismissal [LC, Art. 278(g)].
The length of time within which the return-to-work order was defied by the strikers is not significant in determining their liability for the legal consequences thereof. The following cases are illustrative of this rule:
Once the DOLE Secretary assumes jurisdiction over a labor dispute or certifies it to the NLRC for compulsory arbitration, such jurisdiction should not be interfered with by the application of the coercive processes of a strike or lockout. Any defiance thereof is a valid ground for the loss of employment status.
NOTE: The SOLE may cite the defiant party in contempt pursuant to the power vested in him under the provisions of the LC.
a.
The period of defiance was less than 9 hours from 8:45 a.m. to 5:25 p.m. on September 19, 2003. (University of SanAgustin Employees’ Union-FFW vs. CA, G.R. No. 169632, March 28, 2008) b. The period of defiance was only 9 days. (Federation of Free Workers vs. Inciong, G.R. No. L-49983, April 20, 1992)
Justifications for the dismissal of a defiant Employee 1.
2. 3.
A strike that is undertaken after the issuance by the SOLE of an assumption or certification order becomes a prohibited activity and thus illegal. The striking union officers and members, as a result, are deemed to have lost their employment status for having knowingly participated in an illegal strike. From the moment an Ee defies a return-to-work order, he is deemed to have abandoned his job. By staging a strike after the assumption or certification for compulsory arbitration, the Ee forfeit their right to be re-admitted to work, having, in effect, abandoned their employment. (Steel Corporation of the Philippnes v. SCP Employees Union, G.R. Nos. 169829-30, August 16, 2008)
Some principles on defiance of the assumption or certification order a. b.
c. d.
NOTE: Once the SOLE assumes jurisdiction over a labor dispute or certifies it to the NLRC for compulsory arbitration, such jurisdiction should not be intered with by the application of the coercive process of a strike or lockout.
The assumption/certification order may be served at any time of the day or night. No practice of giving 24 hours to strikers within which to return to work. There is no law or jurisprudence recognizing this practice. The defiant strikers could be validly replaced. The refusal to acknowledge receipt of the assumption/certification orders and other processes is an apparent attempt to frustrate the ends of justice, hence, invalid. The union cannot be allowed to thwart the efficacy of the said orders issued in the national interest through the simple expediency of refusing to acknowledge receipt thereof.
--Q: Several employees and members of Union A were terminated by Western Phone Co. on the ground of redundancy. After complying with the necessary requirements, the Union staged a strike and picketed the premises of the company. The management then filed a petition for the SOLE to assume jurisdiction over the dispute. Without the benefit of a hearing, the SOLE issued an Order to assume jurisdiction and
The workers defying a return-to-work o rder issued in connection with the asusmption or certification by the SOLE may, in fact, be subjected not only to immediate disciplinary action such as dismissal or loss of employment status but to criminal prosecution as well. Defiant strikers could be validly replaced.
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Labor Relations for the parties to revert to the status quo ante litem. a.
Was the order to assume jurisdiction legal? Explain. Under the same set of facts the Secretary instead issued an Order directing all striking workers to return to work within 24 hours, except those who were terminated due to redundancy. Was the order legal? Explain.
b.
4.
5. 6.
A: YES. The SOLE has plenary power to assume
a.
7.
jurisdiction under Art. 278(g), LC: “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 SLE may assume jurisdiction over the dispute and decide it or certify it to the NLRC for compulsory arbitration.” This extraordinary authority given to the SOLE is aimed at arriving at a peaceful and speedy solution to labor disputes without jeopardizing national interests. (Steel Corportaion v. SCP Employees Union, G.R. Nos. 169829-30, April 16, 2008) Such assumption shall have the effect of automatically enjoining an impending strike or lockout or an order directing immediate return to work and resume operations, if a strike already took place, and for the employer to re-admit all employees under the same terms and conditions prevailing before the strike or lockout. [LC, Art. 278(g); D.O. No. 40-G-03, Rule XXII, Sec. 15]
8. 9.
10. 11. 12. 13. 14. 15. 16. 17. 18.
NO. The order will be inconsistent with the
b.
established State policy of enjoining the parties from performing acts that undermines the underlying principles emodied in Art. 278(g), LC. In this case, exempting the employees terminated due to redundancy from those who are required to return-to-work, the SOLE comes short of his duty under Art. 278(g), LC to maintain status quo or the terms and conditions prevailing before the strike.
19.
Toyota Motor Phils. Corp. Workers Association vs. NLRC, G.R. Nos. 158786 & 158789, October 19, 2007 – the SC ruled that protest rallies staged by the Ees from February 21 to 23, 2001 in front of the offices of the BLR and the DOLE Secretary constitute illegal strike and not legitimate exercise of their right to peaceably assemble and petition the government for redress of grievances. It was illegal for having been undertaken without satisfying the mandatory pre-requisites for a valid strike under Art. 263 (now Art. 278) of the LC.
--ILLEGAL STRIKE A strike is illegal if declared and staged: 1.
2. 3.
Ees, compelling the dismissal of an employee, forcing recognition of the union, or for trivial purposes or circumventing contracts and judicial orders. Through unlawful means in the pursuit of its objective, such as widespread terrorism of non-strikers; In violation of an existing injunction or temporary restraining order; Contrary to an existing agreement, such as a no-strike clause or conclusive arbitration clause Based on non-strikeable or invalid grounds such as: inter-union/intra-union disputes, simple violation of CBA (in contrast to gross violation thereof which is deemed ULP), violation of labor standards, legislated wage orders (wage distortion). Without first having bargained collectively Without submitting the issues to the grievance machinery or voluntary arbitration or failing to exhaust the steps provided therein While conciliation and mediation proceeding is on-going at NCMB Based on issues already brought to voluntary or compulsory arbitration During the pendency of a case involving the same ground/s cited in the notice of strike In defiance of an assumption or certification or return-to-work order. After the conversion of the notice of strike into a preventive mediation case. By a minority union. By an illegitimate union. By dismissed employees. In violation of the company code of conduct which prohibits “inciting or participating in riots, disorders, alleged strikes, or concerted actions detrimental to the compay’s interest,” the penalty for which is dismissal. As protest rallies in front of government offices such as in the following cases:
Contrary to specific prohibition of law, such as strike by Ees performing governmental functions. In violation of a specific requirement of law. For an unlawful purpose, such as inducing the Er to commit ULP against non-union
The ruling in Toyota was cited in Solidbank Corporation vs. Gamier, G.R. No. 159460, November
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Labor Law and Social Legislation 15, 2010as basis in declaring the protest action of the Ees of Solidbank which staged in front of the Office of the DOLE Secretary in Intramuros, Manila, as constitutive of illegal strike since it paralyzed the operations of the bank. The protest action in this case was conducted because of the CBA deadlock.
As a general rule, backwages are granted to indemnify a dismissed Ee for his loss of earnings during the whole period that he is out of his job. Considering that an illegally dismissed Ee is not deemed to have left his employment, he is entitled to all the rights and privileges that accrue to him from the employment. That backwages are not granted to Ees participating in an illegal strike simply accords with the reality that they do not render work for the Er during the period of the illegal strike under the principle of a fair day’s wage for a fair day’s labor.
20. As welga ng bayan which is in the nature of a general strike as well as an extended sympathy strike.
Good Faith Strike is no longer a valid defense Strike declared in good faith – A strike may be
With respect to backwages, the principle of “fair day’s wage for a fair day’s labor” remains as the basic factor in determining the award thereof. If there is no work performed by the employee there can be no wage or pay unless, of course, the laborer was able, willing and ready to work but was illegally locked out, suspended or dismissed or otherwise illegally prevented from working. However, for this exception to apply, it is required that the strike be legal. (Danilo Escario v. NLRC, G.R. No. 160302, September 27, 2010)
considered legal when the union believed that the respondent company committed unfair labor acts and the circumstances warranted such belief in good faith although subsequently such allegation of unfair labor practices are found out as not true. (PICEWO-FFW v. People’s Industrial and Commercial Corp., 112 Scra 440) However, with the enactment of R.A. 6715 which took effect on March 21, 1989, the rule now is that such requirements as the filing of a notice of strike, strike vote, and notice given to the DOLE are mandatory in nature.
LIABILITY OF UNION OFFICERS vs. LIABILITY OF ORDINARY WORKERS
Thus, even if the union acted in good faith in the belief that the company was committing an unfair labor practice, if no notice of strike and a strike vote were conducted, the said strike is illegal. Claim of good faith is not a valid excuse (defense) to dispense with the procedural steps for a lawful strike. (Grand Boulevard Hotel v. Dacanay, G.R. No. 153665, 18 July 2003; Poquiz, Vol. II )
Participation in lawful strike
Strike may be declared illegal on the ground of non-compliance with the strict and mandatory requirements for a valid conduct of a strike
Participation in illegal strike
An employee who participates in a lawful strike is NOT deemed to have abandoned his employment. Such participation should not constitute sufficient ground for the termination of his employment even if a replacement has already been hired by the Er during the lawful strike.
1. Distinction in the liability between union officers and ordinary union members. a. Union officers – the mere finding or
The requirements of law and its implementing rules are mandatory and failure of a union to comply renders the strike illegal. (Magdala Multipurpose & Livelihood Cooperative v. Kilusang Manggagawa ng LGS, G.R. Nos. 191138-39, October 19, 2011)
declaration of illegality of the strike will result in the termination of all union officers who knowingly participated in the illegal strike. Unlike ordinary members, it is not required, for purposes of termination, that the officers should commit an illegal act during the strike. However, absent any showing that the Ees are union officers, they cannot be dismissed solely on the illegality of the strike.
Employees who staged an illegal strike are not entitled to backwages Contemplating two causes for the dismissal of an Ee—(a) unlawful lockout, and (b) participation in an illegal strike—the third paragraph of Art. 264(a) [now 279(a)] authorizes the award of full backwages only when the termination of employment is a consequence of an unlawful lockout.
To illustrate how the “knowing participation” of union officers may be ascertained, the following were taken into account in Abaria vs. NLRC, G.R. No. 154113, December 7, 2011:
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Labor Relations 1.
Their persistence in holding picketing activities despite the declaration by the NCMB that their union was not duly registered as a legitimate labor organization and notwithstanding the latter from the federation’s legal counsel informing them that their acts constituted disloyalty to the national federation; and 2. Their filing of notice of strike and conducting a strike vote despite the fact that their union has no legal personality to negotiate with their Er for collective bargaining purposes b. Ordinary union members – the mere finding or declaration of illegality of a strike will not result in termination of ordinary union members. For an ordinary union member to suffer termination, it must be shown by clear evidence that he has committed illegal acts during the strike.
f.
No wholesale dismissal of strikers allowed. The Er cannot unceremoniously dismiss a hundred of its Ees in the absence of clear and convincing proof that these people were indeed guilty of the acts charged and then, afterwards, go to court to seek validation of the dismissal it whimsically executed.
Participation in the commission of illegal acts during a strike 1.
2.
Reason for the distinction – union officers have the duty to guide their members to respect the law. If instead of doing so, the officers urged the members to violate the law, their dismissal from the service is just a penalty for their unlawful act. Their responsibility as main players in an illegal strike is greater than that of an ordinary union member’s and, therefore, limiting the penalty of dismissal only to the former for their participation in an illegal strike is in order.
The legality or illegality of strike is immaterial as far as liability for commission of illegal acts during the strike is concerned. As long as the union officer or member commits an illegal act in the course of the strike, be it legal or illegal, his employment can be validly terminated The term “illegal acts” under Art. 279(a) may encompass a number of acts that violate existing labor or criminal laws, such as: a. “Any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the Er’s premises for lawful purposes, or obstruct public thoroughfares” [LC, Art. 279€] b. Commission of crimes and other unlawful acts in carrying out the strike. c. Violation of any order, prohibition, or injunction issued by the DOLE Secretary or NLRC in connection with the assumption of jurisdiction or certification order under Art. 278(g) of the LC.
Some principles on illegality of a strike: a.
b.
c.
d.
e.
The fact that the Ees are signatories to the CBA does not itself sufficiently establish their status as union officers during the illegal strike. Neither could their active roles during the bargaining negotiations be considered as evidence of their being union officers. Only the union officers during the period of illegal strike are liable. If the Ees acted as union officers after the strike, they may not be held liable and, therefore, could not be terminated in their capacity as such. Shop stewards are union officers. Hence, they should be terminated upon the the declaration of the illegality of the strike. Union officers may be dismissed despite the fact that the illegal strike was staged only for 1 day or even for less than 10 hours. This holds true in cases of defiance of the assumption/certification order issued in national interest cases. If the dispositive portion of the decision failed to mention the names of union officers, resort should be made to the text of the decision.
This enumeration is not exclusive as jurisprudence abounds where the term “illegal acts” has been interpreted and construed to cover other breaches of existing laws. Liability for illegal acts should be determined on an individual basis. For this purpose, the individual identity of the union members who participated in the commission of illegal acts may be proved through affidavits and photographs. Simply referring to them as “strikers,” or “complainants in this cases” is not enough to j ustify their dismissal. 3.
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Some principles on commission of illegal acts in the course of the strike: a. Only members who are identified as having participated in the commission of illegal acts are liable. Those who did not participate should not be blamed therefor. b. To effectively hold ordinary union members liable, those who participated in the commissions of illegal acts must not only be identified but the specific illegal acts they each committed should be described with particularity.
Labor Law and Social Legislation c.
Persons not entitled to reinstatement
If violence was committed by both Er and Ees, the same cannot be cited as a ground to declare the strike illegal.
1. 2.
Basis
Union Officer
Ordinary worker
May be declared to have lost his employment status
Cannot be terminated
NOTE: Those union members who have joined an illegal strike but have not committed any illegal act shall be reinstated but without backwages. The responsibility for the illegal acts committed during the strike must be on an individual and not on a collective basis. (First City Interlink Transportation Co., Inc. v. Confesor, G.R. No. 106316, May 5, 1997)
NOTE: The LC protects ordinary, rank-andfile union members who participated in such a strike from losing their jobs provided that they did not commit illegal acts during the strike.
Knowingly participating in an illegal strike
Union officers who knowingly participate in the illegal strike Any striker or union who knowingly participates in the commission of illegal acts during the strike
--Q: X was dismissed for joining an illegal strike but was reinstated because he is only a member of the union who did not commit any illegal act. Is X entitled for backwages for the period of strike? A: NO. Conformably with the long 212onoured principle of “a fair day’s wage for a fair day’s labor”, Ee’s dismissed for joining illegal strike are not entitled to backwages for the period of the strike even if they are reinstated by virtue of their being merely members of the striking union who did not commit any illegal act during the strike. ( Escario v. NLRC, G.R. 124055, June 8, 2000)
--Rule on strikes in hospitals
Knowingly participating in the commission of illegal acts during strike
May be terminated
May be terminated
1.
2.
(Samahang Manggagawa Sa Sulpicio Lines, Inc.– Naflu et al. v. Sulpicio Lines, Inc., G.R. No. 140992, March 25, 2004)
It shall be the duty of the striking Ees or lockingout Er to provide and maintain an effective skeletal workforce of medical and health personnel for the duration of the strike or lockout. SOLE may immediately assume jurisdiction within 24 hours from knowledge of the occurrence of such strike or lockout certify it to the NLRC for compulsory arbitration.
--Q: More or less 1400 employees of the company staged a mass walk-out, allegedly without anybody leading them as it was a simultaneous, immediate and unanimous group action and decision, to protest the non-payment of their salaries and wages. The SLE who found the strike to be illegal granted the clearance to terminate the employment of those who were instigators in the illegal strike. Was the decision of the Secretary in granting the clearance correct?
Rule on reinstatement of striking workers Striking Ees are entitled to reinstatement, regardless of whether or not the strike was the consequence of the Er’s ULP because w hile out on strike, the strikers are not considered to have abandoned their employment, but rather have only ceased from their labor; the declaration of a strike is not a renunciation of employment relation.
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Labor Relations A: NO. A mere finding of the illegality of a strike
In strike cases, the award of separation pay in lieu of reinstatement is proper only when the strikers did not participate in the commission of illegal acts in the course thereof.
should not be automatically followed by wholesale dismissal of the strikers from their employment. While it is true that administrative agencies exercising quasi-judicial functions are free from the rigidities of procedure, it is equally well-settled that avoidance of technicalities of law or procedure in ascertaining objectively the facts in each case should not, however, cause denial of due process. (Bacus v. Ople, G.R. No. L-56856, October 23, 1984)
Note: Entitlement of strikers to their backwages or strike duration pay GR: Strikers are not entitled to their backwages or strike duration pay even if such strike was legal.
----Q: Two days after the union struck, the SLE ordered the striking workers to return to work within 24 hours. But the striking union failed to return to work and instead they continued their pickets. As a result, violence erupted in the picket lines. The service bus ferrying nonstriking workers was stoned causing injuries to its passengers. Threats, defamation, illegal detention, and physical injuries also occurred. The company was directed to accept back all striking workers, except the union officers, shop stewards, and those with pending criminal charges. Was the SLE correct in not including the union officers, shop stewards and those with pending criminal charges in the return-to-work order?
XPN: 1.
2.
3. 4.
Where the strikers voluntarily and unconditionally offered to return to work, but the Er refused to accept the offer – Ers are entitled to backwages from the date their offer was made When there is a return-to-work order and the Ees are discriminated against other Ees, workers are entitled to backwages from the date of discrimination In case of a ULP strike, in the discretion of the authority deciding the case When the Ees were illegally locked out and thus compel them to stage a strike.
If the strike is illegal, no backwages should be paid. Thus, in Arellano University Employees and Workers Union vs. CA, G.R. No. 139940, September 19, 2006, where the strike was declared illegal, petitioner union members who were found not to have participated in the commission of illegal acts during the strike were ordered reinstated to their former positions but without backwages. If reinstatement is no longer possible, they should receive separation pay of 1 month for every year of service in accordance with existing jurisprudence. With respect to the union officers, their mere participation in the illegal strike warrants their dismissal.
A: NO. To exclude union officers, shop stewards and those with pending criminal charges in the directive to the company to accept back the striking workers without first determining whether they knowingly committed illegal acts would be tantamount to dismissal without due process of law. (Telefunken Semiconductors Ees Union-FFW v. SOLE, G.R. No. 122743 & 127215, December 12, 1997)
--Employees who abandoned a legal strike but were refused reinstatement can be awarded backwages
No backwages will be awarded to union members as a penalty for their participation in the illegal strike. As for the union officers, for knowingly pa rticipating in an illegal strike, the law mandates that a union officer may be terminated from employment and they are not entitled to any relief. (Gold City Integrated Port Services, Inc. v. NLRC ,G.R. No. 86000, September 21, 1990)
Provided the following requisites are present: 1. 2.
The strike was legal There was an unconditional offer to return to work as when the strikers manifested their willingness to abide by the CIR back-to-work order and even sought the aid of competent authorities to effect their return 3. The strikers were refused reinstatement such as when they have not been re-admitted to their former position. (Philippine Marine Officers' Guild v. Compañia Maritima et al., G.R. Nos. L 20662 and L-20662, March 27, 1971)
LIABILITY OF EMPLOYER Liability for reinstatement of strikers a.
Separation pay in lieu of reinstatement in strike cases
213
Reinstate (without backwages) ordinary rankand-file union members who did not participate in the commission of illegal acts during the conduct of the illegal strike may be ordered
Labor Law and Social Legislation b.
c.
d.
Terminate strikers who committed illegal acts during and in the course of a strike. They are not entitled to be reinstated. Additionally, they may be held criminally liable therefor. Forefeit reinstatement of strikers who failed to report for work without proper justification and despite the order reinstating them to their job. Pay backwages, reckoned from the labor Arbiter’s issuance of the reinstatement order up to its reversal by the NLRC, if Er fails to reinstate strikers who were ordered reinstated by the Labor Arbiter.
cannot later on seek the dismissal of the employee by reason of such acts.
WAIVER OF ILLEGALITY OF STRIKE Voluntary reinstatement constitutes a waiver of the illegality of the strike The act of the Er in inviting the workers to return to their posts without making any reference to the pending case involving the issue of the illegality of the strike or imposing any condition or alteration of the terms of their employment was deemed a waiver of its right to consider the strikers as wrongdoers. More so in this case when such invitation was accepted by the strikers. By said act, the parties may be said to have both abandoned their original positions and come to a virtual compromise to resume unconditionally their former relations. (Citizens’ Labor Union vs. Standard Vacuum Oil Co., G.R. No.L-7478, May 6, 1955)
--Q: By reason of a deadlock in collective bargaining, the union, after the lapse of the cooling-off period, declares a strike. The strike is peaceful but fruitless; the management is adamant. So after 60 days, the strikers abandon their strike and offer to return to work. Is the company bound to re-admit them? Why?
Instance when there is a waiver of the illegality of a strike by the employer
A: YES. By going on strike, the Ees are not deemed to have abandoned their work; they are merely utilizing a weapon given to them by law to seek better terms and conditions of employment and to protect their rights. An Er who refuses to re-admit the strikers, excepting those who have forfeited their employment status because of illegal acts committed in the course of the strike would be discriminating against them for having exercised their right to engage in a concerted action; it commits a ULP. (Cromwell Commercial Employees and Laborers Union v. CIR, et al., G.R. No. L-19778, September 30, 1964)
When an Er accedes to the peaceful settlement brooked by the NLRC by agreeing to accept all Ees who had not yet returned to work, it waives the issue of the illegality of the strike. (Reformist Union v. NLRC, G.R. No. 120482, January 27, 1997)
Effect of compliance with the return-to-work order to the legality of strike GR: A return-to-work order does not have the effect of rendering the issue of the legality of the strike as moot and academic. (Insurefco Paper Pulp and Project Workers Union v. Insular Sugar Refining Corp., 95 Phil. 761)
--Mere participation of an Ee in a lawful strike shall not constitute sufficient ground for termination of his employment
XPN: Er may be considered to have waived its right to proceed against the striking Es for alleged commission of illegal acts during the strike when, during a conference before the Chairman of the NLRC, it agreed to reinstate them and comply with the return-to-work order issued by the SOLE. (TASLI-ALU v. Court of Appeals, G.R. No. 145428, July 7, 2004)
If by reason of the prolonged strike, the company was compelled to hire replacements this would not constitute as sufficient reason for it not to re-admit the strikers. Under Art. 279(a) of the LC, mere participation of an Ee in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the Er during such lawful strike. A contrary rule would enable the Er to dismiss an Ee by the simple expedient of hiring a replacement.
Defiance of Return-to-work order Not only union officers but also union members who defy a return-to-work order are subject to dismissal. They are deemed to have participated in an illegal act. (St. Scholastica’s College v. Ruben Torres, G.R. No. 100158, June 29, 1992)
The illegal acts of a re-admitted striker is deemed to have been condoned
INJUNCTION
If an employer knowingly re-admits to work a striker who committed illegal acts during a strike, it
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Labor Relations It is an order or a writ that commands a person to do or not to do a particular act. It may be a positive (mandatory) or a negative (prohibitory) command.
the freedom of speech duly guaranteed by the Constitution.
XPNs (Picketing may be enjoined by the NLRC): Injunction in picketing, strike or lockout cases
1. 2.
GR: Prohibition on injunction against the conduct of strikes and lockouts – Strikes and
3.
lockouts that are validly declared enjoy the protection of the law and cannot be enjoined unless illegal acts are committed or threatened to be committed in the course thereof. In the case of strikes, this policy applies even if the strike appears to be illegal in nature. The rationale for this policy ids the protection extended to the right to strike under the Constitution and the law. It is basically treated as a weapon that the law guarantees to Ees for the advancement of their interest and for their protection.
When carried out through illegal means; Involves the use of violence and other illegal acts; Affects the rights of third parties a nd injunction becomes necessary to protect such rights.
--Q: Company C, a toy manufacturer, decided to ban the use of cell phones in the factory premises. In the pertinent Memorandum, management explained that too much texting and phone-calling by employees disrupted company operations. Two employee-members of Union X were terminated from employment due to violation of the memorandum-policy. The union countered with a prohibitory injunction case (with prayer for the issuance of a temporary restraining order) filed with the RTC challenging the validity and constitutionality of the cell phone ban. The company filed a motion to dismiss, arguing that the case should be referred to the grievance machinery pursuant to an existing CBA with Union X, and eventually to Voluntary Arbitration. Is the company correct? Explain. (2010 Bar)
XPNs: In some cases, injunctions issued to enjoin the conduct of the strike itself and not only the commission of illegal acts in the course thereof, were held to be valid. 1.
Injunction may be issued not only against the commission of illegal acts in the course of the strike but against the strike itself because the notice of strike filed by the union has been converted into a preventive mediation case. Having been so converted, a strike can no longer be staged based on said notice. Upon such conversion, the legal effect is that there is no more notice of strike to speak of. (San Miguel Corporation vs. NLRC, G.R. No. 119293, June 10, 2003) 2. NLRC committed grave abuse of discretion when it denied the petition for injunction to restrain the union from declaring a strike based on non-strikeable grounds. (San Miguel Corporation vs. NLRC, G.R. No. 99266, March 2, 1999)
A: NO. The RTC has jurisdiction to hear and decide the prohibitory injunction case filed by Union X against Company C to enjoin the latter from implementing the memorandum-policy against the use of cell phones in the factory. The issue in this case is the validity and constitutionality of the cell phone ban being implemented by Company C. The issue, therefore, does not involve the interpretation of the memorandum-policy, but its intrinsic validity. (Haliguefla v. PAL 602 SCRA 297)
--REQUISITES FOR LABOR INJUNCTIONS
Regular courts are prohibited from issuing injunction against strikes or lockouts
Injunction in labor disputes GR: No temporary or permanent injunction or
The cases cited above involve the issuance of restraining order or injunction by the NLRC pursuant to the exercise of its injunctive power. In contrast, regular courts are absolutely prohibited to grant any injunctive relief in cases of strikes or lockouts.
restraining order in any case involving or growing out of labor disputes shall be issued by any court (LC, Art. 266).
XPNs: 1. 2.
Injunction power of the NLRC (LC, Art. 225) Prohibited activities during a strike or lockout (LC, Art. 279) 3. Assumption or certification power of the SOLE in national interest cases [LC, Art. 278(g)]
Injunction in picketing cases GR: Injunction cannot be issued against the conduct of picketing by the workers. Under our constitutional set up, picketing is considered part of
215
Labor Law and Social Legislation Requisites in issuing an injunction in labor cases 1.
2. 3.
They are the third party in a picketing who has no existing connection or interest with the picketing union. (MSF Tire & Rubber v. CA, G.R. No. 128632, August 5, 1999)
There is an actual or threatened commission of any or all prohibited or unlawful acts in any labor dispute There is a need to enjoin or restrain such acts or to require the performance of a particular act 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. [LC, Art. 225(e)]
NOTE: While peaceful picketing is entitled to protection as an exercise of free speech, the 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 right may be regulated at the instance of third parties or "innocent bystanders" if it appears that the inevitable result of it 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. (Ibid .)
Provided, that no temporary or permanent injunction in any case involving or growing out of a labor dispute as defined in this Code shall b e 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: 1.
2. 3.
4. 5.
Required proof to be established by an innocent bystander before a court enjoins a labor strike
That prohibited or unlawful acts have been threatened and will be 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; That substantial and irreparable injury to complainant’s property will follow; 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; That complainant has no adequate remedy at law; and That the public officers charged with the duty to protect complainant’s property are unable or unwilling to furnish adequate protection.
The innocent by stander must show: 1. Compliance with the grounds specified in Rule 58 of the Rules of Court, and 2. That 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. (MSF Tire & Rubber v. CA, G.R. No. 128632, August 5, 1999)
When injunction on picketing is allowed through the regular courts and not through the NLRC In situations where the picket affects not only the Er but also the business operations of other establishments owned by third parties, an injunction may be secured by the latter from the regular courts to enjoin the picket under the “Innocent Bystander Rule.” Under this rule, the third party Ers or “innocent bystanders” who have no ER-Ee relationship with the picketing strikers, may apply for injunction with the regular courts (not with the NLRC) to enjoin the conduct of the picket.
NOTE: "Labor dispute" includes any controversy or matters concerning terms or conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of Er and Ee. (LC, Art. 219)
Because of the absence of such Er-Ee relationship, the NLRC cannot entertain such application for injunction from “innocent bystanders.” Only the Er of the picketers can apply for injunctive relief from the NLRC.
INNOCENT BYSTANDER RULE Innocent bystander
--Q: May the RTC take cognizance of the complaint which is incidental to a labor dispute?
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Labor Relations A: NO. The RTC has no jurisdiction to act on labor
injunction against the union, the main purpose of which is to disperse the picketing of the members of the union. The union filed a motionto dismiss on the ground of lack of jurisdiction. The RTC denied the motion to dismiss and enjoined the picketing, it said that mere allegations of Employer-Employee relationship does not automatically deprive the court of its jurisdiction and even the subsequent filing of charges of ULP, as an afterthought, does not deprive it of its jurisdiction. Was the issuance by the RTC of the injunction proper?
cases or various incidents arising therefrom, including the execution of decisions, awards or orders where the subject matter of the 3 rd party claim is only incidental to a labor case. A party, by filing its 3 rd party claim with the deputy sheriff, submits itself to the jurisdiction of the NLRC acting through the LA. The broad powers granted to the LA and to the NLRC by Arts. 224, 225 and 230 of the LC can only be interpreted as vesting in them jurisdiction over incidents arising from, in connection with or relating to labor disputes, as the controversy under consideration, to the exclusion of the regular courts. The RTC, being a co-equal body of the NLRC, has no jurisdiction to issue any restraining order or injunction to enjoin the execution of any decision of the latter. (Deltaventures v. Cabato, G.R. No. 118216, March 9, 2000)
A: NO. The concerted action taken by the members of the union in picketing the premises of the department store, no matter how illegal, cannot be regarded as acts not arising from a labor dispute over which the RTCs may exercise jurisdiction. (Samahang Manggagawa ng Liberty Commercial v. Pimentel, G.R. No. L-78621, December 2, 1987)
---
----Q: Liwayway Publication Inc. is a second sublessee of a part of the premises of the Permanent Concrete Products, Inc. It has a bodega for its newsprint in the sublet property which it uses for its printing and publishing business. The daily supply of newsprint needed to feed its printing plant is taken from its warehouse. The employees of the Permanent Concrete Products Inc. declared a strike against their company. The union members picketed, stopped and
LABOR DISPUTES A labor dispute includes any controversy or matter concerning: Terms and conditions of employment, or 1. 2. The association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment 3. Regardless of whether the disputants stand in the proximate relation of Er and Ee. [LC, Art. 219(l)]
prohibited Liwayway’s trucks from entering the
compound to load newsprint from its bodega. Tests on whether a controversy is a labor dispute
Does the lower court have jurisdiction to issue a writ of preliminary injunction considering that there was a labor dispute between Permanent Concrete Products, Inc. and the union?
1. As to nature – It depends on whether the dispute arises from Er-Ee relationship, although disputants need not be proximately Er or Ee of another. 2. As to subject matter – The test depends on whether it concerns terms or conditions of employment or association or representation of persons in negotiating, fixing, maintaining or changing terms or conditions of employment.
A: YES. Liwayway Publication Inc. is not in any way related to the striking union except for the fact that it is the sub- lessee of a bodega in the company’s compound. The business of Liwayway is exclusively the publication of magazines which has absolutely no relation or connection whatsoever with the cause of the strike of the union against their company, much less with the terms, conditions or demands of the strikers. Liwayway is merely a 3 rd person or an innocent by-stander. (Liwayway Pub., Inc. v. Permanent Concrete Workers Union, G.R. No. L 25003, October 23, 1981)
Kinds of labor disputes 1. Labor standard disputes
----Q: The employer filed with the RTC a complaint for damages with preliminary mandatory
217
a.
Compensation e.g. Underpayment of minimum wage; stringent output quota; illegal pay deductions
b.
Benefits e.g. Non-payment of holiday pay, OT pay or other benefits
Labor Law and Social Legislation
c.
Any conflict between and among union members, grievances arising from any violation of the rights and conditions of membership, violation of or disagreement over any provision of the union’s constitution and by-laws, or disputes from chartering or affiliation of union.
Working Conditions e.g. Unrectified work hazards
2. Labor relations disputes a.
b.
c.
d.
e.
Organizational right disputes/ Unfair Labor Practice (ULP) – e.g. Coercion, restraint or interference in unionization efforts; reprisal or discrimination due to union activities; company unionism; ULP, strike or lockout; union members’ complaint against union officers
Internal union dispute It 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 LC [LC, Art. 219, (q)].
Representation disputes e.g. – Uncertainty as to which is the majority union; determination of appropriate CB unit; contests for recognition by different sets of officers in the same union
Rights disputes They are claims for violations of a specific right arising from a contract, e.g. CBA or company policies.
Bargaining disputes e.g. Refusal to bargain; bargaining in bad faith; bargaining deadlock; economic strike or lockout
Interest disputes They involve questions on “what should be included in the CBA.” Strictly speaking, the parties may choose a voluntary arbitrator to decide on the terms and conditions of employment, but this is impracticable because it will be a value judgment of the arbitrators and not of the parties.
Contract administration or personnel policy disputes e.g. Non-compliance with CBA provision (ULP if gross non-compliance with economic provisions); disregard of grievance machinery; non observance of unwarranted use of union security clause; illegal or unreasonable personnel management policies; violation of no-strike/no-lockout agreement
Contract –negotiation disputes These are disputes as to the terms of the CBA.
Contract –interpretation disputes These are disputes arising under an existing CBA, involving such matters as the interpretation and application of the contract, or alleged violation of its provisions.
Employment tenure disputes e.g. Non-regularization of Ees; nonabsorption of labor-only contracting staff; illegal termination; non-issuance of employment contract
Instances when a person or entity is considered as participating or interested in a labor dispute
Parties to a labor dispute 1. 2.
If relief is sought against him or it, and He or it is engaged in the same industry, trade, craft, or occupation in which such dispute occurs, or 3. Has a direct or indirect interest therein, or Is a member, officer, or agent of any association composed in whole or in part of Ees or Ers engaged in such industry, trade, craft, or occupation. 1. 2.
Primary parties are the Er, Ees and the union. Secondary parties are the voluntary arbitrator, agencies of DOLE, NLRC, SLE and the Office of the President.
Inter-union dispute
___________________________________________________________
Any conflict between and among legitimate labor unions involving representation questions for the purposes of CB or to any other conflict or dispute between legitimate labor unions.
JURISDICTION AND REMEDIES ___________________________________________________________
Intra-union dispute
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Jurisdiction and Remedies A. LABOR ARBITER JURISDICTION
2.
Nature of jurisdiction of Labor Arbiters LAs only have original and exclusive jurisdiction. They have no appellate jurisdiction. 3.
Cases falling under the Labor Arbiters’ exclusive and original jurisdiction to hear and decide: 1. 2. 3.
4. 5.
ULP Termination disputes Those involving wages, rates of pay, hours of work, and other terms and conditions of employment, accompanied with a claim for reinstatement. Claims for actual, moral, exemplary and other forms of damages arising from Er-Ee relations Cases arising from any violation of Art. 264, LC including questions involving the legality of strikes and lockouts.
4.
XPN: Claims for Employment Compensation, Social Security, Philhealth and maternity benefits, all other claims arising from Er-Ee relations, including those of persons in domestic or household service, involving an amount exceeding P5,000 regardless of whether accompanied with a claim for reinstatement. 6.
7.
8.
9.
over national interest cases and decide them himself. In certified cases . When the NLRC exercises its power of compulsory arbitration over similar national interest cases that are certified to it by the DOLE Secretary pursuant to the exercise by the latter of his certification power under the same Article263 (g). In cases arising from CBA . When the cases arise from the interpretation or implementation of collective bargaining agreements and from the interpretation or enforcement of company personnel policies which 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. In cases submitted for voluntary arbitration . When the parties agree to submit the case to voluntary arbitration before a Voluntary Arbitrator or panel of Voluntary Arbitrators who, under Articles 261 and 262 of the Labor Code, are also possessed of original and exclusive jurisdiction to hear and decide cases mutually submitted to them by the parties for arbitration and adjudication.
Nature of the cases which the Labor Arbiter may resolve The cases that the LA can hear and decide are employment related. Where no Er-Ee relationship exists between the parties and no issue is involved which may be resolved by reference to the LC, other labor statutes, or any CBA, it is the RTC that has jurisdiction (Lapanday Agricultural Dev’t. Corp v. CA, G.R. No. 112139, January 31, 2000).
Monetary claims of overseas contract workers arising from Er-Ee relations under the RA 10022 or Act Amending the Migrant Workers and Overseas Filipinos Act of 1995. Wage distortion disputes in unorganized establishments not voluntarily settled by the parties pursuant to Wage Rationalization Act or RA 6727. Enforcement of compromise agreements when there is non-compliance by any of the parties pursuant to Art. 227 of the LC, as amended; and Other cases as may be provided by law.
The LA has jurisdiction over controversies involving Ers and Ees only if there is a “reasonable causal connection” between the claim asserted and the Er Ee relations. Absent such link, the complaint is cognizable by the regular court (Eviota v. CA, G.R. No. 152121, July 29, 2003).
Labor arbiters exercise concurrent jurisdiction with the NLRC with respect to contempt cases .
NOTE: Although the provision speaks of exclusive Extent of the jurisdiction of the Labor Arbiter if there are unresolved matters arising from the interpretation of the CBA
and original jurisdiction of LAs, the cases enumerated may instead be submitted to a voluntary arbitrator by agreement of the parties under Art. 262 of the LC. The law prefers voluntary over compulsory arbitration.
GR: LAs have no jurisdiction over unresolved or unsettled grievances arising from the interpretation or implementation of the CBA and those arising from the interpretation or enforcement of company personnel policies.
Exceptions to the original and exclusive jurisdiction of Labor Arbiters: 1.
In assumed cases. When cases. When the DOLE Secretary or the President exercises his power under Article 263(g) of the Labor Code to assume jurisdiction
XPN: Actual termination disputes
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Labor Law and Social Legislation NOTE: Where the dispute is just in the
of general civil law on contracts which is within the jurisdiction of the regular courts (SMC v. NLRC, G.R. No. 80774, May 31, 1988). 9. Cause of action based on quasi-delict or tort which has no reasonable connection with any of the claims enumerated in Art.217, LC (Ocheda v. CA, G.R. No. 85517, October 16, 1992). 10. Complaint arising from violation of training agreement (Singapore Airlines v. Pano, G.R. No. L-47739, June 22 1983).
interpretation, implementation, or enforcement stage of the termination, it may be referred to the grievance machinery set up by the CBA or by voluntary arbitration. Where there was already actual termination, i.e., violation of rights, it is already cognizable by the LA (Maneja v. NLRC, G.R. No. 124013, June 5, 1998).
Usage of the word “may” in the provisions of the
Grievance Procedure allow the alternative submission of the case before the labor arbiter
--Q: Lincoln was in the business of trading broadcast equipment used by television and radio networks. He employed Lionel as his agent. Subsequently, Lincoln set up Liberty Communications to formally engage in the same business. He requested Lionel to be one of the incorporators and assigned to him 100 Liberty shares. Lionel was also given the title Assistant Vice-President for Sales and Head of Technical Coordination. After several months, there were
The use of the word “may” shows the intention of the parties to reserve the right to submit the illegal termination dispute to the jurisdiction of the LA, rather than to a voluntary arbitrator. Petitioner validly exercised his option to submit his case to a LA when he filed his complaint before the proper government agency. Voluntary arbitration is mandatory in character only if there is a specific agreement between the parties to that effect. In the case at bar, however, the use of the word “may” shows the intention of the parties to reserve the right of recourse to LAs (Vivero v. CA, G.R. No. 138938, October 24, 2000).
allegations that Lionel was engaged in “under the table dealings” and received “confidential commissions” from Liberty’s clients and
suppliers. He was, therefore, charged with serious misconduct and willful breach of trust, and was given 48 hours to present his explanation on the charges. Lionel was unable to comply with the 48-hour deadline and was subsequently barred from entering company premises. Lionel then filed a complaint with the Labor Arbiter claiming constructive dismissal. Among others, the company sought the dismissal of the complaint alleging that the case involved an intra-corporate controversy which was within the jurisdiction of the Regional Trial Court (RTC).
Cases which do not fall under the jurisdiction of the Labor Arbiters 1.
2. 3.
4.
5.
6.
7.
8.
Foreign governments (JUSMAG-Phils. v. NLRC, G.R. No. 108813, December 15, 1994). International agencies (Lasco ( Lasco v. NLRC, G.R. Nos. 109095-109107, February 23, 1995). Intra-corporate disputes which fall under P.D. 902-A and now falls under the jurisdiction of the regular courts pursuant to the new Securities Regulation Code (Nacpil v. IBC, G.R. No. 144767, March 21, 2002). Executing money claims against government (Dept. of Agriculture v. NLRC, G.R. No. 104269, November 11, 1993). Cases involving GOCCs with original charters which are governed by civil service law, rules or regulations (1987 Constitution, Art. IX-B, Sec. 2(1)). Local water district (Tanjay Water District v. Gabaton, G.R. No. L-63742, April 17, 1989) except 1989) except where NLRC jurisdiction is invoked (Zamboanga City Water District v. Buat, G.R. No. 104389, May 27, 1994). The aggregate money claim does not exceed P5,000 and without claim for reinstatement (Rajah Humabon Hotel, Inc. v. Trajano, G.R. Nos. 100222-23 September 14,1993). Claim of Ee for cash prize under the Innovation Program of the company, although arising from Er-Ee relationship, is one requiring application
If you were the Labor Arbiter assigned to the case, how would you rule on the c ompany’s motion to dismiss? (2014 Bar Question) A: I will deny the motion to dismiss. "Corporate officers" in the context of Presidential Decree No. 902-A are those officers of the corporation who are given that character by the Corporation Code or by the corporation's by-laws. Section 25 of the Corporation Code enumerates three specific officers that in law are considered as corporate officers – the president, secretary, and treasurer. The position held by Lincoln is not one of them but an Assistant Vice-President, which is likewise not in the company’s by-laws. The Labor Arbiter, therefore, has jurisdiction over the case (Art. 217(a)(2), Labor Code).
-----
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Jurisdiction and Remedies Q: Mario engaged his best friend, Carlo, in his fledgling coffee venture as Chief Marketing Agent of the company, earning salary and commission. After one year of successful
be considered as an intra-corporate controversy cognizable by the RTC. As the Labor La bor Arbiter assigned to this thi s case, ca se, how would you resolve the jurisdiction question. (2015 Bar Question)
operations and satisfied with Carlo’s work,
Mario assigns 100 shares of stock to Carlo as bonus.
A: The Labor Arbiter has jurisdiction over Carlo’s Later on, it is discovered that Carlo had involved in unethical conduct which caused embarrassment to the company. Mario is forced to terminate Carlo without giving himthe opportunity to explain.
illegal dismissal complaint as he was hired by Mario on a “salary and and commission” commission” basis. In Grepalife v. Judico Judico (180 SCRA 445) it was held that a worker who is paid on a salary plus commission basis is an employee. While regular regular courts have jurisdiction over Mario’s corporate act of severing ties with Carlo, the Labor Arbiter, pursuant to Art. 217 A-(2) of the Labor Code, has jurisdiction over Carlo’s illegal dismissal complaint.
Carlo filed a case against Mario and the company for illegal dismissal. Mario objected on the ground that the Labor Arbiter had no jurisdiction over the case as it would properly
---
Powers of the Secretary of Labor and Employment vs. Regional Director vs. Labor Arbiter Visitation and Enforcement Power of Secretary of Labor and Employment
Regional Director
Labor Arbiter LA exercises original and exclusive jurisdiction on cases involving :
a) Inspection of establishments; and b) Issuance of orders to compel compliance with labor standards, wage orders and other labor laws
Adjudication of Ee’s claims for wages and benefits
a. ULP ; b. termination disputes ; c. wages ; d. rates of pay; e. hours of work ; f. other terms of employment, claims for damages arising from Er-Ee relationship, legality of strikes and lockouts ; and g. all other claims arising from Er-Ee relationship involving an amount exceeding Php 5,000.00
Enforcement of labor legislation in general
Limited to monetary claims
All other claims arising from Er-Ee relations
Proceeding is an offshoot of routine inspections
Initiated by sworn complaints filed by any interested party
LA decides case within 30 calendar days after submission of the case by the parties for decision
Jurisdictional requirements: 1) Complaint arises from ErEe relationship No jurisdictional requirements
2) Claimant is an Ee or person employed in domestic or household service or a HH 3) Complaint does NOT include a claim for reinstatement
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1) All other claims arising from Er-Ee relations 2) Including those of persons in domestic or household service 3) Involving an amount exceeding P5,000 4) Whether or not accompanied with a claim for reinstatement
Labor Law and Social Legislation
4) Aggregate money claim of EACH claimant does not exceed P5,000 Appealable to SLE (In case compliance order is issued by Regional Office)
Appealable to NLRC
Q: FASAP, the sole and exclusive bargaining representative of the flight attendants, flight stewards, and pursers of PAL, and respondent PAL entered into a CBA incorporating the terms and conditions of their agreement for the years ‘01-‘05. Sec. 144, Part A of the CBA provides that compulsory retirement shall be 55 y.o. for females and 60 y.o. for males. FASAP filed an action with the RTC claiming that the CBA provision is discriminatory and, hence, unconstitutional. RTC issued a TRO. The appellate court ruled that the RTC has no jurisdiction over the case at bar. Does the RTC have jurisdiction over the petitioners' action challenging the legality of the provisions on the compulsory retirement age contained in the CBA?
Appealable to NLRC
c.
d. e.
NOTE: Mere notice of appeal without complying with the aforementioned requisites shall not stop the running of the period for perfecting an appeal.
A: YES. The subject of litigation is incapable of pecuniary estimation, exclusively cognizable by the RTC, pursuant to Sec. 19(1) of BP Blg. 129, as amended. Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals.
NOTE: While Article 223 of the Labor Code and Section 3(a), Rule VI of the then New Rules of Procedure of the NLRC require the party intending to appeal from the LA’s ruling to furnish the other party a copy of his memorandum of appeal, the Court has held that the mere failure to serve the same upon the opposing party does not bar the NLRC from giving due course to an appeal. Such failure is only treated as a formal lapse, an excusable neglect, and, hence, not a jurisdictional defect warranting the dismissal of an appeal. Instead, the NLRC should require the appellant to provide the opposing party copies of the notice of appeal and memorandum of appeal. (LEI SHERYLL FERNANDEZ vs. BOTICA CLAUDIO represented by GUADALUPE JOSE, G.R. No. 205870, August 13, 2014)
Not every controversy or money claim by an Ee against the Er or vice-versa is within the exclusive jurisdiction of the LA. Actions between Ees and Er where the Er-Ee relationship is merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular court. Here, the Er-Ee relationship between the parties is merely incidental and the cause of action ultimately arose from different sources of obligation, i.e., i.e., the Constitution and CEDAW (Halaguena vs. PAL Incorporated, G.R. No. 172013, October 2, 2009).
--REQUIREMENTS TO PERFECT APPEAL FROM LA TO NLRC a.
b.
In the form of a memorandum of appeal which shall state the grounds relied upon and arguments in support thereof, the relief prayed for, and with a statement of the date the appellant received the appealed decision, resolution or order. In three (3) legibly typewritten or printed copies. Accompanied by (i) proof of payment of the required appeal fee; (ii) posting of a cash or surety bond as provided in Sec. 6 of this Rule; (iii) a certificate of non-forum shopping; and (iv) proof of service upon the other parties (NLRC 2011 Rules of Procedure, Rule VI, Sec. 4).
Grounds for filing an appeal
Filed within the reglementary period of ten (10) calendar days from receipt if it involves a decision, award, or order of the LA, or five (5) calendar days from receipt if it involves a decision or resolution of the RD. Verified by the appellant himself in accordance with Sec. 4, Rule 7 of the Rules of Court, as amended.
The appeal may be entertained only on any of the following grounds: 1. 2.
222
If there is prima facie evidence of abuse of discretion on the part of the LA or RD; If the decision, award or order was secured through fraud or coercion, including graft and corruption;
Jurisdiction and Remedies 3. 4.
If made purely on questions of law; and/or If serious errors in the findings of facts are raised which, if not corrected, would cause grave or irreparable damage or injury to the appellant (NLRC 2011 Rules of Procedure, Rule VI, Sec. 2).
Perfection of jurisdictional
appeal,
mandatory
2. 3.
and
4. 5. 6.
The perfection of appeal within the period and in the manner prescribed by the law is jurisdictional and non-compliance with the legal requirements is fatal and has the effect of rendering the judgment final and executor, hence, unacceptable.
7. 8.
Posting of an appeal bond required to perfect an appeal from a LA’s decision involving monetary
award
that the bond posted is genuine, and shall be in effect until final disposition of the case; An indemnity agreement between the Erappellant and bonding company; Proof of security deposit or collateral securing the bond: provided, that a check shall not be considered as an acceptable security; A certificate of authority from the Insurance Commission; Certificate of registration from the SEC; Certificate of authority to transact surety business from the Office of the President; Certificate of accreditation and authority from the SC; and A notarized board resolution or secretary's certificate from the bonding company showing its authorized signatories and their specimen signatures (NLRC 2011 Rules of Procedure, Rule VI, Sec. 6).
NOTE: The appellant shall furnish the appellee with
In case the decision of the LA or the RD involves a monetary award, an appeal by the Er may be perfected only upon the posting of a bond (NLRC 2011 Rules of Procedure, Rule VI, Sec. 6).
a certified true copy of the said surety bond with all the above-mentioned supporting documents.
Period within which a cash or surety bond shall be valid and effective
In Cawaling v. Menese, Menese, the Supreme Court categorically ruled that the defense of good faith does not render the issued bond valid. (A.C. No. 9698, November 13, 2013)
From the date of deposit d eposit or posting, until the case is finally decided, resolved or terminated, or the award satisfied. This condition shall be deemed incorporated in the terms and conditions of the surety bond, and shall be binding on the appellants and the bonding company (NLRC (NLRC 2011 Rules of Procedure, Rule VI, Sec. 6).
The condition of posting a cash or surety bond is not a meaningless requirement – it is meant to assure the workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the former’s appeal. Such aim is defeated if the bond issued turned out to be invalid due to the surety company’s expired accreditation.(MOUNT accreditation.(MOUNT CARMEL COLLEGE EMPLOYEES UNION (MCCEU)/RUMOLO S. BASCAR, et al., vs. MOUNT CARMEL COLLEGE, INCORPORATED, G.R. No. 187621, September 24, 2014)
Effect if the bond is verified to be irregular or not genuine The Commission shall cause the immediate dismissal of the appeal, and censure or cite in contempt the responsible parties and their counsels, or subject them to reasonable fine or penalty (NLRC penalty (NLRC 2011 Rules of Procedure, Rule VI, Sec. 6).
Forms of the appeal bond
NOTE: The appellee shall verify the regularity and
It shall either be in the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages and attorney's fees (NLRC 2011 Rules of Procedure Rule VI, Sec. 6).
genuineness of the bond and immediately report any irregularity to the NLRC.
Reduction of bond Issuance of a surety bond GR: Bond cannot be reduced. It shall be issued by a reputable bonding company duly accredited by the Commission or the SC, and shall be accompanied by original or certified true copies of the following: 1.
XPN: On meritorious grounds, and only upon the posting of a bond in a reasonable amount in relation to the monetary award.
NOTE: The mere filing of a motion to reduce bond
A joint declaration under oath by the Er, his counsel, and the bonding company, attesting
without complying with the requisites in the
223
Labor Law and Social Legislation preceding paragraphs shall not stop the running of the period to perfect an appeal (NLRC 2011 Rules of Procedure, Rule VI, Sec. 6).
filed, whether such motion is required or not, the 60 day period shall be counted from notice of the denial of said motion. No extension of time to file the petition shall be granted except for compelling reason and in no case exceeding 15 days(Rules of Court, Rule 65, Sec. 4).
NOTE: While it has been settled that the posting of a cash or surety bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the LA, the Rules of Procedure of the NLRC nonetheless allows the reduction of the bond upon a showing of (a) the existence of a meritorious ground for reduction, and (b) the posting of a bond in a reasonable amount in relation to the monetary award. Thus, when the appellant employer prayed for the reduction of the bond in view of serious liquidity problems evidenced by audited financial statements, while simultaneously posting a surety bond which is more than 10% of the full judgment award, the bond may be reduced and the appeal is considered perfected. (PHILIPPINE TOURISTERS, INC. and/or ALEJANDRO R. YAGUE, JR. vs. MAS TRANSIT WORKERS UNION ANGLO-KMU and is members, represented by ABRAHAM TUMALA, JR., G.R. No. 201237, September 3, 2014)
Effect if no service of summons was made In the absence of service of summons or a valid waiver thereof, the hearings and judgment rendered by the LA is null and void.
Compulsory arbitration The process of settlement of labor disputes by a government agency which has the authority to investigate and make an award binding on all the parties.
Labor Arbiter conducts compulsory arbitration Under the LC, it is the LA who is clothed with the authority to conduct compulsory arbitration on cases involving termination disputes (PAL v. NLRC, G.R. No. 55159, December 22, 1989).
--Q: Company A, within the reglementary period, appealed the decision of a Labor Arbiter directing therein statement of an employee and
Rules on venue of filing cases
awarding backwages. However, A’s cash bond
1.
was filed beyond the ten day period. Should the NLRC entertain the appeal? Why? (2001 Bar Question)
All cases which the LAs have authority to decide may be filed in the Regional Arbitration Branch (RAB) having jurisdiction over the workplace of the complainant /petitioner.
A: NO. The NLRC should not entertain the appeal, as
NOTE: Workplace is understood to be the place
the same was not perfected due to failure to file a bond. “An appeal may be perfected only upon the posting of cash or surety bond, issued by reputable bonding company duly accredited by the Commission the amount equivalent to the monetary award in the judgment appealed from” ( Aba v. NLRC, G.R No. 122627, July 28, 1999 ). ---
or locality where the Ee is regularly assigned when the cause of action arose. It shall include the place where the Ee is supposed to report back after a temporary detail, assignment or travel. In case of field Ees, as well as ambulant or itinerant workers, their workplace is where they are: a. Regularly assigned b. Supposed to regularly receive their salaries and wages c. Receive their work instructions from d. Reporting the results of their assignment to their Er
Motion for reconsideration (MR) of the NLRC decision required before certiorari may be availed A motion for reconsideration shall be filed before petition for certiorari to enable NLRC to correct its mistakes, otherwise, NLRC’s decision becomes final and executory.
2.
Remedy in case of denial of the MR 3. If the motion is denied, the aggrieved party may file a petition for certiorari not later than 60 days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely
224
Where 2 or more RABs have jurisdiction over the workplace, the first to acquire jurisdiction shall exclude others. Improper venue when not objected to before filing of position papers shall be deemed waived.
Jurisdiction and Remedies 4.
5.
Venue may be changed by written agreement of the parties or when the NLRC or the LA so orders, upon motion by the proper party in meritorious cases. For Overseas Contract Workers where the complainant resides or where the principal office of the respondent Er is located, at the option of the complainant.
without requiring him to report back to his work.
Duty of the employer to notify the employee ordered reinstated Contents of an order of reinstatement: a.
NOTE: The Rules of Procedure on Venue is
A statement that the reinstatement aspect is immediately executor; and A directive for the employer to submit a report of compliance within ten (10) calendar days from receipt of the decision.
merely permissive, allowing a different venue when the interest of substantial justice demands a different one (Dayag v. Canizares,
b.
GR. No. 124193, March 6, 1998).
NOTE: Disobedience of this directive clearly denotes a refusal to reinstate. The employee need not file a motion for the issuance of the writ of execution since the Labor Arbiter is mandated to motu proprio issue the writ.
REINSTATEMENT PENDING APPEAL Effect of perfection of an appeal on execution
Instances when writ of execution of Labor
The perfection of an appeal shall stay the execution of the decision of the LA on a ppeal, except execution for reinstatement pending appeal.
Arbiter’s reinstatement order still required Instances when a writ of execution should still be issued immediately, even pending appeal, by the Labor Arbiter to implement his order of resintatement (2011 NRLC Rules and Procedures):
NOTE: Art. 223 of LC is clear that an award by the LA 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 (Pioneer Texturizing Corp. v. NLRC, G.R. No. 118651, October 16, 1997).
1.
When the employer disobeys the prescribed directive to submit a report of compliance within ten (10) calendar days from receipt of the decision; or When the employer refused to reinstate the dismissed employee.
Ministerial duty of Labor Arbiter to implement reinstatement orders
2.
Unless there is a restraining order, it is ministerial upon the LA to implement the order of reinstatement and it is mandatory on the Er to comply therewith (Garcia v. PAL, G.R. No. 164856, January 20, 2009).
The Labor Arbiter shall motu proprio issue a corresponding writ to satisfy the reinstatement wages as they accrue until actual reinstatement or reversal of the order of reinstatement.
NOTE: Reinstatement pending appeal, applicable
Jurisdiction of NLRC vs. Jurisdiction of LA
only to the reinstatement order issued by the Labor Arbiter; writ of execution required when reinstatement is ordered by the NLRC on appeal, or subsequently by the Court of Appeals or Supreme Court, as the case may be.
Options
of
employer
to
1. 2.
implement
3.
reinstatement of a Labor Arbiter’s decision: 1. Actual reinstatement . The Ee should be reinstated to his position which he occupies prior to his illegal dismissal under the same terms and conditions prevailing prior to his dismissal or separation or, if no longer available, to a substantially equivalent position ; or 2. Payroll reinstatement . The Ee should be reinstated in the payroll of the company
The NLRC has exclusive appellate jurisdiction on all cases decided by the LA. The NLRC does not have original jurisdiction on the cases over which the LA have original and exclusive jurisdiction. The NLRC cannot have appellate jurisdiction if a claim does not fall within the exclusive original jurisdiction of the LA.
B. NATIONAL LABOR RELATIONS COMMISSION It is an administrative body with quasi-judicial functions and the principal government agency that hears and decides labor-management disputes. It is attached to the DOLE solely for program and policy coordination only.
225
Labor Law and Social Legislation Allocation of the powers and functions of the NLRC 1.
En Banc a.
b. c.
2.
a.
b.
Promulgating rules and regulations and governing the hearings and disposition of cases before any of its d ivisions and regional branches. Formulating policies affecting its administration and operations. On temporary or emergency basis, to allow cases within the jurisdiction of any division to be heard and decided by any other division whose docket allows the additional workload and such transfer will not expose litigants to unnecessary additional expense.
--Q: Philippine News Network (PNN) engages the services of Anya, a prominent news anchor from a rival station, National News Network (NNN). NNN objects to the transfer of Anya claiming that she is barred from working in a competing company for a period of three years from the expiration of her contract. Anya proceeds to sign with PNN which then asks her to anchor their nightly newscast. NNN sues Anya and PNN before the National Labor Relations Commission (NLRC), asking for a labor injunction. Anya and PNN object claiming that it is a matter cognizable by a regular court and not the NLRC. Is NNN's remedy correct? Why or why not? (2015 Bar Question)
Division (8 Divisions with 3 members) a. b. c.
Adjudicatory; All other powers, functions and duties; Exclusive appellate jurisdiction over cases within their respective territorial jurisdiction.
Individual Commissioner adjudicatory power
does
not
All cases decided by the LA under Art. 217(b) of the LC and Sec. 10 of RA 8042 (Migrant Worker’s Act); and Cases decided by the Regional Offices of DOLE in the exercise of its adjudicatory function under Art.129 of the LC over monetary claims of workers amounting to not more than P5,000 and not accompanied by claim for reinstatement.
have
The law lodges the adjudicatory power on each of the eight divisions, neither on the individual commissioners nor on the whole commission. The “division” is a legal identity, not the person who sits in it. Hence, an individual commissioner has no adjudicatory power, although of course, he can concur or dissent in deciding a case.
A: The NLRC has no jurisdiction. As to PNN, there is no employer-employee relationship between itself and NNN; hence, the NLRC cannot hear and resolve their dispute (Reasonable Causal Connection Rule). As to Anya, the injunctive power of the NLRC is ancillary in nature; hence, it requires a principal case, which is absent. Besides, the dispute between her and PNN is not resolvable solely through the application of the Labor Code, other labor statutes, CBA or employment contract.
JURISDICTION Kinds of jurisdiction of the NLRC
--1.
Exclusive Original Jurisdiction a.
b.
c. d. 2.
Jurisdiction of Labor Arbiter vs. NLRC (2015 Bar)
Certified labor disputes causing or likely to cause a strike or lockout in an industry indispensable to national interest, certified to it by the SLE or the President of the Philippines for compulsory arbitration. Injunction in ordinary labor disputes 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. Injunction in strikes or lockouts under Art. 264 of the LC Contempt cases
BASIS
Jurisdiction
Exclusive Appellate Jurisdiction
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LA
NLRC
LA can hear and resolve cases under Art. 217 (old) of the Labor Code, money claims under Sec. 7 of R.A. 10022; and referred wage distortion disputes in
NLRC reviews decisions rendered by the LA; decisions or orders rendered by the RD under Art. 129 of the Labor Code; and conducts compulsory
Jurisdiction and Remedies
Issuance of Labor Injunction
unorganized establishments, as well as the enforcement of compromise agreements pursuant to the 2011 NLRC Rules of Procedure, as amended
arbitration in certified cases.
Labor Arbiter cannot issue an injunctive writ.
NLRC can issue an injunctive
NOTE: The conclusion of a division on any case submitted to it for decision should be reached in consultation before the case is assigned to a member for the writing of the opinion. 3.
A certification that a consultation has been conducted, signed by the presiding commissioner of the division, shall be issued (copy attached to the record of case and served upon the parties).
Qualifications of Commissioners 1. 2. 3.
the
Chairman
and
Member of the Philippine Bar Engaged in the practice of law in the Philippines for at least 15 years At least five (5) years of experience or exposure in handling labor management relations Preferably a resident of the region where he is to hold office
Composition of the NLRC
4.
1. 2.
Qualifications of an Executive Labor Arbiter
Chairman 23 Members a. Eight (8) members each of whom shall be chosen only from among the nominees of the workers and Er organization respectively. b. The Chairman and the seven (7) remaining members shall come from the public sector, with the latter to be chosen preferably from among the incumbent LAs. Upon assumption into office, the members c. nominated by the workers and Ers organization shall divest themselves of any affiliation with or interest in the federation or association to which they belong.
1. 2. 3.
Member of the Philippine Bar Engaged in the practice of law in the Philippines for at least ten (10) years At least five (5) years of experience or exposure in handling labor management relations
Terms of office of the Chairman, Commissioners, and Labor Arbiters They shall hold office during good behavior until they reach the age of 65 unless removed for causes as provided by law or become incapacitated to discharge the function of his office.
There is no need for the Commission on Appointments to confirm the positions in the NLRC. Such requirement has no constitutional basis (Calderon v. Carale, GR. No. 91636, April 23, 1992).
Provided , however, that the President of the Philippines may extend the services of the Commissioners and LAs up to the maximum age of 70 years upon the recommendation of the Commission en banc.
Adjudication of cases by the NLRC 1.
the
--Q: Some disgruntled members of Bantay Labor Union filed with the Regional Office of the DOLE a written complaint against their union officers for mismanagement of union funds. The RD did not rule in the complainants' favor. The latter elevated the RD’s decision to the NLRC. The union officers moved to dismiss on the ground of lack of jurisdiction. Are the union officers correct? Why? (2001 Bar Question)
The NLRC adjudicates cases by division. A concurrence of 2 votes is needed for a valid judgment.
NOTE: Whenever the required membership in a division is not complete and the concurrence of the Commissioners to arrive at judgment or resolution cannot be obtained, the Chairman shall designate such number of additional Commissioners from the other divisions as may be necessary.
A: YES. The union officers are correct in claiming 2.
It shall be mandatory for the division to meet f or purposes of consultation.
that the NLRC has no jurisdiction over the appealed ruling of the RD. In Barles v. Bitonio (G.R. No. 120220, June 16, 1999), the SC ruled that “Appellate a uthority
227
Labor Law and Social Legislation over decisions of the RD involving examination of union account is expressly conferred on the BLR under the Rule of Procedure on MediationArbitration.”
suppletory in character vis-à-vis labor disputes which are primarily governed by labor laws (Montoya v. Escayo, G.R. No. 82211-12, March 21, 1989).
Sec. 4. Jurisdiction of the BLR—(b) The BLR shall exercise appellate jurisdiction over all cases originating from the RD involving complaints for examination of union books of accounts.
Powers of the NLRC 1.
----Q: Company "A" and Union "B" could not resolve their negotiations for a new CBA. After conciliation proceedings before the NCMB proved futile, B went on strike. Violence during the strike prompted A to file charges against striker-members of B for their illegal acts. The SLE assumed jurisdiction, referred the strike to the NLRC and issued a return-to-work order. The NLRC directed the parties to submit their respective position papers and documentary evidence. At the initial hearing before the NLRC, the parties agreed to submit the case for resolution after the submission of the position papers and evidence.
2.
3.
4. 5. 6.
Rulemaking power – Promulgation of rules and regulations: a. Governing disposition of cases before any of its division/regional offices. b. Pertaining to its internal functions c. As may be necessary to carry out the purposes of the LC. Power to issue compulsory processes (administer oaths, summon parties, issue subpoenas) Power to investigate matters and hear disputes within its jurisdiction (adjudicatory power – original and appellate jurisdiction over cases) Contempt power Ocular Inspection Power to issue injunctions and restraining orders
EFFECT OF NLRC REVERSAL OF LABOR Subsequently, the NLRC issued an arbitral award resolving the disputed provisions of the CBA and ordered the dismissal of certain strikers for having knowingly committed illegal acts during the strike. The dismissed employees elevated their dismissal to the CA claiming that they were deprived of their right to due process and that the affidavits submitted by A were self-serving and of no probative value. Should the appeal prosper? State the reason(s) for your answer clearly. (2001 Bar Question)
ARBITER’S ORDER OF REINSTATEMENT
Dismissed employees may collect wages during the period between the Labor Arbiter’s order of reinstatement pending appeal and the NLRC’s decision overturning that of the LA’s The LC provides that the decision of the LA reinstating a dismissed or separated Ee, insofar as the reinstatement aspect is concerned, shall be immediately executory, pending appeal.
A: NO. The SC, in many cases, has ruled that
A dismissed employee whose case was favorably decided by the LA is entitled to receive wages pending appeal upon reinstatement, which reinstatement is immediately executory. After the LA’s decision is reversed by a higher tribunal, the employer’s duty to reinstate the dismissed employee is effectively terminated. The employee, in turn, is not required to return the wages that he had received prior to the reversal of the LA’s decision.
decisions made by the NLRC may be based on position papers. In the question, it is stated that the parties agreed to submit the case for resolution after the submission of position papers and evidence. Given this fact, the striker-members of B cannot now complain that they were denied due process. They are in estoppel. After voluntarily submitting a case and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the court. A party cannot adopt a posture of double dealing (Marquez vs. Secretary of Labor, G.R. No. 80685, March 16, 1989).
By way of exception, an employee may be barred from collecting the accrued wages if shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer and not when it was due to the employer’s unjustified act or omission by filling several pleadings to suspend the execution of the LA’s reinstatement order and not notifying the petitioners of their intent to actually reinstate them. (Froilan M.
--Barangay conciliation not available in labor cases Labor cases are not subject to barangay conciliation since ordinary rules of procedure are merely
228
Jurisdiction and Remedies NOTE: Art. 218 of the LC limits the grant of
Bergonio, et al. vs. South East Asian Airlines an d Irene Dornier, G.R. No. 195227, April 21, 2014)
injunctive power to the NLRC. The LA is excludedstatutorily. Hence, no NLRC Rules can grant him that power.
Effect of reversal of reinstatement order 1. Actually reinstated: The Bergonlo Rule After reversal of Labor Arbiter’s decision, the employer’s duty to reinstate the dismissed employee in the actual service or in the payroll is effectively terminated. The employee, in turn is not required to return the wages that he had received prior to the reversal of the LA’s decision (Bergonlo Jr. v. South East Asian Airlines, April 21, 2014) 2.
Procedure for order/injunction
3.
Reception at the hearing of the testimonies of the witnesses with opportunity for crossexamination, in support of the allegations of the complaint made under oath as well as testimony in opposition thereto. Finding of fact of the Commission to the effect that: a. Prohibited or unlawful acts have been threatened and will be committed, or have been and will be continued unless restrained, but no injunction or TRO shall be issued on account of any threat, prohibited or unlawful act, except against the 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. b. The substantial and irreparable injury to the complainant’s property.
4.
decision Judicial review of NLRC’s decision is available through a petition for certiorari (Rule 65) which should be initially filed with the CA in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief desired. The CA is procedurally equipped to resolve unclear or ambiguous factual finding, aside from the increased number of its component divisions (St. Martin Funeral Home v. NLRC, G.R. No. 130866, September 16, 1998).
Injunction or a temporary restraining order (TRO)
restraining
Filing of a verified petition Hearing after due and personal notice has been served in such manner as the Commission shall direct to: a. All known persons against whom relief is sought; b. Also the President or other public officials of the province or city within which the unlawful acts have been threatened or commercial charged with the duty to protect the complainant’s property.
REMEDIES Availability of judicial review of the NLRC’s
of
1. 2.
Payroll reinstatement: The Wenphil Rule The period for computing the backwages due to the dismissed employees during the period of appeal should end on the date that a higher court reversed the labor arbitration ruling of illegal dismissal (Wenphil Corporation v. Abing, April 7. 2014)
issuance
NOTE: Irreparable Injury an injury which The power of the NLRC to enjoin or restrain, any actual or threatened, commission of, any or all, prohibited or unlawful acts under Art. 218 of LC can only be exercised in labor disputes.
cannot be adequately compensated in damages due to the nature of the injury itself or the nature of the right or property injured or when there exist no pecuniary standard for the measurement of damages.
NOTE: A restraining order is generally regarded as an order to maintain the subject of controversy in status quo until the hearing of an application for a temporary injunction (BF Homes v. Reyes, G.R. No. L30690, November 19, 1982).
c.
Persons authorized to issue a TRO
d.
1. 2. 3.
President [Art.263(g), LC] Secretary of Labor [Art.263(g), LC] NLRC ( Art.218, LC)
That as to each item of relief to be granted, greater injury will be inflicted upon the complainant by the denial of the relief than will be inflicted upon the defendants by the granting of the relief. That complainant has no adequate remedy at law Adequate remedy – one that affords relief with reference to the matter in controversy and which is appropriate to the particular
229
Labor Law and Social Legislation circumstances of the case if the remedy is specifically provided by law (PAL v. NLRC, GR. No. 120567, March 20, 1998).
concerned of all cases pending with the Regional Arbitration Braches and the Voluntary Arbitrators relative or incident to the certified case before it.
That public officers charged with the duty to protect complainant’s property are unable or unwilling to furnish adequate protection. 5.
5.
a certified labor dispute involves a business entity with several workplaces located indifferent regions, the Division having territorial jurisdiction over the principal office of the company shall acquire jurisdiction to decide such labor dispute; unless the certification order provides otherwise.
Posting of a bond.
CERTIFIED CASES These are cases certified or referred to the Commission for compulsory arbitration under Art. 263(g) of the LC dealing about national interest cases.
NOTE: Same effect of certification to the NLRC a s in cases assumed directly by DOLE Secretary. The effects described above are also applicable when the DOLE Secretary directly assumes jurisdiction over a labor dispute affecting industries imbued with national interest and decides it himself
A national interest dispute may be certified to the NLRC even before a strike is declared since Art. 263(g) of the LC does not require the existence of a strike, but only of an industrial dispute [Government Service Insurance System Employees Association (GSISEA), et al. v. Court of Industrial Relations, G.R. No. L-18734, December 30, 1961].
Function of the NLRC in certified cases When sitting in a compulsory arbitration certified to by the SLE, the NLRC is not sitting as a judicial court but as an administrative body charged with the duty to implement the order of the SLE. As an implementing body, its authority does not include the power to amend the Secretary’s order (UST v. NLRC and UST Faculty Union, G. R. No. 89920, October 18, 1990).
Effects of certification of labor disputes The certification of a labor dispute to the NLRC has the following effects. 1.
2.
3.
4.
On which Division should take cognizance of the certified case in case entity has several workplaces in different regions - Whenever
On intended or impending strike or lockout - upon certification, the intended or impending strike is automatically enjoined, notwithstanding the thing of any motion for reconsideration of the certification order or the non-resolution of any such motion which may have been duly submitted to the DOLE Secretary. On actual strike or lockout - If a work stoppage has already taken place at the time of the 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. On cases already filed or may be file - All cases between the same parties, except where the certification order specifies otherwise the issues submitted for arbitration which are already filed or may be filed and are relevant to or are proper incidents of the certified case, shall be considered subsumed or aborted by the certified case, and shall be decided by the appropriate Division of the Commission. On other pending cases - The parties to a certified case, under pain of contempt, shall inform their counsels and the Division
Effect of defiance from the certification order Non-compliance with the certification order of the SLE shall be considered as an illegal act committed in the course of the strike or lockout and shall authorize the Commission to enforce the same under pain of immediate disciplinary action, including dismissal or loss of employment status or payment by the locking-out Er of backwages, damages and/or other affirmative relief, even criminal prosecution against the liable parties (NLRC 2011 Rules, Rule VIII, Sec. 4).
Procedure in deciding certified cases 1.
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Unless there is a necessity to conduct a clarificatory hearing, the Commission shall resolve all certified cases within 30 calendar days from receipt by the assigned Commissioner of the complete records, which shall include the position papers of the parties and the order of the SLE denying the motion for reconsideration of the certification order, if such motion has been filed.
Jurisdiction and Remedies 2.
3.
4.
Where a clarificatory hearing is needed, the Commission shall, within five days from receipt of the records, issue a notice to be served on the parties through the fastest means available, requiring them to appear and submit additional evidence, if any. Notwithstanding the necessity for a clarificatory hearing, all certified cases shall be resolved by the Commission within 60 calendar days from receipt of the complete records.
In labor disputes, grave abuse of discretion may be ascribed to the NLRC when, inter alia, its findings and the conclusions reached thereby are not supported by substantial evidence. Tested against these considerations, the Court finds that the CA correctly granted respondents’ certiorari petition before it, since the NLRC gravely abused its discretion in ruling that petitioners were regular employees of Sykes Asia when the latter had established by substantial evidence that they were merely project-based. (Ma. Charito C. Gadia, et al., vs. Sykes Asia, Inc., Chuck Sykes, Mike Hinds, Michael Henderson, G.R. No. 209499, January 28, 2015)
No motion for postponement or extension shall be entertained (NLRC 2005 Rules, Rule VIII, Sec. 5).
Period when the petition for certiorari should be filed with the Court of Appeals
C. COURT OF APPEALS RULES OF COURT, RULE 65
Under Sec. 4, Rule 65 (as amended by A.M. No. 00-203-SC) of the Rules of Civil Procedure, the petition must be filed within 60 days from notice of the judgment or from notice of the resolution denying the petitioner’s motion for reconsideration. This amendment is effective September 1, 2000, but being curative may be given retroactive application (Narzoles v. NLRC, G.R. No. 141959, September 29, 2000).
Remedy of a party aggrieved by a decision of the NLRC File a petition for certiorari (Rule 65) which should be initially filed with the CA in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief desired. The CA is procedurally equipped to resolve unclear or ambiguous factual finding, aside from the increased number of its component divisions (St. Martin Funeral Home v. NLRC, G.R. No. 130866, September 16, 1998).
Art. 224 of the LC, which requires that copies of final decisions, orders or awards be furnished not only the party’s counsel of record but also the party himself applies to the execution thereof and not to the filing of an appeal or petition for certiorari. The period within which a petition for certiorari against a decision of the NLRC may be filed should be computed from the date counsel of record of the party receives a copy of the decision or resolution, and not from the date the party himself receives a copy thereof (Ginete v. Sunrise Manning Agency, G.R. No. 142023, June 21, 2001).
NOTE: Rule 65, Section 1, Rules of Court: Petition for Certiorari - When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.
--Q: Company A was sold to Company B with the undertaking that Company B will absorb the former’s employees. However, they were not hired by Company B or given separation pay by Company A. They thus filed an action for illegal dismissal but was denied. When the case reached the CA via a petition for certiorari , the same was dismissed outrightly considering that the verification and certification against forum shopping was signed only by 3 out of the 228 petitioners. Was the CA correct?
The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46.
A: YES. While litigation is not a game of technicalities, and that the rules of procedure should not be enforced strictly at the cost of substantial justice, still it does not follow that the Rules of Court may be ignored at will and at random to the prejudice of the orderly presentation,
Grave abuse of discretion may be ascribed to the NLRC when its findings and conclusions are not supported by substantial evidence
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Labor Law and Social Legislation assessment and just resolution of the issues. The Rules of Court provide that a petition for certiorari must be verified and accompanied by a sworn certification of non-forum shopping. Failure to comply with these mandatory requirements shall be sufficient ground for the dismissal of the petition. Considering that only 3 of the 228 named petitioners signed the requirement, the CA dismissed the case against them, as they did not execute a Verification and Certification against forum shopping. It does not involve a failure to attach the Annexes. Rather, the procedural infirmity consists of omission – the failure to sign a Verification and Certification against forum shopping (Ramirez et. al. v. Mar Fishing Co., Inc. et. al., G.R. No. 168208, June 13, 2012).
The Supreme Court is very strict regarding appeals filed outside the reglementary period for filing the same. To extend the period of the appeal is to delay the case, a circumstance which could give the employer the chance to wear out the efforts and meager resources of the worker that the latter is constrained to give up for less than what is due him (Firestone Tire and Rubber Co. of the Philippines v. Firestone Tire and Rubber Co. Employees Union, G.R. No. 75363, August 4, 1992).
XPN: The Court may recognize the merits of a case
The BLR no longer handles all labor management disputes; rather its functions and jurisdiction are largely confined to:
E. BUREAU OF LABOR RELATIONS JURISDICTION (ORIGINAL AND APPELLATE) Coverage of the BLR’s jurisdiction and functions
by considering the special circumstances or compelling reasons that justifies the relaxation of the rule requiring verification and certification of non-forum shopping in the interest of substantial justice (Ibid.).
1. 2. 3.
--D. SUPREME COURT
Union matters; Collective bargaining registry; and Labor education.
Jurisdiction over labor management problems or disputes is also exercised by other offices
RULES OF COURT, RULE 45 How to appeal from a judgment, or final order or resolution, of the Court of Appeals A party desiring to appeal may file with the Supreme Court a verified petition for review on certiorari under Rule 45 within fifteen (15) days from notice of the judgment, final order or resolution appealed from (Sea Power Shipping Enterprises, Inc. v. CA, G.R. No. 138270, June 28, 2001).
1. 2. 3. 4. 5. 6. 7. 8. 9.
DOLE Regional Offices Office of the Secretary of Labor NLRC POEA OWWA SSS-ECC RTWPB NWPC Regular courts over intra-corporate disputes.
NOTE: Rule 45, Sec. 1, Rules of Court:
Mediator-arbiter
Filing of petition with Supreme Court. —A party desiring to appeal by certiorari from a judgment, final order or resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court or other courts, whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition may include an application for a writ of preliminary injunction or other provisional remedies and shall raise only questions of law, which must be distinctly set forth. The petitioner may seek the same provisional remedies by verified motion filed in the same action or proceeding at any time during its pendency.
An officer in the Regional Office or Bureau authorized to hear, conciliate and decide representation cases or assist in the disposition of intra or inter-union disputes.
Kinds of cases that fall within BLR’s jurisdiction The BLR has original and exclusive jurisdiction over: 1. 2. 3.
Inter-union disputes Intra-union disputes Other related labor relations disputes
Coverage of inter/intra-union disputes Policy of the Supreme Court regarding appeals in labor cases
They shall include: 1. Conduct or nullification of election of union and workers’ association officers
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Jurisdiction and Remedies 2. 3. 4. 5. 6. 7. 8.
9.
10. 11. 12.
13.
Audit/accounts examination of union or workers’ association funds Deregistration of CBAs Validity/invalidity of union affiliation or disaffiliation Validity/invalidity of acceptance/ nonacceptance for union membership Validity/invalidity of voluntary recognition Opposition to application for union or CBA registration Violations of or disagreements over any provision of the constitution and by-laws of union or workers’ association Disagreements over chartering or registration of labor organizations or the registration of CBAs; Violations of the rights and conditions of membership in a union or workers’ association; Violations of the rights of LLO, except interpretation of CBAs; Validity/invalidity of impeachment/ expulsion/suspension or any disciplinary action meted against any officer and member, including those arising from non-compliance with the reportorial requirements under Rule V; Such other disputes or conflicts involving the rights to self-organization, union membership and CB – a. Between and among LLO and b. Between and among members of a union or workers’ association (IRR as amended by D.O. 40-F-03, Book V, Rule XI, Sec. 1).
The complaint must be signed by at least 30% of the entire membership of the union.
Filing a complaint or petition if the issue involves a member only Only the affected member may file the complaint (D.O. 40-03, Rule XI, Sec. 5).
GR: Redress must first be sought within the union itself in accordance with its constitution and bylaws.
XPNs: 1. 2. 3. 4. 5.
6. 7. 8.
Futility of intra-union remedies; Improper expulsion procedure; Undue delay in appeal as to constitute substantial injustice; The action is for damages; Lack of jurisdiction of the investigating body; action for the administrative agency is patently illegal, arbitrary and oppressive; Issue is purely a question of law; Where the administrative agency had already prejudged the case; and Where the administrative agency was practically given the opportunity to act on the case but it did not.
Appeal of a decision in inter/intra-union dispute A decision in an inter/intra-union dispute may be appealed.
Coverage of the phrase “other related labor relations disputes”
Rules on appeal in intra/inter-union disputes
1.
1.
Formal Requirements a. Under oath b. Consist of a memorandum of appeal c. Based on either of the following grounds: i. Grave abuse of discretion ii. Gross violation of the rules iii. With supporting arguments and evidence
2.
Period – Within 10 days from receipt of decision (D.O. 40-03, Rule XI, Sec. 16).
3.
To whom appealable
2.
3.
Any conflict between: a. A labor union and the Er; or b. A labor union and a group that is not a LO; or c. A labor union and an individual who is not a member of such union Cancellation of registration of unions and worker’s associations filed by individual/s other than its members, or group that is not a LO. A petition for Interpleader involving labor relations (IRR as amended by D.O. 40-F-03, Book Vi, Rule XI, Sec. 2).
Filing a complaint or petition involving intra/inter-union disputes
a. BLR – If the case originated from the MedArbiter/Regional Director. b. SLE – If the case originated from the BLR.
A legitimate labor organization or its members may file a complaint or petition involving intra/interunion disputes (D.O. 40-03, Rule XI, Sec. 5).
4.
Filing a complaint or petition if the issue involves the entire membership
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Where Filed – Regional Office or to the BLR, where the complaint originated. Records are transmitted to the BLR or Sec. within 24 hours
Labor Law and Social Legislation from the receipt of the memorandum of appeal (D.O. 40-03, Rule XI, Sec. 17).
Extent of authority of the Bureau of Labor Relations
authorized by any quasi - judicial agency in the exercise of its quasi-judicial functions. Hence, NCMB’s decision, not having been rendered by a quasi-judicial body, cannot be elevated to the Court of Appeals under said rule.
1.
Alternative modes of settlement of labor dispute
2.
It may hold a referendum election among the members of a union for the purpose of determining whether or not they desire to be affiliated with a federation.
1. 2. 3.
But the BLR has no authority to: a. Order a referendum among union members to decide whether to expel or suspend union officers. b. Forward a case to the Trade Union Congress of the Philippines for arbitration and decision.
Nature of the proceedings The proceedings are non-litigious.
All labor disputes are required to be submitted to mandatory conciliation-mediation
Administrative functions of the Bureau of Labor Relations 1. 2. 3. 4.
GR: All issues arising from labor and employment shall be subject to mandatory conciliationmediation. The LA or the appropriate DOLE agency or office that has jurisdiction over the dispute shall entertain only endorsed or referred cases by the duly authorized officer [Labor Code as amended by R.A. 103960, Art. 228(a)].
Regulation of the labor unions Keeping the registry of labor unions Maintenance of a file of the CBA Maintenance of a file of all settlements or final decisions of the SC, CA, NLRC and other agencies on labor disputes
XPNs: 1.
Effects of filing or pendency of inter/intra-union dispute and other labor relations disputes 2.
1.
2.
3.
Voluntary Arbitration Conciliation Mediation
The rights relationships and obligations of the party-litigants against each other and other parties-in-interest prior to the institution of the petition shall continue to remain during the pendency of the petition and until the date of the decision rendered therein. Thereafter, they shall be governed by the decision ordered. The filing or pendency of any inter/intra union disputes is not a prejudicial question to any petition for certification election, hence it shall not be a ground for the dismissal of a petition for certification of election or suspension of the proceedings for the certification of election (Rule XI, DO 40-03, Rule XI, Sec. 3).
Grievance machinery and Voluntary Arbitration, in which case, their agreement will govern When excepted by the SLE (Ibid.)
NOTE: Any or both parties involved in the dispute may pre-terminate the conciliation-mediation proceedings and request referral or endorsement to the appropriate DOLE agency or office which has jurisdiction over the dispute, or if both parties so agree, refer the unresolved issues to voluntary arbitration [LC as amended by R.A. 103960, Art. 228(a)].
Arbitration It is the submission of a dispute to an impartial person for determination, based on evidence and arguments of the parties. The arbiter’s de cision or award is enforceable upon the disputants. It may be voluntary, by agreement, or compulsory which is required by statutory provision (Luzon Dev’t Bank v. Ass’n of Luzon Dev’t Bank Employees, G.R. No. 120319 October 6, 1995).
F. NATIONAL CONCILIATION AND MEDIATION BOARD (NCMB) NCMB is not a quasi-judicial agency NCMB is not a quasi-judicial agency. Not being a quasi-judicial agency, NCMB’s ruling cannot be elevated to, and be cognizable by, the Court of Appeals.
Court cannot fix resort to voluntary arbitration Resort to VA dispute should not be fixed by the court but by the parties relying on their strengths and resources.
Rule 43 of the Rules of Court applies only to awards, judgments, final orders or resolutions of or
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Jurisdiction and Remedies Parties to labor relations cases 1. 2. 3.
conferences, and by cooling tempers, aids in reaching an agreement
Employee’s organization Management The public
mediator cannot make an award nor render a decision
Legal basis of conciliation and mediation
NOTE: Er and Ees are active parties while the public and the State are passive parties (Poquiz, 2006).
The State shall promote xxx the preferential use of voluntary modes of settling disputes including conciliation and shall ensure mutual compliance by the parties thereof in order to foster industrial peace (1987 Constitution, Art. 13, Sec. 3).
Tripartism It is the representation of 3 s ectors in policy-making bodies of the government. These are: 1. 2. 3.
NOTE: A similar provision is echoed in the
The public or the government The employers The workers
Declaration of Policy under Art. 211(a) of the LC, as amended.
Persons who can avail of conciliation and mediation services of the NCMB
NOTE: Workers cannot insist that they be represented in the policy making in the company. Such kind of representation in the policy-making bodies of private enterprises is not ordained, not even by the Constitution. What is provided for is workers participation in policy and decisionmaking process directly affecting their rights, benefits, and welfare.
Any party to a labor dispute, either the union or management, may seek the assistance of NCMB or any of its Regional Branches by means of formal request for conciliation and preventive mediation. Depending on the nature of the problem, a request may be filed in the form of consultation, notice of preventive mediation or notice of strike/lockout.
1. CONCILIATION vs. MEDIATION CONCILIATION
MEDIATION
An intervention by a neutral third party
An intervention by a neutral third party
The conciliator relies on his persuasive expertise and takes an active role in assisting parties by trying to keep disputants talking, facilitating other procedural niceties, carrying messages back and forth between the parties, and generally being a good fellow who tries to keep things calm and forward-looking in a tense situation
The mediator starts advising the parties or offering solutions or alternatives to the problems with the end in view of assisting them towards voluntarily reaching their own mutually acceptable settlement of the dispute
It is the process where a disinterested 3rd party meets with management and labor, at their request or otherwise, during a labor dispute or in CB
It is when a 3rd party studies each side of the dispute then makes proposals for the disputants to consider. The
Where to file a request for conciliation and mediation An informal or formal request for conciliation and mediation service can be filed at the NCMB
Central Office or any of its Regional Branches. There are at present 14 regional offices of the NCMB which are strategically located all over the country for the convenient use of prospective clients.
2. PREVENTIVE MEDIATION Preventive mediation case Preventive mediation case refers to the potential labor dispute which is the subject of a formal or informal request for conciliation and mediation assistance soughtby either or both parties or upon the initiative of the NCMB to avoid the occurrence of an actual labor dispute.
How to initiate preventive mediation Preventive mediation proceeding may be initiated in two (2) ways:
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Labor Law and Social Legislation 1.
2.
NOTE: Only a certified or duly recognized
By filing a notice or request of preventive mediation, as distinguished from a notice of strike/lockout, or By conversion of the notice of strike/lockout into a preventive mediation case.
bargaining agent may file a notice or request for preventive mediation. If the notice was filed not by the Union but by its individual members, the NCMB had no jurisdiction to entertain it. (Insular Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao, G.R. Nos. 174040-41, September 22, 2010)
Authority to convert a notice of strike/lockout into a preventive mediation case
Filing of notice or request for preventive mediation cannot be filed by the Federation
The NCMB has the authority to convert a notice of strike/lockout filed by the union/employer into a preventive mediation case under any of the following circumstances: 1. When the issues raised in the notice of strike/lockout are not strike-able in character. 2. When the party which filed the notice of strike/lockout voluntarily asks for the conversion. 3. When both parties to a labor dispute mutually agree to have it subjected to preventive mediation proceeding.
The notice or request for preventive mediation cannot be filed by the Federation on behalf of its local/chapter. A local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its members. Mere affiliation does not divest the local union of its own personality; neither does it give the mother federation the license to act independently of the local union. It only gives rise to a contract of agency, where the former acts in representation of the latter. Hence, local unions are considered principals while the federation is deemed to be merely their agent . (Ibid.)
NOTE: Such authority is in pursuance of the NCMB’s duty to enable the parties to settle their dispute amicably and in line with the State policy of favoring voluntary modes of settling labor disputes.
Conversion of a notice of strike or notice of lockout into a preventive mediation case will result in its dismissal
Valid issues for a notice of strike/lockout or preventive mediation A notice of strike or lockout maybe filed on ground of ULP acts, gross violation of the CBA, or deadlock in CBAs. A complaint on any of the above grounds must be specified in the NCMB Form or the proper form used in the filing of complaint.
Once the notice of strike is converted into a preventive mediation case, the notice is deemed dropped from the dockets as if no notice of strike has been filed. Since there is no more notice of strike to speak about, any strike subsequently staged by the union after the conversion is deemed not to have complied with the requirements of a valid strike and therefore illegal.The same rule applies in the case of lockout by an employer.
In case of preventive mediation, any issue may be brought before the NCMB Central Office or its regional offices for conciliation and possible settlement through a letter. This method is more preferable than a notice of strike/lockout because of the non-adversarial atmosphere that pervades during the conciliation conferences.
Persons who may file a notice for preventive mediation
Advantages that can be derived from conciliation and mediation services
Any certified or duly recognized bargaining representative may file a notice or declare a strike or request for preventive mediation in cases of bargaining deadlocks and ULPs. The Er may file a notice or declare a lockout or request for preventive mediation in the same cases.
Conciliation and mediation is non-litigious/nonadversarial, less expensive, and expeditious. Under this informal set-up, the parties find it more expedient to fully ventilate their respective positions without running around with legal technicalities and, in the course thereof, afford them wider latitude of possible approaches to the problem.
In the absence of a certified or duly recognized bargaining representative, any LLO in the establishment may file a notice, request preventive mediation or declare a strike, but only on grounds of ULP (NCMB Manual of Procedure, Rule IV, Sec. 3).
Parties are bound by the agreement entered into
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Jurisdiction and Remedies The parties are bound to honor any agreement entered into by them. It must be pointed out that such an agreement came into existence as a result of painstaking efforts among the union, management, and the ConciliatorMediator. Therefore, it is only logical to assume that the Conciliator assigned to the case has to follow up and monitor the implementation of the agreement.
1.
Conciliation and mediation service still possible during actual strike or lockout
5.
2.
3. 4.
6. It is possible to subject an actual strike or actual lockout to continuing conciliation and mediation services. In fact, it is at this critical stage that such conciliation and mediation services be fully given a chance to work out possible solution to the labor dispute. With the ability of the ConciliatorMediator to put the parties at ease and place them at a cooperative mood, the final solution/s of the issues involved may still be settled.
Labor standards enforcement cases under Article 128; Small money claims cases arising from labor standards violations in the amount not exceeding P5,000.00 and not accompanied with a claim or reinstatement under Article 129; Occupational safety and health violation; Registration of unions and cancellation thereof, cases filed against unions and other labor relations related cases; Complaints against private recruitment and placement agencies for local employment; and Cases submitted to them for voluntary arbitration in their capacity as Ex- Officio Vouluntary Arbitrators under Department Order No. 83 - 07, Series of 2007.
RECOVERY AND ADJUDICATORY POWERS OF DOLE REGIONAL DIRECTORS Money claims falling under the jurisdiction of the DOLE Regional Directors
Possibility of remanding the dispute already been assumed or certified to the NLRC to conciliation and mediation
Under Art. 129 of the LC, the RDs or any of the duly authorized hearing officers of DOLE have jurisdiction over claims for recovery of wages, simple money claims and other benefits, provided that:
The parties are not precluded from availing the services of an NCMB Conciliator-Mediator as the duty to bargain collectively subsists until the final resolution of all issues involved in the dispute.
1. 2. 3.
Conciliation is so pervasive in application that, prior to a compulsory arbitration award, the parties are encouraged to continue to exhaust all possible avenues of mutually resolving their dispute, especially through conciliation and mediation services.
The claim must arise from Er-Ee relationship; The claimant does not seek reinstatement; and The aggregate money claim of each employee does not exceed Php 5,000.00.
NOTE: In the absence of any of the above requisites, it is the LA who shall have the jurisdiction over the claims arising from Er-Ee relations, except claims for Ee’s compensation, SSS, Philhealth, and maternity benefits, pursuant to Art.217 of the LC.
Benefits that the parties can have in appearing during conciliation conferences
The proceedings before the Regional Office shall be summary and non-litigious in nature.
Generally speaking, any party appearing during scheduled conciliation conferences has the advantage of presenting its position on the labor controversy. The issue raised in the complaint can be better ventilated with the presence of the concerned parties. Moreover, the parties can observe a norm of conduct usually followed in like forum.
Adjudicatory power of the Regional Director The RD or any of his duly authorized hearing officers is empowered through summary proceeding and after due notice, to hear and decide cases involving recovery of wages and other monetary claims and benefits, including legal interests.
G. DOLE REGIONAL DIRECTOR H. DOLE SECRETARY Jurisdiction of the DOLE Regional Directors 1. VISITORIAL POWERS AND ENFORCEMENT POWERS
The Dole Regional Directors have original and exclusive jurisdiction over the following cases:
Visitorial power
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Labor Law and Social Legislation v. Secretary, G.R. No. 131750, November 16, 1998).
It constitutes: 1. Access to Er’s records and premises at any time of the day or night, whenever work is being undertaken To copy from said records 2. 3. Question any Ee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of the LC and of any wage order, or rules and regulation issued pursuant thereto.
Violations under Art. 128 of the LC 1.
2.
Instances where the visitorial power of the SLE may be exercised under the LC
Obstruct, impede, delay or otherwise render ineffective the orders of the SOLE or his authorized representatives Any government employee found guilty of, or abuse of authority, shall be subject to administrative investigation and summary dismissal from service.
Limitations to other courts Power to: 1. Inspect books of accounts and records of any person or entity engaged in recruitment and placement, require it to submit reports regularly on prescribed forms and act in violations of any provisions of the LC on recruitment and placement (Art. 37). 2. Have access to Er’s records and premises to determine violations of any provisions of the LC on recruitment and placement ( Art. 128). 3. Conduct industrial safety inspections of establishments ( Art. 165). 4. Inquire into the financial activities of LLO and examine their books of accounts upon the filing of the complaint under oath and duly supported by the written consent of at least 20% of the total membership of the LO concerned.
In relation to enforcement orders issued under Art. 128 of the LC, no inferior court or entity shall: 1. 2.
Issue temporary or permanent injunction or restraining order; or Assume jurisdiction over any case
Instances when Enforcement power may not be used 1. 2. 3.
Case does not arise from the exercise of visitorial power When Er-Ee relationship ceased to exist at the time of the inspection If Er contests the finding of the Labor Regulation Officer and such contestable issue is not verifiable in the normal course of inspection
Enforcement power SLE does not have the power to determine the existence of an employer-employee relationship in the exercise of its visitorial and enforcement powers under Art. 128 of the LC
It is the power of the SLE to: 1. Issue compliance orders 2. Issue writs of execution for the enforcement of their orders, except in cases where the Er contests the findings of the labor officer and raise issues supported by documentary proof which were not considered in the course of inspection 3. Order stoppage of work or suspension of operation when non-compliance with the law or implementing rules and regulations poses grave and imminent danger to health and safety of workers in the workplace 4. Require Ers to keep and maintain such employment records as may be necessary in aid to the visitorial and enforcement powers 5. Conduct hearings within 24 hours to determine whether: a. An order for stoppage of work or suspension of operations shall be lifted or not; and b. Er shall pay the concerned Ees their salaries in case the violation is attributable to his fault (As amended by RA 7730; (Guico
The visitorial and enforcement powers of the SOLE come into play only “in cases when the relationship of Er-Ee still exists.” The SLE’s power does not apply in two instances, namely: (a) where the Er-Ee relationship has ceased; and (b) where no such relationship has ever existed. The question of Er-Ee relationship becomes a battle of evidence, the determination of which should be comprehensive and intensive and therefore best left to the specialized quasi-judicial body that is the NLRC (People’s Broadcasting v. The Secretary of the Department of Labor and Employment, G.R. No. 179652, May 8, 2009).
2. POWER TO SUSPEND EFFECTS OF TERMINATION The SLE 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 DOLE before whom such dispute is pending that the
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Jurisdiction and Remedies the term “assume jurisdiction” connotes the intent of the law is to give the SOLE full authority to resolve all matters within the dispute that gave rise to or which arose out of the strike or lockout —it includes and extends to all questions and controversies arising from or related to the dispute, including cases over which the Labor Arbiter has exclusive jurisdiction (Bagong Pagkakaisa ng Manggagawa ng Triumph International v. Secretary of the Department of Labor and Employment, G.R. No. 167401, July 5, 2010).
termination may cause serious labor dispute or is in implementation of a mass layoff [LC, Art. 277(b)].
NOTE: Art. 277 (b) of LC is applicable on suspension of the effects of termination if there is a showing that the termination may cause serious labor dispute within the company while Art. 263 (g) of LC on assumption of jurisdiction is applicable in cases of strike in establishments affecting national interest, not just the company.
Reinstatement Pending Resolution Of The Termination Dispute
Effect of the assumption or certification
Suspension of the effects of termination will necessarily result in the immediate reinstatement of the terminated employees. An order of reinstatement pending resolution of the case may thus be issued by the SLE pursuant to this power.
It automatically enjoins 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 the assumption or certification, all striking or locked out Ees shall immediately return to work and the Er shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout.
ASSUMPTION OF JURISDICTION SLE can assume jurisdiction over a labor dispute
Assumption of jurisdiction can be exercised without the necessity of prior notice or hearing given to any of the party disputants
When there is a labor dispute causing or likely to cause a strike affecting national interest, the SLE, on his own initiative or upon petition by any of the parties, may either assume jurisdiction or certify th e dispute to the NLRC for compulsory arbitration.
The rationale for the SOLE’s assumption of jurisdiction can justifiably rest on his own consideration of the exigency of the situation in relation to the national interests (Capitol Medical Center v. Trajano, G.R. No. 155690, June 30, 2005).
NOTE: Art. 263(g) of the LC is both an extraordinary and a pre-emptive power to address an extraordinary situation (a strike or lockout in an industry indispensable to the national interest). As
Power of SLE under Art 277 (b)
Power of SLE under Art 263 (g) /Assumption of Jurisdiction
Involves only the issue of termination employment which may cause a serious labor dispute or is in implementation of a mass lay-off
Applicable to all labor disputes, irrespective of the grounds therefor, provided such labor disputes will cause or likely to cause strikes or lockouts in industries indispensible to the national interest
Requires the conduct of preliminary determination of the existence of prima facie evidence that the termination may cause a serious labor dispute or is in implementation of a mass lay-off to be conducted by appropriate official of DOLE before whom the termination dispute is pending.
Does not require such preliminary prima facie determination. In fact, prior notice and hearing are not required before the SLE may issue an assumption or certification order.
“Serious labor dispute” contemplated may or may not involve a strike or lockout.
May be exercised in cases of termination of employment for as long any of the two (2) grounds mentioned in Article 277(b) exists, irrespective of the nature of the business of the employer.
Labor dispute referred to will cause or likely to cause a strike or lockout.
May only be exercised in industries indispensible to the national interest.
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Labor Law and Social Legislation
Remedy: automatic return to work of the strikers or Remedy:
immediate reinstatement resolution of the termination case
pending
locked-out employees, if the strike or lock-out is ongoing at the time of the issuance of the assumption/ certification order of the enjoining of the strike or lockout, if one has not taken place, pending the resolution of the issues raised in the notice of strike or lockout.
3. REMEDIES SLE has no appellate jurisdiction over decisions of RD involving petitions for examinations of union accounts. It is the BLR which exercises appellate jurisdiction in such case (Barles v. Bitonio, G.R. No. 120270, June 16, 1999).
APPELLATE JURISDICTION Cases within the appellate jurisdiction of the SLE 1.
Appeal from and adverse decision of the POEA (2003 POEA Rules and Regulations, Rule V, Part VII, Sec. 1; Eastern Mediterranean Maritime Ltd. And Agemar Manning Agency Inc., v. Surio et. al., G.R. No. 154213, August 23, 2012).
2.
Appeal the order or results of a certification election on the ground that the Rules and Regulations or parts thereof established by the SLE for the conduct of election have been violated (LC, Art. 259).
3.
A review of cancellation proceedings decided by the BLR in the exercise of its exclusive and original jurisdiction ( Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees Union, G.R. No.131374, January 26, 2000).
VOLUNTARY ARBITRATION POWERS Powers of SLE regarding voluntary arbitration The SOLE may authorize any official to act as Voluntary Arbitrator upon the written request and agreement of the parties to a labor dispute [LC, Art. 212 (n)]. He shall also approve, upon recommendation of the NCMB the guidelines in administering the Voluntary Arbitration Fund [ LC, Art. 276 (f)].
GRIEVANCE MACHINERY AND VOLUNTARY ARBITRATION Grievance
NOTE: The SOLE has no jurisdiction over decisions
Any question by either the Er or the union regarding the interpretation or application of the CBA or company personnel policies or any claim by either party that the other party is violating any provision of the CBA or company personnel policies.
of the BLR rendered in the exercise of its appellate power to review the decision of the RD in a petition to cancel the union's certificate of registration, said decisions being final and unappealable (Ibid.)
Grievance machinery
Secs. 7 to 9 of Rule II, Book V of the IRR of the LC provides for two situations: a.
b.
It refers to the mechanism for the adjustment and resolution of grievances arising from the interpretation or implementation of a CBA and those arising from the interpretation or enforcement of company personnel policies. It is part of the continuing process of CB.
The first situation involves a petition for cancellation of union registration which is filed with a Regional Office. A decision of a Regional Office cancelling a union's certificate of registration may be appealed to the BLR whose decision on the matter shall be final and unappealable. The second situation involves a petition for cancellation of certificate of union registration which is filed directly with the BLR. A decision of the BLR cancelling a union's certificate of registration may be appealed to the SLE whose decision on the matter shall be final and unappealable (Ibid.)
Grievance procedure It is the internal rules of procedure established by the parties in their CBA with voluntary arbitration as the terminal step, which are intended to resolve all issues arising from the implementation and interpretation of their CBA.
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Jurisdiction and Remedies the same to voluntary arbitration (Negros Metal Corporation v. Armelo Lamayo, G.R. No. 186557, August 25, 2010).
It refers to the system of grievance settlement at the plant level as provided in the CBA. It usually consists of successive steps starting at the level of the complainant and his immediate supervisor and ending, when necessary, at the level of the top union and company officials.
2.
Cases falling under the jurisdiction of the Grievance Machinery
3.
Any grievance arising from: 1. The interpretation or implementation of the CBA; and 2. The interpretation or enforcement of company personnel policies
4.
Wage distortion issues arising from the application of any wage orders in organized establishments Those arising from interpretation and implementation of productivity incentive programs under R.A. 6971 Violations of CBA provisions which are not gross in character are no longer treated as ULP and shall be resolved as grievances under the CBA
NOTE: Gross violation of CBA provisions shall NOTE: Art. 217(c) of the LC requires LAs to refer
mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement.
cases involving the implementation of CBAs to the grievance machinery provided therein and to voluntary arbitration. Likewise, Art. 260 of the LC clarifies that such disputes must be referred first to the grievance machinery and, if unresolved within seven days, they shall automatically be referred to voluntary arbitration (Miguela Santuyo v. Remerco Garments Manufacturing, Inc., G.R. No. 174420, March 22, 2010).
5.
NLRC and DOLE cannot entertain disputes/grievances/matters under the exclusive and original jurisdiction of the voluntary arbitrator
I. VOLUNTARY ARBITRATOR 1. JURISDICTION
They must immediately dispose and refer the same to the grievance machinery or voluntary arbitration provided in the CBA.
Jurisdiction of the Voluntary Arbitrators Generally, the arbitrator is expected to decide only those questions expressly delineated by the submission agreement. Nevertheless, the arbitrator can assume that he has the necessary power to make a final settlement since arbitration is the final resort for the adjudication of the disputes (Ludo and Luym Corp. v. Saornido, G.R. No. 140960, January 20, 2003).
The parties may choose to submit the dispute to voluntary arbitration proceedings before or at the stage of compulsory arbitration proceedings.
Jurisdiction over actual termination disputes and complaints for illegal dismissal The Labor Arbiter has jurisdiction over actual termination disputes and complaints for illegaldismissal filed by workers pursuant to the union security clause and not the grievance machinery.
Original and exclusive jurisdiction over: 1.
Any other labor disputes upon agreement by the parties including ULP and bargaining deadlock (LC, Art. 262).
All unresolved grievances arising from the: a. Implementation or interpretation of the CBA b. Interpretation or enforcement of company personnel policies
PROCEDURE How to initiate arbitration
NOTE: Under Art. 217, it is clear that a LA has original and exclusive jurisdiction over termination disputes. However, under Art. 261, a VA has original and exclusive jurisdiction over grievances arising from the interpretation or enforcement of company policies. As a general rule then, termination disputes should be brought before a LA, except when the parties unmistakably express that they agree to submit
1.
Submission Agreement – Where the parties
2.
define the disputes to be resolved Demand notice – Invoking agreement arbitration clause
collective
Voluntary arbitrator (VA) 1. 2.
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Any person accredited by the NCMB as such Any person named or designated in the CBA by the parties to act as their VA
Labor Law and Social Legislation 3.
One chosen with or without the assistance of the NCMB, pursuant to a selection procedure agreed upon in the CBA 4. Any official that may be authorized by the SLE to act as VA upon the written request and agreement of the parties to a labor dispute ( LC, Art. 262).
It is but logical, just and equitable that whoever is aggrieved should initiate settlement of grievance through the grievance machinery. To impose compulsory procedure on Ers alone would be oppressive of capital.
Powers of a voluntary arbitrator
Arbitrators by the nature of their functions act in a quasi-judicial capacity (BP 129, as amended by R.A. 9702); where a question of law is involved or there is abuse of discretion, courts will not hesitate to pass upon review of their acts.
1. 2. 3.
Nature of power of the voluntary arbitrator
Hold hearings Receive evidence Take whatever action necessary to resolve the dispute including efforts to effect a voluntary settlement between parties (LC, Art. 262-A).
Procedure for arbitrator/panel
choosing
2. REMEDIES
voluntary
Decisions of voluntary arbitrators appealable GR: Decisions of VA are final and executory after 10
1.
2.
The parties in a CBA shall designate in advance a VA/panel, preferably from the listing of qualified VAs duly accredited by the NCMB, or Include in the agreement a procedure for the selection of such VA or panel of VAs, preferably from the listing of qualified VAs duly accredited by the NCMB [LC, Art.260 (3)].
calendar days from receipt of the copy of the award or decision by the parties (LC, Art. 262-A).
NOTE: Art. 262-A deleted the word “unappealable” from Art. 263. It makes the voluntary arbitration award final and executory after 10 calendar days from receipt of the copy of the award or decision by the parties. Presumably, the decision may still be reconsidered by the VA on the basis of a motion for reconsideration duly filed during that period (Albert Teng v. Alfredo Pahagac, G.R. No. 169704, November 17, 2010).
Who will designate the voluntary arbitrator /panel in case the parties fail to select It is the NCMB that shall designate the VA panel based on the selection procedure provided by the CBA (Manila Central Line Free Workers Union v. Manila Central Line Corp., G.R. No. 109383, June 15, 1998).
XPN: Appeal to the CA via Rule 43 of the Rules of Court within 15 days from the date of receipt of VA’s decision (Luzon Dev’t Bank v. Ass’n of Luzon Dev’t Bank Ee’s, G.R. No. 120319, October 6, 1995).
Labor Arbiters can be designated as voluntary arbitrators
NOTE: A VA by the nature of his functions acts in quasi-judicial capacity. There is no reason why the VA’s decisions involving interpretation of law should be beyond the SC’s review. Administrative officials are presumed to act in accordance with law, yet the SC will not hesitate to pass upon their work where a question of law is involved or where a showing of abuse of authority or discretion in their official acts is properly raised in petitions for certiorari (Continental Marble Corporation v. NLRC, G.R. No. L-43825, May 9, 1988).
There is nothing in the law that prohibits LAs from also acting as voluntary arbitrators as long as the parties agree to have him hear and decide their dispute (Manila Central Line Free Workers Union v. Manila Central Line Corp., G.R. No. 109383, June 15, 1998).
Effect of the award of voluntary arbitrator The decision or award of the voluntary arbitrator acting within the scope of its authority shall determine the rights of the parties and their decisions shall have the same legal effects as judgment of the courts. Such matters on fact and law are conclusive.
--Q: PSSLU had an existing CBA with Sanyo Phils., Inc. with a union security clause which provides that: “all members of the union covered by this
agreement must retain their membership in good standing in the union as condition of his/her continued employment with the company.” On account of anti-union activities, disloyalty and for joining another union, PSSLU expelled 12 employees from the union. As a
Both the employer and the bargaining representative of the employees are required to go through the grievance machinery
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Jurisdiction and Remedies result, PSSLU recommended the dismissal of said Ees pursuant to the union security clause. Sanyo approved the recommendation and considered the said Ees dismissed. Thereafter, the dismissed Ees filed with the Arbitration Branch of the NLRC a complaint for illegal dismissal.
of a performance bonus provision identical to the one contained in their own CBA with SDP. Subsequently, SDP called both respondents SDEA and SDEA-ALU to a meeting wherein SDEA explained that it was unable to grant the performance bonus. In a conciliation meeting, both parties agreed to submit their dispute to voluntary arbitration. Their agreement to arbitrate stated, among other things, that they were "submitting the issue of performance bonus to voluntary arbitration."
Does the voluntary arbitrator have jurisdiction over the case? A: NO. The VA has no jurisdiction over the case.
Does the voluntary arbitrator have the power to pass upon the question of whether to grant the performance bonus and to determine the amount thereof?
Although the dismissal of the Ees concerned was made pursuant to the union security clause provided in the CBA, there was no dispute whatsoever between PSSLU and Sanyo as regards the interpretation or implementation of the said union security clause. Both PSSLU and Sanyo are united and have come to an agreement regarding the dismissal of the Ees concerned. Thus there is no grievance between the union and management which could be brought to the grievance machinery. The dispute is between PSSLU and Sanyo. The dispute therefore, does not involve the interpretation or implementation of a CBA (Sanyo Philippines Workers Union-PSSLU v. Canizares, G.R. No. 101619, June 8, 1992).
A: YES. In their agreement to arbitrate, the parties submitted to the VA “the issue of performance bonus.” The language of the agreement to arbitrate may be seen to be quite cryptic. There is no indication at all that the parties to the arbitration agreement regarded “t he issue of performance bonus” as a two-tiered issue, only one tier of which was being submitted to arbitration. Possibly, Sime Darby’s counsel considered that issue as having dual aspects and intended in his own mind to submit only one of those aspects to the VA, if he did, however, he failed to reflect his thinking and intent in the arbitration agreement (Sime Darby Phils. v. Magsalin, G.R. No. 90426, December 15, 1989).
----Q: X was employed as a telephone operator of Manila Midtown Hotel. She was dismissed from her employment for committing the following violations of offenses subject to disciplinary actions, namely: falsifying official documents and culpable carelessness-negligence or failure to follow specific instructions or established procedures. X then filed a complaint for illegal dismissal with the Arbitration branch of the NLRC. The Hotel challenged the jurisdiction of the Labor Arbitrator on the ground that the case falls within the jurisdictional ambit of the grievance procedure and voluntary arbitration under the CBA.
----Q: Apalisok, production chief for RPN Station, was dismissed due to her alleged hostile, arrogant, disrespectful, and defiant behavior towards the Station Manager. She informed RPN that she is waiving her right to resolve hercase through the grievance machinery provided in the CBA. The voluntary arbitrator resolved the case in the employee’s favor. On appeal, the CA ruled in favor of RPN because it considered Apalisok’s waiver to file her
Does the LA have jurisdiction over the case?
complaint before the grievance machinery as a relinquishment of her right to avail herself of the aid of the voluntary arbitrator. The CA said that the waiver had the effect of resolving an otherwise unresolved grievance, thus the decision of the VA should be set aside for lack of jurisdiction. Is the ruling of the CA correct?
A: YES. The LA has jurisdiction. The dismissal of X does not call for the interpretation or enforcement of company personnel policies but is a termination dispute which comes under the jurisdiction of the LA. The dismissal of X is not an unresolved grievance. Neither does it pertain to interpretation of company personnel policy (Maneja v. NLRC, G.R. No. 124013, June 5, 1998).
A: NO. Art. 262 of the LC provides that upon agreement of the parties, the VA can hear and decide all other labor disputes.
----Q: Sime Darby Salaried Employees Association ALU (SDSEA-ALU) wrote petitioner Sime Darby Pilipinas (SDP) demanding the implementation
The Ees waiver of her option to submit her case to grievance machinery did not amount to
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Labor Law and Social Legislation relinquishing her right to avail herself of voluntary arbitration.
petitioner to the jurisdiction of the VA by the Submission Agreement duly signed by their respective counsels. The VA had jurisdiction over the parties’ controversy (Apalisok v. RPN, G.R. No. 138094, May 29, 2003).
Contrary to the finding of the CA, voluntary arbitration as a mode of settling the dispute was not forced upon RPN. Both parties indeed agreed to submit the issue of validity of the dismissal of
---
J. PRESCRIPTION OF ACTIONS Rules as regards to the prescriptive period provided for in the LC and Special laws on Labor
SUBJECT
PRESCRIPTIVE PERIOD
Criminal Offenses penalized under the LC and its IRR
3years from the date of commission or discovery thereof (People v. Duque, 212 SCRA 607)
ULP Money Claims [including incremental proceeds arising from tuition fees under PD451 (MLQU Association v. MLQU, G.R. No. 82312, 19 April 1989)]
1 year from accrual of such ULP; otherwise forever barred (LC, Art. 290)
GR: 3 years from the time the cause of action accrued; otherwise forever barred (LC, Art. 291)
XPN: Promissory Estoppel
All money claims accruing prior to the effectivity of the LC
Within 1 year from the date of effectivity, in accordance with IRR; otherwise, they shall forever be barred
Illegal Dismissal
4 years. It commences to run from the date of formal dismissal [Mendoza v. NLRC, G.R. No. 122481, (1998)].
Claim for backwages
Workmen’s Compensation claims accruing prior to the effectivity of the LC and between Nov. 1, 1974-Dec. 31, 1974 Reinstatement Simple Illegal Recruitment Syndicated or Large-scale Illegal Recruitment
4 years – Since an award of backwages is merely consequent to a declaration of illegal dismissal(George A. Arriola v. Pilipino Star Ngayon, Inc. and Miguel G. Belmonte, G.R. No. 175689, August 13, 2014) Dec. 31, 1974 shall be filed not later than Mar. 31, 1975 before the appropriate regional offices of the DOLE (LC, Art. 291) 4 years (Callanta v. Carnation, 145 SCRA 268) 5 years (Republic Act No. 8042) 20years (Republic Act No. 8042)
Union funds
After 3 years from the date of submission of the annual financial report to the DOLE or from the date the same should have been submitted as required by law, whichever comes earlier (Omnibus Rules Implementing the LC, Book VII, Rule II, Sec. 5 ).
SSS Violations
20 years from the time of delinquency is known or the assessment is made or the benefit accrues as the case may be (Republic Act No. 8282)(Lo v. CA, G.R. No. 128667, 17 December 1999)
GSIS Benefits
GR :4 years
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Jurisdiction and Remedies XPN: Life and retirement benefits – Imprescriptible Employee’s Compensation Claims
3 years from accrual of cause of action
Promissory estoppel It may arise from the making of a promise, even though without consideration, if it was intended that the promise should be relied upon. If in fact it was relied on, a refusal to enforce it would virtually sanction the perpetration of fraud or would result in other injustice. It presupposes the existence of a promise on the part of one against whom estoppel is claimed. The promise must be plain and unambiguous and sufficiently specific so that the court can understand the obligation assumed and enforce the promise according to its terms.
6.
7.
NOTE: In order to make out a claim of promissory estoppel, a party bears the burden of establishing the following elements: (1) a promise was reasonably expected to induce action or forbearance; (2) such promise did, in fact, induce such action or forbearance; and (3) the party suffered detriment as a result.
8.
9.
Acts considered as criminal violations of the LC Except as otherwise provided in the LC, or unless the acts complained of hinge on a question of interpretation or implementation of ambiguous provisions of an existing CBA, any violation of the provisions of the LC declared to be unlawful or penal in nature shall be punished with a fine of not less than Php 1,000.00 nor more than Php 10,000.00 or imprisonment of not less than three months nor more than three years, or both such fine and imprisonment at the discretion of the court (LC, Art. 288). 1.
2. 3.
4.
5.
10.
11.
Prohibition against transfer of employment After the issuance of an employment permit, the alien shall not transfer to another job or change his employer without prior approval of the SLE (LC, Art. 41). Violation of the provisions on learnership (LC, Art. 77 ). In cases of unlawful withholding of wages, the culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered (LC, Art. 111). It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorney’s fees which exce ed ten percent of the amount of wages recovered (LC, Art. 111). It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any
12.
13.
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part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the worker’s consent (LC, Art. 116). It shall be unlawful to make any deduction from the wages of any employee for the benefit of the Er or his representative or intermediary as consideration of a promise of employment or retention in employment (LC, Art. 116). It shall be unlawful for an Er to refuse to pay or reduce the wages and benefits, discharge or in any manner discriminate against any Ee who has filed any complaint or instituted any proceeding under this Title or has testified or is about to testify in such proceedings ( LC, Art. 118). It shall be unlawful for any person to make any statement, report, or record filed or kept pursuant to the provisions of this Code knowing such statement, report or record to be false in any material respect (LC, Art. 119). It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective the orders of the SLE 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 [ LC, Art. 128 (4)]. It shall be unlawful for any employer to discriminate against any woman Ee with respect to terms and conditions of employment solely on account of her sex (LC, Art. 135 ). It shall be unlawful for an Er to require as a condition of employment or continuation of employment that a woman employee shall not get married, or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman Ee merely by reason of her marriage (LC, Art. 136). It shall be unlawful for any Er: a. to deny any woman Ee the benefits provided for in this Chapter or to discharge any woman employed by him for the purpose of preventing her from enjoying any of the benefits provided under this Code; b. to discharge such woman on account of her pregnancy, or while on leave or in confinement due to her pregnancy; or to discharge or refuse the admission of such woman upon returning to her work for fear that
Labor Law and Social Legislation she may again be pregnant.It shall be unlawful for any Er: a.
to deny any woman Ee the benefits provided for in this Chapter or to discharge any woman employed by him for the purpose of preventing her from enjoying any of the benefits provided under this Code; b. to discharge such woman on account of her pregnancy, or while on leave or in confinement due to her pregnancy; or c. to discharge or refuse the admission of such woman upon returning to her work for fear that she may again be pregnant. 14. Violations of rights and conditions of membership in a labor organization (LC, Art. 241) 15. Unfair labor practice of Ers (LC, Art. 248) 16. Unfair labor practice of labor organizations ( LC, Art. 249 in relation to Art. 247 ) 17. Violation of the provision on retirement benefits (LC, Art. 287)
NOTE: In addition to the penalty prescribed under Art. 288, any alien found guilty shall be summarily deported upon completion of service of sentence. (LC, Art. 288). If the offense is committed by a corporation, trust, firm, partnership, association or any other entity, the penalty shall be imposed upon the guilty officer or officers of such corporation, trust, firm, partnership, association or entity (LC, Art. 28)
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