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LABOR STANDARDS Q1: WHAT ARE THE SALIENT FEATURES 1 OF THE PROTECTION TO LABOR PROVISION OF THE CONSTITUTION? A1: 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 (1) self-organization, (2) collective bargaining and negotiations, and (3) peaceful concerted activities, including the right to strike in accordance with law; (4) security of tenure, (5) humane conditions of work, (6) a living wage, and (7) participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. 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. 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. Q2: HOW SHOULD THE LAWS AND RULES BE CONSTRUED AND APPLIED IN THE RESOLUTION OF LABOR DISPUTES? A2: Article 4 of the Labor Code mandates that all doubts in the implementation and interpretation of the provisions thereof shall be resolved in favor of labor, consistent with the State’s avowed policy to afford protection to labor. [Hocheng v Farrales (2015)] However, while labor laws should be construed liberally in favor of labor, we must be able to balance this with the equally important right of the employer to due process. [Gagui v Dejero (2013)] As to the rules, Article 227 provides that technical rules are not binding. The spirit and intent of labor legislation are for the arbiters to speedily and objectively ascertain the facts, provided due process is duly observed. The application of rules may be relaxed to serve the demands of substantial justice [MERALCO v Gala (2012)] Q3: HOW SHOULD THE TERMS OF LABOR CONTRACTS BE CONSTRUED? A3: Under Article 1700 of the Civil Code, labor contracts, including collective bargaining agreements, must be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve. Labor contracts are not merely contractual in nature but impressed with public interest, thus, they must yield to the common good. [Cirtek Employees Labor Union-FFW v Cirtek Electronics (2010)]
The provision can be divided into parts, namely: (1) the extent of protection; (2) who are covered by the protection; (3) the employment policy of the State; (4) the guarantees/cardinal rights of the worker; and (5) the share in fruits of production 1
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Q4: HOW SHOULD THE COURTS RESOLVE DOUBT BETWEEN THE EVIDENCE SUBMITTED BY THE EMPLOYER AND THE EMPLOYEE? A4: When there is doubt between the evidence submitted by the employer and that submitted by the employee, the scales of justice must be tilted in favor of the employee, consistent with the rule that the employer’s cause could only succeed on the strength of its own evidence, and not on the weakness of the employee’s evidence. [Misamis Oriental II Elective Service Cooperative v Cagalawan (2012)] Q5: WHAT IS SOCIAL JUSTICE AND HOW IS IT LIMITED? A5: Social justice is neither communism, nor despotism, nor atomism, nor anarchy, but the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. [Calalang v Williams (1940)] The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be [a] refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character. [Tirazona vs. Phil EDS Techno-Service, Inc., G.R. 169712 (2009)]. Q6: WHAT CONSTITUTES RECRUITMENT? A6: Recruitment and placement refers to any act of canvassing, enlisting, contracting, transporting, utilizing or hiring or procuring workers. Also included are referrals; contract services; promising, or advertising for employment, locally or abroad, whether for profit or not. Provided, that any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement. [Art. 13 (b), LC] The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) will constitute recruitment and placement even if only one prospective worker is involved. 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 two 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. No. 58674 (1988)] Q7: WHAT CONSTITUTES ILLEGAL RECRUITMENT? A7: Illegal Recruitment shall mean 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, when undertaken by non-licensee or non-holder of authority contemplated under Article 13(b) of the Labor Code: Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged. [Sec. 5, R.A. No. 10022]
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Elements: (1) The offender is a licensee/non-licensee or holder/non-holder of authority engaged in the recruitment and placement of workers; and (2) The offender undertakes wither any recruitment activities defined under Article 13(b), or any prohibited practices enumerated under Article 34 [People vs. Sadiosa, GR No. 107084 (1998); Sec. 10, RA 8042] Q8: COMPARE AND CONTRAST "LICENSE" AND "AUTHORITY" A8: A license and an authority are documents issued by the DOLE authorizing a person or entity to operate a private employment or recruitment agency. A license authorizes the licensee to collect fees, while an authority does not entitle the recruitment entity to collect fees. [Art. 13(d) and (f), LC] Q9: CAN AN AUTHORITY/LICENSE BE TRANSFERRED? A9: No. Under Article 29 of the Labor Code, no license shall be used, directly or indirectly, by any person other than the one in whose favor it was issued, nor at any place other than that stated in the license, nor may such license be transferred, conveyed or assigned to any other person or entity. [See also Sec. 21, Revised POEA Rules 2016] Q10: SHOULD THE INFORMATION FOR ILLEGAL RECRUITMENT ALLEGE THAT IT WAS COMMITTED AGAINST TWO OR MORE PERSONS? A10: No. The Court in People v Panis (1986) ruled that the proviso in Article 13(b) of the Labor Code was intended to create a presumption, and not a condition to recruitment. Q11: IS A SEPARATE PROSECUTION FOR ESTAFA POSSIBLE IN A CASE FOR ILLEGAL RECRUITMENT? A11: Yes. A person who commits illegal recruitment may be separately charged and convicted for illegal recruitment under the Labor Code and estafa under the Revised Penal Code. Illegal recruitment is malum prohibitum while estafa is mala in se. Conviction for offenses under the Labor Code does not bar conviction for offenses punishable under other laws. [People v. Angelita Daud (2014)] Q12: WHEN DOES THE RECRUITMENT OF WORKERS BECOME AN ACT OF ECONOMIC SABOTAGE? A12: Illegal recruitment is considered economic sabotage when the commission thereof is attended by the following qualifying circumstances: (1) By a syndicate – if carried out by a group of 3 or more persons conspiring and confederating with one another, or (2) In large scale –if committed against 3 or more persons, individually or as a group. [Art. 38(b), LC] Q13: WHAT IS THE LIABILITY OF THE LOCAL RECRUITMENT AGENCY AND THE FOREIGN EMPLOYER? A13: The foreign employer 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, death and disability compensation and repatriation. The purpose of
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solidary liability is to assure aggrieved workers of immediate and sufficient payment of what is due them. [OSM Shipping Phil, Inc. v. NLRC (2003)] Q14: WHAT IS THE THEORY OF IMPUTED KNOWLEDGE? A14: This is a doctrine in agency which states that the principal is chargeable with and bound by the knowledge of or notice to his agent received while the agent was acting as such. Simply put, notice to the agent is notice to the principal. As applied, since the local employment agency is considered the agent of the foreign employer, the principal, knowledge of the former of existing labor and social legislation in the Philippines is binding on the latter. Consequently, notice to the former of any violation thereof is notice to the latter. However, notice to the principal is not notice to the agent. The SC held in Sunace International Management Services, Inc. vs. NLRC [G.R. 161757 (2006)] that “the theory of imputed knowledge ascribes the knowledge of the agent to the principal, not the other way around. The knowledge of the principal-foreign employer cannot, therefore, be imputed to its agent.” Q15: WHAT IS THE RULE IN CASE OF TERMINATION OF A MIGRANT WORKER WITHOUT JUST CAUSE? A15: It shall entitle the worker to full reimbursement of: (1) his placement fee and the deductions made with interest at twelve percent (12%) per annum, and; (2) his salaries for the unexpired portion of his employment contract. The clause “or for three (3) months for every year of the unexpired term, whichever is less” found in RA 8042 and RA 10022 was struck down as unconstitutional for being an invalid classification, in violation of the equal protection clause. [Serrano v. Gallant Maritime Services, Inc., G.R. No. 167614 (2009); Sameer Overseas Placement Agency vs. Cabiles, G.R. No. 170139, (2014)] Q16: A DOMESTIC CORPORATION, MAHARLIKA, HAS 70% OF ITS AUTHORIZED AND VOTING CAPITAL STOCK OWNED BY FILIPINOS WHILE 30% OF IT IS OWNED BY FOREIGNERS. WILL MAHARLIKA BE ALLOWED TO ENGAGE IN THE RECRUITMENT OF WORKERS, LOCALLY OR OVERSEAS? A16: No. Art 27 of the Labor Code (and the corresponding POEA Rules) requires that corporations, partnerships or entities have at least 75% of their authorized and voting capital stock be owned and controlled by Filipino citizens in order to be allowed to participate in the recruitment and placement of workers, locally or overseas. Q17: WHAT ARE THE EXEMPTIONS TO THE BAN ON DIRECT HIRING OF FILIPINOS FOR OVERSEAS EMPLOYMENT? A17: The following are exempted from the ban on direct hiring: (a) Members of the diplomatic corps; (b) International organizations; (c) Heads of state and government officials with the rank of at least deputy minister; (d) Other employees as may be allowed by the Sec. of Labor, such as: (1) Those provided in (a), (b) and (c) who bear a lesser rank, if endorsed by the POLO, or Head of Mission in the absence of the POLO;
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(2) Professionals and skilled workers with duly executed/authenticated contracts containing terms and conditions over and above the standards set by the POEA. The number of professional and skilled Overseas Filipino Workers hired for the first time by the employer shall not exceed five (5). For the purpose of determining the number, workers hired as a group shall be counted as one; or (3) Workers hired by a relative/family member who is a permanent resident of the host country. [Sec. 124, Revised POEA Rules 2016] Q18: WHO ARE EXEMPTED FROM APPLYING FOR AN ALIEN EMPLOYMENT PERMIT? A18: (a) All members of the diplomatic service and foreign government officials accredited by and with reciprocity arrangement with the Philippine government; (b) Officers and staff of international organizations of which the Philippine government is a member, and their legitimate spouses desiring to work in the Philippines; (c) All foreign nationals granted exemption by law; (d) Owners and representatives of foreign principals whose companies are accredited by the Philippine Overseas Employment Administration (POEA), who come to the Philippines for a limited period and solely for the purpose of interviewing Filipino applicants for employment abroad; (e) Foreign nationals who come to the Philippines to teach, present and/or conduct research studies in universities and colleges as visiting, exchange or adjunct professors under formal agreements between the Philippine government and foreign government: provided that the exemption is on a reciprocal basis; and (f) Permanent resident foreign nationals and probationary or temporary resident visa holders under Sec. 13 of the Philippine Immigration Act of 1940. [Sec. 2, D.O. 146-15] Q19: DISTINGUISH APPRENTICESHIP FROM LEARNERSHIP. A19: Apprenticeship Highly technical industries
Learnership Semi-skilled industrial occupations
Practical training supplemented by related Practical training whether or not such practical theoretical instruction training is supplemented by theoretical instructions Apprenticeable occupations approved by the Non-apprenticeable occupations SOLE Written apprentice agreement ratified by the Learnership agreement appropriate committees More than 3 months, shall not exceed 6 months
Shall not exceed 3 months
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(1) The person is at least 15 years of age, (1) When no experienced workers are available; provided those who are at least 15 years of (2) The employment of learners is necessary to age but less than 18 may be eligible for prevent curtailment of employment apprenticeship only in non-hazardous opportunities; and occupation; (3) The employment does not create unfair (2) The person is physically fit for the competition in terms of labor costs or impair occupation in which he desires to be trained; or lower working standards. (3) The person possesses vocational aptitude and capacity for the particular occupation as established through appropriate tests; and (4) The person is able to comprehend and follow oral and written instructions. Wage rate shall begin at not less than 75% of the Wage rate shall begin at not less than 75% of minimum wage the minimum wage No compensation if SOLE authorizes, as OJT is Learners in piecework shall be paid in full for the required by the school work done A commitment to employ the learners if they so desire, as regular employees upon completion of the learnership. All learners who have been allowed or suffered to work during the first 2 months shall be deemed regular employees if training is terminated by the employer before the end of the stipulated period through no fault of the learners. Deductibility of ½ of training costs incurred, provided: Program is duly recognized by DOLE Deduction shall not exceed 10% of direct labor wage Payment of minimum wage to apprenticeship Q20: WHO ARE DIFFERENTLY-ABLED WORKERS? A20: (1) Persons with disability are those suffering from restriction or different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being. (2) Impairment is any loss, diminution or aberration of psychological, physiological, or anatomical structure or function. (3) Disability shall mean (1) a physical or mental impairment that substantially limits one or more psychological, physiological or anatomical function of an individual or activities of such individual; (2) a record of such an impairment; (3) being regarded as having such an impairment.
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(4) Handicap refers to a disadvantage for a given individual, resulting from an impairment or a disability, that limits or prevents the function or activity, that is considered normal given the age and sex of the individual. [Sec 4(a), RA 7277] Q21: WHAT ARE THE RIGHTS OF DIFFERENTLY-ABLED WORKERS? A21: Equal opportunity for suitable employment for which he/she is qualified, the right to reserved casual, emergency, and contractual positions in the DSWD, DOH, DepEd, and other government agencies or corporations engaged in social development, the right to sheltered employment which refers to the availability of special facilities for their benefit, the right to apprenticeship and learnership opportunities, the right to receive the full amount of the minimum wage. [RA 7277, as amended by RA 10070 and RA 10524] Q22: WHAT IS THE PROHIBITION AGAINST DISCRIMINATION OF DIFFERENTLY-ABLED WORKERS? A22: No entity, whether public or private shall discriminate against a qualified differently-abled person by reason of disability in regard to job application procedures, the hiring, promotion, or discharge of employees, employee compensation, job training and other terms, conditions, and privileges of employment. [Sec. 5, RA 7277, as amended] Q23: WHAT ARE THE INCENTIVES GRANTED FOR EMPLOYERS IN EMPLOYING DIFFERENTLY-ABLED WORKERS? A23: Tax Incentives in the form of additional deduction, from their gross income, equivalent to 25% of the total amount paid as salaries and wages to differently-abled persons. In addition to that, for construction of differently-abled-friendly facilities not required under existing laws, an additional deduction from their net taxable income, equivalent to 50% of the direct costs of the improvements or modifications; and for establishments giving discounts, they may claim such discounts as tax deductions based on the net cost of the goods sold or services rendered. Q24: PURSUANT TO ARTICLE 82 OF THE LABOR CODE, ARE ALL EMPLOYEES OF GOCCS GOVERNED BY THE CIVIL SERVICE RULES? A24: No. Only those created by original charter are governed by the civil service rules. Following Sec. 2(i), Art. IX-B of the 1987 Constitution, the test is that, if it is created by a special charter, then Civil Service Law applies; but if it is created by the General Corporation Law, then the Labor Code applies. [PNOC Energy Development Corporation v. NLRC (1991)] Q25: WHAT CONSTITUTES ‘HOURS WORKED’? A25: When on duty; when at the workplace; when suffered to work; when permitted to work. [Art 84, LC]
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Q26: UNDERTIME WORK ON ANY PARTICULAR DAY SHALL NOT BE OFFSET BY OVERTIME WORK ON ANY OTHER DAY. HOWEVER, PERMISSION GIVEN TO THE EMPLOYEE TO GO ON LEAVE ON SOME OTHER DAY OF THE WEEK SHALL OFFSET OVERTIME WORK. TRUE OR FALSE? A26: False. Article 88 of the Labor Code expressly provides that permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation. Q27: WHAT IS A COMPRESSED WORKWEEK SCHEME? A27: A Compressed Workweek is a scheme where the normal workweek is reduced to less than six (6) days, but the total number of work hours of 48 hours per week shall remain. In this arrangement, the normal workday is extended to more than eight (8) hours, but should not exceed 12 hours, without corresponding overtime premium. [DOLE Advisory No. 2, Series of 2004)] The compressed workweek 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 (1) 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 vehicle fumes, dressing up for work, etc. [Bisig Manggagawa sa Tryco v. NLRC, et al. (2008)] Q28: WHAT ARE THE CONDITIONS FOR IMPLEMENTATION OF A VALID COMPRESSED WORKWEEK (CWW) SCHEME? A28: (1) The employees covered voluntarily agree to work for more than 8 hours a day, and that the total work hours in a week should not exceed their normal weekly hours prior to the adoption of the CWW scheme. (2) No diminution of weekly take home pay and fringe benefits. (3) If an employee is permitted to work in excess of his normal weekly hours of work prior to adoption of the CWW scheme, all excess hours shall be considered OT work. (4) Appropriate waivers with respect to OT pay for work performed in excess of 8 hours. (5) Effectivity and implementation of the new working time arrangement by agreement of the parties. Q29: INTERRUPTIONS CAUSED BY BROWNOUTS WHICH LAST LONGER THAN 20 MINUTES MAY STILL BE TREATED AS HOURS WORKED. TRUE OR FALSE? A29: True, unless it is shown that (a) employees can leave their workplace or go elsewhere whether within or without the work premises, or that (b) employees can use the time effectively for their own interest.
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Q30: GARVY CHOSE TO ATTEND A FREE-FOR-ALL SEMINAR ON SATURDAY IN SUBIC WHICH THEIR COMPANY OFFERED TO WHOEVER WANTED TO IMPROVE THEIR INTERPERSONAL SKILLS, HOPING HIS PARTICIPATION TO SUCH WOULD BE DEEMED AS COMPENSABLE WORKING HOURS. WILL HIS PARTICIPATION BE DEEMED AS “COMPENSABLE WORKING TIME”? A30: No. For attendance to such seminars and other related activities to NOT be counted as working time, ALL of the following conditions must be met: (1) attendance is outside the employee's regular working hours, (2) attendance is in fact voluntary, and (3) the employee does not perform any productive work during such attendance. [IRR, Book III, Rule 1, Sec. 6]. In this case, all three requirements were met, hence, the time was not compensable. Q31: DOES OVERTIME PAY (OF OVERTIME WORK DONE FROM 10 PM TO 11:30 PM) PRELUDE THE PAYMENT OF NIGHT DIFFERENTIAL PAY? A31: No. When the tour of duty of a laborer falls at nighttime, which is between 10 o'clock in the evening and 6 o'clock in the morning, the receipt of overtime pay will not preclude the right to night differential pay. The latter is payment for work done during the night while the other is payment for the excess of the regular 8-hour work [Naric vs Naric Workers' Union (1959)] Q32: TRUE OR FALSE. COLLEGE FACULTY WHO WERE PAID ON THE BASIS OF STUDENT CONTACT HOURS (HOURS OF CLASSES TAUGHT) SHOULD STILL BE COMPENSATED IN CASE OF OCCURRENCE OF SPECIAL HOLIDAYS. A32: True. Regular holidays are known to both faculty and the school, it is not calculated in the work hours the faculty is supposed to render, and therefore, the faculty members do not expect to get paid on these days. However, during special holidays, the teachers are deprived of the income they are supposed to be earning as they are constrained from performing their duties even when they want or intend to. Even if the classes are extended, they lose the earning they could be getting from other sources for working during the extended days. [Jose Rizal College v NLRC (1987)] Q33: WHAT IS THE DIFFERENCE BETWEEN SUPPLEMENTS AND FACILITIES? A33: Supplements - constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages. Facilities - items of expense necessary for the laborer's and his family's existence and subsistence so that by express provision of law, they form part of the wage and when furnished by the employer are deductible therefrom, since if they are not so furnished, the laborer would spend and pay for them just the same [SLL International Cables Specialist v. NLRC, 4th Division, G.R. No. 172161 (2011)] Q34: HOW IS 13TH MONTH PAY COMPUTED? A34: Generally, it consists of at least 1/12 of the total basic salary earned by an employee within a calendar year. Basic salary shall include: COLA integrated into the basic salary of a covered employee and remunerations or earnings paid by this employer for services rendered. But not the allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash equivalent of: unused vacation and sick leave credits, overtime, premium, night differential, holiday pay and, cost-of-living allowances.
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Q35: WHO ARE COVERED BY THE RULES ON SERVICE CHARGE AND HOW ARE THE SHARES THERETO APPORTIONED? A35: The rule applies to establishments who collect service charges such as, but not limited to: hotels, restaurants, lodging houses, night clubs, cocktail lounge, massage clinics, bars, casinos and gambling houses and similar enterprises including those entities operating primarily as private subsidiaries of the Government. 85% for the employees to be distributed equally among them and 15% for the disposition of management to answer for losses and breakages and, at the discretion of management, for distribution to managerial employees. The shares shall be distributed not less than once every two weeks or twice a month at intervals not exceeding 16 days. Q36: WHAT IS THE DIFFERENCE BETWEEN WAGE AND SALARY? A36: Wages and salary are in essence synonymous. [Songco v. NLRC (1990)] However, there are slight differences. Wage is paid for skilled or unskilled manual labor while salary is paid to white collar workers and denote a higher grade of employment. Wage is not subject to execution, garnishment or attachment except for debts related to necessities [Art. 1708]. Salary is not exempt from execution, garnishment or attachment. [Gaa vs. CA, 1985] Q37: WHAT IS THE RULE AGAINST ELIMINATION OR DIMINUTION OF BENEFITS? A37: Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code [Article 100]. Similarly, no wage order issued by any regional board shall provide for wage rates lower than the statutory minimum wages prescribed by Congress [Art 127]. Note: An agreement increasing the percentage of employee benefits would be valid for being beneficial to the employee. Q38: WHEN WILL THE EMPLOYER BE PROHIBITED FROM REMOVING OR REDUCING BENEFITS? A38: (a) The grant or benefit is founded on a policy or has ripened into a practice over a long period of time; (b) The practice is consistent and deliberate; (c) The practice is not due to error in the construction or application of a doubtful or difficult question of law; and (d) The diminution or discontinuance is done unilaterally by the employee. In order for a grant or benefit to ripen into a company policy, the employee must prove by substantial evidence that the giving of the benefit is done over a long period of time, and that it has been made consistently and deliberately. Q39: WHAT IS THE DEFINITION OF A WAGE DISTORTION? A39: A wage distortion shall mean a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional qualitative differences in wage or salary rates between and among employees in wage or salary rates between and among employee groups in an
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establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of services or other logical bases of differentiation. [Art 124, LC] Q40: WHAT ARE THE ELEMENTS OF WAGE DISTORTION? A40: (1) Existing hierarchy of positions with corresponding salary rates; (2) Significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one; (3) Elimination of the distinction between the two levels; and (4) Existence of a distortion in the same region. [Prubankers Association v. Prudential Bank and Trust Company (1999)] Q41: WHAT ARE THE VALID WAYS OF RECTIFICATION OF WAGE DISTORTION? A41: For organized establishments: (1) Employer and the union shall negotiate to correct the distortions. (2) Disputes shall be resolved through the grievance procedure. (3) If still unresolved, voluntary arbitration. For unorganized establishments: (1) Employer and employees shall endeavor to correct such distortions. (2) Disputes shall be settled through the National Conciliation and Mediation Board. (3) If still unresolved after 10 calendar days of conciliation, it shall be referred to the appropriate branch of the NLRC – compulsory arbitration. Both the employer and employee cannot use economic weapons. (4) Employer cannot declare a lock-out; Employee cannot declare a strike because the law has provided for a procedure for settling (5) The salary or wage differential does not need to be maintained. [National Federation of Labor v. NLRC, 1994] Q42: WHAT ARE THE ACTS OF DISCRIMINATION AGAINST WOMEN PROHIBITED UNDER THE LAW? A42: (1) Payment of a lesser compensation, including wage, salary or other form of remuneration and fringe benefits, to a female employee as against a male employee, for work of equal value; and (2) Favoring a male employee over a female employee with respect to promotion, training opportunities, study and scholarship grants solely on account of their sexes. [Art.133, LC]
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Q43: ARE STIPULATIONS AGAINST MARRIAGE ALLOWED? A43: No. It shall be unlawful for an employer to: (1) require as a condition of employment or continuation of employment that a woman employee shall not get married, or (2) stipulate expressly or tacitly that upon getting married a woman employee shall be deemed resigned or separated or (3) actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage. Except, when the employer can prove that the reasonable demands of the business require a distinction and the basis of the identity of the spouse such as when the spouse is working for a competitor. [Art. 134, LC; Duncan Assoc of Detailman – PTGWO v Glaxo Wellcome, 2004] Q44: WHAT ARE THE ACTS PROHIBITED UNDER THE LAW? A44: It shall be unlawful for any employer: (1) To discharge any woman employed by him for the purpose of preventing such woman from enjoying the maternity leave, facilities and other benefits provided under the Code; (2) To discharge such woman employee on account of her pregnancy, or while on leave or in confinement due to her pregnancy; (3) To discharge or refuse the admission of such woman upon returning to her work for fear that she may be pregnant; (4) To discharge any woman or child or any other employee for having filed a complaint or having testified or being about to testify under the Code; and (5) To require as a condition for a continuation of employment that a woman employee shall not get married or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage. [Art. 135, LC; Book 3, Rule 12, Sec 13(d), IRR] (6) Expulsion and non-readmission of women faculty due to pregnancy outside of marriage shall be outlawed. No school shall turn out or refuse admission to a female student solely on the account of her having contracted pregnancy outside of marriage during her term in school. [Sec. 13(c), RA 9710] Q45: WHEN CAN CHILDREN BELOW 15 YEARS OF AGE BE EMPLOYED? A45: (1) When a child works directly under the sole responsibility of his/her parents or legal guardian and where only members of his/her family are employed: Provided, however, That his/her employment neither endangers his/her life, safety, health, and morals, nor impairs his/her normal development: Provided, further, That the parent or legal guardian shall provide the said child with the prescribed primary and/or secondary education; or (2) Where a child's employment or participation in public entertainment or information through cinema, theater, radio, television or other forms of media is essential: Provided, That the employment contract is concluded by the child's parents or legal guardian, with the express agreement of the child concerned, if possible, and the approval of the Department of Labor and Employment: Provided, further, That the following requirements in all instances are strictly complied with: (a) The employer shall ensure the protection, health, safety, morals and normal development of the child;
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(b) The employer 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 (c) The employer shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skills acquisition of the child. [Sec 2, RA 9231] Q46: WHAT IS CHILD LABOR? A46: Any work or economic activity performed by a child that subjects him/her to any form of exploitation or is harmful to his/her health and safety or physical, mental or psychosocial development. A child is any person under 18 years of age or those over but are unable to fully take care of themselves or protect themselves from abuse, neglect, cruelty, exploitation or discrimination because of a physical or mental disability or condition. Q47: WHAT IS A DOMESTIC WORKER OR “KASAMBAHAY”? A47: Refers to any person engaged in domestic work or work performed in or for a household or households, within an employment relationship such as, but not limited to the following: general househelp, nursemaid or “yaya”, cook, gardener, or laundry person. The term domestic worker or “kasambahay” excludes any person who performs domestic work only occasionally or sporadically and not on an occupational basis. [Sec.4(D), RA 10361] Q48: WHAT ARE THE RIGHTS AND PRIVILEGES OF A KASAMBAHAY? A48: Right to a minimum wage as specified by law, right against abuse, physical violence and harassment and any act tending to degrade his/her dignity, right to receive board, lodging and medical assistance, right to privacy with respect to their communication and personal effects, right to have access to outside communication, right to basic education and training, SSS, PhilHealth and HDMF or Pag-ibig coverage, and annual service incentive leave of 5 days with pay. [RA 10361] Q49: WHAT IS THE WORK OF A HOMEWORKER? A49: Industrial homework which 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 OR a decentralized form of production, where there is ordinarily very little supervision or regulation of methods of work. [Sec. 2(a), Rule XIV, Book III, IRR] Q50: WHAT ARE THE RIGHTS AND BENEFITS ACCORDED HOMEWORKERS? A50: The right to form, join or assist organizations, the right to acquire legal personality and the rights and privileges granted by law to legitimate labor organizations upon issuance of the certification of registration, immediate payment upon employer’s receipt of finished goods or articles, and SSS, Philhealth premium contributions shall be deducted from their pay and shall be remitted by ER/contractor/subcontractor to the SSS. [Rule XIV, Book III, IRR]
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Q51: WHAT ARE THE ELEMENTS OF THE ‘FOUR-FOLD’ TEST OF EMPLOYMENT? A51: (a) Selection and engagement of the employee; (b) Payment of wages; (c) Power of dismissal; and (d) Employer’s power to control the employee’s conduct with respect to the means and methods by which the work is to be accomplished (Brotherhood Labor Unity Movement of the Philippines et. al. v. Zamora, G.R. No. 48645, Jan. 7, 1987). The most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it. [Lirio v. Genovia, G.R. No. 169757 (2011)] Q52: WHEN MUST EVALUATION OF PROBATIONARY EMPLOYEES BE MADE? A52: Evaluation is made before the expiration of the probationary period. In the absence of evaluation, one cannot conclude that the employee failed to meet the standards for probationary employment. Q53: WHAT ARE THE EXCEPTIONS TO THE RULE ON THE DURATION OF PROBATIONARY STATUS OF AN EMPLOYEE? A53: Generally, the period of probationary employment should not exceed six (6) months, reckoned from the date the employee started working. [Art. 281] However, the 6-month limit does not apply in the ff. cases: (1) When it is covered by an apprenticeship agreement stipulating a longer period [Art. 281]; (2) When the parties to the employment contract agree otherwise, such as when established by company policy or required by the nature of the work performed by the employee [San Miguel Corp, v. del Rosario, G.R. Nos. 168194 & 168603, December 13, 2005, citing Buiser v. Leogardo, G.R. No. L-63316, July 31, 1984]; (3) When it involves the 3-year probationary period of teachers [Mercado v. AMA Computer College, G.R. No. 183572, April 13, 2010]; or (4) When the extension of the probationary period was ex gratia, an act of liberality on the part of the employer affording the employee a second chance to make good after having initially failed to prove his worth as an employee. [Mariwasa v. Hon. Leogardo, G.R. No. 74246 (1989)] Q54: WHO IS A REGULAR EMPLOYEE? A54: (a) One who has been engaged to perform activities which are usually necessary and desirable in the usual business or trade of the employer; or (b) One who has rendered at least one year of service, whether such service is continuous or broken, with respect to the activity in which he is employed and his employment shall continue while such activity exists [Art. 280]; or (c) One who is allowed to work after a probationary period [Art. 281]
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The primary standard in determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the usual trade or business of the employer. The connection can be determined by considering the nature of work performed and its relation to the scheme of the particular trade or business in its entirety. [Bernardo v NLRC (1999)] Q55: WHEN MAY A PROJECT EMPLOYEE BECOME A REGULAR EMPLOYEE? A55: A project employee may acquire the status of a regular employee when the following factors concur: (1) There is a continuous (as opposed to intermittent) re-hiring of project employees even after cessation of a project for the same tasks or nature of tasks; and (2) The tasks performed by the alleged project employee are vital, necessary and in-dispensable to the usual business or trade of the employer [Maraguinot vs. NLRC, 1998] Q56: PETER WAS A FISHERMAN. HE HAD BEEN SICK AND WAS ALLOWED TO GO ON LEAVE WITHOUT PAY BUT WAS REFUSED TO BE ADMITTED BACK TO WORK SO HE FILED FOR ILLEGAL DISMISSAL AND NON-PAYMENT OF FIVE DAYS SERVICE INCENTIVE LEAVE. HIS EMPLOYER IS CLAIMING THAT IT CANNOT BE HELD LIABLE FOR SERVICE INCENTIVE LEAVE PAY BY FISHERMEN IN ITS EMPLOY AS THE LATTER SUPPOSEDLY ARE “FIELD PERSONNEL” AND THUS NOT ENTITLED TO SUCH PAY UNDER THE LABOR CODE. IS HIS EMPLOYER CORRECT? A56: No, Peter does not fall under the category of field personnel. While LC 82 excludes “field personnel” from application of the Labor Standards defining them as “non-agricultural employees 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”, Peter cannot be considered as such because fishermen, during the entire course of their fishing voyage, have no choice but to remain on board its vessel. Although they perform non-agricultural work away from his employer's business offices, the fact remains that throughout the duration of their work they are under the effective control and supervision of the employer through the vessel's patron or master. [Mercidar Fishing v NLRC, (1998)] Q57: WHO ARE MEMBERS OF THE MANAGERIAL STAFF FOR THE PURPOSE OF TERMS AND CONDITIONS OF WORK? A57: For purposes of Conditions of Employment (Hours of Work), officers or members of a managerial staff if they perform the following duties and responsibilities: (1) The primary duty consists of the performance of work directly related to management policies of their employer; (2) Customarily and regularly exercise discretion and independent judgment; and (3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; or (ii) Execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii) Execute, under general supervision, special assignments and tasks; and
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(4) Who do not devote more than 20 percent of their hours worked in a work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2) and (3) above. Q58: SEAFARERS WHO HAVE WORKED FOR 10 YEARS ON THE SAME VESSEL ARE REGULAR EMPLOYEES. TRUE OR FALSE? A58: False. Seafarers as overseas Filipino workers are fixed-term employees whose continued rehiring should not be interpreted as a basis for regularization but rather as a series of contract renewals sanctioned under the doctrine set by Millares vs. NLRC [Gu-Miro vs. Adorable, 2004]. Q59: WHAT ARE THE REQUISITES FOR LEGITIMATE CONTRACTING OR SUBCONTRACTING? A59: Contracting or subcontracting shall be legitimate if all the following circumstances occur: (1) The contractor must be registered in accordance with these rules and carries a distinct and independent business (2) The contractor undertakes to perform the job, work or service on its own responsibility, according to its own manner and method, and free from control and direction of the principal in all matters connected with the performance of the work except as to the results thereof; (3) The contractor has substantial capital and/or investment; and Substantial capital refers to paid-up capital stocks/shares of at least P3,000,000 in the case of corporations, partnerships and cooperatives; in case of single proprietorship, a net worth of at least P3,000,000. (4) The Service Agreement ensures compliance with all the rights and benefits under Labor laws. Q60: WHAT ARE THE RELATIONSHIPS THAT EXIST IN A LEGITIMATE CONTRACTING OR SUBCONTRACTING? A60: (1) An employer-employee relationship between the contractor and the employees it engaged to perform the specific job, work or service being contracted; and (2) A contractual relationship between the principal and the contractor as governed by the provisions of the Civil Code. [Sec. 5, par. 1, D.O. 18-A-11] Q61: WHEN IS THERE LABOR-ONLY CONTRACTING? A61: Labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal. [PolyfoamRGC International Corp. v. Concepcion, G.R. No. 172349, (2012)] Q62: WHEN IS JOB CONTRACTING DEEMED AS LABOR-ONLY CONTRACTING? A62: Job contracting shall be deemed as labor-only contracting, an arrangement prohibited by law, if a person who undertakes to supply workers to an employer: A. (1) Does not have substantial capital or investment in the form of tools, equipment, machineries, work premises and other materials; and
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(2) The workers recruited and placed by such person are performing activities which are directly related to the principal business or operations of the employer in which workers are habitually employed; or B. The contractor does not exercise the right of control over the performance of the work of the employee Q63: WHAT IS THE MAIN CONSEQUENCE OF LABOR-ONLY CONTRACTING? A63: As to the employees, where an entity is declared to be a labor-only contractor, the employees supplied by said contractor to the principal employer become regular employees of the latter. Having gained regular status, the employees are entitled to security of tenure and can only be dismissed for just or authorized causes and after they had been afforded due process. [Norkis Trading v. Buenavista, G.R. No. 182018. Oct. 10, 2012] As to the employer, in the event the contractor or subcontractor fails to pay the wages of his employees, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him [Art. 106]. Q64: WHERE DO THE PROVISIONS ON TERMINATION OF EMPLOYMENT UNDER THE LABOR CODE APPLY? A64: They shall apply to all establishments or undertakings, whether profit or not, except to the government and its political subdivisions, including GOCCs without original charter. [Art. 293, LC; Book VI, Rule I, Sec. 1, IRR] Q65: WHO HAS THE BURDEN OF PROVING THAT THE TERMINATION WAS FOR A VALID OR AUTHORIZED CAUSE? A65: Article 292(b) of the Labor Code provides that the onus rests on the employer to prove that the dismissal was for a just or authorized cause. However, the employee must first establish that an employer-employee relationship exists. Unsubstantiated accusations or baseless conclusions of the employer are insufficient legal justifications to dismiss an employee. The unflinching rule in illegal dismissal cases is that the employer bears the burden of proof. [Garza v. Coca-Cola Bottlers Philippines, Inc., G.R. No. 180972 (2014)] Q66: WHAT IS THE RULE ON TERMINATION OF EMPLOYMENT BY AN EMPLOYEE? A66: The employee must serve a written notice to resign on the employer at least one month in advance. However, no notice is required for any of the following: (1) serious insult by the employer or his representative on the honor and person of the employee, (2) inhuman and unbearable treatment accorded the employee by the employer or his representative, (3) commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his family, and (4) other causes analogous to any of the foregoing. [Art. 300, LC]
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Q67: WHAT ARE THE JUST CAUSES ENUMERATED IN THE LABOR CODE UPON WHICH AN EMPLOYER MAY TERMINATE AN EMPLOYEE? A67: An employer may terminate an employment for any of the following causes: (1) serious misconduct or willful disobedience, (2) gross and habitual neglect by the employee of his duties, (3) fraud or willful breach by the employee of the trust reposed in him, (4) commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives, (5) other causes analogous to the foregoing. Q68: WHAT IS SERIOUS MISCONDUCT? A68: Misconduct refers to the improper or wrong conduct that transgresses 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. [Northwest Airlines, Inc, v. Del Rosario, G.R. No. 157633 (2014)] The elements of serious misconduct are: (a) There must be misconduct; (b) The misconduct must be of such grave and aggravated character; (c) It must relate to the performance of the employee’s duties; and (d) There must be showing that the employee becomes unfit to continue working for the employer. [DO 147-15] Q69: DURING THE CHRISTMAS PARTY OF THE COMPANY, BENITEZ BERATED AND MALIGNED KURANGIL BY THROWING FOUL AND OFFENSIVE WORDS AT HIM, SUCH AS "PUTANG INA MO KA VK, GAGO KA!" BENITEZ'S TIRADE INCLUDED THE COMPANY AND IT OFFICERS. MOREOVER, THE INCIDENT HAPPENED IN FRONT OF THE COMPANY'S EMPLOYEES, THEIR FAMILIES, AS WELL AS COMPANY CLIENTS AND GUESTS. CAN BENITEZ BE TERMINATED ON THE GROUND OF SERIOUS MISCONDUCT? A69: Yes. In the case of Benitez v. Santa Fe Moving and Relocation Services (G.R. No. 208163, April 20, 2015) the Supreme Court clarifies the extent of serious misconduct as a just cause for termination. Benitez's offense constituted a serious misconduct as defined by law. His display of insolent and disrespectful behavior, in utter disregard of the time and place of its occurrence, had very much to do with his work. He set a bad example as a union officer and as a crew leader of a vital division of the company. His actuations during the company's Christmas Party on December 18, 2010, could have had negative repercussions for his employer had he been allowed to stay on the job. His standing before those clients who witnessed the incident and those who would hear of it would surely be diminished, to the detriment of the company. Q70: WHAT ARE THE ELEMENTS OF WILLFUL DISOBEDIENCE? A70: (a) There must be disobedience or insubordination;
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(b) The disobedience or insubordination must be willful or intentional characterized by a wrongful and perverse attitude; (c) The order violated must be reasonable, lawful, and made known to the employee [Mirant Philippines Corp v. Sario, G.R. No. 197598 (2012]); and (d) The order must pertain to the duties which he has been engaged to discharge. [DO 147-15] Q71: WHEN CAN AN EMPLOYEE BE DISMISSED FOR GROSS AND HABITUAL NEGLECT OF DUTIES? A71: In order to constitute just cause for an employee’s dismissal due to negligence, (a) there must be neglect of duty; and (b) it must [be both gross and] habitual. Gross negligence 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. Gross negligence connotes want of care in the performance of one’s duties, while habitual neglect implies repeated failure to perform one’s duties for a period of time, depending on the circumstances. Q72: DISTINGUISH NEGLIGENCE AND LOSS OF CONFIDENCE AS A JUST CAUSE FOR DISMISSAL. A72: Gross negligence connotes want or absence of or failure to exercise slight care or diligence and absence of care. Habitual neglect implies repeated failure to perform one's duties for a period of time, depending upon the circumstances. Breach of trust and confidence is premised on the fact that the employee holds a position where great trust is placed by the management and from whom greater fidelity to duty is correspondingly expected. Q73: CAN AN ISOLATED ACT THAT IS NOT HABITUAL BE A GROUND FOR DISMISSAL? A73: No. A single or an isolated act that cannot be categorized as habitual, hence, not a just cause for their dismissal. [National Bookstore v. CA, G.R. No. 146741 (2002)] Q74: WHEN DOES LOSS OF TRUST AND CONFIDENCE CONSTITUTE A JUST CAUSE FOR DISMISSAL? A74: The loss of trust and confidence must be based on willful breach of the trust reposed in the employee by his employer. Such 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. And, in order to constitute a just cause for dismissal, the act complained of must be workrelated and shows that the employee concerned is unfit to continue working for the employer. In addition, loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence or that the employee concerned is entrusted with confidence with respect to delicate matters, such as handling or case and protection of the property and assets of the employer. The betrayal of this trust is the essence of the offense for which an employee is penalized. [Villanueva, Jr. v. NLRC, G.R. No. 176893 (2012)] Q75: WHAT ARE THE REQUISITES FOR DISMISSAL ON THE GROUND OF LOSS OF TRUST AND CONFIDENCE? A75: (a) The Employee concerned is one holding a position of trust and confidence. (b) There must be an act that would justify the loss of trust and confidence.
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(c) The loss of trust and confidence must be based on a willful breach of trust and founded on clearly established facts. [Wesleyan University – Philippines vs. Reyes, G.R. No. 208321 (2014)] Q76: WHAT ARE THE ELEMENTS OF FRAUD OR WILLFUL BREACH OF TRUST? A76: (a) There must be an act, omission or concealment; (b) The act, omission or concealment involves a breach of legal duty, trust or confidence justly reposed; (c) It must be committed against the employer or his/her representative; and (d) It must be in connection with the employee's work [DO 147-15] Q77: WHAT ARE THE ELEMENTS OF LOSS OF CONFIDENCE? A77: (a) There must be an act, omission or concealment; (b) The act, omission or concealment justifies the loss of trust and confidence of the employer to the employee; (c) The employee concerned must be holding a position of trust and confidence; (d) The loss of trust and confidence should not be simulated; (e) It should not be used as a subterfuge for causes which are improper, illegal or unqualified; and (f) It must be genuine and not a mere afterthought to justify an earlier action taken in bad faith. Q78: HOW IS THE DOCTRINE OF LOSS OF CONFIDENCE AS A GROUND FOR VALID TERMINATION APPLIED TO MANAGERIAL EMPLOYEES AS AGAINST FIDUCIARY RANK AND FILE EMPLOYEES? A78: While plain accusations are not sufficient to justify the dismissal of rank and file employees, the mere existence of a basis for believing that managerial employees have breached the trust reposed on them by their employer would suffice to justify their dismissal. [Grand Asian Shipping Lines, Inc. v. Galvez, G.R. No. 178184 (2014)] For fiduciary rank-and-file employees, proof of involvement in the alleged events in question is required. Q79: WHAT ARE THE ELEMENTS OF ANALOGOUS CAUSES? A79: (a) There must be an act or omission similar to those specified just causes (b) The act or omission must be voluntary and/or willful on the part of the employees. No act or omission shall be considered as analogous cause unless expressly specified in the company rules and regulations or policies [DO 147-15] Q80: WHEN IS AN ACT ANALOGOUS TO OTHER CAUSES? A80: One is analogous to another if it is susceptible of comparison with the latter either in general or in some specific detail or has a close relationship with the latter.
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Q81: WHAT ARE THE EXAMPLES OF “OTHER CAUSES ANALOGOUS” THAT MAY BE CONSIDERED AS JUST CAUSES FOR TERMINATION? A81: Other causes include: (a) Abandonment (b) Courtesy Resignation (c) Change of Ownership (d) Habitual Absenteeism/Tardiness (e) Poor Performance (f) Past Offenses (g) Inefficiency (h) Habitual Infractions (i) Immorality (j) Totality of infractions (k) Pregnancy out of wedlock (l) Conviction/Commission of a Crime (m) Temporary “Off-detail” or “floating status” Q82: WHEN IS THERE ABANDONMENT? A82: Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a form of neglect of duty. Two factors should be present: (1) Failure to report for work or absence without valid or justifiable reason, (2) Clear intention to sever ER-EE relationship. The burden to prove whether the employee abandoned his or her work rests on the employer. [Protective Maximum SecuritY, Inc vs. Celso E. Fuentes, G.R. No. 169303 (2015)] Q83: WHAT IS HABITUAL ABSENTEEISM/ TARDINESS? A83: Habitual tardiness is a form of neglect of duty. Lack of initiative, diligence, and discipline to come to work on time everyday exhibit the employee's deportment towards work. Habitual and excessive tardiness is inimical to the general productivity and business of the employer. This is especially true when the tardiness and/or absenteeism occurred frequently and repeatedly within an extensive period of time. [R.B. Michael Press v. Galit, G.R. No. 153510 (2008)] Q84: WHAT IS THE TOTALITY OF INFRACTIONS DOCTRINE? A84: The totality of infractions or the number of violations committed during the period of employment shall be considered in determining the penalty to be imposed upon an erring employee. Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct and ability separate and independent of each other. While it may be true that petitioner was penalized for his previous infractions, this does not and should not mean that his employment record would be wiped clean of his infractions. After all, the record of an employee is a relevant consideration in determining the penalty that should be meted out since an employee's past misconduct and present
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behavior must be taken together in determining the proper imposable penalty. [Merin v. NLRC, G.R. No. 171790 (2008)] Q85: TRUE OR FALSE. AN EMPLOYEE CAN BE DISMISSED BECAUSE OF REFUSAL TO ACCEPT A PROMOTION? A85: False. Dismissal due to an employee’s refusal of a promotion is not within the sphere of management prerogative. There is no law that compels an employee to accept promotion [Dosch v. NLRC, et. al.] An employee cannot be promoted without his consent, even if the same is merely a result of a transfer, and an employee’s refusal to accept promotion cannot be considered as insubordination or willful disobedience of a lawful order of the employer. Q86: WHAT ARE THE BUSINESS-RELATED CAUSES FOR TERMINATION AUTHORIZED BY THE LABOR CODE? A86: There are five business-related causes for termination: (1) installation of labor-saving devices, (2) retrenchment, (3) redundancy, (4) closure of business, (5) temporary/bona fide suspension of operations. Q87: WHEN CAN AN EMPLOYER DISMISS EMPLOYEES FOR INSTALLATION OF LABOR-SAVING DEVICES? A87: The installation of labor-saving device refers to the installation of machinery to effect economy and efficiency in the method of production. The elements of a valid termination on this ground are: (a) There must be an introduction of machinery, equipment or other devices; (b) The introduction must be done in good faith; (c) The purpose of such introduction must be valid as such as to save on cost, enhance efficiency, and other justifiable economic reasons; (d) There is no other option available to the employer than the introduction of the machinery, equipment or device, and the consequent termination of employment of those affected; and (e) There must be fair and reasonable criteria in selecting the employees to be terminated. The installation must be in good faith, and the employer must comply with procedural due process requirements. [DO 147-15] Q88: WHEN IS THERE A VALID RETRENCHMENT? A88: (a) The retrenchment is reasonably necessary and likely to prevent business; (b) The losses, if already incurred, are not merely de minimis, but substantial, serious, actual an real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer; (c) The expected or actual losses must be proved by sufficient and convincing evidence; (d) The retrenchment must be in good faith for the advancement of its interest and not to defeat or circumvent the employees’ right to security of tenure; and
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(e) There must be fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers. (f) The employer must comply with the notice requirement and pay the separation pays due. [DO 147-15] Q89: IS TRANSFER OF PLACE OF BUSINESS A CLOSURE OR RETRENCHMENT THAT WOULD MERIT THE PAYMENT OF SEPARATION PAY? A89: No. There is no complete dissolution of the business undertaking but the relocation of the place of business Q90: WHAT ARE THE ELEMENTS OF REDUNDANCY TO WARRANT DISMISSAL? A90: (a) There must be superfluous positions or services of employees; (b) The positions or services are in excess of what is reasonably demanded by the actual requirements of the enterprise to operate in an economical and efficient manner; (c) There must be good faith in abolishing redundant positions; (d) There must be fair and reasonable criteria in selecting the employees to be terminated; and (e) There must be an adequate proof of redundancy such as, but not limited to, the new staffing pattern, feasibility studies/proposal on the viability of the newly created positions, job description and the approval by the management of the restructuring [DO 147-15] Q91: WHAT ARE THE ELEMENTS OF A VALID CLOSURE OR CESSATION OF OPERATION? A91: (a) There must be a decision to close or cease operation of the enterprise by the management; (b) The decision was made in good faith; (c) There is no other option available to the employer except to close or cease operations. [DO 14715] Q92: WHAT ARE THE REQUISITES FOR A VALID DISMISSAL? A92: For a dismissal to be valid, both the substantive and procedural aspects of due process must be complied with. Substantive due process requires that the dismissal must be for any of the causes provided for in Article 297 – 299 of the Labor Code while procedural due process requires that the employee must be afforded an opportunity to be heard and defend himself. Q93: WHAT IS THE TWIN-NOTICE RULE? A93: The twin-notice rule requires an employer to prove that a worker dismissed for a just cause has been served two notices: (1) first written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side, (2)
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second written notice served upon the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. Q94: IF THE GROUND FOR DISMISSAL IS AN AUTHORIZED CAUSE, HOW SHOULD THE NOTICE BE SERVED? A94The employer must serve a written notice on the employee and the DOLE through its regional office having jurisdiction over the place of business at least 1 month before the intended date thereof. Q95: WHAT IS THE CONSEQUENCE FOR NOT COMPLYING WITH THE REQUISITES OF PROCEDURAL DUE PROCESS? A95: The dismissal remains valid so long as the substantive aspect of due process is complied with, meaning the dismissal is for a just or authorized cause. The violation of the petitioners right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. [Agabon v. NLRC, G.R. No. 158693 (2004)] Q96: WHAT ARE THE RELIEFS AN EMPLOYEE WHO WAS ILLEGALLY DISMISSED? A96: As a general rule, the twin reliefs of (a) reinstatement without loss of seniority rights and privileges; and (b) full backwages inclusive of allowances and to benefits or their monetary equivalent from the time withheld up to actual reinstatement. Q97: WHEN MAY SEPARATION PAY BE AWARDED IN LIEU OF REINSTATEMENT? A97: Separation pay may be awarded in lieu of reinstatement when reinstatement is no longer feasible, such as: (1) When there exist reasons which are not attributable to the fault or beyond the control of the employer; (2) When the illegally dismissed employee has contracted a disease and his reinstatement will endanger the safety of his co-employees; (3) Where a strained relationship exists between the ER and the EE. Q98: WHAT IS THE BASIS OF COMPUTATION OF BACKWAGES? A98: An illegally dismissed employee is entitled to full backwages inclusive of allowances and to his other benefits computed from the time of illegal dismissal up to actual reinstatement. In case reinstatement is no longer feasible, backwages shall be computed up to the finality of the decision. The computation of backwages should be based on the salary the employee was receiving at the time of the dismissal. General increases in basic salary are NOT included in the computation of backwages as they are neither allowance nor benefit.
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Q99: TRUE OR FALSE. IN ILLEGAL DISMISSAL CASES, AN EMPLOYEE DOES NOT HAVE TO PROVE THE FACT OF DISMISSAL. A99: False. In illegal dismissal cases, an employee must first establish, by substantial evidence, the fact of dismissal before shifting to the employer the burden of proving the validity of such dismissal. [Grand Asian Shipping Lines, Inc., Eduardo P. Francisco and William How v. Wilfred Galvez, et al. (2004)] Q100: IS AN EMPLOYER REQUIRED TO ADMIT A DISMISSED EMPLOYEE BACK TO WORK ON THE GROUND OF THE LABOR ARBITER’S DECISION REINSTATING THE LATTER? A100: No. The employer is given an option to either actually reinstate the dismissed employee or constructively reinstate him in the payroll. However, the Labor Arbiter’s decision is immediately executory pending appeal. Q101: IF THE NLRC REVERSES THE DECISION OF THE LABOR ARBITER REINSTATING A DISMISSED EMPLOYEE, MAY AN EMPLOYEE BE COMPELLED TO REIMBURSE THE SALARY AND WAGES RECEIVED DURING THE PENDENCY OF THE APPEAL? A101: No. An employee cannot be compelled to reimburse the salaries and wages he received during the pendency of his appeal, notwithstanding the reversal by the NLRC of the LA's order of reinstatement. [College of the Immaculate Conception v. NLRC, G.R. No. 167563 (2010)] Rule XI, Sec. 14 of the 2011 NLRC Rules of Procedure expressly disallows restitution of wages paid due to reinstatement pending appeal. Q102: WHAT IS THE DOCTRINE OF STRAINED RELATIONS? A102: Doctrine of Strained Relations provides that where reinstatement is not feasible, expedient or practical, as where reinstatement would only exacerbate the tension and strained relations between the parties or where the relationship between the employer and employee has been unduly strained by reason of their irreconcilable differences, particularly where the illegally dismissed employee held a managerial or key position in the company, it would be more prudent to order payment of separation pay instead of reinstatement. [Quijano v. Mercury Drug Corp., G.R. No. 126561 (1998)] Q103: IS THE 30-DAY PERIOD FOR PREVENTIVE SUSPENSION EXTENDIBLE? A103: Yes. Upon the expiry of such period, the employer shall thereafter reinstate the worker in his former or in a substantially equivalent position, or extend the period of suspension provided that during the period of extension, he pays the wages and other benefits due to the worker. [Sec. 9, Rule XXIII, Book V, IRR] Q104: IS THE EMPLOYEE ENTITLED TO WAGES WHILE PREVENTIVELY SUSPENDED? A104: As a general rule, the employee is not entitled to wages during the period of valid preventive suspension. If the preventive suspension is found to be without valid basis, the employer is required to pay the employee his backwages during the period of suspension. Q105: WHAT IS CONSTRUCTIVE DISMISSAL? A105: Constructive dismissal is cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or diminution in pay or both; or
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when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee. Q106: CAN AN EMPLOYEE CITE SECURITY OF TENURE AS BASIS TO REFUSE HIS TRANSFER OR CHANGE OF ASSIGNMENT? A106: No. An employee’s right to security of tenure does not give him such 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. When the transfer is not unreasonable, or inconvenient, or prejudicial to the employee, and it does not involve a demotion in rank or diminution of salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal. [Bisig ng Manggagawa sa TRYCO v. NLRC, G.R. No. 151309 (2008)] Q107: CAN A CATHOLIC SCHOOL, CITING “DISGRACEFUL AND IMMORAL CONDUCT” AND MANAGEMENT PREROGATIVE, DISMISS AN EMPLOYEE WHO GOT PREGNANT OUT OF WEDLOCK? A107: The fact of pregnancy out of wedlock, without more, is not enough to characterize the conduct as disgraceful or immoral. The determination of whether a conduct is disgraceful or immoral involves a two-step process: first, a consideration of the totality of the circumstances surrounding the conduct; and second, an assessment of the said circumstances vis-à-vis the prevailing norms of conduct, i.e., what the society generally considers moral and respectable. For a particular conduct to constitute “disgraceful and immoral” behavior under civil service laws, it must be such that it needs to be regulated on account of the concerns of public and secular morality. Pre-marital sexual relations between two consenting adults who have no impediment to marry each other, and, consequently, conceiving a child out of wedlock, gauged from a purely public and secular view of morality, does not amount to a disgraceful or immoral conduct. [Leus v. St. Scholastica's College Westgrove, January 28, 2015] Q108: IS A COMPANY'S POLICY OF MARITAL DISCRIMINATION VALID IN OUR JURISDICTION? A108: The employer must be able to prove a reasonable business necessity which requires the imposition of such occupational qualification. Otherwise, such policy will be an invalid exercise of management prerogative. [Star Paper Corp. v. Simbol (2006)] In the case of the pharmaceutical industry where trade secrets are involved, the company's policy of prohibiting an EE from having an amorous relationship with an EE of a competitor is a valid exercise of management prerogative. [Duncan Association v. Glaxo Wellcome (2004)] Q109: X SECURITY AGENCY ENTERED INTO A CONTRACT WITH J CORPORATION. PURSUANT TO THIS, X ASSIGNED S AS VIP SECURITY DETAIL FOR ITS CORPORATE OFFICERS MR. AND MRS. G. ON AUGUST 15, 2006, S WAS RELIEVED BY J CORPORATION FROM HIS DUTIES. IN SEPTEMBER OF 2006, X OFFERED S A POSITION IN THE GENERAL SECURITY SERVICE BECAUSE THERE WERE NO AVAILABLE CLIENTS REQUIRING POSITIONS FOR VIP SECURITY. S, HOWEVER DECLINED THE ASSIGNMENT ON THE GROUND THAT HE IS NOT USED TO BEING A REGULAR SECURITY GUARD. FOR MORE THAN SIX MONTHS AFTER HE REPORTED BACK TO X, S WAS WITHOUT ANY REASSIGNMENT. THEREAFTER, SERRANO FILED A COMPLAINT FOR ILLEGAL DISMISSAL AGAINST X. THE LA AND NLRC RULED THAT S WAS CONSTRUCTIVELY DISMISSED. WHEN J CORPORATION RELIEVED S OF HIS DUTIES AS VIP SECURITY ON AUGUST 15, 2006, DID S LOSE HIS STATUS AS BEING EMPLOYED?
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A109: No. S was merely placed on floating status after his relief from his post as a VIP security by his security agency’s client. Temporary "off-detail" or "floating status" is the period of time when security guards are in between assignments or when they are made to wait after being relieved from a previous post until they are transferred to a new one. It does not constitute a dismissal so long as such status does not continue beyond a reasonable time. However, when such a "floating status" lasts for more than six (6) months, the employee may be considered to have been constructively dismissed. [Tatel v. JLFP (2015)] Q110: ARE COMMISSIONS INCLUDED IN THE COMPUTATION FOR BASIC SALARY? A110: If commissions have no direct or necessary relation to the amount of work put in by the employer and the commissions are given merely as a bonus to employees, pursuant to the ruling in Boie-Takeda v. de la Serna (1993), the commissions are not to be included in the computation for basic salary. However, if the commissions constitute remunerations or compensation for the work done by the employee and form a significant part of the salary received, under Philippine Duplicators v. NLRC (1995) ruling, these would form part of the basic salary. Q111: WHAT IS SEPARATION PAY AND HOW IS IT COMPUTED? A111: Separation pay is defined as the amount that an employee receives at the time of his severance from the service and is designed to provide the employee with the wherewithal during the period that he is looking for another employment. [A’ Prime Security Services vs NLRC (1993)] If the separation from service is due to any of the following: Retrenchment to prevent losses, Closure or cessation of operation of an establishment not due to serious losses or financial reverses; or, when the EE is suffering from a disease not curable within a period of six (6) months and his/her continued employment is prejudicial to his/her health or to the health of his/her co-employees, an employee is entitled to receive separation pay equivalent to at least ½ month pay for every year of service or 1 month pay, whichever is higher, a fraction of at least six (6) months being considered as one whole year. If the separation is due to: Installation by employer of labor-saving devices; Redundancy, as when the position of the employee has been found to be excessive or unnecessary in the operation of the enterprise; Impossible reinstatement of the employee to his/her former position or to a substantially equivalent position for reasons not attributable to the fault of the employer, as when the reinstatement ordered by a competent authority cannot be implemented due to closure of cessation of operations of the establishment/employer, or the position to which he/she is to be reinstated no longer exists and there is no substantially equivalent position in the establishment to which he/she can be assigned, separation pay is equivalent to at least one month or one-month pay for every year of service, a fraction of at least 6 months being considered as one whole year. If separation is due to closure of business due to financial losses, no separation pay is required. Q112: WHO ARE ELIGIBLE TO RECEIVE RETIREMENT PAY? A112: Generally, all employees in the private sector, regardless of their position, designation, or status, and irrespective of the method by which their wages are paid, upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract or of the statutory age of 60 years or more but not beyond 65 years which is the compulsory retirement age. The following are not entitled to retirement pay: employees of the National Government and its political subdivisions, including Government-owned and/or controlled corporations, covered by the Civil Service Law; domestic helpers and persons in the personal service of another, and employees in retail, service and agricultural establishments or operations regularly employing not more than ten employees.
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Q113: HOW MUCH IS THE MINIMUM RETIREMENT PAY REQUIRED BY LAW? A113: The minimum retirement pay shall be equivalent to 1/2 month salary for every year of service, a fraction of at least 6 months being considered as one whole year. “One-half month salary” shall include all: 15 days salary based on the latest salary rate; cash equivalent of 5 days of service incentive leave; and 1/12 of the 13th month pay. One half month salary is equivalent to 22.5 days. Q114: ARE RETIREMENT BENEFITS TAXABLE? A114: No. The retirement benefits received by officials and employees of private firms, whether individual or corporate, in accordance with a reasonable private benefit plan maintained by the employer shall be exempt from all taxes and shall not be liable to attachment, garnishment, levy or seizure by or under any legal or equitable process whatsoever provided the additional conditions under the law are met: (1) the retiring official or employee has been in the service of the same employer for at least 10 years and is not less than 50 years of age at the time of his retirement; (2) the retirement benefits shall be availed of by an official or employee only once; and, (3) in case of separation of an official or employee from the service of the employer due to death, sickness or other physical disability or for any cause beyond the control of the said official or employee, any amount received by him or by his heirs from the employer as a consequence of such separation shall likewise be exempt as hereinabove provided. However, the retirement benefit may be charged to pay a debt of the official or employee concerned to the private benefit plan or that arising from liability imposed in a criminal action. Q115: WHAT ARE THE LIMITS TO THE EXERCISE OF MANAGEMENT PREROGATIVE? A115: It must be: (1) 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 under valid agreements; (2) exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play; (3) it must be in accordance with the law and (4) under valid collective bargaining agreement stipulations, if any; and (5) under the principles of equity and substantial justice. Q116: WHEN IS A POST-RETIREMENT COMPETITIVE EMPLOYMENT BAN VALID? A116: As a general rule, post-retirement competitive bans are valid, as long as the restrictions are reasonable. In order to determine whether restrictive covenants are reasonable or not, the following factors should be considered:(a) whether the covenant protects a legitimate business interest of the employer; (b) whether the covenant creates an undue burden on the employee; (c) whether the covenant is injurious to the public welfare; (d) whether the time and territorial limitations contained in the covenant are reasonable; and (e) whether the restraint is reasonable from the standpoint of public policy [Rivera v. Solidbank (2006)]
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Q117: WHEN WILL A POST-EMPLOYMENT BAN BE AN UNREASONABLE COMPANY POLICY? A117: A post-retirement competitive employment ban is an unreasonable company policy if it does not provide geographical limits, even if only for a period of one year. [Rivera v. Solidbank (2006)] Q118: WHO ARE COVERED UNDER THE SSS LAW? A118: i. Compulsory (1) Employees not over 60 years including domestic helpers with at least P1,000 monthly pay; and (2) Self-employed as may be determined by the Commission ii. Voluntary (1) Spouses who devote full time to managing household and family affairs, unless they are also engaged in other vocation or employment [which is subject of compulsory coverage]; (2) OFWs recruited by foreign-based employers; (3) Employees [previously under compulsory coverage] already separated from employment or those self-employed [also under compulsory coverage] with no realized income for a given month, who chose to continue with contributions to maintain right to full benefit. Q119: WHO ARE EXCLUDED FROM THE COVERAGE OF THE SSS LAW? A119: (1) Those whose employment is purely casual, not for the purpose of occupation or business of the employer. (2) Service performed on or in connection with an alien vessel by an employee if he is employed when such vessel is outside the Philippines; (3) Service performed in the employ of the Philippine Government or instrumentality or agency thereof; (4) Service performed in the employ of a foreign government or international organization, or their wholly-owned instrumentalities; and (5) Services performed by temporary and other employees which may be excluded by SSS regulation. Employees of bona fide independent contractors shall not be deemed employees of the employer engaging the services of said contractors. Q120: WHAT ARE THE ELIGIBILITY REQUIREMENTS FOR MATERNITY LEAVE BENEFITS AND WHEN ARE THEY ACCRUED? A120: (1) A female member (2) Paid at least three [3] monthly contributions in the twelve-month period immediately preceding the semester of her childbirth or miscarriage
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(3) She shall have notified her employer of her pregnancy and the probable date of her childbirth, which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide The maternity benefits provided shall be paid only for the first four [4] deliveries or miscarriages. Q121: WHO ARE THE BENEFICIARIES UNDER THE SS S LAW? A21: (1) Primary (a) Dependent spouse (b) Dependent children [legitimate, adopted, and illegitimate]; illegitimate children are entitled only to 50% of the share of legitimate children unless there are no legitimate children, in which case, they get 100%. (2) Secondary – shall only receive when the primary beneficiaries are absent. Dependent parents only (3) Others – shall only receive when the primary and secondary beneficiaries are absent. They are any other persons designated by the member as his/her secondary beneficiary Q122: MAY AN EMPLOYEE COMBINE HIS CONTRIBUTIONS TO THE SSS WITH HIS CONTRIBUTIONS TO THE GSIS? A122: 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. Q123: WHAT IS THE EFFECT OF BEING DISHONORABLY DISCHARGED FROM THE SERVICE? A123: The person will automatically forfeit his right to the benefits that he or his beneficiaries could have been entitled to receive from the GSIS. Q124: WHO ARE COMPULSORILY COVERED BY THE GSIS? A124: (1) All employees receiving compensation who have not yet reached the compulsory retirement age, irrespective of the employment status; (2) Only for life insurance policy: Members of the judiciary and constitutional commissions Q125: WHAT ARE REQUIRED FOR A CLAIM FOR DEATH BENEFITS? A125: In the case of Tancinco v. GSIS [G.R. No. 132916, Nov. 16, 1991]: (a) The employee must be at the place where his work requires him to be (b) The employee must have been performing his official functions
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(c) Should the injury be sustained elsewhere, the employee must have been executing an order for the employer. Q126: 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 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? (3 %) A126: The GSIS was correct in denying the claim but the ground should have been that Luis, being a PNP officer, is excluded from the coverage of the GSIS Law (Sec. 3). As such, his widow cannot claim benefits under the said law. Q127: 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 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? (4%) (TAKEN FROM 2014 BAR, ALSO APPEARED IN 2011 BAR) A127: Under the Limited Portability Law (RA 7699), he will carry his creditable services and paid contributions and the same shall be totalized as he moves from one system to another for purposes of old age, disability, survivorship and other benefits. If there are overlapping periods of membership, they shall be credited only once for purposes of totalization. Q128: THE COA DISALLOWED CERTAIN BENEFITS GRANTED TO GSIS EMPLOYEES. AS A RESULT, THE GSIS DEDUCTED THE SAME FROM THE EMPLOYEES’ RETIREMENT BENEFITS, INTERPRETING THE SAME TO HAVE BECOME MONETARY LIABILITIES OF THE EMPLOYEES AND, THEREFORE, AN EXCEPTION UNDER SEC. 39 OF THE RA 8291. IS THE GSIS CORRECT? A128: No. In GSIS v. COA (G.R. Nos. 138381 & 141624, Nov. 10, 2004), the Court stated that under Sec. 39, RA 8291, COA disallowances cannot be deducted from benefits as the same are explicitly made exempt by law from such deductions. Retirement benefits cannot be diminished by COA disallowances in view of the same provision. To accept the GSIS’ interpretation would allow it to simply consider such disallowances as monetary liabilities in its favor and would empower it to withdraw, at its option, an exemption expressly granted by law. This could not have been the intention of the statute. Q129: WHEN WILL AN INJURY AND RESULTING DISABILITY OR DEATH BE COMPENSABLE? WHEN WILL IT NOT BE COMPENSABLE? A129: It will be compensable when: (1) The injury arises out of and in the course of the employment (2) The sickness must be the result of an occupational disease; otherwise, it must be shown that the risk of contracting the disease is increased by the working conditions It will not be compensable when the injury, sickness, disability, or death was due to: (1) His intoxication (2) His willful intention to injure or kill himself or another; or
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LABOR RELATIONS Q130: WHO MAY EXERCISE THE RIGHT TO SELF-ORGANIZATION? A130: (1) All employees (2) Government employees of corporations created under the Corporation Code (3) Supervisory Employees (4) Aliens with valid working permits (5) Security personnel Q131: TRUE OR FALSE - RANK AND FILE UNION AND SUPERVISORS' UNION CANNOT JOIN THE SAME FEDERATION? A131: False. The rank and file union and the supervisors’ union operating within the same establishment may join the same federation or national union. [Art. 255] Q132: ALL CONFIDENTIAL EMPLOYEES ARE DISQUALIFIED TO UNIONIZE FOR THE PURPOSE OF COLLECTIVE BARGAINING. TRUE OR FALSE? A132: False. Not all confidential employees are disqualified to unionize for the purpose of collective bargaining. Only confidential employees, who, because of the nature of their positions, have access to confidential information affecting labor-management relations as an integral part of their positions are denied the right to self-organization for purpose of collective bargaining [San Miguel Corporation Supervisors vs. Laguesma, 1997] Q133: MAY MANAGERIAL EMPLOYEES FORM A UNION? A133: No. Managerial employees are not eligible to join, assist or form any labor organization [Article 255]. Q134: ARE SUPERVISORY EMPLOYEES ALLOWED TO ORGANIZE? A134: Yes. Supervisory employees may join, assist or form labor organizations but shall not be eligible for membership in any labor organization of the rank-and-file employees [Article 255]. Q135: WHO CANNOT FORM, JOIN, OR ASSIST LABOR ORGANIZATIONS? A135:Managerial employees, confidential employees, non-employees, member-employee of a cooperative, employees of international organizations, high level government employees, and members of the AFP, police officers, policemen, firefighters, and jail guards cannot form, join, or assist labor organizations.
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Q136: WHAT IS THE EFFECT OF COMMINGLING (INCLUSION AS UNION MEMBERS OF EMPLOYEES OUTSIDE THE BARGAINING UNIT)? A136: It 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. [Art. 256] Q137: WHAT IS THE NATURE OF THE RELATIONSHIP BETWEEN THE MEMBERS AND THE LABOR UNION? A137: The nature of the relationship between the union and its members is fiduciary in nature, which arises from the dependence of the employee on the union, and from the comprehensive power vested in the union with respect to the individual. The union may be considered but the agent of its members for the purpose of securing for them fair and just wages and good working conditions. [Heirs of Cruz v. CIR, G.R. No. L-23331-32 (1969)] Q138: WHAT IS THE NATURE OF THE RELATIONSHIP BETWEEN THE LABOR UNION AND THE FEDERATION? A138: It is one of agency. The mother union, acting for and in behalf of its affiliate, had the status of an agent while the local union remained the basic unit of the association, free to serve the common interest of all its members subject only to the restraints imposed by the constitution and by-laws of the association. The same is true even if the local is not a legitimate labor organization. [Filipino Pipe and Foundry Corp v. NLRC, G.R. No. 115180 (1998)] Q139: WHAT IS THE EFFECT OF THE AFFILIATION OF A LOCAL CHAPTER (CHARTERED LOCAL) AND A NATIONAL UNION? A139: Under the rules implementing the Labor Code, a chartered local union acquires legal personality through the charter certificate issued by a duly registered federation or national union, and reported to the Regional Office in accordance with the rules implementing the Labor Code. 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. Q140: WHAT IS THE RULE ON THE “EQUITY OF THE INCUMBENT”? A140: The rule on “equity of the incumbent” states that all existing federations and national unions which meet the qualifications of a legitimate labor organization and none of the grounds for cancellation shall continue to maintain their existing affiliates regardless of the nature of the industry and the location of the affiliates. Q141: WHAT ARE THE EFFECTS OF DISAFFILIATION? A141: On legal personality. A registered independent union retains its legal personality while a chartered local loses its legal personality unless it registers itself. No effect on CBA. A disaffiliation does not disturb the enforceability and administration of a collective agreement; it does not occasion a change of administrators of the contract nor even an amendment of the provisions thereof. [Volkschel Labor Union v. BLR, No. L-45824 (1985)]
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Obligation to pay union dues is coterminous with membership. The obligation of an employee to pay union dues is coterminous with his affiliation or membership. “The employees’ check--off authorization, even if declared irrevocable, is good only as long as they remain members of the union concerned”. A contract between an employer and the parent organization as bargaining agent for the employees is terminated by the disaffiliation of the local of which the employees are members. [Volkschel Labor Union v. BLR, No. L-45824 (1985) Power to represent principal severed. By [the local union’s disaffiliation from the federation], the vinculum that previously bound the two entities was completely severed. [The federation] was divested of any and all power to act in representation of the union. Thus, any act performed by [the federation] affecting the interests and affairs of the [local union] is rendered without force and effect. [ANGLO v. Samana, G.R. No. 118562 (1996)] Q142: WHAT IS THE SUBSTITUTIONARY DOCTRINE? A142: The “substitutionary” doctrine provides that the employees cannot revoke the validly executed collective bargaining contract with their employer by the simple expedient of changing their bargaining agent. It is in the light of this that the phrase "said new agent would have to respect said contract" must be understood. It only means that the employees, thru their new bargaining agent, cannot renege on their collective bargaining contract, except of course to negotiate with management for the shortening thereof [Benguet Consolidated v. BCI Employees and Workers Union-PAFLU, 1998]. Q143: WHAT ARE THE CONDITIONS FOR THE SUBSTITUTIONARY DOCTRINE TO APPLY? A143: (1) Change of bargaining agent [through affiliation, disaffiliation, or other means]; (2) Existing CBA with the previous bargaining agent. Q144: WHAT ARE THE EFFECTS OF THE SUBSTITUTIONARY DOCTRINE? A144: (1) New bargaining agent cannot revoke and must respect the existing CBA (2) It may negotiate with management to shorten the existing CBA’s lifetime. Q145: WHAT IS A BARGAINING UNIT? A145: “Bargaining Unit” refers to a group of employees sharing mutual interests within a given employer unit, comprised of all or less than all of the entire body of employees in the employer unit or any specific occupational or geographical grouping within such employer unit. [Sec. 1(e), Rule I, Book V, IRR] Q146: WHAT IS THE GLOBE DOCTRINE? A146: The Globe doctrine refers to a practice which sanctions the holding of a series of elections, not for the purpose of allowing the group receiving an overall majority of votes to represent all employees, but for the specific purpose of permitting the employees in each of the several categories to select the group which each chooses as a bargaining unit [Kapisanan ng mga Manggagawa sa Manila Road v Yard Crew Union, 1960].
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Q147: WHAT IS A SEBA CERTIFICATION? A147: A SEBA certification is certification granted to any legitimate labor organization upon filing a request by the organization in the regional office which issued its certificate of registration or certificate of creation of chartered local. SEBA certification replaced Voluntary Recognition [DO 40-1-15, 2015]. A request for SEBA certification shall include the following: (a) Names and addresses of the requesting legitimate labor organization; (b) Name and address of the company where it operates; (c) Bargaining unit sought to be represented; (d) Approximate number of employees in the bargaining unit; and (e) Statement of the existence or nonexistence of other labor organization/CBA. Q148: WHAT IS CERTIFICATION ELECTION? A148: Certification election is the process of determining, through secret ballot, the sole and exclusive representative of the employees in an appropriate bargaining unit, for purposes of collective bargaining or negotiation [Book V, Rule I Sec. 1 [h]]. Q149: WHO MAY FILE FOR A PETITION FOR CERTIFICATION ELECTION? A149: (1) Legitimate labor organization (registered w/ DOLE) (2) Unregistered local chapter with charter certificate from national union or federation; (3) National union or federation in behalf of its local/chapter; (4) Employer (when requested to bargain collectively and no existing CBA). Q150: WHAT IS THE PROCEDURE FOR CERTIFICATION ELECTION IN AN UNORGANIZED ESTABLISHMENT? A150: (a) Petition for certification shall be filed by a legitimate labor organization. (b) Upon filing of the petition, the Med-Arbiter shall automatically conduct a certification election. Q151: WHAT IS THE PROCEDURE FOR CERTIFICATION ELECTION IN AN ORGANIZED ESTABLISHMENT? A151: (1) A verified petition questioning the majority status shall be filed by a legitimate labor organization (2) It must be filed within the 60-day period before expiration of CBA (freedom period) (3) Supported by written consent of at least 25% of ALL employees in the bargaining unit (substantial support). (4) Med-arbiter shall automatically order an election.
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Q152: WHAT ARE THE BARS TO CERTIFICATION ELECTION? A152: (a) One-year bar rule No certification election may be held within 1 year from the time a valid certification, consent or run-off election has been conducted within the bargaining unit. If the order of the Med-Arbiter certifying the results of the election has been appealed, the running of the one year period shall be suspended and the reckoning period is the date when the decision becomes final and executory. [Book V, Rule VIII, Sec 3 [a]] (b) Negotiation bar rule; No certification of election may be filed when: (1) Within 1 year after the valid certification election (2) The duly certified union has COMMENCED AND SUSTAINED negotiations in good faith with the employer (3) In accordance with Art. 261 of the Labor Code [Book V, Rule VIII, Sec 3 [b]] (c) Deadlock bar rule; No certification of election may be filed when: (1) The incumbent or certified bargaining agent is a party; (2) A bargaining deadlock had been: submitted to conciliation or arbitration or; had become the subject of a valid notice of strike or lockout [Book V, Rule VIII, Sec. 3 [c]] A “deadlock” is defined as the counteraction of things producing entire stoppage; a state of inaction or of neutralization caused by the opposition of persons or of factions (as in government or voting body); standstill. The word is synonymous with the word impasse which presupposes reasonable effort at good faith bargaining which, despite noble intentions, does not conclude in agreement between the parties [Divine World University v. SOLE, G.R. No. 91915 (1992)] (d) Contract bar rule. BLR shall not entertain any petition for certification election or any other action which may disturb the administration of DULY REGISTERED existing collective bargaining agreements affecting the parties [Art. 238], except: (1) When the petition is filed during the freedom period in Articles 264, 265, and 268. (2) When the CBA is incomplete (3) When the CBA is substandard (4) When the CBA is prematurely renewed (5) When the CBA is unregistered Q153: IS AN EMPLOYER A PARTY TO THE PETITION FOR HOLDING A CERTIFICATION ELECTION? A153: No, the employer shall not be considered a party in the petition with a concomitant right to oppose a petition for certification election. The employer’s participation shall be limited to: (1) Being notified or informed of petitions of such nature (2) Submitting the list of employees during the pre-election conference should the Med-arbiter act favorably on the petition [Art. 271]
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Q154: IS THE REQUISITE WRITTEN CONSENT OF 25% APPLICABLE FOR A PETITION FOR CERTIFICATE APPLICATION APPLIES AS WELL TO A MOTION FOR INTERVENTION? A154: No. Nowhere in the legal provisions does it appear that a motion for intervention in a certification election must be accompanied by a similar written consent. Not even in the Implementing Rules of the Labor Code [PAFLU v. Calleja] Q155: WHO IS A FORCED INTERVENOR IN A PETITION FOR CERTIFICATE ELECTION? A155: The incumbent bargaining agent shall automatically be one of the choices in the certification election as forced intervenor. [Sec. 7, Rule VIII, Book V] Q156: WHEN IS A MOTION FOR INTERVENTION IN A PETITION CERTIFICATION FILED IF THE ESTABLISHMENT IS UNORGANIZED? IF ORGANIZED? A156: For unorganized establishments, it must be filed any time prior to the decision of the Med-Arbiter. For organized establishments, it must be filed during the freedom period. Q157: WHAT IS THE DOUBLE MAJORITY RULE? A157: (1) There must be a valid election; and Valid Election: At least majority of the number of eligible voters have casted their vote (2) The winning union must garner majority of the VALID votes Q158: WHEN ARE DISMISSED EMPLOYEES ELIGIBLE TO VOTE IN A PETITION FOR CERTIFICATION ELECTION? A158: Dismissed employees who contested legality of dismissal in a forum of appropriate jurisdiction at the time of issuance of order for conduct of a certificate election. [Sec. 6, Rule IX, Book V] Q159: WHEN ARE DISMISSED EMPLOYEES NOT ELIGIBLE TO VOTE A PETITION FOR CERTIFICATION ELECTION? A159: The dismissal was declared valid in a final judgment at the time of the conduct of the certification election. [Sec. 6, Rule IX, Book V] Q160: IF THE WINNER OF THE CERTIFICATION ELECTION WAS DISQUALIFIED, DOES IT RENDER THE CHOICE WHICH GARNERED THE 2ND HIGHEST VOTES AS THE WINNER? A160: No. Disqualification of winning candidates will not automatically result in the assumption of office of those who garnered the second highest number of votes. The mere fact that they obtained the second highest number of votes does not mean that they will thereby be considered as the elected officers if the true winners are disqualified. [Manalad v. Trajano]
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Q161: MAY COLLECTION AGENTS HIRED BY A COMPANY FORMED A UNION AND FILED A PETITION FOR CERTIFICATION ELECTION? A161: The collection agents in this case are independent contractors of the company. Thus, they are nonemployees. Non-employees of a Company are not entitled to the constitutional right to join or form a labor organization for purposes of collective bargaining. Accordingly, there is no constitutional and legal basis for such employees to form a "union" and to be granted their petition for direct certification. Q162: WHAT IS THE EFFECT OF A PETITION FOR CERTIFICATION ELECTION FILED BY A RANK-ANDFILE UNION WHICH HAS BEEN PARTLY SIGNED BY SUPERVISORY EMPLOYEES? A162: While Article 255 expressly prohibits supervisory employees from joining a rank-and-file union, it does not provide what would be the effect if a rank-and-file union counts supervisory employees among its members, or vice-versa. The inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 256 of the Labor Code. Q163: WHAT IS THE DUTY TO BARGAIN COLLECTIVELY WHEN THERE EXISTS A CBA? A163: It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties. Q164: HOW DO YOU DETERMINE A MANDATORY BARGAINABLE ISSUE? A164: The test to determine if an issue is a mandatory bargainable issue is whether or not there is a connection between the proposal and the nature of the work. The issue must materially or significantly affect the terms and conditions of employment, and must not depend on its form, but on its practical effect. Q165: WHAT ARE AGENCY FEES? DISTINGUISH IT FROM UNION DUES. A165: Agency fees are the dues and other fees which may be assessed from non-union members within the bargaining unit who accept and avail of the benefits flowing from the CBA. Union dues are union funds paid by union members, normally through check-off by the employer on the basis of an individual written authorization duly signed by the employees pursuant to Article 250 of the Labor Code. Agency fee, on the other hand, is a reasonable fee equivalent to the dues and other fees paid by members of the recognized collective bargaining agent. Article 259 of the Labor Code mandates that only non-union members who accept the benefits under the CBA may be assessed agency fees. Their check-off authorization is not required. Q166: WHAT IS A CHECK-OFF? WHO HAS JURISDICTION OVER CHECK-OFFS DISPUTES? A166: A check-off is a process or device whereby the employer, on agreement with the Union, recognized as the proper bargaining representative, or on prior authorization from the employees, deducts union dues or agency fees from the latter’s wages and remits them directly to the Union. [Marino v Gamilla, 2009]. This is done primarily for the benefit of the union and indirectly for the benefit of the individual employees. Jurisdiction over check-off disputes is conferred to the Bureau of Labor Relations.
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Q167: EXPLAIN THE IMPACT OF THE UNION SECURITY CLAUSE TO THE EMPLOYEES’ RIGHT OF SECURITY OF TENURE. A167: A valid union security clause when enforced or implemented for cause, after according the worker his substantive and procedural due process rights does not violate the employees’ right to security of tenure [Alabang Country Club vs. NLRC, 2008]. Article 259(e) of the Labor Code allows union security clauses and a failure to comply with the same as a valid ground to terminate employment. Q168: WHAT ARE THE REQUISITES FOR A VALID TERMINATION DUE TO UNION SECURITY PROVISION? A168: The employer needs to determine and prove that: (1) The union security clause is applicable; (2) The union is requesting for the enforcement of the union security provision in the CBA; AND (3) There is sufficient evidence to support the union’s decision to expel the employee from the union. Q169: PABLO WORKS AS A DRIVER AT THE NATIONAL TIRE COMPANY (NTC). HE IS A MEMBER OF THE MALAYANG SAMAHAN NG MANGGAGAWA SA NTC, THE EXCLUSIVE RANK-AND-FILE COLLECTIVE BARGAINING REPRESENTATIVE IN THE COMPANY. THE UNION HAS A CBA WITH NTC WHICH CONTAINS A UNION SECURITY AND A CHECK-OFF CLAUSE. THE UNION SECURITY CLAUSE CONTAINS A MAINTENANCE OF MEMBERSHIP PROVISION THAT REQUIRES ALL MEMBERS OF THE BARGAINING UNIT TO MAINTAIN THEIR MEMBERSHIP IN GOOD STANDING WITH THE UNION DURING THE TERM OF THE CBA UNDER PAIN OF DISMISSAL. THE CHECK-OFF CLAUSE ON THE OTHER HAND AUTHORIZES THE COMPANY TO DEDUCT FROM UNION MEMBERS' SALARIES DEFINED AMOUNTS OF UNION DUES AND OTHER FEES. PABLO REFUSED TO ISSUE AN AUTHORIZATION TO THE COMPANY FOR THE CHECK-OFF OF HIS DUES, MAINTAINING THAT HE WILL PERSONALLY REMIT HIS DUES TO THE UNION. WOULD THE NTC MANAGEMENT COMMIT UNFAIR LABOR PRACTICE IF IT DESISTS FROM CHECKING OFF PABLO'S UNION DUES FOR LACK OF INDIVIDUAL AUTHORIZATION FROM PABLO? A169a: No, check-offs in truth impose an extra burden on the employer in the form of additional administrative and bookkeeping costs. It is a burden assumed by management at the instance of the union and for its benefit, in order to facilitate the collection of dues necessary for the latter‘s life and sustenance. But the obligation to pay union dues and agency fees obviously devolves not upon the employer, but the individual employee. It is a personal obligation not demandable from the employer upon default or refusal of the employee to consent to a check-off. The only obligation of the employer under a check-off is to effect the deductions and remit the collection to the union. [Holy Cross of Davao College v. Joaquin, 1996] CAN THE UNION CHARGE PABLO WITH DISLOYALTY FOR REFUSING TO ALLOW THE CHECK OFF OF HIS UNION DUES AND, ON THIS BASIS, ASK THE COMPANY TO DISMISS HIM FROM EMPLOYMENT? A169b: No, the check-off off clause in the CBA will not suffice. The law prohibits interference with the disposition of one‘s salary. The law requires ―individual written authorization‖ to deduct union dues from Pablo‘s salaries. For as long as he pays union dues, Pablo cannot be terminated from employment under the union security clause. As a matter of fact, filing a complaint against the union before the Department of Labor forcible deduction from salaries does not constitute acts of disloyalty against the union [Tolentino v. Angeles, 52 O.G. 4262].
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Q170: DISTINGUISH BETWEEN A ‘CLOSED SHOP’ CLAUSE AND A ‘MAINTENANCE OF MEMBERSHIP’ CLAUSE. A170: A closed shop clause is an agreement between the employer and his employees or their representatives, where no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part. Such clause requires the employee to be a member of the union at the time of hiring and must remain so during the period of employment. On the other hand, a maintenance of membership clause is an agreement where present and future union members must maintain their membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. This requires employees who are union members at the time of the execution of the CBA to maintain their membership of good standing, as a condition of continued employment. [GMC v. Casio, 2010] Q171: MIGUEL IS AN AMERICAN WHO IS WORKING AS A CONSULTANT FOR A LOCAL IT COMPANY. THE COMPANY HAS A UNION AND MIGUEL WANTS TO SUPPORT THE UNION. HOW FAR CAN MIGUEL GO IN TERMS OF HIS SUPPORT FOR THE UNION? A171: Miguel, as a general rule, is prohibited by Art. 285 of the Labor Code from giving any donation, grant or other form of assistance, in cash or in kind, directly or indirectly to the Union, affecting trade union activities without prior permission from the Secretary of Labor relative to “Trade Union activities” as defined in the law. Further, in order to exercise his right to self-organization and join or assist the labor union for purposes of collective bargaining, Miguel must also prove, in addition to his alien employment permit, that his country grants the same or similar rights to Filipino workers as certified by the DFA. Q172: BECAUSE OF A CORPORATE MERGER, CORPORATION A ABSORBED THE EMPLOYEES OF CORPORATION B. THE BARGAINING UNION IN CORPORATION A REQUESTED ITS MANAGEMENT TO REQUIRE CORPORATION B’S EMPLOYEES, WHO ARE UNIONIZED, TO JOIN THE UNION PURSUANT TO THEIR CBA WHOSE UNION SHOP CLAUSE REQUIRES “NEW” EMPLOYEES TO BECOME UNION MEMBERS AS A CONDITION FOR EMPLOYMENT. THE UNION SHOP CLAUSE PROVIDES “NEW EMPLOYEES FALLING WITHIN THE BARGAINING UNIT AS DEFINED IN ARTICLE I OF THIS AGREEMENT, WHO MAY HEREAFTER BE REGULARLY EMPLOYED BY THE BANK SHALL, WITHIN THIRTY (30) DAYS AFTER THEY BECOME REGULAR EMPLOYEES, JOIN THE UNION AS A CONDITION OF THEIR CONTINUED EMPLOYMENT. XXX” CORPORATION A DENIED THE UNION’S REQUEST, ARGUING THAT (1) THE ABSORBED EMPLOYEES ARE NOT NEW EMPLOYEES, THUS, THE UNION SECURITY CLAUSE DOES NOT APPLY TO THEM AND (2) THE FORMER EMPLOYEES OF CORPORATION B BECAME A’S EMPLOYEES BY OPERATION OF LAW, BECAUSE THEY ARE INCLUDED IN THE ASSETS AND LIABILITIES ACQUIRED BY A THROUGH THE MERGER. ARE THE TWO CONTENTIONS OF CORPORATION A CORRECT? EXPLAIN. A172: (1) No. In law or in the CBA, there is no special class of employees called “absorbed employees”. With respect to the Union Shop Clause, it can only classify the employees of the absorbed bank as either "old" or "new”. If they are new employees, the Union Shop Clause did not distinguish between new employees who are non-regular at their hiring but who subsequently become regular and new employees who are "absorbed" as regular and permanent from the beginning of their employment.
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(2) No. Human beings are not embraced in the term "assets and liabilities". The absorption of former Corporation B’s employees was neither by operation of law nor by legal consequence of contract, but was the result of a voluntary merger between the two corporations. The Corporation Code does not mandate the absorption of the employees of the non-surviving corporation by the surviving corporation in the case of a merger. It is contrary to public policy to declare the former employees of the absorbed corporation as forming part of the assets or liabilities that were transferred and absorbed by the other corporation in the Articles of Merger. Assets and liabilities, in this instance, should be deemed to refer only to property rights and obligations of the absorbed corporation and do not include the employment contracts of its personnel. The employees of the absorbed corporation retained the prerogative to allow themselves to be absorbed or not, otherwise, that would be tantamount to involuntary servitude. [Bank of the Philippine Islands v. BPI Employees Union-Davao Chapter-Federation of Unions in BPI UniBank G.R. No. 164301, August 10, 2010] Q173: DISCUSS THE RELATIVE ADVANTAGES/DISADVANTAGES ARBITRATION AND COMPULSORY ARBITRATION.
BETWEEN
VOLUNTARY
A173: Voluntary Arbitration Advantages
Compulsory Arbitration
(a) the parties’ dispute is heard and (a) subject to pre-litigation mediation, a resolved by a person whom both case can be initiated through the parties have chosen as their judge; filing of a verified complaint by a hence, likely to be impartial. union member, unlike in voluntary arbitration where the Voluntary (b) if both parties are willing to submit Arbitrator acquires jurisdiction their dispute, the decision is final primarily through a submission and binding on them in general by agreement. In a case where the reason of their submission company is unwilling, the EBR (and agreement; and only the EBR) may serve a notice to (c) in the event of a challenge, the arbitrate; hence, a union member decision is elevated to the CA and may be left out in the process if the then to the SC, i.e., less one layer of EBR does not serve that notice; appeal because the NLRC is out of (b) a monetary award is secured with the way. the employer’s appeal bond; and (c) there is a system of restitution in compulsory arbitration.
Disadvantage s
(a) in case of appeal by the employer to (a) State interference with the affairs of the CA, the monetary award will not labor and management is be secured with an appeal bond maximized, disregarding the interwhich Rule 43 of the Rules of Court party nature of the relationship; and does not require; and (b) The system of appeals entails a (b) in case of enforcement of judgment, longer process. the Voluntary Arbitrator has no sheriff to enforce it.
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Q174: WHAT IS A STRIKE? A174: Strike means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute (Art. 219[o]). This includes slowdowns, mass leaves, sitdowns, attempts to damage, destroy or sabotage plant equipment and facilities and similar activities. Q175: WHAT ARE THE LEGAL REQUIREMENTS OF A VALID STRIKE? A175: (a) A notice of strike filed with the DOLE 30 days before the intended date thereof in case of bargaining deadlock or 15 days in case of ULP but not union busting (if ULP and union busting, no cooling-off period) (b) A strike vote approved by a majority of the total union membership in the bargaining unit concerned obtained by secret ballot in a meeting called for that purpose; and (c) A notice to the DOLE of the results of the voting at least seven (7) days before the intended strike [Article 278]. Q176: WHAT IS THE CONSEQUENCE OF THE PARTICIPATION IN AN UNLAWFUL STRIKE AND COMMISSION OF ILLEGAL ACTS DURING A STRIKE BY A UNION OFFICER/EMPLOYEE? A176: Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, that mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement has been hired by the employer during such lawful strike [Article 279]. Q177: WHAT IS THE POWER OF THE SECRETARY OF LABOR AND EMPLOYMENT IN A LABOR DISPUTE CAUSING OR LIKELY TO CAUSE A STRIKE OR LOCKOUT IN AN INDUSTRY INDISPENSABLE TO NATIONAL INTEREST? A177: The Secretary of Labor and Employment may assume jurisdiction over the dispute and decide or certify the same to the National Labor Relations Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same [Article 278(g)]. Q178: ALL THE UNION OFFICERS AND 200 MEMBERS OF UNION X WALKED OUT OF THE COMPANY Z’S PREMISES OF THE COMPANY AND PROCEEDED TO THE BARANGAY OFFICE TO SHOW SUPPORT FOR EMPLOYEE A, AN OFFICER OF UNION X CHARGED WITH ORAL DEFAMATION BY THE MANAGER OF COMPANY Z. AS A RESULT OF THE WALKOUT, COMPANY Z PREVENTIVELY SUSPENDED ALL OFFICERS OF UNION X. AFTERWARDS, COMPANY Z TERMINATED THE UNION OFFICERS.
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UNION X FILED A NOTICE OF STRIKE CLAIMING THAT COMPANY Z WAS GUILTY OF UNION BUSTING. COMPANY Z RETALIATED BY CHARGING THEM WITH ULP AND ABANDONMENT OF WORK. ULTIMATELY, THE NLRC DECLARED THE STRIKE TO BE AN ILLEGAL STRIKE (I.E. STRIKING EMPLOYEES BLOCKED THE INGRESS AND EGRESS OF THE PREMISES) BUT FOUND THE UNION MEMBER TO HAVE BEEN MERELY INSTIGATED OR INDUCED TO PARTICIPATE IN THE ILLEGAL STRIKE. (A) SHOULD THE UNION MEMBERS AND UNION OFFICERS BE TERMINATED ON ACCOUNT OF AN ILLEGAL STRIKE? A178: The law makes a distinction between union members and union officers. A worker merely participating in an illegal strike may not be terminated from employment. It is only when he commits illegal acts during a strike that he may be declared to have lost employment status. In contrast, a union officer may be terminated from employment for knowingly participating in an illegal strike or participates in the commission of illegal acts during a strike. The law grants the employer the option of declaring a union officer who participated in an illegal strike as having lost his employment. It possesses the right and prerogative to terminate the union officers from service. [Escario, et al. v. NLRC, G.R. No. 160302, September 27, 2010] (B) IF THE NLRC ORDERS THE REINSTATEMENT OF THE STRIKING EMPLOYEES ON THE GROUND THAT THE STRIKE IS VALID, ARE THE STRIKING EMPLOYEES ENTITLED TO BACKWAGES? No. Under the principle of a fair day’s wage for a fair day’s labor, the striking employees were not entitled to the wages during the period of the strike (even if the strike might be legal), because they performed no work during the strike. (Escario, et al. v. NLRC, G.R. No. 160302, September 27, 2010) Q179: THE COMPANY PERFORMED THE FOLLOWING ACTS: (1) SPONSORING A FIELD TRIP TO ZAMBALES FOR ITS EMPLOYEES, TO THE EXCLUSION OF UNION MEMBERS, BEFORE THE SCHEDULED CERTIFICATION ELECTION; (2) THE ACTIVE CAMPAIGN BY THE SALES OFFICER OF THE COMPANY AGAINST THE UNION PREVAILING AS A BARGAINING AGENT DURING THE FIELD TRIP; (3) ESCORTING ITS EMPLOYEES AFTER THE FIELD TRIP TO THE POLLING CENTER; (4) THE CONTINUOUS HIRING OF SUBCONTRACTORS PERFORMING UNION MEMBERS’ FUNCTIONS; (5) ASSIGNING UNION MEMBERS TO THE CABANGAN SITE TO WORK AS GRASS CUTTERS. WHAT IS THE LEGAL TEST FOR DETERMINING THE EXISTENCE OF UNFAIR LABOR PRACTICES? WHETHER THE ABOVEMENTIONED ACTS CONSTITUTE UNFAIR LABOR PRACTICES? A179: In essence, ULP relates to the commission of acts that transgresses the workers’ right to organize. As specified in Articles 259 and 260 of the Labor Code, the prohibited acts must necessarily relate to the workers' right to self-organization. In the case of Insular Life Assurance Co., Ltd. Employees Association – NATU v. Insular Life Assurance Co. Ltd., the Court had occasion to lay down the test of whether an employer has interfered with and coerced employees in the exercise of their right to selforganization, that is, whether the employer has engaged in conduct which, it may reasonably be said, tends to interfere with the free exercise of employees’ rights; and that it is not necessary that there be direct evidence that any employee was in fact intimidated or coerced by statements of threats of the employer if there is a reasonable inference that anti-union conduct of the employer does have an adverse effect on self-organization. Indubitably, the various acts of the company, taken together, reasonably support an inference that, indeed, such were all orchestrated to restrict the employees’ free exercise of their right to selforganization. The Court viewed the company’s undisputed actions prior and immediately before the scheduled certification election, while seemingly innocuous, unduly meddled in the affairs of its employees in selecting their exclusive bargaining representative. [T & H Shopfitters Corporation/Gin Queen Corporation et al., v. T & H Shopfitters Corporation/Gn Queen Workers Union et al., G.R. No. 191714, February 26, 2014]
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Q180: IS A BANK’S OUTSOURCING OF ITS CASHIERING, DISTRIBUTION AND BOOKKEEPING FUNCTIONS FORMERLY PERFORMED BY UNION MEMBERS TO A SUBSIDIARY OF SAID BANK CONSTITUTIVE OF UNFAIR LABOR PRACTICE? A180: No. The Supreme Court, in the case of BPI Employees Union-Davao City-FUBU vs. BPI, et al. (July 24, 2013), held that the contracting out of services is not illegal per se as part of the exercise of management prerogative. Absent proof that the management acted in a malicious or arbitrary manner, the Court will not interfere with the exercise of business judgment by the employer. The consequent reduction of a number of positions in the bargaining unit does not constitute an interference with the employees’ right to self-organization since the employees in the aforecited case were neither transferred nor dismissed from service. Furthermore, the Court also held that cashiering, distribution and bookkeeping are not inherent banking functions, since these do not involve the main business or operation of banks which is the lending of funds obtained in the form of deposits. Q181: IS THE MALICIOUS AND FLAGRANT VIOLATION OF A UNION SHOP AGREEMENT AN UNFAIR LABOR PRACTICE? A181: No. Under Art. 274 of the Labor Code, violations of a CBA shall no longer be treated as unfair labor practice and shall be resolved as grievances under the CBA. As such, only gross violations of the economic provisions of the CBA are treated as ULP. In BPI Employees Union-Davao City-FUBU vs. BPI, et al. (July 24, 2013), the Supreme Court said that an alleged violation of the union shop agreement in the CBA, even if it were malicious and flagrant is not a gross violation of an economic provision in the agreement and, as such, cannot be considered as an unfair labor practice. Q182: THE COMPANY SENT A LETTER TO THE INDIVIDUAL STRIKERS BY REGISTERED SPECIAL DELIVERY MAIL WITHOUT BEING COURSED THROUGH THE UNION REPRESENTING THE EMPLOYEES IN THE COLLECTIVE BARGAINING. THE COMPANY CONTENDED THAT THE SENDING OF THE LETTERS CONSTITUTED A LEGITIMATE EXERCISE OF THEIR FREEDOM OF SPEECH. WILL THE ACTUATIONS OF THE COMPANY CONSTITUTE UNFAIR LABOR PRACTICE? A182: Yes. It is unfair labor practice for an employer operating under a collective bargaining agreement to negotiate or to attempt to negotiate with his employees individually in connection with changes in the agreement. The basis for the prohibition regarding individual bargaining with the strikers is that the employer is still under obligation to bargain with the union as the employees’ bargaining representative. [The Insular Life Assurance Co., Ltd., Employees Association-NATU, et al. v. The Insular Life Assurance Co., Ltd., G.R. No. L-25291, January 30, 1971] Q183: WHAT IS A RUNAWAY SHOP? A183: A runaway shop is an act constituting unfair labor practice. It is one wherein the employer moves its business to another location or it temporarily closes its business for anti-union purposes. A runaway shop in this sense, is a relocation motivated by anti-union animus rather than for business reasons.
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Q184: DURING THE COURSE OF NEGOTIATIONS FOR THE NEW COLLECTIVE BARGAINING AGREEMENT, THE COMPANY AND UNION X, THE CERTIFIED BARGAINING REPRESENTATIVE, REACHED A DEADLOCK. CAN UNION Y, THE FEDERATION TO WHICH UNION X BELONGS, VALIDLY DECLARE A STRIKE ON BEHALF OF UNION X? A184: No. In case of an economic strike, only the certified bargaining representative or employer can validly declare the same [Article 278 (c), Labor Code]. Q185: DUE TO A SHORTAGE OF SUPPLY IN THE WORLDWIDE MARKET, THE PRICE OF OIL AND OIL PRODUCTS STEADILY INCREASED THROUGHOUT THE YEAR. CITING THE NEGATIVE IMPACT OF HIGH OIL PRICES ON ITS MEMBERS, SEVERAL UNIONS DECIDED TO STAGE A WELGA NG BAYAN TO PROTEST THE GOVERNMENT’S INACTION ON THE ISSUE. IS THE STRIKE VALID OR ILLEGAL? A185: The strike is illegal. Employees with no labor dispute with their employer but who refuse to work on a work day to join a Welga ng Bayan commit an illegal work stoppage [Biflex Phils., Inc. Labor Union and Filflex Industrial and Manufacturing Corporation and Biflex (Phils.), Inc., G.R. No. 155679, December 19, 2006]. Q186: A UNION WITH 150 MEMBERS WERE HOLDING A STRIKE WHEN 3 EMPLOYEES WHO WERE PARTICIPATING IN THE STRIKE DECIDED TO THROW SODA CANS AT THE COMPANY GATE. A NONSTRIKING EMPLOYEE WHO WAS ON HIS WAY TO WORK WAS STRUCK ON THE HEAD AND SUFFERED SLIGHT INJURIES. IS THE STRIKE VALID OR ILLEGAL? A186: The strike is valid. In order to hold the labor organization liable for the unlawful acts of the individuals, there must be proof of actual authorization or ratification of such acts after actual knowledge thereof [Philippine Marine Officers Guild v. Compania Maritima, 22 SCRA 1113]. In other words, a valid strike becomes illegal through the commission of unlawful activities only if the threats and acts of violence are pervasive, i.e., carried out as a matter of union policy. An isolated case should not be the liability of the union. Only the persons actually responsible for the act of violence should be held liable. Q187: ON JULY 9, THE UNION FILED A NOTICE OF STRIKE ALLEGING THE COMMISSION BY THE EMPLOYER OF UNFAIR LABOR PRACTICES. THE RESULTS OF THE STRIKE VOTE WERE FILED WITH THE DOLE ON JULY 17, WHILE THE ACTUAL STRIKE WAS LAUNCHED ON JULY 25. IS THE STRIKE VALID OR ILLEGAL? A187: The strike is valid. In Phimco Industries, Inc. v. Phimco Industries Labor Association (G.R. No. 170830, August 11, 2010), the strike vote was taken and reported within the cooling-off period. The Supreme Court declared the striking union to have fully satisfied the legal procedural requirements. In other words, the cooling-off period and 7-day strike ban may run contemporaneously. Q188: DUE TO THE DISMISSAL OF SEVERAL UNION OFFICERS, THE UNION DECIDED TO STAGE A STRIKE ALLEGING THAT THE COMPANY WAS ENGAGED IN UNION BUSTING. THE NOTICE OF STRIKE WAS FILED ON FEBRUARY 12, WHILE THE STRIKE VOTE WAS TAKEN ON FEBRUARY 13. ON FEBRUARY 14, THE RESULTS OF THE STRIKE VOTE WERE FILED WITH THE DOLE. THE ACTUAL STRIKE WAS LAUNCHED ON FEBRUARY 22. IS THE STRIKE VALID OR ILLEGAL? A188: The strike is valid. In cases of dismissal of union officers which may constitute union busting, the 15-day cooling period shall not apply and the union may take immediate action. However, the requirements on strike vote and 7-day strike ban must still be complied with [First City Interlink Transportation Co., Inc. v. Roldan-Confesor, G.R. No. 106316, May 5, 1997].
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Q189: THE COLLECTIVE BARGAINING AGREEMENT (CBA) BETWEEN LIBRA FILMS AND ITS UNION, LIBRA FILMS EMPLOYEES' UNION (LFEU), CONTAINS THE FOLLOWING STANDARD CLAUSES: 1. MAINTENANCE OF MEMBERSHIP; 2. CHECK OFF FOR UNION DUES AND AGENCY FEES; AND 3. NO STRIKE, NO LOCK-OUT. WHILE LIBRA FILMS AND LFEU ARE IN RE-NEGOTIATIONS 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. ARE LFEU’S CLAIMS CORRECT? A189: No, LFEU’s claim that Libra Films committed 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 membership clause which was a political or representational provision; hence, no ULP was committed. [BPI Employees Union-Davao City v. BPI, 702 SCRA 42] Q190: 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. 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. (A) WAS AILU JUSTIFIED IN DECLARING A STRIKE WITHOUT A STRIKE VOTE AND A NOTICE OF STRIKE? WHY OR WHY NOT? A190a: No. Firstly, a Notice of Strike is always required by Article 278(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 busting and a threat to AILU’s existence, still, Art. 278(f) requires that a strike vote be undertaken through a secret ballot and approved by a majority of the total union membership in the bargaining unit. Since AILU did not file a notice of strike and conduct a strike vote, the strike is illegal.
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(B) WAS THE SECRETARY OF LABOR CORRECT IN DECLINING TO ASSUME JURISDICTION OVER THE DISPUTE? A190b: Yes, the refusal of the Secretary to assume jurisdiction is valid. Article 278(g) of the Labor Code leaves it to the Secretary’s sound discretion to determine if national interest is involved. Assumption power is full and complete. It is also plenary and discretionary [Philtranco Service Enterprises, Inc. v. Philtranco Workers Union-AGLO, 2014]. If in his opinion,national interest is not involved, then the company cannot insist that he assume jurisdiction. (C) WAS LB JUSTIFIED IN TERMINATING ALL THOSE WHO WERE MEMBERS OF AILU ON THE TWO GROUNDS CITED? A190c: If dismissal is based on illegal strike: No. 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, their dismissal is illegal. If dismissal is based on the unlawful acts of barricading to lock the AILU members: Yes. Article 279 (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. Q191: DUE TO THE COMPANY’S REFUSAL TO PAY THE CORRECT AMOUNT OF OVERTIME PAY, THE UNION DECIDED TO HOLD A STRIKE AFTER COMPLYING WITH THE PROCEDURAL REQUIREMENTS SET BY LAW. DURING THE COURSE OF THE STRIKE, THE BREWING TENSION BETWEEN THE COMPANY AND THE UNION FINALLY CULMINATED IN A FISTFIGHT INVOLVING THE UNION PRESIDENT AND FOUR UNION MEMBERS, ON ONE HAND, AND THREE COMPANY REPRESENTATIVES, ON THE OTHER. WHAT ARE THE LIABILITIES, IF ANY, OF THE FOLLOWING: (A) UNION PRESIDENT, (B) FOUR UNION MEMBERS INVOLVED IN THE FISTFIGHT; (C) OTHER UNION OFFICERS; AND (D) OTHER UNION MEMBERS? A191: The liabilities of the employees depend on: (i) the validity or illegality of the strike; (ii) their status as officers or members of the union; and (iii) their participation in the commission of illegal activities. The strike is illegal because it was based on an alleged violation of labor standards, which is a nonstrikeable issue. (a) The union president should be held liable for the illegal strike. Thus, he may lose his employment for: (i) knowingly participating in an illegal strike; and (ii) knowingly participating in the commission of illegal activities. (b) The four union members involved in the fistfight should be held liable and may lose their employment for knowingly participating in the commission of illegal activities during the strike. (c) The other union officers should be held liable and may lose their employment for knowingly participating in the illegal strike.
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(d) The other union members should not be held liable, unless they also knowingly participated in the commission of illegal activities during the strike. Q192: CAN NON-LAWYERS APPEAR BEFORE THE LABOR ARBITER? A192: Yes, when they represent themselves, or if they represent their organization or members thereof. [Art. 222, Labor Code; Rule III, Section 6, 2011 NLRC Rules of Procedures] Q193: C WAS EMPLOYED AS A SALESPERSON OF B CORP., AND EVENTUALLY ROSE TO THE POSITION OF AVP FOR SALES, A POSITION CREATED BY B CORP.'S BOARD OF DIRECTORS BY VIRTUE OF AN ENABLING CLAUSE IN THE CORPORATION'S BY-LAWS WHICH SAYS THAT "THE BOARD, MAY, FROM TIME TO TIME, APPOINT SUCH OTHER OFFICERS AS IT MAY DETERMINE TO BE NECESSARY OR PROPER". HE WAS EVENTUALLY DISMISSED BY B CORP. DUE TO ALLEGATIONS OF SERIOUS MISCONDUCT. WILL THE NLRC HAVE JURISDICTION OVER A CASE FOR ILLEGAL DISMISSAL FILED BY C CONSIDERING THAT HE IS A "CORPORATE OFFICER" AND A STOCKHOLDER? A193: YES, the NLRC has jurisdiction. The mere fact that C is a stockholder and an officer of B Corp. does not necessarily make the case an intra-corporate controversy. C, although an officer of B Corp., is not a corporate officer as defined by law. Corporate officers are those officers who are 1) given that character by the Corporation Law or the By-laws; and 2) elected by the directors or stockholders. An enabling clause in a corporation’s by-laws empowering its board of directors to create additional officers, even with the subsequent passage of a board resolution to that effect, cannot make such position a corporate office, thus C is a "employee" and not a "corporate officer". Also, the mere fact that C is a stockholder does not make the case an intra-corporate dispute, as the case relates to the rights and obligations of C as an employee and not as a stockholder. [Cosare v. Broadcom Asia, Inc. (2014)] Q194: A SIGNED A “GOODWILL CLAUSE” WITH B INDICATING THAT SHE WOULD NOT BE EMPLOYED WITH ANOTHER COMPANY IN COMPETITION WITH B OR ELSE SHE WOULD BE LIABLE FOR DAMAGES. SHE RESIGNED AND WAS SUBSEQUENTLY EMPLOYED BY C, A DIRECT COMPETITOR OF B. HER REMAINING SALARIES WERE UNPAID SO SHE FILED A COMPLAINT IN THE NLRC. B REFUSED TO PAY CONTENDING THAT HER CLAIMS WERE OFFSET WHEN SHE WAS EMPLOYED BY C. IS B’S POSITION CORRECT? A194: No. The NLRC has original and exclusive jurisdiction to hear and decide cases for claims of damages arising from employer-employee relations. While A’s claim arises in connection with an employer-employee relationship, the claims of B arose from a breach of contractual obligation and is therefore a civil complaint under the jurisdiction of regular courts. The breach of the “Goodwill Clause” is an undertaking effective after the cessation of the employment relationship between the parties. As such, breach of the undertaking is a civil law dispute, not a labor case. [Portillo v. Rudolf Lietz, Inc.] Q195: WHAT ARE THE GROUNDS FOR A LABOR INJUNCTION TO ISSUE? A195: The NLRC may issue an injunctive writ to enjoin an illegal activity under Article 279 of the Labor Code; as an ancillary remedy to avoid irreparable injury to the rights of a party in an ordinary labor dispute pursuant to Rule X, 2011 NLRC Rules of Procedure, as amended; and to correct the Labor Arbiter’s grave abuse of discretion pursuant to Rule XII of the 2011 NLRC Rules of Procedure, as amended. Moreover, for labor injunction to issue, it must be proven under Article 225 (e) Labor Code:
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(i) That the prohibited or unlawful acts have been threatened and will be committed and will be continued unless restrained; (ii) That substantial and irreparable injury to the complainant’s property will follow; (iii) That greater injury will be inflicted upon complainant by the denial of relief than will be inflicted upon defendants by the granting of relief; (iv) That complainant has no adequate remedy at law; and (v) That public officers charged with the duty to protect complainant’s property are unable or unwilling to furnish adequate protection Q196: DISTINGUISH THE JURISDICTION OF A LABOR ARBITER FROM THAT OF THE NLRC. A196: As to jurisdiction, the LA can hear and resolve cases under Art. 224 of the Labor Code, money claims under Sec. 7 of R.A. 10022; and referred wage distortion disputes in unorganized establishments, as well as the enforcement of compromise agreements pursuant to the 2011 NLRC Rules of Procedure, as amended. On the other hand, the NLRC reviews decisions rendered by the LA; decisions or orders rendered by the RD under Article 129 of the Labor Code; and conducts compulsory arbitration in certified cases. As to the power to issue a labor injunction, the NLRC can issue an injunctive writ. On the other hand, the Labor Arbiter cannot issue an injunctive writ. Q197: MIGUEL WORKED AS OPERATIONS MANAGER IN FM FUNERAL HOME. HE WAS DISMISSED FOR ALLEGEDLY MISAPPROPRIATING P50,000 WHICH WAS INTENDED FOR PAYMENT BY FM OF ITS VAT TO THE BIR. BECAUSE OF THIS, MIGUEL FILED A COMPLAINT FOR ILLEGAL DISMISSAL BEFORE THE NLRC. FM ARGUED THAT MIGUEL WAS NOT THEIR EMPLOYEE. THE LABOR ARBITER RULED IN FAVOR OF FM DECLARING THAT THERE WAS NO EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE TWO THEREFORE HIS OFFICE HAD NO JURISDICTION OVER THE CASE. ON APPEAL BY MIGUEL, THE NLRC SET ASIDE THE LABOR ARBITER’S DECISION AND REMANDED THE CASE FOR IMMEDIATE APPROPRIATE PROCEEDINGS. FM FILED A MOTION FOR RECONSIDERATION WHICH WAS DENIED BY THE NLRC. AGGRIEVED, FM RESORTED APPEALED TO THE SUPREME COURT BY CERTIORARI UNDER RULE 45. AS THE JUDGE, WILL HIS ACTION PROSPER? A197: No. As ruled in the case of St. Martin Funeral Home v NLRC (1998), all appeals from the NLRC to the Supreme Court are interpreted and declared to mean and refer to petitions for certiorari under Rule 65. Therefore, the proper remedy of FM is to file a petition for certiorari under Rule 65 to the Court of Appeals, in strict observance of the doctrine of hierarchy of courts as the appropriate forum for the relied desired.
