LABOR II: CASES AND POWERPOINT PRESENTATION

LABOR RELATIONS
Note:The Labor Code articles cited here are those that are
numbered according to the Codal of Rex Bookstore, 2013 edition.
The renumbering accommodated the revisions introduced to the
Code by RA 10151. If you are using an older codal version, just
subtract six from the article number (e.g., ULP of employers in the
2013 Rex codal is Art. 254. Old number is Art. 248)
Preliminary Discussions: Constitutional Mandates on Labor, Labor
Law, Labor Legislation, Social Legislation
What is Labor?
As an act: Exertion by human beings of physical or mental
efforts, or both, towards the production of goods and
services.
As a sector of society: That sector or group in a society,
which derives its livelihood chiefly from rendition of work or
services in exchange for compensation under managerial
direction (Mendoza, 2001).
Refers to workers, whether agricultural or non-agricultural
Constitutional Mandates on Labor
The State shall protect and promote the interests of the
Filipino Laborer:
Art. II, Sec. 9. The State shall promote a just and dynamic social
order that will ensure the prosperity and independence of the
nation and free the people from poverty through policies that
provide adequate social services, promote full employment, a rising
standard of living and improved quality of life for all.
Art. II, Sec. 18. The State affirms labor as a primary social economic
force. It shall protect the rights, of workers and promote their
welfare.

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Art. XII, Sec. 12. The State shall promote the preferential use of
Filipino labor, domestic materials and locally produced goods, and
adopt measures that help make them competitive.
Art XIII, Sec. 14. The State shall protect women by providing safe
and healthful working conditions, taking into account their maternal
functions, and such facilities and opportunities that will enhance
their welfare and enable them to realize their full potential in the
service of the nation.
Art. XV, Sec. 8. The State shall, from time to time, review to
upgrade the pensions and other benefits due to retirees of both the
government and the private sectors

Rights of Workers

Art. Ill, Sec. 8. The right of the people, including those employed in
the public and private sectors, to form unions, associations, or
societies for purposes not contrary to law, shall not be abridged.
(formation of labor organizations)
Art. Ill, Sec. 18(2). No involuntary servitude in any form shall exist
except as a punishment for a crime whereof the party shall have
been duly convicted.

Protection to Labor Clause

Art. XIII, Sec. 3 The State shall afford full protection to labor, local
and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law. They
shall be entitled to security of tenure, humane conditions of work,
and a living wage. They shall also participate in policy and decisionmaking process affecting their rights and benefits as may be

LABOR II: CASES AND POWERPOINT PRESENTATION

provided by law.
Art. XIII, Sec. 3 , cont.
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 of investments, and to expansion and growth.
Participation in Policy and Decision Making Processes
Phrase included in the 1987 constitution to highlight
workers participation in policy-making;
Added in the Labor Code
o Article 217, Declaration of Policy
o Article 261, Exclusive Bargaining Representation
and Workers Participation in Policy and DecisionMaking
Defines rights of workers under Labor Standards and Labor
Relations:
Under Labor Standards
Under Labor Relations
Security of Tenure;
Self-organization
Living wage;
Collective
bargaining
and
negotiations
Share in the fruits of production; Peaceful concerted activities,
including strike;
Humane conditions of work.
Participation in policy and
decision-making processes.
Social, Labor and Welfare Legislation

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Constitutional provisions on labor are not self-executory,

hence the need for Social Legislation, Labor Legislation and
Welfare Legislation
Social Legislation - Laws that provide particular kinds of
protection or benefits to society or segments thereof in
furtherance of social justice.
Labor Legislation - Statutes, regulations and jurisprudence
governing the relations between capital and labor. It
provides for certain employment standards and a legal
framework for negotiating, adjusting and administering
those standards and other incidents of employment.
Welfare Legislation - Provides for the minimum economic
security, of the worker and his family in case, of loss of
earnings due to death, old age, disability, dismissal, injury or
disease.

Social Legislation and Labor Legislation, Distinguished

Social legislation encompasses labor legislation, thus is

broader in scope than the latter. All labor laws are social
legislations but not all social legislations are labor laws.

Labor Law, defined.

LABOR II: CASES AND POWERPOINT PRESENTATION

The law governing the rights and duties of employers and

employees with respect to Labor Standards and Labor
Relations.
Labor Standards Law deals with the minimum standards as
to wages, hours of work and other terms and conditions of
employment that employers must provide their employees.
Labor Relations Law defines the status, rights and duties as
well as the institutional mechanisms that govern the
individual and collective interactions between employers,
employees and their representatives.

The Philippine Labor Code, and Other Laws

Presidential Decree No. 442
o Deals with Labor Standards and Labor Relations
o Became effective November 1, 1974
Special Laws:
1. Laws on Social Security (SSS Law, GSIS Law, Limited
Portability Law (RA 7699)
2. National Health Insurance Act
3. Paternity Leave Act
4. Retirement Pay Law
5. Home Mutual Development Fund Law
6. Anti-Sexual Harassment Act
7. Anti-Child Labor Act
8. 13th Month Pay Law
9. Migrant Workers and Overseas Filipinos Act of 1995
(R.A. No. 8042, as amended by RA 10151)
10. Expanded Comprehensive Agrarian Reform Law
11. Magna Carta for Public Health Workers
Labor-related provisions in Other Laws
Civil Code
a. Art. 1700. The relation between capital and labor
are not merely contractual. They are so impressed

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with public interest that labor contracts must yield

to the common good. Therefore, such contracts
are subject to the special laws on labor unions,
collective bargaining, strikes and lockouts, closed
shop, wages, working conditions, hours of labor
and similar subjects.
b. Art. 1701. Neither capital nor labor shall act
oppressively against the other, or impair the
interest or convenience of the public.
c. Art. 1702. In case of doubt, all labor legislations
and all labor contracts shall be construed in favor
of the safety and decent living for the laborer.
d. Art. 1703. No contract which practically amounts to
involuntary servitude, under any guise whatsoever,
shall be valid.
Revised Penal Code
a. Art. 289. Formation, maintenance and prohibition
of combination of capital or labor through violence
or threats. The penalty of arresto mayor and a
fine not exceeding 300 pesos shall be imposed upon
any person who, for the purpose of organizing,
maintaining or preventing coalitions of capital or
labor, strike of laborers or lock-out of employees,
shall employ violence or threats in such a degree as
to compel or force the laborers or employers in the
free and legal exercise of their industry or work, if
the act shall not constitute a more serious offense
in accordance with the provisions of this Code.

The Aim and Basis of Labor Laws

Attainment of Social Justice
o Balance the interest of labor and capital (eliminate
oppression)
o Labor is afforded a greater measure of protection

LABOR II: CASES AND POWERPOINT PRESENTATION

There is greater supply of labor than

demand for their services;
Those who have less in life should have
more in law;
The need for employment by labor comes
from vital, and even desperate necessity
(survival);

Social Justice
Social justice is 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. Social justice means the
PROMOTION OF THE WELFARE of all people, the adoption
by the government of measures calculated to ensure
economic stability of all the component elements of the
society through the maintenance of proper economic and
social equilibrium in the interrelations of- the members of
the community, constitutionally, through the adoption of
measures, legally justifiable, or extra-constitutionally,
through the exercise of powers underlying the existence of
all governments, on the time-honored principle of salus
populi est suprema lex. (Calalang v. Williams, No. 47800,
December 2, 1940).
FACTS:

MAXIMO CALALANG vs A. D. WILLIAMS, ET AL.,

The National Traffic Commission, in its resolution of July 17,

1940, resolved to recommend to the Director of the Public Works
and to the Secretary of Public Works and Communications
that animal-drawn vehicles be prohibited from passing along the
following for a period of one year from the date of the opening of
the Colgante Bridge to traffic:
1) Rosario Street extending from Plaza Calderon de la Barca

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to Dasmarias
Street from 7:30Am to 12:30 pm and from 1:30 pm to 530
pm; and
2) along Rizal Avenue extending from the railroad crossing
at Antipolo Street to
Echague Street from 7 am to 11pm
The Chairman of the National Traffic Commission on July 18,
1940 recommended to the Director of Public Works with the
approval of the Secretary of Public Works the adoption of
thethemeasure proposed in the resolution aforementioned in pursu
ance of the provisions of theCommonwealth Act No. 548 which auth
orizes said Director with the approval from the
Secretary of the Public Works and Communication to promulgate rul
es and regulations to regulate and control the use of and traffic on
national roads.
On August 2, 1940, the Director recommended to the
Secretary the approval of the recommendations made by the
Chairman of the National Traffic Commission with modifications.
The Secretary of Public Works approved the recommendations on
August 10,1940. The Mayor of Manila and the Acting Chief of Police
of Manila have enforced and caused to be enforced the rules and
regulation. As a consequence, all animal-drawn vehicles are not
allowed to pass and pick up passengers in the places above
mentioned to the detriment not only of their owners but of the
riding public as well.
ISSUES:
1) Whether the rules and regulations promulgated by the
respondents pursuant to the provisions of Commonwealth Act NO.
548 constitute an unlawful inference with legitimate business or
trade and abridged the right to personal liberty and freedom of
locomotion?
2) Whether the rules and regulations complained of infringe
upon the constitutional precept regarding the promotion
of social justice to insure the well-being and economic security of all

LABOR II: CASES AND POWERPOINT PRESENTATION

the people?
RULING:
1) No. The promulgation of the Act aims to promote safe
transit upon and avoid obstructions on national roads in the interest
and convenience of the public. In enacting said law, the National
Assembly was prompted by considerations of public convenience
and welfare. It was inspired by the desire to relieve congestion of
traffic, which is a menace to the public safety. Public welfare lies at
the bottom of the promulgation of the said law and the state in
order to promote the general welfare may interfere with personal
liberty, with property, and with business and occupations. Persons
and property may be subject to all kinds of restraints and burdens in
order to secure the general comfort, health, and prosperity of the
State. To this fundamental aims of the government, the rights of the
individual are subordinated. Liberty is a blessing which should not
be made to prevail over authority because society will fall into
anarchy. Neither should authority be made to prevail over liberty
because then the individual will fall into slavery. The paradox lies in
the fact that the apparent curtailment of liberty is precisely the very
means of insuring its preserving.
2) No. 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. Social justice means the promotion of the
welfare of all the people, the adoption by the Government of
measures calculated to insure economic stability of all the
competent elements of society, through the maintenance of a
proper economic and social equilibrium in the interrelations of the
members of the community, constitutionally, through the adoption
of measures legally justifiable, or extra-constitutionally, through the
exercise of powers underlying the existence of all governments on
the time-honored principles of salus populi estsuprema lex.
Social justice must be founded on the recognition of the

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necessity of interdependence among divers and diverse units of a

society and of the protection that should be equally and evenly
extended to all groups as a combined force in our social and
economic life, consistent with the fundamental and paramount
objective of the state of promoting health, comfort and quiet of all
persons, and of bringing about the greatest good to the greatest
number.
Basic Principles: Preliminary Discussions on the Labor Code
What are the basic principles in the constitution and labor-related
laws on protection to labor?
The state shall afford full protection to labor, promote full
employment, equal work opportunities without bias or
discrimination, regulate the relations of employers and
employees, and assure workers rights (refer to protection to
labor clause Art. XIII, Sec. 3, 1987 Const. & Art. 3, Labor
Code);
The relation of capital and labor are impressed with public
interest, hence employment contracts are not ordinary
contracts (Art. 1700, NCC);
In case of doubt or ambiguity, labor laws and rules are to be
construed in favor of labor (Art. 4, Labor Code, Art. 1702,
Civil Code)
o IF THERE IS DOUBT as to the meaning of the legal
and contractual provision, the above-mentioned
applies.
o IF THE PROVISION IS CLEAR AND UNAMBIGUOUS, it
must be applied in accordance with its express
terms. (Meralco v. NLRC, GR No. 78763, July 12,
1989).
Manila Electric Company vs National Labor Relations Commission
& Apolinario Signo

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LABOR II: CASES AND POWERPOINT PRESENTATION

FACTS:

Signo was employed in Meralco as supervisor-leadman

since Jan 1963.In 1981, he supervised the installation of electricity
in de Laras house in Antipolo. De Laras house was not yet within
the required 30-meter distance from the Meralco facility hence he is
not yet within the service scope of Meralco. As a workaround, Signo
had it be declared that a certain sarisari store nearer the facility be
declared as de Laras so as to facilitate the installation. Evertything
would have been smooth thereafter but due to fault of the Power
Sales Division of Meralco, de Lara was not billed for a year.
Investigation was conducted and Meralco found out the irregularity
in Signos work on de Laras electricity installation. Signo was
dismissed on May 18, 1983. Signo filed a case for illegal dismissal
and for backwages. The Lanor Arbiter ruled that though there is a
breach of trust in the actuations of Signo dismissal is a harsh penalty
as Signo has been employed for more than 20 years by Meralco and
has been commended twice before for honesty. The NLRC affirmed
the Labor Arbiter. Meralco appealed.
ISSUE:
Whether or not there has been due process in the dismissal
of Signo.
RULING:
The SC sustained the decision of the NLRC. Well-established is the
principle that findings of administrative agencies which have
acquired expertise because their jurisdiction is confined to specific
matters are generally accorded not only respect but even finality.
Judicial review by this Court on labor cases does not go so far as to
evaluate the sufficiency of the evidence upon which the proper
labor officer or office based his or its determination but is limited to
issues of jurisdiction or grave abuse of discretion.Notwithstanding
the existence of a valid cause for dismissal, such as breach of trust
by an employee, nevertheless, dismissal should not be imposed, as
it is too severe a penalty if the latter has been employed for a
considerable length of time in the service of his employer.

Reinstatement of respondent Signo is proper in the instant case, but

without the award of backwages, considering the good faith of the
employer in dismissing the respondent.
o

The law also recognizes that management has rights

which are also entitled to respect and enforcement
in the interest of fair play (St. Luke's Medical Center
Employee's Assoc, v. NLRC, GR No. 162053, March
7, 2007).

St. Lukes Medical Center Employees Association vs. NLRC

FACTS:
Maribel S. Santos was an X-Ray Technician in the Radiology
department of St. Lukes. Subsequently, Congress passed and
enacted Republic Act No. 7431 known as the Radiologic
Technology Act of 1992, which required that a person must obtain
the proper certificate of registration from the Board of Radiologic
Technology for the practice or offer to practice as a radiology
and/or x-ray technologist in the Philippines. In turn, the Director of
the Institute of Radiology issued a final notice to Santos requiring
her to comply by taking and passing the examination; otherwise St.
Lukes may be compelled to retire her from employment should
there be no other position available where she may be absorbed.
Despite extensions of time within which she could comply, Santos
failed to comply with the requirement for her continued
employment.
ISSUE:
Whether or not Santos was validly dismissed for failure to
secure a certificate of registration from the Board of Radiologic
Technology.
RULING:
While the right of workers to security of tenure is
guaranteed by the Constitution, its exercise may be reasonably
regulated pursuant to the police power of the State to safeguard

LABOR II: CASES AND POWERPOINT PRESENTATION

health, morals, peace, education, order, safety, and the general
welfare of the people. Consequently, persons who desire to engage
in the learned professions requiring scientific or technical
knowledge may be required to take an examination as a
prerequisite to engaging in their chosen careers. The most concrete
example of this would be in the field of medicine, the practice of
which in all its branches has been closely regulated by the State. It
has long been recognized that the regulation of this field is a
reasonable method of protecting the health and safety of the public
to protect the public from the potentially deadly effects of
incompetence and ignorance among those who would practice
medicine. The same rationale applies in the regulation of the
practice of radiologic and x-ray technology.
The enactment of R.A. (Nos.) 7431 and 4226 are recognized
as an exercise of the States inherent police power. It should be
noted that the police power embraces the power to prescribe
regulations to promote the health, morals, educations, good order,
safety or general welfare of the people. The state is justified in
prescribing the specific requirements for x-ray technicians and/or
any other professions connected with the health and safety of its
citizens. St. Lukes being engaged in the hospital and health care
business, is a proper subject of the cited law; thus, having in mind
the legal requirements of these laws, the latter cannot close its eyes
and [let] complainant-appellants private interest override public
interest.
Why the preference for labor over capital?
Comes from acknowledgement that capital wields more
power than labor; (Sanchez v. Harry Lyons Construction Inc.,
GR No. L-2779, October 18, 1950).
DANIEL SANCHEZ, ET AL. vs. HARRY LYONS CONSTRUCTION, INC.,
ET AL.
FACTS:

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Enrique Ramirez and Juan Ramirez were employed by

Material Distributors, Inc. on December 16, 1966 as warehousemen.
Enrique receives a salary of P450/month which was reduced to
P360/month while Juan receives a salary of 250/month. Daniel
Sanchez was employed by the Harry Lyons Construction, Inc. on
January 1, 1947 as a foreman with a salary of P250/month. Mariano
Javier, Venancio Diaz, Esteban Bautista, Faustino Aquillo, Godofredo
Diamante, Marcial Lazaro, Ambrosio de la Cruz, and Marcelino
Macada were employed as guards by the Harry Lyons Construction,
Inc. on January 1, 1947 with a salary of P5/day.
All the employees agreed that such employment may be
terminated at any time, without previous notice, and they further
agree that salary and wages, shall be computed and paid at the rate
specified up to the date of such termination. They also expressly
waive the benefit of article 302 of the Code of Commerce and that
of any other law, ruling, or custom which might require notice of
discharge or payment of salary or wages after date of the
termination of such employment.
The employees were dismissed by the corporations on
December 31, 1947 without one months' previous notice.
ISSUE:
Whether or not both those paid on a monthly and daily
basis are entitled to the benefit granted in article 302 of the Code of
Commerce.
Whether or not their waiver of such benefits legal and valid.
RULING:
Article 302 of the Code of Commerce reads as follows:
ART. 302. In cases in which no special time is fixed in the
contracts of service, any one of the parties thereto may
cancel it, advising the other party thereof one month in
advance. The factor or shop clerk shall be entitled, in such
case, to the salary due for said month.
It is a clear doctrine, as gleaned from the provision of the law
and settled jurisprudence, that in a mercantile contract of service in

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LABOR II: CASES AND POWERPOINT PRESENTATION

which no special time is fixed, any one of the parties may cancel
said contract upon giving of a one-month notice, called a mesada,
to the other party. The law gives an added proviso that in the case
of factors or shop clerks, these shall be entitled to salary during this
one month of standing notice. In any case, the one-month notice
must be given to any employee, whether factor, shop clerk or
otherwise, so long as the two conditions concur, namely, that no
special time is fixed in the contract of service, and that said
employee is a commercial employee. And when such notice is not
given under these conditions, not only the factor or shop clerk but
any employee discharged without cause, is entitled to indemnity
which may be one month's salary.
In the instant case, there lies no doubt that plaintiffs are
commercial employees of appellant corporations, rendering service
as warehousemen, carpenter-foreman and guards. There is likewise
no doubt as can be seen from the contracts of employment
submitted as exhibits, that no special time has been fixed in the
contracts of services between plaintiffs-appellees and defendantsappellants. The stated computation or manner of payment, whether
monthly or daily, does not represent nor determine a special time
of employment. Thus, a commercial employee may be employed for
one year and yet receive his salary on the daily or weekly or
monthly or other basis.
Now, as the second question, namely, the validity of
plaintiffs' waiver of the benefits given them by said article 302. This
court holds that such a waiver, made in advance, is void as being
contrary to public policy. Granting that the "mesada" given in article
302 of the Code of Commerce, is for the bilateral benefit of both
employer and employee, nevertheless, this does not preclude the
finding that a waiver of such "mesada" in advance by the employee
is contrary to public policy.
Public policy, with regard to labor, is clearly stated in article II,
section 5, of the Philippine Constitution, which reads
The promotion of social justice to insure the well-being and

economic security of all the people should be the concern

of the State.
and article XIV, section 6, which reads
The State shall afford protection to labor, especially to
working women and minors, and shall regulate the relations
between land-owner and tenant, and between labor and
capital in industry and in agriculture. . . .
Article 302 of the Code of Commerce must be applied in
consonance with these provisions of our constitution. In the matter
of employment bargaining, there is no doubt that the employer
stands on higher footing than the employee. First of all, there is
greater supply than demand for labor. Secondly, the need for
employment by labor comes from vital and even desperate,
necessity. Consequently, the law must protect labor, at least, to the
extent of raising him to equal footing in bargaining relations with
capital and to shield him from abuses brought about by the
necessity for survival. It is safe to presume therefore, that an
employee or laborer who waives in advance any benefit granted
him by law does so, certainly not in his interest or through
generosity but under the forceful intimidation of urgent need, and
hence, he could not have so acted freely and voluntarily.
o
o
o

There is greater supply than demand for labor;

Those who have less in life should have more in law;
and
The need for employment by labor comes from
vital, and even desperate necessity (survival)

To whom does the Labor Code apply?

General Rule: The Code applies to all workers, whether
agricultural or non-agricultural, including employees in a
government corporation incorporated under the
corporation code;
Exceptions:

LABOR II: CASES AND POWERPOINT PRESENTATION

1. Government employees;
2. Employees of government Corporations created by
special or original charter;
3. Foreign governments;
4. International
Agencies,
employees
of
intergovernmental or international organizations;
5. Corporate officers/Intra-corporate disputes which fall
under PD 902-A and now fall under the jurisdiction of,
the Regular Courts pursuant to the Securities Regulation
Code; and
6. Local water districts except where NLRC jurisdiction is
invoked.
Cases: Government employees
Employees of government Corporations created by special
or original charter (Juco v. NLRC, GR No. 98107, August 18,
1997);
Foreign governments (JUSMAG-Philippines v. NLRC, GR No.
108813, December 15, 1994);
International Agencies (Lasco v. UNRFNRE, GR Nos. 109095109107,
February
23,
1995),
employees
of
intergovernmental or international organizations (SEAFDECAQD v. NLRC, GR No. 86773, February 14, 1992);
Corporate officers / Intra-corporate disputes which fall
under PD 902-A and now fall under the jurisdiction of, the
Regular Courts pursuant to the Securities Regulation Code
(Nacpil v. IBC, GR No. 144767, March 21, 2002); and
Local water districts (Tanjay Water District v. Gabaton, GR
Nos. 63742 and 84300, 17 April 1989) except where NLRC
jurisdiction is invoked (Zamboanga City Water District v.
Buat, GR No. 104389, May 27, 1994).
Who is a worker/employee?

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Article 13 A worker is any member of the labor force,

whether employed or unemployed.
A person who works for an employer for a fee; a person
working for salary or wages.
Note the term employee under Article 218 of the Labor
Code: Not limited to the employees of a particular
employer, it shall include any individual whose work has
ceased as a result of or in connection with any current labor
dispute or because of any unfair labor practice if he has not
obtained any other substantially equivalent or regular
employment.

Protection to labor should not come at the expense of oppressing

capital!
Law recognizes management rights. The employer has the
right to
o Conduct business;
o Prescribe rules;
o Select and hire employees;
o Transfer or discharge employees;
o Discipline of employees, and
o Return of investment and expansion of business.
Management Prerogatives
Rural Bank of Cantilan . v. Julve, GR No. 169750, February
27, 2007.
o Under the doctrine of management prerogative,
every employer has the inherent right to regulate,
according to his own discretion and judgment, all
aspects of employment, including hiring, work"
assignments, working methods, the time, place and
manner of work, work supervision, transfer of
employees, lay-off of workers, and discipline,
dismissal, and recall of employees

LABOR II: CASES AND POWERPOINT PRESENTATION

RURAL BANK OF CANTILAN, INC., and WILLIAM HOTCHKISS III vs.

ARJAY RONNEL H. JULVE
FACTS:
The Rural Bank hired Julve as a management trainee. Later,
he was appointed as planning and marketing officer. Then,
Hotchkiss, the president of the bank, sent Julve a memorandum
appointing him as bookkeeper I at the banks branch in Madrid,
Surigao del Sur. Initially, Julve agreed to accept the appointment,
but eventually, he changed his mind and withdraw from the
appointment because he feels that it is a demotion.
Still, Hotchkiss appointed Julve as bookkeeper I and
assistant branch head of the Madrid branch. However, Julve did not
report for work. Hotchkiss directed Julve to explain why he should
not be sanctioned for his failure to assume his new post at the
Madrid branch. Julve explained that he is not accepting the position
for the reason that he was not given the opportunity to examine the
newly created position before he could make a decision to accept it.
On September 14, 2001, Julve filed with the Regional
Arbitration Branch No. XIII, National Labor Relations Commission
(NLRC), Butuan City, a complaint for constructive dismissal against
the Bank and Hotchkiss.
The Labor Arbiter rendered a decision declaring Julve was
contractively dismissed. On appeal, the NLRC reversed the finding s
of the Labor Arbiter, since the appointment was not a demotion. On
appeal at the CA, the court reversed the decision of the NLRC and
affirmed the decision of the Labor Arbiter
ISSUE:
Whether or not there was a contractive illegal dismissal.
RULING:
Under the doctrine of management prerogative, every
employer has the inherent right to regulate, according to his own
discretion and judgment, all aspects of employment, including
hiring, work assignments, working methods, the time, place and

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manner of work, work supervision, transfer of employees, lay-off of

workers, and discipline, dismissal, and recall of employees. The only
limitations to the exercise of this prerogative are those imposed by
labor laws and the principles of equity and substantial justice.
While the law imposes many obligations upon the
employer, nonetheless, it also protects the employers right to
expect from its employees not only good performance, adequate
work, and diligence, but also good conduct and loyalty. In fact, the
Labor Code does not excuse employees from complying with valid
company policies and reasonable regulations for their governance
and guidance.
Concerning the transfer of employees, these are the
following jurisprudential guidelines: (a) a transfer is a movement
from one position to another of equivalent rank, level or salary
without break in the service or a lateral movement from one
position to another of equivalent rank or salary; (b) the employer
has the inherent right to transfer or reassign an employee for
legitimate business purposes; (c) a transfer becomes unlawful
where it is motivated by discrimination or bad faith or is effected as
a form of punishment or is a demotion without sufficient cause; (d)
the employer must be able to show that the transfer is not
unreasonable, inconvenient, or prejudicial to the employee.
Constructive dismissal is defined as "quitting when
continued employment is rendered impossible, unreasonable, or
unlikely as the offer of employment involves a demotion in rank and
diminution of pay."
In light of the above guidelines, we agree with the NLRC in
ruling that respondent was not constructively dismissed from
employment.

Mendoza v. Rural Bank of Lucban, GR No. 155421, July 7,

2004.
o Management prerogatives, however, are subject to
limitations provided by

LABOR II: CASES AND POWERPOINT PRESENTATION

law,
contract
or
collective
bargaining
agreements and
general principles of fair play and justice

ELMER M. MENDOZA, petitioner, vs. RURAL BANK OF LUCBAN,

respondent.
FACTS:
Respondent bank issued a resolution effecting a reshuffling
of employees to further strengthen the existing internal control
system of all offices and employees. Petitioner was one of those
included for reshuffling. In a letter to his manager, petitioner
expressed his refusal to be assigned to another branch and his
request to be excluded from its implementation. Said request was
answered in the negative. Petitioner then requested for a twentyday sick leave due to his illness. While on leave, petitioner filed a
complaint before the RAB IV for illegal dismissal, underpayment,
separation pay and damages against respondent bank.
ISSUE:
Whether petitioner was constructively dismissed from his
employment
RULING:
The SC ruled that it find no reason to disturb the conclusion
of the NLRC and the CA that there was no constructive dismissal.
Constructive dismissal is defined as an involuntary
resignation resorted to when continued employment is rendered
impossible, unreasonable or unlikely; when there is a demotion in
rank or a diminution of pay; or when a clear discrimination,
insensibility or disdain by an employer becomes unbearable to the
employee. Petitioner argues that he was compelled to file an action
for constructive dismissal, because he had been demoted from
appraiser to clerk and not given any work to do, while his table had
been placed near the toilet and eventually removed. He adds that

P a g e | 11

the reshuffling of employees was done in bad faith, because it was

designed primarily to force him to resign.
Jurisprudence recognizes the exercise of management
prerogatives. For this reason, courts often decline to interfere in
legitimate business decisions of employers. Indeed, labor laws
discourage interference in employers' judgments concerning the
conduct of their business. The law must protect not only the welfare
of employees, but also the right of employers. In the pursuit of its
legitimate business interest, management has the prerogative to
transfer or assign employees from one office or area of operation to
another provided there is no demotion in rank or diminution of
salary, benefits, and other privileges; and the action is not
motivated by discrimination, made in bad faith, or effected as a
form of punishment or demotion without sufficient cause. This
privilege is inherent in the right of employers to control and manage
their enterprise effectively. The right of employees to security of
tenure does not give them vested rights to their positions to the
extent of depriving management of its prerogative to change their
assignments or to transfer them.
Managerial prerogatives, however, are subject to
limitations provided by law, collective bargaining agreements, and
general principles of fair play and justice. The managerial
prerogative to transfer personnel must be exercised without grave
abuse of discretion, bearing in mind the basic elements of justice
and fair play. Having the right should not be confused with the
manner in which that right is exercised. Thus, it cannot be used as a
subterfuge by the employer to rid himself of an undesirable worker.
In particular, the employer must be able to show that the transfer is
not unreasonable, inconvenient or prejudicial to the employee; nor
does it involve a demotion in rank or a diminution of his salaries,
privileges and other benefits. Should the employer fail to overcome
this burden of proof, the employee's transfer shall be tantamount
to constructive dismissal, which has been defined as a quitting
because continued employment is rendered impossible,

P a g e | 12

LABOR II: CASES AND POWERPOINT PRESENTATION

unreasonable or unlikely; as an offer involving a demotion in rank
and diminution in pay. Likewise, constructive dismissal exists when
an act of clear discrimination, insensibility or disdain by an employer
has become so unbearable to the employee leaving him with no
option but to forego with his continued employment."
Petitioner's transfer was made in pursuit of respondent's
policy to "familiarize bank employees with the various phases of
bank operations and further strengthen the existing internal control
system" of all officers and employees. We have previously held that
employees may be transferred based on their qualifications,
aptitudes and competencies to positions in which they can
function with maximum benefit to the company. 34 There appears
no justification for denying an employer the right to transfer
employees to expand their competence and maximize their full
potential for the advancement of the establishment. Petitioner was
not singled out; other employees were also reassigned without their
express consent. Neither was there any demotion in the rank of
petitioner; or any diminution of his salary, privileges and other
benefits.
Viewpoints on Labor Relations: The Whys and Hows
State Policy on Labor Relations
Article 217, Labor Code
o Promote and emphasize the primacy of free
collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation, as
modes of settling labor or industrial disputes;
o Promote free trade unionism as an instrument for
the enhancement of democracy and the promotion
of social justice and development;
o Foster the free and voluntary organization of a
strong and united labor movement;

o
o

Promote the enlightenment of workers concerning

their rights and obligations as union members and
as employees;
Provide an adequate administrative machinery for
the expeditious settlement of labor or industrial
disputes;
Ensure a stable but dynamic and just industrial
peace; and
Ensure the participation of workers in decision and
policy-making processes affecting their rights,
duties and welfare.
Prohibit courts or administrative agencies or
officials from setting or fixing wages, rates of pay,
hours of work or other terms and conditions of
employment, except as otherwise provided under
the Labor Code.

P a g e | 13

LABOR II: CASES AND POWERPOINT PRESENTATION

Self Organization
Workers organize as a union or some other form of
association (registered or unregistered)
Effect of registration with the State: Acquisition of legally
demandable rights, e.g. right to demand collective
bargaining
Organization must have rules and mechanisms that respect
member rights
No employer influence or interference (See Article 261,
Labor Code)
Why Workers Organize
Self Advancement
Job Security
Upholding the rule of law over arbitrary exercise of power
by capital
Provide employees a sense of participation in the enterprise
Self Organization
There can be many labor organizations in the workplace,
but
o Only one recognized representative for workers in
Collective Bargaining
o Selected by the workers themselves by way of
election (with or without intervention of the
government)
Who may exercise right to self-organization
All persons employed in commercial, industrial and in
religious, charitable, medical or educational institutions
(profit or non-profit)
Includes the right to
o Form
o Join

Assist - Labor organizations of their own choosing

Collective Bargaining
Presentation of proposals and counter-proposals by the
parties
If capital and labor agree on substantially all points, a labor
contract is forged (Collective Bargaining Agreement)
If both parties do not agree on material points, this results
in a deadlock
o Parties are obliged to avoid or break the impasse
o Failure to resolve a deadlock may result in work
stoppage
Strike
Lockout
While a legal right, strike or lockout is not an ideal solution
to compel a party to agree to a proposal
Considered as measures of last resort
Strikes and lockouts are heavily regulated
o Purpose
o Manner of implementation
o Violation of established rules will merit sanctions
(admin, civil and criminal)
Parties are allowed to introduce means and methods that
will expedite bargaining
o Subject to compliance to legal standards
Parties are primarily responsible for dealing with problems
arising out of their relations (Inter-party relationship)
o Voluntary modes of settling disputes are preferred
over compulsory processes
o Grievance machinery: In-house problem solving
structure
o State steps in only when
Parties fail to agree
Rights are violated

P a g e | 14

LABOR II: CASES AND POWERPOINT PRESENTATION

States Intervention
SSS Employees Association vs. CA, 175 SCRA 686: The
principle behind labor unionism in private industry is that
industrial peace cannot be secured through compulsion by
law. Relations between private employers and their
employees rest on an essentially voluntary basis. the
terms and conditions of employment in the unionized
private sector are settled through the process of collective
bargaining

FACTS:

SSS Employee Asso. v CA

The petitioners went on strike after the SSS failed to act

upon the unions demands concerning the implementation of their
CBA. SSS filed before the court action for damages with prayer
for writ of preliminary injunction against petitioners for staging an
illegal strike. The court issued a temporary restraining order
pending the resolution of the application for preliminary injunction
while petitioners filed a motion to dismiss alleging the courts lack
of jurisdiction over the subject matter. Petitioners contend that the
court made reversible error in taking cognizance on the subject
matter since the jurisdiction lies on the DOLE or the National Labor
Relations Commission as the case involves a labor dispute. The SSS
contends on one hand that the petitioners are covered by the Civil
Service laws, rules and regulation thus have no right to strike. They
are not covered by the NLRC or DOLE therefore the court may
enjoin the petitioners from striking.
ISSUES:
Whether or not SSS employers have the right to strike
Whether or not the CA erred in taking jurisdiction over the
subject matter
RULING:
The Constitutional provisions enshrined on Human
Rights and Social Justice provides guarantee among workers with
the right to organize and conduct peaceful concerted activities such
as strikes. On one hand, Section 14 of E.O No. 180 provides that
the Civil Service law and rules governing concerted activities and
strikes in the government service shall be observed, subject to any
legislation that may be enacted by Congress referring to
Memorandum Circular No. 6, s. 1987 of the Civil Service
Commission which states that prior to the enactment by Congress
of applicable laws concerning strike by government employees
enjoins under pain of administrative sanctions, all government
officers and employees from staging strikes, demonstrations, mass

P a g e | 15

LABOR II: CASES AND POWERPOINT PRESENTATION

leaves, walk-outs and other forms of mass action which will result in
temporary stoppage or disruption of public service. Therefore in
the absence of any legislation allowing govt. employees to strike
they are prohibited from doing so.
In Sec. 1 of E.O. No. 180 the employees in the civil
service are denominated as government employees and that the
SSS is one such government-controlled corporation with an original
charter, having been created under R.A. No. 1161, its employees are
part of the civil service and are covered by the Civil
Service Commissions memorandum prohibiting strikes.
Neither the DOLE nor the NLRC has jurisdiction over the
subject matter but instead it is the Public Sector Labor-Management
Council which is not granted by law authority to issue writ of
injunction in labor disputes within its jurisdiction thus the resort of
SSS before the general court for the issuance of a writ of injunction
to enjoin the strike is appropriate.

But, when dispute transgresses legal boundaries, the

injuctive powers of the state may be invoked, especially
when national interest is involved.

Definitions
Employer: Includes any person acting in the interest of an
employer, directly or indirectly. The term shall not include
any labor organization or any of its officers or agents except
when acting as an employer.
Employee: Includes any person in the employ of an
employer. The term shall not be limited to the employees
of a particular employer, unless the Labor Code so explicitly
states. It shall include any individual whose work has
ceased as a result of or in connection with any current labor
dispute or because of any unfair labor practice if he has not
obtained any other substantially equivalent and regular
employment.

Categories of employees
Managerial employees
Supervisory employees
Rank-and-file employees
Existence of Er-Ee Relationship is Vital in Labor Relations
If there is no such relationship, there is no basis for
exercising the right of self-organization for purposes of
collective bargaining.
Note also that Labor Arbiters cannot exercise jurisdiction
where Er-Ee Relationship does not exist. (subj. to exception)
Employer-Employee Relationship
Four-Fold Test
1. the selection and engagement of the employee;
2. the payment of wages;
3. the power of dismissal; and
4. the power to control the employees conduct, or
the so-called control test.
Two-tiered test of employment relation ship
1. Control test the employers power to direct the
employee (the manner, means and methods) by
which work is accomplished;
2. Economic reality test economic reality of the
relationship; the question of economic dependency
of the worker on his employer. (Read Orozco vs. CA,
GR 155207, April 29, 2005)
FACTS:

Orozco vs CA, PDI and Magsanoc

Orozco was hired as a writer by the Philippine Daily Inquirer

in 1990. She was the columnist of Feminist Reflections under the
Lifestyle section of the publication. She writes on a weekly basis and

LABOR II: CASES AND POWERPOINT PRESENTATION

on a per article basis (P250-300/article).
In 1991, Magsanoc as the editor-in-chief sought to improve the
Lifestyle section of the paper. She said there were too many
Lifestyle writers and that it was time to reduce the number of
writers. Orozcos column was eventually dropped.
Orozco filed for a case for Illegal Dismissal against PDI and
Magsanoc. Orozco won in the Labor Arbiter. The LA ruled that there
exists an employer-employee relationship between PDI and Orozco
hence Orozco is entitled to receive backwages, reinstatement, and
13th month pay.
PDI appealed to the National Labor Relations Commission. The NLRC
denied the appeal because of the failure of PDI to post a surety
bond as required by Article 223 of the Labor Code. The Court of
Appeals reversed the NLRC.
ISSUE:
Whether or not there exists an employer-employee
relationship between PDI and Orozco. Whether or not PDIs appeal
will prosper.
RULING:
Under Article 223 of the Labor Code:
ART. 223. Appeal. Decisions, awards or orders of the Labor Arbiter
are final and executory unless appealed to the Commission by any
or both parties within ten (10) calendar days from receipt of such
decisions, awards, or orders.
In case of a judgment involving a monetary award, an
appeal by the employer may be perfected only upon the posting of
a cash or surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the
monetary award in the judgment appealed from.
The requirement that the employer post a cash or surety bond to
perfect its/his appeal is apparently intended to assure the workers
that if they prevail in the case, they will receive the money
judgment in their favor upon the dismissal of the employers appeal.
It was intended to discourage employers from using an appeal to

P a g e | 16

delay, or even evade, their obligation to satisfy their employees just

and lawful claims.
But in this case, this principle is relaxed by the Supreme
Court considering the fact that the Labor Arbiter, in ruling that the
Orozco is entitled to backwages, did not provide any computation.
The case is then remanded to the Labor Arbiter for the
computation. This necessarily pended the resolution of the other
issue of whether or not there exists an employer-employee
relationship between PDI and Orozco.
Existence of Er-Ee Relationship in the following instances:
A stipulation stating expressly that there is no Er-Ee
relationship is not controlling (Chavez vs. NLRC, GR No.
146530, Jan. 2005)
Jeepney and taxi drivers (Paguio Transport Corp. vs. NLRC
GR No. 119500, August 1998)
Bus, auto-calesa drivers (R. Transport Corp. vs. Ejandra, GR
No. 148508, May 2004)
Fishermen (Ruga vs. NLRC, Jan. 1990)
Stevedores
Lawyers, doctors, nurses, dentists, public relations
practioners, other professionals
Employees of cooperatives
Insurance agents (salaried)
No Er-Ee Relationship in the following instances:
Commission salesmen
Agents of prinicipal (who are not employees in other
respects)
Working scholars (See Section 14, Rule X, Book III, IRR,
Labor Code)
Consultants
Visiting Physicians
Independent contractors

LABOR II: CASES AND POWERPOINT PRESENTATION

Definitions
Labor disputes: Includes any controversy or matter
concerning terms or conditions of employment or the
association or representation of persons in negotiating,
fixing, maintaining changing or arranging the terms and
conditions of employment, regardless of whether the
disputants stand in the proximate relation of employer and
employee.
Labor Disputes
Nature: arises from Er-Ee relationship, regardless of
whether the disputants stand in the proximate relation of
employer and employee;
o SMCEU-PTGWO vs. Bersamira & SMC, GR No.
87700, June 1990)
Involves issue of SMCs exclusion of
temporary, probationary & contractual
employees in scope of CBA with union
FACTS:

SMC Employees Union vs. Bersamira

SMC entered into contracts for merchandising

services with Lipercon and D'Rite (L&D), independent
contractors duly licensed by DOLE. In said contracts, it was
expressly understood and agreed that the EEs employed by the
contractors were to be paid by the latter and that none of them
were to be deemed EEsor agents of San Mig. There was to be
no employer-employee relation between the contractors and/or
its workers, on the one hand, and SMC on the other.
SMCEU-PTWGO (Union) is duly authorized representative of
the monthly paid rank-and-file EEs of SMC. Their CBA provides
that temporary, probationary, or contract EEs are excluded
from the bargaining unit and outside the scope of CBA. Union

P a g e | 17

advised SMC that some L&D workers had signed up for union
membership and sought the legalization of their employment with
SMC. Union alleged that this group of EEs, while appearing to be
contractual
workers
of
supposedly
independent
contractors, have been continuously working for SMC for a
period of 6 months to 15 years and that their work is
neither casual nor seasonal as they are performing work
or activities necessary desirable in the usual business or
trade of SMC, and that there exists a lobor-only{
contracting situation.It was then demanded that the
employment status of these workers be regularized.
This was not acted upon by SMC, and so Union filed a notice
of strike, and then a second notice. Series of pickets were staged by
L&D workers in various SMC plants and offices. SMC filed an action
at the RTC to enjoin the Union from representing and or acting for
and in behalf of the employees of L&D for the purposes of
collective bargaining; calling for and holding a strike vote to
compel plaintiff to hire the employees or workers of L&D, among
others. Union filed a Motion to Dismiss SMC's Complaint on
the ground of lack of jurisdiction over the case/nature of the action
which motion was opposed by SMC, which was denied by
respondent Judge. And after several hearings, the RTC issued
Injunction. RTC reasoned that the absence of ER-EE
relationship negates the existence of labor dispute, so
court has jurisdiction to take cognizance of SMC's grievance.
Hence, this action.
ISSUE:
Whether or not the RTC correctly assumed jurisdiction over
the controversy and properly issued the writ of preliminary
injunction.
RULING:
NO
A labor dispute can nevertheless exist regardless
of whether the disputants stand in the proximate

P a g e | 18

LABOR II: CASES AND POWERPOINT PRESENTATION

relationship of employer and employee, provided the
controversy concerns among other, the terms and
conditions of employment or a change or arrangement
thereof. The existence of a labor dispute is not negated by
the fact that the plaintiffs and defendants do not stand in
the proximate relation of employer and employee
Crucial to the resolution of the question on jurisdiction is
the matter of whether or not the case at bar involves, or in
connection with, or relates to a labor dispute. An affirmative answer
would bring the case within the original and exclusive
jurisdiction of labor tribunals to the exclusion of the
regular Courts. In this case, the matter re terms, tenure
and conditions of EEs employment and the arrangement
of those terms as well as the matter of representation bring these
issue within the scope of a labor dispute. Hence, it is the labor
tribunal that have jurisdiction and not the regular courts
As the case is indisputably linked with a labor dispute,
jurisdiction belongs to the labor tribunals. So, Labor Arbiters have
original and exclusive jurisdiction to hear and decide the
following cases involving all workers including: [a] unfair
labor practice cases; [b] those that workers may file involving
wages, hours of work and other terms and conditions of
employment; and [c] cases arising from any violation of
A265 LC, including questions involving the legality of striker and
lockouts.
SMCs claim that the action is for damages under A19, 20
and 21 of the Civil Code is not enough to keep the case within the
jurisdictional boundaries of regular Courts. That the claim for
damages is interwoven with a labor dispute, to allow the action filed
below to prosper would bring about "split jurisdiction" which is
obnoxious to the orderly administration of justice. SC recognizes the
proprietary right of SMC to exercise an inherent management
prerogative and its best business judgment to determine whether it
should contract out the performance of some of its work to

independent contractors. However, the rights of all workers to

self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike
in accordance with law equally call for recognition
and protection. Those contending interests must be placed in
proper perspective and equilibrium.

Subject Matter
o Terms and conditions of employment
o Association or Representation of persons

Labor Disputes, Kinds

Standards-related
o Compensation
o Benefits
o Working Conditions
Relations Disputes
o Organizational rights/ULP
o Representation
o Bargaining
o Contract administration
o Personnel policy
o Employment tenure disputes
Resolving Labor Disputes
Grievance procedure CBA-prescribed, in-house
mechanism for addressing complaints.
Conciliation involves third person who meets with both
parties and, by assuaging hurt feelings and cooling tempers,
aids in reaching agreement.
Mediation third person offers suggested solutions to
dispute.

LABOR II: CASES AND POWERPOINT PRESENTATION

Arbitration dispute is submitted to impartial third person

who renders decision based on evidence, law and
jurisprudence. Decision is enforceable.
o Voluntary by agreement of parties
o Compulsory directed by law. Primarily done by
labor arbiters of the NLRC
Enforcement/Compliance Order dispute arises from
concern
uncovered
by
the
exercise
of
enforcement/visitorial power of SOLE, or adjudicatory
powers of the DOLE Regional Directors (Articles 128, 129,
Labor Code)
In case of labor disputes that may affect an industry
indispensable to the national interest, the following apply:
o Assumption of jurisdiction by DOLE
o Certification to the NLRC for compulsory arbitration

The National Labor Relations Commission: Jurisdiction, Case Flow,

Appeals, Cases
The National Labor Relations Commission
Precursor: Court of Industrial Relations
NLRC was created by the Labor Code
o attached to the DOLE
o Under EO 204, s. 2005, DOLE exercises
administrative supervision over the commission
o Under RA 9347, several changes to the composition
of the divisions, rank equivalence, and reverted to
the old version of NLRCs attachment to DOLE
(program and policy coordination)
o Equal representation from workers, employers &
public sector
Jurisdiction of Labor Arbiters

P a g e | 19
Original and exclusive jurisdiction to hear and decide the
following cases involving all workers, whether agricultural
or non-agricultural (Art. 223, LC, Rule V Section 1, 2011
NLRC Rules):
1. Unfair labor practice cases; ULP Means "Unfair
labor practice" means any unfair labor practice as
expressly defined by the Code (Art. 218(K), Art. 254,
Art. 255).
2. Termination disputes;
3. If accompanied with a claim for Reinstatement,
those cases that workers may file involving wages,
rates of pay, hours of work and other terms and
conditions of employment;

The National Labor Relations Commission

NLRC exercises adjudicatory powers and other functions
through its divisions (not the individual commissioners);
En banc decisions pertain only to
o Promulgation of rules governing hearing and
disposition of cases in the divisions (e.g., 2011 NLRC
Rules);
o Recommending Labor Arbiters to the President
o Allowing a division to hear and decide a case under
the jurisdiction of another division
Jurisdiction of Labor Arbiters
4. Claims for actual, moral, exemplary and other forms of
Damages arising from the employer-employee relations;
5. Cases arising from any Violation of Article 270 of this Code,
including questions involving the legality of strikes and
lockouts; and
6. Except claims for Employees Compensation, Social Security,
Medicare and maternity benefits, all other Claims arising
from employer-employee relations, including those of

LABOR II: CASES AND POWERPOINT PRESENTATION

7.

8.
9.

10.

persons in domestic or household service, involving an

amount exceeding five thousand pesos (P5,000.00)
regardless of whether accompanied with a claim for
reinstatement (Article 223, Labor Code, as amended).
Original and exclusive jurisdiction over money claims arising
out of employer-employee relationship or by virtue of any
law or contract, involving Filipino workers for Overseas
deployment, including claims for actual, moral, exemplary
and other forms of damages (Section 10, Republic Act No.
8042, as amended by Republic Act No. 10022).
Wage distortion disputes in unorganized establishments not
voluntarily settled by the parties pursuant to Republic Act
No. 6727.
Enforcement of compromise agreements when there is
non-compliance by any of the parties or if there is prima
facie evidence that the settlement was obtained through
fraud, misrepresentation or coercion (Article 233, Labor
Code, as amended).
Other cases as may be provided by law.

Cases
The jurisdiction of labor arbiters, as well as of the NLRC, is
limited to disputes arising from an employer-employee
relationship which can only be resolved by reference to the
Labor Code, other labor statutes, or their collective
bargaining agreement. U-Bix's complaint was one to collect
sum of money based on civil laws on obligations and
contract, not to enforce rights under the Labor Code, other
labor statutes, or the collective bargaining agreement. (UBix Corporation, et al. vs. Valerie Anne H. Hollero, G.R. No.
177647, October 31, 2008)
U-BIX CORPORATION and EDILBERTO B. BRAVO vs. VALERIE ANNE
H. HOLLERO

FACTS:

P a g e | 20

Valerie Anne H. Hollero was hired as a management trainee

and was eventually promoted to facilities manager by U-Bix
Corporation (U-Bix). Hollero and three other employees were later
sent to the United States for two months of training for a newly
acquired franchise. Before she left, she signed a contract with U-Bix
which reads that VALERIE ANNE H. HOLLERO shall remain in the
employ of U-BIX CORPORATION for a period of five (5) years from
completion of her U.S. Training otherwise she shall reimburse U-BIX
CORPORATION for all costs (prorated) and expenses which U-BIX
CORPORATION incurred for her (Hollero's) training in the U.S
U-Bix, citing Holleros supposed pattern of tardiness,
absences, neglect of duties and lack of interest,
terminated her
employment for loss of trust and confidence. U-Bix then filed
against Hollero before the Labor Arbiter for the reimbursement of
training expenses and damages. Subsequently, Hollero also filed a
complaint against U-Bix for illegal dismissal.
The Labor Arbiter (LA) rendered a decision declaring that
the dismissal of Hollero is valid and legal and ordered her to pay UBix the reimbursement of her training. It dismissed Holleros
complaint for lack of merit. On appeal before the National Labor
Relations Commission (NLRC), the NLRC reversed the LAs decision.
A Motion for Reconsideration was filed but subsequently denied by
NLRC. The Court of Appeals affirmed the lower courts decision.
ISSUES:
Whether or not Hollero was illegally dismissed by U-Bix.
RULING:
An employer who seeks to dismiss an employee must afford
the latter ample opportunity to be heard and to defend himself with
the assistance of his representative if he so desires.
U-Bix failed to discharge the burden of proof that Holleros
dismissal is for a valid and just cause.
In termination cases, the employer has the burden of
proving that the dismissal is for a valid and just cause. While an

LABOR II: CASES AND POWERPOINT PRESENTATION

employer enjoys a wider latitude of discretion in terminating the
employment of managerial employees, managerial employees are
also entitled to security of tenure and cannot be arbitrarily
dismissed at any time and without cause as reasonably established
in an appropriate investigation.
In the case at bar, U-Bix failed to substantiate their
allegations of Holleros habitual absenteeism, habitual tardiness,
neglect of duties, and lack of interest. Daily time records,
attendance records, or other documentary evidence attesting to
these grounds could have readily been presented to support the
allegations but none was.
The merits of a complaint for illegal dismissal do not depend
on its prayer but on whether the employer discharges its burden of
proving that the dismissal is valid.
U-Bix failed to comply with the procedural due process of
dismissing an employee In another vein, the Court finds that U-Bix
and Bravo failed to comply with the procedural requirements for a
valid dismissal. Hollero being a manager did not excuse them from
observing such procedural requirements.
The notice does not inform outright the employee that an
investigation will be conducted on the charges particularized
therein which, if proven, will result to her dismissal. It does not
contain a plain statement of the charges of malfeasance or
misfeasance nor categorically state the effect on her employment if
the charges are proven to be true. It does not apprise Hollero of
possible dismissal should her explanation prove unsatisfactory.
Besides, the U-Bix and Bravo did not even establish that Hollero
received the memorandum.
Neither did U-Bix and Bravo show that they conducted a
hearing or conference during which Hollero, with the assistance of
counsel if she so desired, had opportunity to respond to the charge,
present her evidence, or rebut the evidence presented against her.
The meeting with Hollero on December 23, 1996 did not satisfy the
hearing requirement, for Hollero was not given the opportunity to

P a g e | 21

avail herself of counsel.

Article 277(b) of the Labor Code mandates that an employer
who seeks to dismiss an employee must afford the latter ample
opportunity to be heard and to defend himself with the assistance
of his representative if he so desires. Expounding on this provision,
the Court held that '[a]mple opportunity' connotes every kind of
assistance that management must accord the employee to enable
him to prepare adequately for his defense including legal
representation.

The jurisdiction of labor courts extends only to cases where

an employer-employee relationship exists. (Jaguar Security
& Investigation Agency vs. Rodolfo Sales, et. al., G.R. No.
162420, April 22, 2008)

JAGUAR SECURITY AND INVESTIGATION AGENCY vs. RODOLFO A.

SALES
FACTS:
Jaguar Security and Investigation Agency (Jaguar) is a
private corporation engaged in the business of providing security
services to its clients, one of whom is Delta Milling Industries, Inc.
(Delta).
Rodolfo Sales, Melvin Tamayo, Dionisio Caranyagan, Jesus
Silva, Jr., Jaime Moron and Daneth Fetalvero were hired as security
guards by Jaguar. They were assigned at the premises of Delta in
Libis, Quezon City. Caranyagan and Tamayo were terminated by
Jaguar on May 26, 1998 and August 21, 1998, respectively. Allegedly
their dismissals were arbitrary and illegal. Sales, Moron, Fetalvero
and Silva remained with Jaguar. All the guard-employees, claim for
monetary benefits such as underpayment, overtime pay, rest day
and holiday premium pay, underpaid 13th month pay, night shift
differential, five days service and incentive leave pay. In addition to
these money claims, Caranyagan and Tamayo argue that they were
entitled to separation pay and back wages, for the time they were

LABOR II: CASES AND POWERPOINT PRESENTATION

illegally dismissed until finality of the decision. Furthermore, all
respondents claim for moral and exemplary damages.
On September 18, 1998, respondent security guards instituted the
instant labor case before the labor arbiter. The labor arbiter
rendered a decision in favor of private respondents Sales, et al
On July 1, 1999, petitioner Jaguar filed a partial appeal questioning
the failure of public respondent NLRC to resolve its cross-claim
against Delta as the party ultimately liable for payment of the
monetary award to the security guards.
In its Resolution dated September 19, 2000, the NLRC
dismissed the appeal, holding that it was not the proper forum to
raise the issue. It went on to say that Jaguar, being the direct
employer of the security guards, is the one principally liable to the
employees. Thus, it directed petitioner to file a separate civil action
for recovery of the amount before the regular court having
jurisdiction over the subject matter, for the purpose of proving the
liability of Delta. Jaguar sought reconsideration of the dismissal, but
the Commission denied the same in its Resolution dated November
9, 2001. Petitioner filed a petition for certiorari with the CA, which,
in the herein assailed Decision dated October 21, 2002 and
Resolution dated February 13, 2004, dismissed the petition for lack
of merit.
ISSUE:
Whether or not the regular court has a jurisdiction over the
collection of sum of money.
RULING:
We agree with the respondent that the RTC has jurisdiction
over the subject matter of the present case. It is well-settled in law
and jurisprudence that where no employer-employee relationship
exists between the parties and no issue is involved which may be
resolved by reference to the Labor Code, other labor statutes or any
collective bargaining agreement, it is the Regional Trial Court that
has jurisdiction. In its complaint, private respondent is not seeking
any relief under the Labor Code but seeks payment of a sum of

P a g e | 22

money and damages on account of petitioners alleged breach of its

obligation under their Guard Service Contract. The action is within
the realm of civil law hence jurisdiction over the case belongs to
the regular courts. While the resolution of the issue involves the
application of labor laws, reference to the labor code was only for
the determination of the solidary liability of the petitioner to the
respondent where no employer-employee relation exists. Article
217 of the Labor Code as amended vests upon the labor arbiters
exclusive original jurisdiction only over the following:
1. Unfair labor practices;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases
that workers may file involving wages, rates of pay, hours of
work and other terms and conditions of employment;
4. Claims for actual, moral exemplary and other forms of
damages arising from employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code,
including questions involving legality of strikes and lockouts;
and
6. Except claims for Employees Compensation, Social Security,
Medicare and maternity benefits, all other claims, arising
from employer-employee relations, including those of
persons in domestic or household service, involving an
amount exceeding five thousand pesos (P5,000.00)
regardless of whether accompanied with a claim for
reinstatement.
In all these cases, an employer-employee relationship is an
indispensable jurisdictional requisite; and there is none in this case.
The jurisdiction of labor courts extends only to cases where
an employer-employee relationship exists.
In the present case, there exists no employer-employee
relationship between petitioner and Delta Milling. In its cross-claim,
petitioner is not seeking any relief under the Labor Code but merely
reimbursement of the monetary benefits claims awarded and to be

LABOR II: CASES AND POWERPOINT PRESENTATION

paid to the guard employees. There is no labor dispute involved in
the cross-claim against Delta Milling. Rather, the cross-claim
involves a civil dispute between petitioner and Delta Milling.
Petitioners cross-claim is within the realm of civil law, and
jurisdiction over it belongs to the regular courts.
Exception to the rule that Er-Ee relationship is necessary for
Labor Arbiters to acquire jurisdiction:
The jurisdiction of Labor Arbiters is not limited to claims
arising from Employer-Employee relationships under Sec. 10
of RA 8042, which cover money claims arising out of an
employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas
deployment, including claims fordamages. Santiago vs.
CF Sharp Crew Management, Inc. (GR No. 162419, July
2007)
PAUL V. SANTIAGO, vs. CF SHARP CREW MANAGEMENT, INC.,
FACTS:
Petitioner had been working as a seafarer for Smith Bell
Management, Inc. (respondent) for about five (5) years. He
signed a new contract of employment with the duration of 9
months on Feb 3 1998 and he was to be deployed 10 days after.
This contract was approved by POEA. A week before the date of
departure, the respondent received a phone call from
petitioners wife and some unknown callers asking not to send
the latter off because if allowed, he will jump ship in Canada.
Because of the said information, petitioner was told
that he would not be leaving for Canada anymore. This
prompted him to file a complaint for illegal dismissal against the
respondent. The LA held the latter responsible. On appeal, the
NLRC ruled that there is no employer-employee relationship
between petitioner and respondent, hence, the claims should
be dismissed. The CA agreed with the NLRCs finding that since

P a g e | 23

petitioner had not departed from the Port of Manila, no

employer-employee relationship between the parties arose and
any claim for damages against the so-called employer could
have no leg to stand on.
ISSUE:
When does the employer-employee relationship
involving seafarers commence?
RULING:
A distinction must be made between the perfection of
the employment contract and the commencement of the
employer-employee relationship. The perfection of the
contract, which in this case coincided with the date of execution
thereof, occurred when petitioner and respondent agreed on
the object and the cause, as well as the rest of the terms and
conditions therein. The commencement of the employeremployee relationship, as earlier discussed, would have taken
place had petitioner been actually deployed from the point of
hire. Thus, even before the start of any employer-employee
relationship, contemporaneous with the perfection of the
employment contract was the birth of certain rights and
obligations, the breach of which may give rise to a cause of
action against the erring party. Thus, if the reverse had
happened, that is the seafarer failed or refused to be deployed
as agreed upon, he would be liable for damages.
Respondents act of preventing petitioner from
departing the port of Manila and boarding "MSV Seaspread"
constitutes a breach of contract, giving rise to petitioners cause
of action. Respondent unilaterally and unreasonably reneged on
its obligation to deploy petitioner and must therefore answer
for the actual damages he suffered.
Corporate Officers
Nacpil vs. IBC (GR No. 144767, March 21, 2002) Officers
designated by the board are corporate officers

LABOR II: CASES AND POWERPOINT PRESENTATION

Nacpil vs. International Broadcasting Corporation

FACTS:

Dily Dany Nacpil states that he was Assistant General

Manager for Finance/Administration and Comptroller of
Intercontinental Broadcasting Corporation (IBC) from 1996 until
April 1997. According to Nacpil, when Emiliano Templo was
appointed to replace IBC President Tomas Gomez III sometime in
March 1997, the former told the Board of Directors that as soon as
he assumes the IBC presidency, he would terminate the services of
Nacpil. Apparently, Templo blamed Nacpil, along with a certain Mr.
Basilio and Mr. Gomez, for the prior mismanagement of IBC. Upon
his assumption of the IBC presidency, Templo allegedly harassed,
insulted, humiliated and pressured Nacpil into resigning until the
latter was forced to retire. However, Templo refused to pay him his
retirement benefits, allegedly because he had not yet secured the
clearances from the Presidential Commission on Good Government
(PCGG) and the Commission on Audit (COA). Furthermore, Templo
allegedly refused to recognize Nacpil's employment, claiming that
Nacpil was not the Assistant General Manager/Comptroller of IBC
but merely usurped the powers of the Comptroller. Hence, in 1997,
Nacpil filed with the Labor Arbiter a complaint for illegal dismissal
and non-payment of benefits. Instead of filing its position paper, IBC
filed a motion to dismiss alleging that the Labor Arbiter had no
jurisdiction over the case.
IBC contended that Nacpil was a corporate officer who was
duly elected by the Board of Directors of IBC; hence, the case
qualities as an intra-corporate dispute falling within the jurisdiction
of the Securities and Exchange Commission (SEC). However, the
motion was denied by the Labor Arbiter in an Order dated 22 April
1998. On 21 August 1998, the Labor Arbiter rendered a Decision
stating that Nacpil had been illegally dismissed. IBC was ordered (1)
to reinstate Nacpil to his former position without diminution of
salary or loss of seniority rights, and with full backwages computed

P a g e | 24

from the time of his illegal dismissal on May 16, 1997 up to the time
of his actual reinstatement which is tentatively computed as of the
date of this decision on August 21, 1998 in the amount of
P1,231,750.00; and that should Nacpil be not reinstated within 10
days from receipt of this decision, he shall be entitled to additional
backwages until actually reinstated; and (2) to pay Nacpil P2 Million
as and for moral damages, P500,000.00 as and for exemplary
damages, and 10% thereof as and for attorney's fees. IBC appealed
to the NLRC, but the same was dismissed in a Resolution dated 2
March 1999, for its failure to file the required appeal bond in
accordance with Article 223 of the Labor Code. IBC then filed a
motion for reconsideration that was likewise denied in a Resolution
dated 26 April 1999. IBC then filed with the Court of Appeals a
petition for certiorari under Rule 65, which petition was granted by
the appellate court in its Decision dated 23 November 1999. Nacpil
then filed a motion for reconsideration, which was denied by the
appellate court in a Resolution dated 31 August 2000. Nacpil filed
the petition for review on certiorari.
ISSUE:
1.
Whether the SEC or the NLRC has jurisdiction over
the Nacpils alleged illegal dismissal.
2.
Whether the inclusion of money claims in Nacpils
complaint for illegal dismissal removes the case from the
ambit of the Corporation Code.
RULING:
1. As Nacpil's appointment as comptroller required the
approval and formal action of the IBC's Board of Directors to
become valid, 17 it is clear therefore holds that Nacpil is a corporate
officer whose dismissal may be the subject of a controversy
cognizable by the SEC under Section 5(c) of PD 902-A which includes
controversies involving both election and appointment of corporate
directors, trustees, officers, and managers Had Nacpil been an
ordinary employee, such board action would not have been

LABOR II: CASES AND POWERPOINT PRESENTATION

required. Thus, since Nacpil is considered a corporate officer and his
claim of illegal dismissal is a controversy that falls under the
jurisdiction of the SEC as contemplated by Section 5 of PD 902-A.
The rule is that dismissal or non-appointment of a corporate officer
is clearly an intra-corporate matter and jurisdiction over the case
properly belongs to the SEC, not to the NLRC. As to the argument
that the nature of his functions is recommendatory thereby making
him a mere managerial officer, the Court has previously held that
the relationship of a person to a corporation, whether as officer or
agent or employee is not determined by the nature of the services
performed, but instead by the incidents of the relationship as they
actually exist.
2. It is of no consequence that Nacpil's complaint for illegal
dismissal includes money claims, for such claims are actually part of
the perquisites of his position in, and therefore linked with his
relations with, the corporation. The inclusion of such money claims
does not convert the issue into a simple labor problem. Clearly, the
issues raised by Nacpil against the IBC are matters that come within
the area of corporate affairs and management, and constitute a
corporate controversy in contemplation of the Corporation Code.

FACTS:

Prudential Bank and Trust Company (GR No. 141093, Feb.

20, 2001) - One rising from the ranks is not a mere
corporate officer
Prudential Bank and Trust Company vs. Reyes

Reyes was appointed Accounting Clerk by the Bank on July

14, 1963. From that position she rose to become supervisor. Then in
1982, she was appointed Assistant Vice-President which she
occupied until her illegal dismissal on July 19, 1991.
ISSUE:
Whether or not the illegal dismissal is correctly brought at
the NLRC

P a g e | 25

RULING:
The banks contention that she merely holds an elective
position and that in effect she is not a regular employee is belied by
the nature of her work and her length of service with the Bank. As
earlier stated, she rose from the ranks and has been employed with
the Bank since 1963 until the termination of her employment in
1991. As Assistant Vice President of the Foreign Department of the
Bank, she is tasked, among others, to collect checks drawn against
overseas banks payable in foreign currency and to ensure the
collection of foreign bills or checks purchased, including the signing
of transmittal letters covering the same. It has been stated that the
primary standard of 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. Additionally, an employee is regular because of the
nature of work and the length of service, not because of the mode
or even the reason for hiring them. As Assistant Vice-President of
the Foreign Department of the Bank she performs tasks integral to
the operations of the bank and her length of service with the bank
totalling 28 years speaks volumes of her status as a regular
employee of the bank. In fine, as a regular employee, she is entitled
to security of tenure; that is, her services may be terminated only
for a just or authorized cause. This being in truth a case of illegal
dismissal, it is no wonder then that the Bank endeavoured to the
very end to establish loss of trust and confidence and serious
misconduct on the part of private respondent but, as will be
discussed later, to no avail.

Rural Bank of Coron vs. Cortes, (GR No. 164888, Dec. 6,

2006) A corporate officer who is also an employee may
file an illegal dismissal case with the labor arbiter.

P a g e | 26

LABOR II: CASES AND POWERPOINT PRESENTATION

RURAL BANK OF CORON vs. ANNALISA CORTES, Respondent.
FACTS:
Respondent Annalisa Cortes was hired as of the Rural Bank
of Coron. Later, she married a member of the family which ran the
corporation. Respondent later on became the Financial Assistant,
Personnel Officer and Corporate Secretary of The Rural Bank of
Coron and some other sensitive positions in the sister companies of
the Bank.
On examination of the financial books of the corporations
by petitioner Sandra Garcia Escat, she found out
that respondent
was involved in several anomalies, drawing petitioners to terminate
respondents services on November 23, 1998 in petitioner
corporations.
Respondent filed a complaint for illegal dismissal and nonpayment of salaries and other benefits with the NLRC.
Petitioners moved for the dismissal of the complaint on the
ground of lack of jurisdiction, contending that the case was an intracorporate controversy involving the removal of a corporate officer,
respondent being the Corporate Secretary of the Rural Bank of
Coron, Inc., hence, cognizable by the Securities and Exchange
Commission (SEC) pursuant to Section 5 of PD 902-A.
ISSUE:
Whether or not the NLRC had jurisdiction over the case.
RULING:
The SC held that Labor Arbiter has jurisdiction over
respondents complaint.
While, indeed, respondent was the Corporate Secretary of
the Rural Bank of Coron, she was also its Financial Assistant and the
Personnel Officer of the two other petitioner corporations.
Mainland Construction Co., Inc. v. Movilla instructs that a
corporation can engage its corporate officers to perform services
under a circumstance which would make them employees.
The Labor Arbiter has thus jurisdiction over respondents
complaint.

Cases: See also

Okol vs. Slimmers World International (GR No. 160146,
December 11, 2009)
FACTS:

Okol v. Slimmers

Leslie Okol, a Vice President of Slimmers World, was

terminated from employment after an incident with the Bureau of
Customs regarding equipment belonging to/consigned to Slimmers
World. As such, Okol filed a complaint with the Arbitration branch
of the NLRC against Slimmers World for illegal suspension, illegal
dismissal, unpaid commissions, damages, and attorneys fees, with
prayer for reinstatement and payment of back wages. Slimmers
World filed a Motion to Dismiss the case, asserting that the NLRC
had no jurisdiction over the subject matter of the complaint.
Slimmers Worlds motion was sustained, with the labor arbiter
ruling that since Okol was the vice president at the time of
her dismissal, being a corporate officer, the dispute was an intracorporate controversy falling outside the jurisdiction of the
arbitration branch. On appeal, the NLRC reversed the LA decision
and ordered Slimmers World to reinstate Okol. The CA subsequently
set aside the NLRC decision and ruled that the case was an intracorporate controversy, and falls within the jurisdiction of the
regular courts pursuant to RA 8799.
ISSUES:
1.
Whetheror not Okol was an employee or corporate
officer of Slimmers World.
2.
Whether or not the NLRC has jurisdiction over the
illegal dismissal case filed by Okol.
RULING:
1. Okol was a corporate officer at the time of her dismissal.
According to the Amended By-Laws of Slimmers World which

P a g e | 27

LABOR II: CASES AND POWERPOINT PRESENTATION

enumerate the power of the board of directors as well as the
officers of the corporation, the general management of the
corporation shall be vested in a board of five directors who shall be
stockholders and who shall be elected annually by the stockholders
and who shall serve until the election and qualification of their
successors and Like the Chairman of the Board and the President,
the Vice President shall be elected by the Board of Directors from
[its] own members. The Vice President shall be vested with all the
powers and authority and is required to perform all the duties of
the President during the absence of the latter for any cause. The
Vice President will perform such duties as the Board of Directors
may impose upon him from time to time. This clearly shows that
Okol was a director and officer of Slimmers World.
An office is created by the charter of the corporation and
the officer is elected by the directors and stockholders. On the other
hand, an employee usually occupies no office and generally is
employed not by action of the directors or stockholders but by
the managing officer of the corporation who also determines the
compensation to be paid to such employee.
2. NO. Since it has been shown that Okol was a corporate
officer, her charges of illegal suspension, illegal dismissal, unpaid
commissions, reinstatement and back wages against Slimmers
World fall squarely within the ambit of intra-corporate disputes. A
corporate officers dismissal is always a corporate act, or an intracorporate controversy which arises between a stockholder and a
corporation. The question of remuneration involving a stockholder
and officer, not a mere employee, is not a simple labor problem but
a matter that comes within the area of corporate affairs and
management and is a corporate controversy in contemplation of the
Corporate Code. The determination of the rights of a director and
corporate officer dismissed from his employment as well as the
corresponding liability of a corporation, if any, is an intra-corporate
dispute subject to the jurisdiction of the regular courts. Prior to its
amendment, Section 5 of PD 902-A provided that intra-corporate

disputes fall within the jurisdiction of the SEC. Subsection 5.2,

Section 5 of RA 8799, transferred to RTCs the SECs jurisdiction over
all cases listed in Section 5 of PD 902-A.
CA affirmed. Petition denied, without prejudice to Okols
taking recourse to and seeking relief through the appropriate
remedy in the proper forum. Jurisdiction over the subject matter
is conferred by law.

FACTS:

Gomez vs. PNOC Development and Management

Corporation (GR No. 174044, November 27, 2009)
Gomez vs. PNOC

Petitioner Gloria V. Gomez used to work as Manager of the

Legal Department of Petron Corporation, then a government-owned
corporation. With Petrons privatization, she availed of the
companys early retirement program and left that organization on
April 30, 1994. On the following day, May 1, 1994, however, Filoil
Refinery Corporation (Filoil), also a government-owned corporation,
appointed her its corporate secretary and legal counsel, with the
same managerial rank, compensation, and benefits that she used to
enjoy at Petron. However, the privatization did not materialize so
Gomez continued to serve as corporate secretary of respondent
PDMC. On September 23, 1996 its president re-hired her as
administrator and legal counsel of the company.
On March 29, 1999 the new board of directors of
respondent PDMC removed petitioner Gomez as corporate
secretary. Further, at the boards meeting on October 21, 1999 the
board questioned her continued employment as administrator. In
answer, she presented the former presidents May 24, 1998 letter
that extended her term. Dissatisfied with this, the board sought the
advice of its legal department, which expressed the view that
Gomezs term extension was an ultra vires act of the former
president. It reasoned that, since her position was functionally that

LABOR II: CASES AND POWERPOINT PRESENTATION

of a vice-president or general manager, her term could be extended
under the companys by-laws only with the approval of the board.
The legal department held that her de facto tenure could be
legally put to an end.
Petitioner Gomez for her part conceded that as corporate
secretary, she served only as a corporate officer. But, when they
named her administrator, she became a regular managerial
employee. Consequently, the respondent PDMCs board did not
have to approve either her appointment as such or the extension of
her term in 1998.
ISSUE:
Whether or not Gomez an ordinary employee whose
complaint is within the jurisdiction of the NLRC.
RULING:
Yes. The relationship of a person to a corporation, whether
as officer or agent or employee, is not determined by the nature of
the services he performs but by the incidents of his relationship
with the corporation as they actually exist. That the employee
served concurrently as corporate secretary for a time is immaterial.
A corporation is not prohibited from hiring a corporate officer to
perform services under circumstances which will make him an
employee. Indeed, it is possible for one to have a dual role of officer
and employee. NLRC has jurisdiction over a complaint filed by one
who served both as corporate officer and employee, when the
money claims were made as an employee and not as a corporate
officer.

Atty. Virgilio R. Garcia vs. Eastern Telecommunications

Philippines (GR No. 173115, April 16, 2009)

ATTY. VIRGILIO R. GARCIA vs. EASTERN TELECOMMUNICATIONS

PHILIPPINES, INC. and ATTY. SALVADOR C. HIZON
FACTS:
Atty. Virgilio R. Garcia was the Vice President and Head of

P a g e | 28

Business Support Services and Human Resource Departments of the

Eastern Telecommunications Philippines, Inc. (ETPI). Atty. Salvador
C. Hizon is the President/Chief Executive Officer of ETPI.
Atty. Garcia was placed under preventive suspension based
on three complaints for sexual harassment. In response to the
complaints, the Human Resources Department constituted a
Committee on Decorum to investigate the complaints which
recommended his dismissal. Atty. Hizon advised Atty. Garcia that his
employment with ETPI was, per recommendation of the Committee,
terminated effective 16 April 2000.
A complaint-affidavit for illegal dismissal with prayer for full
backwages and recovery of moral and exemplary damages was filed
by Atty. Virgilio R. Garcia against ETPI and Atty. Salvador C. Hizon.
Atty. Garcia filed a Motion to Inhibit, praying that Labor
Arbiter Libo-on to inhibit himself from further proceeding with the
case, on the ground that he was a fraternity brother of Atty. Hizon
which was denied. Atty. Garcia appealed said order before the NLRC
where the NLRC set aside the order of Labor Arbiter Libo-on and
ordered the re-raffling of the case. ETPI and Atty. Hizon moved for
the reconsideration of the decision, but the same was
denied. Consequently, the case was re-raffled to Labor Arbiter
Ramon Valentin C. Reyes.
Labor Arbiter Reyes found the preventive suspension and
subsequent dismissal of Atty. Garcia illegal. Labor Arbiter Reyes
issued a Writ of Execution insofar as the reinstatement aspect of the
decision was concerned, however, the writ remained unsatisfied
because ETPI and Atty. Hizon refused to reinstate Atty. Garcia to his
former position..
Labor Arbiter Reyes subsequently issued a 1st Alias Writ of
Execution dated 11 December 2002 ordering the sheriff to proceed
to the premises of ETPI to reinstate Atty. Garcia and/or garnish the
amounts prayed for. Per Sheriffs Return dated 17 January 2003, the
1st Alias Writ of Execution was satisfied with the amount
ofP450,000.00 being released for proper disposition to Atty. Garcia.

LABOR II: CASES AND POWERPOINT PRESENTATION

Subsequently, the 2nd Alias Writ of Execution was issued.
ETPI and Atty. Hizon, without waiving their right to continue
to question the jurisdiction of the Labor Arbiter over the case, filed
on 18 February 2003 a Motion to Inhibit, seeking the inhibition of
Labor Arbiter Reyes for allegedly evident partiality in favor of the
complainant in issuing writs of execution in connection with the
order of reinstatement contained in his decision dated 30
September 2002, despite the pendency of an Urgent with the NLRC,
which sought the restraining of the execution pending appeal of the
order of reinstatement. Said motion to inhibit was subsequently
granted by Labor Arbiter Reyes. The case was re-raffled to Labor
Arbiter Elias H. Salinas.
On 21 March 2003, the NLRC rendered its decision reversing
the decision of Labor Arbiter Reyes and dismissing the case for lack
of jurisdiction.
The Commission ruled that the dismissal of Atty. Garcia,
being ETPIs Vice President, partook of the nature of an intracorporate dispute cognizable by Regional Trial Courts and not by
Labor Arbiters. It added that ETPI and Atty. Hizon were not barred
by estoppel from challenging the jurisdiction of the Labor Arbiter
over the instant case. The NLRC made permanent the TRO it since
the Labor Arbiter had no jurisdiction over the case, the decision of
the Labor Arbiter dated 30 September 2002 was void.
On 9 July 2004, Atty. Garcia filed a Motion to Set Aside
Finality of Judgment With Opposition to Motion to Discharge Appeal
Bond, claiming that he did not receive the resolution dated 16
December 2003 of the NLRC, the same having been sent to his
former address at 9 Isidora St., Don Antonio Heights, Diliman,
Quezon City, and not to his new address at 4 Pele St., Filinvest 2,
Batasan Hills, Quezon City, where he had been receiving all
pleadings, Resolutions, Orders and Decisions pertaining to the
instant case since April 2001. On 23 August 2004, the NLRC,
admitting that it missent the resolution dated 16 December 2003
denying Atty. Garcias motion for reconsideration, issued an order

P a g e | 29

granting the motion. It recalled and set aside the Entry of Judgment
dated 14 June 2004 and denied the Motion to Discharge and/or
Release the Appeal Bond.
In its Motion for Reconsideration dated 17 September 2004,
ETPI and Atty. Hizon argued that the NLRC correctly sent the
resolution of 16 December 2003 to counsels allegedly old address,
considering that same was counsels address of record, there being
no formal notice filed with the NLRC informing it of a change of
address. They contended that the aforesaid resolution had become
final and executory, and that Atty. Garcia should bear the
consequences of his inequitable conduct and/or gross
negligence. On 10 January 2005, the NLRC denied the motion for
reconsideration.
On 14 March 2005, Atty. Garcia appealed to the Court of
Appeals via a Petition for Certiorari. It prayed that the Decision
dated 21 March 2003 and resolution dated 16 December 2003 of
the NLRC be annulled and set aside, and that the decision of the
Labor Arbiter dated 30 September 2002 be reinstated.
On 28 March 2005, ETPI and Atty. Hizon likewise filed a
Petition for Certiorari asking that the Orders dated 23 August 2004
and 10 January 2005 of the NLRC be set aside; that its resolution
dated 16 December 2003 be declared final and executory; and that
the NLRC be directed to discharge and/or release Supersede as
Bond No. JCL (15) 00823 SICI Bond No. 75069 dated 18 November
2002 posted by them.
Upon motion of Atty. Garcia, the two petitions for certiorari
were consolidated which were both dismissed by the CA.
ISSUE:
Whether or not the question of legality or illegality of the
removal or termination of employment of an officer of a
corporation is an intra-corporate controversy that falls under the
original exclusive jurisdiction of the regional trial courts.
RULING:
The Supreme Court, in a long line of cases, has decreed that

LABOR II: CASES AND POWERPOINT PRESENTATION

a corporate officers dismissal or removal is always a corporate act
and/or an intra-corporate controversy, over which the Securities
and Exchange Commission [SEC] (now the Regional Trial Court)87 has
original and exclusive jurisdiction.
We have ruled that an intra-corporate controversy is one
which pertains to any of the following relationships: (1) between
the corporation, partnership or association and the public; (2)
between the corporation, partnership or association and the State
insofar as the formers franchise, permit or license to operate is
concerned; (3) between the corporation, partnership or association
and its stockholders, partners, members or officers; and (4) among
the stockholders, partners or associates themselves. In Lozon v.
National Labor Relations Commission, we declared that Presidential
Decree No. 902-A confers on the SEC original and exclusive
jurisdiction to hear and decide controversies and cases involving
intra-corporate and partnership relations between or among the
corporation, officers and stockholders and partners, including their
elections or appointments x x x.
Before a dismissal or removal could properly fall within the
jurisdiction of the SEC, it has to be first established that the person
removed or dismissed was a corporate officer. "Corporate officers"
in the context of Presidential Decree No. 902-A are those officers of
the corporation who are given that character by the Corporation
Code or by the corporations by-laws. There are three specific
officers whom a corporation must have under Section 25 of the
Corporation Code. These are the president, secretary and the
treasurer. The number of officers is not limited to these three. A
corporation may have such other officers as may be provided for by
its by-laws like, but not limited to, the vice-president, cashier,
auditor or general manager. The number of corporate officers is
thus limited by law and by the corporations by-laws.
In the case before us, the by-laws of ETPI provide:
ARTICLE V
Officers

P a g e | 30

Section 1. Number. The officers of the Company shall be a

Chairman of the Board, a President, one or more Vice-Presidents, a
Treasurer, a Secretary, an Assistant Secretary, and such other
officers as may be from time to time be elected or appointed by the
Board of Directors. One person may hold any two compatible
offices.
Atty. Garcia tries to deny he is an officer of ETPI. Not being a
corporate officer, he argues that the Labor Arbiter has jurisdiction
over the case. One of the corporate officers provided for in the bylaws of ETPI is the Vice-President. It can be gathered from Atty.
Garcias complaint-affidavit that he was Vice President for Business
Support Services and Human Resource Departments of ETPI when
his employment was terminated effective 16 April 2000. It is
therefore clear from the by-laws and from Atty. Garcia himself that
he is a corporate officer. One who is included in the by-laws of a
corporation in its roster of corporate officers is an officer of said
corporation and not a mere employee. Being a corporate officer, his
removal is deemed to be an intra-corporate dispute cognizable by
the SEC and not by the Labor Arbiter.
We agree with both the NLRC and the Court of Appeals that
Atty. Garcias ouster as Vice-President, who is a corporate officer of
ETPI, partakes of the nature of an intra-corporate controversy,
jurisdiction over which is vested in the SEC (now the RTC). The Labor
Arbiter thus erred in assuming jurisdiction over the case filed by
Atty. Garcia, because he had no jurisdiction over the subject matter
of the controversy.

Renato Real vs. Sangu Philippines, Inc. et al., G.R. No.

168757, 1/19/2011

RENATO REAL vs. SANGU PHILIPPINES, INC. and/ or KIICHI ABE

FACTS:
Renato Real was the Manager of respondent corporation
Sangu Philippines, Inc. which is engaged in the business of providing

LABOR II: CASES AND POWERPOINT PRESENTATION

manpower for general services. He filed a complaint for illegal
dismissal against the respondents stating that he was neither
notified of the Board meeting during which his removal was
discussed nor was he formally charged with any infraction.
Respondents, on the other hand, said that Real committed
gross acts of misconduct detrimental to the company since 2000.
The LA declared petitioner as having been illegally dismissed. Sangu
appealed to NLRC and established petitioners status as a
stockholder and as a corporate officer and hence, his action against
respondent corporation is an intra-corporate controversy over
which the Labor Arbiter has no jurisdiction. NLRC modified the LAs
decision. On appeal, the CA affirmed the decision of NLRC.
Hence, this petition.
ISSUE:
Whether or not petitioners complaint for illegal dismissal
constitutes an intra-corporate controversy.
RULING:
To determine whether a case involves an intra-corporate
controversy, and is to be heard and decided by the branches of the
RTC specifically designated by the Court to try and decide such
cases, two elements must concur: (a) the status or relationship of
the parties, and (2) the nature of the question that is the subject of
their controversy.
The first element requires that the controversy must arise
out of intra-corporate or partnership relations between any or all of
the parties and the corporation x x . The second element requires
that the dispute among the parties be intrinsically connected with
the regulation of the corporation. If the nature of the controversy
involves matters that are purely civil in character, necessarily, the
case does not involve an intra-corporate controversy.
Guided by this recent jurisprudence, we thus find no merit
in respondents contention that the fact alone that petitioner is a
stockholder and director of respondent corporation automatically
classifies this case as an intra-corporate controversy. To reiterate,

P a g e | 31

not all conflicts between the stockholders and the corporation are
classified as intra-corporate. There are other factors to consider in
determining whether the dispute involves corporate matters as to
consider them as intra-corporate controversies.
Venue
Case may be filed in the RAB having jurisdiction over the
workplace of complainant or petitioner
Where two or more RABs have jurisdiction, venue resides in
the RAB which first acquired it
No objection to venue before the filing of position papers,
issue is deemed waived
May be by written agreement, or by motion for meritorious
cases
Option of the worker
Case Flow, RAB

LABOR II: CASES AND POWERPOINT PRESENTATION

2011 NLRC Rules of Procedure

Significant changes from 2005 Rules (as discussed by Atty.
Ruben Del Rosario)
1. Service of Notices, Resolutions, Orders and Decisions by Private
Courier (Section 4, Rule III). Under the 2005 Rules, service of
notices such as summons, notice of conference, resolutions, orders
and decisions is made through the NLRCs messenger or sent by
registered mail only. In the 2011 Rules, service can be done by
private
courier
also.
2. Authority of the Labor Arbitration Associate to Conduct
Conciliation and Mediation Conference (Section 8a, Rule V). The
2005 Rules state that the Labor Arbiter shall personally preside
over and take full control of the proceedings. The 2011 Rules state
that the Labor Arbiter may be assisted by the Labor Arbitration
Associate in the conduct of the proceedings.
2011 NLRC Rules of Procedure
5. Remedy of the Respondents (Manning Agents) When
Declared To Have Waived Their Right to File Position Paper
(Section 20, Rule V)
In instances where a party is declared to have waived
his/her right to file position paper, the 2011 NLRC Rules
have provided a remedy. The 2011 NLRC Rules states: A
party declared to have waived his/her right to file position
paper may, at any time after notice thereof and before a
case is submitted for decision, file a motion under oath to
set aside the order of waiver upon proper showing that
failure to appear during the hearings was due to justifiable
and meritorious grounds. If said motion is granted, the
manning agents can now file the necessary Position Paper.
6. Limited Period to Conduct Hearing or Clarificatory
Conference (Section 14a, Rule V)
The concept of hearing or clarificatory conference referred
to in this rule is independent of and different from the

P a g e | 32
mediation or conciliation hearing wherein the seafarer and
the manning agents are encouraged to enter into an
amicable settlement. The clarificatory hearing is conducted
after the submission of the position papers
Briefly stated, a clarificatory hearing is rarely held and it is
discretionary on the part of the Labor Arbiter. As the term
connotes, its purpose is to ask the parties clarificatory
questions to further elicit facts or information which will
include obtaining relevant documentary evidence from any
party or witness.
The hearing or clarificatory conference shall be terminated
within thirty (30) calendar days from the date of the initial
clarificatory conference. The period now is shorter as it was
ninety (90) calendar days under the 2005 NLRC Rules.
In any event, under both the 2005 and 2011 Rules, cases
involving overseas Filipino workers (including seafarers) the
mandatory conciliation and mediation conferences and
clarificatory conferences must be terminated within sixty
(60) days from the acquisition of jurisdiction by the Labor
Arbiter over the person of the respondents.
7. Procedure for Recovery of Amount Paid to the Seafarer
During Execution Proceedings (Section 14, Rule XI)
By way of brief background, if the case is lost in the Labor
Arbiter level, the manning agents/principals can file an
appeal before the Commission level to assail the Labor
Arbiters decision. If the appeal is dismissed, the remedy of
the manning agents is to file a Motion for Reconsideration.
The denial of the motion will render the Labor Arbiters
decision final and executory. Consequently, at this stage,
manning agents and their principals are required to pay the
seafarer based on said final award.
In the meantime, the case can still continue because the
manning agents has the remedy of elevating the matter to
the Court of Appeals and eventually, to the Supreme Court.

LABOR II: CASES AND POWERPOINT PRESENTATION

In some cases, the Court of Appeals and/or the Supreme

Court would either reverse (the seafarer is not entitled at all
to his claim) or modify (the judgment award is reduced) the
decision of the NLRC.
In case of reversal or modification by the Court of Appeals
or Supreme Court of the Labor Arbiters decision, the next
recourse of the manning agents is to recover the amount it
has previously paid to the seafarer.
The present 2011 NLRC Rules of Procedure explicitly
provides for the steps on how to recover the said amount
from the seafarer. Under the 2011 NLRC Rules the Labor
Arbiters of the NLRC can issue orders of restitution to
enable the manning agents to recover the amount they
previously paid to the claimants as a result of the reversed
or modified decisions of the NLRC. This provision was not
present under the 2005 NLRC Rules.
8. Extraordinary Remedy Available to the Manning
Agents/Principals Other Than Appeal (Rule XII)
One of, if not, the most critical stage in NLRC proceedings is
during execution of the judgment award. It is at this point
that the seafarer can now collect from the manning agents
or the bonding company the amount mentioned in the
Labor Arbiters decision.
The writ of execution is the basic document which would
empower the NLRC Sheriff to collect the judgment award
from manning agent which is the losing party. Under the
2005 NLRC Rules of Procedure, once the writ is issued, the
manning agents are already helpless to stop the NLRC
Sheriff from enforcing the judgment award unless of course,
and this is very rare, the Court of Appeals issues a
Temporary Restraining Order and/or Writ of Injunction.
The 2011 NLRC Rules of Procedure provides for a specific
remedy. It is not in the form of an appeal but a verified
petition with the NLRC Commission the purpose of which is

P a g e | 33
to annul or modify the order of the Labor Arbiter issuing the
writ of execution.
The immediate effect of the filing of the said verified
Petition is that the NLRC Sheriff cannot, in the meantime,
enforce the writ of execution or the NLRC Sheriff, in
laymans term, cannot collect the amount stated in the
decision from the manning agents or from the bonding
company.
Please note that the mere filing of the verified Petition will
prevent the bank of either the manning agents or the
bonding company from releasing the garnished amount to
the seafarer within fifteen (15) calendar days from the filing
of the Petition. Of course, the period can be longer if the
NLRC issues a Temporary Restraining Order or Writ of
Preliminary Injunction which has a lifetime of twenty (20) or
sixty (60) days, respectively. It can also go beyond said
period if the NLRC issues a final injunction.
However, the Temporary Restraining Order or the Writ of
Preliminary Injunction only becomes effective upon posting
by the manning agents of a cash bond, not surety bond,
amounting to Php50,000.00 or a higher amount as may be
required by the NLRC.
Important Note: While the extraordinary remedy described
above can be availed of during execution proceedings, Rule
XII of the 2011 NLRC Rules can be availed of by any party
aggrieved by an order or resolution of the Labor Arbiter. It
is thus not confined to just execution proceedings but on all
orders or resolutions of the Labor Arbiter. For example, if
the manning agent files a Motion to Dismiss on the ground
that the seafarer has already been paid his disability
benefits and it is denied by the Labor Arbiter, the manning
agent can avail of the extraordinary remedy under Rule XII
of the 2011 NLRC Rules.

LABOR II: CASES AND POWERPOINT PRESENTATION

The above are the currently perceived significant changes
but we are continually reviewing the 2011 NLRC Rules and
will report on any other significant developments in
subsequent updates.

2011 NLRC Rules, amendments

En Banc Resolution 11-12 amended the 2011 NLRC Rules of
Procedure.
Venue: When venue is not objected to before the first
scheduled mandatory conference, such issue or objection
will be deemed waived. (Rule IV, Section 1, par. c)
Confidentiality of Commission Records: access to pleadings
and other documents filed by parties to a case are
restricted. Reports, drafts of decisions, records of
deliberations, and other documents involving private rights
are made confidential. Nevertheless, decisions, resolutions
and orders of the NLRC are open to the parties and their
counsel or authorized representative during office hours.
(Rule XIII, Section 8)
RULE
V,
SECTION
11.
AMENDMENT
OF
COMPLAINT/PETITION. An amended complaint or petition
may be filed before the Labor Arbiter at any time before the
filing of position paper, with proof of service of a copy
thereof to the opposing party/ies. If the amendment of the
complaint or petition involves impleading additional
respondent/s, service of another summons in accordance
with Section 3 hereof is necessary to acquire jurisdiction
over the person of the said respondent/s.
RULE V, SECTION 20. DEATH OF PARTIES. In case a
complainant dies during the pendency of the proceedings,
he/she may be substituted by his/her heirs. If it is the
individual respondent, the provision of Section 20, Rule 3 of
the Rules of Court shall apply.

P a g e | 34
RULE XI, SECTION 5. EFFECT OF A MOTION TO LIFT ENTRY
OF JUDGMENT. In case a motion to lift Entry of Judgment is
filed, the execution proceedings shall not be suspended and
the records of the case shall not be elevated to the
Commission unless ordered otherwise.
RULE XI, SECTION 11 EXECUTION IN CASE OF DEATH OF
PARTY. Where a party dies after the entry of judgment or
issuance of certificate of finality, execution thereon may
issue or one already issued may be enforced in accordance
with the applicable provisions of the Rules of Court. The
sheriff shall submit to the Commission or Labor Arbiter a
report before and after the sale. Proceeds of the sale should
be deposited with the Cashier for proper disposition by the
Commission or Labor Arbiter.
The foregoing provisions provide mechanisms to: a) amend
complaints b) substitute heirs in case of death of a party
and c) execute judgments. The amendments also clarify
certain ambiguities in the rules. For instance, the amended
rules specify the reckoning point of the five (5) year
effectivity of the writ of execution, which is the date of
entry of judgment or issuance of certificate of finality. (Rule
XI, Section 7)
In respect of execution of monetary judgments, the
amended rules state the manner by which a losing party
may voluntarily tender payment. The amended rules also
enumerate the order of funds and properties against which
the judgment may be enforced in the event the losing party
refuses or fails to pay. Notably, the prevailing party may
even file a motion for the issuance of a break open order
with the Commission or the Labor Arbiter if the losing party
prevents the sheriff from entering the place where the
property subject of execution is kept. (Rule XI, Section 9 and
10)

LABOR II: CASES AND POWERPOINT PRESENTATION

The amended rules introduced a new provision, which

would have a significant effect during execution
proceedings. It contemplates a situation where a case is
elevated to the Court of Appeals and subsequently to the
Supreme Court. The new provision states that a total or
partial reversal of judgment by the Court of Appeals has the
effect of suspending the execution insofar as the reversal is
concerned even during the pendency of a motion for
reconsideration on such judgment. Where the judgment of
the Court of Appeals is reversed by the Supreme Court,
execution proceedings shall commence upon presentation
of a certified true copy of the decision and entry of
judgment. (Section 17, Rule XI)

Doctrine of Forum Non Conveniens

Manila Hotel Corporation vs. NLRC (GR No. 120077,
October 13, 2000) The NLRC has no jurisdiction when the
main aspects of the case transpired in foreign jurisdictions
and the only link that the Philippines has with the case is
that the employee is a Filipino citizen.
Manila Hotel Corporation vs. National Labor Relations Commission
FACTS:

In May 1988, Marcelo Santos was an overseas worker in

Oman. In June 1988, he was recruited by Palace Hotel in Beijing,
China. Due to higher pay and benefits, Santos agreed to the hotels
job offer and so he started working there in November 1988. The
employment contract between him and Palace Hotel was however
without the intervention of the Philippine Overseas Employment
Administration (POEA). In August 1989, Palace Hotel notified Santos
that he will be laid off due to business reverses. In September 1989,
he was officially terminated.
In February 1990, Santos filed a complaint for illegal

P a g e | 35

dismissal against Manila Hotel Corporation (MHC) and Manila Hotel

International, Ltd. (MHIL). The Palace Hotel was impleaded but no
summons were served upon it. MHC is a government owned and
controlled corporation. It owns 50% of MHIL, a foreign corporation
(Hong Kong). MHIL manages the affair of the Palace Hotel. The labor
arbiter who handled the case ruled in favor of Santos. The National
Labor Relations Commission (NLRC) affirmed the labor arbiter.
ISSUE:
Whether or not the NLRC has jurisdiction over the case.
RULING:
No. The NLRC is a very inconvenient forum for the following
reasons:
1. The only link that the Philippines has in this case is the fact
that Santos is a Filipino;
2. However, the Palace Hotel and MHIL are foreign
corporations MHC cannot be held liable because it merely owns
50% of MHIL, it has no direct business in the affairs of the Palace
Hotel. The veil of corporate fiction cant be pierced because it was
not shown that MHC is directly managing the affairs of MHIL.
Hence, they are separate entities.
3. Santos contract with the Palace Hotel was not entered into
in the Philippines;
4. Santos contract was entered into without the intervention
of the POEA (had POEA intervened, NLRC still does not have
jurisdiction because it will be the POEA which will hear the case);
5. MHIL and the Palace Hotel are not doing business in the
Philippines; their agents/officers are not residents of the
Philippines;
Due to the foregoing, the NLRC cannot possibly determine
all the relevant facts pertaining to the case. It is not competent to
determine the facts because the acts complained of happened
outside our jurisdiction. It cannot determine which law is applicable.
And in case a judgment is rendered, it cannot be enforced against
the Palace Hotel (in the first place, it was not served any summons).

LABOR II: CASES AND POWERPOINT PRESENTATION

The Supreme Court emphasized that under the rule
of forum non conveniens, a Philippine court or agency may assume
jurisdiction over the case if it chooses to do so provided:
(1) that the Philippine court is one to which the parties may
conveniently resort to;
(2) that the Philippine court is in a position to make an intelligent
decision as to the law and the facts; and
(3) that the Philippine court has or is likely to have power to enforce
its decision.
None of the above conditions are apparent in the case at
bar.

PNB vs. Cabansag (GR No. 157010, June 21, 2005) when
the employee is directly hired in a foreign country but
nonetheless secures a (POEA) employment certificate, she is
an OFW and thus the case falls under the jurisdiction of the
labor arbiter.

PHILIPPINE NATIONAL BANK, petitioner, vs. FLORENCE O.

CABANSAG, respondent.
FACTS:
In late 1998, [herein Respondent Florence Cabansag]
arrived in Singapore as a tourist. She applied for employment, with
the Singapore Branch of the Philippine National Bank. At the time,
the Singapore PNB Branch was under the helm of Ruben C. Tobias, a
lawyer, as General Manager, with the rank of Vice-President of the
Bank. She applied for employment as Branch Credit Officer, at a
total monthly package of $SG4,500.00, effective upon assumption
of duties after approval. Ruben C. Tobias found her eminently
qualified and wrote on October 26, 1998, a letter to the President of
the Bank in Manila, recommending the appointment of Florence O.
Cabansag, for the position.
On December 7, 1998, Ruben C. Tobias wrote a letter to
Florence O. Cabansag offering her a temporary appointment, as

P a g e | 36

Credit Officer, at a basic salary of Singapore Dollars 4,500.00, a

month and, upon her successful completion of her probation to be
determined solely, by the Bank, she may be extended at the
discretion of the Bank, a permanent appointment and that her
temporary appointment was subject to certain terms and
conditions.
Cabansag accepted the position and assumed office. In the
meantime, the Philippine Embassy in Singapore processed the
employment contract of Florence O. Cabansag and, on March 8,
1999, she was issued by the Philippine Overseas Employment
Administration, an Overseas Employment Certificate, certifying
that she was a bona fide contract worker for Singapore.
Barely three (3) months in office Tobias told Cabansag that
her resignation was imperative as a cost-cutting measure of the
Bank. Tobias, likewise, told Cabansag that the PNB Singapore
Branch will be sold or transformed into a remittance office and that,
in either way, she had to resign from her employment. She then
asked Ruben C. Tobias that she be furnished with a Formal Advice
from the PNB Head Office in Manila. However, Ruben C. Tobias
flatly refused. Florence O. Cabansag did not submit any letter of
resignation.
On April 16, 1999, Ruben C. Tobias again summoned
Florence O. Cabansag to his office and demanded that she submit
her letter of resignation, with the pretext that he needed a Chinesespeaking Credit Officer to penetrate the local market, with the
information that a Chinese-speaking Credit Officer had already been
hired and will be reporting for work soon. She was warned that,
unless she submitted her letter of resignation, her employment
record will be blemished with the notation DISMISSED spread
thereon. Without giving any definitive answer, Florence O.
Cabansag asked Ruben C. Tobias that she be given sufficient time to
look for another job. Ruben C. Tobias told her that she should be
out of her employment by May 15, 1999.
However, on April 19, 1999, Ruben C. Tobias again

LABOR II: CASES AND POWERPOINT PRESENTATION

summoned Florence O. Cabansag and adamantly ordered her to
submit her letter of resignation. She refused. On April 20, 1999, she
received a letter from Ruben C. Tobias terminating her employment
with the Bank.
On January 18, 2000, the Labor Arbiter rendered judgment
in favor of the Complainant and against the Respondents. PNB
appealed the labor arbiters Decision to the NLRC. In a Resolution
dated June 29, 2001, the Commission affirmed that Decision.
Petitioner appealed to the Court of Appeals which rendered
a decision in favor of Florence Cabansag.
ISSUE:
Whether or not the arbitration branch of the NLRC in the
National Capital Region has jurisdiction over the instant
controversy.
RULING:
The jurisdiction of labor arbiters and the NLRC is specified in
Article 217 of the Labor Code and more specifically, Section 10 of RA
8042 reads in part:
SECTION 10. Money Claims. Notwithstanding any
provision of law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90) calendar
days after the filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment including claims
for actual, moral, exemplary and other forms of damages.
Based on the foregoing provisions, labor arbiters clearly
have original and exclusive jurisdiction over claims arising from
employer-employee relations, including termination disputes
involving all workers, among whom are overseas Filipino workers
(OFW). We are not unmindful of the fact that respondent was
directly hired, while on a tourist status in Singapore, by the PNB
branch in that city state. Prior to employing respondent, petitioner
had to obtain an employment pass for her from the Singapore

P a g e | 37

Ministry of Manpower. Securing the pass was a regulatory

requirement pursuant to the immigration regulations of that
country.
Noteworthy is the fact that respondent likewise applied for
and secured an Overseas Employment Certificate from the POEA
through the Philippine Embassy in Singapore. The Certificate, issued
on March 8, 1999, declared her a bona fide contract worker for
Singapore. Under Philippine law, this document authorized her
working status in a foreign country and entitled her to all benefits
and processes under our statutes. Thus, even assuming arguendo
that she was considered at the start of her employment as a direct
hire governed by and subject to the laws, common practices and
customs prevailing in Singapore she subsequently became a
contract worker or an OFW who was covered by Philippine labor
laws and policies upon certification by the POEA. At the time her
employment was illegally terminated, she already possessed the
POEA employment Certificate.
Whether employed locally or overseas, all Filipino workers
enjoy the protective mantle of Philippine labor and social
legislation, contract stipulations to the contrary notwithstanding.
For purposes of venue, workplace shall be understood as
the place or locality where the employee is regularly assigned when
the cause of action arose. It shall include the place where the
employee is supposed to report back after a temporary detail,
assignment or travel. In the case of field employees, as well as
ambulant or itinerant workers, their workplace is where they are
regularly assigned, or where they are supposed to regularly receive
their salaries/wages or work instructions from, and report the
results of their assignment to their employers.
Under the Migrant Workers and Overseas Filipinos Act of
1995 (RA 8042), a migrant worker refers to a person who is to be
engaged, is engaged or has been engaged in a remunerated activity
in a state of which he or she is not a legal resident; to be used
interchangeably with overseas Filipino worker.[21] Undeniably,

LABOR II: CASES AND POWERPOINT PRESENTATION

respondent was employed by petitioner in its branch office in
Singapore. Admittedly, she is a Filipino and not a legal resident of
that state. She thus falls within the category of migrant worker or
overseas Filipino worker.
Counter claims of employers
Banez vs. Valdevilla (GR No. 128024, May 9, 2000) Art.
217 (now 223) is comprehensive enough to include claims
for all forms of damages arising from Er-Ee relations,
including Ers claims for actual damages against a dismissed
Ee.
BEBIANO M. BAEZ vs. HON. DOWNEY C. VALDEVILLA and ORO
MARKETING, INC.
FACTS:
Baez was the sales operations manager of Oro Marketing
in Iligan City. In 1993, Oro Marketing "indefinitely suspended" Baez
and the latter filed a complaint for illegal dismissal with the NLRC in
Iligan City. In a decision dated July 7, 1994, Labor Arbiter Nicodemus
G. Palangan found Baez to have been illegally dismissed and
ordered the payment of separation pay in lieu of reinstatement, and
of backwages and attorney's fees. The decision was appealed to the
NLRC, which dismissed the same for having been filed out of time.
Elevated by petition for certiorari before this Court, the case was
dismissed on technical grounds; however, the Court also pointed
out that even if all the procedural requirements for the filing of the
petition were met, it would still be dismissed for failure to show
grave abuse of discretion on the part of the NLRC.
On November 13, 1995, Oro Marketing filed a complaint for
damages before the RTC of Misamis Oriental . On January 30, 1996,
Baez filed a motion to dismiss the above complaint. He interposed
in the court below that the action for damages, having arisen from
an employer-employee relationship, was squarely under the
exclusive original jurisdiction of the NLRC under Article 217(a),

P a g e | 38

paragraph 4 of the Labor Code and is barred by reason of the final

judgment in the labor case. He accused private respondent of
splitting causes of action, stating that the latter could very well have
included the instant claim for damages in its counterclaim before
the Labor Arbiter. He also pointed out that the civil action of private
respondent is an act of forum-shopping and was merely resorted to
after a failure to obtain a favorable decision with the NLRC.
Ruling upon the motion to dismiss, the RTC declared itself
as having jurisdiction over the subject matter of the instant
controversy on the ground that the damages does not ask for any
relief under the Labor Code of the Philippines. It seeks to recover
damages as redress for defendant's breach of his contractual
obligation to plaintiff who was damaged and prejudiced. The Court
believes such cause of action is within the realm of civil law, and
jurisdiction over the controversy belongs to the regular courts.
ISSUE:
Whether or not the RTC has a jurisdiction of the case.
RULING:
Article 217(a), paragraph 4 of the Labor Code, which was
already in effect at the time of the filing of this case, reads: Exsm
ART. 217. Jurisdiction of Labor Arbiters and the
Commission. --- (a) Except as otherwise provided
under this Code the Labor Arbiters shall have
original and exclusive jurisdiction to hear and
decide, within thirty (30) calendar days after the
submission of the case by the parties for decision
without extension, even in the absence of
stenographic notes, the following cases involving all
workers, whether agricultural or non-agricultural:
4. Claims for actual, moral, exemplary and
other forms of damages arising from the
employer-employee relations;
The above provisions are a result of the amendment by
Section 9 of Republic Act ("R.A.") No. 6715, which took effect on

LABOR II: CASES AND POWERPOINT PRESENTATION

March 21, 1989, and which put to rest the earlier confusion as to
who between Labor Arbiters and regular courts had jurisdiction over
claims for damages as between employers and employees. Sppedjo
It will be recalled that years prior to R.A. 6715, jurisdiction
over all money claims of workers, including claims for damages, was
originally lodged with the Labor Arbiters and the NLRC by Article
217 of the Labor Code. On May 1, 1979, however, Presidential
Decree ("P.D.") No. 1367 amended said Article 217 to the effect that
"Regional Directors shall not indorse and Labor Arbiters shall not
entertain claims for moral or other forms of damages." This
limitation in jurisdiction, however, lasted only briefly since on May
1, 1980, P.D. No. 1691 nullified P.D. No. 1367 and restored Article
217 of the Labor Code almost to its original form. Presently, and as
amended by R.A. 6715, the jurisdiction of Labor Arbiters and the
NLRC in Article 217 is comprehensive enough to include claims for
all forms of damages "arising from the employer-employee
relations".
Whereas this Court in a number of occasions had applied
the jurisdictional provisions of Article 217 to claims for damages
filed by employees, we hold that by the designating clause "arising
from the employer-employee relations" Article 217 should apply
with equal force to the claim of an employer for actual damages
against its dismissed employee, where the basis for the claim arises
from or is necessarily connected with the fact of termination, and
should be entered as a counterclaim in the illegal dismissal case.

Domondon vs. NLRC (GR No. 154376, Sept. 30, 2005)

ROBERTO T. DOMONDON vs. NLRC and NIELS H.B. HAVE

FACTS:
On November 20, 1998, Roberto T. Domondon filed a
complaint before the Regional Arbitration Branch of the NLRC,
Quezon City, against Van Melle Phils., Inc. (VMPI) and its President
and General Manager, Niels H.B. Have. He claimed illegal dismissal

P a g e | 39

and prayed for reinstatement, payment of full backwages inclusive

of allowances, 14th month pay, sick and vacation leaves, share in
the profits, moral and exemplary damages and attorneys fees.
VMPI hired Domondon as Materials Manager through its
then President and General Manager Victor M. Endaya. He was
tasked to supervise the Inventory Control, Purchasing, and
Warehouse and Distribution Sections of the company. He was given
a guaranteed monthly salary of ninety-eight thousand (P98,000.00)
pesos for fourteen (14) months with annual merit adjustment, profit
sharing bonus from 0-2 months based on individual, company and
corporate
performance, and
a
brand
new
1600cc Honda VTEC with 300 liters monthly gas allowance.
When Endaya was transferred to China in August 1997, he
was replaced Have, a Dutch national. Have immediately set a oneon-one meeting with him and requested his courtesy resignation.
Domondon refused to resign and life got difficult for him. His
decisions were always questioned by Have. He was subjected to
verbal abuse. His competence was undermined by baseless and
derogatory memos, which lay the bases for his removal from the
company. He also did not receive his 14th month pay.
On June 10, 1998, in another one-on-one meeting with
Have, Have informed Domondon that things would get more
difficult for him if he does not resign. Have threw a veiled threat at
Domondon to the effect that "a dignified resignation would be
infinitely better than being fired for a fabricated lawful cause."Have
offered financial assistance if Domondon would leave peacefully but
the offer must be accepted immediately or it would be withdrawn.
Thus, Domondon signed a "ready-made" resignation letter without
deliberation and evaluation of the consequences. His main concern
then was to prevent the "end of his professional career."
On the same day that he handed in his resignation letter,
VMPI posted a memorandum with information of his replacement.
He claimed that to lend a semblance of credibility to his forced
resignation, private respondents released to him a portion of the

LABOR II: CASES AND POWERPOINT PRESENTATION

offered financial package.
On their part, private respondents admitted hiring
petitioner under the circumstances set forth by him but denied
illegally dismissing him. They maintained that with his educational
and professional background, petitioner could not have been
coerced and intimidated into resigning from the company. Instead,
they claimed that he voluntarily resigned "to embark on
management consultancy in the field of strategic planning and
import/export." They stated that petitioner informed them about
his intention to resign and requested a "soft landing" financial
support in the amount of three hundred thousand (P300,000.00)
pesos on top of accrued benefits due him upon resignation. Private
respondents granted the request. Subsequently, however,
petitioner proposed the transfer of ownership of the car assigned to
him in lieu of the financial assistance from the company. Since
company policy prohibits disposition of assets without valuable
consideration, the parties agreed that petitioner shall pay for the
car with the P300,000.00 "soft landing" financial assistance from
private respondent VMPI.
Private respondents averred that petitioner, who was then
in charge of the disposition of the assets of the company, effected
the registration of the car in his name. Joannes Cornelis Kuiten, then
Vice-President for Finance, signed for the company. On July 30,
1998, P300,000.00 was credited to petitioners payroll account but
he did not use it to pay for the car as agreed upon. Repeated
demands for payment were unheeded. In its letter of demand dated
October 28, 1998, private respondent VMPI gave petitioner an
option to apply theP169,368.32 total cash conversion of his sick and
vacation leave credits, 13th and 14th months pay less taxes as
partial payment for the car and pay the balance of P130,631.68,
or return the car to the company. Petitioner did not exercise either
option. Instead, on November 20, 1998, he filed a complaint for
illegal dismissal against private respondents.
The Labor Arbiter dismissed the complaint for illegal

P a g e | 40

dismissal. The NLRC affirmed the Decision of the Labor Arbiter on

January 26, 2001 and denied petitioners motion for reconsideration
on March 5, 2001. Petitioner went to the Court of Appeals on a
special civil action for certiorari but failed for the third time. The
appellate court dismissed the petition on February 28, 2002 and
denied petitioners motion for reconsideration on July 17, 2002;
hence, this petition for review on certiorari.
ISSUE:
Whether or not Domondon was illegally dismissed.
Whether or not the Labor Arbiter has the jurisdiction over
the award of the car.
RULING:
Our jurisdiction is limited to reviewing errors of law. Not
being a trier of facts, the Court cannot re-examine and re-evaluate
the probative value of evidence presented to the Labor Arbiter, the
NLRC and the Court of Appeals, which formed the basis of the
questioned decision and resolution. Indeed, their findings when in
absolute agreement are accorded not only respect but even finality
as long as they are supported by substantial evidence.
In any event, we combed the records of the case at bar and
found no compelling reason to disturb the uniform findings and
conclusions of the Court of Appeals, the NLRC and the Labor Arbiter.
There was no arbitrary disregard or misapprehension of evidence of
such nature as to compel a contrary conclusion if properly
appreciated. Petitioners letter of resignation, his educational
attainment,
and
the
circumstances
antecedent
and
contemporaneous to the filing of the complaint for illegal dismissal
are substantial proof of petitioners voluntary resignation.
Petitioners letter of resignation was categorical that he was
resigning "to embark on management consultancy in the field of
strategic planning and import/export." Petitioner was holding a
managerial position at private respondent VMPI and he was
previously Vice-President for strategic planning at LG Collins
Electronics. Thus, "management consultancy in the field of strategic

LABOR II: CASES AND POWERPOINT PRESENTATION

planning" was a logical reason for the resignation, which either
petitioner or private respondents may provide.
"Import/export," whether inclusive or exclusive of the
clause "managerial consultancy," on the other hand, could neither
be inferred from petitioners nature of work with private
respondent VMPI nor from his past work experiences. Thus, even if
petitioner was correct in arguing that he could not have considered
it given the state of the countrys economy, anyone may provide it
as reason for the resignation, including him and private
respondents.
But assuming that private respondents prepared the letter
of resignation for petitioner to sign as claimed, the Court is not
convinced that petitioner was coerced and intimidated into signing
it. Petitioner is no ordinary employee with limited education. He has
a Bachelor of Arts Degree in Economics from the University of Santo
Tomas, has completed academic requirements for Masters of
Business Economics from the University of Asia and the Pacific, and
studied law for two (2) years at Adamson University. He also has a
good professional record, which highlights his marketability.
In termination cases, the employer decides for the
employee. It is different in resignation cases for resignation is a
formal pronouncement of relinquishment of an office. It is made
with the intention of relinquishing the office accompanied by an act
of relinquishment. In the instant case, petitioner relinquished his
position when he submitted his letter of resignation. His subsequent
act of receiving and keeping his requested "soft landing" financial
assistance of P300,000.00, and his retention and use of the car
subject of his arrangement with private respondents showed his
resolve to relinquish his post.
Thus, we affirm the findings of the Labor Arbiter, the NLRC
and the Court of Appeals that private respondents were able to
prove through substantial evidence that petitioner was not illegally
dismissed.
The jurisdiction of Labor Arbiters is provided under Article

P a g e | 41

217(a) of the Labor Code. The matrix is the existence of an

employer-employee relationship. In the case at bar, there is no
dispute that petitioner is an employee of the respondents. In Baez
v. Valdevilla, we held:
x x x Presently, and as amended by R.A. 6715, the
jurisdiction of Labor Arbiters and the NLRC in Article 217 is
comprehensive enough to include claims for all forms of damages
"arising from the employer-employee relations."
Whereas this Court in a number of occasions had applied
the jurisdictional provisions of Article 217 to claims of damages filed
by employees, we hold that by the designating clause "arising from
the employer-employee relations" Article 217 should apply with
equal force to the claim of an employer for actual damages against
its dismissed employee, where the basis for the claim arises from or
is necessarily connected with the fact of termination, and should be
entered as a counterclaim in the illegal dismissal case.
Baez is in accord with paragraph 6 of Article 217(a), which
covers "all other claims, arising from employer-employee
relations," viz:
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other claims, arising
from employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding five
thousand pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
In the case at bar, petitioner claims illegal dismissal and
prays for reinstatement, payment of full backwages inclusive of
allowances, 14th month pay, sick and vacation leaves, share in the
profits, moral and exemplary damages and attorneys fees. These
causes of action clearly fall within the jurisdiction of the Labor
Arbiter, specifically under paragraphs 2, 3 and 4 of Article 217(a).
On the other hand, private respondents made a counterclaim
involving the transfer of ownership of a company car to petitioner.
They maintain that he failed to pay for the car in accordance with

LABOR II: CASES AND POWERPOINT PRESENTATION

their agreement. The issue is whether this claim of private
respondents arose from the employer-employee relationship of the
parties pursuant to paragraph 6 of Article 217(a) under the general
clause as quoted above.
NLRC, Jurisdiction: Two kinds
Original Jurisdiction
o Injunction in ordinary labor disputes
o Injunction in strikes and lockouts under Article 270,
LC
o Certified labor disputes in industries indispensable
to the national interest, where work stoppage is
likely or has already occurred
Exclusive Appellate Jurisdiction
o Cases decided by the labor arbiters
o Cases decided by DOLE regional directors under
Article 129
Labor Arbiters & NLRC, distinction of jurisdictions
NLRC has exclusive appellate jurisdiction on all cases
decided by the labor arbiters.
NLRC does not have original jurisdiction on the cases over
which labor arbiters have original and exclusive jurisdiction.
If the labor arbiter does not exercise original and exclusive
jurisdiction over a case, the NLRC has no appellate
jurisdiction over it.
Appeals
Labor Arbiters decisions ordinary appeal to the NLRC,
w/in 10 calendar days from receipt. NLRCs decision on
appeal is elevated to the CA by way of special civil action
(Rule 65), and then under ordinary appeal (Rule 45) to the
SC

P a g e | 42

Grounds of Appeal
Prima facie evidence of abuse of discretion on the part of
the labor arbiter
Decision, order or award was secured through fraud or
coercion, including graft and corruption
Purely on questions of law
Serious errors in the findings of facts which would cause
grave or irreparable damage or injury to appellant
Perfection of Appeal, requisites
Filed within reglementary period (ten days from receipt of
decision by party seeking appeal)
Under oath
Appeal fee
Posting of cash or surety bond (where judgment involves
monetary award)
Proof of service to adverse party
Appeal
Note the following:
Labor arbiter loses jurisdiction upon perfection of appeal
Lack of verification is not fatal nor jurisdictional
Appeal is still valid despite failure to pay docket fee, but
refusal to pay despite directive is fatal
Raising new issues or changing theory on appeal is not
allowed.
Reinstatement Order
Reinstatement is immediately executory even pending
appeal
Pioneer Texturizing Corporation vs. NLRC employer is
duty-bound to inform employee of reinstatement
PIONEER TEXTURIZING CORP. and/or JULIANO LIM vs. NLRC and
PIONEER TEXTURIZING WORKERS UNION and LOURDES A. DE

LABOR II: CASES AND POWERPOINT PRESENTATION

FACTS:

JESUS

Lourdes A. de Jesus is petitioners reviser/trimmer since

1980. As reviser/trimmer, de Jesus based her assigned work on a
paper note posted by petitioners. The posted paper which contains
the corresponding price for the work to be accomplished by a
worker is identified by its P.O. Number. On August 15, 1992, de
Jesus worked on P.O. No. 3853 by trimming the cloths ribs. She
thereafter submitted tickets corresponding to the work done to her
supervisor. Three days later, de Jesus received from petitioners
personnel manager a memorandum requiring her to explain why no
disciplinary action should be taken against her for dishonesty and
tampering of official records and documents with the intention of
cheating as P.O. No. 3853 allegedly required no trimming. The
memorandum also placed her under preventive suspension for
thirty days starting from August 19, 1992. In her handwritten
explanation, de Jesus maintained that she merely committed a
mistake in trimming P.O. No. 3853 as it has the same style and
design as P.O. No. 3824 which has an attached price list for
trimming the ribs and admitted that she may have been negligent in
presuming that the same work was to be done with P.O. No. 3853,
but not for dishonesty or tampering Petitioners personnel
department, nonetheless, terminated her from employment and
sent her a notice of termination dated September 18, 1992.
On September 22, 1992, de Jesus filed a complaint for illegal
dismissal against petitioners. The Labor Arbiter who heard the case
noted that de Jesus was amply accorded procedural due process in
her termination from service. Nevertheless, after observing that de
Jesus made some further trimming on P.O. No. 3853 and that her
dismissal was not justified, the Labor Arbiter held petitioners guilty
of illegal dismissal. Petitioners were accordingly ordered to
reinstate de Jesus to her previous position without loss of seniority
rights and with full backwages from the time of her suspension on
August 19, 1992. Dissatisfied with the Labor Arbiters decision,

P a g e | 43

petitioners appealed to the public respondent National Labor

Relations Commission (NLRC). In its July 21, 1994 decision, the
NLRC ruled that de Jesus was negligent in presuming that the ribs of
P.O. No. 3853 should likewise be trimmed for having the same style
and design as P.O. No. 3824, thus petitioners cannot be entirely
faulted for dismissing de Jesus. The NLRC declared that the
status quo between them should be maintained and affirmed the
Labor Arbiters order of reinstatement, but without backwages. The
NLRC further directed petitioner to pay de Jesus her back salaries
from the date she filed her motion for execution on September 21,
1993 up to the date of the promulgation of [the]
decision. Petitioners filed their partial motion for reconsideration
which the NLRC denied, hence this petition anchored substantially
on the alleged NLRCs error in holding that de Jesus is entitled to
reinstatement and back salaries.
ISSUE:
Whether or not an order for reinstatement needs a writ of
execution.
RULING:
We note that prior to the enactment of R.A. No. 6715,
Article 223of the Labor Code contains no provision dealing with the
reinstatement of an illegally dismissed employee. The amendment
introduced by R.A. No. 6715 is an innovation and a far departure
from the old law indicating therby the legislatures unequivocal
intent to insert a new rule that will govern the reinstatement aspect
of a decision or resolution in any given labor dispute. In fact, the
law as now worded employs the phrase shall immediately be
executory without qualification emphasizing the need for prompt
compliance. As a rule, shall in a statute commonly denotes an
imperative obligation and is inconsistent with the idea of discretion
and that the presumption is that the word shall, when used in a
statute, is mandatory. An appeal or posting of bond, by plain
mandate of the law, could not even forestall nor stay the executory
nature of an order of reinstatement. The law, moreover, is

P a g e | 44

LABOR II: CASES AND POWERPOINT PRESENTATION

unambiguous and clear. Thus, it must be applied according to its
plain and obvious meaning, according to its express terms.
And in conformity with the executory nature of the
reinstatement order, Rule V, Section 16 (3) of the New Rules of
Procedure of the NLRC strictly requires the Labor Arbiter to direct
the employer to immediately reinstate the dismissed employee

FACTS

An employer may not stay execution of reinstatement, even

when he has posted a bond
Roquero vs. PAL (GR No. 152329, April 2003) - Labor arbiter
has ministerial duty to implement reinstatement order
Roquero vs. PAL

Petitioner Alejandro Roquero was dismissed by PAL for

violating the PAL Code of Discipline regarding the use of prohibited
drugs while on company premises or on duty. He alleged that he
was merely instigated by PAL to take the drugs through a certain
Joseph Ocul. The Labor Arbiter upheld the dismissal but also found
PAL guilty of enticing the complainants into committing the
infraction. Pending appeal at the NLRC, Roquero and another
employee was acquitted by the RTC in the criminal case which
charged them with conspiracy for possession and use of regulated
drug on the ground of instigation.
The NLRC ruled in favor of Roquero as it likewise found PAL
guilty of instigation and ordered reinstatement but without
backwages. PAL refused to execute the writ of execution issued by
the Labor Arbiter on the ground that they have filed a petition for
review before the SC, which was subsequently referred to the CA.
The CA reversed the decision of the NLRC and reinstated the
decision of the Labor Arbiter insofar as it upheld the dismissal of
Roquero but denied the award of separation pay and attorneys
fees.
ISSUES:

1) Whether or not the instigated employee shall be solely

responsible for an action arising from the instigation perpetrated by
the employer
2) Whether or not the reinstatement order can be halted
without a restraining order or preliminary injunction
3) Whether or not the employer who refused to reinstate
the employee despite a writ duly issued be held to pay the salary of
the subject employee from the time he was ordered reinstated up
to the time of the reversal of the decision
RULING:
1. Petitioner is guilty of serious misconduct. It is of public
knowledge that drugs damage the mental faculties of the user. He is
tasked with the repair and maintenance of PALs airplanes. He
cannot discharge that duty if he is a drug user. It can mean great
loss of lives and property. Instigation is only a defense against
criminal liability but not against dismissal from employment
especially when the position involves the safety of human lives.
2. The order of reinstatement is immediately executor. The
unjustified refusal of the employer to reinstate a dismissed
employee entitles him to payment of his salaries effective from the
time the employer failed to reinstate him despite the issuance of a
writ of execution.
3. It is obligatory on the part of the employer to reinstate
and pay the wages of the dismissed employee during the period of
appeal until reversal by the higher court.
Reinstatement by Employer
Actual reinstatement of the employee to his work under the
same terms and conditions prior to dismissal or separation,
or
Reinstatement in the payroll of the company, without
requiring actual return to work
Bureau of Labor Relations

LABOR II: CASES AND POWERPOINT PRESENTATION

FUNCTIONS OF THE BUREAU OF LABOR RELATIONS ABSORBED BY

NCMB
Pursuant to E.O. 126, the National Conciliation and
Mediation Board (NCMB) has absorbed the conciliation,
mediation and voluntary arbitration functions of the BLR.
The BLR functions, as it now stands are confined largely to
union matters, collective bargaining and labor education.
Jurisdiction over labor-management problems or disputes is
also exercised by other offices such as the DOLE regional
offices, the Office of the Secretary of Labor, NLRC, POEA,
OWWA, SSS-ECC, the regional wage and productivity
boards, NWPC, and even the regular courts over intracorporate disputes.
Exclusive and Original Jurisdiction of the BLR
To act on its own initiative or upon the request of either or
both parties on all:
o INTRA-union conflicts;
o INTER-union conflicts; and
o OTHER RELATED Labor Relations Disputes

P a g e | 45
to the NCMB the mediation, conciliation, and arbitration
functions of the BLR.
The parties may, by agreement, settle their differences by
submitting their case to a voluntary arbitrator rather than
taking the case to the BLR.
This category of labor relations disputes as the name
suggests is related to inter/intra union disputes to
differentiate it from other labor-management disputes,
such as those under
o Article 128: Visitorial and enforcement power
o Article 129: recovery of wages, simple money claims
and other benefits
o Article 223: Jurisdiction of the LA and NLRC
o Article 267: Jurisdiction of VA
o Article 270(g): Secretary of Labor, on possibility of
strikes and lockouts

Other Related Labor Relations Disputes (Sec. 2, Rule XI D.O. 40-03)

Shall include any conflict between a labor organization and
the employer or any individual, entity, or group that is NOT
a labor organization or workers association.
This includes:
o Cancellation of registration of unions and workers
associations; and
o A petition for interpleader.

Functions and Authority of BLR under the 1987 Administrative

Code
Sec. 16. Bureau of Labor Relations The BLR shall:
Set policies, standards, and procedures on the registration
and supervision of legitimate labor union activities including
denial, cancellation, and revocation of labor union permits;
Set policies, standards and procedures relating to collective
bargaining agreements, and the examination of financial
records of accounts of labor organization to determine
compliance with relevant laws;
Provide proper orientation to workers on their schemes and
projects for improvement of the standards of living of
workers and their families.

EO 251, S. 1987
removed from the jurisdiction of the BLR all labormanagement disputes. The effect of E.O. 251 is to transfer

Union Disputes
Intra-Union Disputes refer to any conflict between and
among union members, including grievances arising from

LABOR II: CASES AND POWERPOINT PRESENTATION

any violation of the rights and conditions of membership,

violation of or disagreement over any provision of the
unions constitution and by-laws, or disputes arising from
chartering or affiliation.
Inter-Union Disputes refer to any conflict between and
among
legitimate
labor
organizations
involving
representation questions for purposes of collective
bargaining or to any other conflict or dispute between
legitimate labor organizations based on any violations of
their rights as labor organizations.

Coverage of Inter/Intra-Union Disputes (Sec. 1 Rule XI, D.O. 40-03)

Cancellation of registration of a labor organization filed by
its members or by any other labor organization;
Conduct of election of union and workers association
officers/nullification of election of union and workers
association officers;
Audit/accounts examination of union or workers
association funds;
De-registration of CBA;
Validity/invalidity of union affiliation or disaffiliation;
Validity/invalidity of acceptance/non-acceptance for union
membership;
Validity/invalidity of impeachment/expulsion of union and
workers association officers;
Validity/invalidity of voluntary recognition;
Opposition to application for union and CBA registration;
Violations of or disagreements over any provision in a union
or workers association constitution and by-laws;
Disagreements over chartering or registration of labor
organizations and CBAs;
Violations of the rights and conditions of union or workers
association membership;

P a g e | 46
Violations of the rights of legitimate labor organizations,
except interpretation of CBAs; and
Such other disputes or conflicts involving the rights to selforganization, union membership, and collective bargaining
o Between and among legitimate labor organizations;
and
o Between and among members of a union or
workers association.

Special Requirements as to the Filing of Cases

Involving Entire Membership
o The complaint must be signed by at least 30% of the
entire membership of the union; and
o It must also show exhaustion of administrative
remedies.
Involving a Member Only
o In such case, only the affected member may file the
complaint. Redress must first be sough within the
union itself in accordance with its constitution and
by-laws EXCEPT under any of the following
circumstances:
Futility of intra-union remedies;
Improper expulsion procedure;
Undue delay in appeal as to constitute
substantial injustice;
The action is for damages;
Involving a Member Only
o In such case, only the affected member may file the
complaint. Redress must first be sough within the
union itself in accordance with its constitution and
by-laws EXCEPT under any of the following
circumstances:
Lack of jurisdiction of the investigating
body;

LABOR II: CASES AND POWERPOINT PRESENTATION

Action of the administrative agency is

patently illegal, arbitrary, and oppressive;
Issue is purely a question of law;
Where the administrative agency had
already prejudged the case; and
Where the administrative agency was
practically given the opportunity to act on
the case but did not.

Effects of Filing or Pendency of Inter/Intra-Union Dispute and

other Labor Relations Disputes (Sec. 3, Rule XI, D.O. 40-03)
The rights, relationships and obligations of the partlitigants against each other and other parties-in-interest
prior to the institution of the petition shall continue to
remain during the pendency of the petition and until the
date of finality of the decision rendered therein.
Thereafter, the rights, relationships and obligations of the
party litigants against each other and other parties-ininterest shall be governed by the decision so ordered.
Modes of Appeal in Intra/Inter-Union Disputes (Rule XI, D.O. 40-03

P a g e | 47

Summary of Rules on Inter/Intra Union Disputes

Who:
For grounds under Section 1: any LLO members thereof
specially concerned
For grounds under Section 2: any party-in-interest
Where
RO that issued its certificate of registration or certificate of
creation of chartered local if it involves labor unions with
independent registration, chartered locals, workers
association, its officers or members.
Directly with the BLR if it involves a federation/national
union/industry union, its officers or members
Effects of Filing or Pendency of Inter/Intra-Union Dispute and
other Labor Relations Disputes (Sec. 3, Rule XI, D.O. 40-03)
The filing or pendency of any inter/intra-union disputes is
not a prejudicial question to any petition for certification
election and shall not be a ground for the dismissal of a
petition for certification election
or suspension of
proceedings for certification election.
Summary of Rules on Inter/Intra Union Disputes
Formal requirements
In writing
Verified under oath
Contains:
o Name, address and other personal circumstances of
the complainant or petitioner
o Name, address and other personal circumstances of
the respondent or person charged
o Nature of complaint or petition

P a g e | 48

LABOR II: CASES AND POWERPOINT PRESENTATION

o
o
o
o
o
o

Facts and circumstances surrounding complaint or

petition
Causes of action
Statement on exhaustion of Administrative
Remedies
Reliefs prayed for
Certification of non-forum shopping
Other relevant matters

Administrative functions of BLR

Regulation and registration of labor unions
Keeping of registry of labor unions
Maintenance of a file of CBAs
Maintenance of a file of all settlements or final decisions of
the SC, CA, NLRC and other agencies on labor disputes
BLR has no jurisdiction over implementation or
interpretation of CBAs, which shall be subject of grievance
procedure and/or Voluntary arbitration.
Compromise Agreements
Purpose: Parties agree to
o Avoid litigation, or
o Put an end to one already in place
How: making reciprocal concessions
o Win-win
Substantial requirements
o Voluntary, devoid of coercion
o Not contrary to law, morals, public policy
o Reasonable
Formal requirements
o In writing
o Signed in the presence of person before whom case
is filed
When effected:

At any stage of the proceedings, even when there is

already a final & executory judgment
o EXCEPT when judgment is in process of execution
Validity: Valid and binding on both parties, with or without
DOLE assistance
Repudiation:
o If done without DOLE assistance
o In case of non-compliance with agreement
o Prima facie evidence of fraud, misrepresentation,
coercion
Options when agreement is violated:
o Enforce compliance
o Regard as rescinded, revert to original demand
Quitclaim: A formal renunciation or relinquishing of a claim
o Usually integral in compromise agreements
Cases:
o Mindoro Lumber vs. Baay, et.al., GR No. 158753,
June 2005
o

MINDORO LUMBER AND HARDWARE vs. EDUARDO D. BACAY, ET

AL
FACTS:
The private respondents are employees of Mindoro Lumber.
On July 1, 1998, the private respondents, through then union
president Eduardo Bacay, filed a Complaint against Mindoro Lumber
before the Region IV Office of the Department of Labor and
Employment (DOLE) for non-payment of overtime pay, legal holiday
pay, 13th month pay, non-payment/underpayment of minimum
wage and allowances. Pursuant to the said complaint, the DOLE
conducted an inspection on July 10 and determined that Mindoro
Lumber committed several violations
Meanwhile, on August 9, 1998, the private respondents
executed several Affidavits (Sinumpaang Salaysay), declaring
therein that since they each started working on July 1, 1995, they

LABOR II: CASES AND POWERPOINT PRESENTATION

were made to work for seven days a week starting 7:00 a.m. until
5:00 p.m., with lunch break from 11:30 a.m. to 1:00 p.m. They
further declared that their wages were below the rates prescribed
by the applicable wage orders, and that they were not paid
overtime pay, holiday pay or premium pay. The private respondents
stated that the total amount each of them were entitled to, aside
from what they were actually receiving by way of salary and other
emoluments, ranged from P6,744.20 toP242,626.90. They further
averred that their wages were made compliant with the prevailing
regional minimum wages starting July 16, 1998, and for the first
time, payroll and daily time records were being kept.
The counsel for the private respondents then filed a
Manifestation before the Regional Office of the DOLE, praying that
an order be issued directing Mindoro Lumber to pay the amounts
due to them as reflected in their respective Sinumpaang
Salaysay totaling P3,577,276.10.
On September 2, 1998, the private respondents executed
a Sama-samang Salaysay sa Pag-uurong ng Sakdal(Joint Affidavit of
Withdrawal of Complaint), declaring therein that by virtue of the
amount each of them received (which amount was eitherP3,000.00
or P6,000.00 per employee), they were withdrawing their claim
against Mindoro Lumber. Pursuant thereto, their counsel filed a
motion to dismiss.
It appears, however, that based on an affidavit executed by
Eduardo Bacay, he had resigned from Mindoro Lumber as of June 6,
1998. Relative thereto, he had also filed a complaint for Unfair
Labor Practice and Illegal Dismissal. However, on September 2,
1998, Bacay executed an Affidavit declaring that he was no longer
interested in pursuing the said case and that he had voluntarily
resigned from Mindoro Lumber. By virtue of Bacays affidavit, Labor
Arbiter Nieves V. De Castro issued an Order dismissing NLRC Case.
Meanwhile, Elmer Lanot was elected as the new union
president.
On June 27, 1999, the private respondents executed

P a g e | 49

a Sama-Samang Salaysay (Joint Affidavit), declaring therein that

before Bacay resigned from Mindoro Lumber, he persuaded them
to execute the Sama-samang Salaysay sa Pag-uurong ng Sakdal, in
exchange for receiving the amount of P6,000.00 each. Such amount,
however, was grossly disproportionate to their entitlement under
the law; hence, they were withdrawing the said Sama-samang
Salaysay sa Pag-uurong ng Sakdal, and were authorizing Lanot to
pursue their claim against Mindoro Lumber. Pursuant thereto, Lanot
filed a motion before the Regional Office of the DOLE, praying that
the employees be paid the amounts due to each of them, and that
the Sama-samang Salaysay sa Pag-uurong ng Sakdal be declared
null and void.
On November 4, 1999, Regional Director Alex E. Maraan
issued an Order dismissing the case and declared that the Samasamang Salaysay executed by the employees of Mindoro Lumber
was valid.
The private respondents then filed an appeal before the
Office of the Secretary of Labor, questioning the propriety of the
November 4, 1999 Order of the Regional Director.
On March 27, 2001, Labor Secretary Patricia A. Sto. Tomas
issued an Order granting the appeal, and ordered the entire records
of the case remanded to the Regional Office for further
proceedings, without prejudice to the deduction of whatever
amount received by the complainant workers. Mindoro Lumber
forthwith elevated the matter to the CA by way of a petition
for certiorari. On November 22, 2002, the CA rendered its decision
dismissing the petition. A motion for reconsideration proved futile.
ISSUE:
Whether or not the Sama-samang Salaysay sa Pag-uurong
ng Sakdal constitutes a valid compromise agreement as defined
under Article 227 of the Labor Code of the Philippines, as amended.
RULING:
The petitioner points out that while the Sama-samang
Salaysay sa Pag-uurong ng Sakdal was executed without the

LABOR II: CASES AND POWERPOINT PRESENTATION

assistance of the Bureau of Labor Relations (BLR) or the DOLE
Regional Office, the November 4, 1999 Order of the Regional
Director in Case No. LSED-RO400-9807-CI-001 nonetheless shows
that when Eduardo Bacay appeared before the said office, he was
assisted by counsel.
The petitioners pose is bereft of merit.
Article 227 of the Labor Code, as amended, provides:
Art. 227. Compromise Agreements . Any compromise settlement,
including those involving labor standard laws, voluntarily agreed
upon by the parties with the assistance of the Bureau or the
regional office of the Department of Labor, shall be final and
binding upon the parties. The National Labor Relations Commission
or any court shall not assume jurisdiction over issues involved
therein except in case of non-compliance thereof or if there is prima
facieevidence that the settlement was obtained through fraud,
misrepresentation, or coercion.
The assistance of the BLR or the regional office of the DOLE
in the execution of a compromise settlement is a basic
requirement; without it, there can be no valid compromise
settlement. In this case, the petitioner admits that the purported
compromise settlement was executed by the private respondents
without such required assistance. The closest form of assistance
adverted to by the petitioner in this case was that of Bacays
counsel when the latter appeared before the Office of the Regional
Director to file the following: the Sama-samang Salaysay sa Paguurong ng Sakdal executed by the private respondents;
a Sinumpaang Salaysay executed by Bacay withdrawing the
complaint; and the Motion to Dismiss. Such assistance, however, is
not the "assistance" required by Article 227. As such, the Samasamang Salaysay sa Pag-uurong ng Sakdal executed by the
respondents cannot qualify as a valid compromise settlement.
o

Veloso and Liguaton vs. DOLE, Noahs Ark Sugar

Carriers, GR No. 87297, Aug. 1991

P a g e | 50

ALFREDO VELOSO and EDITO LIGUATON vs. DEPARTMENT OF

LABOR AND EMPLOYMENT, NOAH'S ARK SUGAR CARRIERS AND
WILSON T. GO
FACTS:
Veloso and Ligutan claim that they were forced to sign their
respective releases in favor of their employer by reason of their dire
necessity. Noahs Ark insists that the Veloso and Ligutan entered
into the compromise agreement freely and with open eyes and
should not now be permitted to reject their solemn commitments.
The controversy began when Veloso and Ligutan, along with
several co-employees, filed a complaint against the Noahs Ark for
unfair labor practices, underpayment, and non-payment of
overtime, holiday, and other benefits. This was decided in favor of
the complainants on October 6,1987.
On February 23, 1988, the Noahs Ark filed a motion for
reconsideration and recomputation of the amount awarded to the
petitioners. On April 15, 1988, while the motion was pending,
petitioner Alfredo Veloso, through his wife Connie, signed a
Quitclaim and Release for and in consideration of P25,000.00, and
on the same day his counsel, Atty. Gaga Mauna, manifested
"Satisfaction of Judgment" by receipt of the said sum by Veloso. For
his part, petitioner Liguaton filed a motion to dismiss dated July 16,
1988, based on a Release and Quitclaim dated July 19,1988 , for and
in consideration of the sum of P20,000.00 he acknowledged to have
received from the private respondent.
These releases were later impugned by the Veloso and
Ligutan on September 20, 1988, on the ground that they were
constrained to sign the documents because of their "extreme
necessity." In an Order dated December 16, 1988, the
Undersecretary of Labor rejected their contention
Reconsideration of the order having been denied on March
7, 1989, the petitioners have come to this Court oncertiorari. They
ask that the quitclaims they have signed be annulled and that writs
of execution be issued for the sum of P21,267.92 in favor of Veloso

LABOR II: CASES AND POWERPOINT PRESENTATION

and the sum of P26,267.92 in favor of Liguaton in settlement of
their claims.
ISSUE:
Whether or not the quitclaim should be annulled.
RULING:
"Dire necessity" is not an acceptable ground for annulling
the releases, especially since it has not been shown that the
employees had been forced to execute them. It has not even been
proven that the considerations for the quitclaims were
unconscionably low and that the petitioners had been tricked into
accepting them. While it is true that the writ of execution dated
November 24, 1987, called for the collection of the amount of
P46,267.92 each for the petitioners, that amount was still subject to
recomputation and modification as the private respondent's motion
for reconsideration was still pending before the DOLE. The fact that
the petitioners accepted the lower amounts would suggest that the
original award was exorbitant and they were apprehensive that it
would be adjusted and reduced. In any event, no deception has
been established on the part of the Private respondent that would
justify the annulment of the Petitioners' quitclaims.
The applicable law is Article 227 of the Labor Code providing
clearly as follows:
Art. 227. Compromise agreements. Any
compromise settlement, including those involving
labor standard laws, voluntarily agreed upon by the
parties with the assistance of the Bureau or the
regional office of the Department of Labor, shall be
final and binding upon the parties. The National
Labor Relations Commission or any court shall not
assume jurisdiction over issues involved therein
except in case of non-compliance thereof or if there
is prima facie evidence that the settlement was
obtained through fraud, misrepresentation or
coercion.

P a g e | 51

The petitioners cannot renege on their agreement simply

because they may now feel they made a mistake in not awaiting the
resolution of the private respondent's motion for reconsideration
and recomputation. The possibility that the original award might
have been affirmed does not justify the invalidation of the perfectly
valid compromise agreements they had entered into in good faith
and with full voluntariness. In General Rubber and Footwear Corp.
vs. Drilon, we "made clear that the Court is not saying that accrued
money claims can never be effectively waived by workers and
employees." As we later declared in Periquet v. NLRC:
Not all waivers and quitclaims are invalid as
against public policy. If the agreement was
voluntarily entered into and represents a
reasonable settlement, it is binding on the parties
and may not later be disowned simply because of a
change of mind. It is only where there is clear proof
that the waiver was wangled from an unsuspecting
or gullible person, or the terms of settlement are
unconscionable on its face, that the law will step in
to annul the questionable transaction. But where it
is shown that the person making the waiver did so
voluntarily, with full understanding of what he was
doing, and the consideration for the quitclaim is
credible and reasonable, the transaction must be
recognized as a valid and binding undertaking. As in
this case.
We find that the questioned quitclaims were voluntarily and
knowingly executed and that the petitioners should not be relieved
of their waivers on the ground that they now feel they were
improvident in agreeing to the compromise. What they call their
"dire necessity" then is no warrant to nullify their solemn
undertaking, which cannot be any less binding on them simply
because they are laborers and deserve the protection of the
Constitution. The Constitution protects the just, and it is not the

LABOR II: CASES AND POWERPOINT PRESENTATION

petitioners in this case.
o

JAG & Haggar Jeans vs. NLRC, GR No. 105710, Feb.

1995

JAG & HAGGAR JEANS AND SPORTSWEAR CORPORATION vs.

NATIONAL LABOR RELATIONS COMMISSION, ET AL
FACTS:
In September 1988, the Lakas Manggagawa sa Jag (Union)
composed of the rank-and-file employees of Jag & Haggar Jeans and
Sportswear Corporation staged a strike. Jag filed a petition to
declare the strike illegal.
On November 29, 1988, Labor Arbiter Eduardo Madriaga
rendered a decision, declaring the strike illegal and ordering the
dismissal of the officers, as well as the members of the Union who
took part in the illegal strike.
The affected officers and members of the Union appealed
the decision to NLRC. On August 31, 1989, NLRC rendered its
decision setting aside the Labor Arbiter's decision and ordering the
reinstatement of the affected employees
Again, the aggrieved officers and members of the Union
filed a motion for reconsideration while petitioner filed a
Manifestation/Motion for Clarification.
Pending resolution of the two motions by NLRC, both
parties agreed to negotiate a settlement and to defer the
enforcement of the decision.
On July 30, 1990, the two motions were dismissed by the
NLRC.On October 23, 1990, a compromise agreement was executed
and signed by petitioner and the Union represented by its officers
(Rollo, pp. 16-18).
Out of a total of 114 affected employees, 90 of them availed
of the benefits provided for under the Compromise Agreement.
On May 15, 1991, 24 of the affected employees moved for
the execution of the May 31, 1990 Decision of NLRC.

P a g e | 52

Petitioner filed an opposition, citing the Compromise

Agreement, which had been availed of by 90 of the affected
employees.
On September 12, 1991, Labor Arbiter Salimathar Nambi
issued an order, denying the motion for execution. In the
meantime, 12 of the 24 affected employees also availed of the
benefits under the Compromise Agreement. The remaining 12
employees appealed to NLRC from the denial of their motion for
execution. On February 26, 1992, NLRC set aside the order of Labor
Arbiter Nambi and directed petitioner to accept the union members
to their former or equivalent position with back wages from July 30,
1990 until they were reinstated.
A motion for reconsideration was filed by petitioner but this
was denied on April 22, 1992. On May 19, 1992, petitioner filed with
this Court a petition for certiorari with prayer for issuance of a
restraining order and/or writ of preliminary injunction. However,
the petition was dismissed by the First Division in a resolution dated
May 27, 1992 for failure to comply with the Revised Rules of Court
and Circular Nos. 1-88 and 28-91 (G.R. No. 105184, Rollo, p. 35).
On June 19, 1992, petitioner filed a motion for leave to
refile its petition for certiorari (G.R. No. 105710). In a resolution
dated June 29, 1992, the Third Division of this Court granted the
petition and resolved to issue a temporary restraining order. The
case was reassigned to the First Division.
ISSUE:
Whether or not the Compromise Agreement entered into
by petitioner and the Union is binding upon private respondents.
RULING:
It will be noted that the Compromise Agreement provides in
paragraphs 2 and 3 thereof that:
2. The union Board Members and Shop Stewards
may be dismissed by respondent-appellee subject
to the payment of separation pay equivalent to
one-half month for every year of service; and

P a g e | 53

LABOR II: CASES AND POWERPOINT PRESENTATION

3. The mere union members are directed to report
for work within 10 days from receipt of this Decision
and management is ordered to accept them to their
former or equivalent position (Rollo, pp. 16-17).
The Decision dated May 8, 1990 ordered the reinstatement
of the union members to their former or equivalent position while
in the case of the Union board members and shop stewards,
petitioner was given the option to dismiss them subject to the
payment of separation pay. However, in the Compromise
Agreement, not only the union officers, board members and shop
stewards were considered dismissed from the service but also the
union members subject to the payment of separation pay and
financial assistance.
The waiver of reinstatement, like waivers of money claims,
must be regarded as a personal right which must be exercised
personally by the workers themselves. "For a waiver thereof to be
legally effective, the individual consent or ratification of the workers
or employees involved must be shown. Neither the officers nor the
majority of the union had any authority to waive the accrued rights
pertaining to the dissenting minority members, . . . . The members
of the union need the protective shield of this doctrine not only visa-vis their employer but also, at times,vis-a-vis the management of
their own union, and at other times even against their own
imprudence or impecuniousaess" (General Rubber and Footwear
Corporation v. Drilon, 169 SCRA 808 [1989]).
We have ruled that ". . . when it comes to individual
benefits accruing to members of a union from a favorable final
judgment of any court, the members themselves become the real
parties in interest and it is for them, rather than for the union, to
accept or reject individually the fruits of litigation" (Esso Philippines,
Inc. v. Malayang Manggagawa sa Esso (MME), 75 SCRA 73 [1977]).
The authority to compromise cannot lightly be presumed
and should be duly established by evidence (General Rubber and
Footwear Corporation v. Drilon, supra; Kaisahan ng mga

Manggagawa sa La Campana v. Sarmiento, 133 SCRA 220, [1984]).

We also find no reason for the union members to enter into
a compromise when the decision of NLRC ordering their
reinstatement is more advantageous to them than their being
dismissed from their jobs under said Compromise Agreement.
The Compromise Agreement does not apply to private
respondents who did not sign the Compromise Agreement, nor avail
of its benefits.
However, while respondents Domingo Namia and Rizalde
Flores are not bound by the terms of the Compromise Agreement,
they are bound by the amended decision of NLRC rendered on May
3, 1990 which provides that members of the board of directors of
the union may be dismissed by petitioner subject to the payment of
separation pay. The two respondents did not appeal the amended
decision after the denial by NLRC of their motion for
reconsideration thereof.
WHEREFORE, the Decision dated February 26, 1992 of the
NLRC is AFFIRMED with the modification stated above with respect
to respondents Domingo Namia and Rizalde Flores. The temporary
restraining order is lifted except with respect to aforementioned
respondents.
o

Magbanua vs. Uy, GR No.161003, May 2005

FELIPE O. MAGBANUA, CARLOS DE LA CRUZ, REMY ARNAIZ, BILLY

ARNAIZ, ROLLY ARNAIZ, DOMINGO SALARDA, JULIO CAHILIG and
NICANOR LABUEN, vs. RIZALINO UY
FACTS:
As a final consequence of the final and executory decision
of the Supreme Court which affirmed with modification the decision
of the NLRC, hearings were conducted to determine the amount of
wage differentials due the eight petitioners. The petitioners filed a
Motion for Issuance of Writ of Execution. Rizalino Uy filed a
Manifestation requesting that the cases be terminated and closed,

LABOR II: CASES AND POWERPOINT PRESENTATION

stating that the judgment award as computed had been complied
with to the satisfaction of petitioners. Said Manifestation was also
signed by the eight petitioners. Together with the manifestation is a
Joint Affidavit dated May 5, 1997 of petitioners, attesting to the
receipt of payment from respondent and waiving all other benefits
due them in connection with their complaint. On October 20, 1997,
six of the eight petitioners filed a Manifestation requesting that the
cases be considered closed and terminated as they are already
satisfied of what they have received from respondent. Together
with said Manifestation is a Joint Affidavit in the local dialect, of the
six petitioners attesting that they have no more collectible amount
from respondent and if there is any, they are abandoning and
waiving the same.
ISSUES:
1. Whether or not the final and executory judgment of the
Supreme Court could be subject to compromise settlement;
2. Whether or not the petitioners affidavit waiving their
awards in the labor case executed without the assistance of
their counsel and labor arbiter is valid.
RULING:
1. There is no justification to disallow a compromise
agreement, solely because it was entered into after final judgment.
The validity of the agreement is determined by compliance with the
requisites and principles of contracts, not by when it was entered
into. Petitioners voluntarily entered into the compromise
agreement. Circumstances also reveal that respondent has already
complied with its obligation pursuant to the compromise
agreement. Having already benefited from the agreement, estoppel
bars petitioners from challenging it.
2. The presence or the absence of counsel when a waiver is
executed does not determine its validity. There is no law requiring
the presence of a counsel to validate a waiver. The test is whether it
was executed voluntarily, freely and intelligently; and whether the
consideration for it was credible and reasonable. Where there is

P a g e | 54

clear proof that a waiver was wangled from an unsuspecting or a

gullible person, the law must step in to annul such transaction. In
the present case, petitioners failed to present any evidence to show
that their consent had been vitiated.
Registration and Cancellation: Labor Organizations
Definitions (Article 218)
"Labor organization" means any union or association of
employees which exists in whole or in part for the purpose
of collective bargaining or of dealing with employers
concerning terms and conditions of employment.
"Legitimate labor organization" means any labor
organization duly registered with the Department of Labor
and Employment, and includes any branch or local thereof.

"Bargaining representative" means a legitimate labor

organization whether or not employed by the employer.

Definitions (DO 40-03)

"Chartered Local" refers to a labor organization in the
private sector operating at the enterprise level that
acquired legal personality through the issuance of a charter
certificate by a duly registered federation or national union,
and reported to the Regional Office in accordance with Rule
III, Section 2-E of these Rules.
"Exclusive Bargaining Representative" refers to a legitimate
labor union duly recognized or certified as the sole and
exclusive bargaining representative or agent of all the
employees in a bargaining unit.
"Independent Union" refers to a labor organization
operating at the enterprise level that acquired legal
personality through independent registration under Article

P a g e | 55

LABOR II: CASES AND POWERPOINT PRESENTATION

234 of the Labor Code and Rule III, Section 2-A of these
Rules.
"Labor Organization" refers to any union or association of
employees in the private sector which exists in whole or in
part for the purpose of collective bargaining, mutual aid,
interest, cooperation, protection, or other lawful purposes.
"Labor Relations Division" refers to the (1) Labor
Organization and CBA Registration Unit and (2) MedArbitration Unit in the Regional Office. The Labor
Organization and CBA Registration Unit is in charge of
processing the applications for registration of independent
unions, chartered locals, workers associations and collective
bargaining agreements, maintaining said records and all
other reports and incidents pertaining to labor
organizations and workers' associations.
"Legitimate Labor Organization" refers to any labor
organization in the private sector registered or reported
with the DOLE in accordance with Rules III and IV of these
Rules.
"Legitimate Workers' Association" refers to an association
of workers organized for mutual aid and protection of its
members or for any legitimate purpose other than
collective bargaining registered with the DOLE in
accordance with Rule III, Sections 2-C and 2-D of these
Rules.

Two-Fold Purpose of Labor Organizations

Dealing with the Employer interaction between employers
and employees concerning
o Grievances
o Wages
o Hours
o Other terms and conditions of employment
Applies even without registration

Collective Bargaining is a right acquired through

registration, and recognition or certification as the exclusive
bargaining representative

Classifications of LOs
At the National Level
o National Union/Federation
o Industry Union
o Trade Union Center
o Alliance
o Company Union
Enterprise Level
o Independent Labor Union
o Chapter
RA 9481
AN ACT STRENGTHENING THE WORKERS' CONSTITUTIONAL
RIGHT TO SELF-ORGANIZATION, AMENDING FOR THE
PURPOSE PRESIDENTIAL DECREE NO. 442, AS AMENDED,
OTHERWISE KNOWN AS THE LABOR CODE OF THE
PHILIPPINES
Amended Articles 240, 244, 245, 261, 262 & 263
ART. 234. Requirements of Registration. - A federation, national
union or industry or trade union center or an independent union
shall acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon
issuance of the certificate of registration based on the following
requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address
of the labor organization, the minutes of the organizational
meetings and the list of the workers who participated in such
meetings;

LABOR II: CASES AND POWERPOINT PRESENTATION

(c) In case the applicant is an independent union, the names of all
its members comprising at least twenty percent (20%) of all the
employees in the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more
years, copies of its annual financial reports; and
(e) Four copies of the constitution and by-laws of the applicant
union, minutes of its adoption or ratification, and the list of the
members who participated in it.
ART. 234-A. Chartering and Creation of a Local Chapter. - A duly
registered federation or national union may directly create a local
chapter by issuing a charter certificate indicating the establishment
of the local chapter. The chapter shall acquire legal personality only
for purposes of filing a petition for certification election from the
date it was issued a charter certificate.
The chapter shall be entitled to all other rights and privileges of a
legitimate labor organization only upon the submission of the
following documents in addition to its charter certificate:
(a) The names of the chapter's officers, their addresses, and the
principal office of the chapter; and
(b) The chapter's constitution and by-laws: Provided, That where the
chapter's constitution and by-laws are the same as that of the
federation or the national union, this fact shall be indicated
accordingly.
The additional supporting requirements shall be certified under
oath by the secretary or treasurer of the chapter and attested by its
president.
ART. 238. Cancellation of Registration. - The certificate of
registration of any legitimate labor organization, whether national
or local, may be cancelled by the Bureau, after due hearing, only on
the grounds specified in Article 239 hereof.
ART. 238-A. Effect of a Petition for Cancellation of Registration. - A
petition for cancellation of union registration shall not suspend the
proceedings for certification election nor shall it prevent the filing of
a petition for certification election.

P a g e | 56

In case of cancellation, nothing herein shall restrict the right of the

union to seek just and equitable remedies in the appropriate courts.
ART. 239. Grounds for Cancellation of Union Registration. - The
following may constitute grounds for cancellation of union
registration:
(a) Misrepresentation, false statement or fraud in connection with
the adoption or ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification;
(b) Misrepresentation, false statements or fraud in connection with
the election of officers, minutes of the election of officers, and the
list of voters;
(c) Voluntary dissolution by the members.
ART. 239-A. Voluntary Cancellation of Registration. - The
registration of a legitimate labor organization may be cancelled by
the organization itself. Provided, That at least two-thirds of its
general membership votes, in a meeting duly called for that purpose
to dissolve the organization: Provided, further, That an application
to cancel registration is thereafter submitted by the board of the
organization, attested to by the president thereof.
ART. 245. Ineligibility of Managerial Employees to Join any Labor
Organization; Right of Supervisory Employees. - Managerial
employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for
membership in the collective bargaining unit of the rank-and-file
employees but may join, assist or form separate collective
bargaining units and/or legitimate labor organizations of their own.
The rank and file union and the supervisors' union operating within
the same establishment may join the same federation or national
union.
ART. 245-A. Effect of Inclusion as Members of Employees Outside
the Bargaining Unit. - The inclusion as union members of employees
outside the bargaining unit shall not be a ground for the
cancellation of the registration of the union. Said employees are

LABOR II: CASES AND POWERPOINT PRESENTATION

automatically deemed removed from the list of membership of said
union.
ART. 256. Representation Issue in Organized Establishments. - In
organized establishments, when a verified petition questioning the
majority status of the incumbent bargaining agent is filed by any
legitimate labor organization including a national union or
federation which has already issued a charter certificate to its local
chapter participating in the certification election or a local chapter
which has been issued a charter certificate by the national union or
federation before the Department of Labor and Employment within
the sixty (60)-day period before the expiration of the collective
bargaining agreement, the Med-Arbiter shall automatically order an
election by secret ballot when the verified petition is supported by
the written consent of at least twenty-five percent (25%) of all the
employees in the bargaining unit to ascertain the will of the
employees in the appropriate bargaining unit. To have a valid
election, at least a majority of all eligible voters in the unit must
have cast their votes. The labor union receiving the majority of the
valid votes cast shall be certified as the exclusive bargaining agent
of all the workers in the unit. When an election which provides for
three or more choices results in no choice receiving a majority of
the valid votes cast, a run-off election shall be conducted between
the labor unions receiving the two highest number of
votes: Provided, That the total number of votes for all contending
unions is at least fifty percent (50%) of the number of votes cast. In
cases where the petition was filed by a national union or federation,
it shall not be required to disclose the names of the local chapter's
officers and members.
At the expiration of the freedom period, the employer shall
continue to recognize the majority status of the incumbent
bargaining agent where no petition for certification election is filed.
ART. 257. Petitions in Unorganized Establishments. - In any
establishment where there is no certified bargaining agent, a
certification election shall automatically be conducted by the Med-

P a g e | 57

Arbiter upon the filing of a petition by any legitimate labor

organization, including a national union or federation which has
already issued a charter certificate to its 1ocal/chapter participating
in the certification election or a local/chapter which has been issued
a charter certificate by the national union or federation. In cases
where the petition was filed by a national union or federation, it
shall not be required to disclose the names of the local chapter's
officers and members.
ART. 258-A. Employer as Bystander. - In all cases, whether the
petition for certification election is filed by an employer or a
legitimate labor organization, the employer shall not be considered
a party thereto with a concomitant right to oppose a petition for
certification election. The employer's participation in such
proceedings shall be limited to: (1) being notified or informed of
petitions of such nature; and (2) submitting the list of employees
during the pre-election conference should the Med-Arbiter act
favorably on the petition.
Changes to Labor Code Re: Registration of Labor Organizations
20% membership of employees in bargaining unit required
only for independent unions
Chapters acquire legal personality (for purposes of
certification election) upon receiving their charter
certificate
Grounds of cancellation revised. Some grounds were
removed as they were not promotive of self organization
rights
Petition for Certification Election will continue to be heard
despite petition to cancel registration
Cancellation may be effected by vote of two-thirds of
membership, with application to cancel submitted to DOLE
by the organizations board
Reportorial requirements

LABOR II: CASES AND POWERPOINT PRESENTATION

Supervisors Union and Rank and File Unions may join same
Federation
Commingling of supervisors and rank & file employees no
longer a ground for cancellation
PCEs filed by a federation on behalf of its chapter need not
identify the chapters officers and members
Employer cannot oppose a petition for certification election;
he is considered a bystander

Registration of Labor Organizations

Legal personality
Enjoy the rights given to legitimate labor organization.
o Petition for certification election
o Bargaining rights
o Right to strike
Non-registered unions are not illegitimate or illegal
Union registration refers to the process of determining
whether the application for registration of a labor union
organized for collective bargaining complies with the
documentary requirements prescribed under Rule 3 and 4
of DOLE Department Order No. 4003and the rules
implementing Book V of the Labor Code, as amended.
All labor unions whose members are employed in
commercial, industrial and agricultural enterprises, and
employees of government-owned and controlled
corporations without original charters established under the
Corporation Code, including religious, charitable, medical or
educational institutions whether operating for profit or not
which exist in whole and in part for collective bargaining.
Alien employees with valid working permits issued by DOLE
may exercise their right to self-organization and join or
assist labor unions for purposes of collective bargaining if
they are nationals of a country which grants the same or

P a g e | 58
similar rights to Filipino workers, as certified by the
Department of Foreign Affairs.

Requirements, Local or Chapter

Duly accomplished and notarized Application Form;
Charter certificate issued by the federation or national
union indicating the creation or establishment of the
local/chapter;
The names of the local/chapters officers, their addresses
and principal office of the local/chapter; and,
The local/chapters constitution and by-laws, provided that
where the local/chapters constitution and by-laws is the
same as that of the federation or national union, this fact
shall be indicated accordingly.
Requirements, Independent LO
Duly accomplished and notarized Application Form;
Minutes of Organizational Meeting and Attendance Sheet
List of Members
Financial Report if in existence for at least one (1) year
If less than 1 year, and has not collected any amount, a
certification to this effect.
Constitution and by-laws accompanied by the names and
signatures of ratifying members.
Minutes of adoption or ratification of the constitution and
by-laws, date/s when ratification was made and list of
ratifying members.
Minutes of adoption or ratification is not required if it is
done simultaneously with the organizational meeting
including the date/s when ratification was made and list of
ratifying members.
Statement that it is not reported as a chartered local or any
federation.

LABOR II: CASES AND POWERPOINT PRESENTATION

List of members comprising at least 20% of the employees

of the bargaining unit.

Affiliation/Disaffiliation
The independent unions act of entering into an agreement
of affiliation with a federation or national union, or
A chartered locals act of maintaining its ties to a federation
or national union despite its subsequent independent
registration
Requirements of Affiliation
Report of affiliation of independently registered labor
union;
o Resolution of LU board approving affiliation
o Total number of members, and names of those
approving affiliation
o Certificate of affiliation
o Written notice to the employer concerned if the
affiliating union is the bargaining agent
Chartering vs. Independent Registration

How obtained

Effect
disaffiliation

Independent
Registration
Registration on its
own accord under
Art. 240
of Retains
personality

Chartering

Through
charter
certificate issued by
National
Union/Federation
legal Loses legal personality

Revocation of Charter
May only occur on the grounds of disloyalty or such grounds
specified in the constitution & by-laws;

P a g e | 59
Effected by serving a verified notice to the local/chapter,
copy the BLR
Effect
o revocation of legal personality, except if local
chapter has acquired independent registration.
o If covered by CBA, local chapter may be given
opportunity to register independently

BLR Action
Act on all applications within 30 days from filing, provided
all documents and papers required have been submitted;
When DOLE refuses to register a labor organization which
has complied with the requirements, mandamus is the
proper remedy
Approval Order and Certificate of Registration
Disapproval Decision which states clearly reasons for
denial
Cancellation of Registration
BLR has jurisdiction
Only for grounds in Article 245
Petition for cancellation will not suspend PCE proceedings
Union may still seek just and equitable remedies in
appropriate courts
Grounds for Cancellation
Misrepresentation, false statements or fraud in connection
with the adoption or ratification of the constitution and bylaws or amendments thereto, minutes of ratification and list
of members who took part
Misrepresentation, false statements or fraud in connection
with the election of officers, minutes of the election of
officers and list of voters
Voluntary dissolution by members

LABOR II: CASES AND POWERPOINT PRESENTATION

Ten grounds in Article 245 prior to RA 9481 have been

reduced to three
Examples of removed grounds
o Failure to submit reportorial requirements
o Illegal strike
o Engaging in cabo system

Voluntary Dissolution
May be done by members themselves
2/3 of general membership votes during a meeting called
for the purpose of dissolving organization
Application to cancel registration submitted by the board,
attested by the president
Rights & Conditions of Membership, LO
Article 247
a. Arbitrary or excessive initiation fees
b. Full and detailed reports
c. Direct election of officers
d. Determination of major policy affecting entire
membership of organization
e. Exclusion of subversive persons from membership
f. Exclusion of convicted member as union officer
g. Collection or disbursement only by authorized officers
h. Receipts for all payments
i. Funds for authorized use only
j. Ban on unauthorized compensation on officers
k. True and correct accounting of funds
l. Inspection of records of organization
m. No unauthorized special levy or assessment of fees
n. Check off
o. Information on the Constitution and by-laws
Rights & Conditions of Membership, LO

P a g e | 60
Article 247can be best grouped into four basic
classifications
1. Political rights right to vote and be voted for
2. Deliberation and decision-making. Right to participate
in deliberations on major policy questions and decide by
secret ballot
3. Money matters
4. Information
1. Constitution and By-laws
2. Collective Bargaining Agreement
3. Labor Laws

Violation of Rights of Union Members, Consequences

Cancellation of union registration, OR
Expulsion from office of a union officer.
30% of all members (if affecting entire membership) must
concur re filing of complaint with the BLR
Only affected member/members may file a complaint
pertaining to a violation of which they are affected
Relationship of the Union and its Members
Ang Malayang Manggagawa ng Ang Tibay Enterprises, et al.
vs. Ang Tibay, et al., G.R. No. L-8259, December 1957:
o The relationship of the union and the members is
governed by their mutual agreement, the terms and
conditions of which are set forth in the union
constitution and by laws and binding on the
members as well as the organization itself
ANG MALAYANG MANGGAGAWA NG ANG TIBAY ENTERPRISES, ET
AL vs. ANG TIBAY, ET AL.
FACTS:
Under the CBA, entered by the Pima, Inc. and the National
Workers Brotherhood, it provides that the labor union may

LABOR II: CASES AND POWERPOINT PRESENTATION

recommend to the employer the dismissal or separation from
service of any member. The agreement also provides that the
employer recognizes the union as the sole agent of the employees
and operators of the factory of the employer "with whom to deal
and discuss with matters affecting the relationship of management
and labor." The agreement is to run for one year with a right to
enter into a new and more beneficial agreement for both parties.
Ang Malayang Manggagawa ng Ang Tibay Enterprises, was
not yet registered with the Department of Labor but it was later
registered by Macario Pamintuan, one of its organizers, who later
became its vice president. The 22 complainants herein were
formerly members of both the Pima, Inc. and the National Workers
Brotherhood. Without first resigning from these two unions, they
joined in organizing the complainant union. Immediately after the
latter was registered with the Department of Labor, it sent a letter
to the employer demanding certain concessions in behalf of its
members and suggesting that a collective bargaining agreement be
entered into between them. The employer answered that it could
no longer legally enter into any collective bargaining agreement
with said union as it had already concluded one with the National
Workers Brotherhood on July 30, 1953.
Because the 22 complainants joined the complainant union
without first resigning from the respondent union in violation of the
latter's constitution and by-laws which make such an act punishable
with expulsion, they were expelled from the Pima, Inc. effective
August 1, 1953. After their expulsion, said union requested the
employer to discharge them from their work in accordance with the
provisions of paragraph 9 of the collective bargaining agreement.
The employer saw no other alternative than to dismiss them as
requested. Because of this expulsion, a complaint for unfair labor
practice was filed against the employer and the two labor unions
with which it included a collective bargaining agreement at the
instance of the 22 employees who were separated from the service.
After due hearing, the Court of Industrial Relations found the charge

P a g e | 61

unfounded whereupon said employees, assisted by the new union

with which they affiliated, interposed the present petition for
review.
ISSUE:
Whether or not the collective bargaining agreement shall
bind the union members.
RULING:
While it is recognized that an employee shall have the right
to self-organization and join any labor organization, it at the same
time postulated that such right "shall not impair the right of a labor
organization to prescribe its own rules with respect to the
acquisition or retention of membership therein" [Section 4 (b),
paragraph 1, Republic Act 875]. This provision is significant. It is an
indirect restriction on the right of an employee to self organization.
It is a solemn pronouncement of a policy that while all employee is
given the right to join a labor organization, such right should only be
asserted in a manner that will not spell the destruction of the same
organization. The law requires loyalty to the union on the part of its
members in order to obtain to the full extent its cohesion and
integrity. We therefore see nothing improper in the disputed
provisions of the collective bargaining agreement entered into
between the parties.
When a man joins a labor union (or almost any other
democratically controlled group), necessarily a portion of his
individual freedom is surrendered for the benefit of all members.
He accepts the will of the majority of the members in order that he
may derive the advantages to be gained from the concerted action
of all. Just as the enactments of the legislature bind all of us, to the
constitution and by-laws of the union (unless contrary to good
morals or public policy, or otherwise illegal), which are duly enacted
through democratic processes, bind all of the members. If a
member of a union dislikes the provisions of the by-laws he may
seek to have them amended or may withdraw from the union;
otherwise he must abide by them. It is not the function of courts to

LABOR II: CASES AND POWERPOINT PRESENTATION

decide the wisdom or propriety of legitimate by-laws of a trade
union.
On joining a labor union the constitution and by-laws
become a part of the member's contract of membership under
which he agrees to become bound by the constitution and
governing rules of the union so far as it is not inconsistent with
controlling principles of law. The constitution and by laws of an
unincorporated trade union express the terms of a contract, which
define the privileges and rights secured to, and duties assumed by,
those who have become members. The agreement of a member on
joining a union to abide by its laws and comply with the will of the
lawfully constituted majority does not require a member to submit
to the determination of the union any question involving his
personal rights.
Prohibited as members
Non-employees (247(c))
Subversives (247(e))
What about persons convicted of crimes involving moral
turpitude?
o Allowed as members, not eligible for election as
officer (247(f))
Limitations
The labor organization cannot compel employees to
become members of their labor organization if they are
already members of a RIVAL UNION
The persons mentioned in Art 247[e] (SUBVERSIVES) of the
Labor Code are prohibited from becoming a member of a
labor organization
The members of RELIGIOUS ORGANIZATION whose religion
forbids membership in labor organization could not be
compelled into union membership (Victoriano v. Elizalde
Rope Workers Union, L-25246 September 1974)

FACTS:

P a g e | 62

Victoriano vs. Elizalde Rope Workers Union

Victoriano, an Iglesia ni Cristo member, has been an

employee of the Elizalde Rope Factory since 1958. He was also a
member of the EPWU. Under the CBA between ERF and EPWU, a
close shop agreement is being enforced which means that
employment in the factory relies on the membership in the EPWU;
that in order to retain employment in the said factory one must be a
member of the said Union. In 1962, Victoriano tendered his
resignation from EPWU claiming that as per RA 3350 he is an
exemption to the close shop agreement by virtue of his being a
member of the INC because apparently in the INC, one is forbidden
from being a member of any labor union. It was only in 1974 that
his resignation from the Union was acted upon by EPWU which
notified ERF about it. ERF then moved to terminate Victoriano due
to his non-membership from the EPWU. EPWU and ERF reiterated
that he is not exempt from the close shop agreement because RA
3350 is unconstitutional and that said law violates the EPWUs and
ERFs legal/contractual rights.
ISSUE:
Whether or not RA 3350 is unconstitutional.
RULING:
The right to religion prevails over contractual or legal rights.
As such, an INC member may refuse to join a labor union and
despite the fact that there is a close shop agreement in the factory
where he was employed, his employment could not be validly
terminated for his non-membership in the majority therein. Further,
the right to join a union includes the right not to join a union. The
law is not unconstitutional. It recognizes both the rights of unions
and employers to enforce terms of contracts and at the same time it
recognizes the workers right to join or not to join union. But the RA
recognizes as well the primacy of a constitutional right over a
contractual right.

LABOR II: CASES AND POWERPOINT PRESENTATION

Who are entitled to vote?

Tancino vs. Pura Ferrer-Calleja, G.R. 78131, Jan. 1988
o Only members of the union have the eligibility to
take part in the election of union officers. Eligibility
to vote may be determined through the use of the
applicable payroll period and the status of the
employees during the applicable period. This
pertains to the payroll of the month next preceding
the labor dispute, in case of regular employees and
the payroll period at or near the peak of operation,
in case of employees in seasonal industries.
EDUARDO TANCINCO, et. al. vs. DIRECTOR PURA FERRER-CALLEJA,
et. al.
FACTS:
Lacanilao group are the prime organizers of ITM-MEA.
While the Lacanilao group was preparing to file a petition for direct
certification of the Union as the sole and exclusive bargaining agent
of ITM's bargaining unit, the union's Vice-President, Carlos Dalmacio
was promoted to the position of Department Head, thereby
disqualifying him for union membership. Said incident, among
others led to a strike spearheaded by Lacanilao group. Another
group however, led by Tancinco group staged a strike inside the
company premises. After four (4) days the strike was settled. On
May 10, 1986 an agreement was entered into by the
representatives of the management, Lacanilao group and the
Tancinco group.
On May 19, 1986, a pre-election conference was held, but
the parties failed to agree on the list of voters. During the May 21,
1986 pre-election conference, ANGLO through its National
Secretary, a certain Mr. Cornelio A. Sy made a unilateral ruling
excluding some 56 employees. Prior to the holding of the election of
union officers, Tancinco group protested to said ruling but no

P a g e | 63

action was taken. On May 26, 1986, the election of officers was
conducted under the supervision of MOLE wherein the 56
employees in question participated but whose votes were
segregated without being counted. Lacanilao's group won. Lacanilao
garnered 119 votes with a margin of three (3) votes over Tancinco
prompting petitioners to make a protest. Thereafter, petitioners
filed a formal protest with the Ministry of Labor Regional Office in
San Fernando, Pampanga claiming that the determination of the
qualification of the 56 votes is beyond the competence of ANGLO.
Private respondents maintain the contrary on the premise that
definition of union's membership is solely within their jurisdiction.
ISSUE:
Whether or not 56 employees can vote.
RULING:
The record of the case shows that public respondent
categorically declared as arbitrary, whimsical and without legal basis
the grounds relied upon by ANGLO in disenfranchising the 56 voters
in question. However, despite said finding public respondent ruled
to set aside the Resolution of July 25, 1986 of the Med-Arbiter
based on its own findings that 51 of the 56 disenfranchised voters
were not yet union members at the time of the election of union
officers on May 26, 1986 on the ground that their names do not
appear in the records of the Union submitted to the Labor
Organization Division of the Bureau of Labor on April 24, 1986.
The finding does not have a leg to stand on. Submission of
the employees names with the BLR as qualified members of the
union is not a condition sine qua non to enable said members to
vote in the election of union's officers. It finds no support in fact and
in law. Per public respondent's findings, the April 24, 1986 list
consists of 158 union members only wherein 51 of the 56
challenged voters' names do not appear. Adopting however a rough
estimate of a total number of union members who cast their votes
of some 333 and excluding therefrom the 56 challenged votes, if the
list is to be the basis as to who the union members are then public

LABOR II: CASES AND POWERPOINT PRESENTATION

respondent should have also disqualified some 175 of the 333
voters. It is true that under article 242(c) of the Labor Code, as
amended, only members of the union can participate in the election
of union officers. The question however of eligibility to vote may be
determined through the use of the applicable payroll period and
employee's status during the applicable payroll period. The payroll
of the month next preceding the labor dispute in case of regular
employees and the payroll period at or near the peak of operations
in case of employees in seasonal industries.
In the case before Us, considering that none of the parties
insisted on the use of the payroll period-list as voting list and
considering further that the 51 remaining employees were correctly
ruled to be qualified for membership, their act of joining the
election by casting their votes on May 26, 1986 after the May 10,
1986 agreement is a clear manifestation of their intention to join
the union. They must therefore be considered ipso facto members
thereof Said employees having exercised their right to unionism by
joining ITM-MEA their decision is paramount.
Requirements for Levy of Special Assessments or Extraordinary
Fees
Written resolution;
Approved by a majority of all members; and
Approval obtained at a general membership meeting duly
called for that purpose.
Secretary of the organization shall record the minutes of the
meeting, which shall be attested to by the President.
o list of all members present
o votes cast; and
o purpose of the assessment or fees
Strict Compliance Enjoined
(Palacol et aa. v Ferrer-Galleja, et al, GR No. 85222,
February 6, 1990) - Substantial compliance with the

P a g e | 64
aforementioned procedure is not enough
requirements must be strictly complied with

the

CARMELITO L. PALACOL, ET AL. vs. PURA FERRER-CALLEJA, Director of

the Bureau of Labor Relations,MANILA CCBPI SALES FORCE UNION,
and COCA-COLA BOTTLERS (PHILIPPINES), INC.,
FACTS:
On October 12, 1987, the respondent Manila CCBPI Sales
Force Union (Union), as the collective bargaining agent of all regular
salesmen, regular helpers, and relief helpers of the Manila Plant and
Metro Manila Sales Office of the Coca-Cola Bottlers (Philippines),
Inc. (Company) concluded a new collective bargaining agreement
with the latter. Among the compensation benefits granted to the
employees was a general salary increase to be given in lump sum
including recomputation of actual commissions earned based on the
new rates of increase. On the same day, the president of the Union
submitted to the Company the ratification by the union members of
the new CBA and authorization for the Company to deduct union
dues equivalent to P10.00 every payday or P20.00 every month and,
in addition, 10% by way of special assessment, from the CBA lumpsum pay granted to the union members. As embodied in the Board
Resolution of the Union dated September 29, 1987, the purpose of
the special assessment sought to be levied is "to put up a
cooperative and credit union; purchase vehicles and other items
needed for the benefit of the officers and the general membership;
and for the payment for services rendered by union officers,
consultants and others."This "Authorization and CBA Ratification"
was obtained by the Union through a secret referendum held in
separate local membership meetings on various dates. The total
membership of the Union was about 800. Of this number, 672
members originally authorized the10% special assessment, while
173 opposed the same.
Subsequently however, one hundred seventy (170)
members of the Union submitted documents to the Company

LABOR II: CASES AND POWERPOINT PRESENTATION

stating that although they have ratified the new CBA, they are
withdrawing or disauthorizing the deduction of any amount from
their CBA lump sum. Later, 185 other union members submitted
similar documents expressing the same intent. These members,
numbering 355 in all (170 + 185),added to the original oppositors of
173, turned the tide in favor of disauthorization for the special
assessment, with a total of 528 objectors and a remainder of 272
supporters. Petitioners assailed the 10% special assessment as a
violation of Article 241 in relation to Article 222(b) of the Labor
Code. The Union however contended that the deductions not only
have the popular endorsement and approval of the general
membership, but likewise complied with the legal requirements of
Article 241.
ISSUE:
Whether or not a special assessment be validly deducted by
a labor union from the lump-sum pay of its members, granted under
a collective bargaining agreement (CBA), notwithstanding a
subsequent disauthorization of the same by a majority of the
unionmembers.
RULING:
The deduction of the 10% special assessment by the Union
was not made in accordance with the requirements provided by
law. Under Article 241, the Union must submit to the Company a
written resolution of a majority of all the members at a general
membership meeting duly called for the purpose. In addition, the
secretary of the organization must record the minutes of the
meeting which, in turn, must include, among others, the list of all
the members present as well as the votes cast. The Union, however,
failed to comply with the requirements of Article 241 of the Labor
Code. It held local membership meetings on separate occasions, on
different dates and at various venues, contrary to the express
requirement that there must be a general membership meeting.
The contention of the Union that "the local membership meetings
are precisely the very general meetings required by law" is

P a g e | 65

untenable because the law would not have specified a general

membership meeting had the legislative intent been to allow local
meetings in lieu of the latter. It submitted only minutes of the local
membership meetings when what is required is a written resolution
adopted at the general meeting
Worse still, the minutes of three of those local meetings
held were recorded by a union director and not by the union
secretary. The minutes submitted to the Company contained no list
of the members present and no record of the votes cast. Since it is
quite evident that the Union did not comply with the law at every
turn, the only conclusion that may be made therefrom is that there
was no valid levy of the special assessment. Even assuming that the
special assessment was validly levied, and granting that individual
written authorizations were obtained by the Union, nevertheless
there can be no valid check-off considering that the majority of the
union members had already withdrawn their individual
authorizations. A withdrawal of individual authorizations is
equivalent to no authorization at all. This is so even if the
withdrawal of authorization was done in collective form. There is
nothing in the law which requires that the disauthorization must be
in individual form.
Check-off
A method of deducting from an employees pay at
prescribed period, the amounts due to the union for fees,
fines or assessments
Nature and Purpose of Check-off
Union dues are the lifeblood of the union. All unions are
authorized to collect reasonable membership fees, union
dues, assessments and fines and other contributions for
labor education and research, mutual death and
hospitalization benefits, welfare fund, strike fund and credit
and cooperative undertakings. (Art. 283 [a])

LABOR II: CASES AND POWERPOINT PRESENTATION

Requirements With Regard to Check-offs (Art 241 [O])

General Rule: NO special assessment, attorneys fees,
registration fees or any other extraordinary fees may be
checked off from any amount due an employee without an
individual written authorization duly signed by the employee
The Authorization should specifically state the:
o Amount; and
o Purpose and the beneficiary of the deduction
Exceptions
For mandatory activities provided under the Code; and
When non-members of the union avail of the benefits of the
CBA:
o Said non-members may be assessed union dues
equivalent to that paid by members;
o Only by a board resolution approved by majority of
the members in a general meeting called for the
purpose
Check Off
Eduardo J. Marino, Jr. et al. vs. Gil Y. Gamilla, et al., G.R. No.
149763, July 7, 2009: The individual written authorization
duly signed by the employee is an additional requirement in
order that a special assessment may be validly checked-off.
In case of check-off another requisite is necessary in
addition to the requirements for special assessment,
enumerated above and this is, individual written
authorization for check-off duly signed by the employee
concerned.
Facts:

EDUARDO J. MARIO, ET AL. v. GIL Y. GAMILLA, ET AL.

Mario Group was among the executive officers and

directors of the University of Sto. Tomas Faculty Union (USTFU), a

P a g e | 66

labor union duly organized and registered under the laws of the
Republic of the Philippines and the bargaining representative of the
faculty members of the University of Santo Tomas (UST). On the
other hand, respondents were UST professors and USTFU members.
The 1986 Collective Bargaining Agreement (CBA) between UST and
USTFU expired on 31 May 1988.
Thereafter, bargaining
negotiations ensued between UST and the Mario Group, which
represented USTFU. As the parties were not able to reach an
agreement despite their earnest efforts, a bargaining deadlock was
declared and USTFU filed a notice of strike. Subsequently, then
Secretary of the DOLE, Franklin Drilon assumed jurisdiction over the
dispute. The DOLE Secretary issued an Order laying the terms and
conditions for a new CBA between the UST and USTFU. In
accordance with said Order, the UST and USTFU entered into a CBA
in 1991, which was to be effective for the period of 1 June 1988 to
31 May 1993 (hereinafter 1988-1993 CBA). In keeping with Article
253-A of the Labor Code, as amended, the economic provisions of
the 1988-1993 CBA were subject to renegotiation for the fourth and
fifth years.
Accordingly, on 10 September 1992, UST and USTFU
executed a Memorandum of Agreement (MOA), whereby UST
faculty members belonging to the collective bargaining unit were
granted additional economic benefits for the fourth and fifth years
of the 1988-1993 CBA. The MOA grants additional benefits to
faculty members belonging to the collective bargaining unit in the
amount of P42 million. It likewise provides that the union shall have
the right to a pro-rata lump sum check-off of all sums of money due
and payable to it from the package of said economic benefits
granted. Majority of the USTFU members signed the individual
instruments of ratification with purportedly signified their consent
to the MOA. The ratification provides that a check-off of 10%
thereof covering union dues, and special assessment for Labor
Education Fund and attorneys fees from USTFU members is
authorized to be made in lump sum.

LABOR II: CASES AND POWERPOINT PRESENTATION

USTFU, through its President, Atty. Marino wrote a letter to
the UST Treasurer requesting the release to the union of the sum of
P4.2 million which was 10% of the P42M economic benefits
belonging to the collective bargaining unit. The P4.2 million was
sought by USTFU in consideration of its efforts in obtaining the said
P42 million economic benefits package. UST remitted the sum of
P4.2 million to USTFU. After deducting from the P42 million
economic benefits package the P4.2 million check-off to USTFU, the
amounts owed to UST, and the salary increases and bonuses of the
covered faculty members, a net amount of P6,389,145.04 remained.
The remaining amount was distributed to the faculty members.
Several complaints were filed by the respondents against
the petitioners on the ground for violating the rights and conditions
of membership in USTFU with respect to the approval of the
attorneys/agency fees worth P4.2 million in the form of check-off.
Then the DOLE Department Order No. 9 took effect, amending the
Rules Implementing Book V of the Labor Code, as amended.
Thereunder, jurisdiction over the complaints for any violation of the
union constitution and by-laws and the conditions of union
membership was vested in the Regional Director of the DOLE.
Pursuant to said Department Order, all four Petitions/Complaints
filed by respondents against the Mario Group were consolidated
and indorsed to the Office of the Regional Director of the DOLENCR. The DOLE-NCR Regional Director rendered a Decision in the
consolidated cases in respondents favor.
Petitioners interposed an appeal before the BLR. BLR
rendered a decision to the effect that USTFU officers are hereby
ordered to return to the general membership the amount of P4.2
million they have collected by way of attorneys fees and that the
election shall be held under the control and supervision of the
Regional Office. The BLR, however, agreed in the finding of the
DOLE-NCR Regional Director that the P42 million economic benefits
package was sourced from the faculty members share in the tuition
fee increases under Republic Act No. 6728. Under said law, 70% of

P a g e | 67

tuition fee increases shall go to the payment of salaries, wages,

allowances, and other benefits of teaching and non-teaching
personnel. The BLR further reasoned that the P4.2 M collected by
the Marino Group was in the nature of attorneys fees and
therefore, fell under the general prohibition against such fees in
Article 222(b) of the Labor Code. Also, the exception to charging
against union funds was not applicable because the P42 million
economic benefits package under the 10 September 1992 MOA was
not union fund, as the same was intended not for the union coffers,
but for the members of the entire bargaining unit. The fact that the
P4.2 million check-off was approved by the majority of USTFU
members was immaterial in view of the clear command of Article
222(b) that any contract, agreement, or arrangement of any sort,
contrary to the prohibition contained therein, shall be null and void.
Issues:
Whether or not the 10% check-off collected by the Mario
Group from the P42 million economic benefits package legal
RULING:
The P4.2 M check-off is illegal. Article 222(b) of the Labor
Code, as amended, prohibits the payment of attorney's fees only
when it is effected through forced contributions from the
employees from their own funds as distinguished from union funds.
Hence, the general rule is that attorneys fees, negotiation fees, and
other similar charges may only be collected from union funds, not
from the amounts that pertain to individual union members. As an
exception to the general rule, special assessments or other
extraordinary fees may be levied upon or checked off from any
amount due an employee for as long as there is proper
authorization by the employee.
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. The Union is assured thereby of

LABOR II: CASES AND POWERPOINT PRESENTATION

continuous funding. As this Court has acknowledged, the system of
check-off is primarily for the benefit of the Union and, only
indirectly, for the individual employees.
A reading of the terms of the MOA reveals that after the
satisfaction of the outstanding obligations of UST under the 1986
CBA, the balance of the P42 million was to be distributed to the
covered faculty members of the collective bargaining unit in the
form of salary increases, returns on paycheck deductions; and
increases in hospitalization, educational, and retirement benefits,
and other economic benefits. The deduction of the P4.2 million, as
alleged attorneys/agency fees, from the P42 million economic
benefits package effectively decreased the share from said package
accruing to each member of the collective bargaining unit.
The Court further determines that the requisites for a valid
levy and check-off of special assessments, laid down by Article
241(n) and (o), respectively, of the Labor Code, as amended, have
not been complied with in the case at bar. To recall, these
requisites are: (1) an authorization by a written resolution of the
majority of all the union members at the general membership
meeting duly called for the purpose; (2) secretary's record of the
minutes of the meeting; and (3) individual written authorization for
check-off duly signed by the employee concerned.
The inclusion of the authorization for a check-off of union
dues and special assessments for the Labor Education Fund and
attorneys fees, in the same document for the ratification of the
MOA granting the P42 million economic benefits package,
necessarily vitiated the consent of USTFU members. There was no
way for any individual union member to separate his or her consent
to the ratification of the MOA from his or her authorization of the
check-off of union dues and special assessments. Also, the failure of
the Mario Group to strictly comply with the requirements set forth
by the Labor Code, as amended, and the USTFU Constitution and
By-Laws, invalidates the questioned special assessment. Substantial
compliance is not enough in view of the fact that the special

P a g e | 68

assessment will diminish the compensation of the union members.

Their express consent is required, and this consent must be
obtained in accordance with the steps outlined by law, which must
be followed to the letter.
Opinion:
It is worth emphasizing that the Constitution promotes and
makes quality education accessible to all Filipino citizens, as well as
the recognition of the State of the complementary roles of public
and private educational institutions in the educational system.
Education should be really within reach by every person who is
willing to learn.
The system of check-off is primarily for the benefit of the
Union and, only indirectly, for the individual employees. It provides
for constant fund for the union. However, the law provides for its
limitations and certain requisites must be complied with for the
valid imposition of check offs.
These requisites are:
1. Authorization by a written resolution of the majority of all
the members at a general membership meeting duly called
for the purpose;
2. Secretarys record of the minutes of the meeting; and
3. Individual written authorization for check-off duly signed by
the employee concerned.
Therefore, the compliance with the requirements set by law
in order for the employer to avail for the check-off must be strictly
observed so as not to prejudice the member of the union.
Jurisdiction over Check-Off Disputes
Being an intra-union conflict, the Regional Director of DOLE
has jurisdiction over check off disputes.
Union Dues
Regular monthly contributions paid by the members to the
union in exchange for the benefits given to them by the CBA

P a g e | 69

LABOR II: CASES AND POWERPOINT PRESENTATION

and to finance the activities of the union in representing
them.
Agency Fees
Dues equivalent to union dues charged from the non-union
members who were benefited by the CBA provisions.
The relationship between the non-union employees and the
Union that is the bargaining representative is that of
principal agent
Since the union was able to secure better terms and
conditions of employment for all employees, it is proper
that they be compensated for their representation
Requisites for Assessing Agency Fees
The employee is part of the bargaining unit,
He is not a member of the union; and
He partook of the benefits of the CBA
Written authorization is not necessary for collection
Union Dues vs. Agency Fees
Union Dues
Applies to Union Members

Agency Fees
Applies to Non Members of the
Union
Paid by reason of their Paid by reason of the benefits
membership
they enjoyed under the CBA
Written
authorization
is Written authorization is NOT
required for dues to be required
deducted from salaries (CheckOff)
Agency Fees not Imposable
NAIBAILU v. San Miguel Brewery Inc., GR No. 18170, August
31, 1963

Agency Fee cannot be imposed on employees

already in the service and are members of another
union. If a closed shop agreement cannot be
applied to them, neither may an agency fee, as a
lesser form of union security, be imposed to them.
Payment by non-union members of agency fees
does not amount to an unjust enrichment basically
because the purpose of such dues is to avoid
discrimination between union and non-union
members.

NATIONAL BREWERY & ALLIED INDUSTRIES LABOR UNION OF THE

PHILIPPINES vs. SAN MIGUEL BREWERY, INC., et. al.
FACTS:
Appellant National Brewery & Allied Industries Labor Union
of the Philippines is the bargaining representative of all regular
workers paid on the daily basis and of route helpers of San Miguel
Brewery, Inc.
On October 2, 1959, it signed a collective bargaining
agreement with the company, which provided, among other things,
that The COMPANY will deduct the UNION agency fee from the
wages of workers who are not members of the UNION, provided the
aforesaid workers authorized the COMPANY to make such
deductions in writing or if no such authorization is given, if a
competent court direct the COMPANY to make such deduction. (Art.
II, Sec. 4)
Alleging that it had obtained benefits for all workers in the
company and that "defendant Independent S.M.B. Workers'
Association refused and still refuses to pay UNION AGENCY FEE to
the plaintiff UNION and defendant COMPANY also refuses and still
refuses to deduct the UNION AGENCY FEE from the wages of
workers who are not members of the plaintiff UNION and remit the
same to the latter," the union brought suit in the Court of First
Instance of Manila on November 17, 1960 for the collection of

LABOR II: CASES AND POWERPOINT PRESENTATION

union agency fees under the bargaining contract.
The lower court, in dismissing the complaint, held that there
was nothing in the Industrial Peace Act (Republic Act No. 875) which
would authorize the collection of agency fees and that neither may
such collection be justified under the rules of quasi contract
because the workers had not neglected their business so as to
warrant the intervention, of an officious manager.
ISSUE:
Whether or not a union agency fee can be a valid form of
union security.
RULING:
Where the parties are not free to require of employees
membership in a union as a condition of employment, neither can
they require a lesser form of union security. "For one cannot waive
a right he does not have." And herein lies the error into which the
union has fallen in arguing that the agency shop agreement in this
case can be justified under Section 4 (a) (4) because "the lesser
must of necessity be included in the greater."
For although a closed-shop agreement may validly be
entered into under Section 4 (a) (4) of the Industrial Peace Act
(National Labor Union v. Aguinaldo's Echague, Inc., 51 O.G. p. 2899,
We held that the same cannot be made to apply to employees who,
like the employees in this case, are already in the service and are
members of another union. (Freeman Shirt Mfg. Co. v. Court of
Industrial Relations, G.R. No. L-16561, January 28, 1961.) Hence, if a
closed shop agreement cannot be applied to these employees,
neither may an agency fee, as a lesser form of union security, be
imposed upon them.
But the benefits that accrue to nonmembers by reason of a
collective bargaining agreement can hardly be termed "unjust
enrichment" because, as already pointed out, the same are
extended to them precisely to avoid discrimination among
employees.

P a g e | 70

Coverage of CBA to Include Employee-Members of Another Union

Members of a rival union are NOT Considered Free Riders
When the union bids to be the bargaining agent, it
voluntarily assumes the responsibility of representing all
employees in the appropriate bargaining unit.
CHAPTER III. RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS:
ART.248 RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS
Rights of A Legitimate Labor Organization
Undertake activities for benefit of members;
Sue and be sued;
Exclusive representative of all employees;
Represent union members;
Be furnished audited financial statements by employers;
Own properties; and
Be exempted from taxes.
ART.248-A: REPORTORIAL REQUIREMENTS
1. Constitution and by-laws, or amendments thereto, minutes
of ratification, and the list of members who took part in the
ratification of the constitution and by-laws or amendments
thereto;
2. List of officers, minutes of the election of officers and list of
voters within 30 days from election;
3. Annual financial report within 30 days after the close of
every fiscal year; and
4. List of members at least once a year or whenever required
by the Bureau
Failure to comply with the above-mentioned requirements
shall not be a ground for cancellation of union registration
Erring officers or members to be suspended, expelled from
membership, or otherwise sanctioned.

P a g e | 71

LABOR II: CASES AND POWERPOINT PRESENTATION

Title Five: Coverage: Art. 249: Coverage and Employees Right to
Self-Organization
Constitutional Basis of the Right to Self-Organization
Art. III, Sec. 8. The right of the people, including those employed in
the public or private sectors, to form unions, associations, or
societies for purposes not contrary to law shall not be abridged.
Art. XIII, Sec. 3. The State shall guarantee the rights of all workers to
self-organization, collective bargaining and negotiations, and
peaceful concerted activities including the right to strike in
accordance with law.
Right to Self-Organization, Extent
To form, join and assist labor organizations for the purpose
of collective bargaining through representatives of their
own choosing; and
To engage in lawful concerted activities for the same
purpose or for their mutual aid and protection (Art. 252)
Right to Self-Organization,Coverage
All persons employed in commercial, industrial and
agricultural enterprises and in religious, charitable, medical,
or educational institutions
Ambulant, intermittent and itinerant workers, selfemployed people, rural workers and those without definite
Employers may form labor organizations for their mutual
aid and protection.
Right to Self-Organization,Coverage
Art. 250 : Rights of Employees in the public service
o Employees of government corporations established
under the Corporation Code shall have the right to

organize and bargain collectively with their

respective ERs.
o All other EEs in the civil service shall have the right
to form associations for the purposes not contrary
to law.
Art. 251 :
o Managerial employees are not eligible to join,
assist, or form any labor organization.
o Supervisory employees shall not be eligible for
membership in a labor organization of the rankand-file EEs but may join, assist or form separate
labor organizations of their own.

Examples
Reys Hair Salon refused to bargain with the union of the
barbershop composed of eight barbers on the ground that
the shop was a service establishment and the number of
the barbers was less than ten. Is the contention tenable?
No. The law does not fix the minimum number of
employees for the exercise of the right to self-organization
and the right extends to all types of establishments
Faculty members of a non-profit school converted their club
into a labor union. Is this allowed?
Yes. Even employees in non-profit or religious organizations
are entitled to exercise this right.
Is a religious sects directive to its congregation not to join a
labor union a bar for members to form their own union?
The right of the members of a sect not to join a labor union
for being contrary to their religious beliefs does not bar the
members of that sect from forming their own union.
(Kapatiran vs. Calleja)
Supervisory Employees

LABOR II: CASES AND POWERPOINT PRESENTATION

Those, who, in the interest of the ER, effectively

recommend such managerial actions if in the exercise of
such authority is not merely routinary or clerical in nature
but requires the use of independent judgment. (Art. 218)
The criterion which determines whether a particular
employee is within the definition of a statute is the
character of the work performed rather than the title or
nomenclature of position held. (NSRC vs. NLRC)
If the recommendation of the teacher area supervisor is
subject to evaluation, review and final approval of the
principal, is the teacher a supervisory employee? No. This is
merely ineffective or clerical recommendation. ( Laguna
Colleges vs. CIR )

LAGUNA COLLEGE vs. COURT OF INDUSTRIAL RELATIONS, et. al.

FACTS:
Laguna College filed a petition for certification election in
the CIR to determine whether the Laguna College Teachers
Association (LACTA) or any other labor organization is the true and
voluntary choice of the majority of the teachers working in
petitioners establishment, as the sole and exclusive bargaining
representative.
LACTA intervened praying that the petition for certification
election be dismissed and that it be directly certified as the sole and
exclusive bargaining representative of all the teachers, excluding
those occupying supervisory and confidential positions (as) defined
and settled by jurisprudence.
While the certification proceeding was pending, LACTA
staged a strike, but the same was settled by a return to work
agreement executed by union and management on January 4, 1968.
One of the stipulations in the said agreement is as follows: That,
except on questions of law, both parties hereby waive the right to
appeal any decision or order that may be rendered by the CIR. CIR
decided that the LACTA is the sole and exclusive bargaining

P a g e | 72

representative and to the exclusion of those holding supervisors

and/or holding confidential positions.
ISSUE:
Whether or not those whose recommendation as teacher
area supervisor is subject to evaluation, review and final approval of
the principal the teacher is a supervisory employee.
RULING:
Although they are area supervisors they do not exercise any
of the attributes or functions of a supervisor as defined in Section
2(k) of R.A. 875. To better understand their functions, it is best to
know what is an area supervisor. The word area in the designation
refers to a particular subject, like English, Mathematics and Physics,
Filipino, General Science, Biology and Chemistry, and Social ScienceHistory and Economics. It is a fact that not one of these area
supervisors has the power to hire or fire, lay-off, suspend, discharge
or discipline the teacher under them or adjust their grievances. The
power to rate the efficiency of the teachers under them is even
subject to review or revision by the principal, Mr. Wenceslao
Retizos. As a matter of fact, their functions are but
recommendatory.

Supervisors were given the job of either to assist the

foreman if the effective dispatch of manpower and
equipment or execute and coordinate work plans
emanating from his supervisors. Are these supervisors
supervisory personnel? No. They only execute approved and
established policies leaving little or no discretion at all
whether to implement the said policies or not. (Southern
Philippines Federation vs. Calleja)

SOUTHERN PHILIPPINES FEDERATION OF LABOR vs. HON. FERRERCALLEJA (1989)

FACTS:
Petitioner SPF filed with the DOLE a petition for certification

LABOR II: CASES AND POWERPOINT PRESENTATION

election among the rank-and-file employees of private respondent
Apex Minong Co. The Med-Arbiter granted the petition and directed
the holding of the certification election. During the pre-election
conference, petitioner union objected to the inclusion in the list of
workers prepared by Apex the following: (1) employees occupying
the positions of Supervisor I, II and III; (2) employees under
confidential/special payrolls; and (3) employees who were not
paying dues. According to petitioner, the mentioned employees
were disqualified from participating in the certification election
since the Supervisors were managerial employees while the last two
were disqualified by virtue of their non-membership in the Union
and their exclusion from the benefits of the collective bargaining
agreement. After the certification of election was conducted,
respondent Union filed an urgent motion to open the challenged
ballots. The Med-Arbiter granted the motion and directed the
challenged ballots be opened and inventoried. Petitioner appealed
to the BLR wherein respondent Director Ferrer-Calleja dismissed
said appeal and affirmed the decision of the Med-Arbiter and
ordered that the 197 ballots should be opened and canvassed. As a
consequence of the opening and canvass of the challenged ballots,
the Med-Arbiter
ISSUE:
Whether or not respondent Director committed grave
abuse of discretion in not excluding the 197 employees from voting
in the certification election.
RULING:
NO. The functions of the questioned positions are not
managerial in nature because they only execute approved and
established policies leaving little or no discretion at all whether to
implement the said policies or not. The respondent Director,
therefore, did not commit grave abuse of discretion in dismissing
the petitioner's appeal from the Med-Arbiter's Order to open and
count the challenged ballots in denying the petitioner's motion for
reconsideration and in certifying the respondent Union as the sole

P a g e | 73

and exclusive bargaining representative of the rank-and-file

employees of respondent Apex .
As regards the employees in the confidential payroll, the
petitioner has not shown that the nature of their jobs is classified as
managerial except for its allegation that they are considered by
management as occupying managerial positions and highly
confidential. Neither can payment or non-payment of union dues be
the determining factor of whether the challenged employees should
be excluded from the bargaining unit since the union shop provision
in the CBA applies only to newly hired employees but not to
members of the bargaining unit who were not members of the
union at the time of the signing of the CBA. It is, therefore, not
impossible for employees to be members of the bargaining unit
even though they are non-union members or not paying union
dues.
Non-Abridgement of the Right to Organize
Art. 252 speaks of the illegality of the following acts with
respect to the exercise to the right of self-organization
o Restraint
o Coercion
o Discrimination
o Undue interfere with employees and the workers in
their exercise of self-organization right
Alexander Reyes vs. Cresenciano Trejano , GR No. 84433,
June 1992. The right to self-organization includes the right
not to form or join a union
ALEXANDER REYES, ALBERTO M. NERA, EDGARDO M. GECA, and
138 others vs. CRESENCIANO B. TRAJANO, as Officer-in-Charge,
Bureau of Labor Relations, Med. Arbiter PATERNO ADAP, and TRIUNION EMPLOYEES UNION, et al.,
FACTS:
The OIC of the BLR sustained the denial by the Med Arbiter

LABOR II: CASES AND POWERPOINT PRESENTATION

of the right to vote of 141 members of the "Iglesia ni Kristo" (INK),
all employed in the same company, at a certification election at
which two (2) labor organizations were contesting the right to be
the exclusive representative of the employees in the bargaining
unit. That denial is assailed as having been done with grave abuse of
discretion in the special civil action of certiorari at bar, commenced
by the INK members adversely affected thereby.
The competing unions were Tri-Union Employees UnionOrganized Labor Association in Line Industries and Agriculture
(TUEU-OLALIA), and Trade Union of the Philippines and Allied
Services (TUPAS). Of the 348 workers initially deemed to be
qualified voters, only 240 actually took part in the election. Among
the 240 employees who cast their votes were 141 members of the
INK.
The challenged votes were those cast by the 141 INK
members. They were segregated and excluded from the final count
in virtue of an agreement between the competing unions, reached
at the pre-election conference that the INK members should not be
allowed to vote "because they are not members of any union and
refused to participate in the previous certification elections."
The INK employees promptly made known their protest to
the exclusion of their votes. They filed f a petition to cancel the
election alleging that it "was not fair" and the result thereof did "not
reflect the true sentiments of the majority of the employees."
TUEU-OLALIA opposed the petition. It contended that the
petitioners "do not have legal personality to protest the results of
the election," because "they are not members of either contending
unit, but . . . of the INK" which prohibits its followers, on religious
grounds, from joining or forming any labor organization. . . ."
ISSUE:
Whether or not the INK members should participate in
voting the sole and exclusive bargaining representative.
RULING:
The right of self-organization includes the right to organize

P a g e | 74

or affiliate with a labor union or determine which of two or more

unions in an establishment to join, and to engage in concerted
activities with co-workers for purposes of collective bargaining
through representatives of their own choosing, or for their mutual
aid and protection, i.e., the protection, promotion, or enhancement
of their rights and interests.
Logically, the right NOT to join, affiliate with, or assist any
union, and to disaffiliate or resign from a labor organization, is
subsumed in the right to join, affiliate with, or assist any union, and
to maintain membership therein. The right to form or join a labor
organization necessarily includes the right to refuse or refrain from
exercising said right. It is self-evident that just as no one should be
denied the exercise of a right granted by law, so also, no one should
be compelled to exercise such a conferred right. The fact that a
person has opted to acquire membership in a labor union does not
preclude his subsequently opting to renounce such membership.
That the INK employees, as employees in the same
bargaining unit in the true sense of the term, do have the right of
self-organization, is also in truth beyond question, as well as the fact
that when they voted that the employees in their bargaining unit
should be represented by "NO UNION," they were simply exercising
that right of self-organization, albeit in its negative aspect.
The respondents' argument that the petitioners are
disqualified to vote because they "are not constituted into a duly
organized labor union" "but members of the INK which prohibits
its followers, on religious grounds, from joining or forming any labor
organization" and "hence, not one of the unions which vied for
certification as sole and exclusive bargaining representative," is
specious. Neither law, administrative rule nor jurisprudence
requires that only employees affiliated with any labor organization
may take part in a certification election. On the contrary, the plainly
discernible intendment of the law is to grant the right to vote to
all bona fide employees in the bargaining unit, whether they are
members of a labor organization or not.

LABOR II: CASES AND POWERPOINT PRESENTATION

Airtime Specialists vs. Ferrer- Calleja, (180 SCRA 179). The

intendment of the law is to grant to bona-fide employees of
a bargaining unit, whether members of a labor organization
or not, the right to vote in certification elections

AIRTIME SPECIALISTS, INC., et. al. vs. HON. DIRECTOR OF LABOR

RELATIONS PURA FERRER-CALLEJA, et. al.
FACTS:
Samahan ng mga Manggagawa sa Asia-FFW Chapter (SAMAASIA, for short) filed with the NCR, Ministry of Labor and
Employment, two separate petitions for direct certification and/or
certification election on behalf of the regular rank-and-file
employees of the Airtime Specialists and Absolute Sound, Inc. The
other respondent Pinagbuklod ng Manggagawa sa Ataco-FFW
Chapter (PMA for short) also filed with the same office, similar
separate petitions in behalf of the regular rank and file employees
of petitioners Country Wealth Development, Ad Planner and
Marketing Counsellors and Atlas Resources. All these five cases
were consolidated.
Petitioners filed their position paper with motion to dismiss
on the following grounds-disaffiliation of the rank and file
employees, ineligibility of some signatories because they had less
than one (1) year of service resulting in the non-compliance with
the 30% requirement.
Med-Arbiter issued a decision ordering a certification
election.
Petitioners argue that the public respondents committed
grave abuse of discretion when they considered (a) employees with
less than one year of service and even (b) probationary employees
as qualified participants in the certification election process. They
contend that "by the very fact that such (probationary)-employees
have not earned regular status, they are not of the bargaining unit".
ISSUE:

P a g e | 75

Whether or not non-union members can validly participate

in the certification election.
RULING:
Petitioners' contentions are untenable.
In a certification election all rank-and-file employees in the
appropriate bargaining unit are entitled to vote. This principle is
clearly stated in Art. 255 of the Labor Code which states that the
"labor organization designated or selected by the majority of the
employees in an appropriate bargaining unit shall be the exclusive
representative of the employees in such unit for the purpose of
collective bargaining." Collective bargaining covers all aspects of the
employment relation and the resultant CBA negotiated by the
certified union binds all employees in the bargaining unit. Hence, all
rank-and-file employees, probationary or permanent, have a
substantial interest in the selection of the bargaining
representative. The Code makes no distinction as to their
employment status as basis for eligibility in supporting the petition
for certification election. The law refers to "all" the employees in
the bargaining unit. All they need to be eligible to support the
petition is to belong to the "bargaining unit."
The employees have the constitutional right to choose the
labor organization which they desire to join. The exercise of such
right would be rendered nugatory and ineffectual if they would be
denied the opportunity to choose in a certification election, which is
not a litigation, but a mere investigation of a non-adversary
character, the bargaining unit to represent them (NAMAWUMIF vs.
Estrella, 87 SCRA 84). The holding of a certification election is a
statutory policy that should not be circumvented (ATU vs. Noriel, 89
SCRA 264).

However, by virtue of the operation or enforcement of a

closed shop clause in a CBA, an employee may be
compelled under pain of dismissal, to become a member of
a labor union.

LABOR II: CASES AND POWERPOINT PRESENTATION

May an ER impose as condition for employment that the

applicant shall not join a labor organization or shall
withdraw from the one he belongs to?
No. Such a condition partakes of the nature of a yellow dog
contract and constitutes an unfair labor practice. It is
interference with the individuals right to self-organization.
SPFL v. Calleja, 179 SCRA 127, GR No. 80882, April 1989.
The right to self-organization must be upheld in the absence
of express provision of law to the contrary. It cannot be
curtailed by a Collective Bargaining Agreement

SOUTHERN PHILIPPINES FEDERATION OF LABOR vs. HON. FERRERCALLEJA (1989)

FACTS:
Petitioner SPF filed with the DOLE a petition for certification
election among the rank-and-file employees of private respondent
Apex Minong Co. The Med-Arbiter granted the petition and directed
the holding of the certification election. During the pre-election
conference, petitioner union objected to the inclusion in the list of
workers prepared by Apex the following: (1) employees occupying
the positions of Supervisor I, II and III; (2) employees under
confidential/special payrolls; and (3) employees who were not
paying dues. According to petitioner, the mentioned employees
were disqualified from participating in the certification election
since the Supervisors were managerial employees while the last two
were disqualified by virtue of their non-membership in the Union
and their exclusion from the benefits of the collective bargaining
agreement. After the certification of election was conducted,
respondent Union filed an urgent motion to open the challenged
ballots. The Med-Arbiter granted the motion and directed the
challenged ballots be opened and inventoried. Petitioner appealed
to the BLR wherein respondent Director Ferrer-Calleja dismissed
said appeal and affirmed the decision of the Med-Arbiter and
ordered that the 197 ballots should be opened and canvassed. As a

P a g e | 76

consequence of the opening and canvass of the challenged ballots,

the Med-Arbiter
ISSUE:
Whether or not the challenged employees can be members
of the bargaining unit and to vote in the certification election.
RULING:
Although we have upheld the validity of the CBA as the law
among the parties, its provisions cannot override what is expressly
provided by law that only managerial employees are ineligible to
join, assist or form any labor organization (See Art. 247, Labor
Code). Therefore, regardless of the challenged employees'
designations, whether they are employed as Supervisors or in the
confidential payrolls, if the nature of their job does not fall under
the definition of "managerial" as defined in the Labor Code, they are
eligible to be members of the bargaining unit and to vote in the
certification election. Their right to self-organization must be upheld
in the absence of an express provision of law to the contrary. It
cannot be curtailed by a collective bargaining agreement.
Labor Code Provisions on Unfair Labor Practices
Art. 253 concept of ULP and procedure for prosecution
Art. 254 ULP by employers
Art. 255 ULP by labor organizations
Art. 267 CBA violations which are gross in character
Art. 270(c) union busting involving dismissal of union
officers which threatens existence of union
Elements of Unfair Labor Practice
Concurrence of BOTH
1. There should exist an employer-employee relationship
between the offended party and offender
2. Act complained of must be EXPRESSLY mentioned and
defined in the Labor Code

P a g e | 77

LABOR II: CASES AND POWERPOINT PRESENTATION

ULP of Employers
Interference, restraint, coercion of employees in the
exercise of their right to self organization;
Yellow dog contract
Contracting out services or functions performed by union
members, that interfere, restrain or coerce employees in
the exercise of their right
Company union
Company Union
Initiate, dominate, assist or otherwise interfere with the
formation or administration of any labor organization
Includes giving of financial or other support to it or its
organizers or supporters
ULP of Employers
Discrimination
o Wages, hours of work, terms and conditions of
employment
o Except with respect to Union Security Clauses
Dismissal or prejudice or discrimination by reason of
testimony
Violation of duty to bargain
Payment of Negotiation or Attorneys Fees to the Union, its
officers or agents
Violate CBA
Yellow dog contract
Known previously as infamous document or iron-clad
document
From the United Mine Workers Journal (1921) This
agreement has been well named. It is yellow dog for sure.
It reduces to the level of a yellow dog any man that signs it,
for he signs away every right he possesses under the

Constitution and by-laws of the land and makes himself the

truckling, helpless slave of the employer.
ULPs of Labor Organizations
Restraint or coercion of employees in the exercise of their
right
Causing or attempting to cause employer to discriminate
against an employee
Violate duty, or refuse to bargain collectively with employer
Causing or attempting to cause employer to pay or deliver
any money or other things of value for services which are
not performed, including demand for union negotiation fees
(Feather-bedding)
Ask for or accept negotiation or attorneys fees from
employers as part of settlement of any issue in collective
bargaining or any other dispute
Violation of a CBA
Criminal Liability for ULPs
Only officers or agents of corporations, associations or
partnerships who actually participated in, authorized or
ratified ULPs to be held criminally liable
On the part of the Union, its officers, members of governing
boards, representatives or agents
Totality of Conduct Doctrine
Expressions of opinion by an employer, though innocent in
themselves, may be constitutive of ULP because of the
circumstances under which they are uttered, the history of
the employers labor relations or anti-union bias or because
of their connection with an established collateral plan of
coercion or interference.
Union Security Clause

LABOR II: CASES AND POWERPOINT PRESENTATION

Stipulation in the CBA where management recognizes

membership of employees in the union which negotiated
said agreement should be maintained or continued as a
condition of employment or retention of employment
Purpose is to safeguard and ensure continued existence of
the union

Union Security Clause, Types

Closed shop
Maintenance of membership agreement
Union shop agreement
Modified union shop
Exclusive Bargaining Agreement
Bargaining for members only agreement
Agency shop agreement
Preferential hiring agreement

P a g e | 78

Execution of written contract embodying terms

Negotiation of issues arising out of interpretation or
application of agreement
Negotiation of terms of new contract, or proposed
modifications.
System of collective bargaining consists of:
o Negotiation of contracts (legislative phase)
o Administration of contract (executive phase)
o Interpretation or application (judicial phase)
Collective Bargaining, Process (Article 256, 257, Labor Code)

Legal Principles Pertinent to Union Security Clause

Employer must still afford employee due process
Collective bargaining and administration of agreement
Collective Bargaining
A democratic framework to stabilize Er-Ee relations, to
create a climate of sound and stable industrial peace
A mutual responsibility & legal obligation of the employer
and the union
Collective bargaining denotes negotiations looking forward
to a collective agreement, however, it is a continuous
process.
Collective Bargaining, Process
Negotiation of wages, hours & terms, conditions of
employment

Collective Bargaining Agreement

A contract
executed upon request of either the employer or the
exclusive bargaining representatives
Incorporating all agreements reached during negotiations
o With respect to wages, hours of work and other
terms and conditions of employment
o Including proposals for adjusting any grievance or
questions under such agreement
Azucena: It is more than a contract; it is a generalized
code to govern a myriad cases which the draftsmen cannot
wholly anticipate. It covers the whole employment

LABOR II: CASES AND POWERPOINT PRESENTATION

relationship and prescribes the rights and duties of the
parties. It is a system of industrial self-government with
the grievance machinery at the very heart of the system.
Collective Bargaining, Parties

Collective Bargaining, Parties

Bargaining Representative
o Refers to the Legitimate Labor Organization
selected or designated by the employes. Does not
refer to its officers.
o How selected is discussed under Articles 261-265 of
Labor Code
Selection or Designation of Exclusive Bargaining Agent
Manifestation of workers participatory right
PAL vs. NLRC (GR No. 85985, Aug. 1993) The CBA may not
be interpreted as cession of employees right to participate
in the deliberation of matters which may affect their rights
and the formulation of policies relative thereto.
PAL v NLRC (1993)

FACTS:

P a g e | 79

PAL completely revised its 1966 Code of Discipline on

March 15, 1985. The code was circulated among employees and
was immediately implemented. Some employees were forthwith
subjected to the disciplinary measures embodied therein. PALEA
filed a complaint before NLRC for unfair labor practice. They
contend that PAL arbitrarily implemented the code of discipline
without notice and prior discussion with the Union by the
management. They alleged that the code was circulated only in
limited numbers, that it was arbitrary and prejudicial to the rights of
the employees
ISSUE:
Whether or not the formulation of a code of discipline
among employees is a shared responsibility of employer and
the employees.
RULING:
Yes. The court ruled against petitioner. Employees must
take part in the formulation of the code of discipline. Industrial
peace cannot be achieved if employees are denied their just
participation in the discussion of matters affecting their rights.
When PAL revised the code in 1985, RA 6715 - which
included in the state policy to ensure participation of workers in
decision and policy-making processes affecting their right, duties
and welfare - was yet to be enacted in 1989. However, in
the absence of the provision of law, exercise of management
prerogatives was never considered boundless.
The provisions of the code clearly have repercussions on the
employees right to security of tenure. Its implementation may
result in the deprivation of an employees means of livelihood which
is a property right. The court must uphold the constitutional
requirements for the protection of labor and promotion of social
justice. When there is doubt, favor the worker.PAL posits that under
the 1989-1991 CBA, PALEA in effect recognized PALs exclusive right
to make and enforce company rules and regulations to carry out the

LABOR II: CASES AND POWERPOINT PRESENTATION

functions of management without having to discuss it with PALEA.
But the court rules that such provision must not be interpreted as
cession of employees rights to participate in the deliberation of
matters which may affect their rights and the formulation of policies
relative thereof. Whatever disciplinary measures are adopted, it
cannot be properly implemented in the absence of full cooperation
of employees. Such cooperation cannot be attained if employees
are restive on account, of their being left out in the determination
of cardinal and fundamental matters affecting their employment.

May be exercised by a Labor-Management Council, aside

from or instead of a union (dealing with the employer vs.
collective bargaining)
Does not preclude the exercise of an individual employees
right to raise his own grievance.

Collective Bargaining Unit

That group of jobs and jobholders represented by the
recognized or certified union when it bargains with the
employer.
May comprise all of the supervisors or, separately, all the
rank-and-file population of the company.
The law favors having only one grouping per category
(following the united-we-stand, divided we fall logic), but
does not prohibit sub-groups that are appropriate.
CBU, Under DO 40-03
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.
What is Appropriateness?

P a g e | 80
BLRs primary function, considering all legally relevant
factors.
Bargaining Unit may be determined following the four
recognized modes:
1. Substantial Mutual Interests principle or community or
mutuality of interests rule
2. Will of the Employees (Globe Doctrine)
3. Collective Bargaining History
4. Employment Status

Substantial Mutual Interests Rule

Employees sought to be represented must have substantial
mutual interests in terms of employment and working
conditions
Characterized by similarity of employment status, same
duties and responsibilities and substantially similar
compensation and working conditions.
Substantial Mutual Interests Rule
There must be a logical basis for the formation of a
bargaining unit.
Adherence to the adage Strength in Numbers
Geographical location can be completely disregarded if
communal or mutual interests of the employees are not
sacrificed.
However, if employers in two plants are clearly distinct,
each group of employees in the plants are treated as
separate units (Diatagon vs. Ople)
DIATAGON LABOR FEDERATION LOCAL 110 OF THE ULGWP vs.
HON. BLAS F. OPLE, Secretary of Labor, CARMELO C. NORIEL, et. al
FACTS:
The Diatagon Labor Federation Local 110 of ULGWP (United
Lumber and General Workers of the Philippines) had a CBA with the
Lianga Bay logging Co., Inc. which was due to expire. Before the

LABOR II: CASES AND POWERPOINT PRESENTATION

expiration of that CBA, a rival union, the Mindanao Association of
Trade Unions, filed with the BLR a petition for the holding of a
certification election at Lianga Bay Logging Co., Inc. Before that
petition could be acted upon, the Diatagon Labor Federation was
able to negotiate on March 17, 1975 with Georgia Pacific
International Corporation a CBA for a term of three years expiring
on March 31, 1978 (p. 355, Rollo). That CBA was certified by the
Bureau of Labor Relations on July 10, 1975.
At this juncture, it should be stressed that the said CBA
included 236 employees working at the veneer plant and electrical
department of Georgia Pacific International Corporation in Lianga.
Those 236 employees were formerly employees of Lianga Bay
Logging Co., Inc. After July, 1974, they were transferred to Georgia
Pacific International Corporation and became employees of the
latter By reason of that transfer, the employees of Lianga Bay
Logging Co., lnc. were reduced to 653 (p. 87, Rollo). Georgia Pacific
International Corporation has around 400 employees. The Diatagon
Labor Federation claims to have 328 members among the
employees of Georgia Pacific International Corporation.
It is the contention of the Mindanao Association of Trade
Unions that the said CBA was negotiated between Georgia Pacific
International Corporation and the Diatagon Labor Federation in
order to frustrate the petition for certification election at Lianga Bay
Logging Co., Inc. which, as above stated, was filed by the Mindanao
Association of Trade Unions on February 3,1975.
Pursuant to the order of the Med-Arbiter, a certification
election was held in the premises of Lianga Bay Logging Co., Inc. at
Diatagon on July 20, 1975. The Diatagon Labor Federation won the
election. The Mindanao Association of Trade Unions wanted the
aforementioned 236 employees of Georgia Pacific International
Corporation to take part in the election because they were using the
pay envelopes and Identification cards of Lianga Bay Logging Co.,
Inc. but they were not allowed to vote because they were not
included in the payrolls of Lianga Logging Co., Inc.

P a g e | 81

ISSUE:

Whether or not two companies should be regarded as a

single collective bargaining unit.
RULING:
We hold that the director of Labor Relations acted with
grave abuse of discretion in treating the two companies as a single
bargaining unit. That ruling is arbitrary and untenable because the
two companies are indubitably distinct entities with separate
juridical personalities.
The fact that their businesses are related and that the 236
employees of Georgia Pacific International Corporation were
originally employees of Lianga Bay Logging Co., Inc. is not a
justification for disregarding their separate personalities. Hence, the
236 employees, who are now attached to Georgia Pacific
International Corporation, should not be allowed to vote in the
certification election at the Lianga Bay Logging Co., Inc. They should
vote at a separate certification election to determine the collective
bargaining representative of the employees of Georgia Pacific
International Corporation.
Cases, Substantial Mutual Interests
SMC Employees Union vs. Confesor, (GR No. 111262, Sep.
1996)
SAN MIGUEL CORP EPLOYEES UNION-PTGWO vs. CONFESOR
FACTS:
On June 28, 1990, petitioner-union San Miguel Corporation
Employees Union PTGWO entered into a CBA with private
respondent San Miguel Corporation (SMC) to take effect upon the
expiration of the previous CBA or on June 30, 1989.
Meanwhile, effective October 1, 1991, Magnolia and Feeds
and Livestock Division were spun-off and become two separate and
distinct corporations: Magnolia Corporation (Magnolia) and San
Miguel Foods, Inc. (SMFI). Notwithstanding the spin-offs, the CBA

LABOR II: CASES AND POWERPOINT PRESENTATION

remained in force and effect.
After June 30, 1992, the CBA was renegotiated in
accordance with the terms of the CBA and Article 253-A of the Labor
Code. Negotiations started sometime in July, 1992 with the two
parties submitting their respective proposals and counterproposals.
During the negotiations, the petitioner-union insisted that
the bargaining unit of SMC should still include the employees of the
spun-off corporations: Magnolia and SMFI; and that the
renegotiated terms of the CBA shall be effective only for the
remaining period of two years or until June 30, 1994.
SMC, on the other hand, contended that the
members/employees who had moved to Magnolia and SMFI,
automatically ceased to be part of the bargaining unit at the SMC.
Furthermore, the CBA should be effective for three years in
accordance with Art. 253-A of the Labor Code.
Unable to agree on these issues with respect to the
bargaining unit and duration of the CBA, petitioner-union declared a
deadlock on September 29, 1990.
Secretarys decision: the CBA shall be effective for the
period of 3 years from June 30, 1992; and that such CBA shall cover
only the employees of SMC and not of Magnolia and SMFI.
ISSUES:
Whether or not the bargaining unit of SMC includes also
the employees of the Magnolia and SMFI.
RULING:
Undeniably, the transformation of the companies was a
management prerogative and business judgment which the courts
cannot look into unless it is contrary to law, public policy or morals.
Neither can we impute any bad faith on the part of SMC so as to
justify the application of the doctrine of piercing the corporate
veil. Ever mindful of the employees interests, management has
assured the concerned employees that they will be absorbed by the
new corporations without loss of tenure and retaining their present
pay and benefits according to the existing CBAs. They were advised

P a g e | 82

that upon the expiration of the CBAs, new agreements will be

negotiated between the management of the new corporations and
the bargaining representatives of the employees concerned.
Indubitably, therefore, Magnolia and SMFI became distinct
entities with separate juridical personalities. Thus, they can not
belong to a single bargaining unit.
Moreover, in determining an appropriate bargaining unit,
the test of grouping is mutuality or commonality of interests. The
employees sought to be represented by the collective bargaining
agent must have substantial mutual interests in terms of
employment and working conditions as evinced by the type of work
they performed. Considering the spin-offs, the companies would
consequently have their respective and distinctive concerns in
terms of the nature of work, wages, hours of work and other
conditions of employment. Interests of employees in the different
companies perforce differ. The nature of their products and scales
of business may require different skills which must necessarily be
commensurate by different compensation packages. The different
companies may have different volumes of work and different
working conditions. For such reason, the employees of the different
companies see the need to group themselves together and organize
themselves into distinctive and different groups. It would then be
best to have separate bargaining units for the different companies
where the employees can bargain separately according to their
needs and according to their own working conditions.

Philtranco Service Enterprises vs. BLR, (GR No. 85343, Jun.

1989)

SMC vs. Laguesma (GR No. 100485, Sep. 1994)

SMC Supervisors and Exempt Employees Union vs.
Laguesma (GR No. 110399, Aug. 1997)

P a g e | 83

LABOR II: CASES AND POWERPOINT PRESENTATION

St. James School of Quezon City vs. Samahang Manggagawa

sa St. James School of Quezon City (GR No. 151326, Nov. 23,
2005)

Globe Doctrine
Globe Machine and Stamping Co., 3 N.L.R.B. 294 (1937),
A petitioning union claimed that there were three separate
bargaining units in the plant, whereas an intervening union
argued for treating the plant as one overall unit.
The US NLR Board found that either arrangement would
result in appropriate bargaining units, and concluded that
the question was so evenly balanced that the determining
factor should be the desire of the employees themselves.
Each of the three separate units was given the opportunity
to vote for the petitioning union (and representation as a
separate unit), the intervening union (and representation as
an overall unit), or no union.
The Globe procedure thereby allows employees "to
determine the scope of a unit by allowing them to cast a
vote for each of several potential units which the Board has
determined are appropriate."
In defining the appropriate bargaining unit, the
determining factor is the desire of the workers themselves.
Consequently, a certification election should be held
separately to choose which representative union will be
chosen by the workers.
Collective Bargaining History
Prior collective bargaining history and affinity of employees
should be considered in determining the appropriate
bargaining unit.
The existence of a prior collective bargaining history is
neither decisive nor conclusive in the determination of what
constitutes an appropriate bargaining unit (see SMC vs.

Laguesma, NAFTU vs. Mainit Lumber Devt. Company

Workers Union)
CB History vs. Mutuality of Interest
NAFTU vs. Mainit SC applied mutuality of interest among
workers in sawmill division and logging division, despite the
history of divisions being treated as separate units and
geographical distance (see also SMC vs. Laguesma)
Employment Status
Casual employees and those employed on day-to-day basis
must be considered separate because there is no
mutuality of interest (Philippine Land-Air-Sea Labor Union
vs. CIR, GR No. L-14656, Nov. 1960)
Confidential employees cannot be allowed to be included in
rank-and-file bargaining units
Belyca Corporation vs. Ferrer-Calleja (GR No. 77395, Nov.
1988)
Selection of Bargaining Representative
Certification Election
Consent Election
Voluntary Recognition
Certification Election
Process of determining by secret ballot the sole and
exclusive bargaining agent of the employees in an
appropriate bargaining unit, for purposes of collective
bargaining.
No longer necessary under the following circumstances
o Voluntary recognition of the employer
o Employees designate the union as the bargaining
representative

P a g e | 84

LABOR II: CASES AND POWERPOINT PRESENTATION

Certification Election, Requisites
Organized establishments
o Petition questioning the majority status of the
incumbent bargaining agent is filed with the DOLE
during the 60-day freedom period
o Verification of Petition necessary
o Support of at least 25% of all employees in
bargaining unit
In unorganized establishments, certification election shall
be automatically conducted upon the filing of a petition
by a legitimate labor organization

Before the filing of a petition for certification

election, the duly recognized or certified union has
commenced negotiations with the employer within
the one-year period from the date of a valid
certification, consent or run-off election or
voluntary recognition.
A bargaining deadlock to which an incumbent or
certified bargaining agent is a party had been
submitted to conciliation or arbitration or become
the subject of a valid notice of strike or lockout.

Cases, Bargaining Deadlock Rule

Kaisahan ng Manggagawang Pilipino (Kampil-Katipunan) vs.
Trajano (GR No. 75810, Sept. 1991)
Capitol Medical Center Alliance of Concerned EmployeesUSFW vs. Laguesma (GR No. 118915, Feb. 1997)

Party Filing Certification Election

Legitimate labor organization, or
Employer, when requested by a labor organization to
bargain and status of organization is in doubt.
Note: Art. 264-A Employer is a bystander in petitions of
certification election. Employers participation limited to:
o Being notified or informed of petitions of such
nature
o Submitting list of employees to Med-Arbiter during
pre-election conference

Contract Bar Rule

The 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.

Petition for Certification Election

May be filed at any time in the absence of a CBA, except:
o Certification year-bar rule
o Bargaining deadlock bar rule
o Contract bar rule
Certification year-bar rule A certification election may not
be filed within one year from the date of a valid
certification, consent or run-off election, or one year from
the date of voluntary recognition.
Bargaining deadlock-bar rule.

Exceptions
60-day Freedom Period
CBA is not registered with the BLR
CBA contains provisions lower than statutory standards
Falsified, fraudulent or misrepresented documents
Incomplete CBA
Collective bargaining and negotiations entered into prior to
the 60-day freedom period
Internal strife in the union resulting in an industrial dispute
which does not foster industrial peace.

LABOR II: CASES AND POWERPOINT PRESENTATION

Petition for Certification Election, Other Grounds for Dismissal
Petitioner is not listed in DOLEs registry of legitimate labor
organizations, or whose registration is revoke or cancelled
with finality
Petition filed outside of freedom period, provided that the
60 day period based on the original CBA shall not be
affected by any amendment, extension or renewal of the
CBA
Failure to submit 25% support requirement for filing of
petition
Consent Election
Voluntarily agreed upon by the parties with or without the
intervention of the DOLE
Distinction, Certification Election vs. Consent Election
Certification Election to determine the sole and exclusive
bargaining agent of all the employees in an appropriate
bargaining unit for the purpose of collective bargaining;
Consent Election to determine the issue of majority
representation of all workers in the appropriate collective
bargaining unit mainly for the purpose of determining the
administrator of the CBA; not for the purpose of
determining the bargaining agent for purposes of collective
bargaining.
Voluntary Recognition
Process whereby the employer recognizes a labor
organization as the exclusive bargaining representative of
the employees in the appropriate bargaining unit after a
showing that the labor organization is supported by at least
a majority of the employees in the bargaining unit.
Available only in unorganized establishments.

P a g e | 85

FAQs
1. What is Certification Election?
Certification election is a process of determining
through secret ballot the sole and exclusive bargaining
agent (SEBA) of all the employees in an appropriate
bargaining unit for the purpose of collective bargaining.
2. Where does a union file a petition for certification election
(PCE)?
A PCE is filed at the Regional Office which issued the
certificate of petitioning unions certificate of
registration/certificate of creation of chartered local.
3. What are the requirements in filing a PCE?
Among the important requirements are the following:
a. A statement indicating any of the following:
That the bargaining unit is unorganized or that there is
no registered CBA covering the employees in the
bargaining unit;
If there exists a duly registered CBA, that the petition is
filed within the sixty-day freedom period of such
agreement;
If another union had been previously recognized
voluntarily or certified in a valid certification, consent or
run-off election, that the petition is filed outside the
one-year period from entry of voluntary recognition or
conduct of certification or run-off election and no
appeal is pending thereon.
b. In an organized establishment, the signature of at least
twenty-five (25%) percent of all employees in the
appropriate bargaining unit shall be attached to the
petition at the time of its filing (Section 4, Rule VIII, of
the Department Order No. 40-03).
4. What happens after receipt of the PCE?
The petition will be raffled to the Med-Arbiter for
preliminary conference to determine, among others,

P a g e | 86

LABOR II: CASES AND POWERPOINT PRESENTATION

5.

6.

7.
8.

9.
10.

11.

the bargaining unit to be represented, the contending

unions, and the possibility of consent election.
What happens upon approval of the conduct of certification
election by the Mediator-Arbiter?
The PCE will be endorsed to an election officer for the
conduct of pre-election conference wherein the date,
time and place of election will be identified, the list of
challenged and eligible voters will be made, as well as
the number and location of polling places.
May a PCE be denied?
Yes, a PCE may be denied if:
a. it was filed before or after the freedom period of a
registered CBA;
b. the petitioner union is not listed in the DOLE Registry of
legitimate labor organization; or
c. the legal personality of the petitioner-union has been
revoked or cancelled with finality.
Who will conduct the CE?
The DOLE Regional Office through the election officer
conducts the certification election.
How is the SEBA determined?
The union that garners majority of the valid votes cast
in a valid certification election shall be certified as the
SEBA.
May election protest be entertained?
Yes, but protest should have been first recorded in the
minutes of the election proceedings.
What happens if the petitioner union fails to garner the
majority of the valid votes cast?
There will be no SEBA, but another PCE may be filed one
year thereafter.
What are the requisites for certification election in
organized establishments?

12.

13.
14.

15.

Certification election in organized establishments

requires that:
a. a petition questioning the majority status of the
incumbent bargaining agent is filed before the DOLE
within the 60-day freedom period;
b. such petition is verified; and
c. the petition is supported by the written consent of at
least twenty-five percent (25%) of all employees in the
bargaining unit.
What is the requirement for certification election in
unorganized establishments?
Certification election in unorganized establishments
shall automatically be conducted upon the filing of a
petition for certification election by an independent
union or a federation in behalf of the chartered local or
the local/chapter itself.
May an employer file a PCE?
Yes, the employer may file a PCE if it is requested to
bargain collectively.
May an employer extend voluntary recognition to a
legitimate labor organization without filing a PCE?
Yes, management may voluntarily recognize a union if
there is no other union in the company and if other
requirements are complied with (Sec. 2, Rule 7 of D.O.
40-03).
What is the role of employer in certification election?
The employer shall not be considered a party to a
petition for certification election, whether it is filed by
an employer or a legitimate labor organization, and
shall have no right to oppose it. Its participation shall be
limited only to being notified or informed of petition for
certification election and submitting the certified list of
employees or where necessary, the payrolls (Employer
as Bystander Rule).

P a g e | 87

LABOR II: CASES AND POWERPOINT PRESENTATION

Collective Bargaining Agreement

A negotiated contract between a legitimate labor
organization and the employer concerning wages, hours of
work and all other terms and conditions of employment in a
bargaining unit
Deemed as the law between the parties during its lifetime
Provisions are construed liberally
Legal Principles Applicable to CBA
A proposal not embodied in the CBA is not part thereof
Minutes of CBA negotiation have no effect if not
incorporated in the CBA
Making a promise during the CBA negotiation is not
considered bad faith
Adamant stance resulting in impasse is not bad faith
No terms and conditions may be imposed by the DOLE or
any other agency which the law and the parties did not
intend to reflect in the CBA
Signing bonus is not demandable under the law
Allegations of bad faith are erased with the signing of the
CBA
Collective Bargaining, Kinds
Single Enterprise
o Between on certified labor union and one employer
Multi-Employer Bargaining
o Between and among several certified labor unions
and employers
o Conditions
Only LLOs that are the SEBA may participate
and negotiate

Only employers with counterpart LLOs

which are incumbent bargaining agents may
participate
Employers must consent to multi-enterprise
bargaining may participate

Duty to Bargain Collectively

Where there is yet no CBA:
o Compliance to Article 256, LC
o Er and union must MEET, CONVENE and CONFER for
collective bargaining purposes
o Requisites of collective bargaining must be
complied with
Er-Ee relationship
Majority status of bargaining union
Demand to negotiate
o Advantage where the negotiations have no
precedent CBA: Clean slate, unencumbered by
previous agreements
Where there exists a CBA
o Neither party shall terminate nor modify such
agreement during its lifetime.
o Parties may serve notice to terminate or modify
agreement during freedom period
o Parties to keep the status quo during freedom
period until new agreement is reached.
Requisites in Relation to CBA
Posting of CBA
o Posted in two conspicuous places in the work
premises, at least five days prior to ratification
o Mandatory requirement; non-compliance will result
in ineffectiveness of CBA (ATU vs. Trajano, 1988)

P a g e | 88

LABOR II: CASES AND POWERPOINT PRESENTATION

Employer responsible for posting (ALU vs. FerrerCalleja, May 1989)
Ratification by Majority of Employees in Bargaining Unit
Registration of CBA
o

Refusal to Negotiate
Ignoring all notices for negotiation and requests for
counter-proposals
Refusing to bargain anew on economic terms of the CBA,
using flimsy excuses such as questioning union
Not serving an answer
All the above are indications of bad faith
Employer who violates the duty to bargain collectively loses
its statutory right to negotiate or renegotiate terms and
conditions of the draft CBA; and may impose the adoption
of the proposals of the union as the CBA
Cases
o General Milling Corporation vs. CA,
o Kiok Loy vs. NLRC
o Divine Word University of Tacloban vs. SOLE
Lifetime of a CBA
Representation aspect 5 years, meaning no petition
questioning the majority status of the incumbent agent
shall be entertained by DOLE
Economic
and
non-economic
provisions
except
representation renegotiated not later than three years after
its execution
Retroactivity of CBA
New CBA concluded by negotiation
o The CBA or other provisions of such agreement
entered into within 6 months from expiration of

term shall retroact to the day immediately following

date of expiration
o If entered into beyond 6 months, parties shall agree
on effectivity
CBA concluded through arbitral award
o LMG Chemicals Corporation vs. Secretary of DOLE,
(GR No. 127422, April 2001)

Breaking the Deadlock

Conciliation and Mediation with NCMB, DOLE
Declaration of Strike or Lockout
Referral to conciliation or voluntary arbitration
Grievance and Voluntary Arbitration
Grievance
Any question by Er or union regarding
o interpretation or application of the CBA, or
o company personnel policies, or
o Any claim by either party that the other party is
violating the CBA or company personnel policies.
Complaint or dissatisfaction arising from the interpretation
or implementation of CBA and those arising from
interpretation or enforcement of personnel policies.
Grievance Machinery
Refers to mechanism for the adjustment and resolution of
grievances
arising
from
the
interpretation
or
implementation of a CBA and those arising from the
interpretation and enforcement of company personnel
policies.
Grievance Procedure

LABOR II: CASES AND POWERPOINT PRESENTATION

Internal rules of procedure established by the parties in

their CBA with voluntary arbitration as the terminal step.
Refers to the system of grievance settlement at the plant
level as provided in the CBA.
Consists of successive steps starting at complainant and his
immediate supervisor, up to the level of top union and
company officials
All grievances submitted to the grievance machinery that
are not settled in seven calendar days from submission shall
be referred to Voluntary Arbitration prescribed in the CBA
Voluntary Arbitrators shall be named and designated in
advance, or include a procedure for selection of VAs.
In case parties fail to select VA, NCMB shall designate

Voluntary Arbitration
Mode of settling labor-management disputes
Parties select a competent, trained and impartial third
person
Decision based on merits of the case
Decision is final and executory
Voluntary Arbitration vs. Court
Voluntary Arbitration
Proceedings may be Informal
Precedents set by other
arbitration not obligatory on VAs
Rules on evidence are not
imposed,
hence
arbitrator
determines what is admissible
Arbitrators are highly specialized

Courts of Law
Proceedings are Formal
Doctrine of Stare Decisis
Rules on evidence outline points
of admissibility of evidence
Judges considered as generalists

Arbitrable Disputes
Contract-negotiation disputes

P a g e | 89
o Terms and conditions of contracts
o Collective bargaining issues
o Known as arbitration of interest
Contract interpretation disputes
o Arises out of existing CBAs
o Known as arbitration of grievance or rights

Interplay of Jurisdiction, Labor Arbiters vs. Voluntary Arbitrators

Jurisdiction of LA Article 223
Jurisdiction of VA- Article 267, 268
Interpretation or implementation of CBA are disposed of by
LAs by referring the matter to the grievance machinery, of
which the terminal step is voluntary arbitration
Under Article 268, VAs may, upon voluntary agreement of
the parties hear and decide ALL other labor disputes
including ULP and bargaining deadlocks
Termination disputes may fall within the jurisdiction of VAs,
provided that the parties had agreed in unequivocal
language that the termination dispute would be referred to
the grievance machinery and voluntary arbitration.
Cases
San Jose vs. NLRC & Ocean Terminal Services (GR 121227,
Aug. 1998)
San Miguel Corporation vs. NLRC
Sanyo Philippines Workers Union vs. Canizares, GR No.
101619, July 1992
Voluntary Arbitrator
Any person accredited by NCMB as such, or
Any person named or designated in the CBA as such, or
One appointed by the NCMB in case either party refuses to
submit to voluntary arbitration

LABOR II: CASES AND POWERPOINT PRESENTATION

Note that VAs are not part of DOLE or any government

agency. His authority to render arbitral awards are vested
by law.

Enforcement of VAs Decision

Article 268-A: Upon motion of any interested party, the VA
may issue a writ of execution requiring the sheriff of the
NLRC or regular courts or public officials whom the parties
may designate in the submission agreement
Strikes, Lockouts and Picketing
Concerted Activities
People planning and acting together
One undertaken by two or more employees, or by one on
behalf of others.
Strikes
Temporary stoppage of work by the concerted action of the
employees as a result of an industrial or labor dispute.
Consists not only of concerted work stoppages but also
sitdowns, mass leaves, slowdowns, attempts to damage,
destroy or sabotage plant equipment or facilities and similar
activities.
Cessation of work by employee in an effort to get more
favorable terms for employment
Concerted refusal by employees to do any work for their
employer, or work at their customary rate of speed until the
object of strike is attained by employers concession
Characteristics of Strikes
Established relationship between strikers and persons
against whom the strike is called
Relationship must be of employer-employe

P a g e | 90
Existence of dispute between the parties and the utilization
by labor of the weapon of concerted refusal to work as a
means of persuading or coercing compliance to demands
Even though work cessation is by belligerent suspension,
Employment relation still continues
Work stoppage is temporary
Concerted action by employees
Striking group is a LLO, and in the case of bargaining
deadlock, the sole bargaining representative

Lockout
Temporary stoppage of work by reason of refusal of an
employer to furnish work as a result of an industrial or labor
dispute
An employers means of protecting his bargaining position
Employer must show that his act is primarily defensive, and
not an act of hostility to collective bargaining or of
discriminaiton.
Valid Lockouts
To forestall threatened acts of sabotage (Rizal Cement
Workers Union vs. Madrigal Co.)
In anticipation of a threatened strike where motivated by
economic considerations
In response to unprotected strike or walkout
In response to a whipsaw strike
Picketing
A right given to workers to peacefully march to and from
before an establishment involved in a labor dispute
accompanied by the carrying and display of signs, placards
and banners intended to inform the public about the
dispute.

P a g e | 91

LABOR II: CASES AND POWERPOINT PRESENTATION

Picketing Allowed by Law
Included in the constitutional guarantee
o to engage in concerted activities for purposes of
collective bargaining for their mutual benefit and
protection
o Freedom of speech principle
Can be performed by persons even in the absence of Er-Ee
relationship
Limitations
Right to peaceful picketing should be exercised with due
respect to the right of others; coercion, intimidation or acts
of violence are strictly prohibited
Picketers cannot rightfully prevent employees of another
company which is not their employer from entering or
leaving their rented premises (innocent bystander)
Kinds of Strikes
Extent
o General occur over a whole community, province,
state or country. An extended form of sympathetic
strike; many workers stop working to put pressure
on government or paralyze economic & social
systems
o Local or Particular applies only in a particular
enterprise or locality
Nature of the Act
o Sitdown Strike Possession, trespass and
prevention of access and operation
o Slowdown reduction of production output
o Partial or quickie strike intermittent,
unannounced work stoppage; used interchangeably
with wildcat strike
Employee Interest

Primary Strike declared by employees who have a

direct and immediate interest in the subject of the
dispute between them and the Er
o Secondary Strike Coercive measure adopted by
workers against an employer connected by product
or employment with alleged unfair labor conditions
or practices
o Sympathetic Strike striking employees have no
demands or grievances of their own, but strike to
directly or indirectly aid others without direct
relation to the advancement of the interest of the
strikers.
Economic Strike one intended to force wage and other
concessions from the employer, which he is not required by
law to grant.
Unfair Labor Practice Strike called against the ULP of the
employer, usually for the purpose of making him desist
from further committing such practices. Called for mutual
protection, and for the discontinuance of employer abuses.
o

Avoidance of Strikes
Parties must first exhaust measures or remedies that will
avoid the strike, akin to the doctrine of Exhaustion of
Administrative Remedies.
Only when non-disruptive alternatives have proved
unsuccessful may strikes be deemed justified.
Jumping the gun on the grievance procedure/voluntary
arbitration of a dispute will mean that the strike is
PREMATURE, thus illegal
Premature Strikes
Insurefco Paper Pulp Project Workers Union vs. Insular
Sugar Refinery Corporation, 95 Phil. 161
Almeda vs. CIR, 97 Phil. 306

LABOR II: CASES AND POWERPOINT PRESENTATION

National Labor Union vs. Phimco., 70 Phil 300

Until all the remedies and negotiations looking toward
the adjustment or settlement of labor disputes have been
exhausted, the law does not look with favor upon resort to
radical measures, the pernicious consequences of which
transcend the rights of the immediate parties. (Union of
the Philippine Education Employees (NLU) vs. PECO, L-4423,
March 31, 1952)

Avoidance of Strikes
Once an issue has been submitted for conciliation,
mediation or compromise, the employees cannot resort to a
strike.
Discussions during conciliation proceedings are confidential
and treated as privileged information
Parties can enter into compromise agreements to avoid a
strike, which compromise shall be immediately final and
executory.
Labor Code Provisions Protecting the Right to Strike
Art. 260 Not subject to labor injunction or restraining
order
Art. 254 No discrimination against striker in the exercise of
the right
Art. 270(a) Preservation of employment relationship
Art. 270(c) Prohibition on Strike-breakers
Strike-Breakers
Persons
who obstruct, impede or interfere
with any peaceful picketing by employees during any labor
controversy affecting wages, conditions of work or in the
exercise of their rights
Through force, violence, coercion, threats or intimidation

P a g e | 92

Strikes, Mandatory Requisites

First requisite: Valid and factual ground
(1) CBA Deadlock; and
(2) Unfair labor practice (ULP).
Second Requisite: Notice (of Strike or Lockout)
(1) CBA Deadlock - 30 days from intended date of strike
(2) Unfair labor practice (ULP) 15 days.
Third requisite: Notice to NCMB-DOLE at least 24 hours
priot to the taking of the strike or lockout vote (secret
ballot)
o Decision to conduct vote
o Date, time and place
Fourth Requisite: Strike or Lockout Vote
o Majority approval required
o Must be implemented even in cases of unionbusting
Fifth requisite: Strike/Lockout Vote Report
o Submitted at least seven days prior to
strike/lockout
o If report submitted during cooling off period, seven
day waiting period begins on the day following the
cooling off period
o If for union busting, cooling period may be
dispensed with
Sixth Requisite: Cooling Off Period
o Reckoned from filing of notice of strike/lockout
o 30 days for deadlock, 15 for ULP
o If strike is for union-busting, period is dispensed
with
Seventh requisite: Waiting period
o Seven days from submission of strike vote report
Nota Bene: Strike Rules

LABOR II: CASES AND POWERPOINT PRESENTATION

1. Failure to comply with requisites will render the strike or
lockout illegal.
2. A strike or lockout based on non-strikeable issues is illegal
3. A strike or lockout is illegal if the issues involved are already
subject of compulsory or voluntary arbitration or
conciliation or the steps in grievance machinery are not
exhausted.
4. A strike or lockout is illegal if unlawful means were
employed or prohibited acts or practices were committed
(e.g., Use of force, violence, threats, coercion, etc.;
Barricades, blockades and obstructions of ingress to
[entrance] or egress from [exit] the company premises).
5. A strike or lockout is illegal if the notice of strike or notice of
lockout is already converted into a preventive mediation
case.
6. A strike or lockout is illegal if staged in violation of the NoStrike, No-Lockout clause in the collective bargaining
agreement.
7. A strike or lockout is illegal if staged in violation of a
temporary restraining order or an injunction or assumption
or certification order.
8. A strike is illegal if staged by a minority union.
9. A strike or lockout is illegal if conducted for unlawful
purpose/s (e.g.: Strike to compel dismissal of employee or
to compel the employer to recognize the union or the socalled Union-Recognition Strike)
10. The local union and not the federation is liable to pay
damages in case of illegal strike.
Preventive Mediation
The NCMB has the authority to convert a notice of strike
filed by the union into a preventive mediation case if it finds
that the real issues raised therein are non-strikeable in
character.

P a g e | 93
NCMB has duty to exert all efforts at mediation and
conciliation to enable parties to settle the dispute amicably
and in line with the state policy of favoring voluntary modes
of settling labor disputes.
Once a notice of strike/lockout is converted into a
preventive mediation case, it will be dropped from the
docket of notices of strikes/lockouts.
Once dropped therefrom, a strike/lockout can no longer be
legally staged based on the same notice. The conversion has
the effect of dismissing the notice.

Invalid Grounds for Strike

1. Violation of collective bargaining agreements, except
those which are gross in character.
2. Inter-union or intra-union disputes. A strike declared more
on the ground of inter-union and intra-union conflict which
is a non-strikeable issue is patently illegal pursuant to the
provision of paragraph [b] of Article 263 (now 269) of the
Labor Code. (Filcon Manufacturing Corporation vs. Lakas
Manggagawa sa Filcon-Lakas Manggagawa Labor Center
[LMF-LMLC], G. R. No. 150166, July 26, 2004).
3. Issues already assumed by the DOLE Secretary or certified
by him to the NLRC for compulsory arbitration. Once the
Secretary of Labor and Employment assumes jurisdiction
over a labor dispute affecting national interest or certifies
the same to the NLRC for compulsory arbitration, the issues
involved in said labor dispute can no longer be invoked by
the union in staging a strike or by management in
conducting a lockout.
4. Issues already brought before grievance machinery or
voluntary arbitration. In a plethora of case, it was held that
a strike is illegal because of the failure to exhaust all the
steps in the grievance machinery/voluntary arbitration

P a g e | 94

LABOR II: CASES AND POWERPOINT PRESENTATION

provided for in the CBA. (Union of Filipro Employees, vs.
Nestle Philippines, Inc., G. R. No. 88710-13, Dec. 19, 1990).
Illegal Strikes
1. Those that are expressly prohibited by law
2. Does not comply with statutory requirements
3. Declared for an unlawful purpose
4. Employs unlawful means
5. In violation of an existing injunction
6. In violation of assumption or certification order
7. Violation of no-strike, no-lockout clause
8. Minority union calls strike
9. Strike by a non-registered union
10. Premature strike
Assumption of Jurisdiction
Occurs when labor dispute that caused or may cause strike
is in an industry indispensable to the national interest
DOLE Secretary assumes jurisdiction and
o May decide the case, or
o Certify the same to the NLRC for compulsory
arbitration
The power of assumption of jurisdiction over labor disputes
in these industries is in the nature of the POLICE POWER
measure
Effects of Assumption
Automatically enjoins intended or impending strike or
lockout
All striking or locked out employees shall return to work
immediately
o Note that striking employees are not considered to
have abandoned their employment, but only ceased
from their labor

Employer shall resume operations and admit all workers

under same conditions pre-strike
No Motion for Reconsideration will stay the assumption
order

Wages to be paid during strike

No work, no pay rule applied
Exceptions
o ULP strike
o Unconditional and voluntary offer to return to work
is refused by employer
o Employees are discriminated against despite a
RTWO
o Non-participating employees were locked out by
employer
o Reinstatement no longer possible
Prohibited Activities
Article 270 - Note prohibitions on:
o Labor Organizations
o Third Persons
o Employers
o Public Officials or Employees
o Picketers
Return to Work Order
Enjoins striking workers to RETURN TO WORK
Defiance of RTWO is considered an illegal act
Strike becomes illegal
Defiant strikers may be sanctioned with disciplinary
measures, e.g. dismissal or loss of employment status or
criminal prosecution
Improved Offer Balloting

LABOR II: CASES AND POWERPOINT PRESENTATION

NCMB shall conduct a referendum by secret ballot on or

before 30th day of the strike;
If majority of union members accept offer
o Striking workers shall return to work immediately
o Employer readmits striking workers upon signing of
agreement
Initiated when EMPLOYER makes an offer that is, in his
opinion, better than his previous stance in the labor dispute

Reduced Offer Balloting

NCMB shall conduct a referendum by secret ballot on or
before 30th day of the lockout;
If majority of board members, trustees or directors accept
offer
o Locked out workers shall return to work
immediately
o Employer readmits workers upon signing of
agreement
Initiated when STRIKERS make an offer that is, in their
opinion, more acceptable than their previous stance in the
labor dispute
Post Employment: Security of Tenure and Termination of
Employment
Security of Tenure
Defined: The constitutional right granted the employee
that the employer shall not terminate the services of an
employee except for JUST CAUSE, or when AUTHORIZED BY
LAW.
It extends to regular (rank and file, managerial) as well as
non-regular employment (probationary, seasonal, project)
Applies as protection from unwarranted and unconsented
demotion and transfer

P a g e | 95

Kinds and Forms of Employment

Article 286
o Regular
o Casual
o Project
o Seasonal
Other forms
o Fixed Period
o Probationary
Regular Employment
Employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade
of the employer
One year of service has been rendered, whether continuous
or broken, with respect to the activity in which he is
employed
Determining Regular Status
Nature of Work Test Whether or not there is reasonable
connection between the particular activity performed by
the employee in relation to the usual business or trade of
the employer
Period of Service Test Employees length of service is at
least one year, whether continuous or broken
Probationary Employee Test Whether or not the
employee is allowed to work after the lapse of the
probationary period.
Casual Employment
Employee has been engaged to perform activities which are
not necessary or desirable in the usual trade or business of
the employer

LABOR II: CASES AND POWERPOINT PRESENTATION

Once a casual employee has rendered at least one year of

service, his status becomes REGULAR
The purpose of this rule is to honor the constitutional
guarantee of security of tenure and right to selforganization

Project Employment
Employee has been engaged for a SPECIFIC project or
undertaking
the completion or termination of the project has been
determined at the time of engagement of the employee
REGULAR STATUS vested when
o Continuous re-hiring of project employees even
after the cessation of a project for the same tasks or
nature of tasks
o Tasks performed by project employee are vital,
necessary and indispensable to the usual business
or trade of the employer
Project Employees
Exodus International Construction Corporation, et al. v.
Guillermo Biscocho, et al., G.R. No. 166109, Feb. 2011:
o Two types of employees in the construction
industry:
Project employees or those employed in
connection with a particular construction
project or phase thereof and such
employment is coterminous with each
project or phase of the project to which
they are assigned.
Non-project employees or those employed
without reference to any particular
construction project or phase of a project;
when one project is completed, employees

P a g e | 96
are automatically transferred to the next
project awarded to employer. There was no
employment agreement given employees
which clearly spelled out the duration of
their employment and the specific work to
be performed and there is no proof that
they were made aware of these terms and
conditions of their employment at the time
of hiring.

Fixed Period Employment

Employment is for a pre-determined period established at
the time of engagement
Validity of Fixed Period Employment:
1. fixed period of employment was knowingly and
voluntarily agreed upon by the parties without any
force, duress, or improper pressure being brought to
bear upon the employee and absent any other
circumstances vitiating his consent; or
2. It satisfactorily appears that the employer and the
employee dealt with each other on more or less equal
terms with no moral dominance exercised by the
former or the latter. (Lynvil Fishing Enterprises, Inc. vs.
Andres G. Ariola, et al., G.R. No. 181974, Feb. 2012)
Probationary Employment
Section 6 of the Implementing Rules of Book VI, Rule VIII-A
of the Code specifically requires the employer to inform
the probationary employee of such reasonable standards
at the time of his engagement, not at any time later; else,
the latter shall be considered a regular employee.
The essence of a probationary period of employment
fundamentally lies in the purpose or objective of both the
employer and the employee during the period. While the

LABOR II: CASES AND POWERPOINT PRESENTATION

employer observes the fitness, propriety and efficiency of a

probationer to ascertain whether he is qualified for
permanent employment, the latter seeks to prove to the
former that he has the qualifications to meet the
reasonable standards for permanent employment. The
trial period or the length of time the probationary
employee remains on probation depends on the parties
agreement, but it shall not exceed six (6) months under
Article 281 of the Labor Code.
Cases
o Canadian Opportunities Unlimited, Inc. vs. Bart Q.
Dalangin, Jr., G.R. No. 172223, February 6, 2012.
o Armando Ailing vs. Jose B. Feliciano, Manuel F. San
Mateo III, et al., G.R. No. 185829. April 25, 2012.

Management Prerogatives
Our laws recognize and respect the exercise by
management of certain rights and prerogatives. For this
reason, courts often decline to interfere in legitimate
business decisions of employers. In fact, labor laws
discourage interference in employers judgment concerning
the conduct of their business. (Philippine Industrial Security
Agency Corporation vs. Aguinaldo, G. R. No. 149974, June
15, 2005; Mendoza vs. Rural Bank of Lucban, G.R. No.
155421, July 7, 2004).
An employer can regulate, generally without restraint,
according to its own discretion and judgment, every aspect
of its business. (Deles, Jr. vs. NLRC, G. R. No. 121348, March
9, 2000).
This privilege is inherent in the right of employers to control
and manage their enterprise effectively. (Mendoza vs. Rural
Bank of Lucban, G.R. No. 155421, 07 July 2004).
Extent of management prerogatives

P a g e | 97
regulate and control all aspects of employment in their
business organizations. Such aspects of employment include
hiring, work assignments, working methods, time, place
and manner of work, tools to be used, processes to be
followed, supervision of workers, working regulations,
transfer of employees, work supervision, lay-off of
workers and the discipline, dismissal and recall of workers.
(Philippine Airlines, Inc. vs. NLRC, G. R. No. 115785, Aug. 4,
2000).
Management retains the prerogative to change the
working hours of its employees. (Sime Darby Pilipinas, Inc.
vs. NLRC, G.R. No. 119205, 15 April 1998, 289 SCRA 86).
A transfer means a movement (1) from one position to
another of equivalent rank, level or salary, without a break
in the service; or (2) from one office to another within the
same business establishment. (Sentinel Security Agency, Inc.
vs. NLRC, G. R. No. 122468, Sept. 3, 1998).
Prerogative of management to transfer an employee from
one office to another within the business establishment
upheld, provided
1. There is no demotion in rank or diminution of salary,
benefits, and other privileges, and;
2. Action is not motivated by discrimination, made in bad
faith, or effected as a form of punishment or demotion
without sufficient cause. (Mendoza vs. Rural Bank of
Lucban, G. R. No. 155421, July 7, 2004; Benguet Electric
Cooperative vs. Fianza, G. R. No. 158606, March 9,
2004).

Transfer, tests
Must be exercised without grave abuse of discretion
Employer must be able to show that the transfer is not
unreasonable, inconvenient or prejudicial to the employee,
otherwise, the employees transfer is tantamount to

LABOR II: CASES AND POWERPOINT PRESENTATION

constructive dismissal. (The Philippine American Life and
General Insurance Co. vs. Gramaje, G. R. No. 156963, Nov.
11, 2004; Globe Telecom, Inc. vs. Florendo-Flores, G. R. No.
150092, Sept. 27, 2002).
Transfer
Basic elements of justice and fair play adhered to.
William Endeliseo Barroga vs. Data Center College of the
Philippines, et al., G.R. No. 174158, June 2011
o Constructive dismissal is quitting because continued
employment is rendered impossible, unreasonable
or unlikely, or because of a demotion in rank or a
diminution of pay. It exists when there is a clear act
of discrimination, insensibility or disdain by an
employer which becomes unbearable for the
employee to continue his employment.
o It is management prerogative for employers to
transfer employees on just and valid grounds such
as genuine business necessity, e.g. financial
constraints
No vested right in position
An employee has a right to security of tenure, but this does
not give her such a vested right in a position as would
deprive the employer of its prerogative to change employee
assignments or transfers where the employees service will
be most beneficial to the employers client.
Cases
o OSS Security & Allied Services, Inc., vs. NLRC, G. R.
No. 112752, Feb. 9, 2000
o Tan vs. NLRC, 299 SCRA 169, 180 [1998]
o Chu vs. NLRC, G. R. No. 106107, June 2, 1994

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