Labor Relations

defines the status,rights and duties and the institutional mechanisms that govern individual and
collective interaction of employers, employees or their representatives.

Labor Law; Labor Relations; Bargaining Unit

"Bargaining Unit" refers to a group of employees sharing mutual interests within a given
employer unit, comprised of all or less than all of the entire body of employees in the
employer unit or any specific occupational or geographical grouping within such employer
unit. [Section 1, Rule I, Book V, Rules to Implement the Labor Code, as amended
by Department Order No. 40-03, Series of 2003 (February 17, 2003)]

A unit to be appropriate must effect a grouping of employees who have substantial,

mutual interests in wages, hours, working conditions and other subjects of collective
bargaining. [Dunlop v. Secretary of Labor and Employment, G.R. No. 131248,
December 11, 1998]

In determining the proper collective bargaining unit and what unit would be appropriate
to be the collective bargaining agency, the Court, in the seminal case of Democratic
Labor Association v. Cebu Stevedoring Company, Inc., G.R. No. L-10321,
February 28, 1958, mentioned several factors that should be considered, to wit: (1)
will of employees (Globe Doctrine); (2) affinity and unity of employees' interest, such as
substantial similarity of work and duties, or similarity of compensation and working
conditions; (3) prior collective bargaining history; and (4) employment status, such as
temporary, seasonal and probationary employees.

Labor Law; Labor Relations; Procedure And Jurisdiction; Bureau Of

Labor Relations - Med Arbiters
Jurisdiction (original and appellate)

The Bureau of Labor Relations and the Labor Relations Divisions in the regional
offices of the Department of Labor, shall have original and exclusive authority
to act, at their own initiative or upon request of either or both parties, on all
inter-union and intra-union conflicts, and all disputes, grievances or problems
arising from or affecting labor-management relations in all workplaces,
whether agricultural or non-agricultural, except those arising from the
implementation or interpretation of collective bargaining agreements which
shall be the subject of grievance procedure and/or voluntary arbitration. The
Bureau shall have fifteen (15) working days to act on labor cases before it,
subject to extension by agreement of the parties. [Article 226, Labor Code
of the Philippines]

Section 226 of the Labor Code, clearly provides that the BLR and the Regional
Directors of DOLE have concurrent jurisdiction over inter-union and intra-
union disputes. Such disputes include the conduct or nullification of election
of union and workers’ association officers. There is, thus, no doubt as to the
BLR’s jurisdiction over the instant dispute involving member-unions of a
federation arising from disagreement over the provisions of the federation’s
constitution and by-laws. [Montano v. Verceles, G.R. No. 168583, July
26, 2010]

Original and exclusive jurisdiction

1. Inter-union conflicts;
2. Intra-union conflicts;
3. All disputes, grievances or problems arising from the implementation or
interpretation of collection bargaining agreements which shall be the subject of
grievance procedure and/or voluntary arbitration.

Concurrent jurisdiction

1. Application for registration of labor unions;

2. Petition for cancellation of union registration.

Appelate jurisdiction

1. Intra-union disputes from decisions of the Med-Arbiters;

2. Over all cases originating from the Regional Director involving:
o Union Registration;
o Cancellation of certificates of union registration; and
o Complaints for examination of union’s books of accounts. [J. Chan, Bar
Reviewer on Labor Law (2012)]

"Med-Arbiter" refers to an officer in the Regional Office or in the Bureau

authorized to hear and decide representation cases, inter/intra-union disputes
and other related labor relations disputes, except cancellation of union
registration cases. [Section 1 (ii), Rule I, Book V, Rules to Implement
the Labor Code, as amended by Department Order No. 40-03, Series
of 2003 (February 17, 2003)]
Labor Law; Labor Relations; Procedure And Jurisdiction; National Labor
Relations Commission (NLRC)
Jurisdiction

The NLRC exercise two kinds of jurisdiction:

1. Original
2. Exclusive appellate jurisdiction.

Original
1. Injunction in ordinary Labor disputes to enjoin or restrain any actual or threatened
commission of any or all prohibited or unlawful acts or to require the performance of
a particular act;
2. Injunction in strikes or lockouts under Article 264;
3. Labor disputes causing or likely to cause a strike or lockout in an industry
indispensable to it by the Secretary of Labor.

Appellate

1. All cases decided by the Labor Arbiters;

2. Contempt cases decided by the Labor Arbiters;
3. Cases decided by the DOLE Regional Directors or the duly authorized hearing officers
of the DOLE involving recovery of wages, simple money claims and other benefits
under Article 129. [J. Chan, Bar Reviewer on Labor Law (2012)]

It must be noted that the NLRC does not have original jurisdiction over cases enumerated
in paragraph a of Article 217 and that if a claim does not fall within the exclusive original
jurisdiction, the NLRC cannot have appellate jurisdiction thereon. [Pondoc v. NLRC, G.R.
No. 116347, October 3, 1996] The Supreme Court has ruled that perfection of an
appeal within the reglementary period is not only mandatory but also jurisdictional and
failure to do so renders the questioned decision final and executory, thus depriving the
appellate court of jurisdiction to alter the final judgment, much less to entertain the
appeal. [Asuncion v. NLRC, G.R. No. 109311, June 17, 1997]

The Commission also has rule making powers, it has been ruled in one case where
pursuant to the "no extension policy" of the National Labor Relations Commission,
aforesaid motion for extension of time was denied in its resolution dated November 15,
1985 and the appeal was dismissed for having been filed out of time. The Court held that,
it is an elementary rule in administrative law that administrative regulations and policies
enacted by administrative bodies to interpret the law which they are entrusted to enforce,
have the force of law, and are entitled to great respect. [Rizal Empire Insurance v.
NLRC, G.R. No. 73140, May 29, 1987]

Effect of NLRC reversal of Labor Arbiter’s order of reinstatement

If the order of reinstatement of the Labor Arbiter is reversed on appeal, 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. On the other hand, if the
employee has been reinstated during the appeal period and such reinstatement order is
reversed with finality, the employee is not required to reimburse whatever salary he
received for he is entitled to such, more so if he actually rendered services during the
period. [Garcia v. PAL, G.R. No. 164856, January 20, 2009]

The Labor Arbiter’s order of reinstatement was immediately executory. After receipt of
the Labor Arbiter’s decision ordering private respondents’ reinstatement, petitioner has
to either re-admit them to work under the same terms and conditions prevailing prior to
their dismissal, or to reinstate them in the payroll. Failing to exercise the options in the
alternative, petitioner must pay private respondents’ salaries which automatically
accrued from notice of the Labor Arbiter’s order of reinstatement until its ultimate
reversal of the NLRC. Since private respondent’s reinstatement pending appeal was
effective only until its reversal by the NLRC on April 28, 1999, they are no longer entitled
to salaries from May 1, 1999 to March 15, 2001, as ordered by the Labor Arbiter.
[Kimberly Clark v. Facundo, G.R. No. 144885, July 12, 2006]

To clarify, respondents are entitled to their accrued salaries only from the time petitioner
received a copy of Labor Arbiter Gan’s Decision declaring respondents’ termination illegal
and ordering their reinstatement up to the date of the NLRC Resolution overturning that
of the Labor Arbiter. This is because it is only during said period that respondents are
deemed to have been illegally dismissed and are entitled to reinstatement pursuant to
Labor Arbiter Gan’s Decision which was the one in effect at that time. Beyond that period,
the NLRC Resolution declaring that there was no illegal dismissal is already the one
prevailing. From such point, respondents’ salaries did not accrue not only because there
is no more illegal dismissal to speak of but also because respondents have not yet been
actually reinstated and have not rendered services to petitioner. [ISLRIZ Trading v.
Capada, G.R. No. 168501, January 31, 2011]

Remedies

Can the aggrieved party filed an appeal to the Court of Appeals? No, the rule is clear, it
specifically states that, [T]his Rule shall not apply to judgments or final orders issued
under the Labor Code of the Philippines. [Rule 43, Rules of Court]

The period or manner of appeal from the NLRC to the CA is governed by Rule 65. The
Court added, that ever since appeals from the NLRC to the Supreme Court were
eliminated, the legislative intendment was that the special civil action of certiorari was
and still is the proper vehicle for judicial review of decisions of the NLRC. The use of the
word "appeal" in relation thereto and in the instances we have noted could have been
a lapsus plumae because appeals by certiorari and the original action for certiorari are
both modes of judicial review addressed to the appellate courts. The important distinction
between them, however, and with which the Court is particularly concerned here is that
the special civil action ofcertiorari is within the concurrent original jurisdiction of this
Court and the Court of Appeals [St. Martin Funeral Home v. National Labor Relations
Commission, G.R. No. 130866, September 16, 1998]

Certified cases

When, in his opinion, there exists a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, the Secretary of Labor and
Employment may assume jurisdiction over the dispute and decide it or certify the same
to the Commission for
compulsory arbitration. Such assumption or certification shall have the effect of
automatically enjoining the intended or impending strike or lockout as specified in the
assumption or certification order. If one has already taken place at the time of
assumption or certification, all striking or locked out employees shall immediately return-
to-work and the employer shall immediately resume operations and readmit all workers
under the same terms and conditions prevailing before the strike or lockout. The
Secretary of Labor and Employment or the Commission may seek the assistance of law
enforcement agencies to ensure compliance. [Article 263 (g), Labor Code of the
Philippines]
The NLRC was thereby charged with the task of implementing a valid return-to-work
order of the Secretary of Labor. As the implementing body, its authority did not include
the power to amend the Secretary's order. Since the Secretary's July 18 order specifically
provided that the dismissed faculty members shall be readmitted under the same terms
and conditions prevailing prior to the present dispute, the NLRC should have directed the
actual reinstatement of the concerned faculty members. It therefore erred in granting
the alternative remedy of payroll reinstatement which, as it turned, only resulted in
confusion. The remedy of payroll reinstatement is nowhere to be found in the orders of
the Secretary of Labor and hence it should not have been imposed by the public
respondent NLRC. There is no showing that the facts called for this type of alternative
remedy. [University of Sto. Tomas v. NLRC, G.R. No. 89920, October 18, 1990]

Article 263(g) is both an extraordinary and a preemptive power to address an

extraordinary situation – a strike or lockout in an industry indispensable to the national
interest. This grant is not limited to the grounds cited in the notice of strike or lockout
that may have preceded the strike or lockout; nor is it limited to the incidents of the
strike or lockout that in the meanwhile may have taken place. As the term “assume
jurisdiction” connotes, the intent of the law is to give the Labor Secretary full authority
to resolve all matters within the dispute that gave rise to or which arose out of the strike
or lockout; it includes and extends to all questions and controversies arising from or
related to the dispute, including cases over which the labor arbiter has exclusive
jurisdiction. [Bagong Pagkakaisa ng Manggagawa v. Secretary, G.R. No. 167401,
July 5, 2010]

Labor Law; Labor Relations; Strikes And Picketing; Innocent Bystander

Rule
In Philippine Association of Free Labor Unions (PAFLU) v. Cloribel, [G.R. No. L-
25878, March 28, 1969], this Court, through Justice J.B.L. Reyes, stated the “innocent
bystander” rule as follows:

The right to picket as a means of communicating the facts of a labor dispute is a phase
of the freedom of speech guaranteed by the constitution. If peacefully carried out, it can
not be curtailed even in the absence of employer-employee relationship.

The right is, however, not an absolute one. While peaceful picketing is entitled to
protection as an exercise of free speech, we believe the courts are not without power
to confine or localize the sphere of communication or the demonstration to the parties to
the labor dispute, including those with related interest, and to insulate establishments or
persons with no industrial connection or having interest totally foreign to the context of
the dispute. Thus the right may be regulated at the instance of third parties or
“innocent bystanders” if it appears that the inevitable result of its exercise is to
create an impression that a labor dispute with which they have no connection
or interest exists between them and the picketing union or constitute an
invasion of their rights. (Emphasis added)

Thus, an “innocent bystander,” who seeks to enjoin a labor strike, must satisfy the court
that aside from the grounds specified in Rule 58 of the Rules of Court, it is entirely
different from, without any connection whatsoever to, either party to the dispute and,
therefore, its interests are totally foreign to the context thereof.[MSF Tire and Rubber,
Inc. vs. Court of Appeals and Philtread Tire Workers’ Union, G.R. No.
128632, August 5, 1999]

In PAFLU v. Cloribel, [G.R. No. L-25878, March 28, 1969], the Court held that
Wellington and Galang were entirely separate entities, different from, and without any
connection whatsoever to, the Metropolitan Bank and Trust Company, against whom the
strike was directed, other than the incidental fact that they are the bank’s landlord and
co-lessee housed in the same building, respectively.

In Liwayway Publications, Inc. v. Permanent Concrete Workers Union [G.R. No.

L-25003, October 23, 1981], the Court ruled that Liwayway was an “innocent
bystander” and thus entitled to enjoin the union’s strike because Liwayway’s only
connection with the employer company was the fact that both were situated in the same
premises.

Labor Law; Labor Relations; Procedure And Jurisdiction; Prescription Of

Actions
Offenses penalized under this Code and the rules and regulations issued
pursuant thereto shall prescribe in three (3) years.

All unfair labor practice arising from Book V shall be filed with the appropriate agency
within one (1) year from accrual of such unfair labor practice; otherwise, they shall be
forever barred. [Article 290, Labor Code of the Philippines]

All money claims arising from employer-employee relations accruing during the
effectivity of this Code shall be filed within three (3) years from the time the cause of
action accrued; otherwise they shall be forever barred. [Article 291, Labor Code of
the Philippines]

When one is arbitrarily and unjustly deprived of his job or means of livelihood, the
action instituted to contest the legality of one's dismissal from employment constitutes,
in essence, an action predicated "upon an injury to the rights of the plaintiff," as
contemplated under Art. 1146 of the New Civil Code, which must be brought within four
(4) years. [PLDT v. Pingol, G.R. No. 182622, September 8, 2010]

With regard to the prescriptive period for money claims, Article 291 of the Labor Code
states:

Article 291. Money Claims. – All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be filed within three (3) years
from the time the cause of action accrued; otherwise they shall be barred forever.
The pivotal question in resolving the issues is the date when the cause of action of
respondent accrued.

It is a settled jurisprudence that a cause of action has three (3) elements, to wit: (1) a
right in favor of the plaintiff by whatever means and under whatever law it arises or is
created; (2) an obligation on the part of the named defendant to respect or not to
violate such right; and (3) an act or omission on the part of such defendant violative of
the right of the plaintiff or constituting a breach of the obligation of the defendant to
the plaintiff. [“J” Marketing Corporation v. Taran, G.R. No. 163924, June 18,
2009]

Note that the running of the prescriptive period can be interrupted by a claim filed at
the proper judicial, quasi-judicial or extrajudicial demand on the employer or the
employer’s acknowledgement of its debt or obligation. [Rivera v. UNILAB, G.R. No.
155639, April 22, 1990]

However, the characterization of a statute into a procedural or substantive law becomes

irrelevant when the country of the forum has a "borrowing statute." Said statute has
the practical effect of treating the foreign statute of limitation as one of substance. A
"borrowing statute" directs the state of the forum to apply the foreign statute of
limitations to the pending claims based on a foreign law. While there are several kinds
of "borrowing statutes," one form provides that an action barred by the laws of the
place where it accrued, will not be enforced in the forum even though the local statute
has not run against it. Hence, the claims having been filed beyond the three years from
accrual of action, are barred by prescription. [Cadalin v. POEA, G.R. No. 1047776,
December 5, 1994]

Labor Law; Labor Relations; Procedure And Jurisdiction; DOLE

Secretary
The Secretary of Labor and Employment or his duly authorized representatives, including
labor regulation officers, shall have access to employer’s records and premises at any
time of the day or night whenever work is being undertaken therein, and the right to
copy therefrom, to question any employee and investigate any fact, condition or matter
which may be necessary to determine violations or which may aid in the enforcement of
this Code and of any labor law, wage order or rules and regulations issued pursuant
thereto.

Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and
in cases where the relationship of employer-employee still exists, the Secretary of Labor
and Employment or his duly authorized representatives shall have the power to issue
compliance orders to give effect to the labor standards provisions of this Code and other
labor legislation based on the
findings of labor employment and enforcement officers or industrial safety engineers
made in the course of inspection. The Secretary or his duly authorized representatives
shall issue writs of execution to the appropriate authority for the enforcement of their
orders, except in cases where the employer contests the findings of the labor employment
and enforcement officer and raises issues supported by documentary proofs which were
not considered in the course of inspection.
An order issued by the duly authorized representative of the Secretary of Labor and
Employment under this Article may be appealed to the latter. In case said order involves
a monetary award, an appeal by the employer may be perfected only upon the posting
of a cash or surety bond issued by a reputable bonding company duly accredited by the
Secretary of Labor and Employment in the amount equivalent to the monetary award in
the order appealed from.

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

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

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

The Secretary of Labor and Employment may, by appropriate regulations, require

employers to keep and maintain such employment records. [Article 128, Labor Code
of the Philippines]

Article 128 (b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the
contrary, and in cases where the relationship of employer-employee still exists, the
Secretary of Labor and Employment or his duly authorized representatives shall have the
power to issue compliance orders to give effect to the labor standards provisions of this
Code and other labor legislationbased on the findings of labor employment and
enforcement officers or industrial safety engineers made in the course of inspection. The
Secretary or his duly authorized representative shall issue writs of execution to the
appropriate authority for the enforcement of their orders, except in cases where the
employer contests the findings of the labor employment and enforcement officer and
raises issues supported by documentary proofs which were not considered in the course
of inspection. [People’s Broadcasting v. Secretary, G.R. No. 179652, May 8, 2009]

If a complaint is brought before the DOLE to give effect to the labor standards provisions
of the Labor Code or other labor legislation, and there is a finding by the DOLE that there
is an existing employer-employee relationship, the DOLE exercises jurisdiction to the
exclusion of the NLRC. If the DOLE finds that there is no employer-employee relationship,
the jurisdiction is properly with the NLRC. If a complaint is filed with the DOLE, and it is
accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor
Arbiter, under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has
original and exclusive jurisdiction over those cases involving wages, rates of pay, hours
of work, and other terms and conditions of employment, if accompanied by a claim for
reinstatement. If a complaint is filed with the NLRC, and there is still an existing
employer-employee relationship, the jurisdiction is properly with the DOLE. The findings
of the DOLE, however, may still be questioned through a petition for certiorari under Rule
65 of the Rules of Court. [People’s Broadcasting v. Secretary, G.R. No. 179652,
March 6, 2012]

The justification for the award to this group of employees who were not signatories to
the complaint is that the visitorial and enforcement powers given to the Secretary of
Labor is relevant to, and exercisable over establishments, not over the individual
members/employees, because what is sought to be achieved by its exercise is the
observance of, and/or compliance by, such firm/establishment with the labor standards
regulations. Necessarily, in case of an award resulting from a violation of labor legislation
by such establishment, the entire members/employees should benefit therefrom.
[Maternity Children’s Hospital v. Secretary of Labor, G.R. No. 78909, June 30,
1989]

Labor Law; Labor Relations; Procedure And Jurisdiction; DOLE Regional

Directors
Jurisdiction

Upon complaint of any interested party, the Regional Director of the

Department of Labor and Employment or any of the duly authorized hearing
officers of the Department is empowered, through summary proceeding and
after due notice, to hear and decide any matter involving the recovery of
wages and other monetary claims and benefits, including legal interest, owing
to an employee or person employed in domestic or household service or
househelper under this Code, arising from employer-employee relations:
Provided, That such complaint does not include a claim for reinstatement:
Provided further, That the aggregate money claims of each employee or
househelper does not exceed Five thousand pesos (P5,000.00). The Regional
Director or hearing officer shall decide or resolve the complaint within thirty
(30) calendar days from the date of the filing of the same. Any sum thus
recovered on behalf of any employee or househelper pursuant to this Article
shall be held in a special deposit account by, and shall be paid on order of, the
Secretary of Labor and Employment or the Regional Director directly to the
employee or househelper concerned. Any such sum not paid to the employee
or househelper because he
cannot be located after diligent and reasonable effort to locate him within a
period of three (3) years, shall be held as a special fund of the Department of
Labor and Employment to be used exclusively for the amelioration and benefit
of workers.

Any decision or resolution of the Regional Director or hearing officer pursuant

to this provision may be
appealed on the same grounds provided in Article 223 of this Code, within five
(5) calendar days from receipt of a copy of said decision or resolution, to the
National Labor Relations Commission which shall resolve the appeal within ten
(10) calendar days from the submission of the last pleading required or
allowed under its rules. [Article 129, Labor Code of the Philippines]

The following requisites must concur for the Regional Director to have
jurisdiction:

1. The claim is presented by an employee, or a person employed in domestic

or household service, or househelper;
2. The claim arises from employer-employee relationships;
3. The claimant does not seek reinstatement;
4. The aggregate money claim of each claimant does not exceed 5,000.
[Azucena, The Labor Code with Comments and Cases, Volume II-A
& B (2013)]

There is abundant jurisprudence to the effect that the requirements of due

process are satisfied when the parties are given an opportunity to submit
position papers. There is no denial of due process where a party is given an
opportunity to be heard and present his case. [Odin Security v. De la Serna,
G.R. No. 87439, February 21, 1990]
Labor Law; Labor Relations; Right To Peaceful Concerted Activities;
Injunctions
No temporary or permanent injunction or restraining order in any case involving or
growing out of labor disputes shall be issued by any court or other entity, except as
otherwise provided in Articles 218 and 264 of this Code. [Article 254, Labor Code of
the Philippines]

The preliminary injunction issued by respondent Court was not against the strike
declared by the Union or the picketing it was conducting, but against acts of violence
and intimidation which on their face were unjustified, not to say unlawful. Irrespective
of the question of jurisdiction, an order of the court prohibiting the commission of such
acts cannot conceivably be a ground on which to base a claim for damages. [Meralco
v. Yatco, G.R. No. L-19785, January 30, 1967]

Labor Law; Labor Relations; Right To Peaceful Concerted Activities;

Definitions
"Strike" means any temporary stoppage of work by the concerted action of employees as
a result of an industrial or labor dispute.

"Lockout" means any temporary refusal of an employer to furnish work as a result of an

industrial or labor dispute.

"Internal union dispute" includes all disputes or grievances arising from any violation of
or disagreement over any provision of the constitution and by laws of a union, including
any violation of the rights and conditions of union membership provided for in this Code.

"Strike-breaker" means any person who obstructs, impedes, or interferes with by force,
violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours
or conditions of work or in the exercise of the right of self-organization or collective
bargaining.

"Strike area" means the establishment, warehouses, depots, plants or offices, including
the sites or premises used as runaway shops, of the employer struck against, as well as
the immediate vicinity actually used by picketing strikers in moving to and fro before all
points of entrance to and exit from said establishment. [Article 212 (o-s), Labor Code
of the Philippines]

Labor Law; Labor Relations; Procedure And Jurisdiction; Prescription Of

Actions
Offenses penalized under this Code and the rules and regulations issued pursuant thereto
shall prescribe in three (3) years.

All unfair labor practice arising from Book V shall be filed with the appropriate agency
within one (1) year from accrual of such unfair labor practice; otherwise, they shall be
forever barred. [Article 290, Labor Code of the Philippines]

All money claims arising from employer-employee relations accruing during the effectivity
of this Code shall be filed within three (3) years from the time the cause of action accrued;
otherwise they shall be forever barred. [Article 291, Labor Code of the Philippines]

When one is arbitrarily and unjustly deprived of his job or means of livelihood, the action
instituted to contest the legality of one's dismissal from employment constitutes, in
essence, an action predicated "upon an injury to the rights of the plaintiff," as
contemplated under Art. 1146 of the New Civil Code, which must be brought within four
(4) years. [PLDT v. Pingol, G.R. No. 182622, September 8, 2010]

With regard to the prescriptive period for money claims, Article 291 of the Labor Code
states:

Article 291. Money Claims. – All money claims arising from employer-employee relations
accruing during the effectivity of this Code shall be filed within three (3) years from the
time the cause of action accrued; otherwise they shall be barred forever.

The pivotal question in resolving the issues is the date when the cause of action of
respondent accrued.

It is a settled jurisprudence that a cause of action has three (3) elements, to wit: (1) a
right in favor of the plaintiff by whatever means and under whatever law it arises or is
created; (2) an obligation on the part of the named defendant to respect or not to violate
such right; and (3) an act or omission on the part of such defendant violative of the right
of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff.
[“J” Marketing Corporation v. Taran, G.R. No. 163924, June 18, 2009]
Note that the running of the prescriptive period can be interrupted by a claim filed at the
proper judicial, quasi-judicial or extrajudicial demand on the employer or the employer’s
acknowledgement of its debt or obligation. [Rivera v. UNILAB, G.R. No. 155639, April
22, 1990]

However, the characterization of a statute into a procedural or substantive law becomes

irrelevant when the country of the forum has a "borrowing statute." Said statute has the
practical effect of treating the foreign statute of limitation as one of substance. A
"borrowing statute" directs the state of the forum to apply the foreign statute of
limitations to the pending claims based on a foreign law. While there are several kinds of
"borrowing statutes," one form provides that an action barred by the laws of the place
where it accrued, will not be enforced in the forum even though the local statute has not
run against it. Hence, the claims having been filed beyond the three years from accrual
of action, are barred by prescription. [Cadalin v. POEA, G.R. No. 104776, December
5, 1994]

Labor Law; Labor Relations; Right To Collective Bargaining

Collective bargaining which is defined as negotiations towards a collective agreement, is one of the
democratic frameworks under the New Labor Code, designed to stabilize the relation between labor
and management and to create a climate of sound and stable industrial peace. It is a mutual
responsibility of the employer and the Union and is characterized as a legal obligation. So much so
that Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer to
refuse "to meet and convene promptly and expeditiously in good faith for the purpose of negotiating
an agreement with respect to wages, hours of work, and all other terms and conditions of
employment including proposals for adjusting any grievance or question arising under such an
agreement and executing a contract incorporating such agreement, if requested by either party. [Loy
v. NLRC, G.R. No. L-54334, January 22, 1986]

Labor Law; Labor Relations; Right To Self-Organization

The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare. [Article II, Sec. 18, 1987 Constitution]

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. [Article III, Sec. 8, 1987 Constitution]

The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities
for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining

and negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane conditions of
work, and a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law. [Article XIII,
Sec. 3, 1987 Constitution]

To foster the free and voluntary organization of a strong and united labor movement
[Art. 211, Labor Code]
Labor Law; Labor Relations; Right To Collective Bargaining; Unfair
Labor Practice (ULP); ULP Of Labor Organizations
It shall be unfair labor practice for a labor organization, its officers, agents or representatives:

1. To restrain or coerce employees in the exercise of their right to self-organization. However, a labor
organization shall have the right to prescribe its own rules with respect to the acquisition or retention of
membership;
2. To cause or attempt to cause an employer to discriminate against an employee, including discrimination
against an employee with respect to whom membership in such organization has been denied or to
terminate an employee on any ground other than the usual terms and conditions under which membership
or continuation of membership is made available to other members;
3. To violate the duty, or refuse to bargain collectively with the employer, provided it is the representative of
the employees;
4. To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other
things of value, in the nature of an exaction, for services which are not performed or not to be performed,
including the demand for fee for union negotiations;
5. To ask for or accept negotiation or attorney’s fees from employers as part of the settlement of any issue in
collective bargaining or any other dispute; or
6. To violate a collective bargaining agreement. [Article 259, Labor Code of the Philippines]

Discrimination
It is well settled that such unions are not entitled to arbitrarily exclude qualified applicants for membership,
and a closed-shop provision would not justify the employer in discharging, or a union in insisting upon the
discharge of, an employee whom the union thus refuses to admit to membership, without any reasonable
ground therefor. Needless to say, if said unions may be compelled to admit new members, who have the
requisite qualifications, with more reason may the law and the courts exercise the coercive power when the
employee involved is a long standing union member, who, owing to provocations of union officers, was
impelled to tender his resignation, which he forthwith withdrew or revoked. Surely, he may, at least, invoke
the rights of those who seek admission for the first time, and can not arbitrarily he denied readmission.
[Salunga v. CIR, G.R. No. L-22456, September 27, 1967]

A union member may not be expelled from her union, and consequently from her job, for personal or
impetuous reasons or for causes foreign to the closed-shop agreement and in a manner characterized by
arbitrariness and whimsicality. [Manila Mandarin Employees Union v. NLRC, G.R. No. 76989, September
29, 1987]
Restraint and Coercion
Complainants' suspension by the President of the Union, and their subsequent expulsion by its Board of
Directors, were due to the charges preferred by said complainants against the officers of the Union, which led
to the discovery of an alleged shortage in its Mutual Aid Fund, and the preference of the case to the City Fiscal
of Quezon City. Thus the Union was guilty of unfair labor practice. [M.D. Transit v. de Guzman, G.R. No. L-
18810, April 23, 1963]
Featherbedding
Featherbedding is a term given to employee practices which create or spread employment by unnecessarily
maintaining or increasing the number of employees used, or the amount of time consumed, to work on a
particular job [Azucena, The Labor Code with Comments and Cases, Volume II-A & B (2013)]
Refusal to Bargain
In one case where a labor organization demanded the employer to negotiate a collective bargaining agreement
before it was certified as the exclusive bargaining agent of the employees since a petition for certification was
still pending was held to be unfair labor practice for violating the employer’s right to bargain only with the
exclusive bargaining agent of the employees. [Lakas ng Manggagawang Makabayan v. Marcel Enterprises,
G.R. No. L-38258, November 19, 1982]

Labor Law; Labor Relations; Right To Peaceful Concerted Activities;

Injunctions; Requisites Of Labor Injunctions
As a rule such restraining orders or injunctions do not issue ex parte, but only after
compliance with the following requisites, to wit:

1. A hearing held "after due and personal notice thereof has been served, in such manner
as the Commission shall direct, to all known persons against whom relief is sought,
and also to the Chief Executive and other public officials of the province or city within
which the unlawful acts have been threatened or committed charged with the duty to
protect complainant's property;"
2. Reception at the hearing of "testimony of witnesses, with opportunity for cross-
examination, in support of the allegations of a complaint made under oath," as well
as "testimony in opposition thereto, if offered . . .;
3. A finding of fact by the Commission, to the effect:
o That prohibited or unlawful acts have been threatened and will be committed and
will be continued unless restrained, but no injunction or temporary restraining
order shall be issued on account of any threat, prohibited or unlawful act, except
against the person or persons, association or organization making the threat or
committing the prohibited or unlawful act or actually authorizing or ratifying the
same after actual knowledge thereof;
o That substantial and irreparable injury to complainant's property will follow;
o That as to each item of relief to be granted, greater injury will be inflicted upon
complainant by the denial of relief than will be inflicted upon defendants by the
granting of relief;
o That complainant has no adequate remedy at law; and
o That the public officers charged with the duty to protect complainant's property
are unable or unwilling to furnish adequate protection.

However, a temporary restraining order may be issued ex parte under the following
conditions:

1. The complainant "shall also allege that, unless a temporary restraining order shall be
issued without notice, a substantial and irreparable injury to complainant's property
will be unavoidable;
2. There is "testimony under oath, sufficient, if sustained, to justify the Commission in
issuing a temporary injunction upon hearing after notice;"
3. The "complainant shall first file an undertaking with adequate security in an amount
to be fixed by the Commission sufficient to recompense those enjoined for any loss,
expense or damage caused by the improvident or erroneous issuance of such order
or injunction, including all reasonable costs, together with a reasonable attorney's
fee, and expense of defense against the order or against the granting of any injunctive
relief sought in the same proceeding and subsequently denied by the Commission;"
and
4. The "temporary restraining order shall be effective for no longer than twenty (20)
days and shall become void at the expiration of said twenty (20) days. [Ilaw Buklod
ng Manggagawa v. NLRC, G.R. No. 91980, June 27, 1991]

abor Law; Labor Relations; Right To Collective Bargaining; Unfair Labor

Practice (ULP); ULP Of Employers
It shall be unlawful for an employer to commit any of the following unfair labor
practice:

1. To interfere with, restrain or coerce employees in the exercise of their right

to self-organization;
2. To require as a condition of employment that a person or an employee shall
not join a labor organization or shall withdraw from one to which he
belongs;
3. To contract out services or functions being performed by union members
when such will interfere with, restrain or coerce employees in the exercise
of their rights to self-organization;
4. To initiate, dominate, assist or otherwise interfere with the formation or
administration of any labor organization, including the giving of financial or
other support to it or its organizers or supporters;
5. To discriminate in regard to wages, hours of work and other terms and
conditions of employment in order to encourage or discourage membership
in any labor organization. Nothing in this Code or in any other law shall
stop the parties from requiring membership in a recognized collective
bargaining agent as a condition for employment, except those employees
who are already members of another union at the time of the signing of
the collective bargaining agreement. Employees of an appropriate
bargaining unit who are not members of the recognized collective
bargaining agent may be assessed a reasonable fee equivalent to the dues
and other fees paid by members of the recognized collective bargaining
agent, if such non-union members accept the benefits under the collective
bargaining agreement: Provided, that the individual authorization required
under Article 242, paragraph (o) of this Code shall not apply to the non-
members of the recognized collective bargaining agent;
6. To dismiss, discharge or otherwise prejudice or discriminate against an
employee for having given or being about to give testimony under this
Code;
7. To violate the duty to bargain collectively as prescribed by this Code;
8. To pay negotiation or attorney’s fees to the union or its officers or agents
as part of the settlement of any issue in collective bargaining or any other
dispute; or
9. To violate a collective bargaining agreement. [Art. 258, Labor Code of
the Philippines]

Interference
The test of whether an employer has interfered with and coerced employees
within the meaning of subsection (a) (1) is whether the employer has engaged
in conduct which it may reasonably be said tends to interfere with the free
exercise of employees' rights under section 3 of the Act, and it is not necessary
that there be direct evidence that any employee was in fact intimidated or
coerced by statements of threats of the employer if there is a reasonable
inference that anti-union conduct of the employer does have an adverse effect
on self-organization and collective bargaining. [Insular Life Assurance Co.,
Employees v. Insular Life Assurance Co., G.R. No. L-25291, January
30, 1971] For instance when the employer participates in the selection of the
union negotiators or forces the union to exclude certain negotiators qualify as
unfair labor practice. [Standard Charter Bank Employees v. Confessor,
G.R. No. 114974, June 16, 2004]

The company's act in dismissing the Petitioners, who then constituted the
remaining and entire officialdom of the Roche Products Labor Union, after the
union's president and vice-president had been earlier dismiss and when the
collective bargaining agreement in the company was about to be renegotiated,
was an unfair labor practice under Sec. 4(a) (1) of the Industrial Peace Act.
Their dismissal, under the circumstances, amounted to interference with, and
restraint or coercion of, the petitioners in the exercise of their right to engage
in concerted activities for their mutual aid and protection. [Dabuet v. Roche
Pharmaceutical, G.R. No. L-45402 April 30, 1987]

In one instance, the employer contented that there was no unfair labor
practice because there was no union yet to speak of. The Court ruled that, the
contention is without merit. Under Article 248(a) of the Labor Code of the
Philippines, "to interfere with, restrain, or coerce employees in their exercise
of the right to self-organization" is an unfair labor practice on the part of the
employer. Paragraph (d) of said Article also considers it an unfair labor
practice for an employer "to initiate, dominate, assist or otherwise interfere
with the formation or administration of any labor organization, including the
giving of financial or other support to it. [Judric Canning v. Inciong, G.R.
No. L-51494, August 19, 1982]

The history of the employer's past conduct and like considerations, coupled
with an intimate connection between the employer's action and the union
affiliations or activities of the particular employee or employees taken as a
whole raise a suspicion as to the motivation for the employer's action, the
failure of the employer to ascribe a valid reason therefor may justify an
inference that his unexplained conduct in respect of the particular employee
or employees was inspired by the latter's union membership or activities.
[Royal Undergarment v. CIR, G.R. No. L-39040, June 6, 1990] Hence,
usage of armed guards to prevent union members from entering the hacienda,
and dismissal of union officials as well as members is a clear interference.
Therefore, the employer is guilty of unfair labor practice. [Hacienda Fatima
v. National Federation of Sugar Cane Workers, G.R. No. 149440,
January 28, 2003]

In one case the where the employer reduced its capital stock from 765,000 to
267, 366 shares, necessitating a mass layoff of employees. The Court held
that the employer’s capital reduction efforts were, to begin with, a subterfuge,
a deception as it were, to camouflage the fact that it had been making profits,
and consequently, to justify the mass layoff in its employees ranks, especially
of union members. [Madrigal and Company v. Zamora, G.R. No. L-4823,
June 30, 1987]

However, in the absence of showing that the illegal dismissal was dictated by
anti-union motives, the same does not constitute an unfair labor practice. The
remedy of the employee is to file an action for reinstatement.
[AHS/Philippine Employees Union v. NLRC, G.R. No. 73721, March 30,
1987]
Yellow Dog Condition
It is one which exacts from workers as a condition of employment that they
shall not join or belong to a labor organization, or attempt to organize one
during their period of employment or that they shall withdraw thereform in
case they are already members of a labor organization. [J. Chan, Bar
Reviewer on Labor Law (2012)] Such contract is prohibited in the
Philippines under Article 258 (b). The typical yellow dog contract is an at-will
employment agreement which contains in addition to the usual provisions for
employment, the following provisions: (1) a representation by the employee
that he is not a member of a labor union; (2) a promise by the employee not
to join a labor union; (3) a promise by the employee that, upon joining a labor
union, he will quit his employment. [Azucena, The Labor Code with
Comments and Cases, Volume II-A & B (2013)]
Contracting Out of Services
An employer’s contracting out of work is itself an unfair labor practice where
motivated by a desire to prevent his employees from organizing and selecting
a collective bargaining representative, rid himself of union men, or escape his
statutory duty to bargain collectively with his employees’ bargaining.
[Azucena, The Labor Code with Comments and Cases, Volume II-A &
B (2013)] Hence, outsourcing per se is not unfair labor practice. [Bankard
v. NLRC, G.R. No. 171664, March 6, 2013] The reason being is that
contracting out is an exercise of the employer’s business judgment and its
inherent prerogatives as long as it is done in good faith. In one case where
the Secretary of Labor imposed a duty on the management to consult the
union before implementing a job contracting out was held to be invalid
because the company can do so in its best business judgment. Provided
however, that it was motivated by good faith and not done for the purpose of
circumventing the law. [Manila Electric Corporation v. Quisumbing, G.R.
No. 127598, January 27, 1999]

In a case, the Court was confronted with the question on whether an existing
CBA which assured employees of their jobs during its lifetime constitutes as a
bar to contracting out. The Court ruled in the affirmative, it held that the said
provision was an assurance of security of tenure during the lifetime of the
CBA. It added that, for what is involved is the integrity of the agreement
reached, the terms should be binding to both parties. [Sea Oil Worker’s
Union v. Shell Company of the Philippines., G.R. No. L-28607, May 31,
1971]

Resorting to a runaway shop is unfair labor practice. A runaway shop is defined

as an industrial plant moved by its owners from one location to another to
escape union labor regulations and laws, but the term is also used to describe
a plant removed to a new location in order to discriminate against employees
at the old plant because of their union activities. However, a complete
cessation of business in one of the plants and having informed the employees
of this plan prior to the closure does not constitute as unfair labor practice.
[Complex Electronics Employees Association v. NLRC, G.R. No.
121315, July 19, 1999]
Company Domination of Union
Domination of a labor union usually manifests in the following forms:

1. Initiation of the company union idea. This may further occur in three styles:
(i) outright information by the employer or his representatives; (ii)
employee formation on outright demand or influence by employer; and (iii)
managerially motivated formation by employees.
2. Financial support to the union. An employer commits unfair labor practice
if he defrays or pays the attorney’s fees to the attorney who drafted the
constitution and by-laws of the union.
3. Employer encouragement and assistance. Immediately granting the union
exclusive recognition as a bargaining agent without determining whether
the union represents the majority of the employees is an illegal form of
assistance amounting to unfair labor practice.
4. Supervisory assistance. This takes the form of soliciting membership,
permitting union activities during working time or coercing employees to
join the union by threats of dismissal or demotion. [Azucena]

Francisco Angco joined respondent union because So Han Suy, treasurer and,
seemingly, production manager of respondent company, had forced him to
sign therefore a blank form, presumably an application for admission in
respondent union, under pain of dismissal if he did not do so; that Nemesio
de Guia had also been asked by So Han Suy to sign a similar form; that So
Han Suy had urged Angco to go, on June 8, 1958 to the Ceresco Restaurant,
where Angco found, among others, So Han Suy, Ng Pong Guan, manager of
respondent company, its counsel Attys. Bernardo Chan and Eliseo P. Legaspi,
and Lope de la Cruz, president of respondent union, and the latter's officers
were elected; that Narciso Chan, president of respondent company, likewise
bade Jorge de Guia to attend said meeting at the Ceresco Restaurant; that no
member of respondent union had been dismissed by respondent company
despite its alleged retrenchment policy; and that, after the dismissal of the
aforementioned officers and members of the complainant union, respondent
company had engaged the services of several laborers. These facts, taken in
relation to those adverted to above, in connection with the first issue, are
sufficient to justify the conclusion of the lower court to the effect that
respondent union is company dominated. [Oceanic Air Products v. CIR,
G.R. No. L-18704, January 31, 1963]
Discrimination
Discrimination has been defined as the failure to treat all persons equally when
no reasonable distinction can be found between those favored and those not
favored. [Portuguez v. GSIS Family Bank, G.R. No. 169570, March 2,
2007]

For the purpose of determining whether or not a discharge is discriminatory,

it is necessary that the underlying reason for the discharged be established.
The fact that a lawful cause for discharge is available is not a defense where
the employee is actually discharged because of his union activities. [Cainta
Catholic School v. Cainta Catholic School Union, G.R. No. 151021, May
4, 2006]
Worthy to stress, however, is that constructive dismissal does not always take
the form of demotion in rank or diminution in pay. In several cases, the
Supreme Court has ruled that the act of a clear discrimination, insensibility or
disdain by an employer may become so unbearable on the part of the
employee so as to foreclose any choice on his part except to resign from such
employment. [Unicorn Safety Glass, Inc. v. Basarte, G.R. No. 154689,
November 25, 2004]

Before a claim for discrimination can prosper, it must be established that, first,
there is no reasonable distinction or classification that can be obtained
between persons belonging to the same class, and second, persons belonging
to the same class have not been treated alike. [Wise and Co., Inc. v. Wise
and Co., Inc. Employees Union-NATU, G.R. No. 87672, October 13,
1989]

The employer has the onus probandi to show that the employee’s separation
from employment is not motivated by discrimination, made in bad faith, or
effected as a form of punishment or demotion without sufficient cause.
[Mendoza v. Rural Bank of Lucban, G.R. No. 155421, July 7, 2004]
Hence, when the employer did not regularize long time employees due to their
union membership while new employees who were non-members were
immediately regularized was held to be an act of discrimination because of the
employer’s failure to prove otherwise. [Manila Railroad Co. v. Kapisanan
ng mga Manggagawa sa Manila Railroad Co., G.R. No. L-19728, July
30, 1964]

In another case, the increase of sales quota of the union president and vice-
president to 300% and 400% respectively, unlike other field representatives;
coupled with the transfer of the said officers to Cebu when the union is being
organized is unfair labor practice. [AHS/Philippines Employees Union v.
NLRC, G.R. No. 73721, March 30, 1987]

In another case, while retrenchment is a valid option for employers, but the
employees retrenched where officers and members of NAFLU, is also
discrimination which is unfair labor practice. [Bataan Shipyard and
Engineering v. NLRC, G.R. No. L-78604, May 9, 1988]

Union Security is a generic term which is applied to and comprehends closed

shop, union shop, maintenance of membership, or any other form of
agreement which imposes upon employees the obligation to acquire or retain
union membership as a condition affecting employment. In a sense it is
discrimination but such discrimination favors unionism, a valid kind of
discrimination. [BPI v. BPI Employees, G.R. No. 164301, August 10,
2010] Hence, the employer is not guilty of unfair labor practice if it complies
in good faith with the request of the certified union for the dismissal of
employees expelled from the union pursuant to the union security clause in
the collective bargaining agreement. [Soriano v. Atienza, G.R. No. 68619,
March 16, 1989]
Discrimination because of testimony
The complaint substantially alleged that A. Manaois and Jose Baldo,
employees of herein petitioner, were dismissed by said petitioner on June 9,
1957 and March 5, 1958, respectively, because of their membership with the
herein respondent Sangilo-Itogon Workers Union and for having testified
against the petitioner in a certification election case involving the employees
of the employer. Considering that Baldo's case was pending before the
grievance committee when he was asked by Gelladoga not to testify, and soon
after he had testified adversely to the petitioner his case was dropped by the
grievance committee, the conclusion is inescapable that the management of
the petitioner herein had much to do with the dropping of Baldo's case, and
because of the dropping of that case the employer never reinstated Baldo to
his work. This conclusion is bolstered further by the fact that the petitioner
herein had opposed the petition for certification election. [Itogon-SUyoc
Mines v. Baldo, G.R. No. L-17739, December 24, 1964]
Violation of Duty to Bargain
Duty to bargain collectively means the performance of the mutual obligation
to meet and confer promptly and expeditiously and in good faith, for the
purpose of negotiating an agreement with respect to wages, hours, and/or
terms and conditions of employment, and of executing a written contract
incorporating such agreement if requested by either party, or for the purpose
of adjusting any grievances or question arising under such agreement, but
such duty does not compel any party to agree to a proposal or to make
concession. [Elizalde Rope Workers v. CIR, G.R. No. L-16419, May 30,
1963]

Bargaining in bad faith

It is essential that the employer and employee should both act in good faith it
is in this principle of good faith that depends entirely the success and
effectiveness of maintaining industrial stability and peace. The signing of the
CBA is not the end of the collective bargaining and negotiation process. It
continues to the stage where the parties thereto are mandated to administer
and implement the agreed terms and conditions of the employment
relationship. [J. Chan, Bar Reviewer on Labor Law (2012)]

The crucial question whether a party has met his statutory duty to bargain in
good faith typically turns on the facts of the individual case. There is no per
se test in good faith in bargaining. [Azucena, The Labor Code with
Comments and Cases, Volume II-A & B (2013)]

With the execution of the CBA, bad faith bargaining can no longer be imputed
upon any of the parties thereto. All provisions in the CBA are supposed to have
been jointly and voluntarily incorporated therein by the parties. [Samahang
Manggagawa sa Top Form Manufacturing v. NLRC, G.R. No. 113856,
September 7, 1998]

Where an employer did not even bother to submit an answer to the union’s
proposal, there is an unmistakable evasion of the duty to bargain. [The
Bradman Co. v. CIR, G.R. No. L-23134, July 21, 1977]

Refusal to bargain

An employer is guilty of an unfair labor practice in refusing to bargain with the

representative of a majority of his employees. To bargain in good faith, an
employer must not only meet and confer with the union which represents his
employees, but also must recognize the union for the purpose of collective
bargaining. In addition, he must recognize the union as the bargaining
representative of all the employees in the appropriate bargaining unit, even if
they are not all members of the union. [Azucena, The Labor Code with
Comments and Cases, Volume II-A & B (2013)]

Individual bargaining

This occurs when an employer negotiates with individual members of the

union. To negotiate or attempt to negotiate with individual members rather
than the certified bargaining agent is unfair labor practice. [Insular Life
Assurance Co., Employees Association v. Insular Life, G.R. No. L-
25291, March 10, 1977]

Blue sky bargaining

Blue-Sky Bargaining is defined as “unrealistic and unreasonable demands in

negotiations by either or both labor and management, where neither concedes
anything and demands the impossible.” It actually is not collective bargaining
at all. [Harold S. Roberts, Robert’s Dictionary of Industrial Relations
(Revised Edition (1971)]

Surface bargaining

Surface bargaining is defined as “going through the motions of negotiating”

without any legal intent to reach an agreement. The resolution of surface
bargaining allegations never presents an easy issue. The determination of
whether a party has engaged in unlawful surface bargaining is usually a
difficult one because it involves, at bottom, a question of the intent of the
party in question, and usually such intent can only be inferred from the totality
of the challenged party’s conduct both at and away from the bargaining table.
[Standard Charter Bank v. Confessor, G.R. No. 114974, June 16, 2004]
Violation of the CBA
For a ULP case to be cognizable by the Labor Arbiter, and the NLRC to exercise
its appellate jurisdiction, the allegations in the complaint should show prima
facie the concurrence of two things, namely: (1) gross violation of the CBA;
AND (2) the violation pertains to the economic provisions of the CBA. [Silva
v. NLRC, G.R. No. 110226, June 19, 1997]

This pronouncement in Silva, however, should not be construed to apply to

violations of the CBA which can be considered as gross violations per se, such
as utter disregard of the very existence of the CBA itself, similar to what
happened in this case. When an employer proceeds to negotiate with a splinter
union despite the existence of its valid CBA with the duly certified and
exclusive bargaining agent, the former indubitably abandons its recognition of
the latter and terminates the entire CBA. [Employees Union of Bayer v.
Bayer Philippines, G.R. No. 162943, December 6, 2010]

In another case, when the employer refused to implement a negotiated wage

increase as embodied in the collective bargaining agreement, with the intent
that it be a separate increase from other benefits constitutes as unfair labor
practice. [Benguet Consolidated v. BCI Employees and Worker’s Union,
G.R. No. L-25471, March 27, 1968]
Labor Law; Labor Relations; Right To Collective Bargaining; Unfair
Labor Practice (ULP); Nature Of ULP
Unfair labor practice refers to acts that violate the workers’ right to organize, and are
defined in Articles 248 and 261 of the Labor Code. The prohibited acts relate to the
workers’ right to self-organization and to the observance of Collective Bargaining
Agreement without which relation the acts, no matter how unfair, are not deemed unfair
labor practices. [Galaxie Steel Workers Union v. NLRC, G.R. No. 165757, October
17, 2006]

As a condition precedent in order to for the charge of Unfair Labor Practice to prosper, it
must be proved that: (a) the injured party comes within the definition of employee, which
necessarily requires an employer-employee relationship; (b) the act charged as unfair
labor practice must fall under the prohibitions of Article 258 (for employers) and Article
259 (Labor Organization). [Azucena, The Labor Code with Comments and Cases,
Volume II-A & B (2013)] Hence, dismissal of an employee because of charges against
the manager is not connected with or arising union activities, the dismissal is not an
unfair labor practice. [Mariano v. Royal Interocean Lines, G.R. No. L-12429,
February 27, 1961]

Labor Dispute
Statutory definition:

"Labor dispute" includes any controversy or matter concerning terms and 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. [Article 212, Chapter II, Labor Code]

Not all disputes between an employer and employee is a labor dispute

In Nestle Philippines vs. NLRC (G.R. No. 85197, March 18, 1991), the respondent employees
availed of a car loan policy under which the company advances the purchase price of a car to be paid
back by the employee through monthly deductions from his salary. The company terminated the
services of respondent employees before the car loans became fully paid. Nestle questioned the
jurisdiction of the NLRC in granting the injunction prayed for by the terminated employees to suspend
the cancellation of their car loans and payments of the monthly amortizations thereon pending the
resolution of their complaints for illegal dismissal.

The Supreme Court held:

"The NLRC gravely abused its discretion and exceeded its jurisdiction by issuing the writ of injunction
to stop the company from enforcing the civil obligation of the [employees] under the car loan
agreements xxx The terms of the car loan agreements are not in issue in the labor case. The rights
and obligations of the parties under those contracts may be enforced by a separate civil action in the
regular courts, not in the NLRC."

The injunctive power of the NLRC can only be exercised with respect to a labor dispute. The demand
for payment under the car loan agreement was not a labor, but a civil, dispute. It involves debtor-
creditor relations, rather than employee-employer relations.

Labor Law; Labor Relations; Procedure And Jurisdiction; Grievance

Machinery And Voluntary Arbitration
Cases arising from the interpretation or implementation of collective bargaining
agreements and those arising from the interpretation or enforcement of company
personnel policies shall be disposed of by the Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitration as may be provided in said agreements
[Article 217 (c), Labor Code of the Philippines]

Subject matter of grievance

The parties to a Collective Bargaining Agreement shall include therein provisions that will
ensure the mutual observance of its terms and conditions. They shall establish a
machinery for the adjustment and resolution of grievances arising from the interpretation
or implementation of their Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies.
All grievances submitted to the grievance machinery which are not settled within seven
(7) calendar days from the date of its submission shall automatically be referred to
voluntary arbitration prescribed in the Collective Bargaining Agreement.

For this purpose, parties to a Collective Bargaining Agreement shall name and designate
in advance a
Voluntary Arbitrator or panel of Voluntary Arbitrators, or include in the agreement a
procedure for the selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators,
preferably from the listing of qualified Voluntary Arbitrators duly accredited by the Board.
In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators,
the Board shall designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as
may be necessary, pursuant to the selection procedure agreed upon in the Collective
Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator
or panel of Arbitrators has been selected by the parties as described above. [Article 260,
Labor Code of the Philippines]

Voluntary Arbitrator

The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive
jurisdiction to hear and decide all unresolved grievances arising from the interpretation
or implementation of the Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies referred to in the
immediately preceding article. Accordingly, violations of a Collective Bargaining
Agreement, except those which are gross in character, shall no longer be treated as unfair
labor practice and shall be resolved as grievances under the Collective Bargaining
Agreement. For purposes of this article, gross violations of Collective Bargaining
Agreement shall mean flagrant and/or malicious refusal to comply with the economic
provisions of such agreement.

The Commission, its Regional Offices and the Regional Directors of the Department of
Labor and Employment shall not entertain disputes, grievances or matters under the
exclusive and original jurisdiction of the Voluntary Arbitrator or panel of Voluntary
Arbitrators and shall immediately dispose and refer the same to the Grievance Machinery
or Voluntary Arbitration provided in the Collective Bargaining Agreement. [Article 261,
Labor Code of the Philippines]

Labor Law; Labor Relations; Procedure And Jurisdiction; National

Conciliation And Mediation Board (NCMB)
Bureau of Labor Relations, which shall continue to perform its present functions except
those to be absorbed by the National Mediation and Conciliation Board as provided under
Section 29 (c) hereof; [Section 2, Executive Order No. 251, July 25, 1987]

Nature of proceedings
The proceedings before a voluntary arbitrator are non-litigious in nature. They are not
governed by technical rules applicable to court or judicial proceedings, but they must, at
all times, comply with the requirements of due process. [Section 1, NCMB Procedural
Guidelines in the Conduct of Voluntary Arbitration Proceedings]

Given NCMB’s following functions, as enumerated in Section 22 of Executive Order No.

126 (the Reorganization Act of the Ministry of Labor and Employment), viz:

1. Formulate policies, programs, standards, procedures, manuals of operation and

guidelines pertaining to effective mediation and conciliation of labor disputes;
2. Perform preventive mediation and conciliation functions;
3. Coordinate and maintain linkages with other sectors or institutions, and other
government authorities concerned with matters relative to the prevention and
settlement of labor disputes;
4. Formulate policies, plans, programs, standards, procedures, manuals of operation and
guidelines pertaining to the promotion of cooperative and non-adversarial schemes,
grievance handling, voluntary arbitration and other voluntary modes of dispute
settlement;
5. Administer the voluntary arbitration program; maintain/update a list of voluntary
arbitrations; compile arbitration awards and decisions;
6. Provide counseling and preventive mediation assistance particularly in the
administration of collective agreements;
7. Monitor and exercise technical supervision over the Board programs being
implemented in the regional offices; and
8. Perform such other functions as may be provided by law or assigned by the Minister,

The NCMB cannot be considered a quasi-judicial agency. [Tabigue v. International

Copra, G.R. No. 183335, December 23, 2009]

Conciliation vs. Mediation

Philippine law do not embody any specific distinction between the two. In other
jurisdictions, however, in mediation, the Mediator facilitates a deliberation or discussion
of issues between the parties. While in conciliation, the Conciliator is given more power
and authority in that he may not only offer an opinion on the issues but may actually
make a binding opinion. [J. Chan, Bar Reviewer on Labor Law (2012)]

Preventive mediation

"Preventive Mediation Cases" refer to labor disputes which are the subject of a formal or
informal request for conciliation and mediation assistance sought by either or both parties
or upon the initiative of the Board. [Section 1 (mm), Rule I, Book V, Rules to
Implement the Labor Code, as amended by Department Order No. 40-03, Series
of 2003 (February 17, 2003)]
Labor Law; Labor Relations; Right To Peaceful Concerted Activities;
Injunctions; Innocent Bystander Rule
The Labor Code is emphatic against the use of violence, coercion, and intimidation during
a strike and to this end prohibits the obstruction of free passage to and from the
employer's premises for lawful purposes. A picketing labor union has no right to prevent
employees of another company from getting in and out of its rented premises, otherwise,
it will be held liable for damages for its acts against an innocent by-stander. [PhilComm
Employees Union v. Philippine Global Communications, G.R. No. 144315, July
17, 2006]

Labor Law; Labor Relations; Right To Peaceful Concerted Activities;

Illegal Strike; Waiver Of Illegality Of Strike
Admitting for the sake of argument that the strike was illegal for being premature, this
defense was waived by the company when it voluntarily agreed to reinstate the striking
workers. [Bisaya Land Transportation v. CIR, G.R. No. L-10114, November 26,
1957]

Labor Law; Labor Relations; Right To Peaceful Concerted Activities;

Illegal Strike; Liability Of Employer
There is a rule that "strikers may not collect their wages during the days they did not
go to work" because of the age-old rule governing the relation of labor and capital
epitomized in a "fair day's wage for a fair day's labor." [Manila Trading & Supply
Co. vs. Manila Trading Labor Association, G. R. No. L-5062, April 27, 1953] This
rule does not apply in this case for the simple reason that the thirty-eight laborers
herein concerned did not voluntarily strike but were practically locked out. They were
notified that on a certain date they would cease to work, and notwithstanding their
efforts to reach a compromise, the company adopted a stern attitude which left no
other alternative to them than to walk out. [Macleod and Co v. Progressive
Federation of Labor, G.R. No. L-7887, May 31, 1955]

The self-same considerations of the company's unfair labor practice and discriminatory
acts and anti-union activities that fully justify the award of backwages to the unlawfully
dismissed employees equally justify the granting of strike duration pay to petitioner
union's members who were left no other alternative by their employer's improper and
oppressive conduct but to declare a strike to render aid and protection to themselves
and their unlawfully dismiss companions. [Davao Free Worker’s Front v. CIR, G.R.
No. L-29356, October 31, 1974]

Labor Law; Labor Relations; Right To Peaceful Concerted Activities;

Illegal Strike; Liability Of Ordinary Workers
A union member who participated in committing illegal acts during a strike may also lose
his employment status.

Thus, when an employee participates in a barricade which bars people from entering and
leaving the employer’s premises, he has violated Art. 264. Coupled with substantial
evidence, the dismissal of such employee is valid. [Chua v. NLRC, G.R. No. 105775,
February 8, 1993]

Hence, where a union, through its officers, not only had knowledge of the acts of violence
committed by some of its strikers, but either participated or ratified the same, the strike
was held to be illegal and the dismissal of ALL active participants therein was justified.
[Phil Marine v. Compania Maritima, G.R. Nos. L-20662 and L-20663, March 19,
1968]

However, a worker merely participating in an illegal strike may not be terminated from
employment. It is only when he commits illegal acts during a strike that he may be
declared to have lost employment
status. [Santa Rosa Coca-Cola Plant Employees Union v. Coca-Cola Bottlers Phils,
Inc., G.R. Nos. 164302-03, January 24, 2007]

Labor Law; Labor Relations; Right To Peaceful Concerted Activities;

Illegal Strike; Liability Of Union Officers
Normally officers are not dismissable unless they participated in an illegal act or illegal
strike.

SC has held that the responsibility of union officers, as main players in an illegal strike,
is greater than that of the members and, therefore, limiting the penalty of dismissal only
for the former for participation in an illegal strike is in order. Hence, with respect to
respondents who are union officers, the validity of their termination by petitioners cannot
be questioned. Being fully aware that the proceedings before the Secretary of Labor were
still pending as in fact they filed a motion for reconsideration of the March 24, 2000 Order,
they cannot invoke good faith as a defense. [Solid Bank v. Gamier, G.R. No. 159460,
November 15, 2010]

Hence, in one case, the court held that, the officers of petitioner misinformed the
members and led them into staging an illegal strike. If the NLRC is to attain the objective
of the Labor Code to ensure a stable but dynamic and just industrial peace the removal
of undesirable labor leaders must be effected. [Continental Cement Corp Labor Union
v. Continental Cement, G.R. No. 51544, August 30, 1990]

A different conclusion would be called for, of course, if the existence of force while the
strike lasts is pervasive and widespread, consistently and deliberately resorted to as a
matter of policy. [Almira v. BF Goodrich, G.R. No. L-34974, July 25, 1974]

Labor Law; Labor Relations; Right To Peaceful Concerted Activities;

Illegal Strike
An illegal strike is one which:

1. is contrary to a specific prohibition of law, such as strike by employees performing

governmental functions; or
2. violates a specific requirement of law; or
3. is declared for an unlawful purpose, such as inducing the employer to commit an unfair labor
practice against nonunion employees; or
4. employs unlawful means in the pursuit of its objectives, such as a widespread terrorism of
nonstrikers; or
5. is declared in violation of an existing injunction; or
6. is contrary to an existing agreement, such as a no-strike clause or conclusive arbitration clause.

Any worker whose employment has been terminated as a consequence of any unlawful lockout shall
be entitled to reinstatement with full backwages. Any union officer who knowingly participates in an
illegal strike and any worker or union officer who knowingly participates in the commission of illegal
acts during a strike may be declared to have lost his employment status: Provided, That mere
participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his
employment, even if a replacement had been hired by the employer during such lawful strike. [Article
264, Labor Code of the Philippines]

The rule on vicarious liability of a union member is inapplicable and it is only when a striking worker
“knowingly participates in the commission of illegal act during a strike” that he will be penalized with
dismissal. [Toyota Motor Workers Association v. NLRC, G.R. No. 158786, October 19, 2007]

The foregoing shows that the law makes a distinction between union officers and members. For
knowingly participating in an illegal strike or participating in the commission of illegal acts during a
strike, the law provides that a union officer may be terminated from employment. The law grants the
employer the option of declaring a union officer who participated in an illegal strike as having lost his
employment. It possesses the right and prerogative to terminate the union officers from service. [Steel
Corporation of the Philippines v. SCP Employees Union-National Federation of Labor
Unions, G.R. Nos. 169829-30, April 16, 2008]

Labor Law; Labor Relations; Right To Peaceful Concerted Activities;

Nature Of Assumption Order Or Certification Order
Such assumption is in the nature of a police power. At any rate, it must be noted that
Articles 263 (g) and 264 of the Labor Code have been enacted pursuant to the police
power of the State, which has been defined as the power inherent in a government to
enact laws, within constitutional limits, to promote the order, safety, health, morals and
general welfare of society. [Philtread Worker’s Union v. Confessor, G.R. No.
117169, March 12, 1997]

When the Secretary exercises these powers, he is granted “great breadth of discretion”
to find a solution to a labor dispute. The most obvious of these powers is the automatic
enjoining of an impending strike or lockout or its lifting if one has already taken place.
[Philcom Employees Union v. Philippine Global Communications and Philcom
Corporation, G.R. No. 144315, July 17, 2006]

The moment the Secretary of Labor assumes jurisdiction over a labor dispute in an
industry indispensable to national interest, such assumption shall have the effect of
automatically enjoining the intended or impending strike. It was not even necessary for
the Secretary of Labor to issue another order directing a return to work. The mere
issuance of an assumption order by the Secretary of Labor automatically carries with it a
return-to-work order, even if the directive to return to work is not expressly stated in the
assumption order. [Telefunken Semiconductors Employees Union v. Court of
Appeals, G.R. Nos. 143013-14, December 18, 2000]