LABOR RELATIONS

A. RIGHT TO SELF-ORGANIZATION

1. Who may/may not exercise the right

a) Doctrine of Necessary Implication

Reportorial Requirements; Coverage of Right to Self-Organization (Art. 252-257)

a. Persons granted/not granted the right
b. Members outside the bargaining unit
c. Doctrine of Necessary Implication
d. Inclusion of disqualified members

Samahang Manggagawa vs. BLR, G.R. No. 211145, Oct. 14, 2015
Kapatiran vs. Ferrer-Calleja, 162 SCRA 367
SMC Supervisors vs. Hon. Laguesma, 277 SCRA 370
NATU vs. Hon. Torres, G.R. No. 93468, Dec. 29, 1994
SSS vs. CA, 175 SCRA 686
Paper Industries vs. Laguesma, G.R. No. 101738, April 12, 2000

CHAN REVIEWER

A.

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RIGHT TO SELF-ORGANIZATION 1. CONSTITUTIONAL BASES.

Under the 1987 Constitution, it is mandated that “the State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their
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welfare.”

Consequently, the State is required to “guarantee the rights of all workers to self- organization, collective bargaining and negotiations, and peaceful concerted
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activities, including the right to strike in accordance with law.”

Further, the Constitution declares that “the right of the people, including those employed in the public and private sectors, to form unions, associations, or societies
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for purposes not contrary to law, shall not be abridged.”

2. LEGAL BASES.

The Labor Code declares as a basic policy that the State:

(1) shall assure the rights of workers, inter alia, to self-organization and collective

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bargaining;
(2) shall promote free trade unionism as an instrument for the enhancement of democracy and the

promotion of social justice and development; and

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(3) shall foster the free and voluntary organization of a strong and united labor movement.

1.

WHO MAY UNIONIZE

FOR PURPOSES OF COLLECTIVE BARGAINING

1. PERSONS WHO MAY JOIN, FORM OR ASSIST A LABOR ORGANIZATION FOR COLLECTIVE BARGAINING PURPOSES.

The following are eligible to join, form or assist a labor organization: In the private sector:

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1. All persons employed in commercial, industrial and agricultural enterprises;
2. Employees of government-owned or controlled corporationswithout original

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charters established under the Corporation Code;
3. Employees of religious, charitable, medical or educational institutions, whether operating

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for profit or not;

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4. Front-line managers, commonly known as supervisory employees [See discussion below];

5. Alien employees [See discussion below];

6. Working children [See discussion below];

7. Homeworkers [See discussion below];

8. Employees of cooperatives [See discussion below]; and

9. Employees of legitimate contractors not with principal but with the contractor [See discussion below].

In the public sector:

All rank-and-file employees of all branches, subdivisions, instrumentalities, and agencies of government, including government-owned and/or controlled corporations
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with original charters, can form, join or assist employees‟ organizations of their own choosing.

a. Right of front-line managers or supervisors to join a union.

There is no prohibition in the law or in the implementing rules regarding the right of supervisory employees to organize a labor organization or workers‟ association
of their own. They are, however, not allowed to become members of a labor union composed of rank-and-file employees. This is clear under Article 245 of the Labor
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Code. In case there is mixed membership of supervisors and rank-and-file employees in one union, the new rule enunciated in Article 245-A of the Labor Code,
unlike in the old law, is that it cannot be invoked as a ground for the cancellation of the registration of the union. The employees so improperly included are
automatically deemed removed from the list of members of said union. In other words, their removal from the said list is by operation of law.

b. Right of alien employees to join a union.

For an alien employee to exercise his right to self-organize, the following requisites should be complied with:

(1) He should have a valid working permit issued by the DOLE; and

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(2) He is a national of a country which grants the same or similar rights to Filipino workers or which has ratified either ILO Convention No. 87 or ILO Convention
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No. 98, as certified by the Philippine Department of Foreign Affairs (DFA) .

c. Right of working children to self-organization.

Working children have the same freedom as adults to join the collective bargaining union of their own choosing in accordance with existing law. Under P.D. No.
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603, it is clearly provided that neither management nor any collective bargaining union shall threaten or coerce working children to join, continue or withdraw as
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members of such union.

d. Right of homeworkers to self-organization.

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Homeworkers have the right to form, join or assist organizations of their own choosing in accordance with law. The registration of homeworkers‟ organizations or
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associations following the requirements prescribed by law will vest legal personality thereto.

e. Right of members or employees of cooperatives to self-organization.

Members of a cooperative have no right to form or join labor organizations for purposes of collective bargaining for being themselves co-owners of the cooperative.
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This prohibition covers employees of the cooperative who are at the same time members thereof.

However, insofar as the cooperative‟ s employees who are not members or co-owners thereof are concerned, they are entitled to exercise their right to self-
organization and collective bargaining as guaranteed in the Constitution and existing laws. It is the fact of ownership of the cooperative and not involvement in the
management thereof which disqualifies a member from joining any labor organization within the cooperative. Thus, irrespective of the degree of their participation in
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the actual management of the cooperative, all members thereof cannot form, assist or join a labor organization for the purpose of collective bargaining.

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But employee-members of a cooperative may withdraw as members of the cooperative for purposes of joining a labor union.

f. Right of employees of legitimate contractors to self-organization.

A contractual employee of a legitimate independent contractor is entitled to all the rights and privileges due a regular employee as provided in the Labor Code
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including the right to self- organization, collective bargaining and peaceful concerted action. But this right cannot be exercised and invoked against the principal
but only against the independent contractor which employed them.

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2. EMPLOYEES WHO ARE ALLOWED TO ORGANIZE A LABOR ORGANIZATION ONLY FOR MUTUAL AID AND PROTECTION BUT NOTFOR COLLECTIVE BARGAINING
PURPOSES.

Ambulant, intermittent and other workers, the self-employed, rural workers and those without any definite employers may form labor organizations for their mutual
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aid and protection and other legitimate purposes except collective bargaining. The reason for this rule is that these persons have no employers with whom they
can collectively bargain.

(a)

WHO CANNOT FORM, JOIN OR ASSIST LABOR ORGANIZATIONS

1. PERSONS NOT ALLOWED TO FORM, JOIN OR ASSIST LABOR ORGANIZATIONS. a. In the private sector.

1. Managerial employees; and 2. Confidential employees.

b. In the public sector.

The following are not eligible to form employees‟ organizations:

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1. High-level employees whose functions are normally considered as policy-making or managerial or whose duties are of a highly confidential nature;

2. Members of the Armed Forces of the Philippines; 3. Police officers;

4. Policemen;
5. Firemen; and

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6. Jail guards.

2. RIGHT OF MANAGERIAL EMPLOYEES TO JOIN A UNION.

a. Types of managerial employees for purposes of exercising right to self-organization.

There are 3 types of managerial employees:

1. Top Management
2. Middle Management
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3. First-Line Management (also called supervisory level)

Top Management. - This is composed of a comparatively small group of executives. It responsible for the overall management of the organization. It establishes
operating policies and guides

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the organization‟ s interactions with its environment. Typical titles of top managers are “chief executive officer,” “president,” or “senior vice-president.” Actual titles
vary from one organization to another and are not always a reliable guide to membership in the highest management classification.

Middle Management. - This refers to more than one level in an organization. Middle managers direct the activities of other managers and sometimes also those of
operating employees. The middle managers‟ principal responsibilities are to direct the activities that implement their organization‟ s policies and to balance the
demands of their superiors with the capacities of their subordinates. A plant manager in an electronic firm is an example of a middle manager.

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First-Line Management. - This is the lowest level in an organization at which individuals are responsible for the work of others. First-line managers direct operating
employees only; they do not supervise other managers. Examples of first-line managers are the “foreman” or production supervisor in a manufacturing plant, the
technical supervisor in a research department, and the clerical supervisor in a large office. First-level managers are often called supervisors.

Based on the above classification, “managerial employees” may fall into two (2) distinct categories: namely:

1. The “managers” per se composed of top and middle managers; and 2. The “supervisors” composed of first-line managers.

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No. 1. above are absolutely prohibited from forming, joining or assisting any labor unions for purposes of collective bargaining.

Only No. 2 above are allowed to form, join or assist a labor organization for purposes of collective bargaining.

3. RIGHT OF CONFIDENTIAL EMPLOYEES TO JOIN A UNION. a. Confidential employee rule.

Within the context of labor relations, “confidential employees” are those who meet the following criteria:

The two (2) criteria are cumulative and both must be met if an employee is to be considered a “confidential employee” that would deprive him of his right to form,
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join or assist a labor organization.

A confidential employee may be a rank-and-file or supervisory employee but because in the normal course of his duties, he becomes aware of management policies
relating to labor relations, he is not allowed to assist, form or join a rank-and-file union or supervisory union, as the case may be. His exclusion from the bargaining
unit is justified under the “confidential employee rule.” To allow him to join a union would give rise to a potential conflict of interest. Management should not be
required to handle labor relations matters through employees who are represented by the union with which the company is required to deal and who, in the normal
performance of their duties, may obtain advance information on the company‟ s position with regard to collective bargaining negotiations, the disposition of
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grievances, or other labor relations matters.

However, the mere access of an employee to confidential labor relations information which is merely incidental to his duties and, therefore, knowledge thereof is not
necessary in the performance of said duties, does not make such employee a confidential employee. If access to confidential labor relations information is to be a
factor in the determination of an employee‟ s confidential status, such information must relate to the employer‟ s labor relations policies. Therefore, access to
information which is regarded by the employer to be confidential from the business standpoint, such as financial information or technical trade secrets, will not
render an employee a confidential employee. An employee may not be excluded from an appropriate bargaining unit merely because he has access to confidential
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information concerning the employer‟ s internal business operations which isnot related to the field of labor relations.

Thus, even a bank cashier who also serves as the secretary of the board of directors may not be classified as a confidential employee disqualified to join a union.
True, the board of directors is

b. Not all managerial employees are prohibited from forming, joining or assisting a union.

(1) They assist or act in a confidential capacity;

(2) To persons or officers who formulate, determine, and effectuate management policies

specifically in the field of labor relations .

responsible for corporate policies, the exercise of corporate powers and the general management of the business and affairs of the corporation. As secretary of the
bank‟ s governing body, the employee serves the bank‟ s management, but could not be deemed to have access to confidential information specifically relating to
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the bank‟ s labor relations policies, absent a clear showing on this matter.

b. Doctrine of necessary implication.

The doctrine of necessary implication is the legal basis for the ineligibility of a confidential employee to join a union. The disqualification of managerial and
confidential employees from joining a bargaining unit of rank-and-file employees or supervisory employees is already well- entrenched in jurisprudence. While Article
245 of the Labor Code limits the ineligibility to join, assist or form a labor organization to managerial employees, jurisprudence has extended this prohibition to
confidential employees or those who, by reason of their positions or nature of work, are required to assist or act in a fiduciary manner to managerial employees and,
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therefore, are likewise privy to sensitive and highly confidential records.

Article 245 of the Labor Code does not directly prohibit confidential employees from engaging in union activities. Their disqualification proceeds merely from the
application of the “doctrine of necessary implication” because what Article 245 singles out as ineligible to join, assist or form any labor organization are managerial
employees. By necessary implication, confidential employees are similarly disqualified. This doctrine states that what is implied in a statute is as much a part thereof
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as that which is expressed.

Simply stated, in the collective bargaining process, managerial employees are supposed to be on the side of the employer to act as its representatives and to see to
it that its interests are well protected. The employer is not assured of such protection if managerial employees themselves are union members. Collective bargaining
in such a situation can become one-sided. It is the same reason why the positions of confidential employees are included in the disqualification found in Article 245
as if such disqualification was written in the provision. If confidential employees could unionize in order to bargain for advantages for themselves, then they could be
governed by their own motives rather than the interest of the employer. Moreover, unionization of confidential employees for the purpose of collective bargaining
would mean the extension of the law to persons or individuals who are supposed to act “in the interest of” the employers. It is not far-fetched that in the course of
the collective bargaining negotiations, they might jeopardize that interest which they are duty-bound to protect.

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c. Cases where confidential employees were not allowed to join unions.

Based on jurisprudence, the following are considered confidential employees under the confidential employee rule:

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1. Accounting personnel and radio and telegraph operators;
2. Division secretaries, all Staff of General Management, Personnel and Industrial Relations

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Department, Secretaries of Audit, EDP and Financial Systems;
3. Legal secretaries who are tasked with, among others, the typing of legal documents,

memoranda and correspondence, the keeping of records and files, the giving of and receiving notices, and such other duties as required by the legal personnel of
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the corporation.

4. Executive secretaries of the General Manager and the executive secretaries of the Quality Assurance Manager, Product Development Manager, Finance Director,
Management System Manager, Human Resources Manager, Marketing Director, Engineering Manager, Materials Manager and Production Manager were also
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considered confidential employees since they have access to “vital labor information.”

d. Cases where confidential employees were allowed to join unions.

Confidential employees are not absolutely prohibited from joining unions. This is the correct view since confidential employees are allowed to join unions in some
cases.

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For instance, in Southern Philippines Federation of Labor v. Ferrer-Calleja, the inclusion of the confidential rank-and-file employees in the bargaining unit of rank-
and-file employees was upheld by the Supreme Court. Much earlier, the High Court proclaimed in Filoil Refinery Corporation v. Filoil Supervisory and Confidential
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Employees Association, that confidential rank-and-file employees may join the union of supervisors, especially in a situation where the confidential employees are
very few in number and are, by practice and tradition, identified with the supervisors in their role as representatives of management vis-à -vis the rank-and-file
employees. Such identity of interest has allowed their inclusion in the bargaining unit of supervisors for purposes of collective bargaining. They remain employees in
relation to the company as their employer. This identity of interest logicallycallsfortheirinclusioninthesamebargainingunitandatthesametimefulfillsthelaw‟ sobjective of
insuring to them the full benefit of their right to self-organization and to collective bargaining which could hardly be accomplished if the respondent association‟ s
membership were to be broken up into five separate ineffective tiny units.

Jurisprudence, therefore, has established that there is no legal prohibition against confidential employees who are not performing managerial functions to form and
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join a union.

e. Some principles on the right to self-organization.

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Any employee, whether employed for a definite period or not, shall, beginning on the first day of his service, be eligible for membership in any labor organization.

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Right to join a union cannot be made subject of a CBA stipulation.

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The separation of unions doctrine has already been rendered nugatory by the latest amendment of Article 245 of the Labor Code introduced by R. A. No. 9481
which added the phrase: “The rank-and-file union and the supervisors’ union operating within the same establishment may join the same federation or national
union.” This doctrine prohibits the situation where the supervisory union and the rank-and-file union operating within the same establishment are both affiliated with
one and the same federation because of the possible conflict of interest which may arise in the areas, inter alia, of discipline, collective bargaining and strike.

f. Some principles on government employees’ right to self-organization.

The labor organization in the government sector is technically called an “employees’

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organization.”

Registration of employees‟ organizations is made with both Civil Service Commission (CSC) and the Bureau of Labor Relations (BLR) of the Department of Labor
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and Employment (DOLE) . Once registered, it is technically called a “registered employees’ organization.” In the private sector, this is theoretically known as a
“legitimate labor organization. ” Cancellation of registration of an employees‟ organization is likewise made by both the CSC and the BLR.

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The sole and exclusive bargaining union is called an “accredited employees’ organization.” In the private sector, this is in principle known as a “recognized or
certified collective bargaining agent.”

The unit where the government employees‟ organization seeks to operate and represent is called “organizational unit.” It is the employer‟ s unit consisting of
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rank-and-file employees unless circumstances otherwise require. In the private sector, this is technically known as “bargaining unit.”

Rights and privileges of a registered employees’ organization. Upon the issuance of the certificate of registration, the employees‟ organization shall have the
following rights and privileges:

a. To be certified, subject to the conditions prescribed in the Rules and Regulations to Govern the Exercise of the Right of Government Employees to Self-
Organization, as the sole representative of the rank-and-file employees with the right to negotiate for them.

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b. To undertake all other activities not contrary to law or public policy for the furtherance and protection of the interests of its members.

Selection of the sole and exclusive representative. The duly registered employees‟ organization having the support of the majority of the employees in the
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appropriate organizational unit should be designated as the sole and exclusive representative of the employees. It is designated as such through modes similar to
private sector‟ s selection of sole and exclusive bargaining agent through any of the following 3 modes:

a. Voluntary recognition upon a showing that no other employees‟ organization is registered or is seeking registration in the organizational unit, based on the
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records of the BLR, and that the said organization has the majority support of the rank-and-file employees in the organizational unit.

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b. Certification election.
c. Run-off election in cases where there are at least three (3) contending organizations and

none received a majority of the valid votes cast. Only the two (2) registered employees‟ organizations receiving the largest and second largest number of votes in
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the first voting shall be voted on.

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The right to strike is absolutely prohibited in the government sector.

2. Commingling/Mixture of membership

3. Rights and conditions of membership

a) Nature of relationship
(1) Member-Labor union
(2) Labor union-Federation
(i) Disaffiliation
(ii) Substitutionary Doctrine

Rights and Conditions of Membership (Art. 250)

a. Union Officers
b. Agency Fees
c. Check-off
d. Mandatory Activities

ALATCO vs. BITEMAA, 91 Phil. 649

National Brewery vs. San Miguel Brewery,, 9 SCRA 847

1. ALATCO vs BITEMA (1952)

DOCTRINE: (ART. 250: Rights and Conditions of Membership in a Labor Organization):
Another type of “check-off” provision establishes the deduction only for those employees who file individual
authorizations with the employer. These latter authorizations are required to be in writing.

FACTS:
Sept. 15, 1950 – The Undersecretary of Labor certified that a labor dispute exists between A.L. Ammen Transportation Co. (ALATCO) and its workers
as represented by BITEMAA due to failure of amicable settlement on the employees’ strike from Sep. 14 until when the Judge of the CIR ordered the
reopening of the business of ALATCO and and the return of the employees involved in the strike on Sep. 20, 1950, “under the same terms and
conditions of employment exiting before the strike;” (that ALATCO is engaged in a practice of allowing check-off to petitioning union BITEMA whose
affiliates have filed with the company their corresponding authority to make the necessary deductions from their monthly earnings.) After proper
hearing, the respondent Court ruled in favor of BITEMAA.

ALATCO argued that there is no law authorizing the CIR to compel an employee to practice check-off against his will.

ISSUE: Whether or not the practice of checking-off is valid.

HELD: YES. THE PRACTICE OF DEDUCTING DUES FROM WAGES AND PAYMENT OF THE AMOUNTS DEDUCTED OVER THE UNION has been recognized
by the law (Commonwealth No. 103) and APPEARS TO BE MORE GERMANE TO WAGE FIXING THAN ARE VACATION LEAVE OR THE DEFRAYING OF
HOSPITALIZATION EXPENSES BY THE MANAGEMENT.

THE CHECK-OFF IS A NORMAL INCIDENT OF EMPLOYMENT; is best illustrated in this case by the fact that the same had been the subject of agreement
between the parties herein and put into practice. CHECK-OFF IS A LEGITIMATE DISPUTE FOR ARBITRATION.

Section 10 of Republic Act No. 602 provides that: (b) Wages, including wages which may be paid retroactively for whatever reason, shall be paid
directly to the employee to whom they are due, except:

(3) In cases where the right of the employees or his (their) union to check-off has been recognized by the employer or authorized in writing by the
individual employees concerned.

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In other words, IT MAY BE ENFORCED IN TWO WAYS: WITH THE CONSENT OF THE EMPLOYER or BY AUTHORITY IN WRITING BY THE EMPLOYEES.

When there is consent of the employer: When the union and the employer agree, the attitude of employees is immaterial. When employees duly
authorize the check-off in writing: The employer’s consent is unnecessary and its recognition of the right is obligatory.

The fact that the practice of check-off imposes an extra burden on the employer is no reason for opposing its arrangement. Wage increases, reduction
of working hours, sick leave, hospitalization, and other privileges granted to the employed entail diminution of profits and additional duties and
obligations to an extent much greater than the inconvenience and the additional expense involved in the adoption of the check-off system. IN THE
ADJUSTMENT OF INDUSTRIAL OCNFLICTS, CONCESSIONS HAVE TO BE MADE and some rights have to be surrendered or enforced if necessary in
the interest of conciliation and peace.

2. NATIONAL BREWERY & PAFLU vs SAN MIGUEL BREWERY

DOCTRINE: (ART. 250: Rights and Conditions of Membership in a Labor Organization):
In an action initiated by the workers for their unpaid wages (NATIONAL LABOR DAY PARADE), the union has no
personality to sue in their behalf for the reason that the real parties-in-interest are the workers themselves.

FACTS: National Brewery and PAFLU entered into agreement with San Miguel Brewery. The company agreed to pay the basic daily rates of those
workers within the bargaining unit who may participate in the Labor Day Parade at the Balintawak Monument (1960). So the Union demanded the
payment to 600 members who attended (whose total basic daily wage amounts to P3,900) the parade.

The company refused to honor its obligation. Thus, the union prayed that they be entitled to collect compensatory, moral and exemplary damages
from the company.

The company answered that the (1) union has no cause of action – but the individual members whose right to recover their wage is personal to them,
and that (2) the court has no jurisdiction over the subject matter of the action.

The union disagreed, contending, that the basis of its complaint is “not the individual contracts of employment but the collective bargaining
agreement that was concluded between the union and the company insofar as their participation in the Labor Day parade.”

ISSUE: Whether or not the Union has a cause of action to recover the wage in behalf of the employees.

HELD: YES.

If the purpose of the action was merely to collect wages that ordinarily accrue to members in connection with their employment, the union would
have no personality to sue for said services in their behalf because in that case, the real parties in interest would be the laborers or employees
themselves.

Not so when the wages accrue mainly on the strength of an agreement entered into between the union and the company as in this case (it is the
union that has obliged itself to secure those wages for this members).

The right of wage for Labor Day parade was only recognized when the agreement was concluded. The basis of the right is the agreement itself and
not the wages to be collected.

Sec. 3, Rule 3 of the ROC applies in this case, “that a party with whom or in whose name a contract has been made for the benefit of another may
sue or be sued without joining the party for whose benefit the action is presented or defended even if the court may at its discretion order such
beneficiary to be made also a party.”

The union is the party with whom or in whose name the collective bargaining agreement in question has been entered into for the benefit of its
members and, in line with the above rule, the union may sue thereon without joining the members for whose benefit the action has been presented.
This is especially so when to join said members would be cumbersome because they amount to more than 600.

3. SAMAHANG MANGGAGAWA SA HANJIN SHIPYARD vs BLR

DOCTRINE: (ART. 253: Coverage of Employees Rights to Self Organization) “More often than not, the right to
self-organization connotes unionism. Workers, however, can also form and join a worker’s association as well as
labor management councils (LMCs). A common element between unionism and LMCs is the existence of
employer-employee relationship. Where neither party is an employer nor an employee of the other, no duty to
bargain collectively would exist.

In contrast, employer-employee relationship is not mandatory in the formation of worker’s association. What
the law simply require is that the members, at the very least, share the same interest. Worker’s association
speaks of mutual aid and protection.

FACTS:
Hanjin Heavy Industries in Makati filed a petition with DOLE-Pampanga praying for the cancellation of registration of Samahan ng Mga Manggagawa
sa Hanjin Shipyard Association on the ground that (1) “only ambulant, intermittent, itinerant, rural workers, self-employed, and those without

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definite employers may form a worker’s association;” (2) that 1/3 of the members of the association had definite employers and thus must instead
formed a union, and (3) that its continued existence and registration would prejudice the company’s goodwill.

DOLE Director ruled in favor of Hanjin and found that the preamble of Samahan was an admission on its part that all of its members were employees
of Hanjin, to wit” “KAMI, ang mga Manggagawa sa HANJIN Shipyard (SAMAHAN)…” However, SAMAHAN failed to adduce evidence that 63 of its
members were employees of Hanjin. Thus, it bolstered Hanjin’s claim of misrepresentation in its application for registration. Having a definite
employer, the other 57 members should have formed a labor union for collective bargaining.

On appeal before the BLR, Samahan pointed out that the words “Hanjin Shipyard” referred to a workplace in Zambales and not as employer or
company.

BLR reversed the ruling of the Regional Director; that the right to self-organization to all workers including those without definite employers is clearly
afforded by the law. That a worker’s association, as an expression of the right to self organization, can be formed but subject to the limitation that it
was only for mutual aid and protection. It, however, ruled that Hanjin Shipyard must be removed in the name of the association to strike a
balance between the contending interests without delisting it from the roster of legitimate labor organizations.

ISSUES: WON SAMAHAN cannot form a worker’s association of employees in Hanjin and instead should have formed a union.

HELD: NO. The right to self-organization includes the right to form a union workers’ association and labor management councils. More often than
not, the right to self-organization connotes unionism. Workers, however, can also form and join a workers' association as well as labor-management
councils (LMC).

A union refers to any labor organization in the private sector organized for collective bargaining and for other legitimate purpose, while a workers'
association is an organization of workers formed for the mutual aid and protection of its members or for any legitimate purpose other than collective
bargaining.

Many associations or groups of employees, or even combinations of only several persons, may qualify as a labor organization yet fall short of
constituting a labor union. WHILE EVERY LABOR UNION IS A LABOR ORGANIZATION, NOT EVERY LABOR ORGANIZATION IS A LABOR UNION. The
difference is one of organization, composition and operation.

Collective bargaining is just one of the forms of employee participation; an employee participation in whatever form (bargaining or no bargaining,
union or no union). Thus, any labor organization which may or may not be a union may deal with the employer. And thus, a worker’s association or
organization does not always have to be a labor union and why employer-employee collective interactions are not always collective bargaining.

To further strengthen employee participation, Article 255 (now 261) of the Labor Code mandates that workers shall have the right to participate in
policy and decision-making processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits
and welfare. For this purpose, workers and employers may form LMCs. A cursory reading of the law demonstrates that a common element between
unionism and the formation of LMCs is the existence of an employer-employee relationship. Where neither party is an employer nor an employee
of the other, no duty to bargain collectively would exist.

IN CONTRAST, THE EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP IS NOT MANDATORY IN THE FORMATION OF WORKERS' ASSOCIATION.
What the law simply requires is that the members of the workers' association, at the very least, share the same interest. The very definition of a
workers' association speaks of "mutual aid and protection."

XXX CHANGING NAME

The Court agrees with the BLR that Hanjin Shipyard must be removed from the name of the association. Hanjin Shipyard is a registered trade name
and thus, it is within their right to prohibit its use. As there is no provision under the labor laws which speak of the use of name by a worker’s
association, the Corporation Code, which governs names of juridical persons provides that “No corporate name may be allowed… if the
proposed name is identical or deceptively or confusingly similar to that of any existing corporation…” It would be misleading for the members
of Samahan to use “Hanjin Shipyard” as it could give the wrong impression tat all of its members are employed by Hanjin.

4. KAPATIRAN VS FERRER-CALLEJA
DOCTRINE: (ART. 253: Coverage of Employees Rights to Self Organization): “The right of the members of Iglesia
Ni Kristo sect not to join a labor union for being contrary to their religious beliefs does not bar them from forming
their own union for “the recognition of the tenets of the sect should not infringe the basic right to self-
organization granted by the Constitution to workers regardless of religious affiliation.”

FACTS:
TUPAS was the sole and exclusive collective bargaining representative of the workers in the Meat and Canning Division of Universal Robina
Corporation for a period of 3 years.

Within the freedom period of 60 days prior to the expiration of its CBA, TUPAS filed an amended notice of strike as means of pressuring the company
to renew a CBA with it.

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However, a new ULO (union labor organization) was registered, composed mostly of workers belonging to the Iglesia ni Kristo sect. It filed a petition
for a certification election at the BLR.

TUPAS moved to dismiss the petition for being defective in form and that the new members of the NEW ULO were mostly members of the Iglesia ni
Kristo.

The Med-Arbiter ordered the holding of a certification election within 20 days.

TUPAS appealed to the BLR. In the meantime, it was able to negotiate a new 3-year CBA with ROBINA.

Respondent BLR Director Calleja dismissed the appeal.

ISSUE: WON the new Union Labor Organization composed of members of the Iglesia Ni Kristo sect are prohibited to join a labor union for being
contrary to religious beliefs.

HELD: NO. The right of members of the Iglesia ni Kristo sect not to join a labor union for being contrary to religious beliefs, does not bar the members
of that sect from forming their own union. THE RECOGNITION OF THE TENETS OF THE SECT SHOULD NOT INFRINGE ON THE BASIC RIGHT TO SELF-
ORGANIZATION GRANTED BY THE CONSTITUTION TO WORKERS, REGARDLESS OF RELIGIOUS AFFILIATION.

The fact that TUPAS was able to negotiate a new CBA with ROBINA within the freedom period of the existing CBA does not foreclose the right of the
rival union to challenge TUPAS’ claim to majority status by filing a timely petition for certification election before TUPAS’ old CBA expired and before
it signed a new CBA with the company.

5. SAN MIGUEL CORP. SUPERVISORS vs LAGUESMA (1997)

DOCTRINE: (Art. 253: Coverage of Employees Rights to Self Organization)
 If the access to confidential labor relations information is merely incidental in the performance of
their functions, they do not have the right to be treated as confidential employees; thus, they are
eligible and have the right to form or join a union.”

ART. 255: Ineligibility of Managerial Employees to Join Any Labor Organization)

 2 Criteria on CONFIDENTIAL EMPLOYEE RULE – are cumulative.
 Access to information which is regarded by the employer to be confidential from the business
standpoint, such as financial information or technical trade secrets (or on internal business operations
which is NOT related to the field of business relations), will not render an employee a confidential
employee. –in contrast with NATU vs TORRES

FACTS:
Oct. 5, 1990 – San Miguel Corp. Supervisors filed a petition for certification election among the supervisors and exempt employees of SMC Magnolia
Poultry Products in Cabuyao, San Fernando, and Otis.

The Med-Arbiter issued an order allowing the petition.

San Miguel Corp. appealed, pointing out that grouping together all three separate plants (Otis, Cabuyao, and San Fernando) into one bargaining unit
and including supervisory levels and above whose positions are confidential in nature.

The action pursued and Undersecretary Laguesma eventually ruled in favor of San Miguel Corp., citing the doctrine that “Confidential employees, like
managerial employees, are not allowed to form, join, or assist a labor union for purposes of collective bargaining.” That in this case, levels 3 and 3 of
the supervisory employees are admittedly confidential employees and this are not allowed to form, join, or assist a labor union for purposes of
collective bargaining.

ISSUES:
(1) WON the supervisory employees are confidential employees,
(2) If they are confidential employees, would they be ineligible from joining.
(3) If they are not confidential employees, do the employees of the 3 plants constitute an appropriate single bargaining unit.

HELD:
(1) NO. CONFIDENTIAL EMPLOYEES ARE THOSE WHO (1) ASSIST OR ACT IN A CONFIDENTIAL CAPACITY (employees need to use labor
relations information) (2) TO PERSONS WHO FORMULATE, DETERMINE, AND EFFECTUATE MANAGEMENT POLICIES IN THE FIELD OF LABOR
RELATIONS. The 2 criteria are cumulative and must both be met for one to be considered a confidential employee.

In this case, said supervisory employees 3 and 4 handle confidential data or documents relate to product formulation, product standards, and product
specification which by no means relate to labor relations. Granting arguendo that an employee has access to confidential labor relations information,
but such is merely incidental to his duties and knowledge thereof is not necessary in the performance of such duties, said access does not render
the employee a confidential employee. CONFIDENTIAL LABOR RELATIONS INFORMATION MUST RELATE TO THE EMPLOYERS LABOR RELATIONS
POLICIES. Access to information which is regarded by the employer to be confidential from the business standpoint, i.e. financial information or
technical trade secrets will not render an employee a confidential employee.

The broad rationale behind this rule is that “employees should not be placed in a position involving a potential conflict of interests.” That IF THESE
EMPLOYEES WOULD BELONG OR BE AFFILIATED WITH A UNION, THE LATTER MIGHT NOT BE ASSURED OF THEIR LOYALTY TO THE UNION IN VIEW

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OF THE EVIDENT CONFLICT OF INTEREST. Since the employees are not classified as confidential employees, they may appropriately for a bargaining
unit for purposes of collective bargaining.

(2) NO. Even assuming that they are confidential employees, jurisprudence has established that there is no legal prohibition against
confidential employees who are NOT performing managerial functions to form and join a union.

(3) YES. An appropriate bargaining unit may be defined as a group of employees of a given employer, which the collective interest of all the
employees indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of law. A unit
mist effect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective
bargaining.

Employees in the instant case have community or mutuality of interest, which is the standard in determining the proper constituency of a collective
bargaining unit. They all belong to the Magnolia Poultry Division of San Miguel Corporation. They perform work of the same nature, receive the same
wages and compensation, and more importantly, they share a common stake in concerted activities.

The fact that the three plants are located in three different places is immaterial. GEOGRAPHICAL LOCATION CAN BE COMPLETELY DISREGARDED
IF THE COMMUNAL OR MUTUAL INTERESTS OF THE EMPLOYEES ARE NOT SACRIFICED. The distance among the 3 plants is not productive of
insurmountable difficulties in the administration of union affairs. Neither are there regional differences that are likely to impede the operations of a
single bargaining representative.

6. NATU-REPUBLIC PLANTERS BANK SUPERVISORS vs TORRES (1994)

DOCTRINE:
(ART. 253: Coverage of Employees Rights to Self Organization)
 Confidential employees performing managerial functions cannot join unions. They are disqualified by
applying the DOCTRINE OF NECESSARY IMPLICATION. (additional standard in San Miguel vs Laguesma)
ART. 254: Ineligibility of Managerial Employees to Join any Labor Organizations
 Branch managers, cashiers, and controllers are confidential employees, having control and/or access to
confidential matters.

FACTS:
Petitioning union seeks nullification of the decision of Sec. of Labor Torres.

March 17, 1989 – NATU filed a petition for certification election to determine the exclusive bargaining representative of respondent Bank’s employees
occupying supervisory positions.

Republic Planters Bank (RPB) moved to dismiss the petition on the ground that the supposed supervisory employees were actually managerial and/or
confidential employees thus ineligible to join, assist or form a union.

Med-Arbiter ordered the conduct of certification election. The choice shall be: (1) NATU-RPB and (2) No union.

ISSUES:
(1) WON the Department Managers, Assistant Managers, Branch Managers, Cashiers and Controllers or respondent bank are managerial
employees hence ineligible to join or assist the union of petitioner.
(2) WON the Department Managers, Assistant Managers, Branch Managers, Cashiers and Controllers or respondent bank confidential employees
hence ineligible to join or assist the union of petitioner.

HELD:
(1) NO. The Labor Code is explicit. A managerial employee is (a) one who is vested with powers or prerogatives to lay down and execute
management policies, or to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees; or (b) one who is vested with both powers
or prerogatives. A supervisory employee is different from a managerial employee in the sense that the supervisory employee, in the interest of the
employer, effectively recommends such managerial actions, if the exercise of such managerial authority is not routinary in nature but requires the
use of independent judgment.

Ranged against these definitions and after a thorough examination of the evidence submitted by both parties, we arrive at a contrary conclusion.
They possess only recommendatory powers subject to evaluation, review and final action by higher officials.

Thus, Branch Managers, Cashiers and Controllers of respondent Bank are not managerial employees but supervisory employees.

It is the nature of the employee's functions, and not the nomenclature or title given to his job, which determines whether he has rank-and-file,
supervisory or managerial status.

(2) NOT ALL. Only the Branch managers, Cashiers, and Controllers of respondent Bank, being confidential employees (“triad of managerial authority;
their signatures are required in bank issuances and releases) are disqualified from joining or assisting petitioner Union or joining, assisting, or forming
any other labor organization.

As regards the other claim of respondent Bank that Branch Managers/OICs, Cashiers and Controllers are confidential employees, having control,
custody and/or access to confidential matters, e.g., the branch's cash position, statements of financial condition, vault combination, cash codes for

10
telegraphic transfers, demand drafts and other negotiable instruments, this claim is not even disputed by petitioner.

A confidential employee is one entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employer's
property.

Art. 245 of the Labor Code singles out not only managerial employees as ineligible to join, assist, or form any labor organization, but also the
confidential employees under the DOCTRINE OF NECESSARY IMPLICATION. The doctrine states that WHAT IS IMPLIED IN A STATUTE IS AS MUCH
A PART THEREOF AS THAT WHICH IS EXPRESSED. What is thought to be an all-embracing legislation may be inadequate to provide for the unfolding
events of the future. The Doctrine of Necessary Implication fills in such gap. Every statute is understood, by implication, to contain all such provisions
as may be necessary to effectuate its object and purpose, or to make effective rights, powers, privileges, or jurisdiction which it grants, including all
such collateral and subsidiary consequences.

In applying the doctrine of necessary implication, we took into consideration the rationale behind the disqualification of managerial employees if
these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of
evident conflict of interests.

In the collective bargaining process, managerial employees are supposed to be on the side of the employer, to act as its representatives, and to
see to it that its interests are well protected. If confidential employees could unionize to bargain for advantages for themselves, they could be
governed by their own motives rather than the interest of the employers. They might jeopardize their duty to act in the interest of the employers.
They may act as spy spies of either party to a CBA.

7. SSSEA vs CA (1989)

DOCTRINE: (Art. 254: Right of Employees in the Public Service) Government employees may, through their
unions or associations, either petition the Congress for the betterment of the terms and conditions of
employment which are within the ambit of legislation or negotiate with the appropriate government agencies
for the improvement of those which are not fixed by law.

If there be any unresolved grievances, the dispute may be referred to the “Public Sector-Labor Management
Council” for appropriate action. The terms and conditions of employment in the government, including any
political subdivision or instrumentality thereof and GOCC with original charters are governed by law and
employees therein shall not strike for the purpose of securing changes thereof.

FACTS:
Officers and members of SSS Employees Association (SSSEA) staged an illegal strike and barricaded the entrances to the SSS Building, preventing
non-striking employees from reporting for work and SSS members from transacting business with the SSS. The strike was due to SSS’ failure to act
on the union’s demands.
The court issued a temporary restraining order.
SSSEA claims that RTC had no jurisdiction to hear the case as jurisdiction lay with the DOLE or the NLRC, since It was a labor dispute.
SSS, on the other hand, advances the contrary view on the ground that the employees of the SSS are covered by civil service laws and not the Labor
Code, thus they do not have to strike.
ISSUE: Whether or not the SSS employees have the right to strike.
HELD: NO. The terms and conditions of employment in the government, including any political subdivision or instrumentality thereof and GOCC
with original charters are governed by law and employees therein shall not strike for the purpose of securing changes thereof.
SSS is one such government-controlled corporation with an original charter, having been created under R.A. No. 1161. Thus, its employees are part
of the civil service and are covered by the CSC’s memorandum prohibiting strikes. Thus, the strike staged by SSS employees was illegal.
SINCE THE TERMS AND CONDITIONS OF GOVERNMENT EMPLOYMENT ARE FIXED BY LAW, GOVERNMENT WORKERS CANNOT USE THE SAME
WEAPONS EMPLOYED BY WORKERS IN THE PRIVATE SECTOR TO SECURE CONCESSIONS FROM THEIR EMPLOYEES. 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 ESSENTIALLY ON VOLUNTARY BASIS.
In government employment, however, it is the legislature and, where properly given delegated power, the administrative heads of government
which fix the terms and conditions of employment as effected through statutes or administrative circulars, rules and regulations, not through
CBAs.
GOVERNMENT EMPLOYEES MAY, therefore, through their unions or associations, EITHER PETITION THE CONGRESS for the betterment of the terms
and conditions of employment which are within the ambit of legislation OR NEGOTIATE WITH THE APPROPRIATE GOVERNMENT AGENCIES for the
improvement of those which are not fixed by law. IF THERE BE ANY UNRESOLVED GRIEVANCES, THE DISPUTE MAY BE REFERRED TO THE PUBLIC
SECTOR LABOR - MANAGEMENT COUNCIL for appropriate action. But employees in the civil service may not resort to strikes, walk-outs and other
temporary work stoppages, like workers in the private sector, to pressure the Government to accede to their demands.

XXX

ON JURISDICTION. It is futile for the petitioners to assert that the subject labor dispute falls within the exclusive jurisdiction of the NLRC and, hence,
the Regional Trial Court had no jurisdiction to issue a writ of injunction enjoining the continuance of the strike. The Labor Code itself provides that
terms and conditions of employment of government employees shall be governed by the Civil Service Law, rules and regulations [Art. 276]. This being
the case, the Regional Trial Court was not precluded, in the exercise of its general jurisdiction under B.P. Blg. 129, as amended, from assuming

11
jurisdiction over the SSS's complaint for damages and issuing the injunctive writ prayed for therein. Unlike the NLRC, the Public Sector Labor -
Management Council has not been granted by law authority to issue writs of injunction in labor disputes within its jurisdiction. Thus, since it is the
Council, and not the NLRC, that has jurisdiction over the instant labor dispute, resort to the general courts of law for the issuance of a writ of injunction
to enjoin the strike is appropriate.

8. PAPER INDUSTRIES CORPORATION (PICOP) vs LAGUESMA

DOCTRINE: (Art. 255, Ineligibility of Managerial Employees) Although subject section heads and unit
managers exercise the authority to hire and fire, the authority they exercise is merely advisory in character
(not a final determination of the company policies, i.e. on hiring, promotion, transfer, suspension, and
termination of employees). Where such power, recommendatory in character, is subject to evaluation, review,
and final action by the department heads and other executives of the company, the same is not an exercise of
independent judgment as required by law.

FACTS: This case seeks to annul the Resolution of the DOLE USec., declaring that supervisors and section heads of Paper Industries Corporation are
managerial employees and should be excluded from the list of voters for the purpose of a certification election among supervisory and technical staff
employees of petitioner.

Petitioner Paper Industries Corp (PICOP) is engaged in the manufacture of paper and timber products in Bislig Surigao del Sur.

Med-Arbiter set the holding of a certification election among PICOP’s supervisory and technical staff employees with four choices: (1) PBSTSEU, (2) FFW, (3)
ALU, and (4) no union.

During the pre-election conference, PICOP questioned and objected to the inclusion of some section heads and supervisors in the list of voters whose
positions it averred were reclassified as managerial employees in the light of the reorganization effected by it. PICOP is dividend into 4 main business groups
(Paper, Timber, Forest, Support Services). A VP heads each of these business groups. A division manager heads the divisions comprising each business group.
A department manager heads the departments comprising each division. Section heads and supervisors head the sections and independent units comprising
each department.

VP (4 groups)  Division Manager (each business group)  Department Manager (departments within each business group)  Section heads and supervisor
(independent units within each department)

PICOP averred that these section managers and unit managers have the authority to hire and fire and are classified as managerial employees, thus ineligible
to form or join any labor organization.

Public Respondent Laguesma, then acting as Undersecretary of Labor set aside the Order of Med-Arbiter, thereby declaring that the supervisors and section
heads are supervisory employees and thus eligible to vote in the certification election.

ISSUE: WON the subject section heads and supervisors are managerial employees and thus are ineligible to form and join any labor organization.

HELD: NO.

Managerial employees are ranked as top managers, middle managers, and first line managers. Top and middle managers have the authority to devise,
implement, and control strategic and operational policies while the First Line managers ensure that such policies are carried out by the ran-and-file
employees of an organization. Under this distinction, managerial employees thus fall into 2 categories: (1) “managers per se” composed of top and middle
managers, and the (2) supervisors composed of first line managers. THE MERE FACT THAT AN EMPLOYEE IS DESIGNATED AS MANAGER DOES NOT IPSO
FACTO MAKE HIM ONE. DESIGNATION SHOULD BE RECONCILED WITH THE ACTUAL JOB DESCRIPTION OF THE EMPLOYEE for it is the job description that
determines the nature of employment.

After a thorough dissection of the job description of the concerned supervisory employees and section heads in this case, it is shown that they are not
actually managerial but only supervisory employees since they do not lay down company policies. Their power is NOT a final determination of the company
policies (on matters relative to hiring, promotion, suspension, transfer, and termination of employees) as it is still subject to confirmation and approval by
their respective superior. WHERE SUCH POWER, WHICH IS RECOMMENDATORY IN CHARACTER, IS SUBJECT TO EVALUATION, REVIEW AND FINAL ACTION
BY THE DEPARTMENT HEADS OR OTHER HIGHER EXECUTIVES OF THE COMPANY, the same is NOT EFFECTIVE and NOT AN EXERCISE OF INDEPENDENT
JUDGMENT AS REQUIRED BY LAW.

9. GIN QUEEN vs GIN QUEEN CORP. WORKERS UNION (2014)

DOCTRINE: Art. 259, Unfair Labor Practices of Employers: EMPLOYEE’S INTERFERENCE

FACTS: T&H Shopfitters Corporation/ Gin Queen Corporation THGW workers union filed their Complaint for ULP by way of union busting, and Illegal
Lockout, with moral and exemplary damages and attorney’s fees, against T&H Shopfitters and Gin Queen, before the Labor Arbiter.

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Respondent union treated T&H Shopfitters and Gin Queen as a single entity and their sole employer. In their desire to improve their working
conditions, respondents and other employees of petitioners held their first formal meeting to discuss the formation of a union.

The following day 17 employees were barred from entering petitioners’ factory premises in Zambales, and ordered to transfer to T&H Shopfitters’
warehouse at Subic Bay Freeport Zone purportedly because of its expansion.

Afterwards, the said 17 employees were repeatedly ordered to go on forced leave due to the unavailability of work.

DOLE eventually issued a certificate of registration in favor of the THGQ Union.

When a certification election was finally scheduled, the president of Gin Queen through a memorandum announced that it was relocating its office
and workers in Cabangan, Zambales, an area of talahiban where union officers and members were made to work as grass cutters.

A day before the election, the petitioners sponsored a field trip where the union officers and members were not included. Due to the heavy pressure
exerted by petitioners, the votes for "no union" prevailed.

The following week after the certification elections were held, THG-GQ Union officers and members were retrenched.

In its defense, Gin Queen, claiming that it is a corporation separate and distinct from T&H Shopfitters, and consequently, T&H Shopfitters and Stinnes
Huang, an officer of T&H Shopfitters cannot be held liable for ULP for the reason that there is no employer-employee relationship between the former
and respondents; that due to the decrease in orders from its customers, they had to resort to cost cutting measures to avoid anticipated financial
losses.

LA ruled against the union. The decision was appealed to the NLRC which reversed the decision of the LA.

“…based on their Articles of Incorporation, T & H Corporation and Gin Queen Corporation are engaged in the same line of business. That
Gin Queen Corporation has been renamed ‘MDL’, but still carries on the same business in the same premises using the same machines and
facilities. These circumstances are badges of fraud that justify the piercing of the veil of corporate fiction.”

ISSUE: WON the company committed Unfair Labor Practices against respondents.

HELD: YES. (BASICALLY THE SC AFFIRMS THE NLRC RULING ON THE PIERCING PART. The rest of the decision is labor related na.)

The questioned acts of petitioners, namely: 1) sponsoring a field trip to Zambales for its employees, to the exclusion of union members, before the
scheduled certification election; 2) the active campaign by the sales officer of petitioners against the union prevailing as a bargaining agent during
the field trip; 3) escorting its employees after the field trip to the polling center; 4) the continuous hiring of subcontractors performing respondents’
functions; 5) assigning union members to the Cabangan site to work as grass cutters; and 6) the enforcement of work on a rotational basis for union
members, all reek of INTERFERENCE on the part of petitioners.

Indubitably, the various acts of petitioners, taken together, reasonably support an inference that, indeed, such were all orchestrated to restrict
respondents’ free exercise of their right to self-organization. The Court is of the considered view that petitioners’ undisputed actions prior and
immediately before the scheduled certification election, while seemingly innocuous, unduly meddled in the affairs of its employees in selecting their
exclusive bargaining representative.

10. BPI vs BPI EMPLOYEES UNION DAVAO CHAPTER (2010)

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 DOCTRINE: (Art. 259, Unfair Labor Practices of Employers)

CLOSED-SHOP AGREEMENT has been considered as one form of union security whereby only union members
can be hired and workers must remain union members as a condition of continued employment. The
requirement for employees and workers to become members of a union as a condition for employment
redounds to the benefit and advantage of said employees because by holding out to loyal members a promise
of employment in the closed-shop, the union wields group solidarity. In fact, that “the closed-shop contract is
the most prized achievement of unionism.”

(Art. 259. Closed Shop Clause Applies to Future Employees & Non-Union Members) The closed-shop agreement
applies to persons (1) to be hired or to employees who are (2) not yet members of any labor organization. It is
also applicable not only to the employees or laborers that are employed after the CBA had been entered into
but also to (3) old employees who are not members of any labor union at the time the said CBA was entered
into. So if an employee or laborer is already a member of a labor union different from the union that entered
into a CBA with the employer providing for a closed-shop, said employee cannot be obliged to become a member
of that union which had entered into a CBA with the employer as a condition for his continued employment.

FACTS
BSP approved the Articles of Merger executed by and between BPI and Far East Bank and Trust Company (FEBTC) and was approved
by the SEC. Pursuant to the said Article and Plan of Merger, all the assets and liabilities of FEBTC were transferred to and absorbed by
BPI as the surviving corporation. FEBTC employees, including those in is different branches across the country, were hired by petitioner
as its own employees, with their status and tenure recognized and salaries and benefits maintained.

Respondent BPI Employees Union – Davao Chapter (Union) is the exclusive bargaining agent of BPI’s rank and file employees in
Davao City. The former FEBTC rank and file employees in Davao City did not belong to any labor union at the time of the merger. Prior
to the effectivity of the merger, the Union invited said FEBTC employees to a meeting regarding the Union Shop Clause of the existing
CBA between petitioner BPI and respondent Union: “New employees falling within the bargaining unit, who may hereafter be regularly
employed by the Bank shall join the Union as a condition of their continued employment.”

After the meeting, others refused to join the Union. Respondent Union then sent notices to said employees and called them to a hearing.
When they refused to attend the hearing, the President of the Union requested BPI to implement the Union Shop Clause of the CBA and
to terminate their employment pursuant thereto.

Voluntary Arbitrator ruled in favor of petitioner BPI’s interpretation that the former FEBTC employees were not covered by the Union
Security Clause on the ground that the said employees were not new but were absorbed employees by operation of law; and ruled
that they could not be compelled to join, as it was their constitutional right to join or not to join any organization.

CA reversed the decision of the Voluntary Arbiter, ruling:

A UNION-SHOP CLAUSE has been defined as a form of union security provision wherein non-members may be hired, but to retain employment
must become union members after a certain period.

This Court agrees with the voluntary arbitrator that the ABSORBED employees are distinct and different from NEW employees BUT only in so far
as their employment service is concerned. Their service is continuous and there is no gap in their service record.

This Court is persuaded that the similarities of new and absorbed employees far outweighs the distinction between them. The similarities lies
on the following, to wit: (a) they have a new employer; (b) new working conditions; (c) new terms of employment and; (d) new company policy
to follow. As such, they should be considered as new employees for purposes of applying the provisions of the CBA regarding the union-shop
clause.

To rule otherwise WOULD RESULT TO A VERY AWKWARD AND UNFAIR SITUATION WHEREIN THE ABSORBED EMPLOYEES SHALL BE IN A
DIFFERENT IF NOT, BETTER SITUATION THAN THE EXISTING BPI EMPLOYEES. The existing BPI employees by virtue of the union-shop clause are
required to pay the monthly union dues, remain as members in good standing of the union otherwise, they shall be terminated from the company,
and other union-related obligations. ON THE OTHER HAND, THE ABSORBED EMPLOYEES SHALL ENJOY THE FRUITS OF LABOR OF THE
PETITIONER-UNION AND ITS MEMBERS FOR NOTHING IN EXCHANGE. Certainly, THIS WOULD DISTURB INDUSTRIAL PEACE IN THE COMPANY
WHICH IS THE PARAMOUNT REASON FOR THE EXISTENCE OF THE CBA AND THE UNION.

This Court has held that a valid form of union security, and such a provision in a collective bargaining agreement is NOT A RESTRICTION OF THE
RIGHT OF FREEDOM OF ASSOCIATION GUARANTEED BY THE CONSTITUTION.

A closed-shop agreement is an agreement whereby an employer binds himself to hire only members of the contracting union who must continue
to remain members in good standing to keep their jobs. It is THE MOST PRIZED ACHIEVEMENT OF UNIONISM. IT ADDS MEMBERSHIP AND
COMPULSORY DUES. By holding out to loyal members a promise of employment in the closed-shop, it wields group solidarity.

ISSUE: WON the FEBTC employees who were absorbed by BPI upon its merger with FEBTC should be covered by Union Shop Clause contained in an
existing CBA of the absorbing company with its own certified labor union.

RULING: YES.

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. There is union
shop when all new regular employees are required to join the union within a certain period for their continued employment. There is maintenance
of membership shop when employees, who are union members as of the effective date of the agreement, or who thereafter become members, must
maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the
agreement is terminated. A closed-shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer and his

14
employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes,
and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest
are a part.

The purpose of a union shop or other union security arrangement is to guarantee the continued existence of the union through enforced membership
for the benefit of the workers.

However, under law and jurisprudence, the following kinds of employees are exempted from its coverage, namely, employees who at the time the
union shop agreement takes effect are (1) bona fide members of a religious organization which prohibits its members from joining labor unions on
religious grounds; (2) employees already in the service and already members of a union other than the majority at the time the union shop
agreement took effect; (3) confidential employees who are excluded from the rank and file bargaining unit; and (4) employees excluded from the
union shop by express terms of the agreement.

When certain employees are obliged to join a particular union as a requisite for continued employment, as in the case of Union Security Clauses, this
condition is a valid restriction of the freedom or right not to join any labor organization because it is in favor of unionism. This Court, on occasion, has
even held that a union security clause in a CBA is not a restriction of the right of freedom of association guaranteed by the Constitution.

Indeed, the situation of the former FEBTC employees in this case clearly does not fall within the first three exceptions to the application of the
Union Shop Clause discussed earlier. No allegation or evidence of religious exemption or prior membership in another union or engagement as a
confidential employee was presented by both parties.

Moreover, a closed shop agreement is an agreement whereby an employer binds himself to hire only members of the contracting union who must
continue to remain members in good standing to keep their jobs. It is the most prized achievement of unionism. It adds membership and compulsory
dues. By holding out to loyal members a promise of employment in the closed shop, it wields group solidarity.

11. LIBERTY COTTON MILLS WORKERS UNION vs LIBERTY COTTON MILLS, PAFLU, AND CIR (1979)

DOCTRINE: (Art. 259: Unfair Labor Practices of Employers: Due Process to Expelled Union Member Prior
Dismissal; Requisites for Valid Dismissal Pursuant to Union Security Clause)

Before effecting the dismissal of an employee for breach of union security agreements, the employer
must observe due process. The employer should give the employee opportunity to be heard and should
not rely on the request of the Union.

FACTS:

It appears that 32 out of 36 members of the local union Liberty Cotton Mills Union, disaffiliated themselves from PAFLU in accordance with the
local union’s Constitution and By-Laws: “Liberty Workers Union-PAFLU shall remain an affiliate as long as 10 or more of its members evidence their
desire to continue the said local union’s affiliation.

In response, PAFLU advised the company that the petitioner workers be expelled from their union membership in the mother federation because
they were found guilty of acts unbecoming of officers and members of the union AND disloyalty to the mother federation for instigating union
disaffiliation, and at the same time requested their dismissal.

Consequently, the company terminated the employment of the petitioner workers pursuant to the provision in the CBA on dismissal from
employment of a disloyal member upon the request in writing by the Union.

ISSUE: WON the dismissal of petitioner workers upon the request of the Union to the employer valid.

HELD: NO. While respondent company is bound to dismiss any employee expelled by PAFLU for disloyalty, this should not be done hastily and
summarily. The company acted in bad faith in dismissing petitioner workers without giving them the benefit of hearing. Instead, the company
immediately dismissed the workers the day after its receipt of the request of PAFLU, thereby disregarding the right of the workers to due process,
self-organization and security of tenure.

THE POWER TO DISMISS IS A NORMAL PREROGATIVE OF THE EMPLOYER. HOWEVER, THIS IS NOT WITHOUT LIMITATIONS. THE EMPLOYER IS
BOUND TO EXERCISE CAUTION in terminating the services of its employees. DUE PROCESS MUST BE OBSERVED IN DISMISSING AN EMPLOYEE

15
BECAUSE IT AFFECTS NOT ONLY HIS POSITION BUT ALSO HIS MEANS OF LIVELIHOOD.

Besides, it was not disloyalty that compelled the employees to disaffiliate but dissatisfaction. The Constitutional guarantee of security of tenure of
the worker and his freedom of association – to join or not to join a union – are paramount and should prevail over a contractual condition for
continued union membership.

12. LAKAS NG MANGGAGAWANG MAKABAYAN (LAKAS) vs MARCELO ENTERPRISES (1982)

DOCTRINE: (Art. 260: Unfair Labor Practices of Labor Organizations: Violation of Duty to Bargain
Collectively)

It is a ULP for a labor organization to violate the duty, or refuse to bargain collectively with the
employer, provided it is the representatives of the employees. Thus, a labor organization commits ULP if
it declares a strike to compel an employer to negotiate a CBA with it during the pendency of a petition
for certification election. Such act is violative of the employer’s basic right to bargain collectively only
with the representative, supported by the majority of its employees, which is the certified bargaining
agent within the premises.

FACTS:

May 23, 1967 - The LAKAS had existing CBAs with the bargaining units in the respective companies of Marcelo Companies. Said CBAs were entered
into while they were affiliated with a national federation, Phil. Social Security Labor Union (PSSLU). Marcelo  LAKAS  PSSLU

2 CBAs were about to expire while the other one is faced with a conflict as there was a rival union.

May 14, 1967 – The management of Marcelo Steel received a letter requesting negotiation of a new CBA from PSSLU in behalf of UNWU. Steel,
however, did not authorize PSSLU as their agent.

IN SUM, PSSLU, with whom the existing CBAs were entered into, was demanding of Marcelo Companies to collectively bargain with it; so was MUEWA,
complainant LAKAS for MULU (the aggrupation of MACTIFU, MFWU, and UNWU). On top of all these, UNWU disauthorized the PSSLU from
representing his union.

AS the management was confused as to which of the union really represents the workers, the President asked for the proof of authorization from the
unions and they were informed of the conflicting claims and suggested that they file for certification election and the decision of the court shall be
followed and respected.

PSSLU refused the suggestion and said they will file ULP for refusing to bargain with them. All of the unions subsequently filed a Notice of Strike.

MUEWA, in the meantime, filed a petition for direct certification before the industrial court which was then granted as it represents the majority of
the workers in Marcelo Tire and there were no oppositions from the other unions or interested persons.

Notices of Strikes were withdrawn and the management agreed to sit down in a conference for the bargaining. On the 4 th conference, LAKAS declared
strike against Marcelo Companies. Acts of violence, vandalism attended by picketing, the premises were blocked, windows of the plants were badly
damaged.

Oct. 13, 1967 – negotiations reached its final stage. LAKAS then declared another strike without filing a notice of strike resulting to complete paralysis
of the business. LAKAS then filed a ULP based on the alleged fact of non-readmission of striking members.

Trial Court ruled that Marcelo Companies were not remiss in their obligation to bargain and that the strikes conducted were illegal. However, it
decided that there was ULP in not readmitting all the strikers.

ISSUE: WON Marcelo Companies are guilty of ULP.

HELD: NO. There was no evidence which shows that the respondent Marcelo Companies were seeking for an opportunity to discharge these
employees for union activities, or to discriminate against them because of such activities. In fact, there is affirmative evidence to the contrary.

LAKAS, even if it had never been the bargaining representative of any of the local unions then existing in the respondent Marcelo Companies, was
not ignored by Marcelo as to its demand for CBA. Neither did the companies refuse to bargain at all.

The Court had ruled that in a situation like this where the issue of legitimate representation in dispute is viewed for not only by one legitimate labor
organization but two or more, there is every equitable ground warranting the holding of a certification election. In this way, the issue as to who
really is the true bargaining representative of all the employees may be firmly settled by the simple expedient of an election.

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It is essential to the right of a bargaining agent to represent the employees that it be the delegate of a majority of the employees and conversely, an
employer is under duty to bargain collectively only when the bargaining agent is representative of the majority of the employees. A natural
consequence of this is that the employer has the right to demand of the asserted bargaining agent proof of its representation of its employees.
Having demonstrated this fact, IT IS NOT AN ULP FOR AN EMPLOYER TO REFUSE TO NEGOTIATE UNTIL THE ASSERTED BARGAINING AGENT HAS
PRESENTED REASONABLE PROOF OF MAJORITY REPRESENTATION. It is necessary, however, that such demand be made in good faith and not
merely as a device for delay or evasion.

The Court held that THERE EXISTED NO DUTY TO BARGAIN COLLECTIVELY WITH LAKAS ON THE PART OF MARCELO COMPANIES. It then follows that
all acts instigated by complainant LAKAS such as the filing of Notice of Strike and the 2 strikes were all illegal and VIOLATIVE OF THE EMPLOYER’S
BASIC RIGHT TO BARGAIN COLLECTIVELY ONLY WITH THE REPRESENTATIVE SUPPORTED BY THE MAJORITY OF ITS EMPLOYEES IN EACH OF THE
BARGAINING UNITS.

ALSO, the Court found as a fact that Marcelo Companies did not refuse to reinstate or re-employ the strikers. Their acts was an act of self-preservation,
designed to effect cost-savings as well as to insure peace and order within their premises.

B. BARGAINING UNIT
C. BARGAINING REPRESENTATIVE
1. Determination of representation status

CHAN REVIEWER

2.

BARGAINING UNIT

1. BARGAINING UNIT, MEANING.

A “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
58
within such employer unit. It may also refer to the group or cluster of jobs or positions within the employer‟ s
establishment that supports the labor organization which is applying for registration.

It is a legal collectivity for collective bargaining purposes whose members have substantially mutual bargaining interests in
the terms and conditions of employment as will ensure to all employees their collective bargaining rights. To be appropriate,
a bargaining unit must involve a grouping of employees who have substantial, mutual interests in wages, hours of work,
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working conditions and other subjects of collective bargaining.

2. NO HARD AND FAST RULE TO DETERMINE A BARGAINING UNIT.

There is no hard and fast rule in determining an appropriate bargaining unit. The test whether the designation of a bargaining
unit is appropriate is whether it will best assure to all employees the exercise of their collective bargaining rights. There
should be a community of interest which should be reflected in groups having substantial similarity of work and duties or
60
similarity of compensation and working conditions, among other criteria.

(a)

TEST TO DETERMINE THE CONSTITUENCY OF AN APPROPRIATE BARGAINING UNIT

1. TESTS IN DETERMINING AN APPROPRIATE BARGAINING UNIT.

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Based on jurisprudence, there are certain tests which may be used in determining the appropriate collective bargaining unit,
to wit:

(1) Community or mutuality of interest doctrine; (2) Globe doctrine;

(3) Collective bargaining history doctrine; and (4) Employment status doctrine.

2. COMMUNITY OR MUTUALITY OF INTEREST DOCTRINE.

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Under this doctrine, the employees sought to be represented by the collective bargaining agent must have community or
mutuality of interest in terms of employment and working conditions as evinced by the type of work they perform. It is
characterized by similarity of employment status, same duties and responsibilities and substantially similar compensation
62
and working conditions.

63
San Miguel Corporation v. Laguesma. - The Supreme Court applied this principle in the petition of the union which seeks
to represent the sales personnel in the various Magnolia sales offices in Northern Luzon. Petitioner took the position that
each sales office should constitute one bargaining unit. In disagreeing to this proposition of petitioner, the High Court said:
“What greatly militates
against this position (of the company) is the meager number of sales personnel in each of the Magnolia sales offices in
Northern Luzon. Even the bargaining unit sought to be represented by respondent union in the entire Northern Luzon sales
area consists only of approximately fifty-five (55) employees.

Surely, it would not be for the best interest of these employees if they would further be fractionalized. The adage „there is
strength in number‟ is the very rationale underlying the formation of a labor union.”

64
San Miguel Corporation Supervisors and Exempt Employees Union v. Laguesma. - The fact that the three (3) plants
comprising the bargaining unit are located in three (3) different places, namely, in Cabuyao, Laguna, in Otis, Pandacan,
Metro Manila, and in San Fernando, Pampanga, was declared immaterial. Geographical location can be completely
disregarded if the communal or mutual interests of the employees are not sacrificed. The distance among the three (3) plants
is not productive of insurmountable difficulties in the administration of union affairs. Neither are there regional differences
that are likely to impede the operations of a single bargaining representative.

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University of the Philippines v. Ferrer-Calleja, - All non-academic rank-and-file employees of the University of the
Philippines in Diliman, Quezon City, Padre Faura, Manila, Los Banos, Laguna and the Visayas were allowed to participate
in a certification election as one bargaining unit.

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St. James School of Quezon City v. Samahang Manggagawa sa St. James School of Quezon City. - Respondent union
sought to represent the rank-and-file employees (consisting of the motor pool, construction and transportation employees) of
petitioner-school‟ s Tandang Sora campus. Petitioner-school opposed it by contending that the bargaining unit should not
only be composed of said employees but must include administrative, teaching and office personnel in its five (5) campuses.
The Supreme Court disagreed with said contention. The motor pool, construction and transportation employees of the
Tandang Sora campus had 149 qualified voters at the time of the certification election, hence, it was ruled that the 149
qualified voters should be used to determine the existence of a quorum during the election. Since a majority or 84 out of the
149 qualified voters cast their votes, a quorum existed during the certification election. The computation of the quorum
should be based on the rank-and-file motor pool, construction and transportation employees of the Tandang Sora campus
and not on all the employees in petitioner‟ s five (5) campuses. Moreover, the administrative, teaching and office personnel
are not members of the union. They do not belong to the bargaining unit that the union seeks to represent.

3. GLOBE DOCTRINE.

This principle is based on the will of the employees. It is called Globe doctrine because this principle was first enunciated in
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the United States case of Globe Machine and Stamping Co., where it was ruled, in defining the appropriate bargaining unit,
that in a case where the company‟ s production workers can be considered either as a single bargaining unit appropriate for
purposes of collective bargaining or as three (3) separate and distinct bargaining units, the determining factor is the desire of
the workers themselves. Consequently, a certification election should be held separately to choose which representative
68
union will be chosen by the workers.

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International School Alliance of Educators [ISAE] v. Quisumbing. - The Supreme Court ruled here that foreign-hired
teachers do not belong to the bargaining unit of the local-hires because the former have not indicated their intention to be
grouped with the latter for purposes of collective bargaining. Moreover, the collective bargaining history of the school also
shows that these groups were always treated separately.

4. COLLECTIVE BARGAINING HISTORY DOCTRINE.

This principle puts premium to the prior collective bargaining history and affinity of the employees in determining the
appropriate bargaining unit. However, the existence of a prior collective bargaining history has been held as neither decisive
70
nor conclusive in the determination of what constitutes an appropriate bargaining unit.

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 71
National Association of Free Trade Unions v. Mainit Lumber Development Company Workers Union. - It was ruled here
that there is mutuality of interest among the workers in the sawmill division and logging division as to justify their formation
of a single bargaining unit. This holds true despite the history of said two divisions being treated as separate units and
notwithstanding their geographical distance from each other.

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San Miguel Corporation v. Laguesma. - Despite the collective bargaining history of having a separate bargaining unit for
each sales office, the Supreme Court applied the principle of mutuality or commonality of interests in holding that the
appropriate bargaining unit is comprised of all the sales force in the whole of Northern Luzon.

5. EMPLOYMENT STATUS DOCTRINE.

The determination of the appropriate bargaining unit based on the employment status of the employees is considered an
73
acceptable mode. For instance, casual employees and those employed on a day-to-day basis, according to the Supreme
74
Court in Philippine Land-Air-Sea Labor Union v. CIR, do not have the mutuality or community of interest with regular and
permanent employees. Hence, their inclusion in the bargaining unit composed of the latter is not justified. Confidential
employees, by the very nature of their functions, assist and act in a confidential capacity to, or have access to confidential
matters of, persons who exercise managerial functions in the field of labor relations. As such, the rationale behind the
ineligibility of managerial employees to form, assist or join a labor union equally applies to them. Hence, they cannot be
75
allowed to be included in the rank-and- file employees‟ bargaining unit. The rationale for this inhibition is that if these
managerial employees would belong to or be affiliated with a union, the latter might not be assured of their loyalty to the
union in view of evident conflict of interest. The union can also become company-dominated with the presence of
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managerial employees in its membership.

77
Belyca Corporation v. Ferrer-Calleja. - This involves a corporation engaged in piggery and poultry raising, planting of
agricultural crops and operation of supermarts and cinemas. The Supreme Court ruled that it is beyond question that the
employees of the livestock-agro division of the corporation perform work entirely different from those being performed by
employees in the supermarts and cinemas. The differences among them lie in their working conditions, hours of work, rates
of pay, including the categories of their positions and employment status. As stated by petitioner in its position paper, due to
the nature of the business in which its livestock-agro division is engaged, very few of its employees therein are permanent,
the overwhelming majority of whom are seasonal and casual and not regular employees. Definitely, they have very little in
common with the employees of the supermarts and cinemas. To lump all its employees in its integrated business concerns
cannot result in an efficacious bargaining unit comprised of constituents enjoying a community or mutuality of interest.
Undeniably, the rank-and-file employees of the livestock-agro division fully constitute a bargaining unit that satisfies both
requirements of classification according to employment status and of substantial similarity of work and duties which will
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ultimately assure its members the exercise of their collective bargaining rights.

3.

BARGAINING AGENT

1. EXCLUSIVE BARGAINING AGENT.

The term “exclusive bargaining representative” or “exclusive bargaining agent” refers to a legitimate labor union duly
79 80
recognized or certified as the sole and exclusive bargaining representative or agent of all the employees in a bargaining
81
unit.

A labor union recognized or certified as the “sole and exclusive bargaining agent” means that it shall remain as such during
the existence of the CBA, to the exclusion of other labor organizations, and no petition questioning its majority status shall
be entertained nor shall certification election be conducted outside of the 60-day freedom period immediately before the
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expiry date of the 5-year term of the CBA.

The moment a union is recognized or certified, what the bargaining union represents are not only its members but also its
83
non-members who are included in the bargaining unit.

The designation of a bargaining union, however, does not deprive an individual employee or group of employees to exercise
their right at any time to present grievances directly to their employer, with or without the intervention of the bargaining
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union.

2. A NON-RECOGNIZED OR NON-CERTIFIED UNION CANNOT COLLECTIVELY BARGAIN WITH EMPLOYER.

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Under Article 255 of the Labor Code, it is clear that only the labor organization duly recognized or selected by the majority
of the employees in an appropriate collective bargaining unit is the exclusive representative of all the employees in such unit
for purposes of collective bargaining.

85
Philippine Diamond Hotel and Resort, Inc. [Manila Diamond Hotel] v. Manila Diamond Hotel Employees Union. - In this
case, the respondent union is admittedly not the exclusive representative of the majority of the employees of petitioner,
hence, it could not demand from the petitioner the right to bargain collectively in their behalf.

3. MODES OF DETERMINING THE SOLE AND EXCLUSIVE BARGAINING AGENT.

The following are the modes:

1. Voluntary recognition; 2. Certification election; 3. Consent election;

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4. Run-off election;

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5. Re-run election.

These modes are discussed below in accordance with the order of presentation prescribed in the syllabus.

(a) VOLUNTARY RECOGNITION (i) REQUIREMENTS

1. VOLUNTARY RECOGNITION, DEFINED.

“Voluntary recognition” refers to the process by which a legitimate labor union is voluntarily recognized by the employer as
the exclusive bargaining representative or agent in a bargaining unit and reported as such with the Regional Office in
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accordance with the Rules to Implement the Labor Code.

2. VOLUNTARY RECOGNITION, WHEN PROPER.

Voluntary recognition is proper only in cases where there is only one legitimate labor organization existing and operating in
a bargaining unit. It cannot be done in case there are two or more unions in contention.

3. REQUIREMENTS FOR VOLUNTARY RECOGNITION.

The notice of voluntary recognition should be accompanied by the original copy and two (2) duplicate copies of the
following documents:

(a) A joint statement under oath attesting to the fact of voluntary recognition;
(b) Certificate of posting of the joint statement of voluntary recognition for fifteen (15)

consecutive days in at least two (2) conspicuous places in the establishment or bargaining unit

where the union seeks to operate;

(c) The approximate number of employees in the bargaining unit, accompanied by the names

of those who support the voluntary recognition comprising at least a majority of the

members of the bargaining unit; and

(d) A statement that the labor union is the only legitimate labor organization operating within

the bargaining unit.

It is further required that all accompanying documents of the notice of voluntary recognition should be certified under oath
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by the employer-representative and president of the recognized labor union.

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4. VOLUNTARY RECOGNITION OF A UNION MADE DURING PENDENCY OF A PETITION FOR
CERTIFICATION ELECTION FILED BY ANOTHER UNION, NOT VALID.

The voluntary recognition by the employer of a union while a petition for certification election filed by a rival union is
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pending does not have any valid effect. Thus, it was held in Me-Shurn Corporation v. Me-Shurn Workers Union - FSM,
that the results of the certification election where the petitioner-union lost cannot be said to constitute a repudiation by the
affected employees of said union‟ s right to represent them, in view of the discriminatory acts committed by the employer
against the said union prior to the holding of the certification election - acts that included the
employer‟ s immediate grant of exclusive recognition to another union as a bargaining agent despite the pending petition for
certification election.

5. NOTICE OF VOLUNTARY RECOGNITION, WHEN AND WHERE FILED.

Within thirty (30) days from such voluntary recognition, the employer and the union should submit a notice of voluntary
recognition to the DOLE Regional Office which issued the recognized labor union‟ s certificate of registration or, in the
case of local chapter, where the charter certificate and the other documents required under Article 234-A were submitted and
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filed.

(b) CERTIFICATION ELECTION

1. CERTIFICATION ELECTION, MEANING.

“Certification election” refers to the process of determining through secret ballot the sole and exclusive bargaining agent of
the employees in an appropriate bargaining unit for purposes of collective bargaining or negotiations.

A certification election is conducted only upon the order of the Med-Arbiter of the Bureau of Labor Relations (BLR) of the
92
Department of Labor and Employment (DOLE) .

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It is the most democratic method of determining the choice of the employees of their bargaining representative.

It is not a litigation proceeding in the sense in which this term is commonly understood. It is a mere investigation of a non-
adversary fact-finding character in which the DOLE plays the part of a disinterested investigator seeking merely to ascertain
94
the desires of the employees as to the matter of representation. It is not, therefore, bound by the technical rules of evidence.

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In case of doubt, the petition should be resolved in favor of the holding of a certification election.

2. WHO MAY FILE A PETITION FOR CERTIFICATION ELECTION.

The petition may be filed by:

1. A legitimate labor organization which may be:

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2. An employer, when requested by a labor organization to bargain collectively and its majority status is in doubt.

a. General rule.

The general rule is that in the absence of a CBA duly registered in accordance with Article 231 of the Labor Code, a petition
99
for certification election may be filed at any time.

b. Bar rules.

No certification election may be held under the following rules:

21
(a) an independent union; or
(b) a national union or federation which has already issued a charter certificate to its local

96
chapter participating in the certification election; or
(c) a local chapter which has been issued a charter certificate by the national union or

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federation.

3. RULES PROHIBITING THE FILING OF PETITION FOR CERTIFICATION ELECTION (BA RULES) .

1. Certification year bar rule;

2. Negotiations bar rule;
3. Bargaining deadlock bar rule; or 4. Contract bar rule.

1. CERTIFICATION YEAR BAR RULE.

Under this rule, a petition for certification election may not be filed within one (1) year:

1. from the date the fact of voluntary recognition has been entered; or
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2. from the date a valid certification, consent, run-off or re-run election has been conducted within the bargaining unit.

Where an appeal has been filed from the order of the Med-Arbiter certifying the results of the election, the running of the
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one (1) year period shall be suspended until the decision on the appeal has become final and executory.

2. NEGOTIATIONS BAR RULE.

Under this rule, no petition for certification election should be entertained while the sole and exclusive bargaining agent and
the employer have commenced and sustained negotiations in good faith within the period of one (1) year from the date of a
valid certification, consent, run-off or re-run election or from the date of voluntary recognition.

Once the CBA negotiations have commenced and while the parties are in the process of negotiating the terms and conditions
of the CBA, no challenging union is allowed to file a petition for certification election that would disturb the process and
unduly forestall the early conclusion of the agreement.

It must be noted that there is no law or rule that imposes a particular restrictive period within which the parties should
conclude the CBA. In other words, the negotiation process may last for months, even years, and during the period of
negotiations, no petition for certification election may be filed.

3. BARGAINING DEADLOCK BAR RULE.

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Under this rule, a petition for certification election may not be entertained when a bargaining deadlock to which an
incumbent or certified bargaining agent is a party has been submitted to conciliation or arbitration or has become the subject
102
of a valid notice of strike or lockout.

“Collective bargaining deadlock” refers to a situation where there is a failure in the collective bargaining negotiations
103
between the collective bargaining agent and the employer resulting in an impasse or stalemate. Despite their efforts at
bargaining in good faith, the parties have failed to resolve the issues and it appears that there are no other definite options or
plans in sight to break it. Simply stated, there is a deadlock when there is a complete blocking or stoppage in the negotiation
104
resulting from the action of equal and opposing forces.

105
Kaisahan ng Manggagawang Pilipino [KAMPIL-KATIPUNAN] v. Trajano. - The bargaining deadlock-bar rule was not
applied here because for more than four (4) years after it was certified as the exclusive bargaining agent of all the rank-and-
file employees, it did not take any action to legally compel the employer to comply with its duty to bargain collectively,
hence, no CBA was executed. Neither did it file any unfair labor practice suit against the employer nor did it initiate a strike
against the latter. Under the circumstances, a certification election may be validly ordered and held.

Even if there is no actual deadlock, if the circumstances are similar to a deadlock, the bargaining deadlock bar rule applies.

The case in point is Capitol Medical Center Alliance of Concerned Employees-Unified Filipino Service Workers v.
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Laguesma. - Distinguishing this case from said case of Kaisahan, the High Court cited the fact that the bargaining agent
here has taken legal actions to legally coerce the employer to comply with its statutory duty to bargain collectively. It has
charged the employer with unfair laborpracticeandconductedastriketoprotesttheemployer‟
srefusaltobargain.Itisonlyjustandequitable that the circumstances in this case should be considered as similar in nature to a
“bargaining deadlock” when no certification election could be held. This is also to make sure that no floodgates will be
opened for the circumvention of the law by unscrupulous employers to prevent any certified bargaining agent from
negotiating a CBA.

4. CONTRACT BAR RULE.

a. Concept.

Under this rule, a petition for certification election may not be filed when a CBA between the employer and a duly
recognized or certified bargaining agent has been registered with the Bureau of Labor Relations (BLR) in accordance with
107
the Labor Code. Where the CBA is duly registered, a petition for certification election may be filed only within the 60-day
108
freedom period prior to its expiry. The purpose of this rule is to ensure stability in the relationship of the workers and the
employer by preventing frequent modifications of any CBA earlier entered into by them in good faith and for the stipulated
109
original period.

b. Justifications for the rule.

The reasons for this rule are as follows:

1. Certification election may only be entertained within the 60-day freedom period. Any petition filed before or after this
110
period should be dismissed outright.

2. When there exists a CBA, it is the duty of both parties to keep the status quo and to continue in full force and effect the
111
terms and conditions thereof during the 60-day freedom period and/or until a new agreement is reached by them.

3. At the expiration of the 60-day freedom period, the employer should continue to recognize the majority status of the
incumbent bargaining agent where no petition for certification election challenging such majority status is filed by any other
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union.

c. When contract bar rule does not apply.

The contract-bar rule does not apply in the following cases:

23
1. Where there is an automatic renewal provision in the CBA but prior to the date when such automatic renewal became
effective, the employer seasonably filed a manifestation with the Bureau of Labor Relations of its intention to terminate the
said agreement if and when it is established that the bargaining agent does not represent anymore the majority of the workers
113
in the bargaining unit.

2. Where the CBA, despite its due registration, is found in appropriate proceedings that: (a) it contains provisions lower than
the standards fixed by law; or (b) the documents supporting its registration are falsified, fraudulent or tainted with
114
misrepresentation.

3. Where the CBA does not foster industrial stability, such as contracts where the identity of the representative is in doubt
since the employer extended direct recognition to the union and concluded a CBA therewith less than one (1) year from the
time a certification election was conducted where the “no union” vote won. This situation obtains in a case where the
company entered into a CBA with the union when its status as exclusive bargaining agent of the employees has not been
115
established yet.

4. Where the CBA was registered before or during the last sixty (60) days of a subsisting agreement or during the pendency
116
of a representation case. It is well-settled that the 60- day freedom period based on the original CBA should not be
117
affected by any amendment, extension or renewal of the CBA for purposes of certification election.

4. REQUIREMENTS FOR VALIDITY OF CERTIFICATION ELECTION. a. Requisites for the validity of the petition for
certification election.

The following requisites should concur:

1. The union should be legitimate which means that it is duly registered and listed in the registry of legitimate labor unions
of the BLR or that its legal personality has not been revoked or cancelled with finality.

2. In case of organized establishments, the petition for certification election is filed during (and not before or after) the 60-
day freedom period of a duly registered CBA.

3. In case of organized establishments, the petition complied with the 25% written support of

the members of the bargaining unit.

4. The petition is filed not in violation of any of the four (4) bar rules [See above discussion

thereof].

c. Example on how to reckon the majorities.

b. Two (2) kinds of majorities.

The process of certification election requires two (2) kinds of majority votes, viz:

1. Number of votes required for the validity of the process of certification election itself. In order to have a valid certification
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election, at least a majority of all eligible voters in the appropriate bargaining unit must have cast their votes.

2.Numberofvotesrequiredtobecertifiedasthecollectivebargainingagent. Tobe certified as the sole and exclusive bargaining

119
agent, the union should obtain a majority of the valid votes cast.

24
To illustrate the proper reckoning of majority votes, in a bargaining unit composed of 100 employees, the first thing to
determine is how many votes should be validly cast in order to have a valid certification election. The second issue is how
many votes should a union garner in order to be declared winner and thus be proclaimed as the sole and exclusive bargaining
agent of all the employees in the bargaining unit.

Following the rule enunciated in Article 256, in order to have a valid certification election, majority of the 100 employees or
at least 51 employees should cast their votes. In order to win the election, a contending union should be able to garner the
majority of the valid votes cast. So, if only 51 employees cast their votes, the majority thereof or at least 26 employees
should vote for the winning union. This illustration is necessary to dispel the notion that in a bargaining unit composed of
100 employees, at least 51 employees should vote for the winning union. As clearly shown in this illustration, a vote of 26
would suffice in order to be certified as the sole and exclusive bargaining agent.

d. Failure of election.

There is failure of election when the number of votes cast in a certification or consent election is less than the majority of the
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number of eligible voters and there are no challenged votes that could materially change the results of the election.

The effect of failure of election is the holding of another election within six (6) months from the date of declaration of the
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failure of election.

e. Proclamation and certification of the result of the certification election.

Within twenty-four (24) hours from the final canvass of votes, there being a valid election, the Election Officer shall
transmit the records of the case to the Med-Arbiter who shall, within the same period from receipt of the minutes and results
of election, issue an order proclaiming the results of the election and certifying the union which obtained the majority of the
valid votes cast as the sole and exclusive bargaining agent in the subject bargaining unit, under any of the following
conditions:

(1) No protest was filed or, even if one was filed, the same was not perfected within the five (5) day period for perfection of
the protest;

(2) No challenge or eligibility issue was raised or, even if one was raised, the resolution of the same will not materially
change the results of the elections.

The winning union shall have the rights, privileges and obligations of a duly certified collective bargaining agent from the
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time the certification is issued.

5. SOME PRINCIPLES ON CERTIFICATION ELECTION.

The pendency of a petition to cancel the certificate of registration of a union participating in a certification election does not
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stay the conduct thereof.

The pendency of an unfair labor practice case filed against a labor organization participating in the certification election does
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not stay the holding thereof.

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Direct certification as a method of selecting the exclusive bargaining agent of the employees is not allowed. This is
because the conduct of a certification election is still necessary in order to arrive in a manner definitive and certain
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concerning the choice of the labor organization to represent the workers in a collective bargaining unit.

127
No certification election in entities immune from suit is allowed.

The “No Union” vote is always one of the choices in a certification election. Where majority of the valid votes cast results in
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“No Union” obtaining the majority, the Med-Arbiter shall declare such fact in the order.

The right to vote starts from first day of employment. Any employee, whether employed for a definite period or not, shall,
beginning on his first day of service, already be considered an employee for purposes of membership in any labor union,
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hence, eligible to participate in a certification election. Consequently, all employees - whether probationary or permanent

25
or regular - may be allowed to participate in the certification election. The law does not make any distinction. It merely
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mentions the term “employees.”

Only persons who have direct employment relationship with the employer may vote in the certification election, regardless
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of their period of employment.

Challenging of votes, grounds. An authorized representative of any of the contending unions and the employer may
challenge a vote before it is deposited in the ballot box only on any of the following grounds:

(a) That there is no employer-employee relationship between the voter and the employer; or
(b) That the voter is not a member of the appropriate bargaining unit which petitioner seeks to

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represent.

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Spoiled ballots are not reckoned to determine majority.

Protest; when perfected. The protesting party must have its protest recorded in the minutes of the election proceeding and
should formalize it with the Med-Arbiter, together with the specific grounds, arguments and evidence, within five (5) days
after the close of the election proceedings. If not recorded in the minutes and formalized within the said prescribed period,
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the protest shall be deemed dropped.

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A protest cannot be filed by a labor union which is not a participant in the certification election. (i)

CERTIFICATION ELECTION
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IN AN UNORGANIZED ESTABLISHMENT

1. UNORGANIZED ESTABLISHMENT, MEANING.

As distinguished from “organized establishment,” an “unorganized establishment” is an employer entity where there is no
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recognized or certified collective bargaining union or agent.

A company or an employer-entity, however, may still be considered an unorganized establishment even if there are unions in
existence therein for as long as not one of them is duly certified as the sole and exclusive bargaining representative of the
employees in the particular bargaining unit it seeks to operate and represent.

Further, a company remains unorganized even if there is a duly recognized or certified bargaining agent for rank-and-file
employees, for purposes of the petition for certification election filed by supervisors. The reason is that the bargaining unit
composed of supervisors is separate and distinct from the unionized bargaining unit of rank-and-file employees. Hence,
being unorganized, the 25% required minimum support of employees within the bargaining unit of the supervisors need not
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be complied with.

2. “AUTOMATIC” CONDUCT OF A CERTIFICATION ELECTION UPON FILING OF THE PETITION FOR

CERTIFICATION ELECTION.

In case of a petition filed by a legitimate organization involving

an unorganized establishment, the Med-Arbiter is required to immediately order the conduct of a certification election upon
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filing of a petition for certification election by a legitimate labor organization. The twenty-five percent (25%) minimum
support of the employees in the bargaining unit which is required in “organized establishments” is not necessary in the case
of “unorganized establishments. ” The obvious purpose is to make it easy for employees to self-organize - a policy which is
enunciated in the Constitution and labor laws.

(ii) CERTIFICATION ELECTION

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IN AN ORGANIZED ESTABLISHMENT
1. REQUISITES FOR THE CONDUCT OF A CERTIFICATION ELECTION IN AN

26
ORGANIZED ESTABLISHMENT.

Under Article 256, the Med-Arbiter is required to automatically order the conduct of a certification election by secret ballot
in an organized establishment as soon as the following requisites are fully met:

1. That a petition questioning the majority status of the incumbent bargaining agent is filed before the DOLE within the 60-
day freedom period;

2. That such petition is verified; and

3. That the petition is supported by the written consent of at least twenty-five percent (25%) all the employees in the
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bargaining unit.

2. WRITTEN CONSENT OF AT LEAST 25% OF ALL THE EMPLOYEES IN THE BARGAINING UNIT.

The 25% requirement may not be strictly enforced. Compliance therewith need not be established with absolute certainty.
Even if the statutory requirement of 25% of the labor force asking for certification election has not been strictly complied
with, the Med-Arbiter is still empowered to order its conduct for the purpose of ascertaining which of the contending labor
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organizations should be chosen as the exclusive bargaining agent.

(c) RUN-OFF ELECTION (i) REQUIREMENTS

1. RUN-OFF ELECTION, MEANING.

A “run-off election” refers to an election between the labor unions receiving the two (2) highest number of votes in a
certification election or consent election with three (3) or more choices, where such a certification election or consent
election results in none of the three (3) or more choices receiving the majority of the valid votes cast, provided that the total
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number of votes for all contending unions is at least fifty percent (50%) of the number of votes cast.

2. WHEN CONDUCTED.

If there are no objections or challenges which, if sustained, can materially alter the results, the Election Officer should motu
proprio conduct a run-off election within ten (10) days from the close of the election proceedings between the labor unions
receiving the two highest number of votes. For obvious reason, the choice of “No Union” should not be included in the run-
off election. Notice of the conduct of a run-off election should be posted by the Election Officer at least five (5) days before
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the actual date thereof.

3. QUALIFICATION OF VOTERS IN THE RUN-OFF ELECTION.

The same voters‟ list used in the certification election or consent election should be used in the run-off election. The ballots
in the run-off election should provide as choices the unions receiving the highest and second highest number of the votes
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cast. The labor union receiving the greater number of valid votes cast should be certified as the winner.

(d)

RE-RUN ELECTION

1. RULE ON RE-RUN ELECTION, NOT FOUND IN THE LABOR CODE.

This mode of choosing the sole and exclusive bargaining unit is not expressly provided in the Labor Code or in its
implementing rules. The circumstances which would justify the holding of a rerun election are not set out in the law.

2. JUSTIFICATIONS FOR HOLDING OF RE-RUN ELECTION.

A re-run election may be justified if certain irregularities have been committed during the conduct of the certification
election such as, inter alia,disenfranchisement of the voters, lack of secrecy in the voting, fraud or bribery, in which case, the

27
certification election should be invalidated. Such invalidation would necessitate the conduct of a re-run election among the
contending unions to determine the true will and desire of the employee-electorates.

3. RELEVANT JURISPRUDENCE.

Philippine jurisprudence has not exactly referred to the holding of another certification election as “re-run” election but the
situations for such re-holding of the certification election as described in some cases, may be deemed descriptive of this
term.

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Confederation of Citizens Labor Unions v. Noriel. - In ordering, inter alia, the conduct of another run-off certification
election inside the premises of the company, the Supreme Court disposed as follows:

of

“We hold that the certification election is invalid because of certain irregularities such as that (1) the workers on the night shift
(ten p.m. to six a.m.) and some of those in the afternoon shift were not able to vote, so much so that out of 1,010 voters only
692 voted and about 318 failed to vote (p. 88, Rollo) ; (2) the secrecy of the ballot was not safeguarded; (3) the election
supervisors were remiss in their duties and were apparently "intimidated" by a union representative and (4) the participating
unions were overzealous in wooing the employees to vote in their favor by resorting to such tactics as giving free tricycle rides
and T-shirts.

“The purpose of a certification election is to give the employees "true representation in their collective bargaining with an
employer" (51 C.J.S. 969) . That purpose was not achieved in the run-off election because many employees or union
members were not able to vote and the employer, through apathy or deliberate intent, did not render assistance in the holding
147
of the election.”

148
National Federation of Labor v. The Secretary of Labor. - This involves a certification election among the rank-and-file
employees of the Hijo Plantation, Inc. resulting in the choice of “no union. ” In ordering a re-run election, the Supreme
Court declared:

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“xxx As this Court stressed in LVN Pictures, Inc. v. Phil. Musicians Guild, it is essential that the employees must be
accorded an opportunity to freely and intelligently determine which labor organization shall act in their behalf. The workers in
this case were denied this opportunity. Not only were a substantial number of them disfranchised, there were, in addition,
allegations of fraud and other irregularities which put in question the integrity of the election. Workers wrote letters and made
complaints protesting the conduct of the election. The Report of Med-Arbiter Pura who investigated these allegations found
the allegations of fraud and irregularities to be true.

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“In one case this Court invalidated a certification election upon a showing of disfranchisement, lack of secrecy in the voting
and bribery. We hold the same in this case. The workers’ right to self-organization as enshrined in both the Constitution and
Labor Code would be rendered nugatory if their right to choose their collective bargaining representative were denied. Indeed,
the policy of the Labor Code favors the holding of a certification election as the most conclusive way of choosing the labor
organization to represent workers in a collective bargaining unit. In case of doubt, the doubt should be resolved in favor of the
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holding of a certification election.”

4. RE-RUN ELECTION VS. FAILURE OF ELECTION.

“Re-run” election should be distinguished from a “failure” of election. In re-run election, there is a valid certification
election but because of certain circumstances, the election is nullified and another one is ordered to truly reflect the will and
sentiment of the electorate-employees in the choice of their bargaining representative.

In failure of election, the number of votes cast in the certification or consent election is less than the majority of the number
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of eligible voters and there are no challenged votes that could materially change the results thereof. Consequently, a
motion for the immediate holding of another certification or consent election within six (6) months from the date of
declaration of the failure of election may be filed. Within twenty-four (24) hours from receipt of such motion, the Election
Officer should immediately schedule the conduct of such election within fifteen (15) days from receipt of the motion and
cause the posting of the notice of certification election at least ten (10) days prior to the scheduled date of election in two (2)
153
most conspicuous places in the establishment. The same guidelines and list of voters shall be used in the election.

(e) CONSENT ELECTION

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1. CONSENT ELECTION, MEANING.

A “consent election” refers to the process of determining through secret ballot the sole and exclusive representative of the
employees in an appropriate bargaining unit for purposes of collective bargaining and negotiation. It is voluntarily agreed
154
upon by the parties, with or without the intervention of the DOLE.

2. CONSENT ELECTION VS. CERTIFICATION ELECTION.

A consent electionis one mutually agreed upon by the parties, with or without the intervention of the DOLE, its purpose
being merely to determine the issue of majority representation of all the

workers in an appropriate collective bargaining unit; while a certification election is one which is ordered by the DOLE. The
purpose for both electoral exercise is the same, i.e., to determine the sole and exclusive bargaining agent of all the
employees in an appropriate bargaining unit for the purpose of collective bargaining. From the very nature of consent
election, it is a separate and distinct process from certification election and has nothing to do with the import and effect of
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the latter.

By law, as a result of the consent election, the right to be the exclusive representative of all the employees in an appropriate
collective bargaining unit is vested in the labor union “designated or selected” for such purpose “by the majority of the
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employees” in the unit concerned.

3. CONSENT ELECTION MAY BE AGREED UPON BY THE PARTIES TO A PENDING CERTIFICATION

ELECTION CASE.

During the preliminary conference that the Med-Arbiter is required to conduct in a certification election proceeding, he is
required to determine if the contending labor unions are willing to submit themselves to a consent election. In case the
contending unions agree to a consent election, the Med-Arbiter is not allowed to issue a formal order calling for the conduct
of a certification election. Instead, he should enter the fact of the agreement on the conduct of the conent election in the
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minutes of the hearing which should then be signed by the parties and attested to by the Med-Arbiter.
4. HOLDING OF A CONSENT ELECTION DURING THE PENDENCY OF A PETITION FOR CERTIFICATION
ELECTION.

Where a petition for certification election has been filed and upon the intercession of the Med- Arbiter, the parties mutually
agree to hold a consent election, the results thereof shall constitute a bar to the holding of a certification election for one (1)
year from the holding of such consent election. Where an appeal has been filed from the results of the consent election, the
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running of the one-year period is suspended until the decision on appeal has become final and executory.
5. HOLDING OF A CONSENT ELECTION WHERE THERE IS NO PETITION FOR CERTIFICATION ELECTION
FILED.

Where no petition for certification election is filed but the parties themselves agree to hold a consent election with the
intercession of the DOLE Regional Office, the results thereof shall constitute a bar to the filing of a petition for certification
159
election.

4.
OTHER RELEVANT MATTERS

(a)

AFFILIATION AND DISAFFILIATION OF THE LOCAL UNION FROM THE MOTHER UNION

1. AFFILIATION.
a. Mother union.

In relation to an affiliate, the federation or national union is commonly known as the “mother union.” This term is not found
in law but oftentimes, the Supreme Court uses this term to describe a federation or a national union.

b. Affiliate.

An “affiliate” refers to:

29
c. A chartered local/local chapter, not an affiliate.

Based on the above definition and description, technically, a local chapter created through the mode of chartering by a
162
mother union under Article 234-A of the Labor Code, cannot be properly called an “affiliate” if it has not acquired any
independent registration of its own.

d. Purpose of affiliation.

The purpose is to further strengthen the collective bargaining leverage of the affiliate. No
doubt, the purpose of affiliation by a local union with a mother union (federation or national union) is to increase by
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collective action its bargaining power in respect of the terms and conditions of labor.

(1) An independent union affiliated with a federation or a national union; or

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(2) A local chapter which has been subsequently granted independent registration but did not disaffiliate from the
161
federation or national union which created it.

e. Contract of agency.

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The mother union, acting for and in behalf of its affiliate, has the status of an agent while the local union remains the
principal - the basic unit of the association free to serve the common interest of all its members subject only to the restraints
165
imposed by the constitution and by-laws of the association.

f. Some principles on affiliation.

166
Independent legal personality of an affiliate union is not affected by affiliation.

The affiliate union is a separate and distinct voluntary association owing its creation to the will of its members. It does not
167
give the mother federation the license to act independently of the affiliate union.

168
The fact that the local chapter is not a legitimate labor organization does not affect the principal-agent relationship.

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Affiliate union becomes subject of the rules of the federation or national union.

The appendage of the acronym of the federation or national union after the name of the affiliate union in the registration
with the DOLE does not change the principal-agent relationship between them. Such inclusion of the acronym is merely to
indicate that the local union is affiliated with the federation or national union at the time of the registration. It does not mean
170
that the affiliate union cannot independently stand on its own.

The fact that it was the federation which negotiated the CBA does not make it the principal and the affiliate or local union
171
which it represents, the agent.

However, if it was the federation which negotiated all the CBAs in the establishment, the local chapter cannot negotiate the
172
renewal of the CBA without the consent and participation of the federation.

The fact that it was the name of the federation that was particularly mentioned as the bargaining party in the CBA without
173
specifying the local union does not have any effect on the right of the federation to participate in the bargaining process.

It is the local union and not the federation/national union with which it is affiliated that has the right to administer and
174
enforce the CBA with the employer.

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In case of illegal strike, the local union, not the mother union, is liable for damages.

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2. DISAFFILIATION.
a. Right to disaffiliate.

The right of the affiliate union to disaffiliate from its mother federation or national union is a constitutionally-guaranteed
right which may be invoked by the former at any time. It is axiomatic that an affiliate union is a separate and voluntary
association free to serve the interest of all its members - consistent with the freedom of association guaranteed in the
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Constitution.

b. Disaffiliation of independently-registered union and local chapter, distinguished.

The disaffiliation of an independently-registered union does not affect its legitimate status as a labor organization. However,
the same thing may not be said of a local chapter which has no independent registration since its creation was effected
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pursuant to the charter certificate issued to it by the federation or national union. Once a local chapter disaffiliates from the
federation or national union which created it, it ceases to be entitled to the rights and privileges granted to a legitimate labor
178
organization. Hence, it cannot, by itself, file a petition for certification election.

c. Some principles on disaffiliation.

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Disaffiliation does not divest an affiliate union of its legal personality. Disaffiliation of an affiliate union is not an act
180
of disloyalty.

Disaffiliation for purposes of forming a new union does not terminate the status of the members thereof as employees of
the company. By said act of disaffiliation, the employees who are members of the local union did not form a new union but
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merely exercised their right to register their local union. The local union is free to disaffiliate from its mother union.

182
Disaffiliation should be approved by the majority of the union members.

Disaffiliation terminates the right to check-off federation dues. The obligation to check- off federation dues is terminated
183
with the valid disaffiliation of the affiliate union from the federation with which it was previously affiliated.

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Disaffiliation does not affect the CBA. It does not operate to amend it or change the administration of the contract.

As a general rule, a labor union may disaffiliate from the mother union to form an independent union only during the 60-
day freedom period prior to the expiration of the existing CBA. It is not, however, legally impossible to effect the
disaffiliation prior to the freedom period, provided that the same is approved by the majority of the members of the
bargaining unit. Under this situation, the CBA continues to bind the members of the new or disaffiliated and independent
185
union up to the expiration thereof.

Disaffiliating from the federation and entering into a CBA with the employer does not constitute an unfair labor
186
practice.

187
Disaffiliation is not a violation of the union security clause.
Election protest involving both the mother federation and local union is not a bar to

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disaffiliation.

The issue of affiliation or disaffiliation is an inter-union conflict the jurisdiction of which properly lies with the Bureau of
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Labor Relations IBLR) and not with the Labor Arbiter.

(i)

SUBSTITUTIONARY DOCTRINE

1. CHANGE OF BARGAINING REPRESENTATIVE DURING THE LIFE OF A CBA.

Based on Philippine jurisprudence, the substitutionary doctrine was conceived during the time when the law has not fixed
the lifetime of the CBA as is now provided in Article 253-A of the Labor Code. The uncertainty on when and how should

31
the majority status of the bargaining agent may be challenged by way of a certification election was thus the lingering
problem hounding the labor front.

190
Thus, in General Maritime Stevedores’ Union of the Philippines v. South Sea Shipping Line, the July 28, 1957 CBA
between respondent company and the United Seamen‟ s Union of the Philippines (USUP) , has been continuously
automatically renewed after every two years so much so that at the time of the writing of the High Court‟ s decision in this
case, it would appear that the CBA will still be effective up to July 28, 1961, that is to say, about a year therefrom.
According to the claim of the petitioners, the bargaining agreement of July 28, 1957 was but a renewal of the same or
similar agreement of July 1955, so that the bargaining agreement has been in existence for about five years, which is too
long a period within which a certification election has not been held. And because of the “automatic renewal clause”
provided in the CBA, the time when the challenge should be made continues to pose a problem. This led the Supreme Court
to analyze cases decided by the National Labor Relations Board (NLRB) of the United States, which was the equivalent at
that time of the Court of Industrial Relations (CIR) and the present-day National Labor Relations Commission (NLRC) . It
thus concluded:

“After reviewing the cases decided by the NLRB of the United States and our own cases, we have arrived at the conclusion
that it is reasonable and proper that when there is a bargaining contract for more than a year, it is too early to hold a
certification election within a year from the effectivity of said bargaining agreement; also that a two-year bargaining contract is
not too long for the purpose of barring a certification election. For this purpose, a bargaining agreement may run for three,
even four years, but in such case, it is equally advisable that to decide whether or not within those three or four years, a
certification election should not be held, may well be left to the sound discretion of the CIR, considering the conditions
involved in the case, particularly, the terms and conditions of the bargaining contract.

“We also hold that where the bargaining contract is to run for more than two years, the principle of substitution may well be
adopted and enforced by the CIR to the effect that after two years of the life of bargaining agreement, a certification election
may be allowed by the CIR; that if a bargaining agent other than the union or organization that

executed the contract, is elected, said new agent would have to respect said contract, but

it considers it too long, or refuse to renew the contract pursuant to an automatic renewal

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In Benguet Consolidated, Inc. v. BCI Employees & Workers Union, (PAFLU) , a CBA was concluded on June 23, 1959
between petitioner company and Benguet-Balatoc Workers Union (“BBWU”) , effective for a period of 4-1/2 years, or from
June 23, 1959 to December 23, 1963. It likewise embodied a “No-Strike, No-Lockout” clause. About three years later, or on
April 6, 1962, before the expiration of the CBA, a certification election was conducted by the Department of Labor among
all the rank-and-file employees of petitioner in the same collective bargaining units. Another union, herein respondent BCI
Employees & Workers Union-PAFLU (UNION-PAFLU) obtained more than 50% of the total number of votes, defeating
BBWU, and accordingly, the CIR, on August 18, 1962, certified UNION-PAFLU as the sole and exclusive collective
bargaining agent of all employees of petitioner company. One of the issues raised in the instant case is whether the CBA
executed between Benguet and BBWU on June 23, 1959 and effective until December 23, 1963 automatically binds
UNION-PAFLU upon its certification, on August 18, 1962, as sole bargaining representative of all employees of petitioner.

193
Petitioner invoked the afore-quoted ruling in General Maritime in support of its contention that the CBA then existing was
binding on the new bargaining agent - UNION PAFLU. The Supreme Court, however, ruled that such invocation is not
persuasive because the above-quoted pronouncement in General Maritime was obiter dictum. The only issue in said case
was whether a CBA which had practically run for five (5) years constituted a bar to certification proceedings. It was held
that it did not and accordingly directed the court a quo to order certification election. With that, nothing more was necessary
for the disposition of the case. Moreover, the pronouncement adverted to was rather premature. The possible certification of
a union different from that which signed the bargaining contract was a mere contingency then since the elections were still to
be held. Clearly, the Court was not called upon to rule on the possible effects of such proceedings on the bargaining
agreement. It further held:

“But worse, BENGUET’s reliance upon the Principle of Substitution is totally misplaced. This principle, formulated by the
NLRB as its initial compromise solution to the problem facing it when there occurs a shift in employees’ union allegiance after
the execution of a bargaining contract with their employer, merely states that even during the effectivity of a collective
bargaining agreement executed between employer and employees thru their agent, the employees can change said agent
but the contract continues to bind them up to its expiration date. They may bargain however for the shortening of said
expiration date.

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“In formulating the „substitutionary‟ doctrine,‟ the only consideration involved was the employees’ interest in the existing
bargaining agreement. The agent’s interest never entered the picture. In fact, the justification for said doctrine was:

„. . .that the majority of the employees, as an entity under the statute, is the true party in interest to the contract, holding rights
through the agency of the union representative. Thus, any exclusive interest claimed by the agent is defeasible at the will of
the principal. . . ‟

“Stated otherwise, the „substitutionary‟ doctrine only provides that the employees cannot revoke the validly executed
collective bargaining contract with their employer by the simple expedient of changing their bargaining agent. And it is in the
light of this that the phrase „said new agent would have to respect said contract‟ must be understood. It only means that the
employees, thru their new bargaining agent, cannot renege on their collective bargaining contract, except of course to
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negotiate with management for the shortening thereof.”

2. EFFECT OF SUBSTITUTIONARY DOCTRINE ON THE DEPOSED UNION’S PERSONAL UNDERTAKINGS.

In case of change of bargaining agent under the substitutionary doctrine, the new bargaining agent is not bound by the
personal undertakings of the deposed union like the “no strike, no lockout” clause in a CBA which is the personal
undertaking of the bargaining agent which negotiated it. Thus in Benguet, it was pronounced:

The „substitutionary‟ doctrine, therefore, cannot be invoked to support the contention that a newly certified collective
bargaining agent automatically assumes all the personal undertakings — like the no-strike stipulation here — in the collective
bargaining agreement made by the deposed union. When BBWU bound

that it may bargain with the management for the shortening of the life of the contract if it considers it too long, or refuse to
191
renew the contract pursuant to an automatic renewal clause.”

itself and its officers not to strike, it could not have validly bound also all the other rival unions existing in the bargaining units
in question. BBWU was the agent of the employees, not of the other unions which possess distinct personalities. To consider
UNION contractually bound to the no-strike stipulation would therefore violate the legal maxim that res inter alios acta alios
nec prodest nec nocet.

“Of course, UNION, as the newly certified bargaining agent, could always voluntarily assume all the personal undertakings
made by the displaced agent. But as the lower court found, there was no showing at all that, prior to the strike, UNION
formally adopted the existing CONTRACT as its own and assumed all the liabilities imposed by the same upon BBWU.”

3. SOME PRINCIPLES ON SUBSTITUTIONARY DOCTRINE.

The substitutionary doctrine cannot be invoked to subvert an existing CBA, in derogation of the principle of freedom of
contract. The substitution of a bargaining agent cannot be allowed if the purpose is to subvert an existing CBA freely entered
into by the parties. Such act cannot be sanctioned in law or in equity as it is in derogation of the principle underlying the
195
freedom of contract and good faith in contractual relations.

The substitutionary doctrine is applicable also to a situation where the local union, which was created through the process of
196 197
chartering by the mother union, disaffiliates from the latter after it secured an independent registration. The local union
will thus be substituted to that of the federation which negotiated the CBA as in Elisco-Elirol Labor Union [NAFLU] v.
198
Noriel, where petitioner union was created through the mode of chartering by the National Federation of Labor Unions
(NAFLU) and later, it secured its independent registration with the BLR and disaffiliated with NAFLU by virtue of a
resolution by its general membership.

Substitutionary doctrine in cases of union schism or split. During the lifetime of the CBA, the majority status of the sole and
exclusive bargaining agent which negotiated it may be questioned as when there exist extraordinary circumstances which
affect its standing in terms of membership, structure and others as may have been occasioned by union schism or split which
completely changes the situation of the employer and the bargaining agent. A petition for certification election may thus be
filed to determine which of the unions has the majority status. The union certified as the new sole and exclusive bargaining
agent will thus substitute the previous one as a party to the existing CBA. This is allowed under the same “substitutionary
doctrine.”

(b)
199
UNION DUES AND SPECIAL ASSESSMENTS

(i)

33
REQUIREMENTS FOR VALIDITY

1. RIGHT OF UNION TO COLLECT DUES AND ASSESSMENTS.

All unions are authorized to collect reasonable amounts of:

1. membership fees; 2. union dues;

3. assessments;
4. fines;

5. contributions for labor education and research, mutual death and hospitalization benefits, welfare fund, strike fund and
200
credit and cooperative undertakings; and

201
6. agency fees.
2. REQUISITES FOR VALIDITY OF UNION DUES AND SPECIAL ASSESSMENTS.

The following requisites must concur in order for union dues and special assessments for the union ‟
sincidentalexpenses,attorney‟ sfeesandrepresentationexpensestobevalid,namely:

(a) Authorization by a written resolution of the majority of all the members at a general membership meeting duly called for
the purpose;

(b)Secretary‟ srecordoftheminutesofsaidmeeting;and
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(c) Individual written authorizations for check-off duly signed by the employees concerned.

3. ASSESSMENT FOR ATTORNEY’S FEES, NEGOTIATION FEES AND SIMILAR CHARGES.

As far as attorney‟ s fees, negotiation fees or similar charges are concerned, the rule is that no such attorney‟ s fees,
negotiation fees or similar charges of any kind arising from the negotiation or conclusion of the CBA shall be imposed on
any individual member of the contracting union. Such fees may be charged only against the union funds in an amount to be
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agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary is deemed null and void.
Clearly, what is prohibited is the payment of attorney‟ s fees when it is effected through forced contributions from the
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workers from their own funds as distinguished from the union funds.

4. CHECK-OFF OF UNION DUES AND ASSESSMENTS.

“Check-off” means a method of deducting from the employee‟ s pay at prescribed periods, any amount due for fees, fines or
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assessments. It is a process or device whereby the employer, on agreement with the union recognized as the proper
bargaining representative, or on prior authorization from its employees, deducts union dues and assessments from the latter‟
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s wages and remits them directly to the union.

5. INDIVIDUAL WRITTEN AUTHORIZATION, WHEN REQUIRED.

The law strictly prohibits the check-off from any amount due an employee who is a member of the union, of any union dues,
special assessment, attorney‟ s fees, negotiation fees or any other extraordinary fees other than for mandatory activities
under the Labor Code, without the individual written authorization duly signed by the employee. Such authorization must
207
specifically state the amount, purpose and beneficiary of the deduction. The purpose of the individual written authorization
is to protect the employees from unwarranted practices that diminish their compensation without their knowledge or
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consent.

6. INDIVIDUAL WRITTEN AUTHORIZATION, WHEN NOT REQUIRED.

In the following cases, individual written authorization is not required:

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a. Assessment from non-members of the bargaining agent of “agency fees” which should be equivalent to the dues and other
209
fees paid by members of the recognized bargaining agent, if such non-members accept the benefits under the CBA.

210
b. Deductions for fees for mandatory activities such as labor relations seminars and labor education activities.

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c. Check-off for union service fees authorized by law.
d. Deductions for withholding tax mandated under the National Internal Revenue Code.
e. Deductions for withholding of wages because of employee‟ s debt to the employer which is

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already due.
f. Deductions made pursuant to a judgment against the worker under circumstances where the

wages may be the subject of attachment or execution but only for debts incurred for food,

213
clothing, shelter and medical attendance.
g. Deductions from wages ordered by the court.
h. Deductions authorized by law such as for premiums for PhilHealth, social security, Pag-

IBIG, employees‟ compensation and the like.

7. SOME PRINCIPLES ON UNION DUES AND ASSESSMENTS.

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Check-off for a special assessment is not valid after the withdrawal of the individual written authorizations.

Unlike in authorization for union dues and assessments, disauthorization does not require that it be written individually.
The fact that the disauthorizations were collective in form consisting of randomly procured signatures and under loose sheets
of paper, is of no moment for the simple

reason that the documents containing the disauthorizations have the signatures of the union members. Such retractions were
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valid. There is nothing in the law which requires that the disauthorizations must be in individual form.

The right of the incumbent bargaining representative to check off and to collect dues is not affected by the pendency of a
216
representation case or an intra-union dispute.

217
Approval of the union dues and assessments by the majority of all the members of the union is required. The Labor
218 219
Code and the Rules to Implement the Labor Code disallow a deduction for special assessment which was passed by a
mere board resolution of the directors, and not by

the majority of all the members of the union. Also, a written authorization duly signed individually by the employees
concerned is a conditionsine qua non therefor. Employees are protected by law from unwarranted practices that have for
their object the diminution of the hard-earned compensation due them.

1. NATURE OF AGENCY FEE - NEITHER CONTRACTUAL NOR STATUTORY BUT QUASI-CONTRACTUAL.

The bargaining agent which successfully negotiated the CBA with the employer is given the right to collect a reasonable fee,
called “agency fee” from its non-members - who are employees covered by the bargaining unit being represented by the
bargaining agent - in case they accept the benefits under the CBA. It is called “agency fees” because by availing of the
benefits of the CBA, they, in effect, recognize and accept the bargaining union as their “agent” as well.

221
According to Holy Cross of Davao College, Inc. v. Joaquin, payment of agency fees to the certified collective bargaining
agent which successfully negotiated the CBA is but a reasonable requirement recognized by law. The collection of agency
fees in an amount equivalent to the union dues and fees, from employees who are not bargaining union members, is
recognized by Article 248(e) of the Labor Code. The employee‟ s acceptance of benefits resulting from a CBA justifies the
deduction of agency fees fromhispayandtheunion‟ sentitlementthereto.Inthisaspect,thelegalbasisoftheunion'srighttoagency
fees is neither contractual nor statutory, but quasi-contractual, deriving from the established principle that non-bargaining

35
union employees may not unjustly enrich themselves by benefiting from employment conditions negotiated by the
bargaining agent.

2. A NON-BARGAINING UNION MEMBER HAS THE RIGHT TO ACCEPT OR NOT THE BENEFITS OF THE CBA.

There is no law that compels a non-bargaining union member to accept the benefits provided in the CBA. He has the
freedom to choose between accepting and rejecting the CBA itself by not accepting any of the benefits flowing therefrom.
Consequently, if a non-bargaining union member does not accept or refuses to avail of the CBA-based benefits, he is not
under any obligation to pay the “agency fees” since, in effect, he does not give recognition to the status of the bargaining
union as his agent.

3. LIMITATION ON THE AMOUNT OF AGENCY FEE.

The bargaining union cannot capriciously fix the amount of agency fees it may collect from its non-members. Article 248(e)
of the Labor Code expressly sets forth the limitation in fixing the amount of the agency fees, thus:

(1) It should be reasonable in amount; and

(2) It should be equivalent to the dues and other fees paid by members of the recognized

222
collective bargaining agent.
Thus, any agency fee collected in excess of this limitation is a nullity.

4. NON-MEMBERS OF THE CERTIFIED BARGAINING AGENT NEED NOT BECOME MEMBERS THEREOF.

The employees who are not members of the certified bargaining agent which successfully concluded the CBA are not
required to become members of the latter. Their acceptance of the benefits flowing from the CBA and their act of paying the
agency fees do not make them members thereof.

5. CHECK-OFF OF AGENCY FEES.

“Check-off” of agency fees is a process or device whereby the employer, upon agreement with the bargaining union, deducts
agency feesfrom the wages of non-bargaining union members who avail of the benefits from the CBA and remits them
223
directly to the bargaining union.

6. ACCRUAL OF RIGHT OF BARGAINING UNION TO DEMAND CHECK-OFF OF AGENCY FEES.

220
(c) AGENCY FEES

(i)
REQUISITES FOR ASSESSMENT

The right of the bargaining union to demand check-off of agency fees accrues from the moment the non-bargaining union
224
member accepts and receives the benefits from the CBA. This is the operative fact that would trigger such liability.

7. NO INDIVIDUAL WRITTEN AUTHORIZATION BY NON-BARGAINING UNION MEMBERS REQUIRED.

To effect the check-off of agency fees, no individual written authorization from the non- bargaining union members who
225
accept the benefits resulting from the CBA is necessary.

8. EMPLOYER’S DUTY TO CHECK-OFF AGENCY FEES.

It is the duty of the employer to deduct or “check-off” the sum equivalent to the amount of agency fees from the non-
226
bargaining union members' wages for direct remittance to the bargaining union.”

9. THE NON-BARGAINING UNION MEMBERS WHO ARE PAYING AGENCY FEES TO THE BARGAINING
UNION REMAIN LIABLE TO PAY UNION DUES TO THEIR OWN UNION.

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 The fact that the non-members of the bargaining union who are members of the minority union are paying agency fees to the
former does not free them from their obligation as members to continue paying their union dues and special assessments to
their union (minority union) . There is no law that puts a stop to such obligation simply because their union failed to be
recognized or certified as the collective bargaining agent. Union dues are required for the continued existence and viability
of their union. Hence, they are obligated to pay two (2) kinds of dues:

227
This is clear from a reading of Article 241 which does not qualify that the right to collect union dues and assessments, on
the part of the union, and the obligation to pay the same, on the part of its members, are extinguished the moment the union
is unsuccessful in its quest to become the sole and exclusive bargaining agent of the employees in the bargaining unit where
it seeks to operate.

10. MINORITY UNION CANNOT DEMAND FROM THE EMPLOYER TO GRANT IT THE RIGHT TO CHECK-OFF
OF UNION DUES AND ASSESSMENTS FROM THEIR MEMBERS.

The obligation on the part of the employer to undertake the duty to check-off union dues and special assessments holds and
applies only to the bargaining agent and not to any other union/s (called “Minority Union/s”) . This is clear from the manner
228
by which the Supreme Court described check-off in the case of Holy Cross of Davao College, Inc. v. Joaquin, that it is on
the basis of the agreement with the union which is recognized as the proper bargaining representative that the employer is
obligated to perform its task of checking off union dues or agency fees. When stipulated in a CBA, or authorized in writing
by the employees concerned - the Labor Code and its Implementing Rules recognize it to be the duty of the employer to
deduct sums equivalent to the amount of union dues from the employees' wages for direct remittance to the union, in order
to facilitate the collection of funds vital to the role of the union as representative of the employees in the bargaining unit if
not, indeed, to its very existence.

D. RIGHTS OF LABOR ORGANIZATION

1. Check off, Assessment, Agency fees
2. Collective bargaining
a) Duty to bargain collectively
b) Collective Bargaining Agreement(CBA)
(1) Mandatory provisions of CBA

Statutory References:
Art. 261 to 272 of the renumbered Labor Code
DOLE Department Order No. 40-03, series of 2003
DOLE Department Order No. 40-1-15, series of 2015
DOLE Department Order 147-15 on just & authorized causes

1. Collective Bargaining and Administration of Agreements

a. Procedures in collective bargaining
b. Duty to bargain collectively
c. Terms of a CBA
i. Periods
ii. Expiry and Renewal thereof and its effects
d. Injunction prohibited
e. Participation in decision-making
f. Petition for Certification Election & Remedies

i. Factors to determine ABU

ii. Methods to determine bargaining unit
iii. Grounds for dismissal of CE
iv. Double Majority
v. Run-off election
vi. Re-run election
g. Employer as bystander
h. Rules that prevent the holding of CE and exception
Cases:
1. Davao Integrated Stevedoring vs. Abarquez, 220 SCRA 197
2. General Milling vs. CA, G.R. No. 146728, Feb. 11, 2004
3. Pier 8 Arrastre vs. Confesor, G.R. No. 110854, Feb. 13, 1995
4. Union of Filipro Employees vs. NLRC, G.R. No. 91025, December 19, 1990
5. Free Employer vs CIR, 14 SCRA 781
6. Tagaytay Highlands vs. Tagaytay Highlands Employees Union, G.R. No. 142000, Jan. 22, 2003
7. RPB Gen. Services vs. Laguesma, 264 SCRA 637
8. Notre Dame of Greater Manila vs. Laguesma, G.R. No. 149883, June 29, 2004
9. California Manufacturing vs. Laguesma, G.R. No. 97020, June 9, 1992
10. Phil. Fruits vs. Torres, G.R. No. 92391, July 3, 1992

37
---
1) Veterans vs. Montenejo, GR 184819, Nov. 29, 2017
2) Sy vs. NEAT, GR 213748, Nov. 27, 2017
3) Maula vs Ximec, GR 207838, Jan. 25, 2017
4) DLSU vs. Bernardo, GR 190809, Feb. 13, 2017
5) Doble vs. ABB, GR 215627, June 5, 2017
6) Bravo vs Urios, GR 198066, June 6, 2017

KIM’S NOTES

CBA REVIEWER
(Finals 1)
LABOR RELATIONS
Atty. Balino

COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENTS

Statutory References: Art. 261 to 272 of the renumbered Labor Code

DOLE Department Order No. 40-03, series of 2003
DOLE Department Order No. 40-1-15, series of 2015

a. Procedures in collective bargaining (Art. 261)

1. Concept
 “To bargain collectively”
 “Collective bargaining agreement”
2. Nature
 “collective bargaining”
3. Characteristics of Collective Bargaining
a. A continuing legal relationship – series of negotiations
b. A process of adjustment or mutual accommodation between the employer and the union. Negotiating parties should bargain in good
faith.
c. A contract of reasonable benefits – Thus, CBA should not provide for benefits below the standards provided by law. Otherwise, it
becomes a SWEETHEART CONTRACT.
d. A contract of relative equality – Not only a process for fixing terms of employment but also for a relative equality of bargaining power
where the employer is compelled to deal with the employees ‘as a group rather than as isolated individuals.’
e. An agency of participatory democracy because workers are allowed to participate in policy and decision making process.
4. Standards in Collective Bargaining
a. Mutual
b. in good faith. Thus, delaying tactics of employer during the bargaining process (i.e. introducing off-tangent matters, frequent change in
bargaining positions, and other deceptive gimmicks) to frustrate collective bargaining, indicate “that the employer appears to negotiate
but without any intention to reach an agreement, which is a SURFACE BARGAINING, a form of ULP.
c. Reasonable Terms and Conditions – Thus, where the union submits a proposal containing exaggerated economic demands beyond the
capacity of the employer, the union is liable for ULP known as “BLUE SKY BARGAINING”
d. The duty to bargain does not compel any party to agree to a proposal or to make any concession.

5. Contents of CBA (18)

6. Procedures/Steps in Collective Bargaining (8: PNE-PRRAI)
7. Written Notice required in Demand to Bargain
8. Failure to submit reply within 10 calendar days, a ULO.

b. Duty to bargain collectively (Arts. 262,263, 264)

1. Pre-Conditions for Collective Bargaining
a. Employer-employee relationship
b. Majority representation of employees’ representative

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 c. Proof of majority representation
d. Demand to bargain
e. That the legitimate labor organization is the certified bargaining agent in the bargaining unit.

2. Pendency of cancellation proceeding, not a bar to set in motion the mechanics of collective bargaining

3. Scope
a. Wages
b. Hours of work
c. All other terms and conditions of employment
d. Including proposals for adjusting any grievances or questions arising under such agreement

4. No per se a test of good faith or bad faith; a question of fact.

5. CBA, a contract in personam – Thus, binding only between parties and not enforceable against a transferee or a buyer in good faith,
except when the transaction with the latter is clothed with bad faith.

6. BOULWAREISM – employer’s bargaining proposal on a “take-it or leave-it” basis; a ULP

7. “Neither party shall terminate nor modify such agreement during its lifetime.” (Art. 264)

CONTRACT-BAR RULE / 60-DAY FREEDOM PERIOD –when either party can serve a written notice to terminate or modify the
agreement. petition for certification election or a motion for intervention may be made within the freedom period or 60 days prior to the
expiry date of the agreement.

PURPOSE: to ensure stability in the relationship of workers and management by preventing frequent modifications

8. “It shall be duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing
agreement during the 60-day period or until a new agreement is reached.”

The law still considers the same as continuing in force and effect until a new CBA shall have been validly executed, and therefore, the
contract-bar rule still applies. Thus, it is the duty of both parties to keep the status quo.

If the employer evades the duty to bargain, the proposed CBA can be unilaterally imposed upon the former.

C. TERMS OF A CBA (ART. 265)

i. Periods
ii. Expiry and Renewal thereof and its effects
 5 years – life span of CBA in terms of ‘representation aspect’
o Representation – refers to the identity and majority status of the union that negotiated the CBA as the exclusive
bargaining agent of the appropriate bargaining unit. Such could not be affected by a subsequent CBA signed between the
same bargaining agent and employer during the 5-year period.
o Extended term of CBA on representation; its effect. “Despite an agreement for a CBA with a life of more than 5 years,
the bargaining unions exclusive bargaining status is effective only for 5 years and can be challenged within 60 days
prior to the expiration of the CBAs.
o 1year extension of CBA approved by the Union in a referendum supervised by the DOLE and accepted by the employer
which gave a “signing bonus” is valid.
o CBA benefits extend to non-union members; provided they be required to pay fees equivalent to the amount or dues paid
by union members

 Not later than 3 years after its execution – workers may renegotiate all other provisions of the CBA, except representation
aspect
o Renegotiation – should only pertain to the terms and conditions of the parties’ relationship for the last remaining 2
years of the 5-year period of the CBA.
o Failure to renegotiate all other provisions before the end of the third year – such provisions shall continue to be in full
force and effect until a new CBA is concluded.  AUTOMATIC RENEWAL CLAUSE / PRINCIPLE OF HOLD-
OVER / CBA CONTINUITY

RETROACTIVITY of CBA
 If parties concluded an agreement within the 6-month period – effectivity date of such retroacts to the day “immediately
following” the expiration date of the term of such other provisions as fixed in the CBA
 Agreement arrived beyond 6 months – parties shall agree on its effectivity/duration of retroactivity
CBA concluded through ARBITRAL AWARDS (Art. 265 retroactivity has no application in arbitral awards):
 The effectivity date of the CBA concluded through arbitral awards made by the DOLE Secretary, the NLRC, or voluntary
arbitrators was made retroactive when the Secretary of Labor resolved the labor dispute. (Note: Previous case in St. Lukes
vs Torres: retroactive to the date of the expiration of the previous collective bargaining agreement

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 SUBSTITUTIONARY DOCTRINE
 Where the collective bargaining agent is changed during the lifetime of an agreement, the new agent takes the place of the
old and administers the agreement which subsists in spite of the change in representation. Note that under the doctrine, the
only consideration is the employee’s interest in the existing bargaining agreement.
 CBA entered into between the predecessor-employer and the bargaining agent are binding on the successor-employer, even
though labor contracts are in personam or that there is no privity between the successor-employer and the bargaining agent.
 Disaffiliation of a local union from the federation does not affect the enforceability and administration of a collective
bargaining agreement.

DEADLOCK in CBA renegotiation

 Deadlock = synonymous with impasse or standstill which presupposes a reasonable effort at good faith bargaining but does
not conclude an agreement between the parties despite noble intentions.
 REMEDIES:
o NCMB to intervene for conciliation of preventive mediation
o Refer the matter for voluntary or compulsory arbitration
o Declare a strike or lock-out = remedy of last resort

SUSPENSION OF CBA (10-year)

 Legally tenable; “The right to free collective bargaining includes the right to suspend it;” as when undertaken in the light
of the severe financial situation faced by the employer
 Does not contravene the protection to labor policy of the Constitution
 Does not violate the 5-year representation limited by Art. 265 for such only applies when there is an extant CBA in full
force and effect and not when CBA is put in abeyance.

2-FOLD PURPOSE OF CBA

1. To promote industrial stability and practicability
2. To assign specific timetables wherein negotiations become a matter of right and requirement.
 NOTHING in Art. 265 prohibits the parties from waiving or suspending the mandatory timetables and agreeing on the
remedies enforce to the same.

d. Injunction prohibited (Art. 266)

 Labor Dispute, defined
 Types of Labor Dispute

 General Rule: INJUNCTION PROHIBITED (in labor disputes)

o Exceptions:
 To enjoin or restrain any actual and threatened commission of any or all prohibited or unlawful acts (Art. 225, e)
 To require the performance of a particular act in any labor dispute which, if not restrained or performed forthwith, (1) may
cause grave or irreparable damage to any party or (2) would render ineffectual any decision in favor of such party (Art. 225,
e)
 When the labor organization or the employer engages in any of the prohibited activities enumerated in Art. 279

o (Others) When Injunctive Relief is Proper/When Right to Strike or Picket be Enjoined?

 Violation in conclusive arbitration clause or failing to exhaust all steps in the grievance machinery and arbitration proceedings
 Right to strike, cannot generally be enjoined except when
(1) Declaration of strike without the filing notice of strike
(2) By the Secretary’s assumption or certification of a labor dispute ‘in an industry indispensable to national interest…’
(3) When trade unionism and strikes are utilized to violate laws, misuse of these tactics can be subject to judicial
intervention to forestall grave injury to a business enterprise.
 Right to picket, if peacefully carried out, cannot be curtailed even in the absence of employer-employee relationship. But
when carried out with the use of violence and other illegal means, it may be regulated even at the instance of 3rd parties or
innocent bystanders. (sub-lessee of a part of the premises of a company against which a picket has been conducted can file a
petition for the issuance of injunction

 Indispensable conditions for granting Temporary Injunctive Relief:

o Complaint alleges facts, satisfactory to establish a proper basis for injunction
o Injunction is reasonable necessary to protect the legal rights of the plaintiff pending the litigation

 Nature of Injunction: a preservative remedy (an appendage to the main suit)

 Who are authorized to issue injunctions or restraining orders?

o Labor Arbiters in cases falling under their original and exclusive jurisdiction
o NLRC or any division, not NCMB

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 o BLR through its Director and Med-Arbiters in cases falling under its original and exclusive jurisdiction
o President – not precluded from determining industries which in his opinion are indispensable to the national interest
o Secretary of Labor – when in his opinion a labor dispute is likely to cause or is causing a strike or lockout in an industry
indispensable to the national interest – shall decide it or certify the same to NLRC for ‘compulsory arbitration.’
- Such certification shall have the effect of automatically enjoining the intended or impending strike or lockout; or (if one has already
taken place) employees to immediately return to work and employer immediately resume operations and readmit all workers under
the same terms and conditions before the lockout or strike.
- No lockout or strike shall be declared after assumption of jurisdiction by the President or the Secretary

 Who cannot issue injunctions (on labor disputes):

o NCMB – must be with the NLRC
o Regional courts

 Requirements for Injunction

o Previous hearing – to establish that ‘(1) substantial and irreparable injury will be caused to the property of the complaint unless
injunction is issued; (2) that the injury to be averted is greater than that caused by the injunction to the defendant; (3) that the
complaint has no adequate remedy at law; and that (4) public officers charged with the duty to protect the complainant’s property
are unable or unwilling to furnish adequate protection.

e. Participation in decision-making (Art. 267)

 Doctrine of Union Monopoly – Once a labor union is chosen as the certified collective bargaining agency in the bargaining unit, it
alone can collectively bargain with the management to the exclusion of other competing unions.

 Appropriate Bargaining Unit – a group of employees of a given employer for collective bargaining purposes, classified according to
their jobs or positions, having substantially mutual bargaining employment interests and conditions.
 ‘One Company, One Union’ policy. It should only cover one company and not 2 or more companies for greater mutual
benefits which the parties could derive; “bargaining strength could be enhanced by virtue of their unity and solidarity.”
 Exception: Where the employer unit has to give way to other units like craft unit, plant unit, or a subdivision thereof.

o 4-Way Test in Determining Appropriate CBU & Factors of Determination:

(f.i. Factors to determine ABU)
 Express Will or Desire of Employees Test (Globe Election Doctrine) – CBU chosen based on the express will or desire of
employees.
 Community Mutuality of Interest Test – whether it will best assure to all employees the exercise of their collective bargaining
rights; “the most efficacious bargaining unit is one which is comprised of constituents enjoying a community of interest and
economic or occupational unit (1) substantial similarity of work and duties or (2) similarity of compensation and working
conditions
 Mutuality or Community of Interest negates formation of 2 bargaining units. (high school and elementary teachers)
 Geographical location may be completely disregarded in order not to sacrifice mutual interests of employees. “The distance
among three plants is not productive of insurmountable difficulties in the administration of union affairs.”
 Prior Collective Bargaining History Test – puts premium to the prior bargaining history and affinity of employees. However,
the court has declared that ‘the existence of a prior collective bargaining history is neither decisive nor conclusive in
determination of appropriate bargaining unit.
 Similarity of Employment Status Test – “Employees hired on a (temporary, seasonal or probationary) brief, casual or day-to-
day basis or for a short, definite term and who have no reasonable basis for continued or renewed employment for any
appreciable substantial time are considered to have no such mutuality of interest in a bargaining unit composed of regular
employees.”
 In which case, 2 separate bargaining units should be formed. (permanent and regular employees on one hand, casual
on the other)

o Rationale: Employees with different status and community of interest is not an efficacious bargaining unit.

o Instances when Appropriate Bargaining Unit Cannot be Formed?

 The adage that “there is strength number” is the very rationale underlying the formation of a labor union.” What
greatly militates against the petitioner’s position that each sales office should constitute one appropriate bargaining
unit is the meager number of sales personnel in each sales offices.
 When companies become distinct entities with separate juridical personalities as a result of corporate spin-off,
employees of both entities cannot belong to a single bargaining unit. (‘Instrumentality Rule’ in Corporation Law)
 Confidential employees, as well as managerial employees, are ineligible to form, assist, or join a labor union given
the nature of their functions.
 Presence of managerial employees is an index of company domination which may become source of undue
advantage (may act as spy).

 Concept of Exclusive Bargaining Agent

o Doctrine of Union Monopoly
o However, an ‘individual employee’ or ‘group of employee’ shall have the right at any time to present grievances to their
employer, despite the existence of a CB agency.
 It does not imply the right to submit to voluntary arbitration.

 Nature of Determination

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 o Non-litigious proceeding – free from technicalities of law and procedure

 Determination of REPRESENTATION status / MODES of Determining an Exclusive Bargaining Agent (f.2. Methods
to determine bargaining unit)
1. Request for certification as ‘sole and exclusive bargaining agent’ (SEBA)
2. Consent election
3. Certification election
4. Run-off election
5. Re-run election
NOTE: Direct Certification ceases to be a method of determining representation status. “Unilateral determination of
majority representation in a bargaining unit may lead to either company domination or preference.”
1. Request for certification as ‘sole and exclusive bargaining agent’ (SEBA)
SEBA Certification – the process whereby the DOLE recognizes a labor organization as the exclusive bargaining representative of the
employees in the appropriate bargaining unit.
 Who may file? Any legitimate labor organization
 Where to file? In the regional office which issued its certificate of registration or certificate of creation of chartered local.
 Request of SEBA certification in unorganized establishment with one 1 legitimate labor org.
A. Regional Director shall call a conference within 5 work days for submission of the (1) (names of (at lease majority) employees
in the covered bargaining unit who signified their support for certification); (2) (certification y oath by the president of the
requesting union or local that all documents submitted are true and correct. For this purpose, employer shall not be deemed a
party-in-interest but as a by-stander to the process of certification.
B. If the requesting union fails to complete the requirements during the conference, the request for SEBA certification shall be
referred to the election officer for the conduct of election.
C. If the Regional Director finds the requirements complete, certification as the SEBA shall be issued.
D. The Regional Director shall cause the posting of the SEBA certification for 15 consecutive days in at least 2 conspicuous
places in the establishment or covered bargaining unit.
E. Upon the issuance of the certification:
1. The certified union or local “shall enjoy all the rights and privileges of an exclusive bargaining agent of all the
employees.”
2. The certification “shall bar the filing of a petition for certification election by any labor organization for a period of 1
year from the date of issuance.
Upon the expiration of 1-year period, any labor organization may ‘file a petition for certification election’ UNLESS a
collective bargaining agreement between the employer and the certified labor organization was executed and
registered with the regional office.

 Request of SEBA certification in unorganized establishment with more than one 1 legitimate labor organization
Regional Director shall refer the same to the election officer for the conduct of certification. (step B of ‘with one legit labor org’)

 Request of SEBA certification in organized establishment

RD shall refer the same to the Mediator-Arbiter for the determination of the propriety of conducting a certification election.

2. Consent election
- Voluntarily agreed upon by the parties with or without the intervention of DOLE to determine the issue of majority representation of all
the workers in the appropriate collective bargaining unit.
- Different from certification election as the latter requires a petition for certification election filed by a union or employer, granted by a
Med-Arbiter; and an election officer is designated by the Regional Director to supervise the election.

1. The Med-Arbiter shall call for the consent election.

2. Shall immediately forward the records of the petition to the Regional Director or representative for the determination of the
Election Officer who shall be chosen by raffle in the presence of the representatives of the contending unions if they so desire.
3. The first pre-election conference shall be scheduled within 10 days from the date of the consent election agreement.
4. Hearings may be conducted by the Med-Arbiter should the contending unions fail to agree to a consent election during the
preliminary conference. The conduct thereof shall in no case exceed 15 days fro the date of the scheduled preliminary
conference/hearing.
Failure of any party in the hearing to file its pleadings when notified shall be deemed have waived its right to be heard.
5. After the hearings, the petition shall be considered submitted for decision.

 The results thereof shall constitute:

1. A bar to the holding of a certification election for 1 year from the holding of such consent election.
2. Where an appeal is filed from the results of the consent election, the running period of 1-year shall be suspended until
decision has become final and executory.

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3. Certification election (f. Petition for Certification Election & Remedies) (Art. 268)
- the (most effective and expeditious) process of determining (through secret ballot) the SEBA of the employees in an appropriate bargaining
unit for the purposes of collective bargaining.
 PURPOSE: ascertainment of the wishes of the majority of the employees in an appropriate bargaining unit ‘to be or not to be
represented y a labor organization;’ to provide democratic space
 SIGNIFICANCE: Assures industrial democracy, establishing “regime of self-rule”
 NATURE: non-litigious (fact-finding character where Med-Arbiter plays a part of a disinterested investigator seeking to ascertain
the desire of the employees as to the matter of their representation) and non-adversarial unless if the representation issue is contested,
then the proceedings becomes one of the adversary type.
o Thus, “principle of res judicata” or ‘bar by prior judgment’ does not apply.

 Who may file? Any legitimate labor organization, including (1) national union or (2) federation that has issued a charter certificate
to its local/chapter, or (3) the local/chapter itself.

 When (NATIONAL UNION/FEDERATION in behalf of its local chapter) to file?

The national union or federation shall not be required to disclose the names of the local/chapter’s officers and members, but shall attach to
the petition the charter certificate it issued to its local/chapter.

 When (EMPLOYER) to file?

When requested to bargain collectively in a bargaining unit where no registered collective bargaining agreement exists.
 SOLE CONCERN RULE: “Except where the employer has to file a petition of CE because of a request to bargain
collectively, employer has nothing to do with a CE which is the sole concern of the workers, and its role is merely that of a
bystander.
 BYSTANDER RULE: that a CE is the sole concern of the workers.
Note: Not considered as a party thereto with a concomitant right to oppose a petition for certification election.
o Employer’s participation is limited to:
1. Being notified of petitions of such nature;
2. Submitting the list of employees during the pre-election conference should the Med-Arbiter act favorably on the
petition.

 Where to file? / VENUE

“Memorandum of Appeal” shall be filed with the Regional Office which issued the petitioning union’s certificate of registration.

 Who will hear the petition? Med-Arbiter.

o Issues on “validity of certificate of registration or the legal personality of the petitioning union as a labor organization,” or
the “validity of registration and execution of CBA” shall be heard and resolved by the Regional Director and not but the
Med-Arbiter.

 Form of petition
1. In writing
2. Verified under oath by the President of petitioning labor organization or the Owner, President, or any Corporate Officer
authorized by the BOD in case when the employer files the petition.

 Contents of Petition
Name of petitioner, address, affiliation, date and number of its certificate of registration.
Among others, a statement indicating any of the circumstances:
1. That the bargaining unit is unorganized or that there is no registered collective bargaining agreement covering the employees in
the bargaining unit. In which case, it may be filed at any time;
2. If there exists a duly registered collective bargaining agreement, that the petition is filed within the 60-day freedom period of
such agreement;

3. 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 1-year period from the date of certification of such SEBA and no appeal is pending thereon;

4. In an organized establishment, the signature of at least 25% of all employees in the appropriate bargaining unit attached to the
petition at the time of its filing;
 25% requirement need not be established with absolute certainty. A prima facie showing of compliance will suffice as
it is a ‘mere technical requirement for cancellation of the certificate of registration’ which should not frustrate the will of
the employees.
 That the signatures were obtained through fraud, the proper remedy is to file a separate petition for cancellation of the
certificate of registration and not to intervene in a petition of certification election.

 REQUIREMENTS OF A VALID CERTIFICATION ELECTION

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 o DOUBLE MAJORITY RULE – (1) majority of the employees in a
bargaining unit must have voted, and (2) the winning union must have
garnered majority of the valid votes cast.
o AUTOMATIC SECOND ELECTION RULE – when an election provides
for 3 or more choices results in no choice receiving a majority of the valid
votes cast, under automatic second election rule, a run-off election shall
be conducted.

1. FIRST MAJORITY RULE – at least a majority of all eligible voters in the bargaining unit must have cast their votes
2. SECOND MAJORITY RULE – the union receiving the majority of the valid votes shall be certified as the SEBA
3. AUTOMATIC SECOND ELECTION RULE
4. In determining the eligible voters who cast their ballots under the first majority rule, the spoiled ballots are included. But in
the second majority rule, the spoiled ballots are excluded but the challenged votes are included.

 WHERE 2 OR MORE PETITIONS INVOLVING THE SAME BARGAINING UNIT

1. The same shall be automatically consolidated with the Med-Arbiter who first acquired jurisdiction.
2. Where the petitions are filed in different Regional Offices, the Regional Office in which the petition was first filed shall exclude
all others.

 PROCEDURE:
1. REGIONAL DIRECTOR SHALL IMMEDIATELY ASSIGN IT BY RAFFLE TO A MEDIATOR-ARBITER.

2. MED-ARBITER SHALL IMMEDIATELY PREPARE AND SERVE NOTICE OF PRELIMINARY CONFERENCE

3. SERVICE OF THE PETITION (BY PERSONAL SERVICE, MAIL, OR COURIER SERVICE) TO THE EMPLOYER AND
THE NOTICE OF PRELIMINARY CONFERENCE TO THE PETITION AND THE INCUMBENT BARGAINING AGENT
(IF ANY) WITHIN 3 DAYS FROM MED-ARBITER’S RECEIPT OF THE PETITION.

4. COPY OF THE PETITION AND THE NOTICE OF PRELIMINARY CONFERENCE SHALL BE POSTED WITHIN THE
SAME 3-DAY PERIOD IN AT LEAST 2 CONSPICUOUS PLACES IN THE ESTABLISHMENT.

5. PRELIMINARY CONFERENCE TO BE HELD ‘WITHIN 10 WORKING DAYS’ FROM THE MED-ARBITER’S RECEIPT.

To determine the following:

a. Bargaining unit to be represented;
b. Contending labor unions;
c. Possibility of a consent election;
d. Existence of any of the bars to certification election;
e. Other matters relevant to the final disposition of the case.

6. MOTION FOR INTERVENTION IN A PETITION FOR CERTIFICATION ELECTION IN AN ORGANIZED

ESTABLISHMENT MAY BE FILED WITH THE MED-ARBITER BY ANY LEGITIMATE LABOR UNION OTHER
THAN THE INCUMBENT BARGAINING AGENT DURING THE FREEDOM PERIOD OF THE CBA.

In the case of unorganized establishment, it shall be filed at any time prior to the decision of the Med-Arbiter.

Incumbent bargaining agent shall automatically be one of the choices in the certification election as forced intervenor.

7. WITHIN 10 DAYS FROM THE DATE OF THE LAST HEARING, THE MED-ARBITER SHALL FORMALLY ISSUE
A RULING GRANTING OR DENYING THE PETITION, EXCEPT IN ORGANIZED ESTABLISHMENTS WHERE THE
GRANT OF THE PETITION CAN ONLY BE MADE AFTER THE LAPSE OF THE FREEDOM PERIOD.

8. THE MED-ARBITER MAY DISMISS THE PETITION FOR CERTIFICATION ELECTION ON THE FOLLOWING
GROUNDS: (f.3. GROUNDS FOR DISMISSAL OF CE)

i. NOT-LISTED IN THE REGISTRY RULE - Petitioning union or national union/federation is not listed in the
department’s registry of legitimate labor unions or that its registration has been cancelled with finality;

ii. Failure to submit a duly issued charter certificate upon filing of the petition by the local/chapter or national
union/federation;

iii. CONTRACT-BAR RULE - Certification election may not be conducted during the existence of a CBA except within the
freedom period. (RPB Gen. Services Employees Union vs Laguesma)

EXCEPTIONS to the Contract-Bar Rule:

1. CBA is unregistered, i.e. not certified by the BLR or not registered by the Regional Office of the DOLE. (But such
does not constitute a bar to certification election.

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 2. CBA is inadequate or incomplete, i.e. lacks legal requirements for grievance machinery or voluntary procedures.
3. CBA was hastily entered into.
4. Withdrawal of affiliation from the contracting union brought about by schism or split, or mass disaffiliation which can
no longer foster industrial peace and stability.
5. Automatic renewal clause – will not apply where the petitioning union makes known to its employer its claim to
represent the employees or seasonably file a petition for certification election or has given a timely notice prior to the
operative date of the automatic renewal clause.

In the absence of such timely notice or timely filing of the petition, the contract executed during the automatic renewal
period is a bar to certification election.
6. Contract where identity of representative is in doubt.
7. CBA entered during the pendency of a petition for certification election.
8. CBA concluded between the employer and the incumbent bargaining agent is not a bar to CE filed by another union
and said CBA can be renegotiated at the option of the new bargaining agent.
9. CBA registered with falsified supporting documents.
10. CBA entered with a labor union that is not the exclusive bargaining agent.
11. PCE filed within the 60-day freedom period before the expiration of the CBA.

iv. OUTSIDE-OF-THE-FREEDOM-PERIOD - Filing of the petition before or after the 60-day freedom period of a duly
registered CBA shall be dismissed outright;

v. ONE-YEAR BAR RULE/CERTIFICATION-YEAR BAR RULE - Filing of a petition within 1 year from the date of
certification of the SEBA or within the same period from a valid certification, consent or run-off election where no appeal
is pending; Certification election may not be held within 1 year from the date of issuance of a final certification election
result. Final Certification Result – that there was an actual conduct of elections, i.e. ballots were cast and there was
counting of votes
- Applies to SEBA certification, consent certification, and re-run off elections.

Exception to the rule: “Failure of certification election” or “where the number of votes in a certification or consent
election is less than the majority of the number of eligible votes and there is no material challenged votes, the Election
Officer shall declare a failure of election, which shall not bar the filing of a motion for the immediate holding of
another certification election or consent election within 6 months from the date of failure of election.

vi. DEADLOCK-BAR RULE - Where a duly certified union has commenced and sustained negotiations with the employer
within 1-year period or where there exists a bargaining deadlock; CE may not be conducted during the existence of a
bargaining deadlock (1) to which an incumbent or certified bargaining agent is a party, and (2) which had been submitted
to conciliation or arbitration or had become the subject of a valid notice of strike or lockout that has already been filed with
the Regional NCMB.

- DEADLOCK – the counteraction of things producing entire stoppage: a state of inaction or of neutralization caused by
the opposition of persons or of factions: standstill; synonymous with “impasse” – presupposes reasonable effort at good
faith bargaining which, despite noble intentions, does not conclude an agreement between parties.
- Where there was no notice of strike, but a mere declaration of bargaining deadlock, it does not bar certification election.

vii. (additional) NEGOTIATION-BAR RULE – No representation issue may be entertained, if before the filing of the petition,
the certified bargaining union has commenced negotiations with the employer within 1 year from the date of certification
election, consent election, run-off election or from the date of SEBA certification.

viii. DOUBLE MAJORITY RULE - Failure to submit the 25% signature requirement to support the filing of the petition for
certification election;

ix. Non-appearance of the petitioner for 2 consecutive scheduled conferences before the med-arbiter despite notice; and

x. Absence of the employer-employee relationship between all the members of the petitioning union and the establishment

xi. (additional) CHARGE-OF-COMPANY-UNIONISM RULE – the pendency of a formal charge of ‘company unionism’
(ULP) is a prejudicial question that bars proceedings for a certification election until decided. One of the reasons is that ‘if
the bargaining agent is finally declared as the winner, it could be decertified and its registration can be cancelled, thus the
entire election process is an exercise in futility.  overruled

D.O. 40-03, series of 2003 (prevailing rule): “The filing or pendency of any inter/intra-union dispute or other labor
relations dispute is NOT a prejudicial question to any petition for CE and shall NOT be a ground for the dismissal of a
petition for CE or suspension of proceedings of CE.

 PROHIBITED GROUNDS FOR THE DENIAL OR SUSPENSION:

1. Any question pertaining to the ‘validity of petitioning union’s certificate of registration’ or CBA shall be heard
and resolved by the Regional Director in an independent petition for cancellation and not by the Med-Arbiter
unless the petitioning union is not found in the Department’s roster of legitimate labor organizations.

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 2. Inclusion of non-union members shall not be a ground for the cancellation of the registration but they are
‘automatically deemed removed’ from the list of membership of said unions.

 RETRACTIONS or RECANTATIONS
o BEFORE the filing of petition – the certification election may not be ordered “for the withdrawal is presumed voluntary”
unless there is convincing proof to the contrary;
o AFTER filing – certification may still be ordered “for the withdrawal is presumed to be involuntary”
 BEST FORUM RULE – The best forum for determining whether there were indeed retractions from some of
the laborers is in the certification election itself wherein the workers can feely express their choice in a secrete
ballot. (Tagaytay Highlands case)

9. APPEAL TO MED-ARBITER’S ORDER GRANTING THE CONDUCT OF CERTIFICATION ELECTION:

a. Unorganized establishment – not allowed; may be raised by means of protest;
b. Organized establishment – appealable to the office of the Secretary of Labor within 10 days from the receipt thereof.

 Where to file the appeal? In the Regional Office where the petition originated.
 Within 24 hours from receipt thereof, the Regional Director shall cause the transmittal thereof to Office of the
Secretary.

10. PERIOD TO REPLY TO THE APPEAL. WITHIN 10 DAYS FROM RECEIPT OF THE MEMORANDUM OF APPEAL.
IT SHALL BE FILED DIRECTLY WITH THE OFFICE OF THE SECRETARY.

11. DECISION OF THE SECRETARY OF LABOR. THE SECRETARY SHALL HAVE 15 DAYS FROM RECEIPT OF THE
ENTIRE RECORDS OF THE PETITION WITHIN WHICH TO DECIDE THE APPEAL.

THE FILING OF MEMORANDUM OF APPEAL FROM THE ORDER OR DECISION OF MED-ARBITER STAYS THE
HOLDING OF ANY CERTIFICATION ELECTION.

12. FINALITY OF ORDER/DECISION. WHERE NO APPEAL IS FILED WITHIN THE 10 DAYS FROM THE RECEIPT
THEREOF BY THE PARTIES, THE DECISION OF THE SECRETARY SHALL BECOME FINAL AND EXECUTORY.

NO MOTION FOR RECONSIDERATION SHALL BE ENTERTAINED EXCEPT WHEN THE REMEDY OF

CERTIORARI, WHICH REQUIRES THE FILING OF A MOTION FOR RECONSIDERATION, IS AVAILED.

13. PRE-ELECTION CONFERENCE

- The machinery of determining the eligibility list of voters prior to the filing of the petition of certification election.
o “The list of eligible voters can no longer be questioned if it was not contested in the pre-election conference. (Notre Dame
vs Laguesma)

o WHO may vote in a certification election (INCLUSION)?

1. Delisted employees in payroll;
2. Who did not work during the eligibility period because of illness, vacation or temporary lay-off;
3. Although terminated, employees who filed a case for illegal dismissal in connection therewith because they have
‘present, un-abandoned right to expectation of reinstatement’
4. Strikers who seek reemployment or reinstatement and who have not been permanently laid off

o WHO may not vote (EXCLUSION OF VOTERS)?

1. Employees who have quit
2. Been discharged for cause
3. Have not been rehired or reinstated prior to the date of the order of certification election

o PROCEDURE in PRE-ELECTION CONFERENCE

1. Within 24 hours from receipt of notice of entry of final judgment granting the conduct of certification election, the
Regional Director shall cause the raffle of the case to an Election Officer;
2. Within 24 hours from the receipt of assignment for conduct of CE, the Election Officer shall cause the issuance of
notice of pre-election conference upon contending unions and the employer
3. Pre-election conference shall be conducted within 10 days from receipt of the assignment (Failure to appear therein
despite notice shall be considered as a waiver to be present and to question or object to any of the agreements
reached therein).
4. Election, which shall (1) not be later than 45 days from the date of the 1st pre-election conference, and shall be (2) on
a regular day, (3) within the employer’s premises.

14. ELECTION

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 SANCTITY OF THE BALLOT: To ensure secrecy of the ballot, the Election Officer shall before the start of actual voting, inspect the
polling place, ballot boxes and the polling booths.
o CHALLENGING OF VOTES (before it is deposited in the ballot box):
GROUNDS FOR CHALLENGING OF VOTES
1. That there is no employer-employee relationship between the voter and the company;
2. That the voter is not a member of the appropriate bargaining unit which petitioner seeks to represent.

o PERFECTION OF ELECTION PROTEST

o Any party-in-interest may file a protest based on the conduct or mechanics of the election. Such protests shall be recorded in the
minutes of the election proceedings.
o If not recorded in the minutes – protest deemed dropped.
o Protesting party must formalize its protest with the Med-Arbiter within 5 days after the close of the election proceedings.
o Labor union which did not take part in the CE cannot file a protest.

o CONDUCT OF ELECTION AND CANVASSING OF VOTES

1. Votes shall be counted and tabulated by the Election Officer in the presence of the representatives of the contending unions.

The opening and canvass shall proceed immediately after the precincts have closed.

2. Upon completion of the canvass, Election Officer shall give each representative a copy of the minutes of the election
proceedings and the results of the election.
3. The ballots and tally sheets shall be sealed in an envelope and signed by the Election Officer and the representatives of the
contending unions.
4. It shall then be transmitted to the Med-Arbiter, together with the minutes and results of the elections within 24 hours from
the completion of the canvass.
Where election is conducted in more than 1 region, consolidation of the results shall be made within 15 days from the
conduct thereof.

15. CERTIFICATION OF COLLECTIVE BARGAINING AGREEMENT

o The union which obtained a majority of the valid votes cast shall be certified as the SEBA of all employees within the bargaining
unit within 5 days from the day of elections, provided no protest is recorded in the minutes of election.

16. PROCLAMATION AND CERTIFICATION OF ELECTION RESULT

o Within 24 hours from final canvass of votes, there being a valid election, the Election Officer shall transmit the records of the case
to the Med-Arbiter who shall, within the same period from receipt and results of the election, issue an order proclaiming the
results of the election and certifying the union when:
1. No protest was filed; or even if there is, it was not perfected within the 5-day period for perfection of the protest;
2. No challenge or eligibility issue was raised, or even if there is, the resolution of the same will not materially change the
results of the election.
o Should the “NO UNION” succeed, the effect is that “no certification election can be conducted within 1 year from the date of
issuance of a final certification election result (One-Year Bar Rule).

4. Run-off election
1. When an election ‘which provides for 3 or more choice’
2. results in none of the contending unions receiving a majority of the valid votes cast, and
3. there are no objections or challenges,
4. which if sustained can materially alter the results
5. the Election officer shall motu proprio conduct a run-off election
6. within 10 days from the close of the election proceedings.
7. Provided, that the total number of votes for all contending unions is at least 50% of the number of vote cast.

 The labor union ‘receiving the greater number of valid votes cast’ shall be certified as the winner.
 The same voters’ list used in the certification election shall be used in a run-off election.
 “No Union” shall not be a choice in the run-off election ‘because it is only conducted between the labor unions receiving the 2 highest
number of votes.’

5. Re-run election
 Refers to an election ‘conducted to break a tie’ between contending unions, including between “no union” and one of the unions.
 It also refers to an election (1) ‘conducted after a failure of election has been declared’ by the election officer; that is, when the
number of votes case in a certification or consent election is less than the majority of the number of eligible voters and there are (2)
no material challenged votes.
o A failure of election shall not bar the filing of a motion for the ‘immediate holding of another certification or consent
election’ within 6 months from the declaration of failure of election.

 PRINCIPLE OF SHARED RESPONSIBILITY / PRINCIPLE OF CO-DETERMINATION or CO-SHARING

 mandates the workers to participate in policy and decision-making processes in the establishment, which directly affect their rights,
benefits and welfare (Sec. 3, Art. XIII, 1987 Constitution).
o Such participation is in the nature of participation and representation which do not impair management prerogatives and not
in the nature of a “co-management control” of the business of the employer.

47
  Leads the formation of labor-management councils (LMCs) to enable workers to participate in policy and decision-making
processes.
ART. 269 (PETITIONS IN UNORGANIZED ESTABLISHMENTS)
o Automatic Certification Election Rule – Med-Arbiter is required to automatically order the conduct of certification election upon filing
of a certification election by a legitimate labor organization even without the 25% support of employees. (California Marketing Corp.
vs Laguesma)
o Thus, where the supervisors of the company constitute a bargaining unit separate and distinct from the rank-and-file which is organized,
and they have no bargaining agent, they may file a petition for certification elections through a legitimate labor organization as one under
unorganized establishment. (California vs Laguesma)

o MANDATORY CERTIFICATION ELECTION

 Organized establishments (Art. 268) – PCE may be filed questioning the ‘majority status’ of the incumbent bargaining unit;
 Unorganized establishments (Art. 269) – PCE can be filed and it ‘shall automatically be conducted by the Med-Arbiter’
 Employer (Art. 270) – may file a PCE when requested to bargain collectively

ART. 270-272. (FILED BY EMPLOYER)

o SOLE CONCERN + BYSTANDER RULE (Phil. Fruits and Vegetables Industries vs Torres)
o “IT IS THE UNION THAT FILES A PCE IF TEHRE IS NO CB AGENT. If a union asks the employer to voluntarily recognize it
as the bargaining agent of the employees, it in effect asks the employer to certify it as the bargaining agent of the employees, a certification
which the employer has no authority to give, for it is the employees’ prerogative and not the employer’s to determine which union they
want to represent them.
o Hence, employer has no locus standi to oppose a petition for certification election to maintain its non-partisan interest.
o As an innocent bystander, the employer “may pray for the dismissal of a PCE on the basis of (1) lack of mutuality of interests of the
members of the union as well as the (2) lack of employer-employee relationship.

o Period for Filing. In the absence of a CBA, an employer who is requested to bargain collectively may file any time, except when:
1. One-Year Bar Rule/Certification-Year Bar Rule;
2. Deadlock Bar Rule

CASES DOCTRINES

1. DAVAO INTEGRATED STEVEDORING VS. ABARQUEZ, 220 SCRA 197

(ART. 261)
 Thus, a collective bargaining agreement refers to a contract executed upon request of
either the employer or the exclusive bargaining representative incorporating the
agreement reached after negotiations with respect to wages, hours of work and all other
terms and conditions of employment, including mandatory provisions for grievance and
arbitration machineries.
 It is not a ordinary contract to which principles of law governing ordinary contracts are
applied.
2. GENERAL MILLING VS. CA, G.R. NO. 146728, FEB. 11, 2004 (ART. 262-263)
 The employer’s failure to make a timely reply to the proposals presented by the union
within 10 calendar days is indicative of its utter lack of interest in bargaining with the
union. Its refusal to make a counter-proposal for CBA negotiation is an indication of its
bad faith and it is a clear evasion of the duty to bargain collectively which is an unfair
labor practice.
 Also, feigning negotiations by going through empty gestures is not bargaining in good
faith.
 Also, when the union submitted a bargaining proposal, the employer did not submit a
counter CBA proposal. What it did was to question the existence of the union and the
status of its membership to prevent any negotiation. Indeed, the employer was in bad
faith.
 There is no per se test of good faith in bargaining. Good faith or bad faith is an inference
to be drawn from the facts of the individual case.

3. PIER 8 ARRASTRE VS. CONFESOR, G.R. NO. 110854, FEB. 13, 1995
 The effectivity date of the CBA concluded through arbitral awards made by the DOLE
Secretary, the NLRC, or voluntary arbitrators was made retroactive when the Secretary
of Labor resolved the labor dispute.

4. UNION OF FILIPRO EMPLOYEES VS. NLRC, G.R. NO. 91025, DECEMBER

19, 1990

5. FREE EMPLOYER VS CIR, 14 SCRA 781 (ART. 268)

 (Nature of certification election; non-litigious, non adversarial proceeding) “Petition for
certification election is not the same as the ordinary complaint where there are adversary
parties, the complainant and the defendant. However, if the representation issue is
contested, the proceeding becomes one of the adversary type and has to be decided

48
 according to lawful evidence where the intervening parties can present their witnesses
and to cross-examine those of the adversary.”

6. TAGAYTAY HIGHLANDS VS. TAGAYTAY HIGHLANDS EMPLOYEES

UNION, G.R. NO. 142000, JAN. 22, 2003 (ART. 268)
 (Petition for certification election should be supported by the written consent of at least
25% of all the employees in the appropriate bargaining unit) “However, if there was
allegation that some of the signatures in the petition for certification election were
obtained through fraud, false statement and misrepresentation, the proper procedure is t
file a separate petition for cancellation of the certificate of registration, and not to
intervene in a petition for certification election.”
 Best Forum Rule (Retractions or recantations before or after filing of petition of
certification election) “IF the retraction was made after the filing of the petition,
certification election may still be ordered for the withdrawal of consent is presumed to
be involuntary. The best forum for determining whether there were indeed retractions
from some of the laborers is in the certification itself wherein the workers can freely
express their choice in a secret ballot, known as the best forum rule.
 (Art. 271) “As an innocent bystander, the employer may pray for the dismissal of a
petition for certification election on the basis of lack of mutuality of interests of the
members of the union as well as lack of employer-employee relationship.”

7. RPB GEN. SERVICES VS. LAGUESMA, 264 SCRA 637 (ART. 268)
 Contract Bar Rule; 60-Day Freedom Period Rule. A petition for certification election
may not be filed when a CBA has been registered with the BLR. Where the CBA is duly
registered, a petition for certification election may be filed within the 60-day freedom
period prior to its expiry.

8. NOTRE DAME OF GREATER MANILA VS. LAGUESMA, G.R. NO. 149883,

JUNE 29, 2004 (ART. 268)
 Appeal-Bar Rule. The filing of the appeal from the Order or Decision of the Med-
Arbiter granting the petition for certification election ‘stays the holding of the
certification election.’
 (Pre-election conference; inclusion-exclusion proceedings) The list of eligible voters can
no longer be questioned if it was not contested in the pre-election conference. “Thus, it
is not proper for the employer to question the qualifications of workers who should be
included in the list of voters in the certification election as the ‘employer is definitely an
intruder.’

9. CALIFORNIA MANUFACTURING VS. LAGUESMA, G.R. NO. 97020, JUNE 9,

1992 (ART. 269)
 (Certification election in unorganized establishments) “In any establishment where there
is no certified bargaining agent, a certification election shall automatically be conducted
by the med-arbitrator upon the filing of a petition by a legitimate labor organization. The
25% subscription requirement necessary for the filing of a petition is not applicable in
unorganized establishments.
 (Art. 269 applies to unorganized labor organizations) “Where the supervisors of the
company constitute a bargaining unit separate and distinct from that of the rank-and-file
which is organized, and they have no bargaining agent, they may file a petition for
certification elections through a legitimate labor organization as one under an
unorganized establishment.”

10. PHIL. FRUITS VS. TORRES, G.R. NO. 92391, JULY 3, 1992
 (Art. 268) (Perfection of election protest) “The protesting party must formalize its
protest with the Med-Arbiter within 5 days after the close of the election proceedings. If
not recorded in the minutes and formalized within the prescribed period, the protest shall
be deemed dropped.”
 (Art. 270) (Petition for certification election filed by an employer) “A certification
election is the sole concern of the workers and the employer is regarded as nothing more
than a bystander with no right to interfere at all in the election, the only exception being
where the employer has to file a petition for certification election because it is requested
to bargain collectively.

LABOR RELATIONS (FINALS 1)

COLLECTIVE BARGAINING AGREEMENT
Case Digests – Atty. Balino

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 11. DAVAO INTEGRATED STEVEDORING VS. ABARQUEZ
220 SCRA 197 (ART. 261)
 Thus, a collective bargaining agreement refers to a contract executed upon request of either the employer or the exclusive bargaining
representative incorporating the agreement reached after negotiations with respect to wages, hours of work and all other terms and conditions of
employment, including mandatory provisions for grievance and arbitration machineries.
 It is not an ordinary contract to which principles of law governing ordinary contracts are applied.

FACTS:
 Petitioner-company and private respondent union entered into a CBA, which contains “sick leave with pay benefits each year to its
employees who have rendered at least 1-year service in the company.”
 Sec. 1 provides that “regular non-intermittent field workers shall be entitled to 15 days sick leave with pay each year…”
 Sec. 3: “All intermittent field workers shall be entitled to vacation and sick leaves.”
 When a new assistant manager (Benjamin Marzo) took over said position, he ordered to stop the payment of “sick leave with pay benefits
of the intermittent workers” on the ground that they are not explicitly entitled to such under the CBA.
 The Union objected, contending that it is a deviation from the true intent of the parties and that it would violate the principle in labor laws
that benefits already extended shall not be taken away; and that it would result in discrimination between the non-intermittent and the
intermittent workers of the company.
ISSUE: WON the intermittent workers are entitled to “sick leave with pay benefits”
RULING:
 YES. The CBA under the Labor Code refers to a contract executed upon request of either the employer or the exclusive bargaining
representative incorporating the agreement reached after negotiations with respect to wages, hours of work and all other terms and
conditions of employment, including mandatory provisions for grievance and arbitration machineries.
 It is not an ordinary contract to which principles of law governing ordinary contracts are applied. It governs the relations between labor
and capital, which is not merely contractual in nature but impressed with public interest. Thus, it must yield to common good.
 As such, it must be construed liberally rather than narrowly and technically.
 The manner they were deprived of the privilege previously recognized and extended to them by petitioner-company is not only tainted
with arbitrariness but likewise discriminatory in nature.

 Petitioner-company’s objection to the authority of the Voluntary Arbitrator to rule in favor of the intermittent workers is misplaced. The
Labor Code is clear that the questioned directive is the necessary consequence of the exercise of his arbitral power as Voluntary Arbitrator
“to hear and decide all unresolved grievances arising from the interpretation or implementation of the CBA.”

12. GENERAL MILLING CORP. (GMC) VS. CA

G.R. NO. 146728, FEB. 11, 2004 (ART. 262-263)
 The employer’s failure to make a timely reply to the proposals presented by the union within 10 calendar days is indicative of
its utter lack of interest in bargaining with the union. Its refusal to make a counter-proposal for CBA negotiation is an indication
of its bad faith and it is a clear evasion of the duty to bargain collectively which is an unfair labor practice.
 Also, feigning negotiations by going through empty gestures is not bargaining in good faith.
 Also, when the union submitted a bargaining proposal, the employer did not submit a counter CBA proposal. What it did was
to question the existence of the union and the status of its membership to prevent any negotiation. Indeed, the employer was in
bad faith.
 There is no per se test of good faith in bargaining. Good faith or bad faith is an inference to be drawn from the facts of the
individual case.
FACTS:
 Petitioner company GMC entered into a CBA with its duly certified bargaining agent GMC Independent Labor Union which included the
issue of representation for 3 year term.
 The day before the CBA’s (3-year term) expired, the union sent GMC a proposed CBA with a request that a counter-proposal be submitted
within 10 days.
 GMC, however, asserted that the union no longer had standing to negotiate the CBA as it received letters from workers withdrawing their
union membership.
 The Union disclaimed the alleged massive disaffiliation and submitted a manifesto, signed by its members stating that they had now
withdrawn from the union.
 The Union then filed a complaint with the NLRC, alleging ULP on the part of GMC for (1) refusal to bargain collectively, (2) interference
with the right to self-organization, and (3) discrimination.
 In the decision of NLRC, it pointed out that the duration of CBA should be 5 years as prescribed under the law (R.A. 6715). Thus, the
respondent union remained the exclusive bargaining agent with the right to renegotiate the economic provisions of the CBA.
ISSUES:
1. WON GMC violated its duty to bargain collectively and/or interfering with the right of its employees to self-organization.
2. WON the CA gravely abused its discretion when it imposed on GMC to adopt the two years proposal by the union commencing from
the expiration of the CBA.

HELD:

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1. YES. (When the union requested for a renegotiation of the economic terms of the CBA the day before its 3-year term ended, “it was still
the certified collective bargaining agent” of the workers because it was seeking said renegotiation within 5 years from the date of effectivity
of the CBA.)
The duty to bargain means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the
purpose of negotiating an agreement. Whether or not a party bargained in good faith turns on the facts of the individual case. There is
no per se test of good faith in bargaining. Good faith or bad faith is an interference to be drawn from the facts. Both parties, under Art.
252, are required to perform their mutual obligation to meet and convene promptly and expeditiously in good faith. The Union lived up to
this obligation but GMC failed in its duty.

It bears stressing that the procedure in collective bargaining is mandatory because of the basic interest of the state in ensuring lasting
industrial peace. Art. 250 provides that “the other party shall make a reply not later than 10 days from receipt of such notice (of a party
desiring to negotiate an agreement).
GMC’s failure to make a timely reply to the proposals is indicative of its utter lack of interest in bargaining with the union and of bad faith.
It did not even bother to submit an answer to the proposals of the union. There is a clear evasion of the duty to bargain collectively, making
it liable for ULP.
Furthermore, GMC also interfered with the employees’ right to self-organization when it exerted pressure on its employees to resign, as
found by the CA.

2. NO. Art. 253. “It shall be the duty of both parties to keep status quo and to continue in full force and effect the terms and conditions
of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties.
The general rule is that when a CBA already exists, its provision shall continue to govern the relationship between parties until a new one is
agreed upon. However, when one of the parties abuses this grace period by purposely delaying the bargaining process, a departure from the
general rule is warranted. Thus, in previous cases, the Court has upheld unilateral imposition on the party guilty of the abuse.

Thus, it would be unfair to the union and its members if the terms and conditions in the old CBA would continue to be imposed on GMCs
employees for the remaining 2 years of the CBA’s duration.

3. PIER 8 ARRASTRE vs CONFESOR

G.R. No. 110854, Feb. 13, 1995
 The effectivity date of the CBA concluded through arbitral awards made by the DOLE Secretary, the NLRC, or voluntary arbitrators
was made retroactive when the Secretary of Labor resolved the labor dispute.

FACTS:
 Petitioner corporation Pier 8 Arrastre and respondent labor union (General Maritime and Stevedores Union – GMSU) entered into a 3-
year CBA, to expire on Nov. 27, 1991.
 During the freedom period, the majority status of GMSU was questioned by NAFLU through a petition for certification election.
 Mar. 19, 1992 (after the 6-month period and the expiration of old CBA) - GMSU was certified as the SEBA of petitioner’s rank and
file employees.
 When negotiations collapsed, GMSU filed a Notice of Strike (on Aug. 24, 1992).
 Public respondent Secretary of Labor (Confesor) assumed jurisdiction, fixing the effectivity date of the CBA on Sept. 30, 1992 (when
she assumed jurisdiction over the dispute.
 That the Union’s contention that the CBA should be fully retroactive to Nov. 28, 1991 cannot be granted as the 6-month period
within which the parties must come to an agreement so shat the same will be automatically retroactive is long past. And that
the Union’s demand for full retroactivity will result in undue financial burden to the company.
 Neither did it merit the petitioner Company’s reliance on Art. 253-A of the then Labor Code as such applies only to the
renegotiated terms of an existing CBA. Here, the deadlock arose from negotiations for a new CBA.
 Petitioner now assails the Order, contending that the Sec. of Labor committed grave abuse of discretion in, among others, making CBA
effective on the date she assumed jurisdiction over the labor dispute and not on Mar. 4, 1993 when she rendered judgment over the
dispute.

ISSUE: When the new CBA should be given effect.

HELD:
In Union of Filipino Employees v. NLRC, 192 SCRA 414 (1990), this court interpreted the above law as follows:

In light of the foregoing, this Court upholds the pronouncement of the NLRC holding the CBA to be signed by the parties effective
upon the promulgation of the assailed resolution. It is clear and explicit from Article 253-A that any agreement on such other
provisions of the CBA shall be given retroactive effect only when it is entered into within six (6) months from its expiry date. If the
agreement was entered into outside the six (6) month period, then the parties shall agree on the duration of the retroactivity thereof.

The assailed resolution which incorporated the CBA to be signed by the parties was promulgated June 5, 1989, the expiry date of
the past CBA. Based on the provision of Section 253-A, its retroactivity should be agreed upon. by the parties. But since no
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agreement to that effect was made, public respondent did not abuse its discretion in giving the said CBA a prospective effect. The
action of the public respondent is within the ambit of its authority vested by existing law.

In the case of Lopez Sugar Corporation v. Federation of Free Workers, 189 SCRA 179 (1991), this Court reiterated the rule that
although a CBA has expired, it continues to have legal effects as between the parties until a new CBA has been entered into. It is
the duty of both parties to the to keep the status quo, and to continue in full force and effect the terms and conditions of the existing
agreement during the 60-day freedom period and/or until a new

agreement is reached by the parties. Applied to the case at bench, the legal effects of the immediate past CBA between
petitioner and private respondent terminated, and the effectivity of the new CBA began, only on March 4, 1993 when
public respondent resolved their dispute.

Art. 253. Duty to bargain collectively when there exists a collective bargaining agreement. — When there is a collective
bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify such
agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at
least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in
full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement
is reached by the parties.

Art. 253-A. Terms of a collective bargaining agreement. — Any CBA that the parties may enter into shall, insofar as the
representation aspect is concerned, be for a term of five (5) years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be conducted by the DOLE outside the
sixty-day period immediately before the date of expiry of such 5-year term of the CBA.

All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its
execution. Any agreement on such other provisions of the CBA entered into within six (6) months from the date of expiry
of the term of such other provisions as fixed in such Collective Bargaining Agreement, shall retroact to the day immediately
following such date. If any such agreement is entered into beyond six months, the parties shall agree on the duration of
collective bargaining agreement, the parties may exercise their rights under this Code.

4. UNION OF FILIPRO EMPLOYEES (UFE) VS. NLRC

G.R. NO. 91025, DECEMBER 19, 1990

FACTS:
(1):
 UFE filed a notice of strike on Nov. 14, 1985 with the BLR.
 Dec. 4, 1988 – UFE filed a complaint for ULP against Nestle and its officials for non-implementation of the CBA provisions.
 Then Minister of Labor and Employment Blas Ople assumed jurisdiction over the dispute, who enjoined strike, lockouts, or any other
form of concerted actions which tend to disrupt the operations of the company.
 UFE assailed the assumption of jurisdiction. Notwithstanding the automatic injunction against any concerted activity, the union members
staged a strike and continued to man picket lines at Makati Administrative Office and all of Nestle’s factories and warehouses in different
parts of the country. They even distributed leaflets to employees and passersby to boycott products of the company.
 Nestle filed a petition declaring the strike illegal.
 Minister Ople issued another Order, ordering the striking workers to report for work within 48 hours from the notice of the Order.
 Despite the 2nd Order, the strike continued.
 Ople then ordered police and military authorities to assist in the proper implementation of the Order. While Nestle filed criminal charges
against those involved.
(2)
 Filipro (Nestle0 and the CDO Filipro Workers Union - WATU renewed a 3-year contract (Dec. 1, 1984 - June 30, 1987).
 Jan. 19, 1985 – the union officers, together with other members of the union sent a letter to WATU advising them that they (union officers)
shall administer the CBA by themselves with the help of Union of Filipro Employees (UFE) where they have allied themselves.
 WATU disregarded the union’s advice, claiming to be the contracting party of the CBA.
 Jan. 22, 1986 – Mar. 14-1986 – the rank and file employees staged a strike at the instigation of UFE officers, who represented themselves
as such.
 Nestle filed a petition to declare the strike illegal.
 The Labor Arbiter declared the strike illegal and the respondent union guilty of ULP.
THE NLRC affirmed the unanimous decisions of the 3 labor arbiters which declared the strikes illegal. The core of the controversy rests
upon the legality of strikes.

ISSUE: WON the NLRC committed grave abuse of discretion in its affirmance of the decisions of the Labor Arbiters.

HELD: NO.

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UFE completely misses the underlying principle in Art. 264(g) on the settlement of labor disputes that assumption and certification orders
are “executory in character” and are to be strictly complied with by the parties even during the pendency of any petition questioning their
validity. This “extraordinary authority” given to the Sec. of Labor is aimed at arriving at a peaceful and speedy solution to labor disputes,
without jeopardizing national interests.
Regardless of their motives or validity of their claims, the striking workers must cease and/or desist from any and all acts that tend to
undermine the authority of the Sec. of Labor once an assumption and/or certification order is issued. They cannot ignore the orders, citing
ULP on the part of the company to justify their actions. Returning to work is not a matter of option but of obligation.
Furthermore, an “assumption and/or certification order” of the Secretary automatically results in a return to work of all striking workers,
even in the absence of a “return to work order.”
A strike that is undertaken despite the issuance by the Sec. of Labor of an assumption or certification order becomes a prohibited activity and
thus illegal.
Thus, the NLRC correctly upheld the illegality of the strikes and the corresponding dismissal of the individual complaints because of their
brazed disregard of successive lawful orders of then Labor Ministers.

5. FREE EMPLOYER VS CIR

14 SCRA 781, July 30, 1965 (ART. 268)
 (Nature of certification election; non-litigious, non adversarial proceeding) “Petition for certification election is not the same as the
ordinary complaint where there are adversary parties, the complainant and the defendant. However, if the representation issue is
contested, the proceeding becomes one of the adversary type and has to be decided according to lawful evidence where the
intervening parties can present their witnesses and to cross-examine those of the adversary.”
FACTS:
 2 labor unions: Free Employees and Workers’ Association (FEWA) and Better buildings Labor Union (BLU) claimed majority
membership and representation to bargain collectively for the laborers of Better Buildings (a single proprietorship of William Warne in
Pasay City – cleaning and sanitation maintenance of office buildings).
 The case was set for trial. On the day set, counsel for FEWA sought a continuance but was denied upon objection of the opposing lawyer.
Evidence was then received for BLU, consisting the sole testimony of that union’s president (Nelson Padilla).
 Later, counsel for FEWA sought to cross-examine the witness. Subpoenas were issued for Padilla but the latter did not appear.
 FEWA’s counsel moved to strike out Padilla’s testimony but the court held in abeyance the granting of such motion. Instead, the Judge,
on the basis of the exhibits identified by Padilla (who never submitted to cross-examination) held that “many workers had dual
membership” and then ordered a certification election.
 FEWA asked for reconsideration but was denied by the Court en banc. Hence, this case.

ISSUE: WON the Industrial Court erred in not ordering the striking out of the testimony of Padilla (BLU’s witness) for lack of cross examination.

HELD: YES. Having been granted the opportunity to cross examine witness (but was twice postponed because witness did not appear for the
purpose), it was error for the court to have decided the case without reserved cross examination. Instead, it decided the case on the merits
without announcing the deferred ruling.
The respondent court’s position that cross examination may be dispensed with is untenable. While the proceedings in case of representation
controversies are investigative in character, yet where 2 rival unions claim representation, the case becomes one of the adversary type,
and has to be decided according to lawful evidence.
The law requires “appropriate hearing upon due notice” which clearly connote that intervening parties must be given opportunity not only
to present their witnesses but also to cross examine those of the adversary, for there is no real hearing when the party is not given opportunity
to test, explain, or refute.
That the CIR is only a quasi-judicial in character, and not bound by strict rules of evidence, does not mean that it can dispense with any and
all rules, even the most substantial, and those shown by experience to be essential in arriving at the truth.

6. TAGAYTAY HIGHLANDS VS. TAGAYTAY HIGHLANDS EMPLOYEES UNION

G.R. NO. 142000, JAN. 22, 2003 (ART. 268)
 (Petition for certification election should be supported by the written consent of at least 25% of all the employees in the appropriate
bargaining unit) “However, if there was allegation that some of the signatures in the petition for certification election were obtained
through fraud, false statement and misrepresentation, the proper procedure is to file a separate petition for cancellation of the certificate
of registration, and not to intervene in a petition for certification election.”

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  Best Forum Rule (Retractions or recantations before or after filing of petition of certification election) “IF the retraction was made after
the filing of the petition, certification election may still be ordered for the withdrawal of consent is presumed to be involuntary. The best
forum for determining whether there were indeed retractions from some of the laborers is in the certification itself wherein the workers
can freely express their choice in a secret ballot, known as the best forum rule.
 (Art. 271) “As an innocent bystander, the employer may pray for the dismissal of a petition for certification election on the basis of lack
of mutuality of interests of the members of the union as well as lack of employer-employee relationship.”

FACTS:

* October 16, 1997 - Tagaytay Highlands Employees Union (THEU), Philippine Transport and General Workers Organization (PTGWO), a
legitimate labor organization said to represent majority of the rank-and-file employees of THIGCI, filed a petition for certification election
before the DOLE Mediation-Arbitration Unit

* November 27, 1997 - opposed petition for certification election because the list of union members submitted by it was defective and fatally
flawed as it included the names and signatures of supervisors, resigned, terminated and absent without leave (AWOL) employees, as well as
employees of The Country Club, Inc., a corporation distinct and separate from THIGCI; and that out of the 192 signatories to the petition, only
71 were actual rank-and-file employees of THIGCI. Also, some of the signatures in the list of union members were secured through fraudulent
and deceitful means, and submitted copies of the handwritten denial and withdrawal of some of its employees from participating in the petition.

* THEU asserted that it complied with all the requirements for valid affiliation and inclusion in the roster of legitimate labor organizations
pursuant to DOLE Department Order No. 9, series of 1997, on account of which it was duly granted a Certification of Affiliation by DOLE on
October 10, 1997; and that Section 5, Rule V of said Department Order provides that the legitimacy of its registration cannot be subject to
collateral attack, and for as long as there is no final order of cancellation, it continues to enjoy the rights accorded to a legitimate organization.
Therefore, the Med-Arbiter should, pursuant to Article 257 of the Labor Code and Section 11, Rule XI of DOLE Department Order No. 09,
automatically order the conduct of a certification election.

* Jan. 28, 1998 - DOLE Med-Arbiter Anastacio Bactin ordered the holding of a certification election

* DOLE Resolution of November 12, 19981 - setting aside the June 4, 1998 Resolution dismissing the petition for certification election. MFR
denied

* CA - denied THIGCI’s Petition for Certiorari and affirmed the DOLE Resolution dated November 12, 1998. It held that while a petition
for certification election is an exception to the innocent bystander rule, hence, the employer may pray for the dismissal of such petition on the
basis of lack of mutuality of interests of the members of the union as well as lack of employer-employee relationship and petitioner failed to
adduce substantial evidence to support its allegations.

ISSUE: WON the withdrawal of some union members from the certification election will affect the result.

HELD: NO

* As for petitioner’ s allegation that some of the signatures in the petition for certification election were obtained through fraud, false statement
and misrepresentation, the proper procedure is, as reflected above, for it to file a petition for cancellation of the certificate of registration, and
not to intervene in a petition for certification election. Regarding the alleged withdrawal of union members from participating in
the certification election, this Court’s following ruling is instructive:

“T]he best forum for determining whether there were indeed retractions from some of the laborers is in the certification election itself
wherein the workers can freely express their choice in a secret ballot. Suffice it to say that the will of the rank-and-file employees should
in every possible instance be determined by secret ballot rather than by administrative or quasi-judicial inquiry. Such representation
and certification election cases are not to be taken as contentious litigations for suits but as mere investigations of a non-adversary, fact-
finding character as to which of the competing unions represents the genuine choice of the workers to be their sole and exclusive collective
bargaining representative with their employer.”

7. RPB (REPUBLIC PLANTERS BANK) GENERAL SERVICES EMPLOYEES UNION vs LAGUESMA

GR. No. 119675, Nov. 21, 1996
 Contract Bar Rule; 60-Day Freedom Period Rule. A petition for certification election may not be filed when a CBA has been
registered with the BLR. Where the CBA is duly registered, a petition for certification election may be filed within the 60-day freedom
period prior to its expiry.

FACTS:
 Petitioner RPBGSEU filed a petition for certification election on Jan. 21, 1991 to determine the SEBA of all regular employees outside
the bargaining unit of RPB.

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 i. It must have to be noted that the CBA between RPB and the existing bargaining unit representative RPBEU (RPB Employees
Union) was effective from June 30,1988-June 30, 1991.
 Private respondent Bank moved to dismiss the petition, contending that (1) petitioner union is comprised of contractual employees and
are not members of petitioner; (2) that these employees are excluded from the existing CBA between private respondent Bank and
RPBEU.
 [Petitioner opposed the motion to dismiss and averred that the proposed unit is not part of the existing bargaining unit; and that some of
its members have been in the employ of the private respondent for more than 6 months.]
 Med-Arbiter dismissed the petition for certification election on the ground that there is already a CB agent representing the appropriate
bargaining unit. Thus, employees who were excluded from the CBA may join the existing bargaining unit in accord with the “one-union,
one-company” policy of the DOLE.
 Then Undersecretary Laguesma reversed the Order of the Med-Arbiter, saying that the documents submitted by petitioner are self-serving
and thus may not be given weight.
ISSUE: WON there was a grave abuse of discretion on the part of Laguesma when it allowed the Bank to participate or intervene in the
certification election.
HELD: NO. “No petition for certification election may be entertained if filed outside the 60-day period immediately before the expiration of
the CBA. The purpose of such prohibition is to ensure industrial peace between employer and its employees during the existence of the CBA.
When a legitimate labor organization has been certified as the SEBA of the rank-and-file employees of a given employer, it shall remain as
such during the existence of the CBA to the exclusion of other labor organizations, and no petition questioning the majority status of said
incumbent agent or any certification election be conducted outside the 60-day freedom period immediately before the expiry date of the
CBA.
In the case at bar, the petition for certification election was filed on Jan. 21, 1991. The CBA between the bank and the duly certified bargaining
agent RPBEU was effective from Jun. 30,1988-Jun. 30, 1991. It is clear that the filing of the petition for CE was premature.

8. NOTRE DAME OF GREATER MANILA vs LAGUESMA

GR. No. 149833, June 29, 2004
 Appeal-Bar Rule. The filing of the appeal from the Order or Decision of the Med-Arbiter granting the petition for certification election
‘stays the holding of the certification election.’
 (Pre-election conference; inclusion-exclusion proceedings) The list of eligible voters can no longer be questioned if it was not contested in
the pre-election conference. “Thus, it is not proper for the employer to question the qualifications of workers who should be included in the
list of voters in the certification election as the ‘employer is definitely an intruder.’

NATURE: Petition for Review under Rule 45 of the Rules of Court

FACTS:

- Notre Dame of Greater Manila Teachers and Employees Union (NDGMTEU) a legitimate labor organization duly accredited and registered
with DOLE filed with Med-Arbitration Branch a petition for direct certification as sole and exclusive bargaining agent or certification election
among the rank and file employees of NDGM. Med Arbiter issued an order granting the certification election (in accordance with A257 of LC,
considering that NDGM was an unorganized establishment, to give each employee a fair chance to choose their bargaining agent) and ordering
Representation officer Francisco to undertake a pre-election conference.

-During the pre-election conference, the parties agreed that the certification election shall be conducted and that the eligible voters shall be
those employees appearing in the list submitted by management (who were regular employees). NDGM registered a motion to include
probationary and substitute employees in the list of qualified voters, but was denied by Med-Arbiter through a notation. NDGM filed an appeal
to Labor Secretary, pending appeal, public respondents conducted a certification election where NDGMTEU won (56 vs 23 who did not want
a union). NDGM filed a written notice of protest against the conduct and results of the certification of election, which was opposed by
NDGMTEU. NDGMTEU filed a motion to certify their union as the exclusive bargaining agent of NDGM, which was granted and certified
by the Med-Arbiter. NDGM’s protest was dismissed so NDGM appealed, which was again dismissed for lack of merit. NDGM filed MFR –
rejected. CA: staying the holding of the certification election unnecessary, certification election complaints should have been raised before the
pre-election conference, where the qualification of voters was already determined. NDGM had no standing to question the qualification of the
workers because in the process of choosing the collective bargaining representative, the employer was definitely an intruder

Petitioner’s contention: (1)A259, LC5 would allow the staying (suspension) of the holding of certification election, with its appeal of the denial
of its Motion. (2) It has the support of all the excluded employees so they could represent these employees and question the validity of the
election

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ISSUES

1. WON the holding of certification elections was stayed by the NDGM’s appeal of the med-arbiter’s notation to the DOLE Secretary on the
Motion to Include the probationary and Substitute Employees in the list of Qualified Voters

2. WON the employer has legal personality to question the election

HELD

1. NO. The appeal of the med-arbiter’s January 13, 1992 handwritten notation –pertaining to the incidental matter of the list of voters –should
not stay the holding of the certification election. Ratio. Not all the orders issued by a med-arbiter are appealable. In fact, “[i]nterlocutory orders
issued by the med-arbiter prior to the grant or denial of the petition, including orders granting motions for intervention issued after an order
calling for a certification election, shall not be appealable. However, any issue arising there from may be raised in the appeal on the decision
granting or denying the petition.”

-The intention of the law is to limit the grounds for appeal that may stay the holding of a certification election. This intent is manifested by the
issuance of Department Order No. 40. Under the new rules, an appeal of a med-arbiter’s order to hold a certification election will not stay the
holding thereof where the employer company is an unorganized establishment, and where no union has yet been duly recognized or certified
as a bargaining representative.

-This new rule, therefore, decreases or limits the appeals that may impede the selection by employees of their bargaining representative.
Expediting such selection process advances the primacy of free collective bargaining, in accordance with the State’s policy to “promote and
emphasize the primacy of free collective bargaining x x x”; and “to ensure the participation of workers in decision and policy-making processes
affecting their rights, duties and welfare.”

Reasoning. INTERPRETATION OF A259 OF LC: A259 is supplemented by Section 10 of Rule V of Book Five of the 1992 Omnibus Rules
Implementing the Labor Code. Stating that such appeal stays the holding of a certification election, the later provision reads: Sec. 10. Decision
of the Secretary final and inappealable.” The Secretary shall have fifteen (15) calendar days within which to decide the appeal from receipt of
the records of the case. The filing of the appeal from the decision of the Med-Arbiter stays the holding of any certification election. The decision
of the Secretary shall be final and inappealable.”

- A259 clearly speaks of the “order x x x of the election.” Hence, the Article pertains, not just to any of the med-arbiter’s orders like the subject
notation, but to the order granting the petition for certification election. This is an unmistakable inference from a reading of Sections 6 and 7
of the implementing rules6. and spirit of welfare legislations intended to protect labor and to promote social justice.

Disposition.

WHEREFORE, the Petition is DENIED, and the assailed Resolution AFFIRMED. Costs against petitioner. SO ORDERED.

9. CALIFORNIA MANUFACTURING vs LAGUESMA

G.R. No. 97020, June 9, 1992 (Art. 269)
 Certification election in unorganized establishments) “In any establishment where there is no certified bargaining agent, a certification
election shall automatically be conducted by the med-arbitrator upon the filing of a petition by a legitimate labor organization. The 25%
subscription requirement necessary for the filing of a petition is not applicable in unorganized establishments.
 (Art. 269 applies to unorganized labor organizations) “Where the supervisors of the company constitute a bargaining unit separate and
distinct from that of the rank-and-file which is organized, and they have no bargaining agent, they may file a petition for certification
elections through a legitimate labor organization as one under an unorganized establishment.”

FACTS -A petition for certification election among the supervisors of California Manufacturing Corp (CMC) was filed by the Federation of Free
Workers (FFW). California Manufacturing Corporation Supervisors Union Chapter (CALMASUCO), alleging inter alia, that it is a duly
registered federation while FFW-CALMASUCO Chapter is a duly registered chapter.

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-CMC alleged that the petition should be denied since it does not contain the requisite number of signatures and that a big number of the
supposed signatories to the petition are not actually supervisors as they have no subordinates to supervise, nor do they have the powers and
functions which under the law would classify them as supervisors.

-FFW-CALMASUCO filed its reply maintaining that under the law, when there is no existing unit yet in a particular bargaining unit at the time
a petition for certification election is filed, the 25% rule on the signatories does not apply.

-Labor Arbiter ruled in favor of FFW. DOLE affirmed.

ISSUE: WON the 25% subscription requirement applies

HELD: No. Ratio Article 257 of the Labor code is applicable to unorganized labor organizations and not to establishments where there exists
a certified bargaining agent which had previously entered into a collective bargaining agreement with the management Reasoning. In the instant
case, it is beyond cavil that the supervisors of CMC which constitute a bargaining unit separate and distinct from that of the rank-and-file, have
no such agent. Thus they correctly filed a petition for certification election thru union FFW-CALMASUCO, likewise indubitably a
legitimate labor organization. CMC’s insistence on the 25% subscription requirement, is clearly immaterial. The same has been expressly
deleted by Section 24 of Republic Act No. 6715 and is presently prescribed only in organized establishments, that is, those with existing
bargaining agents.

10. PHIL. FRUITS vs TORRES G.R. No. 92391, July 3, 1992

 (Art. 268) (Perfection of election protest) “The protesting party must formalize its protest with the Med-Arbiter within 5 days after the
close of the election proceedings. If not recorded in the minutes and formalized within the prescribed period, the protest shall be deemed
dropped.”
 (Art. 270) (Petition for certification election filed by an employer) “A certification election is the sole concern of the workers and the
employer is regarded as nothing more than a bystander with no right to interfere at all in the election, the only exception being where the
employer has to file a petition for certification election because it is requested to bargain collectively.
FACTS:
In 1988, Med-Arbiter Basa issued an Order granting the petition for Certification election filed by the Trade Union of the Philippines and Allied
Services (TUPAS). Said order directed the holding of a certification election among the regular and seasonal workers of the Philippine Fruits
and Vegetables, Inc. After a series of pre-election conferences, all issues relative to the conduct of the certification election were threshed
out except that which pertains to the voting qualifications of the hundred ninety four (194) workers enumerated in the lists of qualified voters
submitted by TUPAS. Election transpired and only 168 of the questioned workers actually voted. This was opposed by the company and
objected the proceeding. However, it was subsequently agreed upon that workers whose names were inadvertently omitted in the list of
qualified voters were allowed to vote, subject to challenge. Only 38 of them voted in the election. Subsequently, since the majority votes of
the employees were not reached, a need to open the 168 challenged vote was necessary, this was again objected by the company. Eventually,
the petitioner-company filed a protest but was then denied. After the denial of its motion for reconsideration by the Secretary of Labor, the
company filed for a petition for certiorari in the Court alleging that the Secretary of Labor committed manifest error in upholding the
certification of TUPAS as the sole bargaining agent mainly on an erroneous ruling that the protest against the canvassing of the votes cast by
168 dismissed workers was filed beyond the reglementary period.

ISSUE: Whether or not the protest was belatedly filed

HELD: Yes. The Court ruled that that the formal protest of petitioner PFVII was filed beyond the reglementary period. Under Section 4, Rule
VI, Book V of the Implementing Rules of the Labor Code:
Sec. 4. Protest to be decided in twenty (20) working days. — Where the protest is formalized before the med-arbiter with five (5) days
after the close of the election proceedings, the med-arbiter shall decide the same within twenty (20) working days from the date of
formalization…xxx

The Court stated the two requirements in order that a protest filed thereunder would prosper: (1) The protest must be filed with the
representation officer and made of record in the minutes of the proceedings before the close of election proceedings, and (2) The protest
must be formalized before the Med-Arbiter within five (5) days after the close of the election proceedings.

The records of the case clearly disclosed that petitioner, after filing a manifestation of protest on December 16, 1988, election day, only
formalized the same on February 20, 1989, or more than two months after the close of election proceedings. As explained correctly by the
Solicitor General, the phrase "close of election proceedings" as used in Sections 3 and 4 of the pertinent Implementing Rules refers to that
period from the closing of the polls to the counting and tabulation of the votes as it could not have been the intention of the Implementing
Rules to include in the term "close of the election proceedings" the period for the final determination of the challenged votes and the canvass
thereof, as in the case at bar which may take a very long period. 6 Thus, if a protest can be formalized within five days

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USITA NOTES

1. What is a Collective Bargaining Unit?

COLLECTIVE BARGAINING UNIT (CBU)
“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. [Book V, Rule 1, Sec1(d)]
Appropriate Bargaining Unit
A group of employees of a given employer comprised of all or less than all of the entire body of employees, which the collective
interests of all the employees indicate to be best suited to serve reciprocal rights and duties of the parties consistent with
equity to the employer. [Belyca Corp. vs Calleja, 1988]

2. What is the relevance in determining CBU?

While officers lead and represent a union, a union represents a CBU. The representative is the union; the group represented is
the CBU. The representative union, once determined, will represent even the members of other unions as long as they are part
of the CBU. This is why the representative union (also called bargaining agent or majority union) is called “exclusive bargaining
representative” (EBR).
CBA Coverage
When there has been a factual determination by the Labor Arbiter that the petitioners were regular employees, said employees
shall fall within the coverage of the bargaining unit and are therefore entitled to CBA benefits as a matter of law and contract.
[Farley Fulache, et a. v ABS-CBN, 2010]
Function of an Appropriate Bargaining Unit
(a) An ELECTORAL DISTRICT. – It marks the boundaries of those who may participate in a certification election.
(b) An ECONOMIC UNIT. – They are a group of employees with community of interests.
(c) A SOVEREIGN BODY. – It selects the sole and exclusive bargaining agent.

Role of a bargaining unit

General rule: The labor organization designated or selected by the majority of the employees in an appropriate collective
bargaining unit shall be the exclusive representative of the employees in such a unit for the purpose of collective bargaining.
Exception: However, an individual employee or group of employees shall have the right at any time to present grievances to
their employer. Any provision of law to the contrary notwithstanding, workers shall have the right, to participate in the policy
and decision-making processes of the establishment where they are employed insofar as said processes will directly affect
their rights, benefits and welfare. For this purpose, workers and employers may form labor-management councils:
Provided, that the representatives of the workers in such labor-management councils shall be elected by at least the majority
of all employees in said establishment. [Art. 255, LC]

3. Are all Employees included in the CBU?

A: Not necessarily.
BARGAINING UNIT: a group of employees of a given employer, comprised of all or less than all the entire body of the
employees, which share reciprocal rights and duties, under the collective bargaining provisions of the law.

4. How do we determine if these employees belong to one CBU?

FOUR FACTORS IN DETERMINING THE APPROPRIATE BARGAINING UNIT: (CHEG)
(1) Community of Interest Doctrine or Substantial Mutual Interest Rule: characterized by the similarity of
employment status, same duties, and responsibilities and substantially similar compensation and working
conditions.
(2) Prior collective bargaining history
(3) Employment status
(4) Globe Doctrine: based on the express will or desire of the workers. In defining the appropriate bargaining unit,
the determining factor is the desire of the workers themselves.

Test to determine the constituency of an appropriate bargaining unit (WAPE)

(1) Will of the Employees (Globe Doctrine)
(2) Affinity & unity (Community) of Employees interest, such as substantial similarity of works and duties or similarity of compensation &
working conditions
(3) Prior CB history
(4) Employment status i.e. temporary, seasonal, & probationary. [UP v. Ferrer-Calleja, 1992 citing Democratic Labor Assoc v. Cebu
Stevedoring Co.]
Other factors: see: #7
(1) Geography and location
(2) Policy of avoiding fragmentation of the bargaining unit

Unit Severance and Globe Doctrine see: #6

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Community or Mutuality of Interests
Fundamental Test: (t)he basic test of an asserted bargaining unit’s ACCEPTABILITY is whether or not it is fundamentally the combination
which will best assure to all employees the exercise of their CB rights. This is related to the policy of the law in ensuring the right to
collective bargain. [UP v. Ferrer-Calleja, 1992]
Rationale
There are greater chances of success for the collective bargaining process. The bargaining unit is designed to maintain the mutuality of
interest among the employees in such unit.
Reason to dissolve, change or expand a certain bargaining unit: When THE INTEREST BETWEEN GROUPS HAS CHANGED OVER TIME

Prior Collective Bargaining History

The existence of a prior collective bargaining history is neither decisive nor conclusive in the determination of what constitutes an
appropriate bargaining unit. [San Miguel Corp. v. Laguesma, 1994]

5. Why do rank and file employees belong to the same CBU?

See Factors/Test in determining CBU
community or mutuality of interest

6. What is GLOBE Doctrine?

Globe Doctrine: Concept
(a) practice designated as the "Globe doctrine," which sanctions the holding of a series of elections, not for the purpose of
allowing the group receiving an over all majority of votes to represent all employees, but for the specific purpose of
permitting the employees in each of the several categories to select the group which each chooses as a bargaining unit.
[Kapisanan ng mga Manggagawa sa Manila Road Co. v. Yard Crew Union , 1960]

Rationale for the Globe Doctrine

Highly skilled or specialized technical workers may choose to form their own bargaining unit because they may be in better
position to bargain with the employer considering the market value of their skills.

7. Are there OTHER Factors in considering CBU?

Geography –Location
Geography and location only play a significant role if:
(1) The separation between the camps and the different kinds of work in each all militate in favor of the system of separate bargaining
units;
(2) When the problems and interests of the workers are peculiar in each camp or department;
(3) The system of having one collective bargaining unit in each camp has operated satisfactorily in the past. [Benguet Consolidated Inc. and
Balatok Mining Co. v. Bobok Lumberjack Assn.,1958]

Policy of avoiding fragmentation of the bargaining unit

It bears noting that the goal of the DOLE is geared towards "a single employer wide unit which is more to the broader and greater benefit of
the employees working force."The philosophy is to avoid fragmentation of the bargaining unit so as to strengthen the employees’
bargaining power with the management. To veer away from such goal would be contrary, inimical and repugnant to the objectives of a
strong and dynamic unionism. [Phil. Diamond Hotel and Resort Inc v Manila Diamond Hotel and Employees Union, 2006]

Since the confidential employees are very few in number and are by practice and tradition identified with the supervisors in their role as
representatives of management vis-à-vis the rank and file employees, such identity of interest has allowed their inclusion in the bargaining
of supervisors for purposes of collective bargaining in turn as employees in relation to the company as their employer. This identity of interest
logically calls for their inclusion in the same bargaining unit and at the same time fulfills the law’s objective of insuring to them the full benefit
of their right to self organization and to collective bargaining, which could hardly be accomplished if the respondent association’s membership
were to be broken up into five separate ineffective tiny units. Creating fragmentary units would not serve the interest of industrial peace.
The breaking up of bargaining units into tiny units will greatly impair their organizational value. [Filoil Refinery Corp. v Filoil Supervisory and
Confidential Employees Union, 1972]

8. What is the most important factor? See #4

(community or mutuality of interest)

9. What is Collective Bargaining?

It is a process where the parties agree to fix and administer terms and conditions of employment which must not be below
the minimum standards fixed by law, and set a mechanism for resolving their grievances.
(https://blr.dole.gov.ph/2014/12/11/collective-bargaining/)

Definition: 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.

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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. [Kiok Loy v. NLRC, 1986]

Collective bargaining Agreement (CBA)

A collective bargaining agreement refers to the 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, including mandatory provisions for grievances
and arbitration machineries. [Book V Rule I Section 1(j)]

Nature and Purpose of Collective Bargaining

The institution of collective bargaining is a prime manifestation of industrial democracy at work. The two parties to the relationship, labor
and management, make their own rules by coming to terms to govern themselves in matters that really count. [United Employees Union of
Gelmart Industries v. Noriel, 1975]

Legal Basis
The State shall guarantee the rights of workers to collective bargaining and negotiations.
The State shall promote the principle of shared responsibilities 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. [1987
Constitution, Art. XIII, Sec. 3]
It is the policy of the State:
To promote and emphasize the primacy of FREE COLLECTIVE BARGAINING and negotiations, including voluntary arbitration, mediation and
conciliation, as modes of setting labor or industrial disputes. [Labor Code, Art 211 A]
It is the policy of the State to promote and emphasize the primacy of free and responsible exercise of the right to self-organization and
collective bargaining, either through single enterprise level negotiations or through the creation of a mechanism by which different employers
and recognized certified labor unions in their establishments bargain collectively. [Book V Rule XVI Sec. 1. Policy]
See also #16

a. Why do we call it “collective”?

Art.262 It shall be the duty of the EMPLOYER and the REPRESENTATIVES OF EMPLOYEES to bargain collectively.

Meaning of the duty to bargain collectively

It is the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating
an agreement.
However, the duty does not compel any party to agree to a proposal or to make any concession. [Art. 252]

b. Who are the PARTIES?

employees' side (parte laboral , also called banco social ) and the employers' side (parte empresarial , also called banco
económico ). They may each be composed of one or more elements, and together constitute the bargaining committee for a
given agreement.

c. Who REPRESENTS the employees?

Without CBA: Representatives of the Employees
With CBA: SEBA

10. Is there a duty to bargain collectively on the part of the employer if there is no exclusive representative?
While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to initiate
contract negotiation.
An employer, when requested to bargain collectively in a bargaining unit where no registered collective bargaining
agreement exists may file a Petition for Certification Election with the Regional Office which issued the petitioning union’s
certificate of registration/certificate of creation of chartered local. (IRR of the Labor Code)

11. What are the jurisdictional preconditions in collective bargaining?

1. Possession of the status representation by the employees’ representative in accordance with any of the means of
selection or designation provided for by the Labor Code.
2. Proof of majority representation (Certification of the BLR that the representative of the employees is the sole and
exclusive bargaining agent having won in a certification of election)
3. Employer-employee relationship;
The duty to bargain collectively arises only between the employer and its employee. Where neither party is an
employer nor an employee of the other, no such duty would exist
4. Demand to bargain under Article 250 (a) of the Labor Code
When a majority representative has been designated, it is an ULP for the employer as a refusal of collective bargaining,
to deal and negotiate with the minority representative to the exclusion of majority representative.

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12. In general, what are the jurisdictional preconditions in collective bargaining?
While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to initiate contract
negotiation.7 The mechanics of collective bargaining is set in motion only when the following jurisdictional preconditions are
present, namely, (1) possession of the status of majority representation of the employees' representative in accordance with
any of the means of selection or designation provided for by the Labor Code; (2) proof of majority representation; and (3) a
demand to bargain under Article 251, par. (a) of the New Labor Code . ... all of which preconditions are undisputedly present in
the instant case. (Kiok Loy/Sweden Ice Cream Plant v. NLRC G.R. No. L-54334 January 22, 1986)
REQUISITES OF COLLECTIVE BARGAINING: (MEDS) /SPED
(1) Possession of status of representation
(2) Proof of majority representation (Certification of BLR)
(3) ER-EE Relationship
(4) Demand to bargain collectively
(Kiok Loy v NLRC)

13. Normally a bargaining process is initiated by proposal or demand, who usually initiates the collective bargaining?
99% of the time, it is the employees who usually intiate the collective bargaining. This is because the employer would
like to maintain the status quo of no CBA.

14. Can the employer also demand?

Yes, the employer may also demand but this is rarely so because it is more beneficial for the employer to maintain the
status quo of no CBA.

15. What will happen if the employer does not reply to the proposal?
The ten-day period is seldom observed. The employees cannot claim ULP right away if the employer does not reply.
Usually, the employers write to the employer to reiterate the demand to bargain.

16. What is the duty to bargain collectively?

IN THE ABSENCE OF CBA: In the absence of an agreement or other voluntary arrangement providing fpor a more
expeditious manner of collective bargaining, it shall be the duty of the employer and the representatives of the employees to
bargain collectively in accordance with the provisions of this Code. (Article 262)
Duty to Bargain Collectively is an obligation 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 grievances or questions arising under such agreements if requested by either party but
such duty does not compel any party to agree to a proposal or to make any concession. (Article 263)
IN THE PRESENCE OF CBA: When there is a collective bargaining agreement, the duty to bargain collectively shall also
mean that neither party shall terminate nor modify such agreement during its lifetime. However, either party can serve a
written notice to terminate or modify such agreement at least sixty (60) days prior to its expiration date.
It shall be the duty of both parties: (1) To keep the status quo and (2) to continue in full force and effect the terms and
conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties. (Article
264)

17. What are the four ULPS in Collective Bargaining?

The four unfair ULP in Bargaining:
1. Bad faith in bargaining (boulwarism), including failure or refusal to execute the CBA, if requested;
2. Evading the mandatory subjects of bargaining;
3. Gross valuation of the CBA;
4. Failure or refusal to meet and convene.
Violations of the collective bargaining agreement, except those which are gross in character shall no longer be treated as an
unfair labor practice but as a grievance under the CBA.

18. Kiok Loy Doctrine

The CBA proposed by the bargaining union may be adopted as the new CBA if employer refused to negotiate.

19. Bargaining in Bad Faith

Bargaining in bad faith is a violation of duty to bargain amounting to ULP. The following acts are held to constitute
refusal to bargain:
a.) Alleging that the union is irresponsible;
b.) Transferring operation to elude the union (run-away shop);
c.) Delaying negotiations by discussing unrelated matters;
d.) Rejecting a union’s offer to prove its majority claim;

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 e.) Engaging in surface bargaining; and
f.) Refusal to make a counter-proposal to the union’s proposal for CBA negotiation.

20. What is boulwarism?

Boulwarism occurs:
a.) When the employer directly bargains with the employee disregarding the union.
b.) The aim was to deal with the union through the employees rather than with the employees through the union.
c.) Employer submits its proposals and adopts a “take it or leave it” stand. This is not negotiation because the “take it
or leave it” stand implies threat.

21. What is bargaining to the point of impasse?

It is the adamant insistence on a bargaining position to the point where the negotiations reach an impasse. Impasse,
as defined in the dictionary, means a situation in which no progress is possible; especially because of a disagreement. It is also
referred to as a deadlock.

22. Is the bargaining to the point of impasse allowed?

Bargaining to the point of impasse may or may not amount to bargaining in bad faith depending on whether the insistence
refers to a mandatory or a non-mandatory subject of bargaining.
Over a mandatory subject a party may insist on bargaining, even to the point of deadlock and his insistence will not be
construed as bargaining in bad faith. The reason is that the duty to bargain requires meeting and convening on terms and
conditions of employment but does not require assent to the other part’s proposal.
On the other hand, a party cannot insist on bargaining to the point of impasse over a non-mandatory subject and such insistence
will be construed as bargaining in bad faith; as evasion of the duty to bargain and such evasion is an unfair labor practice.

23. What if there is deadlock in non-mandatory subjects?

As earlier mentioned, a deadlock on such subjects will be considered as an evasion of the duty to bargain which also
amounts to unfair labor practice. Moreover, a US precedent has held that insistence on non-mandatory subject as a condition
to bargaining on mandatory subject indicates absence of good faith in bargaining. However, it does not mean that such subjects
cannot be proposed. What it forbids is the posture of making a settlement on a non-mandatory subject a precondition to the
discussion or settlement of a mandatory subject.

24. When is a violation of CBA considered U.L.P?

Violation of the collective bargaining agreement amounts to unfair labor practice if the violation is “gross.” Gross
violations refer to flagrant and/or malicious refusal to comply with the economical provisions of the CBA.

25. Who will ratify the CBA? What is the procedure?

The agreement negotiated by the employees’ bargaining agent should be ratified or approved by the majority of all
the workers in the bargaining unit. This requirement is not found in Article 250 but in Article 231 and restated in the
implementing rules. Moreover, the rules also provide for the manner of ratification which is held to be mandatory. Non-
compliance therewith would render the CBA ineffective.

1. The CBA must be posted in two conspicuous places for at least five days to enable the workers to clearly inform
themselves of its provisions.
2. The CBA must be submitted to the DOLE.
3. The CBA submitted must carry the sworn statement of the union secretary, attested by the union president, that the
CBA had been duly posted and ratified, as required by the IRRs.

26. When does the CBA take effect?

If the CBA is the first ever in the bargaining unit, the effectivity date is whatever the parties agree on–perhaps the date
the negotiation started, or ended, or whatever.

If the CBA is a renegotiated CBA to replace the expired one, Article 265 provides that:

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 1. If the renegotiation is finished and the new CBA is concluded within 6 months from the expiry date of the old one,
then the new CBA starts to take effect on the date following such expiry date.
2. If the new CBA was completed beyond that 6-month period, the new CBA, when done, will not automatically
retroact. If it will retroact at all, the retroaction date will have to be agreed upon by the negotiating panels.

27. Automatic Renewal Doctrine?

The last sentence of Article 264 refers to the so-called “automatic renewal” of a CBA, to wit:
“It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and
conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties.”

28. What does the Code say when it comes to the duration of the CBA?
Article 265 has set the durations of the CBA at 5 years for the “representation aspect” and not more than 3 years for
“all other provisions.” The “representation aspect” refers to the identity and majority status of the union that negotiated the
CBA as the exclusive representative of the bargaining unit. “All other provisions” simply refers to the rest of the CBA, economic
as well as non-economic other than representational.

29. Why is the minimum period of the representation 5 years?

According to the principal author of the senate bill which eventually became the law that introduced a significant
change against the then prevailing 3-year term of a CBA, the first year was largely spent in CBA negotiation and the third year
in preparations and campaign for a certification election to dislodge an incumbent union. The year in between was, therefore,
the only period of effective industrial peace. The situation stifled union growth because union funds were dissipated in politics
rather than in service to members. Hence, the purpose of the 5-year term for the representational aspect was to create a legal
framework to promote industrial peace and to develop responsible and fair labor movement, so that any “outside union” could
not disturb the political situation in the enterprise except for the last 60 days of the 5th year. Moreover, the 5-year term would
also train the members to be careful in choosing their union.

30. What is the freedom period?

As provided for under Article 265, the freedom period refers to the 60-day period immediately before the date of
expiry of the 5-year term of the CBA. In other words, it is the last 60 days of the 5 th and last year of the agreement wherein a
petition questioning the majority status of an incumbent bargaining agent and the holding of a certification election may be
allowed.

31. When does the CBA expire?

A: Duration of the CBA, with respect to the representation aspect, the same lasts for 5 year. With respect to other
provisions; economic and non-economic, the same may last for a max period of 3 years after the execution of the CBA.

32. How do we determine the 60-day period?

A: “FREEDOM PERIOD” is the 60-day period immediately preceding the expiration of the representation period of 5 years in the
CBA
It only applies to Organized Establishments – Art.256 (not to Unorganized Art.257)
CBA Effectivity.—
(1) If it is the first ever CBA, the effectivity date is whatever date the parties agree on.
(2) If it is renegotiated CBA, the effectivity date depends upon the duration of conclusion.
(a) If it is concluded within 6 months from the expiry date, the new CBA will retroact to the date following the expiry date [Illustration:
expiry date: December 13; effectivity date: December 14].
(b) If the renegotiated CBA is concluded beyond 6 months from the expiry date, the matter of retroaction and effectivity is left with the
parties.

33. What are the ways of selecting an exclusive bargaining representative?

MEANS TO DETERMINE EXCLUSIVE BARGAINING REPRESENTATIVE:
(1) By Petition for Certification Election
a. By the Legitimate Labor Organization
i. Organized Establishment
ii. Unorganized Establishment
b. By the Employer, when requested to bargain collectively in a bargaining unit where no registered collective bargaining
agreement exists
(2) By Consent Election
(3) By Voluntary Recognition

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34. What is SEBA?
A: Sole and Exclusive Bargaining Agent (SEBA)
EXCLUSIVE BARGAINING REPRESENTATIVE: Legitimate labor organization duly recognized or certified as the sole and
exclusive bargaining representative or agent of all the employees in a bargaining unit.

35. What must be stated or shown by the applicant of SEBA?

A: Procedure in Request for SEBA CERTIFICATION:

WHERE TO FILE: any legitimate labor organization in the Regional Office which issued its certificate of registration or cert. of
creation
REQUIREMENTS:
a. The name and address of the requesting legitimate labor org.
b. Name and address of the company where it operates
c. THE bargaining unit sought to be represented
d. Approx. number of employees in the bargaining unit
e. The statement of the non/existence of other labor orgs/CBA

36. What is the effect if you are certified as the SEBA when there exist other two unions in the company?
A: EFFECTS OF SEBA CERTIFICATION:
a. Upon the issuance of the certification as SEBA, the certified union or local shall enjoy all the rights and privileges of an
exclusive bargaining agent of all the employees in the covered bargaining unit
b. The certification shall also bar the filing of a petition for certification election by any labor org for a period od 1 year
from the date of its issuance
37. Who may file the petition for certificate election?
a. Any legitimate labor org including a national union or federation that has issued a charter certificate to its local/
chapter or the local/ chapter itself
b. An employer, when requested to bargain collectively in a bargaining unit where no registered collective bargaining
agreement exist

Who may file a petition for certification election

(1) Legitimate labor organization (registered w/ DOLE)
(2) Unregistered local chapter with charter certificate from national union or federation
(3) National union or federation in behalf of its local/chapter
(4) Employer (when requested to bargain collectively and no existing CBA)

38. When may an employer file a certification election?

A: An employer may file a certification for election when requested to bargain collectively in a bargaining unit where no
registered collective bargaining agreement exist.

39. What will trigger the right of the employer to file for a petition for certification election?
Employer
The employer may file a petition for certification election only when he is requested by a labor organization to bargain. [Art 258 paragraph
1]

Bystander rule. The employer shall not be considered a party in the petition with a concomitant right to oppose a petition for certification
election. The employer’s participation shall be limited to:
(1) being notified or informed of petitions of such nature
(2) submitting the list of employees during the pre-election conference should the Med-arbiter act favorably on the petition [Art 258-A
introduced by RA 9481]

A company’s interference in the CE creates a suspicion that it intends to establish a company union. [Oriental Tin Can Labor Union v.
Secretary of Labor, 1998]
The employer is not a party to a certification election, which is the sole or exclusive concern of the workers. The only instance when the
employer may be involved in that process is when it is obliged to file a petition for certification election on its workers’ request to bargain
collectively pursuant to Art. 258. [Hercules Industries, Inc. v Sec. of Labor, 1992]
Employer is a TOTAL STRANGER in the process of Certification Election. Employer has NO STANDING to file a MOTION TO DISMISS. [PT&T v
Laguesma, 1993]

40. Procedure involved in filling a certificate election.

Purpose
The purpose of a certification election is precisely the ascertainment of the wishes of the majority of the employees in the appropriate
bargaining unit: to be or not to be represented by a labor organization, and in the affirmative case, by which particular labor organization.
[Reyes v Trajano, 1992]

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Nature of proceeding
It is not litigation, but a mere investigation of a non-adversary character. The object of the proceedings is merely the determination of
proper bargaining units and the ascertainment of the will and choice of the employees in respect of the selection of the bargaining
representative. The determination of the proceeding does not entail the entry of remedial orders or redress of rights, but culmination solely
in an official designation of bargaining units and an affirmation of the employees expressed choice of bargaining agent. [Young Men Labor
Union Stevedores v CIR, 1965]

It is the most DEMOCRATIC and most efficacious/ effective way of determining the will of the bargaining unit. [Samahang Manggagawa sa
Permex v Sec. of Labor, 1998]

It is a STATUTORY POLICY. [Belyca Corp. v. Ferrer-Calleja, 1998]

A certification election is different from a union election. In a union election, the objective is to elect union officers. Therefore, only union
members may vote in a union election while every member of an appropriate bargaining unit can vote in a certification election.

Certification election is the fairest and most effective way of determining which labor organization can truly represent the working force. It
is a fundamental postulate that the will of the majority given expression in an honest election with freedom on the part of the voters to make
their choice, is controlling. [PLUM Federation of Industrial and Agrarian Workers v Noriel, 1978]

Implications
“Technical rules and objections should not hamper the correct ascertainment of the labor union that has the support and confidence of the
majority of the workers and is thus entitled to represent them in bargaining for the terms and conditions of their employment.” [Port
Workers Union v. DOLE, 1992]
Thus, it should not be circumvented. There should be no obstacle in conducting the Certification election. [George & Peter Lines, Inc. v.
Associated Labor Union, 1985]

Who may vote?

All employees whether union members or not, as long as they belong to the appropriate bargaining unit can vote.

Venue for filing the petition

BLR Regional Office which issued the petitioning union’s certificate of registration or certificate of creation of chartered local.

PROCEDURE
Certification election in an unorganized establishment [Art. 257]
Procedure
(a) A petition for certification shall be filed by a legitimate labor organization.
(b) Upon filing of the petition, the Med- Arbiter shall automatically conduct a certification election.

Filing of petition is by A LEGITIMATE labor organization. It cannot be an unregistered labor organization. This is best read in relation to Art.
242 which enumerates the rights granted to a legitimate labor organization and one of those rights is the right to be chosen as the exclusive
bargaining representative. This is one way the law encourages union registration.

Venue: BLR Regional Office which issued the petitioning union’s certificate of registration or certificate of creation of chartered local.

Certification election in an organized establishment [Art. 256]

Procedure
(1) A verified petition questioning the majority status shall be filed by a legitimate labor organization
(2) It must be filed within the 60-day period before expiration of CBA (freedom period)
(3) Supported by written consent of at least 25% of ALL employees in the bargaining unit (substantial support)

Substantial support rule

In organized establishments, the incumbent sole bargaining agent should not be easily replaced for that would disturb industrial peace. To
justify the disturbance, it must appear that at least a substantial number (25% requirement) seeks to have a new exclusive bargaining unit.
Note: A union that is merely filing a MOTION FOR INTERVENTION in a CE filed by another union need NOT present substantial support. The
substantial support is only needed when filing for a petition for certification election. [Port Workers Union v DOLE, 1992]

Double majority requirement (voters, valid votes)

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. [Art. 256]

Discretionary rule
If the petition does not comply with the substantial support requirement, the BLR may exercise its discretion in determining whether or not
a certification election must be conducted. [Scout Albano Memorial College v. Noriel, 1978]

Effect of withdrawal of signatures

65
The employees’ withdrawal from a labor union made before the filing of the petition for certification election is presumed voluntary, while
withdrawal after the filing of such petition is considered to be involuntary and does not affect the petition. [S.S. Ventures International vs.
S.S. Ventures Labor Union]
If performed after the filing of the petition, the withdrawal is presumed to be involuntary and that it was procured through duress,
coercion, or for a valuable consideration. [Oriental Tin Can Labor Union v. Secretary of Labor and Employment, 1998]

Incumbent as forced intervenor

The incumbent bargaining agent shall automatically be one of the choices in the certification election as forced intervenor. [Book V Rule VIII
sec. 7.]

Substantial support not necessary in intervention

The requisite written consent representing substantial support of the workers in the bargaining unit [as required in Art. 256 applies to
petitioners for certification only, and not to motions for intervention. [PAFLU v Calleja, 1989]

Appeal from order of Med-Arbiter holding certification election

Appeal to Secretary of Labor on the ground that the rules and regulations or parts established by the Secretary of Labor for the conduct of
election have been violated. [Art. 259]

41. can you file for a petition for certification election when there is only LLO?
Filing of petition is by A LEGITIMATE labor organization. It cannot be an unregistered labor organization. This is best read in relation to Art.
242 which enumerates the rights granted to a legitimate labor organization and one of those rights is the right to be chosen as the exclusive
bargaining representative. This is one way the law encourages union registration.

42. can employer apply for voluntary recognition?

Definition
“Voluntary Recognition” refers to the process by which a legitimate labor union is recognized by the employer as the exclusive bargaining
representative or agent in a bargaining unit, reported with the Regional office in accordance to Rule VII, Sec 2 of these Rules. [Book V, Rule
1, Sec 1 [bbb]

Substantial Requirements
(1) Unorganized establishment;
(2) Only one union asking for recognition;
(3) The members of the bargaining unit did not object to the projected recognition of the union.

The employer may voluntarily recognize the representation status of a union in unorganized establishments. In this case, however, the
company (SLECC)was not an unorganized establishment when it voluntarily recognized SMSLEC as its exclusive bargaining representative.
Prior to the voluntary recognition, another union (CLUP-SLECC)has already filed a petition for certification election. Thus, the company’s
voluntary recognition of SMSLEC is void. [SLECC v Sec. of Labor, 2009]

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E. UNFAIR LABOR PRACTICE
1. Nature, aspects
2. By employers
3. By labor organizations

Unfair Labor Practices (ULP) (Art. 258 – 260)

a. Nature & Procedure for Prosecution
b. ULP of Employers

i. Tests employed
ii. Company Unionism
iii. Union Security Clauses & its Forms

c. ULP of Labor Organizations

Gin Queen vs. Gin Queen Corp, G.R. No. 191714, Feb. 26, 2014
BPI vs. BPI Employees Union, G.R. No. 164301, August 10, 2010
MMU vs. Liberty Cotton Mills,90 SCRA 391
Lakas vs. Marcelo, 118 SCRA 422

F. PEACEFUL CONCERTED ACTIVITIES

1. By labor organization
a) Strike
(1) Valid versus Illegal strikes
b) Picket
2. By employer
a) Lockout

3. Assumption of jurisdiction
a) Nature
b) Effects of assumption of jurisdiction

JURISDICTION AND REMEDIES

A. LABOR ARBITER
1. Jurisdiction
a) Labor Arbiter vs Regional Director

2. Requirements to perfect appeal to NLRC

3. Reinstatement pending appeal

B. NATIONAL LABOR RELATIONS COMMISSION

1. Jurisdiction

Labor Code (renumbered) Arts. 3, 218-231, 290

2011 NLRC Rules of Procedure

Feati vs. Bautista, 18 SCRA 1191, GR L-21278, Dec. 27, 1966

Gold City vs. NLRC, 245 SCRA 627, GR L-103560, Jul. 6, 1995
RCPI vs. Phil. Comm, 65 SCRA 82, GR L-37662, July 15, 1975
Kiok Loy vs. NLRC, 141 SCRA 179, GR L-54334, Jan. 22, 1986
Mayor vs. Macaraig, GR No. 87211, March 5, 1991
Pepsi vs. Gallang, GR no. 89621, Sept. 24, 1991
PAL vs. NLRC, GR no. 120567, March 20, 1998
Spic n Span Services vs. Paje, et.al., GR No. 174084, August 25, 2010
Abbott vs. NLRC, 145 SCRA 206
St. Martin’s Funeral Home vs. NLRC, GR No. 130866, Sept. 16, 1988

BALINO NOTES

1. ASPECTS OF LABOR LAW (3)

a. LABOR STANDARDS
b. LABOR RELATIONS
2. PARTIES IN A LABOR RELATIONS CASE
3. STATE POLICY
a. What is the effect if there is no ‘pursuit to the Constitution?’
4. Non-Interference of CBA or any Labor Contract
5. Agencies of the Government / Grievance Machineries – enforce the law
a. DOLE
b. NWCB

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 c. NLRC
d. NCMB
e. ILS
f. POLO
6. Employer
7. Employee
8. Types of Employees
a. Managerial – vested with prerogatives
b. Supervisory – use of independent judgment; recommendatory powers
c. Rank-and-file – merely routinary or clerical
9. Can a supervisory employee be considered a managerial employee?
a. The exercise of independent judgment qualifies a supervisory to become a managerial employee.
10. FEATI CASE (broke down the definitions of employers, employees)
* NON-PROFIT ORGANIZATIONS DO NOT COME WITHIN THE JURISDICTION OF NLRC
* NON-PROFIT INSTITUTIONS include EDUCATIONAL INSTITUTIONS which, although earn profits, use such profits
solely for educational improvement and causes and do not use the same to be distributed as dividends to its
stockholders.
* PROFIT ORGS (distribute dividends) ULP cases - NLRC (FEATI case)
* NON PROFIT ULP Cases – NOT NLRC
* EMPLOYER – definition constitutes the word “include;” meaning, the definition is NOT comprehensive but complementary; furthermore,
what is not included in the definition is explicitly provided. Hence, if the issue is not under those excluded in the definition, then it may fall
under those included if it is of similar import as to the general definitions of an employer, who are practically those who enter into an
agreement with another person who shall render services for the person employing who will in turn pay the person rendering services for
the services made.
a. Parties
b. What were the demands of FEATI?
c. One of the issues here is: CIR does not have jurisdiction over the complaint. WHY?
i. Because though they are educational institutions, they are profit-driven institutions.
ii. Because they are not considered industrial (generate income or made under Corporate Code). In this case,
FEATI was not….
d. Why did FEATI say that teachers do not fall under the definition of employees?
i. Because in the old definition: ‘physical labor;’ that teachers do not exert physical chenelin
e. And how did the SC address it?
i. The university hired the services of the professors; university does not exercise…
ii. SC. CONTROL. That nevertheless, despite lack of physical labor, they are getting paid for the services they
provide for the employer; that despite that FEATI is a lessee, Workmen’s Compensation Act – that even a
lessee may be considered as an employer.

NLRC
1. COMPOSITION OF NLRC
i. Labor Arbiter - No age requirement
2. Can it sit in en banc?
3. NLRC, as sitting en banc, does not have adjudicatory powers. True or false?
* Can there be an instance when NLRC sitting en banc can still hear and decide cases?
i. FALSE. Exemption. (there was a repeal of adjudicatory powers)  EMERGENCY CASES – Art. 208 – when there is
insufficiency of manpower;
4. What if, in per division, the 3 members of the division cannot come up with a unanimous decision?  Assign additional
commissioners.
5. Equivalent rank of NLRC Commissioners in judiciary?
a. CA Judges – NLRC Commissioners
b. RTC Judges – Labor Arbiter
6. At what age do Commissioners retire? = 70
7. Appointed by President; not impeachable unlike justices and judges; not under CA
8. Why is the adjudicatory powers repealed?
9. What is JURISDICTION?
a. KINDS of jurisdiction?
10. What is the original jurisdiction of the labor arbiter?
a. Unfair labor practices
b. Termination
c. Claims with reinstatement
d. Etc.
11. TERMINATION definition
a. Viewed as all severance of employment
b. Lay-off not a common term used in Philippine setting but is used synonymously with the authorized causes; with the
option to rehire in the strict definition
c. You are a stockholder of Arellano. You were also hired as VP for party affairs. The Pres. sent you a notice to explain and
fired you on the spot. Is your case cognizable by the Labor Arbiter or the regular court?  LABOR ARBITER.
 It is not cognizable by regular courts as it is not an intra-corporate controversy.
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 An issue involving a stockholder designated as a corporate officer can only be considered as intra-corporate controversy
if the title is under the by-law. If position is NOT under the By-Laws or the Corporation Code (President, Sec.,
Treasurer), it is not cognizable by the regular court bec you are not a corporate officer in the strictest sense of law.

12. REASONABLE – CAUSAL CONNECTION - basis of jurisdiction of Labor Arbiter

 What is the first thing that Labor Arbiter looks for in order to say he has jurisdiction over the case?
a. First establish the fact of employer-employee relation
b. Link of the employer-employee
13. REINSTATEMENT. Are all cases with reinstatement claim cognizable by Labor Arbiter?  TRUE
a. Relevance of the amount:
b. Below 5,000 = Regional Director
c. Exceed 5,000 = NLRC
d. Above 5,000 AND with reinstatement = NLRC
14. EXCEPTION? That the Labor Arbiter has jurisdiction over money claims with claims of reinstatement (and which party can take
cognizance of such claim?)  President and Sec. of Labor (____ Doctrine)
15. SQ: NO LONGER SURPRISE AUDIT as per SEC. of DOLE Belo
16. GOLD CITY vs NLRC
a. How did the Court define “strike”?
b. That strike is one of the most powerful; it paralyzes the operations of the company; hence, requirements for a strike
must be complied.
c. The mere fact that the strike… union officers are considered…unlike union members may be considered pa…
17. CBA VIOLATION. What kinds of violations of CBA are cognizable by Labor Arbiter?  ART. 279 NOW (NOT 264)
a. gross violation (failure to bargain) involving economic provisions

18. RCPI case

- order to reinstate but the company did not comply
- dismissed employees filed a MR, to amend judgment
- COURT:
1. MR and Motion to Intervene not granted. They were strangers to the claims of the employees.
2. Judgment to Modify granted. A logical consequence…

19. Does the labor arbiter has jurisdiction over cooperatives?  NO. It is governed by Cooperatives Development Authority.

20. Part of the jurisdiction of Labor Arbiters are DAMAGES. What are these damages? IN EXAM: enumerate plus + “Must arise from
employer-employee relationship.”

21. What are moral damages?  bad faith

22. Exemplary  deter similar events

23. SCENARIO: I am a seaman. The contract I signed with Kubota shipping is set to be tomorrow for a period of one year.
Who has jurisdiction over my case? (Seaferer not employed by virtue of a contract)
 LABOR ARBITER. Claims of OFWs are under Labor Arbiters

24. GOCCs – who has jurisdiction?

* With Original Charter – Civil Service
* Without Original Charter – Labor Code

25. In the event of success, there shall be an award for success fee. You were not able to enforce your attorney’s fees although it is stated
in the award that 10% of the award shall go to attorney’s fees. Where do you file the claim to enforce the lawyer’s fee?
 Labor Arbiter – because it is considered a collateral matter (damage); pursuant to speedy labor of justice

26. Kiok Loy case

- owner of icecream company (Kiok Loy)
- respondent: bargaining unit
- respondent offered their CBA with Kiok Loy; no response from the latter; thus permit to strike was applied;
- not resolved thus elevated to NLRC; NLRC ruled against Kiok Loy

Defense of Kiok Loy: I was not under the obligation to respond.

Can an employer not participate in the proposal by the union? NO.

 How did Court explain it?  A proposal left unanswered hampers CBA which is a form of ULP and thus falls under the jurisdiction of
Labor Arbiter as “refusal to bargain.”

27. COMPENSATION. If not the Labor Arbiter, who is the proper authority/jurisdiction – ECC. EMPLOYEES COMPENSATION COMMISSION.
28. BELOW 5,000, WHO HAS JURISDICTION? – Regional Director.

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29. QUASI-DELICT – Art. 2176.
A guard was employed by Arellano; shot by another guard; can the guard who was shot claim compensation from Arellano?
 NO. It’s a crime. So the damage or indemnity is not recoverable from Arellano except on the clause of RPC on subsequent liability of
employer but not directly.

30. POWERS of NLRC.

1. Rule Making Power
2. Issue Compulsory Process
3. Hold a person in contempt

31. RULE MAKING POWER

* What do you call the rule issued in the exercise of rule making power?  NLRC RULES OF PROCEDURE

32. Under Rules of NLRC Procedure, position papers are submitted. Does not violate the due process clause?
 NO. Rules of Procedure does not strictly follow the technical rules on evidence. Parties can also still give their arguments.

33. After position papers, what’s next?  (2) REPLY  (3) REJOINDER: not required but can make to charge clients :P  (4)

34. How many days does it take Labor Arbiter to decide?  30 days (?)

35. Prior to Labor Arbiter, SENA (Single Entry Approach)

When you file a case, ipapadala muna sa SENA (mediators, conciliators; the staff of NLRC that will mediate the parties; if no agreement is
reached, then file a formal complaint ~ in docket number; then referred to a Labor Arbiter)

36. Labor Arbiter will conduct 2 hearings

37. If no agreement in the first, 2nd will most likely be a submission of the psotition paper

reply

rejoinder

decision

If not happy with the decision of labor arbiter, where do you go? Can you file a MR? – No because it is a prohibited pleading against the
decision of Labor Arbiter but can file an appeal

Appeal – MEMORANDUM OF APPEAL – case is raffled to the division. (8 divisions in NLRC; each with 3 commissioners)

NLRC – there will be 2 more hearings (discretionary; other than that, paper works)

MEET FOR CONSULTATION –

Assuming you lose case in NLRC, where do you go?  MOTION FOR RECONSIDERATION

36. MAYOR CASE VS MACASINAG

- A new law was passed; that positions of officers in NLRC shall be essentially abolished

- WON the provision is constitutional

NO. Security of tenure. As working in the government, their position can only be vacanted either by old age or other cause provided by law
or by abolition, express or implied.

 Are the commissioners considered as government employees? Yes. They also enjoy security of tenure.

38. PEPSI CASE

- respondent were accused of stealing empty bottles; criminal case of theft; dismissed;
- respondents claim damages for malicious prosecution; defense of Pepsi was ____; filed in Labor Arbiter
- WON cognizable by Labor Arbiter

NO. Claim for damages is allowed; the same does not cover “malicious prosecution” which should be under RPC; no reasonable
connection.

39. COMPULSORY POWER

- Summons (summonses, plural) – an order to appear before Labor Arbiter

70
40. VERIFICATION, required in the position paper. What is the purpose? Who verifies? – states that you are the complainant; read the
complaint and the allegations; that allegations are based on __ records. NOTARIZED. Absence of which is not jurisdictional.

41. What is the case when you falsify the document?  PERJURY

42. INJUNCTION –
* “irreparable injury” –
* in ROC: prohibited and compel (2 purposes)

43. WHEN CAN NLRC ISSUE INJUCTION?

1. irreparable injury
2. no other adequate remedy
3. authority refuse to help
4. ….

44. CAN THE NLRC ISSUE INJUNCTION EX PARTE?

 NO. Hearing is required.

45. CAN TRO BE ISSUED EX PARTE?

 YES.
 Does that not violate due process?
 NO. Because it is not a remedy but an interlocutory order; parties are given to furnish evidence before it be allowed; sworn
statement is required that there is a need to issue it.
 Normally, file TRO and then injunction. For purposes of status quo.

46. WHAT IS STATUS QUO? Last actual peaceful situation prior to the controversy

47. PAL vs NLRC

- status quo: PAL stewards sought for reinstatement;

- Went to NLRC for injunction.

- Why was that wrong according to the Supreme Court?

- For a labor dispute to be…there must first be a case for illegal dismissal.

- Can NLRC enjoin (NLRC order the employer not to dismiss?) CAN EMPLOYEE GO TO NLRC AND ASK FOR INJUNCTION TO ENJOIN
A DISMISSAL?  BECAUSE. Filing of a case is necessary before filing injunction.

48. BOND – purpose: security to whoever the injunction will be favored

49. SPIC N SPAN case –

- filed illegal dismissal through their representative;
- won the case in Labor Arbiter
- SC: Spic n Span contended that there was procedural lapses  they were represented by___

HOW DID SC DECIDE?

 SC: These procedural lapses are not sufficient to dismiss the case. That in labor cases, matters of technicalities and procedure are
somewhat relaxed compared to Rules of Court in order to carry out the doctrine of speedy labor of justice

50. CAN A LAWYER APPEAR?

 Yes, if he represents himself in behalf of a union; OLA (Office of the Legal Aid)

51. WHAT DO YOU MEAN BY CONTEMPT?

 How is it committed before NLRC?

52. Bench Warrant – a contempt has no bail.

Remedy: File a motion to lift the bail.

53. OCULAR INSPECTION – repealed. Gates of corruption and bribery was opened. Subject to abuse. Representatives are being paid.

54. What is the APPELLATE JURISDICTION OF NLRC?

- All cases decided by Labor Arbiter;
- 3rd party claim over a property…
In Exam: WHAT DOES THIS MEAN? WHEN DOES THIS HAPPEN?
WHY IS IT UNDER THE APPELLATE JURISDICTION OF THE NLRC?

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  a 3rd party claim…over a property… EXECUTION. IF YOU WIN A CASE IN NLRC, THE PAYMENT IS NOT REQUIRED TO BE IN CASH.
A PRUDENT LAWYER WOULD ATTACH A PROPERTY (CERT OF REGISTRATION, ETC), THAT’S WHERE ART. 231 COMES IN. Execution by sheriff.
 HERE, under the appellate jurisdiction bec exception to the powers of the sheriff is when the property is under the possession of another
or if another person claims over the property. FILE INTERVENTION OR ADVERSE CLAIM during the time for the hearing of execution. If that
is denied, it becomes appellate jurisdiction of NLRC. That fact alone (denial of 3rd party), warrants appeal to NLRC.

In the case of “garnishment,” what does the bank do?

 The bank will inform the account holder that a garnishment is received.
 If case is decided, manager’s check is issued to the sheriff.

55. EXECUTION  also requires due process. (to appear and comment).
 Can ask for recomputation; means of payment  partly money or partly property

56. HENRY CLYDE ABBOT CASE 

 petitioners were dismissed;
 Motion for Execution was filed bec Labor Arbiter ruled in their favor;
 opposition re recomputation; NLRC granted the appeal

2 Concepts:
1. Execution
2. Can appeal the money claim and the reinstatement is immediately executory; hence, in case of appeal, put “PARTIAL APPEAL” ~
prudence

 ISSUE ON APPEAL: WON NLRC has jurisdiction over recomputation

 the judgment has become final and executory. Motion for execution is now a matter of right.
 Recomputation on decision re amount of award of backwages.
 Labor arbiter in its own, computed for the amount in the decision. Which is already final.

57. ST MARTIN’S FUNERAL case

 Respondent – employed for the sake of goodwill, after lending money to St. Martin’s
 Owner not removed respondent, for allegedly taking money in relation to non-payment of taxes
 respondent claims he was illegally dismissed

 contention: he was not one of those listed s employee

LANDMARK DOCTRINE:
- THE APPEAL ENDS WITH THE NLRC. BACK THEN, NO SPECIFIC REMEDY ON APPEAL WITH NLRC. SO THE COURT SAID, THIS IS
ABSURD (THAT THE LABOR CASES END ONLY UP TO NLRC) BUT THE PROBLEM IS THAT SINCE IT IS STATUTORY, HOW DO YOU
GO IN FILING APPEALS FROM NLRC TO CA>  YOU GO TO THE CA BEC YOUR PETITION FOR CERTIORARI WILL BE TREATED AS
AN APPEAL BEC THERE IS NO OTHER REMEDY. BUT THE PECULIARITY IS THAT IN ORDER FOR YOU TO APPEAL TO THE NLRC IS
‘YOU NEED TO FILE AN MR BECAUSE THE PETITION FOR CERTIORARI REQUIRES THE FILING OF THE MR PRIOR TO THE PETITION
ITSELF.’
- FROM THERE, IT’S AN ORDINARY APPEAL FROM THE CA TO THE SC.
- BUT THE REQUIREMENT UNDER NLRC ROP: IN ORDER TO APPEAL FROM NLRC, BOND IS ALSO REQUIRED.

 IN PETITION FOR CERTIORARI, THERE MUST BE A “TRO” TO THWART THE LOWER COURT FROM PROCEEDING THE CASE WHILE THE
APPEAL IS PENDING.
 REINSTATEMENT –
 MONEY CLAIMS CAN BE APPEALED – NLRC – MR – CA – PETITION FOR CERTIORARI – MR – PETITION FOR REVIEW.

APPEAL FROM LABOR ARBITER AND NLRC – 10 DAYS; UNLIKE IN ROC – 15 DAYS.

BASIS OF APPEAL:

HOW DO YOU PERFECT AN APPEAL?

- FILING
- BOND

EXECUTION

DECISIONS AND AWARDS – EXECUTED VIA MOTION. DUE PROCESS STILL OBSERVED EVEN DURING EXECUTION BEC IT’S A DEPRIVATION OF
PROPERTY.

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 Kim’s Notes (Poquiz Book)

NLRC REVIEWER

Art. 218. Declaration of Policy

 NON-INTERFERENCE OF NON-PARTIES IN COLLECTIVE BARGAINING – “To encourage a truly democratic method of regulating the
relations (TDM-RR) between the employers and employees by means of agreements freely entered (M A F E) into through collective
bargaining, no court or administrative agency or official shall have the power to set or fix (W H O R) wages, rates of pay, hours of work,
or other terms and conditions of employment, except as otherwise provided under the Labor Code.”

 EXCEPTIONS (N R S):
1. NWPC (National Wages and Productivity Commission) – wage fixing
2. RTWPB (Regional Tripartite Wages and Productivity Board) – wage fixing
3. NCMB (National Conciliation and Mediation Board) – wage distortions
4. Secretary of Labor – (C A P) certification and assumption powers over labor disputes;
- CONCURRENT JURISDICTION over those cognizable by Labor Arbiter in the exercise of assumption or preemptive power over cases of national interest.

Art. 219. Definitions.

1. Employer – “includes any person acting in the interest of an employer, directly or indirectly; shall not include any labor
organization or any of its officers or agents except when acting as employer (hiring regular personnel such as clerks).”
- One who hires services of another and pays him compensation
2. Employee – includes any person in the employ of an employer; not limited to employees of a particular employer, unless the law
so explicitly states; include any individual whose work has ceased as a result or in connection with any current labor dispute or
because of ULP if he has not obtained any other substantially equivalent and regular employment.
- May be direct or indirect employee.
- Types of Employees:
f. Managerial – One who is (1) vested with powers or prerogatives to (2) lay down and execute management policies; and
to (3) hire, transfer, suspend, lay-off, recall, assign, or discipline employees.
g. Supervisory – Who (1) effectively recommend such managerial actions (2) if the exercise of such is not merely routinary
or clerical in nature (3) but requires the use of independent judgment
h. Rank-and-file – all employees not falling within any of the above definitions; merely routinary or clerical
(1) FEATI vs BAUTISTA
(1) In UST Case, Court of Industrial Relations has no jurisdiction to
entertain the complaint for unfair labor practice lodged by respondent
association (NOT FOR PROFIT).That while the University collects fees
from its students, all its income is used for the improvement and
enlargement of the institution. The University declares no dividend, and
the members of the corporation who founded it, as ordained in its
articles of incorporation, receive no material compensation for the time
and sacrifice they render to the University and its students. It is
apparent, therefore, that on the face of the record the University of
Santo Tomas is not a corporation created for profit but an educational
institution and therefore not an industrial or business organization

In the Far Eastern University case this Court is unanimous in supporting

the view that AN EDUCATIONAL INSTITUTION THAT IS
OPERATED FOR PROFIT COMES WITHIN THE SCOPE OF THE
INDUSTRIAL PEACE ACT.

(2) BUT THE UNIVERSITY CLAIMS THAT IT IS NOT AN

EMPLOYER within the contemplation of Republic Act No. 875,
because it is not an industrial establishment. At most, it says, it is
only a lessee of the services of its professors and/or instructors pursuant
to a contract of services entered into between them.

It will be noted that in defining the term "employer" the Act uses the
word "includes", which it also used in defining "employee".
Congress did not intend to give a complete definition of
"employer", but rather that such definition should be
complementary to what is commonly understood as employer.

secondly, the Act itself specifically enumerated those who are

not included in the term "employer"
Among these statutory exemptions, educational institutions are not
included

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 Republic Act No. 875 does not give a comprehensive but only a
complementary definition of the term "employer".
An employer is one who employs the services of others; one for
whom employees work and who pays their wages or salaries
(Black Law Dictionary, 4th ed., p. 618).

every professor, instructor or teacher in the teaching staff of the

University, as per allegation of the University itself, has a contract
with the latter for teaching services, albeit for one semester only. The
University engaged the services of the professors, provided them work,
and paid them compensation or salary for their services. Even if the
University may be considered as a lessee of services under a contract
between it and the members of its Faculty, still it is included in the term
"employer". "Running through the word `employ' is the thought that
there has been an agreement on the part of one person to perform a
certain service in return for compensation to be paid by an employer.
Republic Act No. 875 does not state that the employers included in the
definition
of the term "employer" are only and exclusively "industrial
establishments"; on the contrary, as stated above, the term "employer"
encompasses all employers except those specifically excluded by the Act

(3)
The University urges that even if it were an employer, still there would
be no employer-employee relationship between it and the striking
members of the Faculty Club because the latter are not employees

The term "employee"

is again, like the definition of the term "employer" [Sec. 2(c)], by the
use of the term "include", complementary. It embraces not only
those who are usually and ordinarily considered employees, but
also those who have ceased as employees as a consequence of
a labor dispute.

It is admitted by the University that the striking professors

and/or instructors are under contract to teach particular
courses and that they are paid for their services. They are,
therefore, employees of the University.

(4) The contention of the University that the professors and/or

instructors are independent contractors, because the University
does not exercise control over their work, is likewise untenable.

This Court takes judicial notice that a university controls the work of the
members of its faculty; that a university prescribes the courses or
subjects that professors teach, and when and where to teach; that the
professors' work is characterized by regularity and continuity for a fixed
duration; (1) that professors are compensated for their services
by wages and salaries, rather than by profits; that the professors
and/or instructors (2) cannot substitute others to do their work
without the consent of the university; and that the professors (3)
can be laid off if their work is found not satisfactory. All these
indicate that the university has control over their work; and professors
are, therefore, employees and not independent contractors.

ART. 220. NLRC (R.A. 6715)

“There shall be a NLRC which shall be attached to the DOLE solely for program and policy coordination, composed of a chairman and 23
members…”

PHILOSOPHY OF ITS CREATION

o “Speedy labor justice”
o Labor controversies should be left for disposition not to an ordinary court “but to an agency better equipped by training, experience, and
background to handle them.”

NLRC
- attached to the DOLE
- “solely for program and policy coordination” only
- composed of a Chairman and 23 Members from (trisectoral composition)
 8 members – from nominees of workers’ organizations
 8 members – from nominees of employers’ organizations
 7 remaining – from public sector, preferably incumbent labor arbiters
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  “Members (nominated by workers and employers’ organizations), upon assumption into office, shall divest themselves of any
affiliation with (or interest in) the federation or association which they belong”
- “The Commission may sit EN BANC or may sit IN 8 DIVISIONS, each composed of 3 members."
 en banc – only for purposes of:
1. promulgating rules and regulations governing the hearing and disposition of cases before any of its divisions’ and regional
branches (RR HD)
2. formulating policies affecting its administration and operations. (P A O)
3. On temporary or emergency basis, to allow cases within the jurisdiction of any division to be heard and decided by another
division
4. Recommendation to the President as to the extension of term of office of the Chairman, Commissioner, Labor Arbiter
 Divisions
1. adjudicatory functions and all other powers, functions and duties;
o The rules requiring en banc to resolve a certified dispute have already been REPEALED; “shall discharge adjudicatory
functions and powers through their respective divisions.”
2. have exclusive appellate jurisdiction over cases (decided by Labor Arbiters – Art. 224) within their respective territorial
jurisdiction

1st – 6th Division = NCR and other parts of Luzon

1st Division – Chairman shall be the Presiding Commissioner; 7 other - commissioners for the remaining divisions,
respectively; In case of the effective absence of the Chairman, the Presiding Commissioner of the 2nd division shall be the
Acting Chairman.
7th Division = Visayas
8th Division = Mindanao

 “Provided, That the Commission sitting en banc may, on temporary or emergency basis, allow cases within the jurisdiction
of any division to be heard and decided by any other division whose docket (1) allows the additional workload and such transfer (2)
will not expose litigants to unnecessary expenses.

- Concurrence of 2 Commissioners of a division – shall be necessary for the pronouncement of judgment or resolution; when the required
membership of a division is not complete, Chairman shall designate such number of additional Commissioners from other divisions as may
be necessary.

- Conclusion of a division – shall be reached in consultation (must meet) before assigning a member for the writing of the opinion.
 The purpose in requiring consultation is “to preclude any belief that certain decisions of the Commission are one-man
decisions.”

- Chairman – shall have the exclusive administrative supervision over the (1) Commission and its (2) regional branches and all its (3) personnel,
including (4) labor arbiters. (C R P L)

Art. 221. Headquarters, Branches, and Provincial Extension Units.

-The Commission shall establish as many (1) regional branches as there are regional offices of the DOLE, (2) sub-regional branches or provincial
extension units.
- There shall be as many labor arbiters as may be necessary for the effective and efficient operation of the Commission.

 Each regional arbitration branch is headed by an Executive Labor Arbiter.

Art. 222. APPOINTMENT AND QUALIFICATIONS

(No need for confirmation by the CA – unconstitutional)

Chairman and Commissioners:

1. Members of the Philippine Bar;
2. Engaged in the practice of law in the Philippines for at least 15 years;
3. With at least 5 years of experience or exposure in the field of labor-management relations;
4. Preferably be residents of the region where they shall hold office.

Labor Arbiters
1. Members of the Philippine Bar;
2. Engaged in the practice of law in the Philippines for at least 10 years;
3. At least 5 years of experience or exposure in the field of labor-management relations.

Chairman, Commissioners, and Labor Arbiters shall hold office:

1. During good behavior
2. Until they reach the age of 65 years, unless sooner removed for (1) cause/s provided by law, or (2) become incapacitated to discharge
the duties of their office.
3. President of the Philippines may extend their term up to 70 years upon recommendation of the Commission EN BANC.

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 “Declaring all positions of Commissioners, Executive Labor Arbiter, and Labor Arbiters vacant, which operates to remove said incumbents
has been declared unconstitutional on the ground that they are ‘covered by security of tenure.’ They are civil service employees who ‘thus
have the right to remain in office until the expiration of the terms for which they have been appointed’ unless sooner removed for cause
provided by law.” – Mayor vs Macaraig
Art. 223. SALARIES, BENEFITS, AND OTHER EMOLUMENTS.
 Chairman – same rank as of the Presiding Justice of CA
 Members of the Commission = Associate Justices of CA
 Labor Arbiters = judges of RTCs

POWERS AND DUTIES

Art. 224. JURISDICTION OF LABOR ARBITERS AND THE COMMISSION.

A. LABOR ARBITERS
 within 30 calendar days after the submission of the case by the parties for decision without extension,
 shall have ORIGINAL AND EXCLUSIVE JURISDICTION to hear and decide the following cases involving all workers (agricultural or non-
agricultural): [U T R whor – D B C]

1. Unfair Labor Practices

2. Termination Disputes
3. Cases involving Wages, Rates of Pay, Hours of Work, and other Terms and Conditions of Employment (GROSS VIOLATION OF CBA) IF
accompanied with a claim for reinstatement = converts the action into ILLEGAL DISMISSAL

4. Claims for actual, moral, exemplary, and other forms of damages arising from employer-employee relations

5. Cases arising from any violation of Art. 264 (DUTY TO BARGAIN), including questions involving the legality of strikes and lockouts

6. EXCEPT FOR:
(i) Employees Compensation, (ii) Social Security, (iii) PhilHealth, (iv) and Maternity benefits, (C M P S)
ALL OTHER CLAIMS arising from:
EMPLOYER-EMPLOYEE RELATIONS, including those of persons in domestic or household, involving an amount exceeding P5,000
regardless whether accompanied with a claim for reinstatement.

* EXCEPTIONS TO THE ORIGINAL & EXCLUSIVE JURISDICTION OF LABOR ARBITERS:

1. Sec of Labor or NLRC exercises the power of compulsory arbitration
2. Parties agree to submit to voluntary arbitration

B. THE COMMISSION
o shall have EXCLUSIVE APPELLATE JURISDICTION over all cases decided by Labor Arbiters (Art. 220, par. 4, last sentence).
o “Injunctive power in labor disputes involving strike or lockout” lies under the primary jurisdiction of NLRC and not of Labor Arbiter.
o 3rd Party Claim Appeal on adverse decisions relating Execution of Property

7. PAL vs NLRC
private respondents filed with the NLRC a petition for injunction
to reinstate petitioners to their former positions pending the hearing
of this case

NLRC issued the writ of injunction. PAL moved for reconsideration

on the ground that has no jurisdiction to issue an injunction

RULING

 PI or (T)RO may be granted by the Commission through its divisions

when it is established on the bases of sworn allegations in the petition
that the acts complained of (1) involve or arise from any labor dispute
before the Commission, (2) which if not restrained or performed, may
cause grave or irreparable damage to any party; or (3) render
ineffectual any decision in favor of such party.

 From the foregoing provisions of law, the power of the NLRC to
issue an injunctive writ originates from "any labor dispute"
upon application by a party thereof.

 there must first be a labor dispute between the contending parties

before the labor arbiter
 In the case at bar, private respondents disregarded this rule and
directly went to the

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 NLRC through a petition for injunction praying that petitioner be
enjoined from enforcing its dismissal orders.
 Thus, the NLRC exceeded its jurisdiction when it issued the
assailed Order granting private respondents' petition for injunction
and ordering the petitioner to reinstate private respondents.
 Moreover, the preliminary mandatory injunction prayed for by the
private respondents in their petition before the NLRC can also be
entertained by the LABOR ARBITER (who) has the
ancillary power to issue preliminary injunctions or
restraining orders as an incident in the cases pending before
him in order to preserve the rights of the parties during the
pendency of the case.

C. GRIEVANCE MACHINERY (IIC – IEP)

 Cases arising from the (1) interpretation or implementation of CBA and those arising from the (2) interpretation or enforcement of
company personnel policies,
 shall be disposed of by Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration.

D. SECRETARY OF LABOR
 CONCURRENT JURISDICTION over those cognizable by Labor Arbiter in the exercise of assumption or preemptive power over cases of
national interest.

A. JURISDICTION OF LABOR ARBITERS

 EMPLOYERS-EMPLOYEES controversies:
o LABOR ARBITER – only IF there is a “reasonable causal connection” between the claim asserted and the employer-employee
relations.
o REGULAR COURT - Absent such a link, the complaint will be cognizable by the regular courts of justice in the exercise of their civil
and criminal jurisdiction. (Pepsi vs Gallang: malicious prosecution, a separate civil action from the illegal dismissal case filed before
the Labor Arbiter, was properly lodged in the Regional Trial Court)

 1. UNFAIR LABOR PRACTICE – is an act of employer or union that violates the constitutional right to self-organization
o LABOR ARBITER - in ULP cases, include claim for damages and other affirmative relief.
o But “A criminal case of a ULP cannot be instituted until and unless the labor arbiter has decided on the administrative and civil
aspects of an ULP.”

 2. TERMINATION – denotes “DISMISSAL” (resolute intention of employer to dispense with the services of employee) or “LAY-OFF” (a
termination initiated by employer without prejudice to recall or rehire the worker who has been separated temporarily)
o LABOR ARBITER – illegal dismissal
o RTC – termination of a corporate officer, an intra-corporate matter

 5. GROSS VIOLATION OF CBA

o LABOR ARBITER (and for NLRC to exercise its appellate jurisdiction), concurrence of 2 things is required: (G E)
1. Gross violation of CBA;
2. Violation on economic provisions of the CBA.
4. KIOK LOY CASE
 Notice of Strike on the ground of violation of economic
provisions on CBA was filed with the BLR
 Conciliation proceedings ensued but all attempts of
reconciliation failed; hence BLR certified the case to NLRC
for compulsory arbitration
 Labor Arbiter was assigned in the case
 Labor Arbiter submitted its report to the NLRC which in turn
rendered the decision.

 A proposal left unanswered hampers CBA which is a form

of ULP and thus falls under the jurisdiction of Labor
Arbiter as “refusal to bargain.” (NOT WITH BLR)

o GRIEVANCE MACHINERY & VOLUNTARY ARBITRATION PROCESS – for ordinary CBA violations

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 3. MONEY CLAIM WITH A CLAIM FOR REINSTATEMENT
 Claim for wages, rates of pay, hours of work, terms and conditions = money claim
 LABOR ARBITER - above claims accompanied with a claim for reinstatement = converts the cause of action into an illegal dismissal
case

 6. MONEY CLAIM ABOVE P5,000

 Arising from employer-employee relationship
 Except from employees compensation, SSS, Phil Health, and maternity benefits
o REGIONAL DIRECTOR – below P5,000
o LABOR ARBITER – exceeding P5,000 (i.e. salary differential claim)
o LABOR ARBITER – irrespective of the amount, if claim is accompanied by “reinstatement” claim

MONEY CLAIMS JURISDICTION WITH REGIONAL DIRECTOR.

Regional Directors can try money claims only if the following concur:
1. Claim is presented by an employee or person employed in domestic or household service, or house helper under the law;
2. Claimant, no longer being employed, does not seek reinstatement;
3. Money claim does not exceed P5,000.

 EMPLOYEES OF COOPERATIVES
o LABOR ARBITER – only cover (1) monetary claims and (2) illegal dismissal cases involving employees of cooperatives
o ARBITRATIONS COMMITTEE OF COOPERATIVE DEVELOPMENT AUTHORITY - claims or termination of ‘membership’ of members
thereof.

 4. CLAIMS FOR DAMAGES

- reason for jurisdiction being vested with NLRC and Labor Arbiters: “to prevent duplicity of suits”
 MORAL DAMAGES – recoverable where the dismissal was effected (1) without authorized cause or due process (2) attended by bad
faith or fraud…
- purpose is ‘indemnity and NOT punishment’ to alleviate the moral suffering of the injured.
 EXEMPLARY DAMAGES – When moral damages are awarded, exemplary damages may also be decreed especially when the illegal
dismissal is ‘tainted with an ULP.’

 Labor Arbiter’s jurisdiction is comprehensive to “all forms of damages” including COUNTER-CLAIM of an employer for actual
damages against employee where the basis of claim is necessarily connected with the employee’s dismissal.

 7. OTHER CASES UNDER THE LABOR ARBITER’S JURISDICTION

 Violation of Art. 279 (cases arising from violation of the prohibition on strikes, picketing, and lockouts; and the question of legality
thereof)

 OFW Cases – “Labor arbiters of NLRC shall have the original and exclusive jurisdiction to hear and decide, within 90 calendar days, after
the filing of the complaint (claims arising out of an employer-employee relationship by virtue of any law or contract, including claims
for damages)

 GOCCs without original charters, otherwise known as SUBSIDIARIES or CORPORATE OFFSPRINGS

- (1) previously private corporations but were absorbed by GOCCs with original charters or (2) created pursuant to the Corporation
Code.
- Governed by LABOR CODE.

 Collateral Matters – of the main case where the labor arbiter has jurisdiction, i.e. attorney’s fees

 Churchmen – relationship of the church as an employer and the minister as an employee. It is purely secular and has no relation with
the practice of faith. Thus, the matter of terminating a minster as an employee is purely secular in nature and is “different from the
ecclesiastical act of expelling a member” from a religious congregation.

 Deduction for Tax Purposes –a money claim arising from employer-employee relationship

 Social Security contributions – that necessarily flowed from employer-employee relationship

 8. NOT COGNIZABLE BY NLRC:

1. Aggregate money claim does not exceed P5,000 and without claim for reinstatement;
2. Claim for employee’s compensation, social security, Philhealth, and maternity benefits
3. Cash prize under a program of the company as it requires the application of general civil law on contracts.
4. Breach of non-compete provision in a contract – is intrinsically a civil dispute, being a “post-employment relations” matter over
which the RTC has jurisdiction.
5. Claim for sum of money and damages for the cost of repair upon employee’s personal car, shouldered by employer – RTC
6. Quasi-delict or tort which has no reasonable connection with any of the claims under Art. 224

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 7. Intra-corporate controversies involving election or appointment of directors, trustees, officers or managers; declaration of
corporate positions vacant (not a case of dismissal) - RTC.

Labor claims of employees against a company under rehabilitation receivership pursuant to an Order by a management committee
created by SEC.

“Corporate officers” not mentioned in the Corporation Code or the By-Laws are deemed employees.

The status of an employee as a director and stockholder does not automatically convert his dismissal into an intra-corporate dispute
under the “nature of controversy test.”

8. Illegal dismissal case against a quasi-public corporation or GOCCs with original charters such as a local water district. It is governed
by Civil Service Law.
9. Cases arising from interpretation or enforcement of company personnel companies  grievance machineries
10. Violation of a training agreement.
11. A Labor Arbiter has no power to review an order or decision by another labor arbiter.
12. International agencies, such as SEAFDEC, ADB, and IRRI  immune; for otherwise, it would afford a medium through which the
host government (our government) would interfere in its operations or even influence its policies, thereby impairing the capacity
of such body to discharge its responsibilities impartially on behalf of its member states.

EXCEPTION: If the foreign entity partake of the nature of a proprietary activity (for profit), i.e. restaurant services at Camp John Hay Air
Station, the case for illegal dismissal filed by a Filipino cook working therein is well within the jurisdiction of the Philippine courts. ‘By entering
into the employment contract with the cook in the discharge of its proprietary functions, it impliedly divested itself of its sovereign immunity
from suits).

13. Labor claims by Department of Agriculture security guards  should first be brought to the Commission on Audit pursuant to
“State’s immunity from suits,” that no execution shall issue upon any judgment rendered against the Government.
14. Validity of the acquisition and disposal of the Union of a property after the termination of a case.
15. When parties mutually agree to submit their case to a voluntary arbitration.

Art. 225. POWERS OF THE COMMISSION

POWERS OF THE NLRC: (R I C C I)
1. Rule-making power: rules and regulations governing
a. Hearing and disposition of cases before it and its regional branches;
b. Internal functions; and
c. As may be necessary to carry out the purposes of this Code.
2. Issue compulsory processes (O S S):
a. Administer oaths
b. Summon parties
c. Issue subpoena
3. Conduct investigation and hear disputes within its jurisdiction

4. Hold any person in contempt (direct/indirect)

o power to hold any person in contempt;
o not authorized when the power is to punish a private individual for contempt as contempt proceedings are judicial in nature

5. Issue injunctions and restraining orders

a. INJUNCTION – writ of PI is to preserve the status quo until the merits of the case are fully heard (status quo – last actual
peaceful uncontested situation)
b. REQUISITES of a VALID INJUNCTION (P I D - N P D):
i. Prohibited or unlawful acts have been threated and will be committed unless restrained;
ii. Substantial and irreparable injury to complainant’s property will follow;
iii. Greater injury will be inflicted upon complainant by a denial of the relief;
iv. Complainant has no adequate remedy at law;
v. Public officers charged with the duty to protect the complainant’s property are unwilling to furnish adequate
protection;
vi. Due process must be observed (hearing must be conducted)

c. Injunctions cannot be issued ex parte; requires hearing (to determine WON there exists a labor dispute) – PAL vs NLRC
d. TEMPORARY RESTRAINING ORDER (TRO) – an interlocutory order; contemplates further hearing for the application of a
temporary injunction;
- Effective for not longer than 20 days (not extendible) and shall be void at the expiration of said 20 days.

JURISDICTION OF NLRC:
Original Jurisdiction
1. Cases certified to it for compulsory arbitration by the President or the Secretary of Labor;
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 2. Injunction pursuant to Arts. 225 and 279
3. Contempt cases
Appellate Jurisdiction
1. Cases decided by Regional Offices of the DOLE
2. Cases decided by Labor Arbiter (Art. 224, b; & 124 on wage distortion)
3. Denial of 3rd party claim where property was levied by the Sheriff of the Labor Arbiter

Art. 226. OCULAR INSPECTION – repealed; opens floodgates of bribery and corruption

Art. 227. TECHNICAL RULES NOT BINDING AND PRIOR RESORT TO AMICABLE SETTLEMENT.
1. Conciliation of labor disputes before barangay courts is not allowed for it would defeat the DOCTRINE OF SPEEDY LABOR JUSTICE
or the PRINCIPLE OF EMANCIPATION OF LABOR RELATIONS;
2. Technical rules of procedure and evidence may be relaxed in labor cases to serve the demands of substantial justice;

The employees claim for moral damages and attorney’s fees that set out in the position paper, should not be denied on the mere
ground that the employee failed to aver the same in her complaint, as in labor cases, the rules of procedure ought not to be applied
in a very rigid and technical sense.

3. Thus, labor cases can be decided on the basis of position papers;

4. Trial is discretionary on the labor arbiter. Thus the argument ‘that the affidavit is hearsay because affiants were not presented for
rules cross-examination is not persuasive because rules of evidence are not strictly observed in NLRC proceedings.

BUT where the adverse party is deprived to cross-examine, affidavits are generally rejected for being a hearsay unless the affiants were placed
on the witness stand to testify thereon.
5. Principle of res judicata may NOT be invoked considering that labor relations proceedings are “non-litigious and summary,”
without regard to legal technicalities in courts of law. Doctrine of Res Judicata applies only to judicial or quasi-judicial proceedings
and not to the exercise of administrative powers.
6. DUE PROCESS observed despite disregard of technical rules. (rule on substitution of counsel, service of summons).

Art. 228. APPEARANCES AND FEES

Non-lawyers may appear before the Commission or any labor Arbiter only if:
1. They represent themselves; or
2. They represent their organization or members thereof.

NO attorney’s fees, negotiation fees or similar charges (ANS) arising from any collective bargaining negotiations or conclusion of the
collective agreement shall be imposed on any individual member of the contracting union: Provided, however, That attorney’s fees may be
charged against union funds.

 ATTORNEY’S FEES (10% of the amount awarded)

ALLOWED - from union funds
NOT ALLOWED – from workers’ own funds; to protect the employees against unwarranted practice ‘that would diminish his
compensation without his knowledge and consent’

 SPECIAL ASSESSMENT – (for the services rendered by union officers or consultants) is a form of exaction which falls in the category of
“similar charges” and thus prohibited under the law.

 EXCEPTION TO THE RULE: Concurrence of 3 conditions (RMA):

1. Authorization by a written resolution of the majority of all members at the general membership meeting
2. Minutes of the meeting
3. Written authorization for check-off duly signed by each employee.

APPEAL

Art. 229. APPEAL.

 Right to appeal is neither a natural right nor a component of due process. It is merely a statutory privilege. Thus, requirements of
the rules must be complied.
 Decisions or orders of LABOR ARBITER – may be appealed to the NLRC within 10 calendar (not working) days from the receipt (by
the counsel, not by a party; unless the latter is not represented by counsel) of such decisions or orders.
 Otherwise, they shall become FINAL AND EXECUTORY (DOCTRINE OF IMMUTABILITY OF FINAL JUDGMENT) ‘as what remains to be
done is the purely ministerial enforcement or execution of the judgment’ and because the 10-Day period is MANDATORY AND
JURISDICTIONAL
o PURPOSE: to discourage employer from employing dilatory tactics

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  It is a well-settled rule that NLRC is not precluded from receiving evidence, even for the first time on appeal, because technical rules
of procedure are not binding in labor cases.
 EXCEPTIONS:
1. To serve the ends of substantial justice
2. To prevent grave miscarriage of justice or unjust enrichment
3. Delay for only 1 day
4. Special circumstances
5. When the 10th day falls on a Sunday or a Legal Holiday – next working day; “the law does not require the performance of an
impossible act.”
6. Timely appeal filed by a party but the co-party filed it out of time - A reversal of a judgment obtained by a party appealing from
it also benefits a co-party who had not appealed, or who had appealed out of time
7. Recomputation of the consequences of illegal dismissal upon execution of the decision is not a violation of doctrine of
immutability of final judgment as it does not constitute an alteration or amendment of the final decision being implemented
but only the computation of monetary consequences of such dismissal.
8. Only remedy is appeal as motion for reconsideration or petition for relief from judgment is a prohibited pleading against the
decision of Labor Arbiter

 GROUNDS OF APPEAL:
1. Prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
2. If the decision, order, or award was secured through fraud, coercion, including graft and corruption;
3. If made purely on questions of law; and
4. If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant.

 PERFECTION OF APPEAL – includes the filing of the memorandum of appeal… “A mere ‘notice’ of appeal does not constitute the
appeal and shall not stop the running of the period for perfecting an appeal.”
-a “motion for extension of time to file a ‘record on appeal’” may be made before the expiration of the reglementary period for filing.
Likewise, the appeal is deemed perfected only after the approval of the record on appeal and not upon the filing of said record on
appeal.

 POSTING OF BOND – Appeal by employer is only perfected upon posting a bond which shall either be in the form of cash deposit, surety
bond, or property bond, equivalent in the amount to monetary award, exclusive of damage and attorney’s fees.
o Not necessary when ‘monetary award’ not specified
o Not required in cases involving the government except for GOCCS
o Not required in filing petition for review on certiorari under Rule 65.

 APPEAL BOND – for perfection of appeal; to assure workers that if they prevail, they will receive money judgment in their favor; and to
discourage employers from using appeal to delay;
o Failure of employer to post the bond, entitles the employee to file a motion to dismiss.
o It is effective from the date of deposit until the case is finally decided.
 Motion to Reduce Bond is allowed on meritorious grounds.
o Financial incapacity is not sufficient ground to reduce bond.
o McBurnie vs Ganzon Doctrine – The posting of a cash or surety bond in an amount equivalent to 10% of the monetary award
pending resolution of the motion to reduce bond is deemed sufficient to perfect an appeal.
o Shall not stop running of the period to perfect appeal.

 DECISION AS TO ‘REINSTATEMENT’ IMMEDIATELY EXECUTORY, EVEN PENDING APPEAL

o PURPOSE: As poor employees had been deprived of their only source of livelihood.
o If employee has been reinstated during the appeal period and such reinstatement is subsequently reversed on appeal with
finality, the employee is not required to reimburse whatever salaries he has received for he is entitled to such.
o Refund Doctrine, that ‘when a reinstated employee is dismissed upon decision on appeal by finality, he is to refund the salaries
he received pending the appeal’ is abandoned!
 Disregards social justice
 A valid exercise of police power of the State.
 The preservation of the lives of the citizens is the basic duty of the State, that is core vital than the preservation of
corporate profits.
 EXCEPTION TO THE FINALITY RULE:
 Whenever the factual findings are not supported by evidence;
 Findings are vitiated by fraud, imposition, or collusion;

Art. 230. EXECUTION OF DECISIONS, ORDERS OR AWARDS.

 EXECUTION

 Writ of Execution – issued from a court to sheriff to carry into effect a judgment previously obtained.
1. First, personal property
2. Second, real estate

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  HOW ISSUED.
motu proprio or on motion of any interested party within 5 years from the date it becomes final and executory

 WHERE TO FILE MOTION FOR EXECUTION

o On the basis of a final and executory judgment, it should be filed within 5 years from the date of its entry with the LABOR
ARBITER and NOT with the NLRC, since it was he who issued the decision sought to be executed.

 WHEN TO FILE MOTION FOR EXECUTION

o On the basis of a final and executory judgment, it should be filed within 5 years from the date of its entry with the LABOR
ARBITER

 WHEN ISSUED – may be issued on a judgment within 5 years from the date it becomes final and executory;
o A writ issued before a judgment has become final and executory is invalid.
o If the labor arbiter set the execution for conference 6 years after the finality of the decision, he no longer has jurisdiction
over the case.  REMEDY: EXECUTION BY AN INDEPENDENT ACTION BEFORE THE REGIONAL ARBITRATION BRANCH of
origin and within 10 years from the date of its finality.

o EXCEPTIONS:
1. Meritorious grounds: occasioned by actions of the judgment debtor and/or incurred for his benefit or advantage;
2. When enforcement of a judgment is deferred or suspended by the parties, which effectively interrupts the 5-year period;
3. Execution Pending Appeal: “A petition for certiorari with the CA or SC shall not stay the execution of the assailed decision
unless a TRO is issued by said courts. Thus, a party may already move for the execution of the “monetary award” of the
NLRC even during the pendency of the petition for certiorari of the NLRC decision awarding the same with the CA or SC.
 In harmony with the social justice principle: that poor employees who have been deprived of their only source of
livelihood should be provided the means to support their families.
4. STAY EXCUTION for a ‘corporation under rehabilitation receivership.’ – to enable rehabilitation receiver to effectively
exercise its power free from any judicial or extrajudicial interference that might unduly hinder the rescue of the distressed
company.

 WHO MAY ISSUE:

1. Sec. of Labor
2. Regional Director
3. Commission
4. Labor Arbiter
5. Med-Arbiter
6. Voluntary Arbiter
7. Panel of arbitrators

 WHO EXECUTES. Special sheriffs - ensures compliance with the decisions, orders, or awards

 WHEN FINAL AND EXECUTORY – not appealable. Otherwise, there would be no end to a case.
o EXCEPTIONS (BAI):
1.Order varies or goes beyond the terms of the judgment;
2.Ambiguous terms
3.Implementation of Order is irregular

 REMEDY AGAINST A WRONGFUL EXECUTION

o Third Party Claim – filed with the Sheriff’s Office and copies served upon NLRC or Labor Arbiter who issued the writ.
o Upon receipt of the 3PC, all proceedings with respect to the execution of the property subject to 3PC is automatically
suspended.
o Appealable to NLRC within 10 working days.

Art. 231. CONTEMPT POWERS OF THE SECRETARY OF LABOR

 Labor Secretary may hold any person in direct or indirect contempt and impose appropriate penalties thereof.
 Note that the power refers only “to cite” persons for contempt. This is done by the quasi-judicial agencies by initiating it in the RTC,
which has jurisdiction “to decide” contempt cases as they are within the competence of the RTC.
 Contempt – constitutes despising authority, justice, or dignity of court.
o Direct Contempt – misbehavior in the presence of or so near the Secretary
o Indirect Contempt – act committed outside of the presence of the Secretary
 Judgment of Secretary in appealed cases is immediately executory and inappealable.

C. COURT OF APPEALS

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 1. Appeal via Rule 65, Rules of Court

D. SUPREME COURT
1. Rule 45, Rules of Court

E. BUREAU OF LABOR RELATIONS

1. Jurisdiction

F. NATIONAL CONCILIATION AND MEDIATION BOARD

1. Conciliation vs. Mediation
2. Preventive mediation

G. DOLE REGIONAL DIRECTORS

1. Recovery/Adjudicatory power

H. DOLE SECRETARY
1. Visitorial and enforcement powers
2. Power to suspend effects of termination
3. Remedies

I. VOLUNTARY ARBITRATOR
1. Jurisdiction
2. Remedies

J. PRESCRIPTION OF ACTIONS
1. Money claims
2. Illegal dismissal
3. Unfair labor practice
4. Offenses under the Labor Code
5. Illegal recruitment

Laws, Rules, Issuances, and Jurisprudence as of June, 2017

Topics: historical development of labor relations policy and rights of workers, statutory source and interpretation, definitions, employers, employee, overview types and
classification of employees, management prerogatives, NLRC and its composition, jurisdiction, powers and duties, appeal, execution of orders, rules and procedure
Book Reference: Labor Relations and the Law on Dismissal by Dean Salvador Poquiz
Statutory References:
Art. II, Secs. 2, 10, 18
Art. III, Sec.8
Art. IX-B, Sec. 12
Art. XIII, Sec. 3 & 14
Labor Code (renumbered) Arts. 3, 218-231, 290
2011 NLRC Rules of Procedure
Cases:
Feati vs. Bautista, 18 SCRA 1191, GR L-21278, Dec. 27, 1966
Gold City vs. NLRC, 245 SCRA 627, GR L-103560, Jul. 6, 1995
RCPI vs. Phil. Comm, 65 SCRA 82, GR L-37662, July 15, 1975
Kiok Loy vs. NLRC, 141 SCRA 179, GR L-54334, Jan. 22, 1986
Mayor vs. Macaraig, GR No. 87211, March 5, 1991
Pepsi vs. Gallang, GR no. 89621, Sept. 24, 1991
PAL vs. NLRC, GR no. 120567, March 20, 1998
Spic n Span Services vs. Paje, et.al., GR No. 174084, August 25, 2010
Abbott vs. NLRC, 145 SCRA 206
St. Martin’s Funeral Home vs. NLRC, GR No. 130866, Sept. 16, 1988

Book Reference: Labor Relations and Law on Dismissal by Salvador Poquiz

Topics: Bureau of Labor Relations – Jurisdiction & Appeal of BLR Decisions, Compromise Agreements, Release, Quitclaim - Requirements, Registry of Unions & file of
collective bargaining – procedure for registration, prohibition on certification election, Privileged Communication, Labor organizations – Requirements for Registration,
classification, grounds for cancellation, voluntary cancellation of registration
Statutory References: Arts. 232-249 of the renumbered Labor Code
Cases:
Montano vs. Atty. Verceles, GRNo. 168583, July 26, 2010
Employees Union-NFL vs. Waterfront Hotel, GR No. 174040-41, Sep. 22, 2010
Magbanua vs. Uy, GR No. 161003, May 6 2005
Liberty Employees vs. Liberty Mills, 180 SCRA 668
ALU vs. Ferrer Calleja, 173 SCRA 178
Phil. Land-Air vs. CIR, 93 Phil. 747
Phil. Skylanders vs, NLRC, GR No. 127374, Jan. 31, 2002
Cirtek Employees vs. Cirtek Electronics, GR No.190515, June 6, 2001
Tropical Hut Employees vs. Tropical Hut, GR No. L-43495-99, Jan. 20, 1990
PAFLU vs. Sec of Labor, 27 SCRA 40
SS Ventures va. SSVentures Labor Union, GR No. 161690, July 23, 2008

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1. ATTY. ALLAN S. MONTAÑO vs. ATTY. ERNESTO VERCELES

FACTS:
Atty. Allan Montano worked as legal assistant of Federation of Free Workers (FFW) Legal Center. Subsequently, he joined the union of rank-
and file employees (FFW Staff Association) and eventually became the employees’ union President.

In 2001, he was nominated for the position of National Vice President. He was, however, notified that he is not qualified for the position as
his candidacy violates the FFW’s Constitution and By-Laws, that “no member of the Governing Board shall at the same time be an employee
in the staff od the Federation.” Montano thus filed an Urgent Motion for Reconsideration praying that his name be included in the official list
of candidates.

Election ensued in Subic International Hotel, Olongapo City, wherein the delegates allowed Montano’s candidacy despite the pending motion
for reconsideration with the FFW COMELEC. He was then proclaimed as the National Vice President.

Atty. Verceles protested over the Montano’s candidacy and later filed before the Board of Labor Relations (BLR) a petition for the nullification
of the election of Montano. He likewise prayed for injunctive relief, claiming that the premature assumption of the VP duties will cause serious
damage.

Montano filed his comment with Motion to Dismiss on the grounds that (1) the Regional Director of DOLE and not the BLR has jurisdiction
over the case, (2) that the petition was premature due to the pending protest before the FFW COMELEC, (3) and that Verceles has no legal
standing to initiate the petition not being the real party in interest.

Meanwhile, FFW COMELEC stood firm in its stance that Montano’s candidacy contravenes the FFW’s Constitution.

BLR ruled in favor of Montano, saying that there were no grounds to hold the latter to run as VP BUT UPHELD its jurisdiction over the intra-
union dispute case and affirmed Vercele’s legal personality as president of an affiliate union of FFW.

Verceles thus elevated the matter to the CA via petition for certiorari. CA set aside BLR’s decision, saying that while it agreed that jurisdiction
was properly lodged with the BLR and that Atty. Verceles has legal standing to institute the petitions, Atty. Montaño however did not posses
the qualification requirement under the FFW Constitution that ‘candidates must be an officer or member of a legitimate labor organization.’
Since Montano is a legal assistant employed by FFW, he is considered as confidential employee and this ineligible to join the rank-and-file
union of FFW.

ISSUE: WON the BLR has jurisdiction over the matter.

RULING: YES. BLR has jurisdiction over intra-union disputes involving a federation, as clearly provided under Sec. 226 of the Labor Code. 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. As the dispute involves member unions of a
federation disagreeing over the provisions of the federation’s constitution and by-laws, the BLR has no doubt jurisdiction over the matter.

Rule XVI lays down the decentralized intra-union dispute settlement mechanism. Section 1 states that any complaint in this regard ‘shall be
filed in the Regional Office where the union is domiciled.’ The concept of domicile in labor relations regulation is equivalent to the place
where the union seeks to operate or has established a geographical presence for purposes of collective bargaining or for dealing with
employers concerning terms and conditions of employment.

The matter of venue becomes problematic when the intra-union dispute involves a federation, because the geographical presence of a
federation may encompass more than one administrative region. Pursuant to its authority under Article 226, this Bureau exercises original
jurisdiction over intra-union disputes involving federations. It is well-settled that FFW, having local unions all over the country, operates in
more than one administrative region. Therefore, this Bureau maintains original and exclusive jurisdiction over disputes arising from any
violation of or disagreement over any provision of its constitution and by-laws.

2.INSULAR HOTEL EMPLOYEES UNION V. WATERFRONT HOTEL DAVAO (2010)

Peralta, J.

 Nov. 6, 2000: Respondent Waterfront Insular Hotel Davao sent DOLE a Notice of Suspension of Operations for 6 months
due to severe and serious business losses.
 Nov. 8, 2000: During the suspension, Domy Rojas, Pres. of recognized labor union of the Hotel (Davao Insular Hotel
Free Employees Union, DIHFEU-NFL), sent the Hotel several letters asking it to reconsider its decision. The Union
members wanted to keep their jobs and to help the Hotel, so it suggested, among others, to suspend the re-negotiations
of their CBA (no strike, no lockout shall be enforced for 10 years), compromise with the high cost on payroll through
putting the length of service to zero with a minimum hiring rate, payment of benefits may be on a staggered basis or as
available, reduce SL and VLs to 15 days, etc.
 June 15, 2001- After series of negotiations, parties signed a Memorandum of Agreement and the hotel reopened and
resumed its business operations.

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  Aug. 22, 2002: National Federation of Labor (NFL), through Darius Joves and Debbie Plana, filed a notice before the
National Conciliation and Mediation Board (NCMB), alleging that there is a diminution of wages and other benefits through
unlawful Memorandum of Agreement.
 Sep. 2, 2002: The Hotel filed with the NCMB a Manifestation alleged that the persons under IHEU-NFL have no authority
to represent the Union; that the individuals who represented it have not standing to the instant complaint; and that the
existence of intra-union dispute renders the filing of the instance case premature.

 Cullo denied any existence of an intra-union dispute among the members of the union. Cullo, however, confirmed
that the case was filed not by the IHEU-NFL but by the NFL. When asked to present his authority from NFL, Cullo
admitted that the case was, in fact, filed by individual employees named in the SPAs.
 Waterfront argued that the persons who signed the complain were (1) not authorized representatives of the Union
indicated in the Submission Agreement, (2) nor where they parties to the MOA. And thus averred that the voluntary
arbitrator and the NCMB has no jurisdiction over the matter.

ISSUE: WON the accredited voluntary arbitrator has no jurisdiction over the case.

HELD: YES. As to the Cullo’s contention that CA erred in ruling that the voluntary arbitrator had no jurisdiction
simply because the Notice of Mediation did not state the name of the local union thereby, disregarding the Submission
Agreement which states the names of local union as Insular Hotel Employees Union-NFL.

As presented by the Waterfront, IHEU-NFL is a non-entity since it is DIHFEU-NFL which is considered by DOLE as the only
registered union in Waterfront Davao.

The Court finds that the Notice of Mediation was filed by a party who had no authority to do so; and that the respondent had
persistently voiced out its objection against the authority of Joves, Cullo, and the individual members of the Union to file the
complaint before the NCMB.

Procedurally, the first step to submit a case for mediation is to file a NOTICE OF PREVENTIVE MEDIATION WITH THE NATIONAL
CONCILIATION AND MEDIATION BOARD (NCMB). WHO MAY FILE A NOTICE OF PREVENTIVE MEDIATION?
1. Any certified or duly recognized bargaining representative…
2. The employer…
3. In the absence of a certified bargaining representative, “any legitimate labor organization in the establishment”

But only on the grounds of unfair labor practice. It is clear that only a certified or duly recognized bargaining agent may file a
notice or request for preventive mediation. Cullo himself admitted, in a number of pleadings, that the case was filed not by the Union but by
individual members thereof. Clearly, therefore, the NCMB had no jurisdiction to entertain the notice filed before it.

o DO THE INDIVIDUAL MEMBERS OF THE UNION HAVE THE STANDING TO QUESTION THE MOA BEFORE
THE NCMB?

The CBA provides that only the UNION and the COMPANY can exhaust all possibilities of conciliation through grievance machinery
in case of any dispute. Petitioners have not been duly authorized to represent the union.

Furthermore, Art. 260 provides that “only disputes involving the union and the company shall be referred to the grievance
machinery or voluntary arbitrators.”

o IF THE INDIVIDUAL MEMBERS OF THE UNION HAVE NO AUTHORITY TO FILE THE CASE, DOES THE FEDERATION TO
WHICH THE LOCAL UNION IS AFFILIATION HAVE THE STANDING TO DO SO?

NO. “A local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct voluntary association
owing its creation to the will of its members. Mere affiliation does not divest the local union of its own personality, neither does it give the
mother federation the license to act independently of the local union. It only gives rise to a contract of agency, where the former acts in
representation of the latter.

As provided under the NCMB Manual of Procedures, only a certified or duly recognized bargaining representative and an employer may file
a notice of mediation, declare a strike or lockout or request preventive mediation. The Collective Bargaining Agreement (CBA), on the other,
recognizes that DIHFEU-NFL is the exclusive bargaining representative of all permanent employees.

3. FELIPE O. MAGBANUA vs. RIZALINO UY G.R. No. 161003, 6 May 2005

FACTS:

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Pursuant to the Supreme Court decision in Rizalino Uy vs NLRC, hearings were conducted to determine the amount of wage
differentials due to the petitioners in this case, Felipe Magbanua et. al. As computed, the award amounted to P1,487,312.

Uy filed a Manifestation requesting that the cases be terminated as the award had been complied with. Said Manifestation was
signed by petitioners herein.

Some of the petitioners, however, opposed to the motion as they received only partial payments. Six (out of 8) petitioners, on the
other hand, attested that they have no more collectible amount from Uy.

Hence, Labor Arbiter denied the motion for writ of execution and considered the cases closed and terminated.

On appeal, NLRC reversed said decision, holding that a final and executory judgment can no longer be altered and that quitclaims
and releases are frowned upon as contrary to public policy.

ISSUES:

(1) WON the final and executory judgment of the Supreme Court could be subject to compromise settlement.
(2) WON petitioners’ affidavits waiving their awards is valid even if executed without the assistance of their counsel.

HELD:

(1) YES. The issue involving the validity of a compromise agreement after a final judgment is NOT novel in the case law.

LEGALITY OF COMPROMISE AGREEMENT AFTER FINAL JUDGMENT

Petitioners argue that a compromise of final judgment is invalid under Art. 2040,

“If after a litigation has been decided by a final judgment, a compromise should be agreed upon, either or both parties being
unaware of the existence of the final judgment, the compromise may be rescinded…Ignorance of a judgment which may
be set aside (on appeal) is not a valid ground for attacking a compromise.”

The provision requires that either or both of the parties are unaware of a court’s final judgment at the time they agree on a
compromise.

It is evident that COMPROMISE AFTER FINAL JUDGMENT IS NOT PROHIBITED.

Moreover, an important requisite which is the “lack of knowledge of the final judgment” is wanting in this case.

VALIDITY OF COMPROMISE AGREEMENT

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A compromise agreement is a contract whereby the parties make reciprocal concessions in order to resolve their differences and
thus avoid or put an end to a lawsuit. They adjust their difficulties in the manner they have agreed upon, disregarding the possible
gain in litigation and keeping in mind the danger of losing. Verily, the compromise may be either extrajudicial (to prevent
litigation) or judicial (to end a litigation).

A compromise must:
1. Not be contrary to law, morals, good customs and public policy;
2. Must have been freely and intelligently executed by and between the parties;
3. Must comply with the requisites and principles of contracts to have the force of law between parties.
Upon parties, it has the effect and authority of res judicata, once entered into.

The nonfulfillment of its terms and conditions justifies the issuance of a writ of execution; in such an instance, execution becomes
a ministerial duty of the court. Once the case is terminated by final judgment, the rights of the parties are settled and there are
no more disputes that can be compromised.

(2) YES. The presence or the absence of counsel when a waiver is executed does not determine its validity. There is no la
w requiring the presence of a counsel to validatea waiver. The test is whether it was executed voluntarily, freely and int
elligently; and whether the consideration for it was credible and reasonable. Where there is clear proof that a waiver was wangl
ed from an unsuspecting or a gullible person, the law must step in to annul such transaction. In the present case, petitioner
s failed to present any evidence to show that their consent had been vitiated.

4. Liberty Flour Mills Employees, Biascan and Evaristo v. PLAC and NLRC

Feb. 6, 1974: Respondent Phil. Labor Alliance Council (PLAC) and respondent Liberty Flour Mills, Inc. entered into 3-year CBA.
It contained a compliance clause as well as a union shop by imposing "membership in good standing for the duration of the CBA
as a condition for continued employment" of workers.”

Oct. 18 1974: PLAC filed complaint against company for the nonpayment of emergency cost of living allowance (ecola)
Mar. 4, 1975: Petitioners Biascan and Evaristo, who were already veering away from PLAC to organize Federation of National
Democratic Labor Unions (FNDLU) filed similar complaint
Mar. 20, 1975: Petitioners filed petition for certification election with the BLR
 PLAC then expelled the two for disloyalty and demanded the company to dismiss them in accordance with the union
shop clause in CBA.
 When the case was brought to NLRC, it ruled against B and C, disallowing their reinstatement and entitlement to back
wages.
 Evaristo and Biascan, averred that PLAC acted prematurely because the 1974 CBA providing for union shop
HAD NOT YET BEEN CERTIFIED by the BLR and THUS NOT YET IN EFFECT and so could not be the basis of
the dismissal against the two.
ISSUE: WON the BLR’s failure to certify the CBA renders the union shop clause in it nugatory.
HELD: NO.
Firstly, the CBA concluded in 1974 was certifiable and was in fact certified in April 11, 1975. It bears stressing that Evaristo and
Biascan were dismissed on May 20, 1975, more than a month after said certification. Thus, the CBA is binding upon them.
BESIDES, the certification of the CBA by the BLR is NOT REQUIRED to put a stamp of validity to such contract. Once
it is duly entered into and signed by the parties, a CBA becomes effective as between the parties regardless of whether or not the
same has been certified by the BLR.

Doctrine: The rationale for upholding the validity of union shop clauses in a CBA, even if they impinge upon the individual
employees right or freedom of association, is NOT to protect the union for the unions sake. Laws and jurisprudence promote
unionism and afford certain protections to the certified bargaining agent in a unionized company because a strong and effective
union presumably benefits all employees in the bargaining unit since such a union would be in a better position to demand
improved benefits and conditions of work from the employer.

87
5. ASSOCIATED LABOR UNIONS (ALU) vs FERRER CALLEJA (ART. 239)

FACTS:

May 9, 1986, Southern Philippines Federation of Labor (SPFLL) and NAMGAW undertook a strike in an effort to convince GAW Trading to
retract its recognition of ALU.

May 12, 1986 - GAW Trading, Inc. granted the request of Petitioner Associated Labor Unions (ALU) for a conference for the execution of an
initial Collective Bargaining Agreement (CBA), after the latter sent a letter to GAW that majority of the latter’s employees have authorized
ALU to be their sole and exclusive bargaining representative.

May 19, 1986, another union (GAW Lumad Labor Union) filed a Certification Election petition but was found by Med-Arbiter without having
complied the subscription requirement

May 27, 1986 - CBA was executed between GAW Trading and petitioner ALU

The case was referred to the Med-Arbiter who ruled for the holding of a certification election in all branches of GAW Trading in Cebu.

ALU filed a MR (which was considered as an appeal on the questioned order) before the Director of BLR.

BLR Director granted ALU’s appeal and set aside the questioned order on the ground that the CBA has been effective and valid and the
‘contract bar rule’ applicable.

BLR Director’s decision was reversed by a subsequent BLR Director, herein respondent, Ferrer Calleja, holding that the “contract bar rule”
relied upon by her predecessor does NOT apply in this case. Calleja argued:

(1) that the collective bargaining agreement involved herein is defective because it "was not duly submitted;” and
(2) that there is no proof to show that the CBA has been posted in at least two conspicuous places in the establishment at least five
days before its ratification; and
(3) that there is no proof that it has been ratified by the majority of the employees in the bargaining unit.

ISSUE: Whether the CBA was defective.

HELD: YES. We have previously held that the mechanics of collective bargaining are set in motion only when the following jurisdictional
preconditions are present, namely:

(1) possession of the status of majority representation by the employees' representative in accordance with any of the means of selection
and/or designation provided for by the Labor Code;

(2) proof of majority representation; and

(3) a demand to bargain under Article 251, paragraph (a), of the New Labor Code.

as

Evidently, there was PRECIPITATE HASTE on the part of respondent company in recognizing petitioner union. (In the aforementioned letter
where respondent company required petitioner union to present proof of its support by the employees, the company already suggested that
petitioner ALU at the same time submit the proposals that it intended to embody in the projected agreement.) This was on May 12, 1986,
and promptly on the following day the negotiation panel furnish respondent company final copies of the desired agreement which, with
equal dispatch, was signed on May 15, 1986.)

The recognition appears to have been based on the self- serving claim of the latter that it had the support of the majority of the employees
in the bargaining unit. Furthermore, at the time of the supposed recognition, the employer was obviously aware that THERE WERE OTHER
UNIONS EXISTING IN THE UNIT.

It bears mention that even in cases where it was the then Minister of Labor himself who directly certified the union as the bargaining
representative, this Court voided such certification where there was a failure to properly determine with legal certainty whether the union
enjoyed a MAJORITY REPRESENTATION.

An additional infirmity of the CBA was the FAILURE TO POST the same in at least two (2) conspicuous places in the establishment at least
five days before its ratification. The purpose of the requirement is precisely to inform the employees in the bargaining unit of the contents
of said agreement so that they could intelligently decide whether to accept the same or not. The contract is intended for all employees and
not only for the members of the purported representative alone.

88
Another potent reason for annulling the disputed collective bargaining is the finding of respondent director that one hundred eighty-one
(181) of the two hundred eighty-one (281) workers who "ratified" the same now strongly and vehemently deny and/or repudiate the
alleged negotiations and ratification of the CBA.

BASIC TO THE CONTRACT BAR RULE IS THE PROPOSITION THAT THE DELAY OF THE RIGHT TO SELECT REPRESENTATIVES CAN BE JUSTIFIED
ONLY WHERE STABILITY IS DEEMED PARAMOUNT. Excepted from the contract which do not foster industrial stability, such as contracts
where the identity of the representative is in doubt.

ADDITIONALLY, THE INAPPLICABILITY OF THE CONTRACT BAR RULE IS FURTHER UNDERSCORED BY THE FACT THAT WHEN THE DISPUTED
AGREEMENT WAS FILED BEFORE THE LABOR REGIONAL OFFICE ON MAY 27, 1986, A PETITION FOR CERTIFICATION ELECTION HAD ALREADY
BEEN FILED ON MAY 19, 1986. Although the petition was not supported by the signatures of thirty percent (30%) of the workers in the
bargaining unit, the same was enough to initiate said certification election.

6. PHIL. LAND SEA AIR UNION (PLASLU) vs CIR and PEPSI-COLA BOTTLING(CEBU)

FACTS:

Feb. 28, 1950 – Petitioner paid the fee for its renewal of its permit to the Bureau of Labor. But for its failure to meet certain requirement in
the inspection of its books of account, petitioner’s name as a labor union was dropped from the list of registered labor organizations.

March 3, 1950 – Petitioner filed a motion against Pepsi-Cole, complaining about the separation from service without justifiable cause of 16
of its laborers and employees.

March 23, 1950 – Respondent filed a motion to dismiss, alleging that the petitioner does not represent the respondent’s workers and that
less than 31 workers are involved in the case. The motion was denied by the court which found that at least 82 members of the petitioning
union were actually employed by respondent and affected by the dispute.

Jan. 16, 1951 – Petitioner, instead of pressing for action on its request for renewal of the permit, it organized itself as a non-stock corporation
with the SEC.

Aug. 8, 1951 – Pepsi-Cola filed a new motion to dismiss on the ground that PLASLU was not a registered union and thus has no capacity to
sue under C.A. No. 213, and thus the case should be dismissed.

ISSUE: Whether or not the petitioning Union has lost its capacity to sue as a labor union when its name was dropped by the Sec. of Labor
from the list of registered labor organizations.

HELD: YES. C.A. No. 213 was enacted to allow a labor union to organize itself and acquire a personality distinct and separate from its members
and to serve as an instrumentality to conclude CBAs and enjoy all the rights and privileges granted by law to a labor organization. But to
acquire such personality, certain requirements must be complied such as ‘securing a permit to operate from the DOLE; wherein Secretary of
Labor conducts an investigation to determine whether the applicant is entitled to registration and if so, a permit will be issued upon payment
of registration fee. Thus, A LABOR ORGANIZATION IS NOT LEGITIMATE UNLESS THAT REQUIREMENT HAS BEEN COMPLIED WITH.

Thus, the law postulates that “a legitimate labor organization is an organization, association or union of laborers duly registered and
permitted to operate by the Department of Labor”, and that “the registration of, and the issuance of a permit to, any legitimate labor
organization shall entitle it to all the rights and privileges granted by law. These rights and privileges include the right to conclude collective
bargaining agreements and to appear in behalf of its members before the Court of Industrial Relation.

THE FACT THAT PETITIONER HAS ORGANIZED ITSELF UNDER THE CORPORATION LAW AS A NON-STOCK CORPORATION AND HAS OBTAINED
A CERTIFICATE OF INCORPORATION FROM THE SECURITIES AND EXCHANGE COMMISSION IS OF NO MOMENT, FOR SUCH INCORPORATION
HAS ONLY THE EFFECT OF GIVING TO IT JURIDICAL PERSONALITY BEFORE REGULAR COURTS OF JUSTICE.

Nevertheless, the failure of petitioner to secure the renewal of its permit from the DOLE will not operate as a dismissal of this case but
remanded to the CIR.

7. PHILIPPINE SKYLANDERS INC. vs NLRC

Nov. 1993 – Petitioner Phil. Skylanders Employees Association (PSEA), a local labor union affiliated with the Phil. Association of Free Labor
Unions (PAFLU), won in the certification election conducted among the rank and file employees of Philippine Skylanders, Inc. (PSI). Its rival
union, Phil. Skylanders Employees Assoc. – WATU (PSEA-WATU) protested the result before the Sec. of Labor.

Several months later, PSEA sent PAFLU a notice of disaffiliation citing the latter’s deliberate and habitual dereliction of duty towards its
members. Attached to the notice was a copy of resolution signed by the officers and members of PSEA authorizing their local union to
disaffiliate from its mother federation.
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PSEA then affiliated itself with the National Congress of Workers (NCW), and subsequently changed its name to PSEA-NCW.

Mar. 17, 1994 – PSEA-NCW entered into a CBA with PSI which was immediately registered with the DOLE.

PAFLU through Serafin Ayroso filed a complaint against PSI, which was later amended to include the elected officers of PSEA-NCW for unfair
labor practice.
LABOR ARBITER declared PSEA’s disaffiliation from PAFLU as invalid and that PSI, PSEA-PAFLU and their officers as guilty of unfair labor
practice. As PSEA-NCW’s personality was not accorded recognition, its CBA with PSI was invalid. NLRC upheld said decision, that since an
election protest questioning PSEA- PAFLU's certification as the sole and exclusive bargaining agent was pending resolution before the
Secretary of Labor, PSEA could not validly separate from PAFLU, join another national federation and subsequently enter into a collective
bargaining agreement with its employer-company.

PETITIONERS separately moved for reconsideration.

PSEA together with its officer argued that being an independent labor union PSEA may freely serve the interest of all its members and readily
disaffiliate from its mother federation when circumstances so warrant. This right, they averred, was consistent with the constitutional
guarantee of freedom of association.

Solicitor General argued against the Labor Arbiter's assumption of jurisdiction citing the following as reasons: first, there was no employer-
employee relationship between complainant Ayroso and PSI over which the Labor Arbiter could rightfully assert his jurisdiction; second, since
the case involved a dispute between PAFLU as mother federation and PSEA as local union, the controversy fell within the jurisdiction of the
Bureau of Labor Relations; and lastly, the relationship of principal-agent between PAFLU and PSEA had been severed by the local union
through the lawful exercise of its right of disaffiliation

ISSUE: May PSEA, which is an independent and separate local union, validly disaffiliate from PAFLU pending the settlement of an election
protest questioning its status as the sole and exclusive bargaining agent of PSI's rank and file employees?

HELD: YES.

(1) ON JURISDICTION: The issue of disaffiliation is an inter-union conflict the jurisdiction of which properly lies with the Bureau of Labor
Relations (BLR) and not with the Labor Arbiter.

XXX

(2) RIGHT OF THE UNION TO DISAFFILIATE FROM ITS MOTHER FEDERATION. “The right of local unions to separate from their mother
federation on the ground that as separate and voluntary associations, LOCAL UNIONS DO NOT OWE THEIR CREATION AND EXISTENCE
TO THE NATIONAL FEDERATION to which they are affiliated BUT, INSTEAD, TO THE WILL OF THEIR MEMBERS have been upheld by
the Court.”

THE SOLE ESSENCE OF AFFILIATION IS TO INCREASE, BY COLLECTIVE ACTION, THE COMMON BARGAINING POWER OF LOCAL UNIONS
FOR THE EFFECTIVE ENHANCEMENT AND PROTECTION OF THEIR INTERESTS.

THE LOCAL UNIONS REMAIN THE BASIC UNITS OF ASSOCIATION, FREE TO SERVE THEIR OWN INTERESTS SUBJECT TO THE RESTRAINTS
IMPOSED BY THE CONSTITUTION AND BY-LAWS OF THE NATIONAL FEDERATION, AND FREE ALSO TO RENOUNCE THE AFFILIATION UPON THE
TERMS LAID DOWN IN THE AGREEMENT WHICH BROUGHT SUCH AFFILIATION INTO EXISTENCE.

There is nothing shown in the records nor is it claimed by PAFLU that the local union was expressly forbidden to disaffiliate from the federation
nor were there any conditions imposed for a valid breakaway. As such, THE PENDENCY OF AN ELECTION PROTEST INVOLVING BOTH THE
MOTHER FEDERATION AND THE LOCAL UNION DID NOT CONSTITUTE A BAR TO A VALID DISAFFILIATION.

XXX
It was entirely reasonable then for PSI to enter into a collective bargaining agreement with PSEA-NCW. As PSEA had validly severed itself from
PAFLU, there would be no restrictions which could validly hinder it from subsequently affiliating with NCW and entering into a collective
bargaining agreement in behalf of its members.

The mere act of disaffiliation did not divest PSEA of its own personality; neither did it give PAFLU the license to act independently of the local
union.

The complaint then for unfair labor practice lodged by PAFLU against PSI, PSEA and their respective officers, having been filed by a party
which has no legal personality to institute the complaint, should have been dismissed at the first instance for failure to state a cause of action.

8. CIRTEK EMPLOYEES vs CIRTEK ELECTRONICS

 Respondent had an existing CBA with the petitioners from Jan. 1, 2001 – Dec. 31, 2005.
 Prior to the 3rd year of the CBA, parties renegotiated its economic provisions (wage increase) but failed to reach a settlement.

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  Petitioner then declared a bargaining deadlock and filed a notice of strike with the NCMB.
 Respondent, on the other hand, filed a notice of lockout.

 During the proceedings, respondent placed union officers under preventive suspension ‘for allegedly spearheading a boycott of overtime
work’ and were eventually dismissed.

 Secretary of Labor then assumed jurisdiction over the controversy and issued a Return to Work Order which was complied with.

 Before the Secretary of Labor ruled on the controversy, respondent and the remaining officers entered into a MOA, increasing the daily
wage from P6 to P9. And that should the Secretary order a higher award of wage increase, respondent would comply.

 Secretary of Labor resolved the CBA deadlock by awarding a wage increase of P6 to P10, and P9 to P15 for the next trench.

 Respondent moved for a reconsideration citing a ‘Kasunduan’ where members waived their rights and benefits under the Secretary’s
decision. The same was denied.

 CA reversed the Sec. of Labor’s Decision, inciting abuse of discretion in not respecting the MOA.

ISSUES:
1. WON the Sec. of Labor is authorized to give an award higher than that agreed upon in MOA.
2. WON MOA was entered into and ratified by the remaining officers, which was not incorporated in the MOA, that respondent would
honor the Sec. of Labor’s award in the event that it is higher.

YES on BOTH.

1. It is well-settled that the Secretary of Labor, in the exercise of his power to assume jurisdiction under Art. 263 (g), may resolve all
issues involved in the controversy including the award of wage increases and benefits.

WHILE AN ARBITRAL AWARD CANNOT PER SE BE CATEGORIZED AS AN AGREEMENT VOLUNTARILY ENTERED INTO BY THE PARTIES BECAUSE
IT REQUIRES THE INTERVENTION AND IMPOSING POWER OF THE STATE THRU THE SECRETARY OF LABOR WHEN HE ASSUMES JURISDICTION,
THE ARBITRAL AWARD CAN BE CONSIDERED AN APPROXIMATION OF A COLLECTIVE BARGAINING AGREEMENT WHICH WOULD OTHERWISE
HAVE BEEN ENTERED INTO BY THE PARTIES, HENCE, IT HAS THE FORCE AND EFFECT OF A VALID CONTRACT OBLIGATION.


That the arbitral award was higher than that which was purportedly agreed upon in the MOA is of no moment. For the Secretary, in resolving
the CBA deadlock, is not limited to considering the MOA as basis in computing the wage increases. He could, as he did, consider the financial
documents submitted by respondent as well as the parties’ bargaining history and respondent’s financial outlook and improvements

2. The provisions of the MOA should NOT restrict the Secretary’s leeway in deciding the matters before him.

In labor cases pending before the Commission or the Labor Arbiter, the rules of evidence prevailing in courts of law or equity are not
controlling. Rules of procedure and evidence are not applied in a very rigid and technical sense in labor cases. Hence, the Labor Arbiter is not
precluded from accepting and evaluating evidence other than, and even contrary to, what is stated in the CBA.

While the terms and conditions of a CBA constitute the law between the parties, it is not, however, an ordinary contract to which is applied
the principles of law governing ordinary contracts. It is impressed with public interest, this, it must yield to the common good. As such, it must
be construed liberally rather than narrowly and technically.

XXX XXX XXX XXX XXX XXX

(JUNE 6, 2011 CASE; MR for 2010 Case)

 Cirtek Employees Inc. avers, among others, that as early as Feb. 5, 2010, petitioner union had already filed with the DOLE a resolution
of disaffiliation from the Freedom of Free Workers resulting in the latter’s lack of personality to represent the workers in the represent
case.

RULING:

 IN FACTUAL: The alleged disaffiliation of the Union from FFW was by virtue of a Resolution signed on Feb. 23, 2010 and submitted to
the DOLE on March 5, 2010 – 2 months after the present petition was filed on Dec. 22, 2009. Hence, it did not affect FFW to file the
petition.
 The issue of disaffiliation is an intra-union dispute which must be resolved in a different forum at the instance of either or both the
FFW and the union or a rival labor organization, not the employer.
 AN INTRA-UNION DISPUTE refers to any conflict between and among union members, including grievances arising from any violation
of the rights and conditions of membership, violation or disagreement over any provision of the union’s constitution and by-laws, or
disputes arising from chartering or disaffiliation of the union.
 A local union may disaffiliate at any time from its mother federation, absent any showing that the same is prohibited under its
constitution or rule. Such, however, does not result in it losing its legal personality altogether.
 A local labor union is a separate and distinct unit primarily designed to secure and maintain an equality of bargaining power between
the employer and their employee-members.
o A local union does not owe its existence to the federation with which it is affiliated.
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 o It is a separate and distinct voluntary association owing its creation to the will of its members.
o The mere act of affiliation does not divest the local union of its own personality, neither does it give the mother federation
the license to act independently of the local union.
o It only gives rise to a contract of agency where the former acts in representation of the latter.
 Whether then FFW "went against the will and wishes of its principal" (the member- employees under the local union) by pursuing the
case despite the signing of the MOA (disaffiliation), is not for the Court, nor for respondent to determine, but for the Union and FFW
to resolve on their own pursuant to their principal-agent relationship.

9. TROPICAL HUT EMPLOYEES vs TROPICAL HUT MARKET INC

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FACTS:

Jan. 2, 1968 - the rank and file workers of the respondent Tropical Hut Food Market Incorporated, organized a local union called the Tropical
Hut Employees Union (THEU), and immediately sought affiliation with the National Association of Trade Unions (NATU).

Jan. 3, 1968 - the NATU accepted the THEU application for affiliation. A Registration Certificate was then issued by the DOLE. It appears,
however, that NATU itself as a labor federation, was not registered with the Department of Labor.

Apr. 1, 1968 - A CBA was concluded between THEU-NATU, NATU, and Tropical Hut Food Market. Said agreement contains a union-shop
security clause (“Employees who are already members of the UNION at the time of the signing of this Agreement or who become so thereafter
shall be required to maintain their membership therein as a condition of continued employment.” Attached therewith is a check-off
authorization form (designating the NATU as the sole collective bargaining agent in all matters relating to salary rates, hours of work and
other terms and conditions of employment in the Tropical Hut Food Market, Inc. and that NATU is authorized to deduct the amount of P4.00
each every month as the members’ monthly dues.”

Dec. 19, 1973 – NATU was informed that THEU was disaffiliating from the NATU Federation.
Dec. 20, 1973 – THEU announced its affiliation with the Confederation of General Workers (CGW).
Jan. 9, 1974 – President Rosal of CGW wrote a letter to the respondent company demanding the remittance of the union dues collected by
the respondent. This was refused by the company.
Jan. 11, 1974 – NATU replaced Jose Encinas (THEU’s President) and requested that he be dismissed by Tropical Hut company in view of his
violation of the union security clause (maintained membership to the Union is required as a condition of continued employment.)

In view of NATU’s request, Tropical Hut dismissed Encinas

Jan. 12, 1974 – THEU-CGW protested the suspension of Encinas. Such suspension prompted the filing of unfair labor practice against the
responds Tropical Inc. and NATU before the NLRC.

Jan. 15, 1974 – Upon the request of NATU, Tropical Hut applied for clearance with Sec. of Labor to dismiss other officers and members of
THEU-CGW. This was followed by the suspension of other more employees.

The Arbitrator ruled for an immediate reinstatement of the 63 complainants to their former positions with back wages. NLRC reversed said
decision, giving the complainants a second chance by reemploying them ‘upon their voluntary reaffirmation of membership AND loyalty to
THEU-NATU and NATU.’ Sec. of Labor affirmed NLRC’s findings.

ISSUES:
1. WON the disaffiliation was valid.
2. WON the dismissal of petitioner employees on the ground of violating the union security clause (disaffiliation for the mother federation)
was illegal and constituted unfair labor practice.

HELD:
1. NO. The right of a local union to disaffiliate from its mother federation is well-settled. A local union, being a separate and voluntary
association, is free to serve the interest of all its members including the freedom to disaffiliate when circumstances warrant. This right is
consistent with the constitutional guarantee of freedom of association

The inclusion of the word NATU after the name of the local union THEU in the registration with the Department of Labor is merely to stress
that the THEU is NATU's affiliate at the time of the registration. It does not mean that the said local union cannot stand on its own. A LOCAL
UNION OWES ITS CREATION AND CONTINUED EXISTENCE TO THE WILL OF ITS MEMBERS AND NOT TO THE FEDERATION TO WHICH IT
BELONGS.

XXX There is nothing in the constitution of the NATU or in the constitution of the THEU-NATU that the THEU was expressly forbidden to
disaffiliate from the federation. The alleged non-compliance of the local union with the provision in the NATU Constitution requiring the
service of three months notice of intention to withdraw did not produce the effect of nullifying the disaffiliation for the following grounds:
firstly, NATU WAS NOT EVEN A LEGITIMATE LABOR ORGANIZATION, IT APPEARING THAT IT WAS NOT REGISTERED AT THAT TIME WITH THE
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DEPARTMENT OF LABOR, AND THEREFORE DID NOT POSSESS AND ACQUIRE, IN THE FIRST PLACE, THE LEGAL PERSONALITY TO ENFORCE ITS
CONSTITUTION AND LAWS, much less the right and privilege under the Labor Code to organize and affiliate chapters or locals within its group,
and secondly, THE ACT OF NON-COMPLIANCE WITH THE PROCEDURE ON WITHDRAWAL IS PREMISED ON PURELY TECHNICAL GROUNDS
WHICH CANNOT RISE ABOVE THE FUNDAMENTAL RIGHT OF SELF-ORGANIZATION.

2. YES. There is no merit in the contention of the respondents that the act of disaffiliation violated the union security clause of the
CBA and that their dismissal as a consequence thereof is valid. A perusal of the collective bargaining agreements shows that the THEU-NATU,
and not the NATU federation, was recognized as the sole and exclusive collective bargaining agent for all its workers and employees in all
matters concerning wages, hours of work and other terms and conditions of employment. The NATU possessed the status of an agent while
the local union remained the basic principal union which entered into contract with the respondent company. When the THEU disaffiliated
from its mother federation, the former did not lose its legal personality as the bargaining union under the CBA.

Moreover, the union security clause embodied in the agreements cannot be used to justify the dismissals meted to petitioners since it is not
applicable to the circumstances obtaining in this case. THE CBA IMPOSES DISMISSAL ONLY IN CASE AN EMPLOYEE IS EXPELLED FROM THE
UNION FOR JOINING ANOTHER FEDERATION OR FOR FORMING ANOTHER UNION OR WHO FAILS OR REFUSES TO MAINTAIN MEMBERSHIP
THEREIN. THE CASE AT BAR DOES NOT INVOLVE THE WITHDRAWAL OF MERELY SOME EMPLOYEES FROM THE UNION BUT OF THE WHOLE
THEU ITSELF FROM ITS FEDERATION. Clearly, since there is no violation of the union security provision in the CBA, there was no sufficient
ground to terminate the employment of petitioners.

10. PHILIPPINE ASSOC. OF FREE LABOR UNIONS (PAFLU) vs SEC. OF LABOR

1av vph

The Social Security System Employees Association (SSEA), which is affiliated to the Philippine Association of Free Labor Unions (PAFLU), was
issued with an Order of Cancellation of the Registration Certificate by the Registrar of Labor Organizations (Registrar) on the ground of failure
to furnish the BLR with copies of (1) reports on the finances of that union; the names, postal addresses and non-subversive affidavits of the
officers of said union.

PAFLU and SSEA commenced this action on the ground that Sec. 23 of R.A. 875 violates their freedom of assembly and association. Said
provision requires any labor organizations to file a notice, certain documents, and a registration fee with the office of the Secretary of Labor
for them to acquire legal personality and be entitled to all the rights and privileges granted to legitimate labor organizations.

ISSUE: Whether or not the Sec. 23 of R.A. 875 (requiring registration with Sec. of Labor) is violative of freedom of assembly and association.

HELD: NO. The registration is not a limitation to the right of assembly or association. It is merely a condition for the acquisition of legal
personality and the possession of the rights and privileges granted by law to legitimate labor organizations. THE CONSTITUTION DOES NOT
GUARANTEE THESE RIGHTS AND PRIVILEGES, MUCH LESS SAID PERSONALITY, WHICH ARE MERE STATUTORY CREATIONS. For the exercise
of which, registration is required to protect BOTH labor and the public against fraud, abuses, or impostors who pose as organizers. SUCH IS
A VALID EXERCISE OF THE POLICE POWER, because the activities of labor organizations, associations and union of workers affect public
interest, which should be protected.

Furthermore, THE CANCELLATION OF THE SSEA’S REGISTRATION CERTIFICATE WOULD NOT ENTAIL A DISSOLUTION OF SAID ASSOCIATION
OR ITS SUSPENSION. Its existence would not be affected by said cancellation, although its juridical personality and its statutory rights and
privileges would be suspended thereby.

NOTE: There is no law requiring the approval, by the Secretary of Labor, of the decision of the Registrar decreeing the cancellation of a
registration certificate. Moreover, in this case, there is nothing for the Secretary yet to approve or disapprove since petitioner’s motion for
reconsideration of the Registrar’s decision is still pending resolution.

11. SS VENTURES vs SS VENTURES LABOR UNION

1av vph

FACTS: Petitioner is a PEZA-registered export firm, engaged in the business of manufacturing sports shoes. Respondent is a labor
organization registered with the DOLE.

Mar. 21, 2000 – the Union filed a petition for certification election.

Aug. 21, 2000 – Petitioner Ventures filed a petition to cancel the Union’s certificate of registration on the grounds that the latter deliberately
and maliciously included the names of more or less 82 former employees no longer connected with Ventures in its list of members
who attended the organizational meeting and in the adoption/ratification of its constitution and by-laws; that No organizational
meeting and ratification actually took place; and the Union’s application for registration was not supported by at least 20% of the
rank-and-file employees of Ventures.
Regional Director of DOLE- Region III favored Ventures and resolved to Cancel the Certificate of the union. On appeal, the BLR
Director granted the Union’s appeal and reversing the decision of RD. Ventures went to the CA. The CA dismissed Ventures’
petition as well as the MR. Hence, this petition for review
ISSUE: Whether the registration of the Union must be cancelled.

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 RULING: NO.
The right to form, join, or assist a union is specifically protected by Art. XIII, Section 3 of the Constitution and such right
shall not be abridged. Once registered with the DOLE, a union is considered a legitimate labor organization endowed with the
right and privileges granted by law to such organization. While a certificate of registration confers a union with legitimacy with the
concomitant right to participate in or ask for certification election in a bargaining unit, the registration may be canceled or the
union may be decertified as the bargaining unit, in which case the union is divested of the status of a legitimate labor organization.
Among the grounds for cancellation is the commission of any of the acts enumerated in Art. 239(a) of the Labor Code, such as
fraud and misrepresentation in connection with the adoption or ratification of the union’s constitution and like documents. The
Court, has in previous cases, said that to decertify a union, it is not enough to show that the union includes ineligible employees
in its membership. It must also be shown that there was misrepresentation, false statement, or fraud in connection
with the application for registration and the supporting documents, such as the adoption or ratification of the constitution and by-
laws or amendments thereto and the minutes of ratification of the constitution or by-laws, among other documents.
The evidence presented by Ventures consist mostly of separate hand-written statements of 82 employees who alleged that they
were unwilling or harassed signatories to the attendance sheet of the organizational meeting. However these evidence was
presented seven months after the union filed its petition for cancellation of registration. Hence these statements partake of the
nature of withdrawal of union membership executed after the Union’s filing of a petition for certification election on March 21,
2000. We have said that the employees’ withdrawal from a labor union made before the filing of the petition for
certification election is presumed voluntary, while withdrawal after the filing of such petition is considered to be involuntary
and does not affect the same. Now then, if a withdrawal from union membership done after a petition for certification election
has been filed does not vitiate such petition, it is but logical to assume that such withdrawal cannot work to nullify the registration
of the union. The Court is inclined to agree with the CA that the BLR did not abuse its discretion nor gravely err when it concluded
that the affidavits of retraction of the 82 members had no evidentiary weight.
The relevance of the 82 individuals’ active participation in the Union’s organizational meeting and the signing ceremonies thereafter
comes in only for purposes of determining whether or not the Union, even without the 82, would still meet what Art. 234(c) of
the Labor Code requires to be submitted, requiring that the union applicant must file 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. In its union records on file with
this Bureau, respondent union submitted the names of 542 members. This number easily complied with the 20% requirement.
Whatever misgivings the petitioner may have with regard to the 82 dismissed employees is better addressed in the inclusion-
exclusion proceedings during a pre-election conference. The issue surrounding the involvement of the 82 employees is a matter
of membership or voter eligibility. It is not a ground to cancel union registration.
FOR FRAUD AND MISREPRESENTATION TO BE GROUNDS FOR CANCELLATION OF UNION REGISTRATION under
Article 239, THE NATURE OF THE FRAUD AND MISREPRESENTATION MUST BE GRAVE AND COMPELLING enough to
vitiate the consent of a majority of union members.

Rights and Conditions of Membership (Art. 250)

a. Union Officers
b. Agency Fees
c. Check-off
d. Mandatory Activities

ALATCO vs. BITEMAA, 91 Phil. 649

National Brewery vs. San Miguel Brewery,, 9 SCRA 847

Reportorial Requirements; Coverage of Right to Self-Organization (Art. 252-257)

a. Persons granted/not granted the right
b. Members outside the bargaining unit
c. Doctrine of Necessary Implication
d. Inclusion of disqualified members

Samahang Manggagawa vs. BLR, G.R. No. 211145, Oct. 14, 2015
Kapatiran vs. Ferrer-Calleja, 162 SCRA 367
SMC Supervisors vs. Hon. Laguesma, 277 SCRA 370
NATU vs. Hon. Torres, G.R. No. 93468, Dec. 29, 1994
SSS vs. CA, 175 SCRA 686
Paper Industries vs. Laguesma, G.R. No. 101738, April 12, 2000

Unfair Labor Practices (ULP) (Art. 258 – 260)

a. Nature & Procedure for Prosecution
b. ULP of Employers

i. Tests employed
ii. Company Unionism
iii. Union Security Clauses & its Forms

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c. ULP of Labor Organizations

Gin Queen vs. Gin Queen Corp, G.R. No. 191714, Feb. 26, 2014
BPI vs. BPI Employees Union, G.R. No. 164301, August 10, 2010
MMU vs. Liberty Cotton Mills,90 SCRA 391
Lakas vs. Marcelo, 118 SCRA 422

Statutory References:
Arts. 250-260 of the Renumbered Labor Code
Cases:
ALATCO vs. BITEMAA, 91 Phil. 649
National Brewery vs. San Miguel Brewery,, 9 SCRA 847
Samahang Manggagawa vs. BLR, G.R. No. 211145, Oct. 14, 2015
Kapatiran vs. Ferrer-Calleja, 162 SCRA 367
SMC Supervisors vs. Hon. Laguesma, 277 SCRA 370
NATU vs. Hon. Torres, G.R. No. 93468, Dec. 29, 1994
SSS vs. CA, 175 SCRA 686
Paper Industries vs. Laguesma, G.R. No. 101738, April 12, 2000
Gin Queen vs. Gin Queen Corp, G.R. No. 191714, Feb. 26, 2014
BPI vs. BPI Employees Union, G.R. No. 164301, August 10, 2010
MMU vs. Liberty Cotton Mills,90 SCRA 391
Lakas vs. Marcelo, 118 SCRA 422

Part IV.
1. Collective Bargaining and Administration of Agreements
a. Procedures in collective bargaining
b. Duty to bargain collectively
c. Terms of a CBA
i. Periods
ii. Expiry and Renewal thereof and its effects
d. Injunction prohibited
e. Participation in decision-making
f. Petition for Certification Election & Remedies
i. Factors to determine ABU
ii. Methods to determine bargaining unit
iii. Grounds for dismissal of CE
iv. Double Majority
v. Run-off election
vi. Re-run election
g. Employer as bystander
h. Rules that prevent the holding of CE and exception
Statutory References:
Art. 261 to 272 of the renumbered Labor Code
DOLE Department Order No. 40-03, series of 2003
DOLE Department Order No. 40-1-15, series of 2015
Cases:
Davao Integrated Stevedoring vs. Abarquez, 220 SCRA 197
General Milling vs. CA, G.R. No. 146728, Feb. 11, 2004
Pier 8 Arrastre vs. Confesor, G.R. No. 110854, Feb. 13, 1995
Union of Filipro Employees vs. NLRC, G.R. No. 91025, December 19, 1990
Free Employer vs CIR, 14 SCRA 781
Tagaytay Highlands vs. Tagaytay Highlands Employees Union, G.R. No. 142000, Jan. 22, 2003
RPB Gen. Services vs. Laguesma, 264 SCRA 637
Notre Dame of Greater Manila vs. Laguesma, G.R. No. 149883, June 29, 2004
California Manufacturing vs. Laguesma, G.R. No. 97020, June 9, 1992
Phil. Fruits vs. Torres, G.R. No. 92391, July 3, 1992

1) Veterans vs. Montenejo, GR 184819, Nov. 29, 2017

2) Sy vs. NEAT, GR 213748, Nov. 27, 2017
3) Maula vs Ximec, GR 207838, Jan. 25, 2017
4) DLSU vs. Bernardo, GR 190809, Feb. 13, 2017
5) Doble vs. ABB, GR 215627, June 5, 2017
6) Bravo vs Urios, GR 198066, June 6, 2017
Add as assignment and part of the quiz, DOLE Department Order 147-15 on just & authorized causes. Thanks

POST EMPLOYMENT
Reviewer
LABOR RELATIONS

ART. 293. COVERAGE – shall apply to all establishments or undertakings whether for profit or not.

1. COVERAGE
 For Profit or Not
o Educational, medical, charitable, religious
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  Regular Employment, exception:
o government and its political subdivisions, including GOCCs

2. TERMINATION – dismissal or lay-off

 DISMISSAL – a form of ending employer-employee relationship initiated either by the employee or the employer such as in the case of just cause or
authorized cause dismissal
 DISCHARGE – where there is a deliberate intention by the employer to dispense with the employee’s services which may be in the form of actual or
constructive discharge
 LAY-OFF – termination initiated by the employer without prejudice to reinstatement or recall of an employee who has been temporarily separated brought
about by ‘adverse economic conditions, breakdown of machinery, shutdown for repairs or lack of materials’
 TERMINATION – a complete severance of employer-employer relationship.
Types:
 Cessation or closure of business – authorized cause of dismissal initiated by the employer due to severe economic losses or otherwise
 Quit - initiated by employee motivated by his own reasons such as obtaining a better job, dissatisfaction with the terms and conditions of employment.
 FURLOUGH – temporary halt of employment initiated by an employee as a result of lack of work

3. AN ECONOMIC PHENOMENON (termination) – “not a mere cessation of contractual relationship but an economic phenomenon” as it affects members of
the family; that the loss of a job may well mean the loss of hope for a decent life”

ART. 294 – SECURITY OF TENURE

 Regular Employment – “employer shall not terminate the services of an employee”
o Except:
1. For a just cause
2. When authorized by law
o Rights of an employee “unjustly dismissed:”
1. Reinstatement without loss of seniority rights and other privileges
2. Full backwages, inclusive of allowances
3. Other benefits or their monetary equivalent
 All “computed from the time his compensation was withheld up to the time of his actual reinstatement.”

1. Employment, A PROPERTY RIGHT (Art. 13, Sec. 3, Constitution).

“One’s employment, profession, trade or calling is a property right.’

When a person has no property, his job may possibly be his only possession or means of livelihood. “Employment is not merely a contractual relationship; it has
assumed the nature of property right.”

2. RIGHT TO SECURITY OF TENURE

Tenure – permanent or regular status granted to a worker after a probationary or trial period.
Security of Tenure – the right of a worker to be secured or to continue in employment until the same is terminated by virtue of a valid, just cause or on grounds
authorized by law.

 COVERAGE
o extends to all types of employees
o not only confined to cases of termination but also to “unwarranted and unconsented demotion and transfer”
 DOCTRINE OF PERPETUAL EMPLOYMENT
o While security of tenure us constitutionally guaranteed as a right of the employee, it does not however mean perpetual employment for the
employee.
o A contract of perpetual employment “deprives management of its prerogative (to hire, fire and promote) and renders inutile the basic precepts of
labor relations.”
o It unjustly forbids employer form terminating services of employee despite for authorized cause.
o It would be a “destruction of the capital” which the law is also bound to respect.

SECURITY OF TENURE vs MANAGEMENT PREROGATIVE

“The constitutional and legal protection equally recognize the employer’s right and prerogative to manage its operation according to reasonable standards and
norms of fair play.”

A. MANAGEMENT PREROGATIVE
 DOCTRINE OF MANAGEMENT PREROGATIVE: “Every employer has the inherent right to regulate, according to its own discretion and judgment, all aspects
of employment (hiring, work assignments, working methods, time, place and manner of work, work supervision, transfer of employees, lay-off workers, and
discipline, dismissal, and recall of employees).
o LIMITATIONS:
1. Those imposed by labor laws
2. Principles of equity and substantial justice
3. Principles of fair play and justice
4. CBA
5. Employment contract (as agreed by the parties)
6. Employer policy and practice
7. Good faith
8. State’s inherent police powers
9. Must be exercised without grave abuse of discretion.

 CONTROL OF BUSINESS VARIABLES TO ENHANCE CHANCES OF MAKING PROFIT

o Freedom to administer affairs of a business enterprise such that the costs of running it would be below the expected earnings or receipts.

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  COURTS DECLINE TO INTERFERE in legitimate business decisions
o The law does not authorize substitution of judgment of the employer in the conduct of his business so long as it is done in good faith.
 The removal of chairs of employees in exchange for additional rest periods or breaks - a valid management prerogative. It was made
in good faith without doing any harm to the worker’s rights.
1. RIGHT TO DISCIPLINE
o Must be always fair and reasonable; corresponding penalties should be commensurate
2. RIGHT TO DISMISS
o Right to dismiss – a measure of self-protection on the part of employer
o PRINCIPLE OF NON-OPPRESSION - the law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer.
3. RIGHT TO IMPOSE PENALTY
o Proportionality Rule (Doctrine of Commensurate Penalty) – penalty imposed must be commensurate with the act, conduct or omission imputed to
the employee and imposed in connection with the employer’s disciplinary authority. Dismissal should not be imposed if its is unduly harsh and grossly
disproportionate to the charges.
4. RIGHT TO CHOOSE THE PENALTY TO IMPOSE
o Within its prerogative to impose what is considered appropriate penalty under circumstances pursuant to its company riles and regulations
5. RIGHT TO TRANSFER – covers movement of personnel in terms of reorganization,
promotion, and demotion.
 2 Types:
1. from one position to another of equivalent rank, level of salary, without a break in the service;
2. from one office to another within the same business establishment.
 PROMOTION vs DEMOTION
o Promotion – (1) advancement from one position to another (2) with an increase in duties and responsibilities (as authorized by law, and usually
accompanied by an increase in salary). (Increase in salary is merely incidental and should not be determinative of whether or not a promotion is
bestowed upon an employee).
o Demotion – employee is (1) relegated to a subordinate or less important position (2) constituting reduction to a lower grade or rank, (3) with
corresponding decrease in duties and responsibilities, (4) usually accompanied by a decrease in salary.
 DOCTRINAL RULINGS on TRANSFER:
o Employee’s right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to
change his assignment or transfer him where he will be most useful.
o When the transfer is not unreasonable, inconvenient, or prejudicial to the employee, it does not involve demotion in rank or diminution of salaries.
o Transfer must be exercised without grave abuse of discretion, and must be of justice and fair play. Thus, it cannot be a subterfuge by the employer
to rid himself of an undesirable worker.

WHEN VALID:
o Transfer is valid when made to meet the requirements of the business. Thus, where the ‘rotation of employees’ from day shift to night shift was a standard
operating procedure. An employee who had been on the day shift may be transferred to the night shift. Same rule applies when a transfer of employees
from one theater to other theaters also operated by the employer, in order to prevent connivance among them. (Genuine Business Necessity)
o Reassignment according to the demands of the business and the nature of employment (as salesman, calling for expansion of areas) is valid.
o Transfer is valid when made in avoidance of conflict of interest (spouses working at competing companies both assigned in the same region with the same
work).
o A relief and transfer order (as requested by a client) does not sever the employment relationship between a security guard and the agency. While the
security guard has a right to security of tenure, such does not give him a vested right to his position “as would deprive the company of its prerogative” to
change the assignment of or transfer the security guard to a station where his services would be most beneficial to the client; in pursuit of legitimate
business interest, provided there be (1) no demotion in rank or (2) diminution of salary or other benefits and that it was (3) not motivated by discrimination
or (4) bad faith or (5) effected as a punishment without just cause.)
o Transfer of an employee (a linen room attendant, who continuously refused to report to his new work assignment) is justified when the latter did not
show why such action should not have been taken. Employer has the right to demote and transfer an employee who has failed to observe proper diligence
in his work, incurred habitual tardiness and absences, indolence in his assigned work, failure to comply with productivity standards or quota under gross
inefficiency or gross neglect of duty.

WHEN INVALID:
o Transfer is invalid when it was prompted by non-legitimate reasons, such as when it was timed ‘at the height of union concerted activities,’ to demoralize
the union members. Under such circumstances, employees may validly refuse to be transferred.
o Transfer is also invalid when made unceremoniously (without the usual notice) prompting their families to relocate from Cebu to Manila. The Court ruled
that the forced transfer is not only unreasonable, inconvenient, and prejudicial but also in defiance of basic due process and fair play in employment
relations.
o Dismissal is invalid when effected to punish employees for their refusal to heed an unreasonable directive by the employer.
o Willfulness of private respondent’s insubordination was shown by his continued refusal to report to his new work assignment
o Refusal to be transferred as a consequence to a promotion is valid. It cannot be the basis of employee’s dismissal from service. Refusal to be promoted
is a valid exercise of a right.

6. RIGHT TO PRESCRIBE PRODUCTIVITY STANDARDS or QUOTA

 A valid exercise of employer ‘to increase company viability and profitability.’ These standards may be used as an incentive or as disciplinary measure.

7. RIGHT TO GRANT BONUS

 Bonus – an amount granted and paid ex gratia to the employee; it constitutes an act of enlightened generosity and self-interest on the part of the
employer rather than as a demandable obligation
 DEMANDABLE when:
1. Stipulated in an employment contract or CBA – becomes a contractual obligation
2. When the grant is a company policy or practice
3. When granted as an additional compensation which the employer agreed to give not contingent on profit becomes a part of a wage.

8. RIGHT TO CHANGE WORKING HOURS

 It is a management prerogative to embark on flexible work arrangements such as ‘compressed work week scheme; designed to save energy costs,
promote greater work efficiency ad lower the rate of employee absenteeism among others.

9. RIGHT TO PROSCRIBE RULES ON MARRIAGE (marital policies)

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  Standards to determine legality of marital policies / 2 Types of employment policies that affect spouses:
1. “No-spouse employment policy” – prohibits spouses working in the same company;
o It arbitrarily discriminates against all spouses of present employees without regard to the actual effect on the individual’s qualifications or
work performance.
o Likewise, “That a woman shall not get married or that upon getting married, she shall be deemed resigned or separated” (PAL and flight
attendant contract clause) was declared null and void for being contrary to the Labor Code and the protection-to-labor clause in the
Constitution.

o WHEN VALID, stipulation against marriage:

1. When there is “reasonable business necessity” of such bona fide occupational qualification is shown.
 Employer has the burden of proof to show the existence of a Reasonable Business Necessity.
 To justify bona fide occupational qualification, the employer must prove 2 factors:
1. That the employment qualification is reasonably related to the essential operation of the job involved;
2. That there is a factual basis for believing that all or substantially all persons meeting the qualification would be unable
to properly perform the duties of the job.
2. Reasonable because relationship of that nature might compromise interests of the company (to guard trade secrets, manufacturing
formulae, marketing strategies, and other confidential information)
2. “Anti-nepotism employment policy” – prohibits employment of all immediate members of the family.

 RIGHT TO STIPULATE “NON-COMPETE” CLAUSE – contracts which prohibit an employee from engaging in business in direct competition with the
employer are not necessarily void for being in “restraint of trade.”
o It is designed to forestall the evil that upon employee’s resignation or termination, he might start a similar business or work for a competitor
dealing with the same business engaged by his former employer, bringing with him a sensitive information, trade secrets, etc.
 DOCTRINAL RULINGS (NON-INVOVEMENT/COMPETING CLAUSE)
1. Petitioner A was working for respondent B as Vice President in charge of its Hongkong and ASEAN operations under a 5-year contract. A stopped
reporting for work after 2 years. She thereafter became VP for a corporation also engaged in a similar (pre-need) industry. B sued A, invoking the “non-
involvement clause.” Court ruled in favor of B, upholding the validity of the clause. “A non-involvement clause is not necessarily void for being in
restraint of trade as long as there are reasonable limitations as to time, trade and place.” To allow A to engage in a rival business soon after she leaves
would make B’s trade secrets vulnerable especially in a highly competitive marketing environment. (Tiu vs Platinum Plans)
2. Consulta vs CA (March, 2005)
3. The “exclusivity clause” in the company policies only prohibits an employee from selling products other than those manufactured by the company is
not the restraint in trade proscribed by the Constitution. It is a valid management prerogative.

4. Employee was prohibited from engaging in any business or occupation in the Philippines for a period of 5 years after the termination of his employment
contract and must first get the written permission of his employer if he were to do so.

SC ruled that “while the stipulation was indeed limited as to time and space, it was not limited as to trade. Such prohibition forces an employee to
leave the Philippines to work should the employer refuse to give a written permission.
5. But a company policy against transfer of technology or trade secrets to 3rd persons will not hold if said technology is readily available to the public.

B. SECURITY OF TENURE CLAUSE

 Constitutional Due Process – protects individual from the government and assures him of his right in criminal, civil or administrative proceedings.
 Statutory Due Process – the due process referred to in termination of employment; protects employees from being terminated without just cause after
notice and hearing
 Contractual Due Process – company-prescribed procedure must also be observed by the employer.
i. Principle of Agabon – “for the reason that an employer’s breach of its own company procedure is equally violative of the laborer’s rights, elbeIt non-
statutory.”

 Requirements for Validity of Dismissal (2 Aspects of Due Process):

1. Procedural Due Process – the legality of the manner of dismissal
2. Substantive Due Process – legality of the act of dismissal

 Procedural Requirements of Due Process (termination disputes)

i. King of Kings Doctrine (June 29, 2007):
1. Pre-Notice / Formal Specific Charge (to be served on the employee); contents:
a. Specific causes or grounds of termination
b. Directive that the employee is given the opportunity to submit his written explanation within 5 calendar days from receipt of notice
c. Detailed narration of the facts and circumstances that will serve as basis for the charge against the employee (a general description will not
suffice; to enable toe employee to intelligently prepare his defenses)
d. Specifically mention which company rules are violated or which among the grounds under Art. 297 is being charged against the employee.
2. Hearing
 Perez Doctrine – the new guiding principle on the hearing aspect of procedural due process:
i. “Ample opportunity to be heard” standard (Art. 292 (b)): “Employer is required to afford the employee ample opportunity to be heard and
to defend himself” (verbal or written); to answer the charges against him and submit evidence in support of his defense
o It prevails over the “hearing or conference”
ii. Hearing of Conference (Sec. 2.d, Rule 1, Book 6): “Employer is required to afford the employee a “hearing or conference” during which the
employee is concerned, with the assistance of counsel, if he so desires, is given the opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him.”
o It is no longer mandatory, EXCEPT under the following:
1. When requested by the employee in writing;
2. When substantial evidentiary dispute exists;
3. When a company rule or practice requires it; or
4. When similar circumstances justify it.
3. Post-Notice / Notice of Dismissal (if determined that termination is justified)

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  When the Procedural Requirements Apply:
1. Termination is Legal – for a just cause under Art. 297, for an authorized cause under Art. 298, or for health reasons under Art. 299, and due process was
observed.
 dismissal is undoubtedly valid and employer will not suffer any liability
2. Termination is Illegal – without just or authorized cause but due process was observed.
3. Termination is Illegal – without just or authorized cause and due process was not observed.
 2nd and 3rd: dismissals are illegal (employee entitled to reinstatement and full backwages)
4. Termination is Legal – for a just or authorized cause sans due process.
 dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate a valid dismissal. But the employer will be liable
for non-compliance with the procedural requirements and the employee is entitled for nominal damages although not entitled for reinstatement.
 Cost of Nominal Damages (depends whether termination is based on):
 Just cause – P30,000 (Agabon Doctrine)
 Authorized cause – P50,000 (Jaka Food Doctrine)
 Indemnity is stiffer in “authorized cause” because (unlike in just cause, where the employee has committed a wrongful act - indemnity is
tempered), an employee dismissed based on authorized cause has not committed any blameworthy act nor any delinquency or culpability
on his part (as this is a result, i.e. of installation of labor saving devices, or when employer decides to cease business operations or
retrenchment program)
 Factors in Determination of the Amount of Nominal Damages:
 Authorized cause invoked;
 Number of employees to be awarded;
 Capacity of the employers to satisfy the awards;
 Employer’s grant of other termination benefits;
 Whether there was bona fide attempt to comply with the notice requirements.
 Exceptions (Modified):
 When the execution of the decision becomes ‘impossible, unjust, or too burdensome.’
 P50,000 nominal damages is proper despite the dismissal was for a just cause (instead of P30,000) being fixed for indemnity for the
violation of the right to due process.

Procedural Rules, Application

Substantive Procedural Dismissal Effects
(cause of dismissal) (manner of dismissal)
Just Cause Observed Valid Employer – not
liable
Without Just Cause Observed Not Valid Employee –
entitled to
reinstatement &
full backwages
Without Just Cause Not Observed Not Valid Employee –
entitled to
reinstatement &
full backwages
Just Cause Not Observed Valid Employer – liable
for the procedural
infirmities

Employee –
entitled to
indemnity in the
form of nominal
damages bur not
for reinstatement

3. RELIEFS AND NORMAL CONSEQUENCES IN ILLEGAL DISMISSAL

1. Reinstatement without loss of seniority rights and other privileges
2. Full backwages inclusive of allowances and other benefits or their monetary equivalent (computed from the time compensation was withheld up to the
time of their actual reinstatement);
3. Separation pay in lieu of reinstatement;
4. Indemnity in the form of nominal damages (for violation of belated due process rule)
5. Payment of salaries corresponding to the unexpired portion of the employment contract (for an illegally dismissed employee whose employment is
contractual or for a fixed period)

REINSTATEMENT
– restores the employee who was unjustly dismissed to the (status quo ante dismissal) position from which he was removed.

NATURE OF REINSTATEMENT
o As a relief, is a vindication against unjustified dismissal.
o Cannot be nullified y an employee’s employment elsewhere.
 Hence, employment of a worker overseas, pending the case of his wrongful dismissal, is not a waiver of his right to reinstatement as it was done
in the fulfillment of his obligation to minimize damages as a result of his unjustified dismissal. A dismissed employee cannot be expected to remain
idle while his claim is pending judgment.
 Exception:
 When the employee unjustifiably or unreasonably refuses to report after reinstatement has been ordered, the right is considered as
renounced.

DISTINGUISHMENTS
REINSTATEMENT RE-EMPLOYMENT

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 Refers to restoration to a state from which one To place the employee affected in the position
has been removed or separated previously held. (same as reinstatement)
Granted to: illegally dismissed employee
Obligatory on the part of the employer Discretionary on the part of the employer

ORDER OF REINSTATEMENT ACTUAL REINSTATEMENT

Issued by Labor Arbiter Depends upon the employer
Award of backwages: “from the time of dismissal
up to the time said order of reinstatement is
actually implemented.”

Hence: Dismissal  Order of Reinstatement 

Actual Reinstatement
RETURN-TO-WORK ORDER REINSTATEMENT ORDERS
Immediately executory
Interlocutory A judgment on the merits handed down by Labor
Arbiter
Merely meant to maintain status quo pending the
case
REINSTATEMENT BACKWAGES
A restoration to a state from which one has been A relief that restores the income that was lost by
removed or separated reason of unlawful dismissal
The award of one is not a condition precedent to an award of another. Backwages may be awarded
without ordering reinstatement; conversely, reinstatement may be ordered without payment of
backwages.

REINSTATEMENT PENDING APPEAL

(Art. 224) “An order of reinstatement is immediately executory (even self-executory) even pending appeal which requires no writ of execution to be issued to
implement it. The perfection of an appeal shall stay the execution except the immediate reinstatement.

 EXCEPTION: When the dismissal is not illegal, reinstatement pending appeal finds no application.

2 OPTIONS OF THE EMPLOYER ON REINSTATEMENT

1. ACTUAL REINSTATEMENT – restored to his former position under the same terms and conditions prior his dismissal. (performs his job and is paid his
compensation)
2. PAYROLL REINSTATEMENT – without requiring him to report back for work but nevertheless receives his compensation, even though it violates the
PRINCIPLE OF “fair-day’s wage for a fair-day’s labor.”

REMEDY AGAINST REFUSAL OF EMPLOYER TO REINSTATE

1. Labor Arbiter shall motu proprio issue a corresponding writ to satisfy reinstatement wages;
2. A motion can be filed to cite the employer in contempt.
3. A motion can be filed for the payment of monthly salaries for refusal to comply with the reinstatement order.

WHEN REINSTATEMENT IS NOT PROPER:

1. Non-employees
2. Position no longer exists.
Remedy: Be given a “substantially equivalent position” (SEP)
If no SEP available: Reinstatement should not be ordered because that would compel the employer to do the impossible.
Remedy: “separation pay” (1-month salary for every year of service)
3. Position previously occupied is already filled up. It would be unjustified for the employer to dismiss the person hired to replace the dismissed
employee.
Remedy: Reinstate him to a substantially equal position.
4. Position not previously occupied by him. Otherwise, it would create a new employment status that does not exist in the first place.

SEPARATION PAY
 a remedy granted in lieu of reinstatement being barred
 HOW COMPUTED:
- Computed from the commencement of employment up to the time of termination, including imputed service for which the employee is entitled to
backwages. (From first day of employment until the finality of the decision)
- Salary rate at the end of the period of putative service shall be the basis for computation

WHEN REINSTATEMENT IS BARRED:

1. Long passage of time or because of the realities of the situation
2. Would be inimical to the employer’s interest
3. No longer feasible
4. Will not serve the best interests of the parties involved
5. That the company would be prejudiced by the workers’ continued employment
6. That it will not serve the prudent purpose as when supervening facts transpire, making execution unjust or inequitable;
7. There is a strained relation between the employer and the employee, that if reinstated, an atmosphere of antipathy and antagonism may be generated.

CIRCUMSTANCES THAT BAR REINSTATEMENT:

1. Dismissal for cause
2. Abandonment of right or laches
 Estoppel by Laches – arises from negligence or omission to assert a right within a reasonable time

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  PRESCRIPTIVE PERIOD FOR REINSTATEMENT: 4 YEARS
3. Resignation (voluntary basis, without coercion or compulsion)
4. Physical incapacity of employee
5. Employee accepts retirement pay
 If employee had reached the mandatory age of retirement, reinstatement is no longer feasible.
6. Doctrine of Strained Relationship – when relationship becomes so strained (employer can no longer trust employee and vice versa). It precludes
harmonious working relationship.
 Exception: Where the employee has no say in the operations of the employer’s business such as a nurse and nursing aide who have no prerogative
in the operation of the business.
7. Closure or cessation of business
8. Transfer of business to an innocent transferee
 The principle “that labor contracts being in personam are not enforceable against the transferee of an enterprise unless expressly assumed,”
applies only wen the transferee is an entirely new corporation with a distinct personality from the integrating firms and not where the transferee
was found to be merely an alter ego of the different merging firms.
9. Act of State. (declaration of martial law, enactment of Retail Trade Law)
10. Abolition of Position (due to corporate restructuring when certain requirements must be met)
11. Prescription: 4 years (Art. 1146, Civil Code)
12. Conviction for a Crime. A supervening cause that would render the order unjust and inequitable.
13. Not Conducive to Industrial Harmony.
14. Over-Aged Employee
15. Fiduciary Relationship
16. Legal Proscription (OFW entitled to full reimbursement of his placement fee with interest at 12% per annum plus his salaries for the unexpired portion
of his employment contract. Thus, reinstatement is not warranted by law).
17. Fear of Reprisal. (imminent danger to life)
18. Supervening Events. (business acquired by another entitle or establishment that has already closed its operations, total destruction of establishment
due to fortuitous events, court declaration of insolvency, physical injury or disability or death of employee)

REINSTATEMENT WITHOUT LOSS OF SENIORITY RIGHTS

- denotes that benefits due a dismissed employee including seniority rights and other privileges will not be affected by his absence due to suspension of
employment

SENIORITY – the measure of worker’s equity in the job according to length of service (in which workers will be laid-off, promoted, transferred or rehired)

SENIORITY RIGHTS – creditable years of service in the employment record of illegally dismissed employee as if he or she never ceased working for the employer;
this right is contractual and not constitutional

BACKWAGES

BACKWAGES – a form of relief that restores the income of the employee that was lost by reason of unlawful dismissal

NATURE
 A relief, not a private compensation or damages but in furtherance of public objectives of the Labor Code
 Not in redress of private right but in the nature of a command upon the employer to make public reparation for his violation of the Labor Code

FULL BACKWAGES, MEANING

 They are granted on the grounds of equity and a reparation for the illegal dismissal based on earnings which the employee would have obtained

 FEATURE:
o (outstanding feature): The degree of assuredness to an employee that he would have had them as earnings had he not been illegally terminated
from employment
o DETERMINATION OF SALARY BASE for computation of backwges - Bustamante Ruling “Full Backwages Without Qualification or Deduction”
(prevailing rule) vs “Deduction of Earnings Elsewhere (abandoned rule)
 Include not only the basic salary but also the regular allowances, emergency cost of living allowances, transportation allowances, and the 13th
month pay mandated by law, BUT NOT including salary differentials

REASON: for they are to be paid “without deduction and qualification as to any wage increases or other benefits that may have bee
received by their co-workers who were not dismissed or did no go on strike.”

 One that is not diminished or reduced by the earnings derived by the employee elsewhere during the period of his illegal dismissal.
 REASON: The employee while litigating the legality of his dismissal must still earn a living to support himself and family.

 RECKONING PERIOD / GUIDEPOSTS IN AWARDING BACKWAGES, Doctrinal Rulings

o Should be reckoned from the time the compensation was withheld (from the time of illegal dismissal) up to the time of actual reinstatement,
whether actual or in payroll.
o If reinstatement is no longer possible (in lieu of reinstatement), it shall be computed from the time of illegal termination up to the finality of
the decision.
o If employment is for a definite period, employee is entitled only to the payment of his salaries corresponding to the unexpired portion of his
fixed term employment contract.
o If petitioner has already reached 71 years of age at the time the decision was rendered, the award of backwages must be computed from the
time of her illegal dismissal up to her compulsory retirement age of 60.
o If employer has already closed down its operations, full backwages should be computed only up to the date of the closure.
o The period of valid suspension is deductible from backwages. Backwages should be reckoned from end of valid suspension.
o For project employees – entitled to full backwages computed from the date of the termination of their employment until the actual completion
of work.

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 o For irregular employees – determined by the wages earned by other irregular workers doing the same kind of work who have not been
dismissed

 REINSTATEMENT WITHOUT BACKWAGES, Doctrinal Rulings

1. When dismissal is deemed too harsh a penalty;
 When the employee was out of job because of his dismissal (for committing theft), which was reduced to suspension
 Failure to report for work within 24 hours from receipt of Return-to-Work Order prompted by a medical emergency, remising in properly
informing the employer of said the intended absence.
 Employee found stealing ore with high gold content. His dismissal was considered drastic considering his 23 years of service without previous
derogatory record and he was prematurely suspended during the pendency of the case.
 Employee filed a leave for 1 day and took a rest without prior leave for 25 days upon the advice of the doctor. While employee was at fault, he
couldn’t be dismissed.
2. When the employer acted in good faith;
3. When there is no evidence that the employer dismissed the employee.
 When there was no termination of employment by the employer. Backwages can only be sustained when there is a finding of illegal dismissal.
4. Economic Strike.
 Based on the principle of “a fair day’s wage” accrues only for a “fair day’s labor”
 Exceptions:
i. When employees were illegally locked out thus compelled them to stage a strike;
ii. Employer is guilty of the grossest form of ULP;
iii. Employer committed discrimination in the rehiring of strikers, refusing to readmit those against whom there were pending criminal cases
while admitting non-strikers who were also criminally charged in court;
iv. When workers who staged a voluntary ULP strike offered to return to work unconditionally but the employer refused to reinstate them.

 REINSTATEMENT WITH “LIMITED BACKWAGES,” DOCTRINAL RULINGS

 On the account that (1) the fact of dismissal of the employee would be too harsh a penalty; and (2) that the employer was in good faith in
terminating the employee.

1. Illegally dismissed employee when still fit to resume his work but employer’s liability is mitigated by its evident good faith (dismissal based on
the terms of its Health, Welfare, and Retirement Plan) – entitled to reinstatement but award of backwages only limited to 1 year
2. Employee’s dismissal was to severe a penalty (illegal) as employee had served for 21 years and her first offense was only that to leave for
studying French language for the benefit of employer who no longer had to spend for translation services. Even so, limited backwages (up to
2 years) was awarded.

 CIRCUMSTANCES THAT BAR AWARD OF FULL BACKWAGES

1. DISMISSAL FOR CAUSE (even if she was denied due process) – Otherwise, she would be unjustly enriching herself at the expense of the employer.
2. DEATH, PHYSICAL OR MENTAL INCAPACITY – based on the principle of “no work, no pay;” this also applies when the employee refuses to work.
3. BUSINESS REVERSES – cessation or closure of business due to economic reverses does not entitle a separated employee payment of backwages;
but he is entitled to separation pay
4. ACT OF STATE – i.e. proclamation of martial law; it would be the height of injustice if the employer would be required to pay wages and separation
pay
5. DETENTION IN PRISON – An employee could not report for work in this case. The prolonged absences bar prisoner to earn wages.

 CIRCUMSTANCES THAT DO NOT BAR AWARD OF WAGES

1. DISMISSAL WITHOUT CAUSE
2. PRINCIPLE OF STRAINED RELATIONSHIP – employment relationship has become so strained to preclude a harmonious relationship
3. REASONABLE DELAY – being part of the due process, the period during which the case is pending should not be excluded or deducted in computing
the backwages.
4. UNFAVORABLE BUSINESS CONDITION – not a sufficient ground to deny payment of backwages even if the employer’s business was not in a good,
favorable condition unless the employer has ceased operation on account of ‘serious business reverses’

SEPARATION PAY

 DEFINITION: the amount that an employee receives at the time of his severance from the service and is designated ‘to provide the employee with the
wherewithal during the time that he is looking for another employment.’
- Concerns the transitional period when the dismissed employee must undergo before locating a replacement job.
- Payable to employee whose services are ‘validly terminated’ for authorized causes such as automation, retrenchment, redundancy, closure of
business or disease.
- It is a measure of social justice. Thus, it may not be given in cases of valid dismissal, i.e. habitual intoxication, offense involving moral turpitude
like theft or illicit relations with a fellow worker. Employer may not be required to grant separation pay on the ground of social justice.
 May be granted in the form of financial assistance as an act of social justice or based on equity so long as the dismissal was not for serious
misconduct
- “Based on Equity” - PLDT Ruling
 EXCEPTIONS TO “NO-SEPARATION-PAY RULE” – Based on “EQUITY”
1. Employee was validly removed for loss of confidence because of her failure to account certain funds – can nonetheless be granted
separation pay;
2. Employee had instigated labor unrest among the workers and had serious difference among with them
- PLDT Ruling overruled by TOYORA Ruling: “In all foregoing situations, in addition to serious misconduct, in dismissals based on other grounds
under Art. 297 (willful disobedience, gross or habitual neglect of duty, fraud or willful breach of contract, commission of a crime against the
employer or his family)
 PLDT Ruling still applied as exception to Toyota Ruling “in consideration of the length of service, amount involved, whether the act is the
first offense, performance of the employee, and the like.”

 SEPARATION, IN LIEU OF REINSTATEMENT. CIRCUMSTANCES:

It is an alternative relief in lieu of reinstatement, when the latter:

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 (1) can no longer be effected in view of the passage of a long period of time or because of realities of the situation;
(2) is inimical to the employer’s interest;
(3) is no longer feasible;
(4) does not serve the best interests of the parties involved;
(5) employer is prejudiced by the workers’ continued employment;
(6) facts that make execution unjust or inequitable have supervened;
(7) strained relations between employer-employee.

 SEPARATION PAY and PAYMENT OF BACKWAGES, distinguished

EXAMPLE: Illegally dismissed employee is entitled to:
1. REINSTATEMENT to his former position without loss of seniority rights,
2. Payment of BACKWAGES corresponding to the period from his illegal dismissal up to actual reinstatement – a form of relief tat restores the income
that was lost by reason of unlawful dismissal
o These twin remedies make the dismissed employee look forward to continued employment.
o They are distinct and separate from one another.
3. SEPARATION PAY – amount an employee receives at the time of his severance from the service and is designated to provide the employee with
“the wherewithal during the period that he is looking for another employment.” It is awarded when reinstatement is no longer feasible; a
substitute for immediate and continued re-employment; oriented towards the immediate future, the transitional period the dismissed employee
must undergo before locating a replacement job.
o The awards of separation pay and backwages are not mutually exclusive and both may be given.

 WHEN NOT GRANTED:

1. Strikers are not entitled for commission of illegal acts.
2. Act of State – i.e. compulsory acquisition by the government of its land for purposes of agrarian reform

DAMAGES

 DEFINITION: The indemnity recoverable by a person who has sustained an injury either in his person, property, or relative rights, through the act or
default of another
 WHEN RECOVERABLE, MORAL AND EXEMPLARY DAMAGES
o Only when the dismissal was attended by bad faith or fraud, or constituted an act oppressive to labor, or in contrary to morals, good customs
or public policy.
o Where the person suffered sleepless nights, mental anguish and serious anxiety
o Claim must be proved by clear and convincing evidence
o When the award for damages be eliminated, so must the award for attorney’s fees be deleted.
o GENERAL RULE: Corporate director or officer should not be made personally liable for the payment of employees back salaries (doctrine of
corporate legal entity) unless when the termination is embedded with malice or in bad faith.
o Corporate directors and officers are held solidarily liable with the corporation for the termination of employment of employees done with
malice or in bad faith. To sustain such a finding, there should be an evidence on record of such act.

ART. 295 – REGULAR, PROJECT, and CASUAL EMPLOYEES (for purposes of determining the right of an employee to certain benefits, to join or form a union, or
to security of tenure)

 REGULAR – those who have been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer;
 PROJECT – those whose employment has been (1) fixed for a specific project or undertaking, the completion or termination of which has been determined
at the time of engagement of the employee or where the work or service to be performed is (2) seasonal in nature and the employment is for the duration
of the season;
 CASUAL - neither regular nor project employees; considered regular when at least 1 year of service, whether continuous or broken, has been rendered.

 CLASSIFICATION OF REGULAR EMPLOYEES:

1. BY NATURE OF WORK – refers to employees who perform a particular activity “which is necessary or desirable in the usual business or trade of the
employer” regardless of length of service
2. BY YEARS OF SERVICE – employees who have been performing the job, regardless of the nature thereof, for at least a year

 PRIMARY STANDARD OR TEST (DETERMINING REGULAR EMPLOYMENT): The reasonable connection between the particular activity performed by the
employee in relation to the usual trade or business of the employer.
o Nature of the work performed must be viewed from the perspective of the business or trade in its entirety and not a confined scope. (route
helpers are regular employees)
o Qualified Disabled Employee should be given the same terms and conditions of employment as a qualified able-bodied person.

 FIXED TERM EMPLOYMENT – when an employee is engaged to work for a specific project or undertaking (that is necessary or desirable in the usual business
or trade of the employer)
o Decisive Determinant: Not the activities that the employee is called upon to perform but the day certain agreed upon by the parties for the
commencement and termination of their employment relationship.
o not limited to those by nature seasonal or for specific projects with predetermined dates of completion; they also include those to which the
parties by free choice have assigned a specific date of termination (overseas employment contracts, appointments to the positions of dean, college
secretary, and other administrative offices in education institutions)
o There are certain forms of employment which require the nature of a regular employment (performance of usual and desirable functions and
which exceed to 1 year) but do not necessarily attain regular employment status such as seafarers. They are considered contractual employees
and not as regular employees.
 The fact that the service rendered by the employees is usually necessary and desirable in the business of operations of the employer
will not impair the validity of such contracts.
o BRENT DOCTRINE: “Employer-employee on more or less in equal footing in entering into the contract.” – when a prospective employee is in a
position to make demands upon the prospective employer, such employee needs less protection than the ordinary worker.

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 SEASONAL EMPLOYMENT
o Deemed seasonal where an employee is engaged to work during a particular season on an activity that is usually necessary or desirable in the
usual business or trade of the employer
o Legally ends upon the completion of the season
o The proviso that ‘casual employees be considered as regular employees for having rendered at least 1 year of service’ does not apply. The purpose
of the proviso ‘being to put to an end to casual employment’ and ‘not to prevent small businesses from engaging in legitimate methods to realize
profit.’
o During off-season, the relationship is not severed. It is merely considered ‘on a leave without absence without pay.’

 CAUSAL EMPLOYMENT
o Where an employee is engaged to work on an activity that is not usually necessary or desirable in the usual business, or trade of the employer.
o Refers to any other employment arrangement that does not fall under any of the regular or project/seasonal form of employment.
o It is purely casual when it is not a part of the business in which the employer is engaged.
o “Who rendered at least 1 year of service” – to put an end to casual employment to give meaning to the Constitutional guarantees of “security of
tenure” and “right to self organization”

 PROJECT EMPLOYMENT
o Where the employees are employed in connection with a particular construction project, or phase thereof with predetermined date of
completion.
o Term of employment is co-terminus with the project’s completion, unless when the employee is continuously rehired and re-engaged ‘without
interruption’ due to the demands of employer’s business ~ in which case, the person is a regular employee.
 Continuous rehiring – a badge of regular employment; but not necessarily controlling
 But rehiring of construction workers on a project-to-project basis – does not confer regular employment status since their re-hiring is
only a ‘natural consequence’ of the fact that experience construction workers are preferred.
 Also, extension of the employment of a project employee long after the completion of the project has been completed removes the
employee fro the scope of a project employee and makes him a regular employee.
o Principal Test for Determining “Project-Based Employees”
 That the duration and scope of employment was specified at the time they were engaged;
 That there was indeed a specific project or undertaking.
o They are NOT ENTITLED TO SEPARATION PAY.
o But illegally dismissed project employees are ENTITLED TO FULL BACKWAGES from date of termination until completion of undertaking
(unexpired portion of the employment contract) if reinstatement is no longer possible.

 EFFECT OF FAILURE TO SUBMIT REPORTS ON TERMINATION OF PROJECTS

o Submission of “Termination Report” with the DOLE is mandatory every time a project or a phase thereof is completed.
o Failure to submit reports “indicates that respondents were not project employees.”

 MEMBERS OF A WORK POOL

o SC: “Employees who are members of a work pool from which a company draws workers for deployment to its different projects ‘do not become
regular employees by reason of that fact alone.’ A project may acquire the status of a regular employee when the following concur:
1. There is a continuous rehiring of project employees even after cessation of the project;
2. The tasks performed by the alleged ‘project employee’ are vital, necessary and indispensable to the usual business or trade of the employer.

 NON-PROJECT EMPLOYMENT
o Where the employees are employed without reference to any particular project or a phase thereof (i.e. employed by construction company)
o But if they are employed in a particular project, the completion or of any phase thereof will not mean severance of employer-employee
relationship.
o 3 Types of Non-Project Employees:
1. PROBATIONARY – those who, upon the completion of the probationary period, are entitled to regularization
2. REGULAR – those who have completed the probationary period or those appointed to fill up regular positions vacated as a result of death,
retirement, resignation, or termination of the regular holders thereof
3. CASUAL – those employed for a short-term duration to perform work not related to the main line of the business of employer.

ART. 296 – PROBATIONARY EMPLOYMENT

NATURE: One who for a given time, is under observation and evaluation to determine whether or not he is fit or qualified for regular employment.
- During the period, employer is given the opportunity to observe the skill, competence and attitude of the employee while the latter seeks to prove to the
employer that he has the qualifications to meet reasonable standards for regular employment.
- Length of time is immaterial in determining the correlative rights of both employer and employee in dealing with each other during said period

CHARACTERISTICS:
1. An employment for a trial period;
2. A temporary employment status prior to regular employment; and
3. It arises through a contract with the following elements:
a. Employee must learn and work at a particular type of work
b. Such work calls for certain qualifications, skills, experience or training;
c. Employer reserves the power to terminate the employment during or at the end of the trial period;
d. Employee becomes a regular employee if he learns the job and performs it to the satisfaction of the employer.

6-MONTH PROBATIONARY PERIOD; EXCEPTIONS

GENERAL RULE: It should not exceed 6 months from the date the employee started working. Upon completion of the 6-month period, one becomes a regular
employee.
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EXCEPTIONS:
1. When the employer and employee agreed on a shorter or longer period;
2. When the nature of work to be performed by the employee requires a longer period, such as extensive trainings;
3. When a longer period is required and established by company policy.

PROBATIONARY/ RECKONING PERIOD (HOW COMPUTED)

GENERAL RULE: “From the date of appointment up to the same calendar date of the 6th month following.”

 FOR APPRENTICE – Apprenticeship period: “Not less than 3 months but not more than 6 months.”
 FOR LEARNERS – (non-apprenticeable) Learnership period: “not more than 3 months”

Apprentices and Learners becomes regular employees and will not undergo anymore a probationary period in the company that conducted the training.

 FOR TEACHERS, PROFESSORS, AND INSTRUCTORS

- 3 consecutive years (not school years) of satisfactory service pursuant to DOLE Manual of Regulations for Private Schools
- may be reduced if employer is convinced of the fitness
- being on probationary period, one cannot automatically claim “security of tenure” and compel employer to renew the employment contract.

EXTENSION PERIOD: allowed beyond 6 months if agreed upon by employer and employee.
- Extension is given ex gratia, an act of liberality on the part of employer
- Y voluntarily agreeing, employee waived any benefit of attaching to the completion of the period if he still failed to make the grade during the period
of extension.
o BUT termination 3 days after the expiration of 6-month period is held as deemed regular employee

DOUBLE OR SUCCESSIVE PROBATION, not allowed

 Evil sought to be prevented is “to discourage scheming employers from using the system to circumvent the mandate of the law on regularization and
make it easier for them to dismiss employees.”

TERMINATION OF PROBATIONARY EMPLOYMENT, GROUNDS:

1. For a just cause (neglect of his duties, failure to meet quota)
2. When he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of
his engagement.

ART. 288 TERMINATION BY EMPLOYER

CAUSES (S G F O)
1. SERIOUS MISCONDUCT or WILLFUL DISOBEDIENCE by the employee of the lawful orders of his employer or representative in connection with his work;
2. GROSS AND HABITUAL NEGLECT by the employee of his duties;
3. COMMISSION OF A CRIME OR OFFENSE by the employee against the (a) person of his employer or (b) any immediate member of his family; (3) or his
duly authorized representative; and
4. OTHER CAUSES analogous to the foregoing.

PREROGATIVE TO DISMISS OR LAYOFF

 Must be made without abuse of discretion
o Because “a job is more than a salary it carries” – there is a psychological effect in one’s self laid-off from work
o Employment to a common man is his very life and blood, his very breadbasket

DOCTRINE OF INCOMPATIBILITY
“Employee is expected to behave in such a manner that would insure the efficient and orderly operation of the employer’s business. Where the employee has
done something that is contrary or incompatible with the faithful performance of his duties, his employer has a just cause for terminating his employment.

PROCEDURAL DUE PROCESS REQUIREMENTS:

1. NOTICE (Two-Notice Rule):
 Pre-Notice – apprising him for acts or omissions for which his dismissal is sought and is considered as the proper charge
 Post-Notice – informing the decision to dismiss him; given only after the employee is given the opportunity to answer the charge upon
receipt of the first notice
2. ANSWER & HEARING
 Ample Opportunity – connotes every kind of assistance that management must accord to the employee to enable him to prepare adequately
for his defense
3. PREVENTIVE SUSPENSION
 Only if his continued employment poses a serious and imminent threat to life and property of the employer or of his co-employees.
 Maximum period: 30 days. Can be extended provided that employer pas the employee his wages and other benefits
4. DECISION TO DISMISS

ESSENCE OF DUE PROCESS

 Simply means that the employer shall afford the worker an ample opportunity to be heard or to explain (in administrative proceedings) or to seek a
reconsideration of the action or ruling complained of.
 Contemplates ‘freedom from arbitrariness’
 It is not the denial of right to be heard that constitutes a violation of due process but the deprivation of the opportunity to be head.
 BUT, it does not always require a trial-type proceeding.

ESSENTIAL ELEMENTS OF DUE PROCESS:

1. Right to notice of the institution of the proceedings
2. Reasonable opportunity to appear and defend his right, introduce witnesses and relevant evidence in his favor;
3. Tribunal with competent jurisdiction;

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 4. Finding or decision by a tribunal supported by substantial evidence

2 ASPECTS OF DUE PROCESS:

1. SUBSTANTIVE – just and lawful cause
2. PROCEDURAL –notice and hearing; manner of dismissal

TYPES OF DISMISSAL
A. VALID
1. For a JUST CAUSE (Art. 297)
2. For AUTHORIZED CAUSE (Art. 298)
3. For HEALTH REASONS (Art. 299)
B. ILLEGAL
4. Without just cause/authorized cause – with due process
5. Without just/authorized cause – without due process
6. For just/authorized cause – without due process (sanctions employer)
7. For false/non-existent cause (warrants reinstatement)

WENPHIL DOCTRINE (BELATED PROCESS RULE)

“Where the employer had a valid reason to dismiss an employee but did not comply with the due process requirement, dismissal may be upheld but employer will
be penalized to pay an indemnity to the employee.”

 The lack of statutory process should not nullify the dismissal or render it illegal or ineffectual.
 The indemnity should be stiffer to discourage the abhorrent practice of dismissal now pay later which is sought to be deterred in the case of Serrano vs NLRC.
Indemnity is not to penalize employer but to vindicate the employee’s right to statutory due process violated by employer.

PRINCIPLES APPLIED IN IMPOSING PENALTY OF DISMISSAL

1. GRAVITY OF THE OFFENSE
2. EMPLOYMENT POSITION
3. TOTALITY OF INFRACTIONS (COLLECTIVE INFRACTIONS RULE)
4. NATURE OF THE BUSINESS
5. FIRST-OFFENSE RULE – first infraction may be considered as a mitigating factor in imposing the penalty of dismissal.
6. PRINCIPLE OF EQUITY
7. PRINCIPLE OF COMPASSION AND UNDERSTANDING

ART. 297 – TERMINATION BY EMPLOYER

JUST CAUSES

1. SERIOUS MISCONDUCT

Misconduct – a transgression of some established and definite rule of action; a forbidden act or dereliction of duty that is willful in character
 To be a ‘just cause’ for dismissal:
1. Must be of such a grave and aggravated in character and not merely trivial or unimportant;
2. Must be in connection with the employee’s duties and functions;
3. must show that he has become unfit to continue working for the employer.
 Immorality. Determination: 2-STEP PROCESS:
1. Consideration of the totality of the circumstances surrounding the conduct;
2. Assessment of said circumstances vis-a-vis the prevailing norms

2. WILLFUL DISOBEDIENCE
 JUST CAUSE FOR DISMISSAL WHEN ORDERS OR INSTRUCTIONS ARE:
1. Reasonable and lawful – not only to the kind or character but also to the manner in which they are made.
2. Sufficiently known to the employee
3. In connection with the duties which the employee has engaged to discharge
 REQUISITES FOR WILLFUL DISOBEDIENCE to be considered ‘just cause:’
1. Employee’s assailed conduct must have been intentional or willful, the willfulness being characterized as wrongful and perverse
2. The order violated must be reasonable and lawful and which is made known to the employee and must pertain to the duties for which he has been
engaged to discharge.

3. GROSS AND HABITUAL NEGLECT OF DUTY

 Gross Neglect – an absence of that diligence that an ordinarily prudent man would use in his own affairs.
 Habitual
 To justify the employee’s dismissal:
o The neglect of duties must not only be gross but must also be habitual.
o It does not seem necessary that the employer show that he has incurred actual loss, damage or prejudice by reason of the employee’s conduct.

4. FRAUD
 Requisites:
1. Employee has committed deceitful acts and used dishonest means for personal gain or to damage the employer;

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 2. The fraud is work-related which rendered him unfit to work for his employer.

5. WILFULL BREACH OF TRUST AND CONFIDENCE

 Requisites:
1. Employees holds a position of trust and confidence;
2. Justifying acts causing employer’s loss of trust and confidence, founded on clearly established facts
3. Employee’s breach of trust must be willful
4. Must be work-related
 Positions of Trust and Confidence:
1. Bookkeeper or accounting clerk;
2. Purchaser;
3. Accountant;
4. Cashier
5. Salesman
6. Bank teller
7. Ship captain
8. Managerial employees

6. COMMISSION OF A CRIME AGAINST THE PERSON OF THE EMPLOYER, HIS REPRESENTATIVE OR ANY IMMEDIATE MEMBER OF HIS FAMILY;

7. ANALOGOUS CASES.

 Other Causes:
1. Dismissal of union officers who knowingly participate in an illegal strike;
2. Dismissal of any union officer, member or any employee who participates actively in the commission of illegal acts during the strike’
3. Dismissal of strikers who violate the assumption order by the President, Sec. of Labor, or the NLRC over vital industry dispute;
4. Dismissal of union members pursuant to the ‘union security clause’

ART. 298 – CLOSURE OF ESTABLISHMENT AND REDUCTION OF PERSONNEL

 2 Classes of Authorized Causes:

1. Economic Related Causes (Art. 298):
a. Introduction of labor-saving device (automation)
b. Redundancy
c. Retrenchment (downsizing)
d. Total closure of business not due to serious financial reverses; and
e. Closure of business due to financial reverses.
2. Health Related Causes (Art. 299)

 Common Requisites of Authorized Causes:

1. Good faith on the part of the employer in effecting the termination;
2. Termination is a matter of last resort (no other options available after resorting to cost-cutting measures);
3. 2 separate written notices served on both the effected employees and the DOLE at least 1 month prior to the date of termination;
4. Separation pay is paid to the affected employees:
a. If based on Introduction of labor-saving device or redundancy – one month pay or at least one month pay for every year of service,
whichever is higher. * A fraction of at least 6 months shall be considered as 1 whole year.
b. If based on retrenchment or partial closure of business or closure not due to serious business losses – 1 month pay or at least ½ month
pay for every year of service, whichever is higher. * A fraction of at least 6 months shall be considered as 1 whole year.
c. If total disclosure is due to serious business losses – no separation pay is required to be paid.
5. Fair and reasonable criteria in determining what positions will be affected by the termination

 Authorized-Cause Dismissal vs Just-Cause Dismissal

o Authorized-Cause Dismissal
 liability on the part of the employer to pay separation pay as mandated by law
 where the dismissal process is initiated by the employer’s exercise of his “management prerogative” such as installation of labor saving
devices, etc.
 If the employer failed to comply with the notice requirement: sanction should be stiffer (dismissal initiated by employer)
o Just-Cause Dismissal
 No payment of separation pay is required
 Employee himself initiated the dismissal process upon his commission of some serious misconduct., etc.
 If the employer failed to comply with the notice requirement: sanction imposed upon him should be tempered because the dismissal was in
effect initiated by an act imputable to the employee.

1. LABOR SAVING DEVICES (AUTOMATION/MODERNIZATION)

 a management prerogative to terminate employment by ‘replacing muscle power with machine power’ to effect more economy and greater
efficiency in production

2. REDUNDANCY
 exists where the services of an employee are in excess of what is reasonably demanded by the actual requirement of the enterprise
 position is redundant where it is superfluous causing, among others, over-hiring of workers, decreased volume of business, or dropping of a particular
product line or service activity
 does not necessarily mean duplication of work, that no other person was holding the same position prior to termination does not show that his
position had not become redundant.

3. RETRENCHMENT

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  resorted by management during period of business recession, industrial depression or seasonal fluctuations or during lulls over shortage of materials
 a reduction in manpower to minimize business losses
o losses must be (1) substantial, (2) reasonably imminent, (3) must be proved by sufficient evidence;
o retrenchment must be (1) exercised as a last resort; (2) reasonably necessary and likely to prevent the expected losses (rebutted when fat executive
bonuses are still given or so called ‘golden parachutes’.
o Substantive Requirements:
1. One-month prior notice to employee and DOLE;
2. Fair and reasonable criteria in carrying out the retrenchment program, i.e. less-preferred status (temporary employees), efficiency
rating, seniority;
3. Proof of the alleged losses suffered by the company
4. Payment of separation pay;
5. Good faith in effecting retrenchment
 PERMANENT RETRENCHMENT vs TEMPORARY LAY-OFF
o Employees cannot forever be temporarily laid-off. To remedy this, Art. 301 may be applied by analogy (bona fide 6 months suspension of operation
of business or fulfillment by employee of a military service or civic duty shall not terminate employment).
o PR (ART. 298)
o TLO – should not last longer than 6 months. After that, employees should be either (1) recalled to work or (2) permanently retrenched.
Otherwise, it would be tantamount to ‘dismissing the employees,’ in which employer must be liable.

4. CLOSURE OF BUSINESS
- complete or partial cessation of operations/shutdown of establishment of employer
-an authorized cause for termination of employment, carried out to save the financial ruin or promote the business interest of employer
- 2 instances involved:
1. When not due to serious business losses or financial reverses;
2. When due to serious business losses or financial reverses.
- Limitations:
1. Must not be for the purpose of circumventing the provisions on termination (tenurial rights) of employment.
- Requirements for a valid closure:
1. service of written notice to employees and DOLE at least 1 month before the intended date thereof;
2. cessation of business is bona fide in character;
3. payment to the employees of separation pay (1/2 month pay for every year of service or 1 month pay, whichever is higher)
 CLOSURE OF BUSINESS vs RETRENCHMENT
o Closure of Business
1. Undertaking due to business losses is the reversal of fortune whereby there is a complete cessation of business operations to prevent further financial
drain upon employer who cannot pay his employees anymore since the business has already stopped.
2. Separation pay – not required if closure is caused by serious losses
3. Need not depend for validity on evidence of actual or imminent reversal of employer’s fortune (termination…due to business closure, regardless of
underlying reasons and motivations thereof, be it financial losses or not)
o Retrenchment:
1. The reduction of personnel for cutting down of cost of operations in terms of salary and wages because of losses in operation occasioned by lack of
work and considerable reduction in the volume of business
2. Separation pay must be given to prevent losses

1. VETERANS vs MONTENEJO
Facts:

On January 4, 1991, VFP entered into a management agreement with VMDC. Under the said agreement,
VMDC was to assume management and operation of the Veterans Federation of the Philippines Industrial
Area (VFPIA) in exchange for forty percent (40%) of the lease rentals generated from the area.

VDMC hired its own personnel and employees for the management of said area, among of which were
respondents Montenejo, Bonifacio, Valverde and Pagal. The management agreement between VFP and
VMDC had a term of five (5) years which was renewable for another five (5) years.

On November 1999, the VFP board passed a resolution terminating the management agreement effective
December 31, 1999. VMDC conceded to the termination. On January 3, 2000, the President of VMDC issued
a memorandum informing the company’s employees of the termination of their services effective at the close
of office hours on January 31, 2000 in view of the termination of the management agreement. On the said
date, VMDC dismissed all of its employees and paid them their respective separation pay.

Monetenejo, et. al. filed before the Labor Arbiter a complaint for illegal dismissal, money claims, and
damages. VMDC posited that the dismissals of respondents were valid due to an authorized cause which was
the cessation or closure of its business. VFP also asserted that it could not be held liable under the complaint
because it is not the employer of Montenejo, et. al.
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The Labor Arbiter dismissed the complaint for illegal dismissal. Meanwhile, the National Labor Relations
Commission (NLRC) reversed the decision of the Labor Arbiter. The Court affirmed the decision of the
NLRC.

Issues:

1. Whether or not Montenejo, et. al. had been illegally dismissed; and

2. Whether or not VFP may be solidarily held liable with VDMC for any monetary award that may be
adjudged in favour of Montenejo, et al.

Ruling:

NO. The Court ruled that VMDC’s closure was established; the closure was bona fide; and the dismissals of
Montenejo,et. al. are based on an authorized cause. Montenejo, et. al. were dismissed as a result of the closure
of VMDC. Said closure qualifies as a bona fide cessation of operations or business as contemplated under
Articles 298 of the Labor Code. The dismissals of Montenejo, et. al. were, therefore, premised on an authorized
cause. Respondents were only entitled to nominal damages on top of the separation pay under Article 298 of
the Labor Code.

One of the authorized causes for dismissal recognized under the Labor Code is the bona fide cessation of
business or operations by the employer. Article 298 of the Labor Code explicitly sanctions terminations due
to he employer’s cessation of business or operations as long as the cessation is bona fide or is not made for
the purpose of circumventing the employees’ right to security of tenure.

It is well-settled in jurisprudence that what can be considered as an invalid cessation of business or operations
can be: (1) a company that supposedly closed due to financial losses but was discovered to have revived its
operations barely a month after it closed; (2) a company which apparently closed one of its departments; (3)
closure of the high school department in a school prompted by a deadlock in the Collective Bargaining
Agreement negotiations between a school and its faculty union but was reopened its high school department;
and (4) closure of one of its departments by allegedly transferring its operations to a concessionaire. All of the
preceding examples have a common characteristic of not genuine closures or cessations of businesses. They
are mere simulations which made it appear that the employer intended to close its business or operations when
the latter, in truth, had no such intention.

To unmask the true intent of an employer when effecting a closure of business, it is important to consider not
only the measures adopted by the employer prior to the purported closure but also the actions taken by the
latter after the fact.

The closure of VMDC was duly proven and can be inferred from other facts that were established by the
records and were not refuted by the parties such as: (1) the fact that VMDC had turned over possession of all
buildings, equipment, and other properties necessary to the operation of the VFPIA to VFP; and (2) the fact
that on January 31, 2000, VMDC had dismissed all of its officials and employees.

The decision of VMDC to cease its operations after the termination of the management agreement is, under
the law, a lawful exercise by the company’s leadership of its management prerogative that must perforce be
upheld where, as in this case, there is an absence of showing that the cessation was made for prohibited
purposes. The dismissals cannot be regarded as illegal because they were predicated upon an authorized cause
recognized by law.

Montenejo, et. al. are not entitled to monetary awards adjudged in their favour by the NLRC but only to
separation pay under Article 298 of the Labor Code. The awards for full backwages and separation pay in
lieu of reinstatement cannot be sustained as these awards are reserved by law and jurisprudence for
employees who were illegally dismissed.

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The ruling in Agabon v. NLRC states that when a dismissal is based on a just cause but is implemented without
observance of the statutory notice requirements, the dismissal should be upheld as valid but the employer must
thereby pay an indemnity to the employee in the amount of PHP 30,000.

Meanwhile, the ruling in Jaka Food Processing Corporation v Pacot increased the amount of indemnity
payable by the employer in cases where the dismissals are based on authorized causes but have been effected
without observance of the notice requirements. In this scenario, the indemnity was increased to PHP 50,000.

The doctrine of piercing the veil of corporate fiction does not apply to this case. The doctrine of piercing the
veil of corporate fiction is a legal precept that allows a corporation’s separate personality to be disregarded
under certain circumstances, so that a corporation and its stockholders or members, or a corporation and
another related corporation could be treated as a single entity. This doctrine will apply only in cases where the
separate corporate personality of a corporation is being abused or being used for wrongful purposes.

As laid down in Concept Builders, Inc. v. NLRC, the test to determine when it would be proper to apply the
doctrine of piercing the veil of corporate fiction would be:
 1. Control, not mere majority or complete stock
control, but complete domination, not only of finances but of policy and business practice in respect to the
transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or
existence of its own;
 2. Such control must have been used by the defendant to commit fraud or wrong, to
perpetuate the violation of a statutory or other positive legal duty, or dishonest and unjust act in contravention
of plaintiff’s legal rights; and
 3. The aforesaid control and breach of duty must proximately cause the injury
or unjust loss complained of.

The absence of any one of these elements prevents piercing the corporate veil. As also laid down in Rufina
Luy Lim v. CA, mere ownership by a single stockholder or by another corporation of all or nearly all of the
capital stock of a corporation is not of itself a sufficient reason for disregarding the fiction of separate corporate
personalities. To disregard the separate juridical personality of a corporation, the wrong-doing must be clearly
and convincingly established. It cannot be presumed.

2. SY vs NEAT
FACTS:

 Petitioners in this case are Ricardo Sy and Henry Alix who both work for respondent Neat, Inc. a
corporation which is the owner/distributor of “Banana Peel” rubber slippers.
 Petitioner Ricardo Sy was hired as company driver and was dismissed from work. He alleged that
there was this co-worker Enconado who blocked his way to the Daily Time Record, which annoyed
him as he was going to be late for work. When Enconado was assigned to be his partner (delivery
utility), Sy requested to assign him another “pahinante.” Since the request was not acted upon, in order
to avoid confrontation with Enconado, he assigned to himself a new pahinante.
 The next day, Sy was informed that he would be suspended for 3 days due to insubordination.
 When he came back to work, he was not allowed anymore to log-in and was informed that his services
will be terminated due to poor performance.
 Petitioner Alix, for his part, averred that he was ordered to assist a newly-hired clerk. After helping,
he sat down for a while. He was then caught by the respondent (President of the company) who
assumed that he was doing nothing during the working hours. He was suspended for 3 days and
thereafter dismissed.
 A month after his dismissal, Alix went back to the company to ask for his salary. He was asked to sign
a document which turned out to be a waiver.
 Sy and Alix filed a complaint for illegal dismissal and payment of money claims.
 Neat Inc. countered that the petitioners were both problem employees and were in fact recipient of
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 numerous disciplinary actions. (improper uniform, insubordination, poor performance evaluation,
negligence in performing work, wasting time during working hours)

ISSUES:

(1) WON petitioners were validly terminated on the ground of serious misconduct and willful
disobedience of the lawful orders of the employer and gross and habitual neglect of duties.
(2) WON petitioners are entitled to moral and exemplary damages and attorney’s fees.

HELD:

(1) NO. It is well settled that in illegal dismissal cases, “the burden of proof is upon the employer to show
that the employee’s termination from service is for a just and valid cause.” In determining the sanction
imposable on an employee, the employer may consider the former’s past misconduct and previous
infractions – principle of totality of infractions or the number of violations committed during the
period of employment shall be considered in determining the penalty to be imposed upon an erring
employee. Respondents failed to prove that the totality of infractions committed ‘constitutes a just
cause for his dismissal.’

The past 3 infractions in 2009 for wearing of improper uniform can no longer be taken against Sy
because he was already warned and penalized for them, and in fact reformed his errors in that regard.
Where an employee had already suffered the corresponding penalties for his infraction, to consider the
same offenses as justification for his dismissal would be penalizing the employee twice for the same
offense.

Significantly, the issue on improper uniform are not related to his latest infractions of insubordination
and purported poor performance evaluation. Previous offenses may be used as valid justification for
dismissal only if they are related to the subsequent offense upon which the basis of termination is
decreed or if they have a bearing on the proximate offense warranting dismissal.

As a just cause for termination of employment, the neglect of duties must not only be gross but
habitual as well.

the Court may now dwell on the procedural requirements of due process as laid down in King of Kings
46
Transport, Inc. v. Mamac:

To clarify, the following should be considered in terminating the services of employees:

(1) The first written notice to be served on the employees should contain the specific causes or grounds for
termination against them, and a directive that the employees are given the opportunity to submit their written
explanation within a reasonable period. "Reasonable opportunity" under the Omnibus Rules means every kind
of assistance that management must accord to the employees to enable them to prepare adequately for their
defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to
give the employees an opportunity to study the accusation against them, consult a union official or lawyer,
gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order
to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a
detailed narration of the facts and circumstances that will serve as basis for the charge against the employees.
A general description of the charge will not suffice. Lastly, the notice should specifically mention which
company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against
the employees.

(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein
the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against
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them; (2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by
the management. During the hearing or conference, the employees are given the chance to defend themselves
personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or
hearing could be used by the parties as an opportunity to come to an amicable settlement.

(3) After determining that termination of employment is justified, the employers shall serve the employees a
written notice of termination indicating that: (1) all circumstances involving the charge against the
employees have been considered; and (2) grounds have been established to justify the severance of their
employment.

Respondents failed to afford petitioners the first written notice, containing the specific causes or grounds for
termination against them, as well as the requisite hearing or conference wherein they should have been given
reasonable opportunity to be heard and defend themselves.

An employee who is dismissed without just cause and due process is entitled to either reinstatement if viable
or separation pay if reinstatement is no longer viable, and payment of full backwages and other benefits.
Specifically prayed for by petitioner Sy, the NLRC correctly awarded separation pay, which is proper when
reinstatement is no longer viable due to the antagonism and strained relationship between the employer and
the employee as a consequence of the litigation, not to mention the considerable length of time that the latter
has been out of the former's employ. Nevertheless, the Court limits the award of separation pay, backwages
and other benefits, because Sy is not entirely faultless. Since the latest infraction of Sy relating to attitude
problem at work does not constitute serious misconduct, willful disobedience to lawful orders of the employer
or gross and habitual negligence in the performance of duties, as to merit the harsh penalty of dismissal, the
Court holds that Sy is entitled to the award of (1) separation pay equivalent to 1 month salary for every year
of service computed from May 5, 2008 when he was hired up to December 27, 2012 when the NLRC ruled
that he was illegally dismissed; and (2) backwages and other benefits, computed from the time of his
termination on August 4, 2012 until December 27, 2012.

Anent the Waiver and Release dated June 10, 2011 where Alix stated that he has no claim of whatever kind
and nature against Neat, Inc., the Court sustains the CA that such quitclaim does not bar an employee from
demanding what is legally due him, especially when it is made under circumstances where the voluntariness
of such agreement is questionable. While quitclaims are, at times, considered as valid and binding compromise
agreements, the rule is settled that the burden rests on the employer to prove that the quitclaim constitutes a
credible and reasonable settlement of what an employee is entitled to recover, and that the one accomplishing
it has done so voluntarily and with a full understanding of its import.

The Court likewise upholds the award of nominal damages awarded in favor of petitioners Sy and Alix.1âw

To be entitled to an award of moral damages, it is not enough for an employee to prove that he was dismissed
without just cause or due process. Moral damages are recoverable only where the dismissal or suspension of
the employee was attended by bad faith or fraud, or constituted an act oppressive to labor, or was done in a
manner contrary to morals, good customs or public policy

Finally, as to the liability of respondent Paul Vincent Ng as President and Chief Executive Officer of Neat,
Inc., for the illegal dismissal of petitioner Sy and the dismissal of Alix without due process: in labor cases,
corporate directors and officers are solidarily liable with the corporation for the termination of employment
of employees only if such is done with malice or in bad faith. There being no proof that he was guilty of
malice and bad faith in Sy's illegal dismissal, respondent Ng, as its President and CEO, cannot be held
solidarily liable with Neat, Inc.

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 3. MAULA vs XIMEX
FACTS:

Petitioner Maula was hired by respondent as Operation Staff. His duties include, but are not limited to,
documentation, checker, dispatcher or airfreight coordinator.

Petitioner’s employment was uneventful until came February 18, 2009 when the respondent’s HRD required
him and some other employees to sign a form sub-titled “Personal Data for New Hires.” When he inquired
about it he was told it was nothing but merely for the twenty-peso increase which the company owner allegedly
wanted to see. He could not help but entertain doubts on the scheme as they were hurriedly made to sign the
same. It also appeared from the form that the designated salary/wage was daily instead of on a monthly basis.

On February 25, 2009, petitioner, together with some other concerned employees, requested for a meeting
with their manager together with the manager of the HRD. They questioned the document and aired their side
voicing their apprehensions against the designation “For New Hires” since they were long time regular
employees earning monthly salary/wages and not daily wage earners. The respondent company’s manager,
Amador Cabrera, retorted: “Ay wala yan walang kwenta yan.”

On March 25, 2009, in the evening, a supposed problem cropped up. A misroute of cargo was reported and
the company cast the whole blame on the petitioner. It was alleged that he erroneously wrote the label on the
box – the name and destination, and allegedly was the one who checked the cargo. The imputation is quite
absurd because it was the client who actually wrote the name and destination, whereas, it was not the petitioner
but his co-employee who checked the cargo. The following day, he received a memorandum charging him
with “negligence in performing duties.”

Thereafter, he received another memorandum of “reassignment” wherein he was directed to report in another
department of the company. But then, at around 4:30 p.m. of the same day, he was instructed by the HR
manager to proceed to his former office for him to train his replacement. He went inside the warehouse and
at around 6:00 p.m. he began teaching his replacement. At 8:00 p.m., his replacement went outside. He waited
for sometime and came to know later when he verified outside that the person already went straight home.

When he went back inside, his supervisor insisted to him to continue with his former work, but due to the
“reassignment paper” he had some reservations. Sensing he might again be framed up and maliciously accused
of such as what happened on March 25, 2009, he thus refused. Around 10:30 p.m., he went home.

The following day, an attempt to serve another memorandum was made on him. This time he was made to
explain by the HR Manager why he did not perform his former work and not report to his reassignment. It
only validated his apprehension of a set-up. For how could he be at two places at the same time (his former
work is situated in Sucat, Parañaque, whereas, his new assignment is in FTI, Taguig City). It bears
emphasizing that the directive for him to continue discharging his former duties was merely verbal. At this
point, petitioner lost his composure. Exasperated, he refused to receive the memorandum and thus
retorted “Seguro na-abnormal na ang utak mo” as it dawned on him that they were out looking for every
means possible to pin him down.

Nonetheless, he reported to his reassignment in FTI Taguig on April 3, 2009. There he was served with the
memorandum suspending him from work for 30 days effective April 4, 2009 for alleged “Serious misconduct
and willful disobedience by the employee of the lawful orders of his employer or representative in connection
with his work.”

On May 4, 2009, he reported to the office only to be refused entry. Instead, a dismissal letter was handed to
him.
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Petitioner Maula filed a complaint against respondent Ximex and its officers for illegal dismissal and other
money claims. LA and NLRC found that petitioner was illegally dismissed. CA reversed the same.

ISSUE: Whether or not Maula’s inflammatory language constitutes serious misconduct which warrants his
dismissal.

HELD: NO

Petitioner’s outburst did not constitute serious misconduct

The Court held that respondent manifestly failed to prove that petitioner’s alleged act constitutes serious
misconduct.

Misconduct is improper or wrong conduct; it is the transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere
error in judgment. The misconduct, to be serious within the meaning of the Labor Code, must be of such a
grave and aggravated character and not merely trivial or unimportant. Thus, for misconduct or improper
behavior to be a just cause for dismissal, (a) it must be serious; (b) it must relate to the performance of the
employee’s duties; and (c) it must show that the employee has become unfit to continue working for the
employer.

While this Court held in past decisions that accusatory and inflammatory language used by an employee to
the employer or superior can be a ground for dismissal or termination, the circumstances peculiar to this case
find the previous rulings inapplicable. The admittedly insulting and unbecoming language uttered by
petitioner to the HR Manager on April 3, 2009 should be viewed with reasonable leniency in light of the
fact that it was committed under an emotionally charged state. We agree with the labor arbiter and the
NLRC that the on-the-spur-of-the-moment outburst of petitioner, he having reached his breaking
point, was due to what he perceived as successive retaliatory and orchestrated actions of respondent.
Indeed, there was only lapse in judgment rather than a premeditated defiance of authority.

Further, petitioner’s purported “thug-like” demeanor is not serious in nature. Despite the “grave
embarassment” supposedly caused on Gorospe, she did not even take any separate action independent of the
company. Likewise, respondent did not elaborate exactly how and to what extent that its “nature of
business” and “industrial peace” were damaged by petitioner’s misconduct. It was not shown in detail
that he has become unfit to continue working for the company and that the continuance of his services
is patently inimical to respondent’s interest.

Doctrine of totality of infractions not applicable

Respondent contends that aside from petitioner’s disrespectful remark against Gorospe, he also committed
several prior intentional misconduct, to wit: erroneous packaging of a cargo of respondent’s client, abandoning
work after logging in, failing to teach the rudiments of his job to the new employees assigned to his group
despite orders from his superior, and refusing to accept the management’s order on the transfer of assignment.

The Court held that respondent cannot invoke the principle of totality of infractions considering that
petitioner’s alleged previous acts of misconduct were not established in accordance with
the requirements of procedural due process. In fact, respondent conceded that he “was not even
censured for any infraction in the past.”

It admitted that “the March 25, 2009 incident that petitioner was referring to could not be construed as laying
the predicate for his dismissal, because he was not penalized for the misrouting incident when he had
adequately and satisfactorily explained his side. Neither was he penalized for the other memoranda previously
or subsequently issued to him.”

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Penalty of dismissal too harsh

This Court likewise found the penalty of dismissal too harsh. Not every case of insubordination or
willful disobedience by an employee reasonably deserves the penalty of dismissal because the penalty to be
imposed on an erring employee must be commensurate with the gravity of his or her offense. Petitioner’s
termination from employment is also inappropriate considering that he had been with respondent company
for seven (7) years and he had no previous derogatory record. It is settled that notwithstanding the existence
of a just cause, dismissal should not be imposed, as it is too severe a penalty, if the employee had been
employed for a considerable length of time in the service of his or her employer, and such employment
is untainted by any kind of dishonesty and irregularity.

Petitioner was not accorded procedural due process

The Court held that the Memorandum dated April 3, 2009 does not contain the following: a detailed narration
of facts and circumstances for petitioner to intelligently prepare his explanation and defenses, the specific
company rule violated and the corresponding penalty therefor, and a directive giving him at least five (5)
calendar days to submit a written explanation.

No ample opportunity to be heard was also accorded to petitioner. Instead of devising a just way to get the
side of petitioner through testimonial and/or documentary evidence, respondent took advantage of his
“refusal” to file a written explanation. This should not be so. An employer is duty-bound to exert earnest
efforts to arrive at a settlement of its differences with the employee. While a full adversarial hearing or
conference is not required, there must be a fair and reasonable opportunity for the employee to explain
the controversy at hand.

Finally, the termination letter issued by respondent miserably failed to satisfy the requisite contents of a valid
notice of termination. Instead of discussing the facts and circumstances to support the violation of the alleged
company rule that imposed a penalty of dismissal, the letter merely repeats the self-serving accusations stated
in Memorandum dated April 3, 2009.

Preventive suspension imposed was not justified

The Court held that preventive suspension is justified where the employee’s continued employment poses a
serious and imminent threat to the life or property of the employer or of the employee’s co-workers. Without
this kind of threat, preventive suspension is not proper.

Here, it cannot be said that petitioner posed a danger on the lives of the officers or employees of
respondent or their properties. Being one of the Operation Staff, which was a rank and file position, he
could not and would not be able to sabotage the operations of respondent. The difficulty of finding a
logical and reasonable connection between his assigned tasks and the necessity of his preventive suspension
is apparent from the fact that even respondent was not able to present concrete evidence to support its general
allegation.

Rules on Preventive Suspension: Sections 8 and 9 of Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code

4. DLSU ARANETA vs BERNARDO

Facts:

The case was about the denial of the retirement benefits of an employee by its employer. Bernardo was a part-
time lecturer for DLSU. He has been an employee of DLSU from 1974 up to 2003. On the year 2003, Bernardo
received a letter from DLSU that his services is no longer required. Bernardo being a 75 years old teacher, did
not protest the decision of DLSU not to re hire him. Bernardo, later, then asked his employer for his retirement
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benefits, which the latter then refused to pay and allege that Bernardo is only a part time employee and is not
allowed to avail the retirement benefits agreed by the labor union, and that; his action has already prescribe,
stating that he should have filed for his claim 3 years after he turned 65 years old. Aggrieved, Bernardo filed
a claim against DLSU.

Issue:
1. WON the agreement of their labor union and the employer shall prevail.
2. WON the prescription shall run against Bernardo when he turned 65.
3. Whether or not Bernardo is entitled to the retirement benefits.

Held:
1. No. provisions of the CBA can be respected as long as it is not contrary to law. Hence, a part time
worker is not one of those who are exempted from receiving a retirement benefit.
2. No. The prescription should run after his last day at work. Even though the compulsory retirement age
is 65, the mutual consent of each party to work for and to allow to work the other will still be respected.
Hence the prescription should run after the last day of work.
3. YES. According to Article 302 of the Labor Code, as amended by RA No 7641, any employee may
be retired upon reaching the retirement age and that he shall be entitled to receive retirement benefits
under the existing laws. Further, according to section 1 of Book VI Rule 2 of the Rules Implementing
the Labor Code, the same rule shall apply to all employees in the private sector, regardless of their
position, designation or status and irrespective of the method by which their wages are paid, except to
those specifically exempted under Section 2 hereof. The exemptions do not cover the part-time
employees. Applying the principle of expressio unio est expulsio alterius which is that the express
mention of one person, thing, or consequence implies the exclusion of all others, Bernardo's claim for
retirement benefits cannot be denied on the ground that he was a part-time employee.

Superimposed

5. DOBLE vs ABB
 Petitioner Luis Doble was hired by ABB, INC. as Junior Design Engineer on March 29, 1993. During
almost 19 years of his employment with ABB, he rose through the ranks until on 2012 when he was
called by ABB Country Manager and President informing that his performance for 2011 was rated
with grade 1 which is equivalent to unsatisfactory performance. Doble was already the Vice President
and Local Division Manager of Power System Division during this time.
 He was then given the option to resign and will be paid with separation pay provided he would submit
a letter of resignation. He was given only an hour to decide.
 Shocked by the abrupt decision of the management, Doble asked why he should be the one made to
resign and was given the response that ‘it was the decision of the management.’
 Under the extreme pressure and threat (to submit the resignation letter within the day or else he be not
allowed to leave the company premises) of Mrs. Miranda (Country HR Manager), he went to his office
and prepared the resignation letter. When he returned to his office, he was surprised that he did not
have an access anymore on the server and could not use his computer. (resignation letter: “as per your
instruction” removed) (company car plan of Ford Escape purchased; balance charged from his
separation pay)
 Complainant was only allowed to leave the office at about 8:40 in the evening.

 Doble filed a complaint for illegal dismissal with prayer for reinstatement and payment of backwages,
other monetary claims and damages.

ISSUE: Whether or not Doble was illegally dismissed.

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NO. The court holds that Doble voluntarily resigned and was not constructively dismissed.

In illegal dismissal cases, the fundamental rule is that when an employer interposes the defense of
resignation, the burden to prove that the employee indeed voluntarily resigned necessarily rests
upon the employer.
Constructive dismissal is defined as quitting or cessation of work because continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in rank or a diminution of pay and other benefits. It exists if an act of clear
discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could
foreclose any choice by him except to forego his continued employment. There is involuntary resignation due to the harsh,
hostile, and unfavorable conditions set by the employer. The test of constructive dismissal is whether a reasonable person in
the employee's position would have felt compelled to give up his employment/position under the circumstances.

On the other hand, "[r]esignation is the voluntary act of an employee who is in a situation where one believes that personal
reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself
from employment. It is a formal pronouncement or relinquishment of an office, with the intention of relinquishing the office
accompanied by the act of relinquishment. As the intent to relinquish must concur with the overt act of relinquishment, the
acts of the employee before and after the alleged resignation must be considered in determining whether he or she, in fact,
intended to sever his or her employment.

For his part, Doble insisted that he was constructively dismissed because he was threatened,
detained as if he were a prisoner, unreasonably pressured and compelled to write a resignation
letter for more than eight (8) hours inside the company office. Because of the incident, which
supposedly besmirched his reputation, he claimed to have suffered embarrassment before his staff
and other personnel, sleepless nights, moral shock and anxiety. He even claimed to have received
calls and text messages from customers, competitors, colleagues and friends because of what the
company did to him. Apart from his bare and self-serving allegations, however, Doble failed to
present substantial documentary or testimonial evidence to corroborate the same. It is well settled
that bare allegations of constructive dismissal, when uncorroborated by the evidence on
record, cannot be given credence.

Since Doble claims to have been forced to submit a resignation letter, it is incumbent upon him to
prove with clear and convincing evidence that his resignation was not voluntary, but was actually a
case of constructive dismissal, i.e., a product of coercion or intimidation. Coercion exists when there
is a reasonable or well-grounded fear of an imminent evil upon a person or his property or upon the
person or property of his spouse, descendants or ascendants. The requisites for intimidation to
vitiate one's consent are stated in St. Michael Academy v. NLRC, thus:

.... (1) that the intimidation caused the consent to be given; (2) that the threatened act be unjust or
unlawful; (3) that the threat be real or serious, there being evident disproportion between the evil
and the resistance which all men can offer, leading to the choice of doing the act which is forced on
the person to do as the lesser evil; and (4) that it produces a well-grounded fear from the fact that
the person from whom it comes has the necessary means or ability to inflict the threatened injury to
his person or property x x x.

After a careful review of the records, the Court finds that the above-stated requisites are absent.

Even if the option to resign originated from the employer, what is important for resignation to be
deemed voluntary is that the employee's intent to relinquish must concur with the overt act of
relinquishment. It bears emphasis that Doble negotiated for a higher separation pay. In fact, Doble
tendered a resignation letter only after being offered a better separation benefit of 1-month pay for
every year of service, and even submitted a separate letter expressing his intent to buy his service
vehicle. After considering the acts of Doble before and after his resignation, the Court is convinced
of Doble's clear intention to sever his employment with ABB, Inc.

It is curious to note that despite his allegations that "under the extreme pressure and threat of Mrs.
Miranda, he went to his office and prepared the letter of resignation" and that "she gave instruction
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to the security guard of the gate not to allow him to go outside the company," Doble neither
impleaded her as respondent in the complaint for illegal dismissal nor sought to hold her jointly and
severally liable, together with the company and its President, for monetary claims and damages.

Concededly, under prevailing jurisprudence, a deed of release of quitclaim does not bar an
employee from demanding benefits to which he is legally entitled. Employees who received their
separation pay are not barred from contesting the legality of their dismissal, and the acceptance of
such benefits would not amount to estoppel. The basic reason for this is that such quitclaims and/or
complete releases are null and void for being contrary to public policy.

Anent his monetary claims for 13th month pay, yearly bonus of about ₱750,000.00, 15 days vacation
leave, 3 days long service leave, recreational allowance of ₱l80,000.00 per year, and rice subsidy
of ₱20,400.00, Doble argued that he is entitled thereto in light of the rule that where there is a finding
of illegal dismissal, an employee who is unjustly dismissed shall be entitled to reinstatement without
loss of seniority rights, benefits and other privileges or its monetary equivalent computed from the
time compensation was withheld up to the time of actual reinstatement. Suffice it to stress that there
being no illegal dismissal in this case, Doble's monetary claims must be denied for lack of legal
basis.

6. BRAVO vs URIOS COLLEGE

 Bravo was employed as a part-time teacher by Urios College in 1988. In 2002, he was designated as
the school’s comptroller.
 Urios College organized a committee to formulate a new ranking system for non-academic employees
for school year 2001-2002.
 The proposed ranking system was presented to Bravo for comments. He recommended that “the
position of comptroller should be classified as a middle-management person (because it was)
informally merged with the position of the Vice President for Finance. He further suggested that since
he assumed the duties of Comptroller and Vice-President for Finance, his salary scale should be
upgraded.
 The committee allegedly agreed with Bravo and accepted his recommendations.
 The implementation of the new ranking system was later reflected on the payroll. This was opposed
by several individuals within the school.
 In October 2004, Urios College organized a committee to review the ranking system implemented
during 2001-2002. In its report, the committee found that the ranking system caused salary distortions
among several employees. There were also discrepancies in the salary adjustments of Bravo and 2
other employees. The committee discovered that the Comptroller’s office solely prepared and
implemented the salary adjustment schedule without approval from the HR department.
 Bravo alleged that he did not prepare the ranking system for SY 2001-2002 and that it was the ranking
committee which categorized the position of Comptroller as middle management.
 Bravo was found guilty of serious misconduct. Urios College notified Bravo of its decision to
terminate his services of serious misconduct and loss of trust and confidence.
 In his appeal, Bravo argues that “suggesting an upgrade in his rank and salary cannot be considered
serious misconduct.” He further argues “that a dismissal based on loss of trust and confidence must
rest on actual breach of duty. It may not be invoked by an employer without any factual basis.”
 On the other hand, respondent asserts that there was substantial evidence to dismiss petitioner as the
latter failed to follow regular protocol with respect to the computation of his and other employees’
salaries. Bravo occupies a highly sensitive position. Hence, his integrity should be beyond reproach.
And that proof beyond reasonable doubt is not required in termination cases based on loss of trust and

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 confidence as long as there is reasonable ground to believe that the employee committed an act of
dishonesty.

ISSUE(S):
1. Whether or not petitioner’s employment was terminated for a just cause.
2. Whether or not petitioner is entitled to the payment of separation pay, backwages, and attorney’s fees.

HELD:
1. Yes.

To warrant termination of employment under Article 297(a) of the Labor Code, the misconduct must be
serious or "of such grave and aggravated character." Trivial and unimportant acts are not contemplated under
Article 297(a) of the Labor Code. In addition, the misconduct must "relate to the performance of the
employee's duties" that would render the employee "unfit to continue working for the employer."

Thus, to warrant the dismissal from service of a rank-and-file employee under Article 297(a) of the Labor
Code, the misconduct (1) must be serious, (2) should "relate to the performance of the employee's duties," (3)
should render the employee "unfit to continue working for the employer," and (4) should "have been
performed with wrongful intent."

There is no evidence that the position of Comptroller was officially reclassified as middle management by
respondent. Petitioner's employment ranking slip, if at all, only constituted proof of petitioner's evaluation
score. It hardly represented the formal act of respondent in reclassifying the position of Comptroller. Hence,
petitioner could not summarily assign to himself a higher salary rate without rendering himself unfit to
continue working for respondent.

However, it appears that petitioner was neither induced nor motivated by any wrongful intent. He believed in
good faith that respondent had accepted and approved his recommendations on the proposed ranking scale for
school year 2001-2002.

Nevertheless, due to the nature of his occupation, petitioner's employment may be terminated for willful
breach of trust under Article 297(c), not Article 297(a), of the Labor Code. A dismissal based on willful breach
of trust or loss of trust and confidence under Article 297 of the Labor Code entails the concurrence of two (2)
conditions.

First, the employee whose services are to be terminated must occupy a position of trust and confidence. There
are two (2) types of positions in which trust and confidence are reposed by the employer, namely, managerial
employees and fiduciary rank-and-file employees. Managerial employees are considered to occupy positions
of trust and confidence because they are "entrusted with confidential and delicate matters." On the other hand,
fiduciary rank-and-file employees refer to those employees, who, "in the normal and routine exercise of their
functions, regularly handle significant amounts of [the employer's] money or property."

The second condition that must be satisfied is the presence of some basis for the loss of trust and confidence.
This means that "the employer must establish the existence of an act justifying the loss of trust and
confidence." Otherwise, employees will be left at the mercy of their employers.

Set against these parameters, this Court holds that petitioner was validly dismissed based on loss of trust and
confidence. Petitioner was not an ordinary rank-and-file employee. His position of responsibility on delicate
financial matters entailed a substantial amount of trust from respondent. The entire payroll account depended
on the accuracy of the classifications made by the Comptroller. It was reasonable for the employer to trust that
he had basis for his computations especially with respect to his own compensation. The preparation of the
payroll is a sensitive matter requiring attention to detail. Not only does the payroll involve the company's
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finances, it also affects the welfare of all other employees who rely on their monthly salaries.

Petitioner's act in assigning to himself a higher salary rate without proper authorization is a clear breach of the
trust and confidence reposed in him.

2. Under Article 294 of the Labor Code, the reliefs of an illegally dismissed employee are reinstatement and
full backwages. "Backwages is a form of relief that restores the income that was lost by reason of [the
employee's] dismissal" from employment. It is "computed from the time that [the employee's] compensation
was withheld . . . [until] his [or her] actual reinstatement." However, when reinstatement is no longer feasible,
separation pay is awarded.

Considering that there was a just cause for terminating petitioner from employment, there is no basis to award
him separation pay and backwages. There are also no factual and legal bases to award attorney's fees to
petitioner.

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