U.P.

LAW BOC LABOR LAW & SOCIAL LEGISLATION PRE-WEEK REVIEWER

LABOR 1
Q1: Enumerate the cardinal labor rights as provided in the 1987 Constitution.
A1:
Right to self-organization
Right to collective bargaining and negotiation
Right to peaceful concerted activities, including the right to strike
Right to security of tenure
Right to humane conditions of work
Right to a living wage
Right to participate in policy and decision making [Art. XIII, Sec. 3]

Q2: True or False: separation pay shall be allowed in all cases where the employee is validly dismissed.
A2: False. Separation pay shall be allowed as a measure of social justice only in those instances where
the employee is validly dismissed for causes other than serious misconduct or those reflecting on his
moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an
offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may
not be required to give the dismissed employee separation pay, or financial assistance, or whatever other
name it is called, on the ground of social justice [PLDT vs. NLRC, 247 Phil. 641 (1988)]

Q3: True or False: Non-agricultural employees are those who regularly perform their duties away
from the principal or place of business or branch office of the employer or whose actual hours of
work in the field cannot be determined with reasonable certainty.
A3: False. Non-agricultural employees are those (1) who regularly perform their duties away from the
principal or place of business or branch office of the employer AND (2) whose actual hours of work in the
field cannot be determined with reasonable certainty. [Art. 82, LC]

Q4: When is time during which an employee is inactive, by reason of interruptions in his work
beyond his control, considered working time?
A4: If the imminence of the resumption of work requires the employee’s presence at the place of work, or
if the interval is too brief to be utilized effectively and gainfully in the employee’s own interest. [Book III,
Rule 1, Sec. 4, IRR]

Q5: True or False: Regular, full-time teachers are entitled to salary during the semestral break.
A5: True. Regular full-time teachers are entitled to salary during semestral breaks. These semestral breaks are
in the nature of work interruptions beyond the employees’ control. As such, these breaks cannot be considered
as absences within the meaning of the law for which deductions may be made from monthly allowances.
[University of the Pangasinan Faculty Union v. University of Pangasinan, G.R. No. L-63122( 1984)]

Q6: True or False: When seamen are on board and cannot leave the ship beyond the regular eight
working number of hours, they are automatically entitled to overtime pay for such time beyond their
working hours. A6: False. Citing the 1957 ruling of Luzon Stevedoring Co., Inc. vs Luzon Marine Department
Union, et al [G.R. 9265 (1957)], the SC reiterated in the more recent case of Cagampan, et al. vs. NLRC [G.R.
85122-24 (1991)], that “seamen are required to stay on board of their vessels by the very nature of their duties,
and it is for this reason that, in addition to their regular compensation, they are given free living quarters to be
on board. It could not have been the purpose of the law to require their employers to pay them overtime pay
even when they are not actually working. The correct criterion in determining whether or not sailors are entitled
to overtime pay is not, therefore, whether they are on board and cannot leave ship beyond the regular eight
working number of hours, but whether they actually rendered service in excess of said number of hours.”

Q7: What are the conditions for the adoption of a Compressed Work Week scheme?
A7: The CWW scheme is undertaken as a result of an express and voluntary agreement of majority of the
covered employees or their duly authorized representatives. This agreement may be expressed through
collective bargaining or other legitimate workplace mechanisms of participation such as labor
management councils, employee assemblies or referenda.

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In firms using substances, chemicals and processes or operating under conditions where there are
airborne contaminants, human carcinogens or noise prolonged exposure to which may pose hazards to
employees’ health and safety, there must be a certification from an accredited health and safety
organization or practitioner from the firm’s safety committee that work beyond eight hours is within
threshold limits or tolerable levels of exposure, as set in the OSHS.

The employer shall notify DOLE, through the Regional Office having jurisdiction over the workplace, of the
adoption of the CWW scheme. The notice shall be in DOLE CWW Report Form attached to this Advisory.
[DOLE Advisory No. 02-04]

Q8: True or False: Undertime offsets overtime.

A8: False. Undertime work on any particular day shall not be offset by overtime work on any other day.
Permission given to the employee to go on leave on some other day of the week shall NOT exempt the
employer from paying the additional compensation required in this Chapter. [Art. 88, LC]

Q9: What are the rates of pay for two holidays on the same day?
A9: According to “DOLE Explanatory Bulletin on Worker’s Entitlement to Holiday Pay on 9 April 1993,” if
two holidays fall on the same day:
If unworked, 200% of basic wage.
If worked, 300% of basic wage. [Azucena]

Q10: When is 13th month pay to be paid?

A10: Generally, not later than Dec 24 of each year. However, an employer may give to his employees half
(½) of the required 13th Month Pay before the opening of the regular school year and the other half on or
before the 24th of December every year.

The frequency of payment of this monetary benefit may be the subject of agreement between the
employer and the recognized CBA of the employees [IRR of PD 851, Sec. 5]

Q11: What are the conditions for payment of wages through check?
A11:
• Bank/Facility for encashment is within 1-km radius from the workplace
• ER did not receive any pecuniary benefit because of said arrangement
• EEs are given reasonable time during banking hours to withdraw their wages (compensable
hours, if during working hours)
• The payment by check is with the written consent of the EEs concerned, in the absence of a CBA
[Sec. 1-2, Rule VIII, Book III, IRR of LC]

Q12: True or False: Being mere privileges, benefits may be subject to reduced by the employer at any time.
A12: False. If the following are met, then the employer cannot remove or reduce benefits [Vergara Jr. vs.
Coca-Cola Bottlers Phils., G.R. No. 176985 (2013)]:
• Ripened company policy: Benefit is founded on a policy which has ripened into a practice over a
long period
• Practice is consistent and deliberate and
• Not due to error in the construction or application of a doubtful or difficult question of law. [Globe
Mackay Cable vs. NLRC, G.R. No. 74156 (1988)]
• The diminution or discontinuance is done unilaterally by the employer.

Q13: True or False: Policy decisions by the company are accorded a presumption of regularity
which the complaining employee must always overturn with evidence.
A13: False. It is incumbent upon the company to show that decisions made under management
prerogative are in good faith and not intended to circumvent employees’ rights. [San Miguel Brewery
Sales Force Union (PTGWO) vs. Ople, 1989]

Q14: True or False: Pending investigation of irregularities allegedly committed by an employee, he

may not be re-assigned for reason thereof.

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A14: False. Re-assignments made by management pending investigation of irregularities allegedly committed
by an employee fall within the ambit of management prerogative. The purpose of reassignments is no different
from that of preventive suspension which management could validly impose as a disciplinary measure for the
protection of the company's property pending investigation of any alleged malfeasance or misfeasance
committed by the employee. [Ruiz vs. Wendel Osaka Realty Corp., G.R. No. 189082 (2012)]

Q15: What are the requirements for maternity leave eligibility?

A15:
• A female member
• Paid at least three [3] monthly contributions in the twelve-month period immediately preceding the
semester of her childbirth or miscarriage
• Shall have notified her employer of her pregnancy and the probable date of her childbirth, which
notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide.
[Sec. 14-A of RA 1161 (Social Security Law), as amended by RA 7322 and RA 8282]

Q16: How should quitclaims, releases, and waivers of benefits be treated?

A16: Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily
entered into and represents a reasonable settlement, it is binding on the parties and may not later be
disowned simply because of a change of mind. It is only where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its
face, that the law will step in to annul the questionable transaction. But where it is shown that the person
making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration
for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding
undertaking. [Edi Staffbuilders vs. NLRC, G.R. No. 145587 (2007)]

Q17: Who has the burden of proof when faced with the allegation that an independent contractor
is actually a labor-only contractor?
A17: Generally, the presumption is that the contractor is a labor-only contracting unless such contractor
overcomes the burden of proving that it has the substantial capital, investment, tools and the like. Hence
the burden of proof of overcoming said allegation would rest with the contractor as the party who must
necessarily refute and overcome said presumption. However, in cases wherein the principal employer
would rely on the independent and legitimate status of the contractor as a defense, the burden of proof
will also fall upon said principal employer. As such, he must present sufficient evidence to overcome the
presumption. [Valencia vs. Classique Vinyl Products, G.R. No. 206390 (2017)]

Q18: When does the presumption that a contractor is a labor-only contract not exist?
A18: The presumption of labor-only contracting does not arise when the contractor has in fact registered
with the DOLE and have been issued a Certificate of Registration. However, the SC has long held that a
Certificate of Registration issued by the Department of Labor and Employment is not conclusive evidence
of such status. [Babas vs. Lorenzo Shipping Corp., G.R. No. 186091 (2010)]

Q19: What is the required procedural due process to be given when the employee is dismissed
based on the totality of infractions doctrine?
A19: An employer cannot invoke the principle of totality of infractions when the employee’s previous acts of
misconduct were not established in accordance with the requirements of procedural due process. It is necessary that
that for the previous infractions committed by the employee to be considered in its totality, that said previous
infractions be coupled with a consequent censuring, penalty, reprimanding, or otherwise non-condonation of the
employer. These subsequent actions by the employer would then lay the predicate for an eventual dismissal should
the employee again give ground for dismissal. [Maula vs. Ximex Delivery Express, G.R. No. 207838 (2017)]

Q20: When is preventive suspension against an erring employee proper?

A20: Preventive suspension may be legally imposed against an employee whose alleged violation is the
subject of an investigation. The purpose of suspension is to prevent harm or injury to the company as well
as to fellow employees. 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.

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It must be evident that the employee posed a danger on the lives of the officers or employees of the company
or their properties. There must be a logical and reasonable connection between his assigned tasks and the
necessity of his preventive suspension. [Maula vs. Ximex Delivery Express, G.R. No. 207838 (2017)]

Q21: When is the penalty of dismissal too harsh?

A21: 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. 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. [BDO Unibank v. Nerves, G.R. No. 208735 (2017)]

Q22: True or False: Seafarers who have worked for 10 years on the same vessel are regular employees.
A22: False. Seafarers as overseas Filipino workers are fixed-term employees whose continued rehiring
should not be interpreted as a basis for regularization but rather as a series of contract renewals
sanctioned under the doctrine set by Millares vs. NLRC [Gu-Miro vs. Adorable, G.R. No. 160952 (2004)].

Q23: When is a project employee deemed regularized?

A23: Project employee is deemed regularized if services are extended without specifying duration. When an
employees’ services were extended beyond the initial project duration without any specification of as to the
duration, such makes him a regular employee. And his status as a regular employee is not affected by the fact
that he was assigned to several other projects and there were intervals in between said projects since he
enjoys security of tenure. [Pasos vs. Philippine National Construction Corporation, G.R. No. 192394 (2013)]

A project or work pool employee who has been continuously rehired by the same employer for the same
tasks that are necessary to the usual business of the employer must be deemed a regular employee.
[Alcatel Phils. vs. Relos, G.R. No. 164315 (2009)]

Q24: When is a seasonal employee deemed regularized?

A24: The Court has consistently held that seasonal employees may be considered as regular employees.
Regular seasonal employees are those called to work from time to time. The nature of their relationship
with the employer is such that during the off season, they are temporarily laid off; but reemployed during
the summer season or when their services may be needed. They are in regular employment because of
the nature of their job, and not because of the length of time they have worked.

This rule, however, is not absolute. Seasonal workers who have worked for one season only may not be
considered regular employees. Also, when seasonal employees are free to contract their services with
other farm owners, then the former are not regular employees. For regular employees to be considered as
such, the primary standard used is the reasonable connection between the particular activity they perform
and the usual trade or business of the employer. [Gapayao vs. Fulo, G.R. No. 193493 (2013)]

Q25: What must be considered in determining whether or not a project employee?

A25: For an employee to be validly categorized as a project employee, it is necessary that the specific project or
undertaking had been identified and its period and completion date determined and made known to the employee at
the time of his engagement. [FVR Skills and Services Exponents, Inc. (SKILLEX) vs. Seva, G.R. No. 200857 (2014)]

Q26: Differentiate between a supplement and a facility.

A26: The benefit or privilege given to the employee which constitutes an extra remuneration above and over his basic
or ordinary earning or wage is supplement; and when said benefit or privilege is part of the laborers' basic wages, it is
a facility. The distinction lies not so much in the kind of benefit or item (food, lodging, bonus or sick leave) given, but in
the purpose for which it is given. Ultimately, the real difference lies not on the kind of the benefit but on the purpose
why it was given by the employer. If it is primarily for the employee’s gain, then the benefit is a facility; if its provision
is mainly for the employer’s advantage, then it is a supplement. Again, this is to ensure that employees are protected
in circumstances where the employer designates a benefit as deductible from the wages even though it clearly works
to the employer’s greater convenience or advantage. Under the purpose test, substantial consideration must be given
to the nature of the employer’s business in relation to the character

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or type of work performed by the employees involved. [Our Haus Realty Development Corporation vs.
Parian, G.R. No. 204651 (2014)]

Q27: What is necessary to prove illegal recruitment?

A27: Article 38(a) of the Labor Code, as amended, specifies that recruitment activities undertaken by non-
licensees or non-holders of authority are deemed illegal and punishable by law. When the illegal
recruitment is committed against three or more persons, individually or as a group, then it is deemed
committed in large scale and carries with it stiffer penalties as the same is deemed a form of economic
sabotage. But to prove illegal recruitment, it must be shown that the accused, without being duly
authorized by law, gave complainants the distinct impression that he had the power or ability to send them
abroad for work, such that the latter were convinced to part with their money in order to be employed. It is
important that there must at least be a promise or offer of an employment from the person posing as a
recruiter, whether locally or abroad. [People vs. Laogo, G.R. No. 1762642011]

Q28: Can an employee be a regular employee with a fixed term contract?

A28: An employee can be a regular employee with a fixed-term contract. The law does not preclude the
possibility that a regular employee may opt to have a fixed-term contract for valid reasons. This was
recognized in Brent: For as long as it was the employee who requested, or bargained, that the contract
have a “definite date of termination,” or that the fixed-term contract be freely entered into by the employer
and the employee, then the validity of the fixed-term contract will be upheld. [Fuji Television Network, Inc.
vs. Espiritu, G.R. No. 204944-45 (2014)]

Q29: What is the effect of an unauthorized substitution/alteration of POEA-approved employment contract?

A29: The subsequent execution of a side agreement of an overseas contract worker with her foreign
employer, such that the side agreement reduced her salary, is void because it is against our laws, morals,
and public policy. The side agreement cannot supersede the standard employment contract as approved
by POEA. [Chavez vs. Bonto-Perez, G.R. No. 109808 (1995)]

Q30: What are the limitations on the exercise of management prerogative?

A30: As per Philippine Airlines vs. Pascua, G.R. 143258, (2003),
1. Law;
2. CBA;
3. Employment Contract;
4. Employer Policy;
5. Employer Practice;
6. General Principles of Fair play and justice;
7. Should be done in good faith.

Q31: Does the employer have the discretion to impose a heavier penalty than that provided for by
the company rules?
A31: Yes, if the circumstances warrant the imposition thereof. The fact that the offense was committed for
the first time or not resulted in any prejudice to the company was held not to be a valid limitation against
this discretion. Company rules and regulations cannot operate altogether to negate the employer’s
prerogative and responsibility to determine the appropriate and commensurate sanction. [Standford
Microsystems vs. NLRC, G.R. No. 74187 (1988)]

Q32: When is illegal recruitment considered an offense involving economic sabotage?

A32:
It is considered an offense involving economic sabotage when it is committed by a syndicate or in large scale.
It is deemed committed by a syndicate if carried out by a group of 3 or more persons conspiring or
confederating with one another.
It is deemed committed in large scale if committed against 3 or more persons individually or as a group.
[Sec. 6, RA 8042]

Q33: What are the just causes for termination by the employer?
A33:

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• Serious misconduct or willful disobedience by the employee of the lawful orders of his employer
or representative in connection with his work;
• Gross and habitual neglect by the employee of his duties;
• Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
• Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representatives; and
• Other causes analogous to the foregoing. [Art. 297, LC]

Q34: What are the requisites for serious misconduct to be a valid ground of termination?
A34:
• There must be a misconduct;
• The misconduct must be of such grave and aggravated character;
• It must relate to the performance of the employee’s duties; and
• There must be showing that the employee becomes unfit to continue working for the employer.
[DO 147-15, Sec. 5.2(a)]

Q35: What are the requisites for Willful Disobedience or Insubordination to be a valid ground for termination?
A35:
• There must be disobedience or insubordination
• The disobedience or insubordination must be willful or intentional characterized by a wrongful and
perverse attitude;
• The order violated must be reasonable, lawful, and made known to the employee; and
• The order must pertain to the duties which he has been engaged to discharge. [DO 174-15, Sec. 5.2(b)]

Q36: What are the requisites for Gross and Habitual Neglect of Duties to be a valid ground for termination?
A36:
• There must be a neglect of duty; and
• The negligence must be both gross and habitual in character. [DO 174-15, Sec. 5.2(c)]

Q37: What are the requisites for Fraud or Willful Breach of Trust to be a valid ground for termination?
A37:
• There must be an act, omission, or concealment;
• The act, omission or concealment involves a breach of legal duty, trust, or confidence justly reposed;
• It must be committed against the employer or his/her representative; and
• It must be in connection with the employee’s work. [DO 174-15, Sec. 5.2 (d)]

Q38: What are the requisites for Loss of Confidence to be a valid ground for termination?
A38:
• There must be an act, omission or concealment;
• The act, omission, or concealment justifies the loss of trust and confidence of the employer to the
employee;
• The employee concerned must be holding a position of trust and confidence;
• The loss of trust and confidence should not be simulated;
• It should not be used as a subterfuge for causes which are improper, illegal, or unjustified; and
• It must be genuine and not a mere afterthought to justify an earlier action taken in bad faith. [DO
174-15, Sec. 5.2 (e)]

Q39: What happens when an employee is absolved of an offense that led to her/his dismissal and
is ordered reinstated, but later is convicted in a criminal prosecution for the same offense?
A39: It would enable the NLRC to review its judgement and modify it so as to delete the award of
separation pay. [Sampaguita Garments Corporation vs. NLRC, G.R. No. 102406 (1994)]

Q40: What are the requisites for Installation of Labor-saving devices to be a valid ground for termination?
A40:

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• There must be introduction of machinery, equipment or other devices;

• The introduction must be done in good faith;
• The purpose for such introduction must be valid such as to save on cost, enhance efficiency and
other justifiable economic reasons;
• There is no other option available to the employer than the introduction of machinery, equipment
or device and the consequent termination of employment of those affected thereby; and
• There must be fair and reasonable criteria in selecting employees to be terminated. [DO 174-15,
Sec. 5.4 (a)]

Q41: What are the requisites for Redundancy to be a valid ground for termination?
A41:
• There must be superfluous positions or services of employees;
• The positions or services are in excess of what is reasonably demanded by the actual
requirements of the enterprise to operate in an economical and efficient manner;
• There must be good faith in abolishing redundant positions. [DO 174-15, Sec. 5.4 (b)]

Q42: What are the requisites for Retrenchment to be a valid ground for termination?
A42:
• The retrenchment must be reasonably necessary and likely to prevent business losses;
• The losses, if already incurred, are not merely de minimis, but substantial, serious, actual and
real, or if only expected, are reasonably imminent;
• The expected or actual losses must be proved by sufficient and convincing evidence;
• The retrenchment must be in good faith for the advancement of its interest and not to defeat or
circumvent the employee’s right to security of tenure; and
• There must be fair and reasonable criteria in ascertaining who would be dismissed and who
would be retained among the employees, such as status, efficiency, seniority, physical fitness,
age, and financial hardship for certain workers. [DO 174-15 Sec. 5.4 (c)]

Q43: What are the requisites for Closure to be a valid ground for termination?
A43:
• There must be a decision to close or cease operation of the enterprise by the management.
• The decision was made in good faith;
• There is no other option available to the employer except to close or cease operations. [DO 174-
15, Sec. 5.4 (d)]

Q44: What are the requisites for Disease to be a valid ground for termination?
A44:
• The employee must be suffering from any disease;
• The continued employment of the employee is prohibited by law or prejudicial to his/her health as
well as to the health of his/her co-employees; and
• There must be certification by a competent public health authority that the disease is incurable
within a period of 6 months even with proper medical treatment. [DO 174-15, Sec. 5.4 (e)]

Q45: What is the procedural requirement for Termination of Employment by the Employer?
A45:
• For just causes, the employer must serve two written notices and comply with the following:
• The first written notice should contain:
• The specific causes or grounds for termination;
• Detailed narration of the facts and circumstances that will serve as basis for the charge against
the employee;
• A directive that the employee is given opportunity to submit a written explanation within a reasonable
period. “Reasonable period” should be construed as at least 5 calendar days from receipt of the notice.
• After serving the first notice, the employer should afford the employee ample opportunity to be
heard and to defend her/himself with the assistance of a legal representative if they so desire.

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• “Ample opportunity to be heard” means any meaningful opportunity, verbal or written, given to the
employee to answer the charges and submit evidence in support of their explanation. A formal
hearing or conference only becomes mandatory when requested by the employee in writing,
when substantial evidentiary disputes exist, when company rule or practice requires it, or when
similar circumstances justify it.
• After determining that the termination of employment is justified the employer shall serve the
employee a written notice of termination indicating that:
• All circumstances involving the charge against the employee have been considered; and
• The grounds have been established to justify the severance of their employment.
• For authorized causes, the employer has to serve a written notice to the employee and the
Regional Office of DOLE specifying the grounds for termination, at least 30 days before effectivity
of termination. [Sec. 5.3, DO 147-15]

Q46: What is the liability for non-compliance with procedural requirements?

A46: The employer will be liable for nominal damages. The employer will also be liable for full backwages
and separation pay if the employee was terminated for an authorized cause. This does not, however,
invalidate the termination. [Agabon vs. NLRC, G.R. No. 158693 (2004)]

Q47: What is an employee, who has been unjustly dismissed from work, entitled to?
A47:
• Reinstatement without loss of seniority rights and other privileges
• Full backwages, inclusive of allowances
• Other benefits or their monetary equivalent, computed from the time his compensation was
withheld from him up to the time of his actual reinstatement. [Art. 294, LC]

Q48: Are contracting arrangements unlawful?

A48: No. Contracting or subcontracting arrangements shall be legitimate if the following circumstances concur:
• The contractor or subcontractor is engaged in a distinct and independent business and undertakes to
perform the job or work on its own responsibility, according to its own manner and method;
• The contractor or subcontractor has substantial capital to carry out the job farmed out by the principal on his
account, manner and method, investment in the form of tools, equipment, machinery and supervision;
• In performing the work farmed out, the contractor or subcontractor is free from the control and/or
direction of the principal in all matters connected with the performance of the work except as to
the result thereto; and
• The Service Agreement ensures compliance with all the rights and benefits for all the employees
of the contractor or subcontractor under the labor laws. [Sec. 8, DO 174-17]
What is prohibited is labor-only contracting.

Q49: What is labor-only contracting?

A49: This refers to an arrangement where the contractor or subcontractor merely recruits, supplies, or
places workers to perform a job, work or service for a principal, and the ff elements are present:
• The contractor or subcontractor does not have substantial capital, or
• The contractor or subcontractor does not have investments in the form of tools, equipment,
machineries, supervision, work premises, among others, and
• The contractor’s or subcontractor’s employees recruited and placed are performing activities
which are directly related to the main business operation of the principal; or
• The contractor or subcontractor does not exercise the right to control over the performance of the
work of the employee. [Sec. 5, DO 174-17]

Q50: What is does substantial capital mean for purposes of contracting?

A50: It refers to paid-up capital stocks/shares of at least Five Million pesos in the cause of corporations,
partnerships and cooperatives; in the case of single proprietorship, a net worth of at least Five Million
Pesos. [Sec. 3(l), DO 174-17]

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Q51: What is a trilateral relationship?

A51: This refers to the relationship in a contracting or subcontracting arrangement where there is a
contract for a specific job, work or service between the principal and the contractor, and a contract of
employment between the contractor and its workers. There are 3 parties involved in these arrangements:
the principal who decides to farm out a job, work or service to a contractor; the contractor who has the
capacity to independently undertake the performance of the job, work or service; and the contractual
workers engaged by the contractor to accomplish the job, work or service. [Sec. 3(m), DO 18-A-11]

Q52: What are the rights of the contractor’s employees?

A52:
• Safe and healthful working conditions;
• Labor standards such as but not limited to service incentive leave, rest days, overtime pay, holiday pay, 13 th
month pay and separation pay as may be provided in the Service Agreement or under the Labor Code;
• Retirement benefits under the SSS or retirement plans of the contractor/subcontractor;
• Social security and welfare benefits;
• Self-organization, collective bargaining and peaceful concerted activities; including the right to
strike. [Sec. 10, DO 174-17]

Q53: What are the effects of termination of employment of the contractor’s/subcontractor’s employee?
A53: If it is prior to the expiration of the Service Agreement, Articles 297-299 of the Labor Code shall govern.

If the termination of employment is caused by the pre-termination of the Service Agreement not due to
Authorized causes under Article 198, the right of the contractor’s/subcontractor’s employee to unpaid
wages and other unpaid benefits shall be borne by the party at fault, without prejudice to the solidary
liability of the parties to the Service Agreement.

If the termination results from the expiration of the Service Agreement, or the completion of the phase of the job
or work for which the employee is engaged, the latter may opt to wait for re-employment within 3 months to
resign and transfer to another contractor-employer. Failure of the contractor to provide new employment for the
employee shall entitle the latter to payment of separation benefits. [Sec. 13, DO 174-17]

Q54: What are the elements of an Employer-Employee Relationship based on the Four-Fold Test?
A54:
• Selection and engagement on the employee
• The payment of wages
• The power of dismissal
• The employer’s power to control the employee not only as to the result of the work, but also with
respect to the means and methods by which the work is to be accomplished. [Chavez vs. NLRC,
G.R. No. 146530, (2005)]

Q55: What is Wage Distortion?

A55: This is a situation where an increase in prescribed wage rates results in the elimination or severe
contraction of intentional quantitative differences in wage or salary rates between and among employee
groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure
based on skills, length of service, or other logical bases of differentiation. [Art. 124(j), LC]

The elements are:

• An existing hierarchy of positions with corresponding salary rates
• A significant change in the salary rate of a lower pay class without a concomitant increase in the
salary rate of a higher one
• The elimination of the distinction between the two levels
• The existence of the distortion in the same region of the country [Prubankers Association vs.
Prudential Bank & Trust Co., G.R. No. 131247 (1999)]

Q56: Is there a wage distortion when employees in one region are given salary increases but
employees of the same company in another region are not?

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A56: No. Wage distortion deals with the difference in compensation between employees of different pay classes in
the same region. It does not make an issue the difference in the wages between employees of the same pay classes
in different regions. [Prubankers Association v. Prudential Bank and Trust Co., G.R. No. 131247 (1999)]

Q57: Is there a wage distortion when a company adopts an upgraded salary scale that increases
the hiring rates of new employees without increasing the salary rates of old employees?
A57: No. Wage distortion arises from wage orders and not from acts of an employer. [Bankard
Employees Union-WATU vs. NLRC, 423 SCRA 148 (2004)]

Q58: May the employer make deductions from the wages of the employees?
A58: Yes, but only in the following circumstances:
• When deductions are authorized by law, including deductions for the insurance premiums advanced by
the employer in behalf of the employee as well as union dues where the right to check-off has been
recognized by the employer or authorized in writing by the individual employee himself.
• When the deductions are with the written authorization of the employees for payment to the third
person and the employer agrees to do so; Provided, That the latter does not receive any
pecuniary benefit, directly or indirectly, from the transaction. [Rule VIII, Sec. 10, Omnibus Rules]
Q59: What is the difference between salary and wages?
A59: Wages applies to compensation for manual labor, whether skilled or unskilled, while salary denotes
a compensation for a higher degree of employment. [Gaa vs. CA, G.R. No. L-44169 (1985)]

Q60: When can separation pay in lieu of reinstatement be granted?

A60:
• When reasons exist which are not attributable to the fault or are beyond the control of the employer;
• When the illegally dismissed employee has contracted a disease and his reinstatement will
endanger the safety of his co-employees; or,
• Where a strained relationship exists between the employer and the dismissed employee.
[Composite Enterprises Inc. v. Caparoso, G.R. No. 159919 (2007)]

Q61: When is an employee not entitled to backwages?

A61: When an employee was dismissed but it was found that the dismissal was too harsh a penalty, the
court can order reinstatement and deny backwages as the substitute penalty. [Integrated Microelectronics
Inc. vs. Pionilla, G.R. No. 200222 (2013)]

LABOR 2
Q62: True or false: All confidential employees are disqualified to unionize for the purpose of
collective bargaining.
A62: False. Not all confidential employees are disqualified to unionize for the purpose of collective
bargaining. Only confidential employees, who, because of the nature of their positions, have access to
confidential information affecting labor-management relations as an integral part of their positions are
denied the right to self-organization for purpose of collective bargaining [San Miguel Corporation
Supervisors vs. Laguesma, G.R. No. 110399 (1997)]

Q63: True or false: Supervisory employees are not allowed to organize.

A63: False. Supervisory employees may join, assist or form labor organizations but shall not be eligible
for membership in any labor organization of the rank-and-file employees [Article 255].

Q64: What is the rule on the “equity of the incumbent"?

A64: The rule on “equity of the incumbent” states that all existing federations and national unions which meet
the qualifications of a legitimate labor organization and none of the grounds for cancellation shall continue to
maintain their existing affiliates regardless of the nature of the industry and the location of the affiliates.

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Q65: What is the effect of the affiliation of a local chapter (chartered local) and a national union?
A65: Under the rules implementing the Labor Code, a chartered local union acquires legal personality
through the charter certificate issued by a duly registered federation or national union, and reported to the
Regional Office in accordance with the rules implementing the Labor Code. A local union does not owe its
existence to the federation with which it is affiliated. It is a separate and distinct voluntary association
owing its creation to the will of its members. Mere affiliation does not divest the local union of its own
personality, neither does it give the mother federation the license to act independently of the local union. It
only gives rise to a contract of agency, where the former acts in representation of the latter.

Q66: What are the effects of disaffiliation?

A66: A registered independent union retains its legal personality while a chartered local loses its legal
personality unless it registers itself. [Volkschel Labor Union v. BLR, G.R. No. L-45824 (1985)]

It does not disturb the enforceability and administration of a collective agreement; it does not occasion a
change of administrators of the contract nor even an amendment of the provisions thereof. [Volkschel
Labor Union v. BLR, supra]

The obligation of an employee to pay union dues is coterminous with his affiliation or membership. The
employees’ checkoff authorization, even if declared irrevocable, is good only as long as they remain
members of the union concerned. A contract between an employer and the parent organization as
bargaining agent for the employees is terminated by the disaffiliation of the local of which the employees
are members. [Volkschel Labor Union v. BLR, supra]

The vinculum that previously bound the two entities was completely severed. The federation was divested
of any and all power to act in representation of the union. Thus, any act performed by the federation
affecting the interests and affairs of the union is rendered without force and effect. [ANGLO v. SAMANA
Bay, G.R. No. 118562 (1996)]

Q67: What is a strike?

A67: Strike means any temporary stoppage of work by the concerted action of employees as a result of
an industrial or labor dispute (Art. 219[o]). This includes slowdowns, mass leaves, sitdowns, attempts to
damage, destroy or sabotage plant equipment and facilities and similar activities.

Q68: What are the legal requirements of a valid strike?

A68:
(a) A notice of strike filed with the DOLE 30 days before the intended date thereof in case of bargaining
deadlock or 15 days in case of ULP but not union busting (if ULP and union busting, no cooling-off period)
(b) A strike vote approved by a majority of the total union membership in the bargaining unit concerned
obtained by secret ballot in a meeting called for that purpose; and
(c) A notice to the DOLE of the results of the voting at least seven (7) days before the intended strike [Article 278].

Q69: Is a bank’s outsourcing of its cashiering, distribution and bookkeeping functions formerly
performed by union members to a subsidiary of said bank constitutive of unfair labor practice?
A69: No. The contracting out of services is not illegal per se as part of the exercise of management prerogative.
Absent proof that the management acted in a malicious or arbitrary manner, the Court will not interfere with the
exercise of business judgment by the employer. The consequent reduction of a number of positions in the
bargaining unit does not constitute an interference with the employees’ right to self-organization since the
employees in the aforecited case were neither transferred nor dismissed from service. Furthermore, the Court
also held that cashiering, distribution and bookkeeping are not inherent banking functions, since these do not
involve the main business or operation of banks which is the lending of funds obtained in the form of deposits.
[BPI Employees Union-Davao City-FUBU vs. BPI, et al., G.R. No. 174912 (2013)]

Q70: If the NLRC orders the reinstatement of the striking employees on the ground that the strike
is valid, are the striking employees entitled to backwages?
A70: No. Under the principle of a fair day’s wage for a fair day’s labor, the striking employees were not
entitled to the wages during the period of the strike (even if the strike might be legal), because they
performed no work during the strike. (Escario, et al. v. NLRC, G.R. No. 160302, September 27, 2010)

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Q71: The company sent a letter to the individual strikers by registered special delivery mail
without being coursed through the union representing the employees in the collective bargaining.
The company contended that the sending of the letters constituted a legitimate exercise of their
freedom of speech. Will the actuations of the company constitute unfair labor practice?
A71: Yes. It is unfair labor practice for an employer operating under a collective bargaining agreement to negotiate or
to attempt to negotiate with his employees individually in connection with changes in the agreement. The basis for the
prohibition regarding individual bargaining with the strikers is that the employer is still under obligation to bargain with
the union as the employees’ bargaining representative. [The Insular Life Assurance Co., Ltd., Employees Association-
NATU, et al. v. The Insular Life Assurance Co., Ltd., G.R. No. L-25291, January 30, 1971]

Q72: During the course of negotiations for the new collective bargaining agreement, the company
and Union X, the certified bargaining representative, reached a deadlock. Can Union Y, the
federation to which Union X belongs, validly declare a strike on behalf of Union X?
A72: No. In case of an economic strike, only the certified bargaining representative or employer can
validly declare the same [Article 278 (c), Labor Code].

Q73: A signed a “Goodwill Clause” with B indicating that she would not be employed with another company
in competition with B or else she would be liable for damages. She resigned and was subsequently employed
by C, a direct competitor of B. Her remaining salaries were unpaid so she filed a complaint in the NLRC. B
refused to pay contending that her claims were offset when she was employed by C. Is B’s position correct?
A73: No. The NLRC has original and exclusive jurisdiction to hear and decide cases for claims of
damages arising from employer-employee relations. While A’s claim arises in connection with an
employer-employee relationship, the claims of B arose from a breach of contractual obligation and is
therefore a civil complaint under the jurisdiction of regular courts.

The breach of the “Goodwill Clause” is an undertaking effective after the cessation of the employment
relationship between the parties. As such, breach of the undertaking is a civil law dispute, not a labor
case. [Portillo v. Rudolf Lietz, Inc., G.R. No. 196539 (2012)]

Q74: Distinguish the jurisdiction of a Labor Arbiter from that of the NLRC.
A74: As to jurisdiction, the LA can hear and resolve cases under Art. 224 of the Labor Code, money
claims under Sec. 7 of R.A. 10022; and referred wage distortion disputes in unorganized establishments,
as well as the enforcement of compromise agreements pursuant to the 2011 NLRC Rules of Procedure,
as amended. On the other hand, the NLRC reviews decisions rendered by the LA; decisions or orders
rendered by the RD under Article 129 of the Labor Code; and conducts compulsory arbitration in certified
cases. As to the power to issue a labor injunction, the NLRC can issue an injunctive writ. On the other
hand, the Labor Arbiter cannot issue an injunctive writ.

Q75: What is a certification election?

A75: Certification election is the process of determining, through secret ballot, the sole and exclusive
representative of the employees in an appropriate bargaining unit, for purposes of collective bargaining or
negotiation [Book V, Rule I Sec. 1 (h)].

Q76: Who may file for a petition for certification election?

A76:
(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).

Q77: What are the bars to certification election?

A77:
(a) One-year bar rule
No certification election may be held within 1 year from the time a valid certification, consent or run-off
election has been conducted within the bargaining unit.

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If the order of the Med-Arbiter certifying the results of the election has been appealed, the running of the
one year period shall be suspended and the reckoning period is the date when the decision becomes final
and executory. [Book V, Rule VIII, Sec 3 [a]]

(b) Negotiation bar rule;

No certification of election may be filed when: (1) Within 1 year after the valid certification election (2) The
duly certified union has COMMENCED AND SUSTAINED negotiations in good faith with the employer (3)
In accordance with Art. 261 of the Labor Code [Book V, Rule VIII, Sec 3 [b]]

(c) Deadlock bar rule;

No certification of election may be filed when: (1) The incumbent or certified bargaining agent is a party;
(2) A bargaining deadlock had been:
(a) submitted to conciliation or arbitration or;
(b) Had become the subject of a valid notice of strike or lockout [Book V, Rule VIII, Sec. 3 (c)]

A “deadlock” is defined as the counteraction of things producing entire stoppage; a state of inaction or of
neutralization caused by the opposition of persons or of factions (as in government or voting body);
standstill. The word is synonymous with the word impasse which presupposes reasonable effort at good
faith bargaining which, despite noble intentions, does not conclude in agreement between the parties
[Divine World University v. SOLE, G.R. No. 91915 (1992)]

(4) Contract bar rule.

BLR shall not entertain any petition for certification election or any other action which may disturb the
administration of DULY REGISTERED existing collective bargaining agreements affecting the parties [Art.
238], except:
(1) When the petition is filed during the freedom period in Articles 264, 265, and 268.
(2) When the CBA is incomplete
(3) When the CBA is substandard
(4) When the CBA is prematurely renewed
(5) When the CBA is unregistered

Q78: Can non-lawyers appear before the Labor Arbiter?

A78: Yes, when they represent themselves, or if they represent their organization or members thereof.
[Art. 222, Labor Code; Rule III, Section 6, 2011 NLRC Rules of Procedures]

Q79: What is a SEBA certification?

A79: SEBA certification is certification granted to any legitimate labor organization upon filing a request by
the organization in the regional office which issued its certificate of registration or certificate of creation of
chartered local. SEBA certification replaced Voluntary Recognition [DO 40-1-15, 2015]

A request for SEBA certification shall include the following:

(a) Names and addresses of the requesting legitimate labor organization;
(b) Name and address of the company where it operates;
(c)Bargaining unit sought to be represented;
(d) Approximate number of employees in the bargaining unit; and
(e)Statement of the existence or nonexistence of other labor organization/CBA.

Q80: What is a check-off? Who has jurisdiction over check-offs disputes?

A80: A check-off is a process or device whereby the employer, on agreement with the Union, recognized
as the proper bargaining representative, or on prior authorization from the employees, deducts union dues
or agency fees from the latter’s wages and remits them directly to the Union. [Marino vs. Gamilla, G.R.
No. 149763 (2009)]. This is done primarily for the benefit of the union and indirectly for the benefit of the
individual employees. Jurisdiction over check-off disputes is conferred to the Bureau of Labor Relations.

Q81: What is the Globe doctrine?

A81: The Globe doctrine refers to a practice which sanctions the holding of a series of elections, not for the purpose
of allowing the group receiving an overall majority of votes to represent all employees, but for the specific purpose

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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 vs. Yard Crew Union, G.R. Nos. L-
16292-94, L-16309 & L-16317-18 (1960)].

Q82: True or false: If the winner of the certification election was disqualified, the choice garnering
the 2nd highest number of votes becomes the winner.
A82: False. Disqualification of winning candidates will not automatically result in the assumption of office
of those who garnered the second highest number of votes. The mere fact that they obtained the second
highest number of votes does not mean that they will thereby be considered as the elected officers if the
true winners are disqualified. [Manalad vs. Trajano, G.R. No. 72772-73 (1989)]

Q83: What are the types of union security agreements?

A83:
a) Closed shop – only union members may be employed and for the duration of the agreement,
remains a member in good standing of a union.
b) Union shop – all new regular employees are required to join the union within a certain period as a
condition for their continued employment.
c) Modified union shop – employees who are not union members at the time of signing the contract
need not join the union but all hired workers thereafter must join.
d) Maintenance of membership shop – present and future union members must maintain their
membership as a condition for continued employment until they are promoted or transferred out
or the agreement is terminated
e) Agency shop – members must pay union agency fees for benefits received from the union’s negotiations
f) Open shop – one is not required to join a union as a condition of hiring or continued employment.

Q84: What is a runaway shop?

A84: A runaway shop is an act constituting unfair labor practice. It is one wherein the employer moves its
business to another location or it temporarily closes its business for anti-union purposes. A runaway shop
in this sense, is a relocation motivated by anti-union animus rather than for business reasons.

Q85: Are all employees required to join a union that has a particular security clause?
A85: No. The general rule is that the clause applies to all employees in the bargaining unit covered by the union
security clause.
The exceptions are:
(1)those already members of another union at the time of the signing of the CBA [Art. 259(e), LC];
(2) those already in service at the time the union security clause took effect [Guijarno vs. CIR,
G.R. No. L-28791-93 (1973)];
(3) any employee who at the time of the union security provision takes effect is a member of a
religious organization which prohibits its members from joining labor unions [Reyes vs. Trajano,
G.R. No. 84433 (1992)];
(4) confidential employees who are excluded from the rank and file bargaining unit;
and
(5) employees specifically excluded by the express terms of the agreement.

Q86: What are the requisites for a valid termination due to Union Security Provision?
A86: The employer needs to determine and prove that:
1.The union security clause is applicable;
2. The union is requesting for the enforcement of the union security provision in the CBA; AND
3. There is sufficient evidence to support the union’s decision to expel the employee from the union.

Q87: May a petition for certification election be filed after the 60-day freedom period? Why?
A87: No. The contract bar rule applies that a certification election can only be entertained within 60 days
prior to the expiry date of an existing CBA. If there is no CBA yet, it is the duty of both parties to keep the
status quo during the 60-dy period and/or until a new agreement is reached by the parties.

Q88: How can a party appeal the decisions of the NLRC?

A88: Decisions of the NLRC are appealable to CA via Rule 65, not to SC [St. Martin’s Funeral Homes vs. NLRC, G.R.

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No. 130866 (1998)]

Q89: How does a party appeal the decisions of the voluntary arbitrator?
A89: Decisions of the voluntary arbitrator are akin to those of the RTC, and should thus be first appealed to the CA
under Rule 43 before being elevated to the SC. [AMA Computer College vs. Nacino, G.R. No. 162739 (2008)]

Q90: What is a potential or ongoing dispute in relation to the Administrative Intervention for
Dispute Avoidance apply?
A90: Parties voluntarily bring a potential or ongoing dispute is a (1) live and active dispute; (2) that may
lead to a strike/lockout or to a massive labor unrest; (3) which is not the subject of any complaint or notice
of strike or lockout at the time the request for intervention was made. [DOLE Circ. No. 1-2006]

Q91: The union, in agreement with the management, executed a quitclaim for certain monetary
benefits intended for its members from a judgment decided in favor of the union. Is the union’s
act, functioning as the agent of its employees, valid?
A91: No. The relationship between unions and its members is fiduciary in nature, which involves the
requirement of fair dealing. It arises from two factors: “one is the degree of dependence of the individual
employee on the union organization; the other, a corollary of the first, is the comprehensive power vested
in the union with respect to the individual.” The union cannot waive or quitclaim part of the judgment
award unless such authority was expressly granted through an SPA and the employer must deal with the
employees in good faith. [Heirs of Cruz vs. CIR, G.R. No. L-23331-32 (1969)]

Q92: How are major policies affecting the entire membership of the union in unions determined?
Is it enough that the union members raise their hands to show agreement?
A92: No. The general rule is that major policy determinations are made by secret balloting. The exception
is (1) when the nature of the organization or (2) force majeure renders such secret ballot impractical and
thus the board of the organization may make such decision in behalf of the general membership. [Halili
vs. CIR, G.R. No. L-24854 (!985)]

Q93: Differentiate a CBU from a Labor Organization and a Union:

A93: Collective Bargaining Unit: 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
occupation or geographical grouping within such employer unit [Book V, Rule I, Section 1(d), IRR]

Labor Organization: Any union or association of employees in the private sector which exists in whole or
in part for the purpose of collective bargaining, mutual aid, interest, cooperation, protection, and other
lawful purposes. [Art. 219(g), LC; Book Five, Rule I, Sec. 1 (cc), IRR]

Union: A labor organization in the private sector organized for collective bargaining and for other legitimate
purposes [Book Five, Rule I, Sec. 1[zz], IRR]

Q94: What is the duty to bargain collectively when there exists a CBA?
A94: 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.

Q95: If supervisory employees join a union of the rank and file employees, should the PCE of the
union be cancelled? What is the effect of such?
A95: No. The inclusion of disqualified employees is not among the grounds for cancellation unless such
mingling was due to misrepresentation, false statement or fraud. [Art. 239, LC]

If there is commingling, they would be deemed excluded or removed from the list. [Art.
256, LC] Q96: What is the substitutionary doctrine?
A96: The substitutionary doctrine provides that the employees cannot revoke the validly executed
collective bargaining contract with their employer by the simple expedient of changing their bargaining
agent. [Benguet Consolidated vs. BCI Employees and Workers Union-PAFLU, G.R. No. L-24711 (1968)]

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Q97: What are the conditions for the substitutionary doctrine to apply?
A97:
(1)Change of bargaining agent [through affiliation, disaffiliation, or other means];
(2) Existing CBA with the previous bargaining agent.

Q98: What are the effects of the substitutionary doctrine?

A98:
(1)New bargaining agent cannot revoke and must respect the existing CBA
(2) It may negotiate with management to shorten the existing CBA’s lifetime.

Q99: What is the effect of the disaffiliation of a union from a federation on (a) the CBA, (b) the ability to
negotiate with the employer and (c) the local union which is not independently registered?
A99: It does not disturb the enforceability and administration of a CBA, nor does it serve as an amendment.

A valid disaffiliation would terminate the contract of agency between the union and the federation. Thus,
the federation can no longer represent the union’s actions nor deal with the employer. [ANGLO vs.
SAMANA Bay, G.R. No. 118562 (1996)]

The not independently-registered local union cannot exercise the rights and privileges granted by the law
to a legitimate labor organization [Abraria vs. NLRC, G.R. No. 154113 (2011)]

Q100: Can terminated employees with pending cases be allowed to vote and if so, what are the
requirements for such?
A100: Yes. Employees who have been dismissed and have contested the legality of his/her dismissal in a forum of
appropriate jurisdiction at the time of the issuance of the order for the conduct of the CE and there has not yet been a
valid, final judgement on his dismissal at the time of the conduct of the CE. [Book V, Rule IX, Section 5]

Employees who have been improperly laid-off but who have a present, unabandoned right to or expectation of re-
employment, are eligible to vote in CEs. [Phil. Fruits and Vegetable Industries Inc. vs. Torres, G.R. No. 92391 (1992)]

Q101: How can union members cancel their own union registration?
A101: Under Art. 247, one of the grounds to cancel union registration is voluntary dissolution by members
(along with (1) Misrepresentation, false statement, or fraud in connection with the adoption or ratification
of- CBL or amendments thereto,the minutes of ratification, andlist of employees who took part in
ratification and (2) Misrepresentation, false statement or fraud in connection with the election of officers,
minutes of the election of officers, andthe list of voters).
Voluntary dissolution can be filed by any part in interest and needs to file in the Regional Director’s Office
for independent unions chartered local, or workers’ association or to the BLR for federations, national
unions or trade centers the following requirements:
• Members’ desire to dissolve the registration of their union should have been voted
through secret balloting
• Balloting should take place in a meeting duly called for the purpose of deciding whether
or not to dissolve the union
• The vote to dissolve should represent 2/3 affirmative vote of general membership (not quorum
• Members’ resolution should be followed by an application for cancellation passed and
submitted by union’s governing board, which application must be attested to by the
president. [Art. 248, LC]

Q102: XYZ Union was the sole and exclusive bargaining agent of ABC Corp., a company with offices all
over the Philippines. Because of management decisions, XYZ Union rallied its members all over the
company branches and called them to picket in their respective areas. The picketing turned violent in at
least three branches, with the union members preventing employees from entering company premises.
ABC Corp. decided to file a complaint for unfair labor practice and a preliminary injunction for the
union to stop their picketing. The Labor Arbiter granted the preliminary injunction on the ground it has
jurisdiction over all complaints for unfair labor practice. Is the Labor Arbiter correct?

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A102: No. An injunction is a separate remedy from the filing of a complaint for unfair labor practice. It is the National
Labor Relations Commission that has jurisdiction to issue injunctions. The Labor Arbiter’s power to issue injunctions
as an ancillary remedy has since been deleted in the NLRC Rules of Procedure. [Art. 225(e), LC]

Q103: The employees of Unifoods Co. decided to organize themselves into Samahan ng mga Manggagawa ng
Unifoods. Before them, there has never been any labor organization within the company. After they registered with
the Bureau of Labor Relations and became a legitimate labor union, they sent a letter to management with their
proposal for a CBA. After 20 days, the management did not reply. They filed a complaint for unfair labor practice
with the Labor Arbiter on the ground that Unifoods Co.’s violated of their duty to bargain collectively under the
Labor Code. The Labor Arbiter dismissed their case. Was the Labor Arbiter correct?
A103: Yes. A labor union has no right to bargain collectively unless it is certified as the sole and exclusive
bargaining agent of the establishment. The fact that the union was registered is not sufficient. [Art. 251(c),
LC; Philippine Diamond Hotel and Resort, Inc. (Manila Diamond Hotel) vs. Manila Diamond Hotel
Employees Union, G.R. No. 158075 (2006)]

Q104: Union B had a Collective Bargaining Agreement with Company A. It provided that employees
would receive rice allowance of 3 sacks a month. One month before the expiry of the three -year term
on Oct. 1, 2018, Union B sent a letter together with its proposals to Company to negotiate on economic
provisions. Negotiations persisted until Jan. 1, 2019 when the company finally agreed to a CBA. In the
new agreement, employees would receive rice allowance of 5 sacks a month. Union A filed a complaint
for unfair labor practice when Company A refused to give 5 sacks from the time the CBA ended on Oct.
1, 2018. Company A countered that it was not in bad faith when it gave 3 sacks a month until Dec. 31,
2018, arguing that the new CBA only takes effect after its execution. Is company A correct?
A104: No. Union A is correct. In any agreement on economic provisions of the CBA entered into within 6
months from the expiry of the term, such provisions shall retroact to the day immediately following such
date. [Art. 265, LC] Therefore, the employees are entitled to 5 sacks a month from Oct. 1, 2018, when the
CBA’s three-year term expired.

Q105: Union B has a CBA with Company X, which is a leading retail brand. Under the CBA, employees
are provided with a 30% discount on all store purchases. Union B demanded that Company X allow the
30% discount in addition to the regular sale discount in stores. Company X insisted that the CBA
discount excludes the regular store discounts. After going through the CBA grievance procedure, the
designated voluntary arbitrator ruled in favor of Company X. Where should Union B file its appeal?
A105: Union B should file the appeal before the Court of Appeals. Decisions of voluntary arbitrators are
appealable to the CA by Rule 43. [AMA Computer College vs. Nacino, G.R. No. 162739 (2008)]]

Q106: Union C was a chapter of Federation A. Union C, the sole and exclusive bargaining agent, went on strike
because Company B would not agree to increase their wages during collective bargaining negotiations. Company B
filed a complaint for unfair labor practice on the ground that Union C committed an illegal strike because they have
no legal personality. Union C filed a motion to dismiss on the ground that they have legal personality, having been
issued the charter certificate. Should the motion to dismiss be denied?
A106: Yes. The issuance of a charter certificate only grants the chapter legal personality for the purposes
of filing a petition for certification election. To be entitled to all other rights and privileges of a legitimate
labor organization, which includes the right to strike, the chapter must submit the additional requirements
required by law. [Art. 241, LC]

Q107: Union B is a newly organized union who was certified as the sole and exclusive bargaining agent of
Company A. Three months later, Company A hired Contractor C which engaged in the same line of work of
the union members. Union C, fearful that Company A was engaging in union busting, filed a notice of strike.
Upon the advice of their counsel, they held the strike without waiting for the 15-day cooling off period.
Company A filed a petition to declare the strike illegal in the NLRC. Will the complaint prosper?
A107: No. The 15-day cooling period does not apply when there is dismissal from employment of union officers
duly elected in accordance with the union constitution and by-laws, which may constitute union busting where
the existence of the union is threatened. In this case, there was no dismissal yet. [Art. 278(c), LC]

Q108: Company A and Union C recently had a legal dispute which required the union to hire an attorney. In
payment of attorney's fees, the union and union members agreed to charge it against the payroll of the union

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U.P. LAW BOC LABOR LAW & SOCIAL LEGISLATION PRE-WEEK REVIEWER

members, following the procedure in the Labor Code. A month later, Union Member B filed a
complaint to declare such levy illegal. Will the complaint prosper?
A108: Yes. Attorney's fees may be charged against union funds, not against the payroll of the union
member. [Art. 228(b), LC]

Q109: Hanford Commercial Partnership is in the middle of a labor crisis. Management is in the middle
of holding a lockout. DOLE takes cognizance of the matter and decides to hold an improved offer
balloting to settle the lockout. Out of the 5 partners, 4 partners holding 40% total interest in the
partnership voted on the reduced offer of the union. Will the workers be able to return to work?
A109: No. The law requires that at least majority of the partners holding controlling interest should vote to
accept the reduced offer. [Art. 280, LC] In this case, though majority of partners voted, they only held 40%
of the total interest in the partnership.

Q110: Anak ng Pawis Union-FTW has been in bad terms with the Grand Steeling Mill Co. because the latter
would not agree to the increase in rice allowance in light of the present rates of inflation. The union filed a
notice to strike. After 3 consecutive days of striking, the company made them an offer to return to work.
Unfortunately, the next day, the union members were refused entry into company premises. Upon advise
from their counsel, they filed to petition to declare the lockout of their employer as illegal on the ground that
the employer did not file a notice of lockout, did not follow the 30-day cooling off period, lockout vote, or the
succeeding 7-day period before holding the lockout. The Labor Arbiter, which they suspected to be pro-
management, dismissed their complaint. Was the dismissal proper?
A110: Yes. A strike, which was openly and publicly declared by a union, cannot be converted into a pure
and simple lockout, by the mere expedient of filing before the trial court a notice of offer to return to work,
during the pendency of a labor dispute between the union and the employer. [Rizal Cement Workers
Union vs. CIR, G.R. No. L-18442 (1962)]

Q111: Harry was dismissed by his company because of alleged theft. Being part of the union, Harry
underwent the grievance procedure under the CBA. The grievance panel decided that the company was
justified in dismissing him. Harry filed a case for illegal dismissal in the NLRC. The company filed a motion to
dismiss on the ground that the proper recourse is for Harry to appeal to voluntary arbitration because his
dismissal was an interpretation/implementation of the CBA. Will the motion to dismiss prosper?
A111: No. The Labor Arbiter has exclusive original jurisdiction over termination disputes. [Art. 224, LC]

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