Part One

THE LABOR CODE

WITH ANNOTATIONS

1
 LABOR RELATIONS

2
 BOOK FIVE
LABOR RELATIONS

3
 LABOR RELATIONS

THE BEST PRESCRIPTION

From 17 years of experience in the field of labor relations,
I think the best prescription for the maintenance of industrial
peace would come from the company itself and how it maintains
its relations with the union or its employees.
We should develop the consciousness between the parties
at the firm level for them to try to settle disputes through the
grievance machinery. This, however, requires good faith and
sincerity on panels of both parties. I have always counselled
against management confronting the grievance and raising the
flag of management prerogative. I can assure you that if you
do it, you can never resolve a dispute through the grievance
machinery. Gone are the days when you can just go under the
cover of the management prerogative clause. You must address
these problems, and it takes both sincerity and will to make the
grievance machinery work.

Franklin M. Drilon
(ECOP: 1987 Constitution: Its Implications
on Employment and Labor Relations)

THE TRUE UNION LEADER

As union leader, he must see to it that the policies and
activities of the union in the conduct of labor relations are within
the precepts of law. Any deviation from the legal boundaries shall
be imputable to the leader. He bears the responsibility of guiding
the union along the path of law; to cause the union to demand
what is not legally demandable would foment anarchy which is a
prelude to chaos.

Chief Justice Marcelo B. Fernan

(Victoria vs. Inciong, G.R. No. 49046, January 26, 1988)

4
 CAN THE LABOR UNION SURVIVE?

Now the labor union is in tatters and disarray, and in

apparently irreversible decline. It is losing members fast. It
is losing power even faster... English trade unions have lost a

quarter
have lostoftwo-fifths
their members... Labor unions
of their members... in the
Union United States
membership and
union power are equally declining fast in Italy and France, and
are beginning to do so in West Germany.
The labor union can go in three directions. If it does nothing,
it may disappear even in a free democratic society. Or it may
shrink to the point where it becomes irrelevant.
A second choice is to try to maintain itself through
dominating the political power structure and having government
impose compulsory union membership and such power positions
for the union as ‘codetermination,’ which gives it a veto power
over company management.
There is a third choice: the union rethinks its function. The
union might reinvent itself as the organ of society — and of the
employing institution — concerned with human potential and
human achievement, and with optimizing the human resource
altogether. The union would still have a role as the representative
of the employees against management stupidity, management
arbitrariness, and management abuse of power. It would however
not be an adversarial relationship but resemble the Scandin avian
‘Ombudsman.’ The union would work with management on
productivity and quality and altogether on keeping enterprise
competitive and thus maintaining the members’ jobs and their
incomes...
These, to be sure, are but straws in the wind; and so far
it is not a strong wind. But can the labour union — whether of
manual, ofan
accepts as clerical, or of knowledge
opportunity the shift toworkers — economy
the world survive unless
and toit
the knowledge society?

Peter F. Drucker
The New Realities, 1989, pp. 185-189

5
 LABOR RELATIONS

WHAT STUNTS PROGRESS

The Welga ng Bayan which was in fact aWelga Laban sa Bayan is off-
spring of a misreading of the constitutional provisions. The Constitution
authorizes only strikes that are peaceful and in accordance with law.
But strikes, whether peaceful or in accordance with law,
unfortunately are not the i nstrument to secure better salaries or benefits
for the workers. This has been the world’s plainest experience in the
last two decades that also saw the dismantling of the most cherished
doctrines of socialism. We don’t have to go very far to bring home our
point. What has debunked the dogma that strike is labor’s most necessary
and rewarding right is the history of labor in the past two decades in our
part of the globe, the area of economic miracle, the model Pacific Rim
where we are.
The records show that in countries here where there are no strikes,
or where strikes are few and far between, the workers enjoy the highest
wages and handsomest fringe benefits. By the same token, in countries
where strikes abound, the workingman gets very poor pay and small
benefits.
It was ILO, International Labor Organization of the United
Nations, that documented a comparative study of the number of strikes
in our area and came up with the conclusion that “industrial peace is
essential to the prosperity in Asean countries.”
The central folly is to try to divide wealth before creating it. It ought
to be clear to the labor leaders and the bleeding-hearts in the Left and in
Congress that there exists a law superior to the laws made by Congress
or by wage regulatory boards. This is the economic law of supply and
demand. Labor benefits are limited by the economic condition of the
business enterprises and of the nation. The key to better deal for l abor
is better business. In Japan and Taiwan, workers get fantastic salaries
because there are more jobs than applicants.
Smarter labor leaders negotiate for higher salaries in exchange
for higher productivity. The deal benefits both parties.
All told, the world’s experience in the last decades is that a country’s
economic prosperity is what raises theworkingman’s wages and condition;
and that staging strikes is what subverts and stunts economic progress.
Thus, strikes work against the interest of the workers. One day not far off
someone will rewrite the law books, even the Constitution, to moderate
the doctrine that the right to strike is labor’s most vital and rewarding
right.

Napoleon G. Rama
Philippine Panorama, Nov. 4, 1990

6
 GENESIS OF INDUSTRIAL PEACE

Unrest and friction in industrial relations develop from

the fact that employers frequently disregard or fail to appreciate
fully the complaints and grievances of employees. Charges of
favoritism, discrimination, unfair treatment, mistakes in the pay
envelope, and other complaints may seem trivial to the employer,
but they are usually very serious to the workers. The deaf ear that
is often turned to complaining employees is largely responsible
for the growth of a feeling of industrial injustice, suspicion,
mistrust, and class hatred.
Not infrequently men are discharged for causes that to
them seem insignificant, and often the reasons for dismissal
are not clear or are not known at all. The absolute right to hire
and fire in modern industry has been exercised autocratically,
especially when delegated to foremen who, because of favoritism,
difference in political and religious views, personal jealousy, or a
feeling of superiority, discharge workers indiscriminately without
even attempting to assign any cause or to justify the action to the

worker.
It is not sufficient, therefore, for managers to refer
complaints and grievances to supervisors. Some other agency of
adjustment must be provided. Either the manager must provide
regular hours for hearing such cases, or the responsibility must
be placed upon the employment or personnel department...
Whatever method may be introduc ed, it is commonly agreed
that the channels of communication between these parties
should always be open. In no other way can even a semblance of
democratic administration of industry be assured and industrial
peace and goodwill promoted. An efficient personnel department
does much to make the worker feel that he is getting a square
deal, and this is the genesis of successful industrial management.
Wi th ou t a co nt en te d pe rs on ne l, pr od uc ti ve ef fi ci en cy is
impossible.

GORDON S. WATKINS and PAUL A. DODD

Labor Problems (1940)

7
 LABOR RELATIONS

DISMISSAL FROWNED UPON

Except for the most serious causes affecting the business of
the employer, our labor laws frown upon the penalty of dismissal.
Where a penalty less punitive would suffice, an employee should
not be sanctioned with a consequence so severe.

CHIEF JUSTICE ARTEMIO V.

PANGANIBAN
Solvic Industrial Corp., et al. vs. NLRC, et al.
G.R. No. 125548, September 25, 1998

EQUALIZING FORCE

In the lopsided world of work, the job seeker is much weaker

than the job provider. This imbalance explains the need for law and
the role it plays. Law is the equalizing force. It tempers the power of
the strong and strengthens the faith of the weak towards enlightened
recognition of their interdependence. There is no better way than
balanced sharing of both efforts and rewards. Law tempers greed
and deception as it breeds fair sharing among par tners.
And yet, law by itself does not accomplish much. It is lifeless.
It draws its life from the strength of reason as well as the subtlety
of the human heart. Reason informs that the weakness of one
ought to be transformed into the strength of the many, and that this
transformation is not only allowed but zealously safeguarded by law.
The mind thus educated, the heart must be brave enough to act to
translate the legal concept into reality. On the employer’s par t, the
heart and the mind dictate respect for the workers’ rights. In this
manner their interdependence will prove mutually beneficial, and
cold statutory statements will come to life.
CA. Azucena, Jr.

8
 BOOK FIVE
LABOR RELATIONS
Title I
POLICY AND DEFINITION
Chapter I
POLICY

Overview/Key Questions: Box 1

1. What are the policy objectives of our labor relations
law?
2. Employer-emp loyee relationsh ip must exist so that
labor relations law may apply within an enterprise. What
factors determine the existence of such relationship?
3. What are considered labor disputes ? What are the
available remedies?

ART. 211. DECLARATION OF POLICY

A. It is the policy of the State:
(a) To promote and emphasize the primacy of free collective
bargaining and negotiations, including voluntary arbitration, mediation and
conciliation, as modes of settling labor or industrial disputes;
(b) To promote free trade unionism as an instrument for the
enhancement of democracy and the promotion of social justice and
development;
(c) To foster the free and voluntary organization of a strong and
united labor movement;
(d) To promote the enlightenment of workers concerning their
rights and obligations as union members and as employees;
(e) To provide an adequate administrative machinery for the
expeditious settlement of labor or industrial disputes;
(f) To ensure a stable but dynamic and just industrial peace; and
(g) To ensure the participation of workers in decision and policy-
making processes affecting their rights, duties and welfare.

9
ART. 211 LABOR RELATIONS

B. To encourage a truly democratic method of regulating the

relations between the employers and employees by means of agreements
freely entered into through collective bargaining, no cour t or administrative
agency or official shall have the power to set or fix wages, rates of pay, hours
of work or other terms and conditions of employment, except as otherwise
provided under this Code.
COMMENTS AND CASES
1. OVERVIEW AND VIEWPOINT
In the opening comments to the Preliminary Title in Volume I, it is said
that labor legislation is divided broadly into labor standards and labor relations.
“Labor Standards” refers to the minimum terms and conditions of employment
to which employees are legally entitled and with which employers must comply.
“Labor Relations” refers to the interactions between employer and employees
or their representatives and the mechanism by which the standards and other
terms and conditions of employment are negotiated, adjusted and enforced.
Thus defined, Books I to IV of the Code deal largely with standards and V to VII
with relations.
What is the “correct” sequence of studying the books? This is just a question
of instructional sequence which is not of great importance because the distinction
between labor standard and labor relation is in fact academic. The distinction
does not matter, for instance, when an employer and the employees negotiate a
labor contract, or when an employee files a complaint with a government agency.
Negotiating a contract and filing a complaint are aspects of labor relations but
their subjects oftentimes are labor standards. Similarly, the government body
that hears and decides labor disputes, in general, whether involving money
claims or anti-union acts, is called “labor relations” commission and not “labor
standards and relations” commission. Labor standards and labor relations actually
intertwine; they are not mutually exclusive.
What follows is a perspective of labor relations in the private sector.
The government labor relations policy is declared in Article 211 which is
a focused elaboration of the basic labor policy announced in Article 3 which,
in turn, echoes the constitutional mandates. The policy intends to attain social
justice through industrial peace and progress. The latter is significantly founded

on employee
employees. In participation
Management and collective
parlance, interactions
the input between
is the parties’ employer
rights and
and duties,
the process is workers’ organization and collective bargaining, and the output
is industrial peace and progress towards social justice as the end goal.
As in political democracy the crux of labor relations is the process and
substance of employee participation, that is, how rights and duties are exercised,
how agreements are reached, and how relationship is enhanced.
The process starts when workers organize themselves into a union or some
other form of association. They may or may not register their organization with

10
i
ii
iii
iv
v
vi
vii
 Books by the Author

EMPLOYMENT AND OUTSOURCING UNDER PHILIPPINE LAW

Two Basic Labor Questions: Legal concepts and court rulings on
employment and nonemployment relationships explained for the
general reader; 2010 edition

THE LABOR CODE WITH COMMENTS AND CASES (VOLUMES I and II)
The textbooks:A comprehensive instructional study of the whole Labor
Code, richly amplified with comments and court rulings; intended for
law students, lawyers, and other practitioners; recipient of the Supreme
Court “Centenary Book Award”; a “popular labor law textbook” (the
Supreme Court in Cainta Catholic Schoolcase, May 4, 2006); now on its
nineteenth year, seventh edition

EVERYONE’S LABOR CODE

The Labor Code for business and
The labor law fundamentals and reviewer:
law students, bar reviewees, unionists, and the general public; key codal
provisionsare supplemented with essentialexplanatory ‘Notes’ and rulings
condensed in plain English; seventeenth year, sixth edition
ESSENTIAL LABOR LAWS
The companion book: A handy bible of the labor laws most frequently
consulted by most practitioners and ardent students; updated with
Notes; third edition forthcoming

LABOR LAWS SOURCE BOOK

The compilation: The integrated, updated, and systematic compilation
of virtually all labor laws; primarily meant for practitioners, teachers,
and researchers; consists of three parts: the Labor Code with update and
reference notes; the ImplementingRules; and other labor laws;previously
titled Labor Law Handbook; now on fourth edition

DEMOCRACY AND SOCIALISM: A CURRICULUM OF CONTENTIONS

A study in political theory: An integrating exposition of the principles and
postulates of the two socio-political ideologies; approved as general reading
or college reference book by the Department ofEducation

viii
 THE

LABOR CODE
WITH COMMENTS
AND CASES
Part of the Labor Law-Labor Relations Series

by

C. A. AZUCENA, JR.

VOLUME II

Seventh Edition
2010

Published & Distributed by:

856 Nicanor Reyes, Sr. St.

Tel. Nos. 735-13-64 • 736-05-67
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ix
www.rexinteractive.com
Philippine Copyright 1991, 1992, 1996, 1999, 2004, 2007, 2010
by CESARIO ALVERO AZUCENA, JR.
Practitioner, Professor, Bar Reviewer

Seventh Edition, 2010

Nineteenth Year
US Library of Congress
Call No. KPM1214.31974.A6
A956 1991

All rights reserved.

No part of this book may be reproduced in any way
without a written permission from the author.

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 PREFACE
Keeping Faith with Tradition

A book has to build and keep its own tradition. This seventh
edition is an effort to do that.
Republic Act No. 9481 of 2007 amends a number of Labor Code
articles to strengthen the self-organizational right of employees.
Because of this law the Department of Labor and Employment had
to make numerous changes to the rules implementing the law on
labor relations, through Department Order No. 40-F-03 released in
October 2008.
Aside from these legislative and administrative changes, sig-
nificant rulings were also issued by the Supreme Court, affecting
some statutory provisions and previous decisions. Among these are
those declaring as unconstitutional Section 10 of R.A. No. 8042; the
precedent-setting rulings on labor contracting and cooperatives; the
debatable ruling on jurisdiction to determine employer-employee
relationship; and again, the reversal of the ruling on the effect of
employee’s defeat in an illegal dismissal case.
These developments—and many more—are all reflected in this
new edition.
Unchanged, however, are the underlying objective and the fea-
tures and methodology of the book. The objective is to analyze and
explain, as clearly and authoritatively as possible, the country’s labor
law anchored to the Labor Code. The aim, in other words, is to build
knowledge—at least to form cohesive and retainable understanding
of concepts comprising a defined subject. This being the aim I have

resisted
off court(in this and
rulings the past
without editions)or
integrating the easier workthem.
synthesizing of merely
Therattling
harder
and more meaningful task is determining what materials to include,
what to exclude, and how to tie them together, correctly and clearly,
so as to create compact, graspable concepts. Those tasks this edition
does. This book therefore continues to feature annotations consisting
of authoritative explanations and court rulings, including the most
significant and recent ones. The codal articles and the annotations

xi
are linked, analyzed and synthesized objectively and academically.*
Figuratively, my aim is not to scatter seedlings in a forest but to build
a well-designed landscape with pathways and plants neatly lined up.
The features and the methods of explanations, I hope, enhance the
objective of offering accessible knowledge of Philippine labor law.
Because this has been the book’s mission since its birth some
twenty years ago and because the book has been generously accepted
in that light by generations of students, lawyers, and nonlawyers, this
edition has to keep faith with that tradition.
All these twenty years, of course, I have always acknowledged
my boundless debt of gratitude to my readers inside and outside the
universities.
CAA
Mandaluyong City and
San Pablo City
Labor Day, 2010

*It should be the business of teachers to stand outside the strife of parties
and endeavor to instill into the young the habit of impartial inquiry, leading them
to judge issues on their merits and to be on their guard against accepting ex parte
statements at their face value. The teacher should not be expected to flatter the
prejudices either of the mob or of officials. His professional virtue should consist in
a readiness to do justice to all sides, and in an endeavour to rise above controversy

into a region
the results of investigation
of his dispassionateare
scientific investigation.
inconvenient, If there
he should are people
be protected to whom
against their
resentment, unless it can be shown that he has lent himself to dishonest propaganda
by the dissemination of demonstrable untruths.

BERTRAND RUSSELL
Unpopular Essays
Routledge, 1950
(p. 129)

xii
To
Father and Mother,
my Lolita, Noel, Mylene, Carmen, and Bennet,
my brothers and sisters,
and
those of my clients and students
who have inspired me,
this work is
gratefully dedicated.

Lawyer’s Formation
A lawyer’s professional life begins the day that he or she
starts law school. This has not always been the case, of course, but
today the first place of almost every lawyer’s career consists of a
period of time spent studying law in a formal academic program
under the supervision of university professors. However diverse
their professional experiences may be in other respects, there-
fore, lawyers still share at least one thing in common: they have
all been law students at one time or another, and it is as students
that their professional habits first take shape.

Anthony T. Kronman
The Lost Lawyer (1993)
p. 109

xiii
 ABBREVIATIONS

Without meaning to be informal but only for ease and brevity, this text
occasionally uses abbreviations, commonly known in labor relations practice,
such as the following:
BLR Bureau of Labor Relations
BU Bargaining Unit
BWC Bureau of Working Conditions
C.A. Commonwealth Act/Court of Appeals
CBA Collective Bargaining Agreement
CBL Constitution and By-laws
C.E. Certification Election
CNA Collective Negotiation Agreement
CSC Civil Service Commission
D.O. Department Order
DOLE Department of Labor and Employment
EBR Exclusive Bargaining Representative
E-E Employer-employee (Relationship)
E.O. Executive Order
JC Job Contracting
LA Labor Arbiter
LLO Legitimate Labor Organization
LMC Labor-Management Council/Committee
LoC Labor-only Contracting
M.O. Memorandum Order
MR Motion for Reconsideration
NCMB National Conciliation and Mediation Board
NLRB National Labor Relations Board (in U.S.)
NLRC National Labor Relations Commission
NWPC National Wages and Productivity Commission
OSEC Office of the Secretary
OWWA Overseas Workers’ Welfare Administration
PD Presidential Decree
POEA Philippine Overseas Employment Authority
R.A. Republic Act
RD Regional Director
RO Regional Office
RTWPB Regional Tripartite Wages and Productivity Board
TESDA Technical Education and Skills Development Authority
TRO Temporary Restraining Order
VA Voluntary Arbitration
VR Voluntary Recognition
WA Workers’ Association
WO Wage Order

xiv
 THE
LABOR CODE
OF THE
PHILIPPINES

Presidential Decree No. 442

A DECREE INSTITUTING A LABOR CODE, THEREBY
REVISING AND CONSOLIDATING LABOR AND
SOCIAL LAWS TO AFFORD PROTECTION TO
LABOR, PROMOTE EMPLOYMENT AND HUMAN
RESOURCES DEVELOPMENT AND ENSURE
INDUSTRIAL PEACE BASED ON SOCIAL JUSTICE.

As Amended
By Presidential Decree
Nos. 570-A, 626, 643, 823, 819, 849, 850, 865-A
891, 1367, 1368, 1391, 1412, 1641, 1691, 1692
1693, 1920, 1921

Batas Pambansa
Blg. 32, 70, 130 and 227

Executive Order
Nos. 47, 111, 126, 179, 180, 203, 247, 251, 252, 307,
797

and

Republic Act
Nos. 6640, 6657, 6715, 6725, 6727, 7641, 7655, 7700,
7730, 7796, 8042, 8188, 8558, 9177, 9256, 9347, 9481

W ITH
COMMENTS AND CASES
IMPLEMENTING RULES
APPENDICES
xv
 STRUCTURE

VOL UME I co nt ai ns th e Pre li min ar y Ti tl e an d Boo ks I to IV of th e

Labor Code:
PART ONE — The Labor Code with Annotations

Preliminary Title
Book I — Pre-employment
Book II — Human Resources Development
Book III — Conditions of Employment
Book IV — Health, Safety and Social Welfare Benefits
PART TWO — Rules Implementing the Labor Code
Appendix

VOLUME II covers Book V to VII of the Labor Code:

PART ONE — The Labor Code with Annotations

Book V — Labor Relations
Book VI — Post-employment
Book VII — Transitory and Final Provisions
PART TWO — Rules Implementing the Labor Code

xvi
 TABLE OF CONTENTS
Volume II
Preface, xi
Abbreviations, xiv
Structure, xvi

Part One
THE LABOR CODE WITH ANNOTATIONS

BOOK FIVE — LABOR RELATIONS

“The Best Prescription”, 4

“The True Union Leader”, 4
“Can the Labor Union Survive?”, 5
“What Stunts Progress”, 6
“Genesis of Industrial Peace”, 7
“Dismissal Frowned Upon”, 8
“Equalizing force”, 8

Title I — POLICY AND DEFINITION

Chapter I — POLICY
Art. 211. Declaration of Policy, 9
Comments and Cases
1. Overview and Viewpoint, 10
2. Workers’ Organization, 13
3. Why Workers Organize, 13
4. ILO Convention No. 87, 14
5. Workers’ Participation in Policy-Making, 15

Chapter II — DEFINITIONS
Art. 212. Definitions, 16
Comments and Cases
1. Employer-Employee Relationship Essential, 18
2. Who are Employees, 19
2.1 “One Whose Work Has Ceased...”, 20
3. Labor Organization As Employer, 20
4. Labor Dispute, 21
5. Labor Disputes and Remedies: A Summary, 22

xvii
 5.1 Definition, 22
5.2 Tests or Criteria of “Labor Dispute”, 23
5.3 Kinds of Labor Disputes, 23
5.4 Remedies in Labor Disputes, 24

Title II — NATIONAL LABOR RELATIONS COMMISSION

Chapter I — CREATION AND COMPOSITION

Art. 213. National Labor Relations Commission, 27
Art. 214. Headquarters, Branches and Provincial Extension Units, 29
Comments and Cases
1. NLRC: Nature and Organization, 29
1.1 Creation and Autonomy, 29
1.2 Administrative Supervision Delegated to the DOLE
Secretary, 30
1.3 Essential Character, 30
1.4 Tripartite Composition, 31
1.5 Allocation of Powers Between NLRC En Banc
and Its Divisions, 31
1.6 The NLRC Rules of Procedure, 32
Art. 215. Appointment and Qualifications, 32

Comments
Requiring Confirmation by Commission on Appointments,
Unconstitutional, 33
Art. 216. Salaries, Benefits, and Other Emoluments, 33
Chapter II — POWERS AND DUTIES
[Part 1. JURISDICTION]

Art. 217. Jurisdiction of Labor Arbiters and the Commission, 34

Comments and Cases
1. Additional Cases, 35
2. Compulsory Arbitration By Labor Arbiters, 35
2.1 NLRC Appellate Proceedings Not Part of Arbitration, 35
2.2 Nature of Proceedings, 36
2.3 Article 217 Yields to Arts. 261 and 262, 36
3. Labor Arbiter’s Jurisdiction, in General, 37
3.1 Supervisory Control, Crucial, 37
4. Venue, 38
4.1 Worker’s Option, 39
4.2 Waiver, 40
5. Labor Arbiter’s Jurisdiction: U.L.P. Cases, 40
6. CBA Violation amounting to ULP, 41
7. Labor Arbiter’s Jurisdiction: Termination Disputes, 41

xviii
 7.1 Termination of Corporate Officer; Jurisdiction Over
Intra-Corporate Disputes Transferred from SEC to RTC, 43
7.2 Effect of Claim for Backwages, Benefits, or Damages, 45
7.3 Mainland vs. Movilla : The “Better Policy” in
Determining SEC Jurisdiction, 46
7.4 Tabang vs. NLRC: SEC Jurisdiction Reaffirmed; Corporate
Officer and Intra-Corporate Controversy Defined, 47
7.5 When Bank Officer May be a Regular Employee, 50
8. Labor Arbiter’s Jurisdiction: Money Claims, 50
8.1 Only Money
8.2 Money ClaimsClaims
Must Not
HaveArising
Arisen from
from CBA, 51
Employment, 51
8.3 Money Claims of Coop Employees, 53
8.4 Jurisdiction Over Claims for Damages, 54
8.5 Splitting of Actions Not Allowed, 54
8.6 Employer’s Complaint for Damages, 55
9. Labor Arbiter’s Jurisdiction: Strikes and Lockouts, 55
10. Labor Arbiter’s Jurisdiction: OFW’s Money Claims or Dismissal, 56
11. Labor Arbiter’s Jurisdiction: Wage Distortion, 57
12. Labor Arbiter’s Jurisdiction: Disputes over Compromise
Settlements, 57
13. Submission to Jurisdiction, 58
14. Immunity of Foreign Governments, 59
14.1 Immunity of the UN and Its Specialized Agencies, 59
15. Executing Money Claims Against the Government, 60
16. Local Water District, 61
16.1 Exception: Where NLRC Jurisdiction is Invoked, 62
17. Republic Act No. 6715 – Retroactive?, 63

[Part 2. POWERS]

Art. 218. Powers of the Commission, 64

Art. 219. Ocular Inspection, 67
Comments and Cases
1. Powers of the Commission, 67
1.1 Rule-Making Power, 67
1.2 Power to Issue Compulsory Processes, 67
1.3 Power to Investigate and Hear Disputes Within
Its Jurisdiction, 67
1.4 Contempt Power, 68
1.5 Power to Conduct Ocular Inspection, 68
1.6 Adjudicatory Power: Original, 68
1.7 Adjudicatory Power: Appellate, 69
2. Power to Issue Injunction or Temporary Restraining Order, 70
2.1 Injunction by Labor Arbiter, 71
2.2 Requisites for Issuance of Restraining Order or
Injunction, 72
2.3 Conditions for Issuance Ex Parte of a Temporary
Restraining Order (TRO), 72

xix
 2.4 No Adequate Remedy, 74
2.5 Cash Bond, 74
2.6 Scope, 75
2.7 Reception of Evidence, 75
2.8 Twenty-day Life of TRO, 76
2.9 Illustrative Case: Issuance of TRO, 76
2.10 Injunction from NLRC Not the Proper Remedy Against
Employee’s Dismissal, 77

[Part 3. PROCEDURE]

Art. 221. Technical Rules Not Binding and Prior Resort

to Amicable Settlement, 79
Comments and Cases
1. Proceedings Before Labor Arbiter or the Commission;
Technical Rules Not Applicable, 79
1.1 Modicum of Admissibility; Substantial Evidence, 80
1.2 Cardinal Rights in Quasi-Judicial Proceedings, 80
1.3 Verification, 82
1.4 Party Respondent, 83
1.5 Prohibited Pleadings and Motions, 84
2. Mandatory Conciliation and Mediation Conference; Compromise
Encouraged, 84
2.1 Binding Effect of Compromise Agreement, 86
2.2 Quitclaim and Waivers, 87
2.2a Final and Executory Judgment Cannot be Negotiated, 89
3. Motion to Dismiss, 89
3.1 Motu Propio Dismissal of Complaint Based on Prescription, 90
3.2 Res Judicata as Reason to Dismiss Complaint, 90
3.3 No Dismissal of Complaint Despite Death, 91
3.4 Revival or Refiling of Dismissed Case, 91
4. Submission of Position Papers and Reply, 92
4.1 Determination of Necessity of Hearing or Clarificatory
Conference, 92
4.2 Role of the Labor Arbiter in Hearing and Clarificatory
Conference, 92
4.3 Non-appearance of Parties; Postponement of Hearing
and Clarificatory Conferences, 92
5. Submission of the Case for Decision, 93
5.1 Position Papers as Basis of Decision, 93
5.2 Lack of Verification, Not Fatal, 94
5.3 Due Process: Opportunity To be Heard, 94
5.4 Inhibition, 95
5.5 Due Process Includes Impartiality of the Appeal Body, 95
6. Suspension of Proceedings, 96
7. Filing and Service of Pleadings and Decisions, 97
7.1 Service of Notice and Resolutions, 97

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 7.2 Proof and Completeness of Service, 98
8. Resolution of Doubt in Law or Evidence, 99
9. Decision of Labor Arbiter, 101
9.1 Contents of Decisions, 101
9.2 No Motions for Reconsideration and Petitions for
Relief from Judgment, 101
“Not Automatically in Favor of Labor”, 102
Art. 222. Appearances and Fees, 102

Comments and Cases

1. Appearance of Non-lawyers, 102
2. Change of Lawyer, 103
3. Authority to Bind Party, 104
4. Attorney’s Fee, 105
4.1 Negotiation Fee, 105
4.2 For Services Rendered by Union Officers, 106
4.3 Attorney’s Fee Collectible Only from Union Funds, 106

Chapter III — APPEAL

Art. 223. Appeal, 108

Comments and Cases
1. No Motion for Reconsideration of Labor Arbiter’s

1.1Decision, 109
Final Decisions Cannot be Amended, 109
2. Period to Appeal from Labor Arbiter, 110
2.1 Ten Calendar Days, 110
2.2 Ten-Calendar-Day Rule Not Applicable Prior to
Vir-Jen Case, 111
2.3 Under the 2005 NLRC Rules of Procedure, 111
2.4 Date of Receipt by Mail, 111
2.5 Failure to Give Copy of Appeal to Adverse Party
Within Ten Days, 111
2.6 No Extension of Period, 112
2.7 Periods Generally Mandatory, 112
3. Grounds of Appeal, 112
4. Where to File Appeal, 113
5. Requisites for Perfection of Appeal, 113
6. Frivolous Appeal, 113
6.1 Unverified Letter Not Proper Appeal, 114
7. Payment of Appeal Fees, 114
8. Appeal Bond; Filing on Time; Exceptions, 115
8.1 Motion to Reduce Bond under NLRC Rules, 118
8.2 No Bond, No Appeal Perfected, 118
8.2a Relaxing the Ten-Day Period, 119
8.3 No Distinction Between “Filing” and “Perfection”
of Appeal; Star Angel Decision, Not “Venerable”, 119
8.4 Amount of Appeal Bond Excludes Damages, 120

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 8.5 Is Property Bond Acceptable, 120
8.6 Bond Accepted Conditionally, 121
8.7 Supersedeas Bond, 121
9. Records and Transmittal, 121
10. Effect of Appeal of Arbiter’s Decision, 122
10.1 Execution or Reinstatement Pending Appeal, 122
10.2 Effect of Perfection of Appeal on Execution, 122
11. Frivolous or Dilatory Appeals, 122
12. Appeals from Decisions of other Agencies, 122
13. Proceedings Before the Commission, 123
13.1 Issues on Appeal, 124
13.2 Technical Rules Not Binding, 124
13.2a Evidence Submitted on Appeal to NLRC, 124
13.3 Conciliation/Mediation, 125
13.4 Consultation, 125
13.5 Dissenting Opinion, 125
13.6 Inhibition, 126
14. Form of Decision, Resolution and Order, 126
14.1 Reasoned Reversal, 126
14.2 Extended Meaning of “Appeal” under Article 223;
NLRC May Issue Writ of Certiorari , 127
15. Finality of Decision of the Commission and Entry of
Judgment, 128
16. Motions for Reconsideration, 128
16.1 Party who Failed
Decision to Arbiter
of Labor Appeal on mayTime FromMotion
Still File
for Reconsideration of NLRC Decision, 128
17. Certified Cases, 129
18. Appeal from the National Labor Relations Commission, 129
18.1 Review by Certiorari by the Court of Appeals; the
St. Martin case, 129
18.2 When and Where to File Petition, 131
18.2a One Day Late, 132
18.2b Certified True Copy of NLRC Decision, 132
18.3 Effect on NLRC’s Decision, 132
18.4 Appeal to Labor Secretary Abolished, 132
18.5 Grounds for Certiorari , 132
18.6 “Grave Abuse of Discretion”, 133
18.7 Sole Office of Certiorari , 133

18.8Appeal
18.9 Not afrom
SlaveOSEC
to Technical
to CA; Rules, 134 Ruling Applies, 135
St. Martin
18.10 Exhaustion of Administrative Remedies; Motion for
Reconsideration Required, 136
18.10a Exceptions, 136
19. Certificate of Non-Forum Shopping, 138
19.1 Certification of Nonforum Shopping Must be Made by
Petitioner, 139
20. Disposition by the Court of Appeals, 140

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 20.1 Remand, 140
20.2 Dismissal of Appeal, 140
20.3 Findings of Facts Generally Final, 141
20.4 Exceptions, 141
20.5 Examples: Some Findings of Facts Reversed, 142
21. From CA to SC; Only Question of Law, Rule 45, 143
“Faster Disposition of Appealed Cases”, 144
Art. 224. Execution of Decisions, Orders, or Awards, 145

Comments and Cases

1. Execution, 145
1.1 Both Party and Counsel Should Be Notified, 146
1.2 Article 244 is Execution, Not Appeal, Procedure, 146
2. Execution upon Finality of Decision or Order, 146
3. Appeal on the Execution of Decision; Supervening Events, 148
4. General Rule: Regional Trial Court Cannot Issue Injunction
Against NLRC, 150
4.1 Execution Over Property Owned Only by Judgment
Debtor; Remedies of Third-Party Claimant; the
Yupangco Case, 151
4.2 RTC Injunction Against Labor Arbiter or NLRC, When
Allowed, 154
4.3 Third Party Claim, 156
4.4 Simulated Sale, Void Ab Initio, 156
Art. 225. Contempt Powers of the Secretary of Labor, 157

Title III — BUREAU OF LABOR RELATIONS

Art. 226. Bureau of Labor Relations, 158

Comments and Cases
1. BLR Jurisdiction and Functions, 158
2. Inter-Union and Intra-Union Disputes; D.O. No. 40-03, 159
2.1 D.O. No. 40-03, 160
2.2 Effect of Pendency, 160
2.3 Appeal, 161
3. Extent of BLR Authority, 162
4. Katarungang Pambarangay, Not Applicable to Labor Disputes, 163

Art. 227. Compromise Agreements, 163

Comments and Cases
1. Compromise Agreements, 164
2. Formal Requirements of Compromise Agreement, 165
3. Valid Compromise and Quitclaim, 165
4. Compromise Should Be Duly Authorized, 167
5. Rulings on Compromise Settlements Summarized, 169
6. When to Effect Compromise: Final Decision, Negotiable?, 170

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 6.1 The definitive Ruling: Magbanua vs. Uy, 170
6.2 Absence of Counsel Remedied, 172
6.3 Reiteration, 172
7. Options When Compromise Agreement is Violated, 173
Art. 228. Indorsement of Cases to Labor Arbiters (Repealed
by Batas Pambansa Blg. 230), 173
Art. 229. Issuance of Subpoenas, 173

Art. 230. Appointment of Bureau Personnel, 174

Art. 231. Registr y of Unions and File of Collective Agreements, 174
Comments and Cases
Registry of Unions and CBAs, 174
Art. 232. Prohibition on Certification Election, 175
Comments
The Contract-Bar Rule, 175
Art. 233. Privileged Communication, 176

Title IV — LABOR ORGANIZATION

Chapter I — REGISTRATION AND CANCELLATION

Art. 234. Requirements of Registration, 177

Art. 234-A. Chartering and Creation of a Local Chapter, 178
Art. 235. Action on Application, 178
Art. 236. Denial of Registration; Appeal, 178
Art. 237. Additional Requirements for Federations or National Unions, 178
Art. 238. [Repealed by EO 111, December 24, 1986], 179
Comments and Cases
1. Labor Organization; Two Broad Purposes, 179
1.1 Distinction between “Collective Bargaining” and “Dealing
with Employer”, 180
1.2 Labor Organization Not Necessarily a Union, 181
2. Classification
2.1 At the of Labor Organizations,
National Level, 181 181
2.2 At the Enterprise Level, 182
2.3 Recent Changes by R.A. No. 9481, 183
3. Registration Rationale, 185
3.1 Effect of Registration Under the Corporation Law, 186
4. Where to Register, 186
5. Registration Requirements, 186
5.1 Federation or National Union, 186

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 5.2 Independent Labor Union, 187
5.3 Worker’s Association, 188
5.4 Chartered Local, 188
5.4a Chartered Local has to be Registered;
Requirements, 188
5.4b Legal Personality only to File a PCE, 189
5.4c Submission of Confirming Documents, 189
5.4d A Trade Union Center cannot Create
a Chapter, 189
5.4e When does a Chapter Become an LLO?, 190
5.4f Recognition by BLR not a Ministerial Duty, 190
5.4g Requirements Relaxed, 192
5.5 Union’s Legitimacy not Subject to Collateral Attack, 192
6. Collective Bargaining Unit (CBU), 192
7. Constitution, By-Laws, and Regulations, 193
“Some Reasons For Joining A Union”, 195
7.1 Limitation to By-laws, 196
7.2 Amendments, 196
8. Provisions Common to the Registration of Labor Organizations
and Workers’ Association, 196
8.1 Attestation, Fee, Copies of Documents, 196
8.2 Action on the Application/Notices, 196
8.3 Denial of Application/Return of Notice, 197
8.4 Appeal, 197
9. Affiliation,
9.1 Report 197of Affiliation; Requirements, 198
10. Disaffiliation, 199
10.1 Local Union is the Principal; Federation, the Agent, 201
10.2 When to Disaffiliate, 201
10.3 Disaffiliation Must be by Majority Decision, 202
10.4 Disaffiliation: Effect on Legal Status, 203
10.5 Disaffiliation: Effect on Union Dues, 203
10.6 Disaffiliation; Effect on Existing CBA; the “Substitutionary”
Doctrine, 204
11. Revocation of Charter, 204
11.1 Effect of Cancellation of Registration of Federation or
National Union on Locals/Chapters, 204
12. Merger or Consolidation, 205
12.1 Notice of Merger/Consolidation of Labor Organizations;

12.2Where to File, 206

Requirements of Notice of Merger/Consolidation, 206
12.3 Certificate of Registration, 207
13. Change of Name, 207
13.1 Effect of Change of Name, 207
Art. 238. Cancellation of Registration, 207
Art. 238-A. Effect of Petition for Cancellation of Registration, 207
Art. 239. Grounds for Cancellation of Union Registration, 208

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Art. 239-A. Voluntary Cancellation of Registration, 209
Comments and Cases
1. Cancellation of Registration; Grounds, 209
1.1 Invalid Grounds, 209
1.2 “Cabo” and other Grounds Deleted, 210
1.3 Administrative Cancellation; the “reportorial
requirements”, 210
2. Who Files Petition for Cancellation, 211

4.3. Procedure,
Where to File
212 Petition, 212
Art. 240. Equity of the Incumbent, 212

Chapter II — RIGHTS AND CONDITIONS OF MEMBERSHIP

Art. 241. Rights and Conditions of Membership in a Labor

Organization, 213
Comments and Cases
1. Democratization of Unions, 216
2. Nature of Relationship Between Union and Its Members, 216
2.1 Duty of Court to Protect Laborers from Unjust
Exploitation by Oppressive Employers and Union
Leaders, 217
3. Rights of Union Members, 217
3.1 Eligibility for Membership, 218
4. Election of Union Officers, 218
4.1 Eligibility of Voters, 220
4.2 Union Officer Must Be an Employee, 221
4.3 Disqualification of Union Officers, 221
4.4 Union Election Protest: Proclamation of Winners, 222
5. Action Against Union Officers, 222
“Rights of Union Members”, 222
6. Due Process in Impeachment, 223
7. Expulsion of Member, 224
8. Relief Within the Union, 226
8.1 Exceptions, 227
9. Consequence of Violation of Rights, 227
9.1 Exception: When 30% Not Required, 228
10. Visitorial Power, 229
11. Check-Offs and Assessments, 229
11.1 Assessments, Like Dues, May also be Checked
Off, 229
11.2 Three Requisites to Collect Special
Assessment, 232
11.2a Article 241 (n and o): Authorization Should
Proceed from Free Consent, 232

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 11.3 Check-Off of Agency Fee, 233
11.4 Illegal Check-Off Ground for Cancellation, 233
11.5 Employer’s Liability in Check-Off Arrangement, 233
11.6 Jurisdiction Over Check-Off Disputes, 234

Chapter III — RIGHTS OF LEGITIMATE LABOR

ORGANIZATIONS

Art. 242. Rights of Legitimate Labor Organizations, 235

Comments and Cases

1. Not Any L.L.O., 236
2. Right of Union to Represent Its Members, 236
2.1 Members Doubting their Union, 237
3. Compromise Binding Upon Minority Members of Union;
Exception, 237
4. Compromise of Money Claims, 238
5. Right to be Furnished with Financial Statement, 239
6. Right to Collect Dues, 239
Art. 242-A. Reportorial Requirements, 239

Title V — COVERAGE

Art. 243. Coverage and Employees’ Right to Self-Organization, 241

Comments and Case

1. Organizing in General, 241
1.1 Coverage of the Right to Organize; Exceptions, 242
2. Right to Organize Cannot be Bargained Away, 242
3. Employees of Nonprofit Institutions, 243
4. Exception: Employee-Members of a Cooperative, 243
“A Fundamental Human Right”, 244
4.1 Exception to Exception: Association, Not Union, 245
5. Exception: International Organizations, 245
5.1 Waiver of Immunity, 246
5.2 Foreign Workers, 246
6. Exception: Religious Objectors; Iglesia ni Kristo Members, 247
6.1 Does the Exemption Still Stand?, 248
6.2 Iglesia ni Kristo Members May Form and Join Own
Union, 249
Art. 244. Right of Employees in the Public Service, 249
Comments and Cases
1. Government Employees’ Right to Organize; Limitations, 249
1.1 Limited Purpose, 251
1.2 No Signing Bonus, 251
1.3 Excepted Employees, 252
1.3a Professors as Rank-and-File Employees, 252
1.4 Right to Strike, 254

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 2. Registration, 254
3. Certification Election in Government Corporation, 255
3.1 Election of Officers in Government Unions, 255
4. When PSLMC May Rule on Legality of Dismissal, 256
5. Union-busting in a Government Agency, U.L.P., 256
5.1 Even Temporary Employees May Organize, 257
Art. 245. Ineligibility of Managerial Employees to Join any Labor
Organization; Right of Supervisory Employees, 257

Art. 245-A. Effect of Inclusion as Members of Employees Outside

the Bargaining Unit, 257
Comments and Cases
1. Categories of Employees, 258
2. Ineligibility of Managers, 258
2.1 Types of Managerial Employees, 258
2.2 Constitutionality of the Prohibition, 260
2.2a Other Opinions, 261
3. Evolution of Supervisors’ Right to Organize, 262
3.1 First Period: Under the Industrial Peace Act, 262
3.2 Second Period: Under the Labor Code Before
Amendment by R.A. No. 6715, 263
3.3 Third Period: Under the Labor Code as Amended
by R.A. 6715, 263
4. Test
5. Definitions of Manager
of Supervisory and265
Status, Supervisor, 264
5.1 The Power to Recommend, 266
5.2 Examples of Ineffective or Clerical Recommendation, 267
5.3 Managers or Supervisors: Under the ILO Convention, 267
6. Segregation of Rank-and-File and Supervisors, 267
6.1 Effects of Having Mixed Membership, 268
6.2 Affiliation of Supervisors and Rank-and-File Unions, 269
7. Confidential Employees, 269
7.1 First Swing: Inclusion Among Rank-and-File, 269
7.2 Second Swing: Exclusion from Rank-and-File, 270
7.3 Third Swing: Inclusion Among Supervisors, 270
7.4 Fourth Swing: Inclusion Among Monthly Paid Rank-
and-File, 271
7.4a Limited Exclusion; Doctrine of Necessary

7.4b The Implication,

Metrolab 272
and Meralco Summations:
Exclusion from bargaining unit and Closed-shop
Clause, 273
7.4c Who are Confidential Employees?, 275
7.4d The Labor Nexus, 276
7.4e New CBA may Include Employees Excluded
from old CBA; Expired CBA may be Modified,
not just Renewed, 277

xxviii
 8. Security Guards, May Join Rank-and-File on Supervisor Union, 278
9. Workers in Export Processing Zones, 278
Art. 246. Nonabridgment of Right to Self-Organization, 279
Comments
1. Concept of the Right to Self-Organization, 279
Title VI — UNFAIR LABOR PRACTICES

Chapter I — CONCEPT
Art. 247. Concept of Unfair Labor Practice and Procedure
for Prosecution Thereof, 281
Comments and Cases
1. Concept of Unfair Labor Practice, 282
1.1 Elements, 283
1.2 Prejudice to Public Interest not an Element of U.L.P, 284
2. Prosecution of U.L.P., 284
“Right Culture — Instead of Anti-Unionism”, 285

Chapter II — UNFAIR LABOR PRACTICES OF EMPLOYERS

Art. 248. Unfair Labor Practices of Employers, 286

Comments and Cases
1. Conditions Precedent to U.L.P. Charge, 287
1.1 Historical Evidence of the Link, 288
2. ILO Convention No. 98, 289
3. No U.L.P: Illustrative Instances of Valid Exercise of Management
Rights, 290
3.1 Personnel Movements, 290
3.2 Acceptance of Mass Resignation, 291
3.3 Grant of Profit-Sharing Benefits to Non-Union Members, 292
3.4 Forced Vacation Leave, 293
3.5 Issuance of Rules or Policy, 293
3.6 Taking Action Against Slowdown, 294
4. Determination of Validity, 295
5. First U.L.P. Interference (Art. 248[a]), 295
5.1 Interrogation, 297
5.2 U.L.P Even Before Union is Registered, 297
5.3 Prohibiting Organizing Activities, 298
5.4 Violence or Intimidation, 299
5.5 Espionage and Surveillance, 300
5.6 Economic Inducements, 300
5.7 Employer’s Expression of Opinion; Totality of Conduct
Doctrine, 300
5.8 Mass Layoff Amounting to U.L.P., 302
5.9 Lockout or Closure Amounting to U.L.P., 303
5.9a Sale in Bad Faith, 304

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 5.9b Assumption of Obligation by New Company, 305
5.10 Successor Employer; Piercing the Corporate Veil, 305
6. Second U.L.P.: “Yellow Dog” Condition (Art. 248[b]), 307
7. Third U.L.P.: Contracting Out (Art. 248[c]), 307
7.1 Contracting Out Restricted by CBA, 309
7.2 Runaway Shop, 310
8. Fourth U.L.P.: Company-domination of Union (Art. 248[d]), 312
9. Fifth U.L.P.: Discrimination (Art. 248[e]), 314
9.1 Discrimination in Work Quota, 315
9.2 Discrimination in Bonus Allocation or Salary Adjustments, 315
9.3 Discrimination in Layoff or Dismissal, 316
9.4 Discrimination in Regularization, 316
9.5 Discrimination by Blacklisting, 317
9.6 Indirect Discrimination, 318
9.7 Test of Discrimination, 318
9.8 Constructive Discharge, 320
9.9 Discharge Due to Union Activity, A Question of Fact, 320
9.10 Valid Discrimination: Union Security Clause, 320
9.10a Kinds of Union Security Agreements, 321
9.10b Validity of Closed-Shop Agreement, 322
9.10c Advantages and Disadvantages of Closed-Shop
Agreement, 323
9.10d Valid Dismissal Because of Application of Union
Security Clause, 324
9.10e Dismissal Pursuant
Must Clearly AppeartoinClosed-Shop Clause
Contract, 326
9.10f Due Process Required in Enforcing Union Security
Clause; Intra-union Matter becomes Termination
Dispute with Employer, 327
9.10g Liability of Union to Pay Wages and Fringe Benefits
of Illegally Dismissed Employee, 328
9.10h Employer in Good Faith Not Liable, 329
9.10i Closed-Shop, To Whom Not Applicable, 329
9.10j Agency Fee Instead of Union Membership, 330
10. Sixth U.L.P.: Discrimination Because of Testimony
(Art. 248[f]), 330
10.1 Refusal to Testify, 331
10.2 Labor Standards Violation May Lead to a Strike, 332
11. Seventh U.L.P.: Violation of the Duty to Bargain

(Art. 248[g]),
12. Eighth 332 Negotiation (Art. 248[h]), 333
U.L.P.: Paid
13. Ninth U.L.P.: Violation of the CBA (Art. 248[i]), 333
14. Relief in U.L.P. Cases, 333
14.1 Cease and Desist Order, 333
14.2 Affirmative Order, 334
14.3 Order to Bargain; Mandated CBA, 334
14.4 Disestablishment, 334
15. U.L.P. Not Subject to Compromise, 335

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 16. U.L.P. in a Given Period Should Be Included in
Single Charge, 335
17. Employer’s Responsibility for U.L.P. Acts by Subordinate
Officials, 335

Chapter III — UNFAIR LABOR PRACTICES OF LABOR

ORGANIZATIONS
Art. 249. Unfair Labor Practices of Labor Organizations, 337

Comments and Cases

1. Restraint or Coercion by Labor Organization; Interference
by Union is Not ULP, 338
1.1 Coercing Participation in Strike, 338
2. Union-Induced Discrimination, 339
2.1 Arbitrary Use of Union Security Clause, 339
2.2 Not Disloyalty to Ask Help from Another Union, 342
3. Refusal to Bargain, 342
4. Featherbedding and Make-Work Arrangements, 343
5. CBA Deal with Employer, 343

Title VII — COLLECTIVE BARGAINING AND ADMINISTRATION

OF AGREEMENT
[Part 1. COLLECTIVE BARGAINING CONCEPT AND PROCEDURE]

Art. 250. Procedure in Collective Bargaining, 344

Art. 251. Duty to Bargain Collectively in the Absence of Collective
Bargaining Agreements, 345
Comments and Cases
1. Nature of Collective Bargaining, 345
1.1 Definition, 345
1.1a CBA Defined, 346
1.2 Rationale, 346
1.3 Strength of the Collective Bargaining Method, 347
2. Emergence of Collective Bargaining, 348
2.1 Originator, 349
2.2 Adoption in the Philippines, 349
“The Status of Free Men”, 350
3. Parties to Collective Bargaining, 351
4. Jurisdictional Preconditions of Collective Bargaining, 351
4.1 Bargaining with Minority Union, ULP, 352
5. When Bargaining Should Begin, 353
6. Single Enterprise Bargaining Procedure Broadly Described, 354
7. Multi-Employer Bargaining, 354
7.1 Rationale of Multi-employer Bargaining, 355
7.2 Multi-employer Bargaining Procedure, 356
7.3 Unfavorable to Consumers?, 358
7.4 Optional, 358

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Art. 252. Meaning of Duty to Bargain Collectively, 359
Art. 253. Duty to Bargain Collectively When There Exists a Collective
Bargaining Agreement, 359
Comments and Cases
1. Duty to Bargain Defined, 360
1.1 Four Forms of ULP in Bargaining, 360
2. First ULP in Bargaining: Failure or Refusal to Meet
and Convene, 361
2.1 Unresolved Petition for Union Cancellation, 361
2.2 Selling the Company, 362
2.3 Successor Employer: Continuity and Identity, 363
2.4 Conversion to Independent Franchise or Operation, 364
2.5 Do Economic Exigencies Justify Refusal to Bargain?, 364
2.6 Acts not Deemed Refusal to Bargain, 365
2.7 Alleged Interference in the Selection of the Union’s
Negotiating Panel, 367
2.8 Non-reply to Proposal; CBA Imposed on Employer, 367
2.8a Repetition in Divine Word University, 368
3. Second U.L.P. in Bargaining: Evading the Mandatory Subjects, 369
3.1 Wages and Employment Conditions, 369
3.1a Wage Factors; “Solomonic” Approach, 371
3.2 Workloads and Work Rules, 372
3.2a Code of Conduct, 372
3.3
3.4 Management Prerogatives
Union Discipline Clause, 372
Clause, 373
3.5 Arbitration, Strike-Vote, or No-Strike Clauses, 373
3.6 No-Lockout Clause; Clause Fixing Contractual Term, 373
3.7 Signing Bonus, 373
3.8 Voluntary Benefits, 374
3.9 No Duty to Agree Even on Mandatory Subjects, 374
3.10 Non-mandatory Subjects, 375
3.11 Bargaining to the Point of Impasse: Not Necessarily
Bad Faith, 375
3.12 When Is There Deadlock or Impasse?, 377
3.12a Duty to Bargain When There is Deadlock or
Impasse, 377
3.12b Strike or Lockout in Case of Deadlock, 378
4. Third ULP in Bargaining: Bad Faith, 379
4.1 Determination of Good Faith, 379
4.2 When Can Bargaining in Bad Faith Occur?, 380
4.3 Instances of Bad Faith: Delay of, or Imposing Time
Limit on, Negotiations, 381
4.3a Bad Faitth: Surface Bargaining; Shifting Bargaining
Positions; Blue Sky Bargaining, 384
4.3b Bad Faith: Inflexible Demands; Strike Amid
Negotiation, 386
4.3c Bad Faith: Bloulwarism; Take-It-or-Leave-It
Bargaining, 387

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 4.4 Not Bad Faith to Propose Modifications to the Expiring
CBA, 388
4.5 Giving of Information, 388
5. Fourth ULP in Bargaining: Gross Violation of the Contract, 390
6. Ratification by the CBU; Mandatory Requirements, 390
6.1 Invalid Ratification, 390
6.2 When Ratification Not Needed, 391
6.3 Ratified but Unsigned, 392
6.4 Unratified but Implemented, 392
7. Execution of Contract, 392
7.1 Unwritten or Unsigned Agreement, 393
7.2 Effect of Signing on Other Disputes, 393
8. Registration of CBA, 393
“Management’s Negotiation Strategy”, 394
8.1 Registration Requirements, 395
9. Implementation, then Renegotiation, 395
10. Automatic Renewal of CBA, 396
Art. 253-A. Terms of a Collective Bargaining Agreement, 399
Comments and Cases
1. Effectivity and Retroactivity, 399
1.1 Effectivity of CBA Concluded After Six Months from
Expiration of Old CBA, 400
2. Duration of a C.B.A., 401
3. Extension of Effectivity of CBA, When Valid, 405
3.1 Ten-year Suspension of CBA, 405
Art. 254. Injunction Prohibited, 407
Comments and Cases
1. No Injunction Policy, 407
1.1 Reason of the No-Injunction Policy, 408
1.2 Injunction Issued by Regular Court, When Proper, 409
“Social Dumping/Concession Bargaining”, 410

Title VII — COLLECTIVE BARGAINING AND ADMINISTRATION

OF AGREEMENT

[Part 2. EMPLOYEE PARTICIPATION AND REPRESENTATION]

Art. 255. Exclusive Bargaining Representation and Workers’

Participation in Policy and Decision-Making, 411
Comments and Cases
1. Workers’ Participatory Right: Its Constitutional Meaning, 412
1.1 Employees’ Participation in Formulating the Code
of Discipline, 415
2. Workers’ Participation as the Real Objective: The LMC, 417
2.1 Department’s Promotion of LMC and Other Councils, 418

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 3. Individual Grievance, 419
4. Collective Bargaining Unit (CBU) Defined, 419
5. Appropriateness of Bargaining Unit; Factors Considered, 420
5.1 Bargaining History Not Decisive Factor, 422
5.2 Exclusion of Confidential Employees, 423
5.3 Temporary or Part-Time Employees, 423
5.4 Seasonal Employees, 424
5.5 Probationary Employees, 424
6. Referendum Where Interests Are Dissimilar, 424
6.1 Desire of the Employees; The Globe Doctrine, 425
7. Single or “Employer Unit” is Preferred, 426
7.1 Exceptions to One-unit Policy, 426
8. Two Companies with Related Businesses, 427
8.1 Subsidiaries and Spun-off Corporations, 429
9. Summation of Significance, 430
Art. 256. Representation Issue in Organized Establishments, 431
Art. 257. Petitions in Unorganized Establishments, 431
Art. 258. When an Employer May File Petition, 432
Art. 258-A. Employer as Bystander, 432
Art. 259. Appeal From Certification Election Orders, 432
Comments and Cases
1. Determining the Bargaining Union: Overview of the Methods, 432
2. First Method: Voluntary Recognition (V.R.), 434
2.1 V.R. Under D.O. No. 40-03, 434
3. Second Method: Certification Election (C.E.), 436
3.1 Fact-Finding, 436
3.1a Certification Election Differentiated from
Union Election, 437
3.2 Direct Certification No Longer Allowed, 438
3.3 Who Files Petition for Certification Election (PCE), 438
3.3a Intervention, 439
3.4 Where to File the PCE, 440
3.5 When to File the PCE, 440
3.6 Form and Contents of Petition, 441
3.7 Action on the Petition; Preminary Conference, 442
3.8 Action on the Petition; Hearings and Pleadings, 442
3.9 Action on the Petition: Denial; Eight Grounds, 443
3.9a First Ground: Non-appearance, 444
3.9b Second Ground: Illegitimacy: Unregistered
Union, 445
3.9c Third Ground: Illegitimacy: No Charter, 447
3.9d Fourth Ground: Absence of Employment
Relationship, 447
3.9e Fifth Ground: The 12-month Bar, 447
3.9f Sixth Ground: Negotiation or Deadlock Bar, 449

xxxiv
 3.9g Seventh Ground: Election Bar: Existing CBA, 451
3.9h Eight Ground: Election Bar: Lack of Support, 458
3.10 Prohibited Ground for the Denial/Suspension of
the Petition, 461
3.10a Commingling, 461
3.10b Validity of Registration, 461
3.10c Authority to Decide Existence of Employer-
Employee Relationship; Med-Arbiter’ Order
Appealable to Secretary, 461
3.11 Employer a Bystander; Cannot Oppose PCE, 462
3.12 Action on the Petition; Approval, 463
3.13 Appeal of Order Granting or Denying Petition, 464
3.14 Conducting the C.E., 465
3.14a Pre-election Conference, 465
3.14b Conducting the C.E.; the Voters, 467
3.14c Conducting the C.E.: The Voting, 470
3.14d Conducting the C.E.: Canvassing of Votes, 472
3.14e Who Wins in the C.E.; Proclamation and
Certification, 472
3.14f Failure of Election; Motion for a Remedial
Election, 473
3.14g Run-off Election, 473
3.15 Appeal to Secretary as to Election Result, 475
3.16 Election Irregularities, Protest by Employer, 476
4. 4.1
ThirdEffect
Method: ConsentElection,
of Consent Election,477
476
5. The Winner as Sole and Exclusive Representative, 478
5.1 Exclusive Bargaining Agent Represents Even the Minority
Union, 478
5.2 Protection and Capacity of the Loser; the Duty of Fair
Representation, 478
5.3 Is the Bargaining Union a Majority Union?, 479
5.4 May the Bargaining Agent Represent Retired Employees?, 480

Title VII-A — GRIEVANCE MACHINERY AND VOLUNTARY

ARBITRATION
Art. 260. Grievance Machinery and Voluntary Arbitration, 481
Comments and Cases
1. Contract Administration as Part of the Duty to Bargain, 482
2. CBA, Law Between the Parties, 482
2.1 Construing the Contract, 486
2.2 Proposal Contained in Minutes but Not in the CBA Itself, 487
2.3 “Zipper Clause”, 488
3. Law Deemed Written in Contract, 489
4. Binding Effect of Agreement, 489
4.1 Persons Entitled to Benefits, 489
4.2 Managers Not Entitled to CBA Benefits; Exception, 490

xxxv
 4.3 Effect of Collective Agreement on the Individual Contracts
of Employment, 490
5. Enforceability Against Transferee of Enterprise, 490
5.1 Purchase of Assets, 490
5.2 Exceptions, 492
5.3 Merger and Consolidation, 493
5.4 Wiley Doctrine, 493
6. Change of Bargaining Agent; Substitutionary Doctrine, 494
7. Grievances, 496
7.1 By-passing the Grievance Machinery: ULP, 496
7.2 Waiver of Grievance Machinery Procedure and Submission
To VA, 498
7.3 Structure and Procedure, 498
8. Voluntary Arbitration, 499
“Settling Grievances”, 500
“Grievance Handling Tips For T.U.C.P. Shop Stewards”, 501
8.1 Voluntary Arbitration: A Private Judicial System, 503
8.2 Voluntary Arbitration, a Master Procedure, 503
9. Who May Be Accredited as Voluntary Arbitrator, 504
10. How Voluntary Arbitrator Is Chosen, 505
11. Distinguished from a Court of Law, 505
Art. 261. Jurisdiction of Voluntary Arbitrators or Panel of Voluntary
Arbitrators, 506

Art. 262. Jurisdiction Over Other Labor Disputes, 506

Comments and Cases
1. Arbitrable Disputes, 506
2. Jurisdiction of L.A. and V.A., 507
2.1 Jurisdiction Over Termination Disputes, 509
2.1a “Policies,” “Rules,” “Procedures”, 510
2.2 Jurisdiction Over CBA Violations, 511
2.3 Other Cases, 512
2.4 Dispute over Company’s Drug Abuse Policy, 513
3. How Voluntary Arbitration Is Initiated, 513
3.1 The Submission Agreement; Extent of Arbitrator’s
Authority, 513
4. Powers of the Arbitrator, 515
4.1 Power to Arbitrate Any Dispute, 515

4.2 No Power
5. Functions to Add 517
of Arbitrator, to or Subtract from the Contract, 516
5.1 Arbitrator’s Interpretation of CBA, 517
Art. 262-A. Procedures, 518
Comments and Cases
1. Compliance with Duty to Arbitrate, 519
2. Who Determines the Arbitration Procedures, 519
3. Ethical Standards of Arbitrators, 519

xxxvi
 4. Voluntary Arbitration Award, Generally Final; Exceptions, 520
4.1 Motion for Reconsideration, 521
4.2 Review of Award by Certiorari, 522
4.2a From VA to CA: Mode of Appeal is Rule 43,
not 65, 523
4.3 Findings of Facts of a Voluntary Arbitrator, 524
Art. 262-B. Cost of Voluntary Arbitration and Voluntary Arbitrator’s Fee, 524
“Principles of Union Management Relations”, 524

Title VIII — STRIKES AND LOCKOUTS AND FOREIGN INVOLVEMENT

IN TRADE UNION ACTIVITIES

Chapter I — STRIKES AND LOCKOUTS

[Part 1. REGULATIONS AND LIMITS OF STRIKE AND LOCKOUT]

Art. 263. Strikes, Picketing, and Lockouts, 528

Art. 264. Prohibited Activities, 531
Art. 265. Improved Offer Balloting, 532
Comments and Cases
1. The Right to Engage in Concerted Activities, 532
1.1 Concerted Activity by one, 533
2. Nature of Strike, 534
2.1 Definition, 534
2.2 Characteristics, 534
2.3 Basic Objective, 535
2.4 Constitutional Status, 535
2.5 Nature and Definition of Lockout, 536
3. Grounds for Strike/Lockout, 537
4. Kinds of Strike, 539
4.1 Extent, 539
4.2 Nature of the Act, 539
4.3 Degree of Employee Interest, 539
4.4 Purpose or Nature of Employee Interest, 539
5. A Valid Strike Needs a Labor Dispute, 542
5.1 Sympathetic Strike, 543
5.2 Welga
6. Avoidance of ng Bayan
Strike, 544(People’s Strike), 543
6.1 Conciliation, Mediation, Compromise to Avoid Strike, 545
6.2 Premature Strike, 545
7. Protection of Strike, 546
7.1 Role of the Police, 547
8. Status of Strikers, 548
8.1 Notion of “Striking Employee”, 549

xxxvii
 9. Legality of Strike: The Six Factors Affecting Legality, 549
10. First Factor in Legality of Strike: Statutory Prohibition, 550
11. Second Factor in Legality of Strike: Procedural
Requirements, 553
11.1 Declaration of Strike or Lockout, 557
11.2 Procedural Requirements, Mandatory; Non-observance
Makes Strike Illegal, 557
11.2a Strike on Installment: Work Slowdown and
Overtime Boycott, 561
11.3 In Case of Union Busting, 562
11.4 Strike During Arbitration, Illegal, 563
11.5 Strike Despite Preventive Mediation, 564
11.6 Violation of a Valid Order, 566
11.7 Grievance Procedure Bypassed, 566
11.8 Dismissal of Employees During Conciliation, When Legal
and Enforceable, 569
12. Third Factor in Legality of Strike: Purpose; Economic
and ULP Strike, 570
12.1 The Conversion Doctrine, 571
12.2 Lawful Purpose: Strike Incident to Collective
Bargaining, 572
12.2a Legality of Strike Nor Dependent Upon Ability
of Management to Grant Demands, 573
12.3 Lawful Purpose: Strike Against Employer’s Unfair
Labor Purpose:
12.4 Lawful Practice, ULP
574 Strike in Good Faith, 575
12.4a The “Good-Faith Strike” Doctrine Retraced and
Reiterated, 577
12.4b “Good-Faith Strike” Doctrine Applied Even to
a Strike without Prior Notice and Despite
a No-Strike Clause, 579
12.4c Even “Good-Faith Strike” Requires Rational
Basis, 580
12.4d Do the Procedural Requirements Apply even to
a ULP Strike in Good Faith?, 582
12.5 Lawful Purpose: Strike to Compel Recognition of
and Bargaining with the Majority Union, 583
12.6 Unlawful Purpose: Strike for Union Recognition Without
Having Proven Majority Status, 584

12.6a
12.6b May
Strikea Held
Minority Union Strike?,
to Compel 585 while Case
Recognition
is Unresolved, Illegal, 586
12.7 Unlawful Purpose: Trivial, Unjust, or Unreasonable, 587
12.8 Strike to Compel Removal of an Employee; Implied
Assertion of Union Infallibility, 588
12.9 Unlawful Purpose: Strike on Nonstrikeable Issue, 589
12.9a Nonstrikeable: Physical Rearrangement of
Office, 589

xxxviii
 12.9b Nonstrikeable: Company’s Sales Evaluation
Policy, 590
12.9c Nonstrikeable: Salary Distortion Under the Wage
Rationalization Act, 591
12.9d Nonstrikeable: Inter-union or Intra-union Dispute, 593
13. Fourth Factor in Legality of Strike: Means and Methods, 593
13.1 Threats, Coercion or Violence, 593
13.1a Violence on Both Sides, 595
13.2 Responsibility for Use of Force: Individual
or Collective?, 595
“Causes of Violence”, 596
13.3 Minor Disorders, 597
13.4 Officials’ Inability to Leave Premises, Not Illegal Detention, 598
13.5 Blockade or Obstruction, 599
14. Fifth Factor in Legality of Strike: Injunction, 599
14.1 “National Interest” Cases; Automatic Injunction and
Return-to-Work Order, 599
“Don’t Pull Down the House”, 599
14.2 What are Considered “National Interest” Cases, 600
14.2a “National Interest” by Statutory Declaration, 601
14.3 Assumption of Jurisdiction: Prior Notice Not Required, 602
14.4 Power to Assume Jurisdiction, Constitutional, 602
14.5 Certification to NLRC, 603
14.6 Effects of Defiance, 603
14.7 Assumption or Certification Order Immediately Effective
Even without Return-to-Work Order; Strike Becomes an
Illegal Activity, 605
14.8 Refusing to Receive the RTWO, 606
14.9 Defying the RTWO, 608
14.10 Defiance of RTWO, an Illegal Act, 609
14.10a “Abandonment” has Varying Elements, 612
14.11 Restoration of Condition Upon Issuance of Return-
to-Work Order, 612
14.12 Actual, Not-Payroll, Readmission, 613
14.13 Voluntary Return to Work Is Not Waiver of Original
Demands, 614
14.14 All Issues to be Determined in the Certified
Industrial Dispute, 615
14.15 Submission of Incidental Issues; Rulings Reconciled, 617
14.16 Procedure in Certified Cases, 620
14.17 Assumption Order Regulates Management Prerogatives, 621
14.18 “Legal Discretion”; Judicial Review of Secretary’s Award
or Order, 622
14.19 Secretary’s Abuse of Discretion, Examples, 623
14.20 Withdrawal of Case to Submit to VA, 624
15. Sixth Factor in Legality of Strike: Agreement of the Parties, 624
15.1 Ruling in Master Iron Case, 626
15.2 No-Strike Clause Binding; Primacy of Voluntary Arbitration
Agreement, 627

xxxix
 15.3 No-Strike Clause Not Binding Upon Newly Certified
Bargaining Agent, 629
15.4 If Members Disregard a No-Strike Clause, Union
May Become Liable, 630
15.5 No Violation If Work Stoppage Not Initiated
or Supported by the Union, 630
15.6 No-Strike Pledge Inferred from Other Provisions, 631
16. Improved-Offer Balloting, 631

[Part 2. PICKETING AND OTHER CONCERTED ACTIONS]

1. Picketing, 632
1.1 As Phase of Freedom of Speech, 632
1.2 Picketing without Striking, 633
1.3 Moving Picket, 633
1.4 Picketing of Neutral Parties or “Innocent Bystanders”, 634
1.5 Picketing of Home, 636
1.6 Limitations, 636
1.7 Obstruction, 636
1.8 Violence and Intimidation, 637
1.9 Untruthful Picketing, 637
2. Other Concerted Activities, 638
2.1 Collective Letter, 638
2.2 Publicity, 638
2.3 Placards and Banners, 639
2.4 Wearing of Armbands, 639
2.5 Speeches, Music, and Broadcasts, 640
2.6 Employees’ Demonstration to Protest Police Abuses, 640
2.6a Rallies as Illegal Strike, 641
3. Boycott, 641
3.1 Kinds of Boycott, 642
3.2 Lawfulness of the Boycott, 643
3.3 Means or Methods to Carr y Out the Boycott, 643
3.4 Overtime Boycott, 644
4. Slowdown, 644
Art. 266. Requirement for Arrest and Detention, 645
Comments
Directive to Prosecutors, 645

[Part 3. CONSEQUENCES OF CONCERTED ACTIONS]

1. Strikers’ Retention of Employment, 646
2. Strikers’ Loss of Employment, 648
2.1 What “Illegal Acts”?, 648
2.2 Suspension Instead of Dismissal, 649
2.3 Union Officers or Leaders?, 649
2.4 Shop Stewards are Union Officers, 650
2.5 Union Members, 651

xl
 3. Who Declares “Loss of Employment Status”?, 651
3.1 Declaration of illegality of Strike Not a Prerequisite
to Dismissal of illegal Strikers, 652
3.1a Exception: Pending Case at the NLRC, 652
4. “Good-Faith Strike”, 653
5. Strike Which Is Illegal and Not Marked with Good Faith —
Strikers Forfeit their Employment, 654
6. Forfeiture of Reinstatement, 655
7. Discrimination in Readmission of Strikers, 656
8. Exaction of Promise or Clearances from Returning
Strikers, 657
9. Reinstatement may Render Moot the Question of Illegality
of Strike, 657
10. Generally, No Backwages in Strike, 658
10.1 Economic Strike, 658
10.1a Unfair Labor Practice Strike, 659
10.2 Exception: “Involuntary” Strikers Illegally Locked Out, 660
10.2a “Volunatry” Strikers in ULP Strike who Offered
to Return to Work Unconditionally, 661
11. Court’s Discretion on Backwages, 662
12. Employer’s Right to Hire Replacements During Strike; Discharge
of Replacements, 664
12.1 Where Reinstatement of Illegally Dismissed Strikers
Has Become Impossible, Backwages Should
be Paid,
13. Resignation 665
of Strikers Does Not Prevent Signing of CBA, 666
14. Civil Liability of Labor Organizations, 667
14.1 Labor Organizations Not Liable for Unauthorized Acts
of Officers, 667
14.2 Liability of Officers of Labor Organizations, 667
14.3 Liability of Members of Labor Organizations, 667
14.4 Liability of Labor Unions for Damages Arising
from Boycott, 668
14.5 Liability of Labor Unions for Damages for Interfering with
Right of Laborers to Work, 668
14.6 Liability for Extorting Money from Employers, 669
14.7 Liability for Damages Arising Out of Publications
and Circulation of False Statements, 669
15. Damages, 669

Chapter II — ASSISTANCE TO LABOR ORGANIZATIONS

Art. 267. Assistance by the Department of Labor, 672
Art. 268. Assistance by the Institute of Labor and Manpower Studies, 672
Comments
Labor Education, 672

xli
Chapter III — FOREIGN ACTIVITIES
Art. 269. Prohibition Against Aliens; Exceptions, 673
Art. 270. Regulation of Foreign Assistance, 673
Art. 271. Applicability to Farm Tenants and Rural Workers, 674

Chapter IV — PENALTIES FOR VIOLATION

Art. 272. Penalties, 675

Title IX — SPECIAL PROVISIONS

Art. 273. Study of Labor-Management Relations, 676
Art. 274. Visitorial Power, 676
Comments
1. Visitorial-Enforcement Power, 677
2. Under D.O. No. 40-03, 677
Art. 275. Tripartism and Tripartite Conferences, 679
Comments
Tripartism, 679
Art. 276. Government Employees, 680

Art. 277. Miscellaneous Provisions, 680

“Labor-Management Council: The Nonadversarial, Participative
Approach”, 683
“Protecting Labor in the Global Economy”, 684

BOOK SIX — POST-EMPLOYMENT

“The Job as Property Right”, 687

“Due Process”, 688
“Loss of Confidence”, 688
“Non-Technical”, 688
“Justitia Nemini Neganda Est”, 689
“Respect for Finding of Facts”, 689
“No Coddling of Labor”, 690

Title I — TERMINATION OF EMPLOYMENT

[Part 1. INTRODUCTION: EMPLOYEE’S

SECURITY OF TENURE]
Art. 278. Coverage, 691
Art. 279. Security of Tenure, 691

xlii
Comments and Cases
1. Constitutional Guaranty of Tenure, 691
1.1 Non-regular Employees, 692
2. Tenure of Managerial Personnel, 693
2.1 Even Managerial Employees Are Entitled to Security
of Tenure, 693
3. Right to Security of Tenure cannot be Contracted Away, 694

[Part 2. KINDS OF EMPLOYMENT]

Art. 280. Regular and Casual Employment, 695
Comments and Cases
1. Essentiality of Employer-Employee Relationship, 695
1.1 Article 280 Presupposes Employment Relationship, 696
2. Regular Employment, 697
2.1 Examples of Regular Employment by Nature of Work, 698
2.1a Workers Supplied by Labor-only Contractor
Considered Regular Employees of Contractee, 699
2.1b “Contractual Project” Employee Becoming
Regular, 700
2.1c “Day-to-Day Contractual” Employee Becoming
Regular, 701
2.1d Temporary Employee Becoming Regular, 702

2.2 Casual employee;

of Service, 702 Regular Employee by Year(s)
2.2a Casual Employee with Less Than One Year
of Service does not become Regular, 704
2.2b Salary of Casual Employee Converted to Regular
should not be Reduced, 704
2.3 May Regular Jobs be Contracted Out?, 705
2.4 Contracting Out Almost All Regular Jobs, 706
2.5 Does Contracting Out Require Union’s Conformity?, 708
3. Project Employment: Meaning and Scope, 709
3.1 Two Types of Project Activities, 710
3.2 Principal Test, 711
3.3 Project Employees in the Construction Industry, 712
3.4 Indicators of Project Employment, 713
3.5 Work Pool, 714
3.5a Illustrative Case: Project Employee, 714
3.5b Project Employees not Entitled to Separation Pay;
Exception, 715
3.6 Non-Project Employee; Three Types, 716
3.7 What Makes a Project Employee Regular, 718
3.7a Recapitulation: Circumstances that make a Project
Employee Regular, 719
3.7b “Completion of Project” nor Valid Reason to
Separate a Project Employee who has become
Regular, 721

xliii
 3.7c
Computing the Backwages of Project Employee
who has become Regular; “No work, No Pay”
Rule Applicable, 721
4. Seasonal Employment; “Regular Seasonal” After One Season, 721
4.1 Employer-Employee Relationship Exists Between
Milling Company and Its Workers Even During
Off Season, 723
4.2 Seasonal “Pakiao” Employees, 723
4.3 The Mercado Ruling: Project Employees Do Not Become
Regular Although Service Exceeds One Year, 724
4.3a Mercado Reconciled with Earlier Rulings, 726
4.4 “Regular Contractuals” Entitled to Benefits of Regular
Employees, 726
5. Fixed-Period Employment, When Valid, 727
5.1 Brent Doctrine Summarized, 729
5.2 Pretermination of Fixed-Period Employment, Liability of
Employer, 730
5.3 Illegal “Fixed Period Employment”; Brent Ruling
Clarified, 730
5.3a Effect of Retention of Employee Beyond the Period
of Employment, 731
5.3b When “Five-Month Contractuals” considered Regular
Employees; the Purefoods Precedent, 733
5.3c Effect of Renewals of Fixed-Period Employment

5.3d in Regularare
Seafarers Jobs, 734
Contractuals, 735
Art. 281. Probationary Employment, 736
Comments and Cases
1. Probationary Employment, 736
2. Employer’s Right to Select; the Need for Probation, 737
3. Rights of Probationary Employee; Termination Only
for Cause, 738
4. Limitations to Termination of Probation; Regular Status After
Probationary Period, 741
5. No Successive Probations, 741
5.1 Probation in Sister Company, 742
6. Period of Probation Not Necessarily Six Months, 742
7. Extension of Probation, 743
8. Last Day of Probation, 744
9. Probation of Teachers, 745
9.1 Reversion from Full-time to Part-time Teacher, 746
10. Employment Contracts Mostly Adhesion Contracts, 747

[Part 3. MANAGEMENT RIGHTS AND THE JUST CAUSES

OF TERMINATION]

Art. 282. Termination By Employer, 748

xliv
Comments and Cases
I. MANAGEMENT RIGHTS
1. Right to Manage People, in General, 749
2. The Right to Discipline, 750
3. The Right to Transfer Employees, 750
4. The Right to Demote, 751
5. The Right to Dismiss, 751
5.1 Power to Dismiss Not Absolute, 752
II. JUST CAUSES OF TERMINATION
1. Causes of Dismissal in General, 752
2. Just Cause: Serious Misconduct, 753
2.1 Examples of Misconduct, 753
2.1a Illustrative Case: Sexual Harassment, 754
2.2 Cause Found Inadequate, 755
2.2a Teacher in Love with Student: The Heart has
Reasons which Reason does not know, 756
2.3 Extra-marital Relationship as Immorality, 757
2.3a Immortal Conduct Defined, 757
2.4 Being the Spouse of a Co-employee, 758
3. Just Cause: Willful Disobedience, 758
3.1 Valid Termination: Employer’s Policy Enforceable
Despite Union’s Objection, 759
3.2 Elements of Disobedience, 760
3.3 Disobeying an Order to Transfer, 761
3.3a Valid Transfer, 761
3.3b Invalid Transfer, 762
3.3c May an Employee Disobey an Inconvenient
Transfer?, 763
3.3d Change of Position and Work, 767
3.3e Test of Validity of Transfer, 768
3.3f Invalid Change of Position, 769
3.3g Transfer with Promotion of a Manager, 770
3.3h Transfer Distinguished from Promotion, 772
4. Just Cause: Neglect of Duties, 773
4.1 Gross Negligence Defined; Examples, 774
4.2 Abandonment, 775
4.2a Elements of Abandonment; Immediate filing
of Dismissal Complaint, 775
4.2b Immediate Filing
Abandonment; of Complaint
Exception, 776 Negates
4.3 Tardiness and Absenteeism, 776
4.3a Illustrative Case: Valid Dismissal Due to
Unauthorized Absences of a Union Officer, 777
4.4 Is “Attitude Problem” a Just Cause to Dismiss on Employee?, 778
5. Just Cause: Dishonesty, Loss of Confidence, 778
5.1 Examples of Dishonesty: Falsification of Time Cards, 779
5.1a Theft of Company Property, 780

xlv
 5.2 Loss of Confidence, 780
5.2a To Whom Applicable; “Position of Trust”
Explained, 781
5.2b Conflict of Interest; Employment with
Competitor, 782
5.3 Proof Required, 782
5.4 Guidelines Summarized, 783
6. Just Cause: Commission of a Crime or Offense, 784
6.1 Conviction or Prosecution Not Required, 784
7. Analogous Causes, 784
[Part 4. AUTHORIZED CAUSES OF TERMINATION]

Art. 283. Closure of Establishment and Reduction of Personnel, 786

Art. 284. Disease as Ground for Termination, 786
Comments and Cases
1. Authorized Causes in General, 787
1.1 Many Other Authorized Causes, 787
1.2 Separation Pay, 787
1.3 Backwages Incompatible with Statutory Separation Pay, 788
2. Introduction of Labor-Saving Devices, 788
3. Redundancy, 789
“Subcontracting in the Global Economy”, 790
3.1 Creation of Positions with Functions Related or Similar
to those of the Abolished Positions Does Not Necessarily
Invalidate the Declarations of Redundancy, 791
3.2 Valid Abolition of Position and Transfer to Lower
Position, 792
3.3 Replacing a Regular Employee with an Independent
Contractor, 794
3.4 Invalid Declaration of Redundancy; Illustrative Case, 796
4. Retrenchment, 797
4.1 Causes of Retrenchment, 798
4.2 Basic Requisites of Valid Retrenchment, 799
4.2a Criteria; Whom to lay Off, 801
4.2b Seniority Rights, 801
4.3 Four Standards of Retrenchment, 801
4.4 Evidence to Prove Losses: “Modicum of Admissibility, 803
4.5 Hiring of Replacements after Retrenchment, 804
4.6 Contracting Out After Retrenchment/Redundacy, 804
4.7 Redundancy Distinguished from Retrenchment;
Temporary Versus Permanent Retrenchment, 805
4.8 The Puzzle: Redundancy or Preventive Retrenchment?, 808
4.9 Reduction of Work Days; Constructive Retrenchment, 811
5. Closure of Business, 811
5.1 Closure Because of Losses, 811
5.1a Losses must be Shown, 812
5.2 Right to Close Whether Losing or Not, 813

xlvi
 5.2a Closure Contrasted to Downsizing, 814
5.3 Partial Closure, 814
5.4 Temporary Shutdown, 815
5.5 Should Separation Pay be Paid in Case of Closure
Because of Serious Business Losses?, 815
5.5a Contrary Jurisprudence, 816
5.5b The Final Word: Rulings in North Davao
and Reahs Corporation, 816
5.5c Does Previous Generosity Obligate the
Company?, 817
5.6 Justification for Closure Not Credible; Unfair Labor
Practice, 818
5.7 Closure by Operation of the Agrarian Reform Law, 820
5.7a Expiration of Lease, 820
6. Sale in Good Faith, 821
6.1 Sale of Business: Is it “Closure” or “Cessation
of Business”?, 822
“Global Competition in Labor Cost”, 824
6.2 Successor-in-Interest, Contractual Obligation
to Employ, 825
7. Merger, 825
8. Consolidation, 828
9. Ailment or Disease, 828

[Part 5. PROCEDURE TO TERMINATE EMPLOYMENT]

1. Procedure Under the Rules, 830
2. Procedural Due Process; Ample Opportunity to be Heard, 831
2.1 Standards of Procedural Due Process, 832
2.2 Two-Notice Requirement for the “Just” and the
“Authorized” Causes, 833
2.3 Preventive Suspension and Investigation Do Not
Replace “Two-Notice” Requirement of Due Process;
Defect Not Cured by NLRC Hearings, 833
2.4 Consultation with Union, Insufficient Notice, 834
2.5 Illustrative Case: “Ample Opportunity” for Employee’s
Defense, 835
2.5a At least Five Days, 835
2.5b Participation of Counsel, 835
2.5c Formal Hearing Nor Required, 837
2.6 Procedural Due Process Not Wiped Away by Union
Security Clause, 838
2.7 When Hearing Not Required, 840
2.8 Due Process in Authorized Causes; Two-Notices Required
but Not a Hearing, 840
2.8a Individual, Not Collective, Notice, 841
2.8b Voluntary Arbitration as Notice, 841
2.8c When Notice Not Needed, 842
2.9 Burden of Proof, 842

xlvii
 2.10 Condonation, 843
3. Preventive Suspension, 843
3.1 Invalid Preventive Suspension, 843
3.2 Valid Preventive Suspension, 844
3.3 Period of Suspension, 845
3.4 Preventive Suspension Exceeding 30 Days; Constructive
Dismissal, 845
4. Appropriate Penalty, 845
4.1 Value of Property, 846
4.2 Past-Offenses, 847
5. Filing of Illegal Dismissal Complaint; Venue and Time, 848
6. Clearance No Longer Required, 848

[Part 6. CONSEQUENCES OF TERMINATION]

1. Separation Pay, 849
1.1 Background: Old Law, 849
1.2 Under Present Law; Four Kinds of Separation Pay, 850
1.3 First Kind of Separation Pay: As a Statutory
Requirement for Authorized Causes Under Art. 283
and 284, 850
1.3a Amount of Separation Pay for Authorized
Causes, 850
1.3b Computation of Statutory Separation Pay;
Inclusion of Regular Allowance, 851
1.4 Second Kind of Separation Pay: As Financial Assistance
in Legal Dismissal Under Article 282, 851
1.4a More Exceptions: No Financial Assistance, 854
1.4b Dishonesty Doubted: Financial Assistance may
be Granted, 855
1.4c Financial Assistance for an Uncovered Retiree, 857
1.4d Grant of Financial Assistance, Although Not
Objected to, may be Revoked, 857
1.4e Amount of Financial Assistance, 857
1.5 Third Kind of Separation Pay: As Substitute for
Reinstatement in Illegal Dismissal Cases, 858
1.6 Fourth Kind of Separation Pay: As Employment Benefit
from Employer, 858
2. Backwages, 859
2.1 Backwages Distinguished from Separation Pay, 860
2.1a Backwages Distinguished from Unpaid Salary, 861
2.2 Complainant’s Failure to Claim Backwages, 861
2.3 Labor Arbiter’s Failure to Award Backwages, 861
2.4 Basis of Computation of Backwages, 863
2.4a Reckoning of Backwages, 866
2.5 “Full” Backwages: The Rule Before R.A. 6715; The Mercury
Drug Rule, 867
2.5a Backwages: The Rule after R.A. 6715; “Full”

xlviii
 Backwages but with Deductions; Mercury Drug
Rule Abandoned, 868
2.5b Full Backwages without Deduction; Pines City
Ruling Abandoned in Bustamante, 869
2.6 Full Backwages Amendment Not Retroactive, 869
2.7 Backwages Up to Retirement Age Only, 870
2.8 Inflation, 870
2.9 Dismissal for Cause But Without Due Process; The
Wenphil Doctrine, 870
2.9a Amount of Penalty for not Observing Due
Process, 871
2.9b No Just Cause and No Due Process – The WenPhil
Doctrine does not apply; Dismissal Illegal, 872
2.10 Objections to Wenphil: Indemnity Only Too Niggardly?, 873
2.11 Illegal or Merely Defective?, 874
2.12 Serrano Modifies Wenphil: Where Due Process is Disregarded,
Full Backwages Must be Awarded, 875
2.13 From Wenphil to Serrano to Viernes: Not Only Full
Backwages but also Indemnity, 877
2.14 Agabon Discards Serrano and Partially Restores Wenphil, 878
2.14a JAKA Revises Agabon: Higher Indemnity in
the Authorized Causes, 881
2.14b JAKA Refined Further by Industrial Timber, 882
3. Reinstatement, 883
3.1
3.2 Reinstatement
Reinstatement without Backwages,
Not Feasible Due to884
Changed
Circumstances, 884
3.2a Contrast: Reinstatement Enforced Despite
Closure of Original Employer, 885
3.3 Reinstatement Not Feasible Due to Strained Relations, 887
3.3a Qualifications to the “Strained Relations”
Principle, 888
3.4 When Reinstatement Not Feasible; Separation Pay
in Lieu of Reinstatement, 890
3.4a “Separation Pay in lieu of Reinstatement” Different
from Backwages, 891
3.4b “Separation Pay in lieu of Reinstatement” Different
from Separation Pay in Legal Terminations, 891
3.4c How much is the Separation Pay in lieu of

3.4d Reinstatement? 892lieu of Reinstatement of Seasonal

Separation Pay in
Worker, 892
3.5 Objection: Disproportionate Substitution, 893
4. Remedy if Reinstatement is Thwarted, 894
4.1 Backwages Continue to Accrue until Employer
Complies with Reinstatement Order, 897
5. Salary Rate Upon Reinstatement, 898
6. Reinstatement Immediately Executory; Employer’s Options, 899

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 6.1 May an Employee Lose the Right to Reinstatement?, 900
6.2 No Obligation to Reimburse, 902
6.2a Garcia Drops Genuino and Reaffirms Roquero, 903
6.3 Rationale of Payroll Reinstatement, 904
6.4 Rationale and Constitutionality of Reinstatement During
Appeal, 904
6.5 Exception to Immediate Reinstatement, 905
6.6 Reinstatement Pending Appeal is Enforceable Despite
Employer’s Denial of Employer-Employee Relationship, 905
6.7 Reinstatement Should have been Ordered by Labor
Arbiter, 906
6.8 Amendment by R.A. 6715 Not Retroactive, 906
7. Is Reinstatement Self-Executory?, 907
7.1 NLRC’s Reinstatement Order Not Self-Executory, 908
8. If Reinstatement is not Prayed For, 908
9. Damages, 909
9.1 Moral Damages, 909
9.2 Exemplary Damages, 911
10. Indemnity to Househelper, 912
11. Attorney’s Fees, 912
12. Persons Liable for Wrongful Dismissal: General Rule —
The Sunio Doctrine, 912
12.1 Government as Stockholder Not Directly Liable for
Corporate Indebtedness, 913
12.2 Exception:
PersonallyPiercing the Corporate Veil: Officers Become
Liable, 913
12.3 Instances When Corporate Officers Become Solidarily
Liable, 916
12.4 Limited Liability of Indirect Employer, 917
13. Quitclaim; Public Policy Protects Labor, 919
13.1 Not All Waivers are Against Public Policy; Elements of
Validity of Waivers and Quitclaims, 920
13.1a “Dire Necessity” does not Nullify Quitclaim, 921
[Part 7. TERMINATION BY EMPLOYEE AND SUSPENSION
OF OPERATION]
Art. 285. Termination by Employee, 922
Comments and Cases

1. Resignation and Resignation Notice, 922

2. Withdrawal of Resignation, 923
3. Resignation Pay, 924
4. Constructive Dismissal; Forced Resignation, 924
4.1 Constructive Dismissal Even Without Quitting; Preventive
Suspension Beyond 30 Days Amounts to Constructive
Dismissal, 926
5. Not Constructive Dismissal, Valid Transfer, 928
5.1 Not Constructive Dismissal: Voluntary Resignation, 929

l
 5.2 Not Constructive Dismissal: Resignation to Avoid
Dismissal, 929
6. Intention to Resign, 929
Art. 286. When Employment Not Deemed Terminated, 930
Comments and Cases
1. Suspension of Operations; “Floating Status”, 931

Title II — RETIREMENT FROM THE SERVICE

Art. 287. Retirement, 933
Comments and Cases
1. Previous Law and its Amendments, 934
1.1 Amendments by R.A. No. 7641 and R.A. No. 8558, 934
1.2 Coverage, 935
2. Retirement Defined, 935
2.1 Conditions for Entitlement to Retirement, Not
Continuing, 935
3. Two Kinds of Retirement; Employee’s Option, 936
3.1 Employer’s Option, 937
3.2 Is Compulsory Retirement Below Age 60 Allowable?, 937
3.2a Employee’s Assent to the Retirement Plan, 939
4. New Retirement Law Given Retroactive Effect, 940

5. 4.1 Conditions
Amount for Retroactive
of Retirement Pay, 941 Application, 941
6. Retirement Benefits Aside from Separation Pay; Distinction, 942
6.1 Gratuity Pay Distinguished from Retirement Benefit, 946
7. Unjustified Denial of Retirement Benefit, 946
7.1 Separation Disguised as Retirement, 947
7.2 Dismissal to Avoid Retirement Benefits, 948
8. Extension of Service of Retiree, 949

BOOK SEVEN — TRANSITORY AND FINAL PROVISIONS

“The New Reality: The Transnational Economy”, 953

“Cheap Labor: Globalization of Poverty?”, 954

Title I — PENAL PROVISIONS AND LIABILITIES

Art. 288. Penalties, 957

Art. 289. Who are Liable When Committed by Other than Natural Person, 957
Title II — PRESCRIPTION OF OFFENSES AND CLAIMS
Art. 290. Offenses, 958
Art. 291. Money Claims, 958
Art. 292. Institution of Money Claims, 958

li
Comments and Cases
1. Prescriptive Period for Money Claims, 959
1.1 Reckoning of the Three-year Prescription; Accrual of Cause
of Action, 959
1.2 Money Claims Based on a Foreign Law, 961
1.3 Filing after Three Years: “Promissory Estoppel”, 962
1.4 Money Claim that Accrued Before the Labor Code, 963
2. Award for Monetary Benefits May Exceed Three Years, 963
3. Money Claims Include Incremental Proceeds Arising from Tuition
Fee Increases, 964
4. Action for Reinstatement Prescribes in Four Years, 964
4.1 When Does the Period Begin?, 965
4.2 Prescriptive Period Not Suspended by Criminal Case, 965
5. Laches, 966

Title III — TRANSITORY AND FINAL PROVISIONS

Art. 293. Application of Law Enacted Prior to this Code, 967

Art. 294. Secretary of Labor to Initiate Integration of Maternity Leave
Benefits, 967
Art. 295. Funding of the Overseas Employment Development Board
and the National Seamen Board, 967
Art. 296. Termination of the Workmen’s Compensation Program, 967

Art. 297. Continuation of Insurance Policies and Indemnity Bonds, 968

Art. 298. Abolition of the Court of Industrial Relations and the National
Labor Relations Commission, 968
Art. 299. Disposition of Pending Cases, 968
Art. 300. Personnel Whose Services are Terminated, 969
Art. 301. Separability Provisions, 969
Art. 302. Repealing Clause, 969

Part Two
IMPLEMENTING RULES

“American Labor Productivity”, 973

“Competitiveness
“Anti-Labor Laws”,Plan”,
975 974
“Massive Failure”, 976

IMPLEMENTING RULES OF BOOK V — LABOR RELATIONS

Rule I. Definition of Terms, 977
Rule II. Coverage of the Right to Self-Organization, 981
Rule III. Registration of Labor Organizations, 982

lii
Rule IV. Provisions Common to the Registration of Labor
Organizations and Workers’ Association, 986
Rule V. Reporting Requirements of Labor Unions
and Workers’ Associations, 988
Rule VI. Determination of Representation Status, 988
Rule VII. Voluntary Recognition, 989
Rule VIII. Certification Election, 990
Rule IX. Conduct of Certification Election, 997
Rule X. Run-Off Elections, 1001
Rule XI. Inter/Intra Union Disputes and Other Related Labor
Relation Disputes, 1002
Rule XII. Election of Officers of Labor Unions and Workers’
Associations, 1007
Rule XIII. Administration of Trade Union Funds and Actions
Arising Therefrom, 1008
Rule XIV. Cancellation of Registration of Labor Organizations, 1011
Rule XV. Registry of Labor Organizations and Collective Bargaining
Agreements, 1012
Rule XVI. Collective Bargaining, 1013
Rule XVII. Registration of Collective Bargaining Agreements, 1015
Rule XVIII. Central Registry of Labor Organizations and Collective
Bargaining Agreements, 1017
Rule XIX. Grievance Machinery and Voluntary Arbitration, 1017
Rule XX. Labor Education and Research, 1020
Rule
Rule XXI.
XXII. Labor-Management
Conciliation, Strikesand
andOther Councils,
Lockouts, 1021 1021
Rule XXIII. Contempt, 1024
Rule XXIV. Execution of Decisions, Awards or Orders, 1025
Rule XXV. General Provisions, 1025
Rule XXVI. Transitory Provisions, 1026

ADDENDA TO IMPLEMENTING RULES OF BOOK V

Addendum V-1: Rule XIV – Termination of Employment, 1027

Addendum V-2: Rule XXII – Termination of Employment, 1028

IMPLEMENTING RULES OF BOOK VI — POST-EMPLOYMENT

Rule I. Termination of Employment and Retirement, 1031
Rule II. Retirement Benefits, 1034

APPENDIX TO THE IMPLEMENTING RULES OF BOOK VI

Labor Advisory on Retirement Pay Law, 1038

Rules Prescribing the Retirement Age for Underground Mine
Employees, 1040

liii
 IMPLEMENTING RULES OF BOOK VII — PRESCRIPTION,
TRANSITORY AND FINAL PROVISIONS
Rule I. Venue of Actions, 1043
Rule II. Prescription of Actions, 1043
Rule III. Laws Repealed, 1044
Rule IV. Date of Effectivity, 1045

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