Labor Law Review (Midterm)

LABOR LAW REVIEWDean Antonio Abad

EMPLOYER-EMPLOYEE RELATIONSHIP

Concept

Contractual. Render services in exchange for remuneration

or compensation. So impressed with public interest that labor

contracts must yield to the common good. (A.1700, CC)o Subject to laws on minimum standards of

wage, hours of work, right to self-organization, collective bargaining, strikes, picketing, and other collective actions.

Four-fold test

1. Selection and engagement of employees.2. Payment of wages.3. Power of dismissal.4. Power to control employees’ conduct.

Control Test: One where the employer has reserved the right to control not only the work to be achieved, but the manner and method by which such work is to be achieved. (LVN Pictures v. LVN Musician’s Guild) Refers to the existence and not necessarily to

the actual exercise thereof. It is not essential for the employer to actually supervise the performance of duties of the EE; it is enough that the ER has the right to wield that power. (Republic v. Asiapro)

Economic Reality Test: Economic realities prevailing within the activity or between the parties are examined, taking into consideration the totality of circumstances surrounding the true nature of the relationship between the parties. Appropriate when there is no written

agreement or contract on which to base the relationship.

Benchmark of economic reality - economic dependence of the worker on his ER. (Orozco v. Fifth Division of CA)

When a worker possesses some attributes of an EE and others of an independent contractor, which make him fall within an intermediate area, he may be classified under the category of an EE when the economic facts of the relations make it more nearly one of employment than

one of independent business enterprise with respect to the ends sought to be accomplished. (SSS v. CA)

Doubt ought to be resolved in favor of the category which is most beneficial to the worker.

Not every form of control will have the effect of establishing an ER-EE relationship

Draw the line between:1. Rules that merely serve as guidelines, which

only promote the result. - No ER-EE relationship exists.

2. Rules that fix the methodology and bind or restrict the party hired to the use of such means of methods. - ER-EE relationship exists (address both the result and the means employed to achieve it).

Thus, the SC ruled that: Insurance agents are not EEs of insurance

companies, in the absence of evidence that rules or regulations were promulgated or issued which effectively controlled or restricted the agent’s choice of methods - or the methods themselves - of selling insurance. (Insular Life v. NLRC)o BUT, this ruling was tempered with the

qualification that had there been evidence that the company promulgated rules or regulations that effectively controlled or restricted an insurance agent’s choice of methods or the methods themselves in selling insurance, an ER-EE relationship would have existed. (Tongko v. Manulife)

Caddies are not EEs in absence of control.

Examples where ER-EE relationship exists

1. Not lessor-lessee Jeep owners/operators and drivers (Jardin

et al. v. NLRC)o The former exercises supervision and

control over the latter. o The owner, as holder of the CPC, must

see to it that the driver follows the route prescribed by the franchising authority and the rules promulgated as regards its operation. Moreover, jeep drivers perform activities which are usually necessary or desirable in the usual business or trade of their ER.

Bus company and the bus driver.

Labor Law Review - Dean AbadAzis - A2014

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o Petitioner’s claim that respondent was legally dismissed for abandonment was in fact a negative pregnant: an acknowledgment that there was no mutual termination of the alleged contract of lease and that respondent was his EE.

o Note By analogy, this doctrine applies to rel. bet. bus owner/operator and conductor, auto-calesa owner/operator and driver, taxi owner/operator and driver.

2. Resident physicians and hospital; control test If the hospital controls both the means and

the details of the process by which the physician is to accomplish his task.

Old cases: Residency is a continuation of their medical course; it clearly amounts to a pursuit of further education on a specific discipline. Thus, no ER-EE rel. exists.

3. Not industrial partner A.1767, CC states that in a contract of

partnership, 2 or more persons bind themselves to contribute money, property or industry to a common fund, with the intention of dividing the profits among themselves. Not one of these circumstances is present.

4. Jeepney drivers on boundary system5. Drivers/helpers of salesmen are EEs of the

company6. Handicraft workers on pakyaw system7. Tailors, pressers and stitchers in COD tailoring

dept. (Rosario Bros. v. Ople)8. Musicians who were engaged by musical director

for background music in making of movies

Examples where no ER-EE relationship exists

1. Insurance company and commission agents (NOTE: Tongko v. Manulife)

2. Company v. collecting agents on commission basis

3. Softdrinks company v. independent contractors selling softdrinks

4. Shoe shine boys

There being no ER-EE rel., there can be no compulsory coverage under the Social Security Act

Difference between EE and independent contractor

Independent contractor is one who carries on a distinct and independent business and

undertakes to perform the job, work or service on its own account and under its own responsibility according to its own manner and method, free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof.

While an independent contractor enjoys independence and freedom from the control and supervision of his principal, an EE is subject to the ER’s power to control the means and methods by which the EE’s work is to be performed and accomplished.

Thus, a newspaper columnist is not an EE of the newspaper but an independent contractor engaged to do independent work. (Orozco v. Fifth Division of CA) - How she utilized her talent, skill, experience, and viewpoint in writing her column was not subject to dictation by respondent.

A radio broadcast specialist who works under minimal supervision is an independent contractor.

Off-camera talents are not independent contractors but are EEs. (Fulache v. ABS-CBN)o Under the terms of the CBA, petitioners are

members of the appropriate bargaining unit because they are regular rank-and-file EEs and do not belong to any of the excluded categories.

o The LA’s decision, affirmed all the way up to the CA, ruled against ABS-CBN’s submission that they are independent contractors.

JOB CONTRACTING AND LABOR-ONLY CONTRACTING ARRANGEMENTS

Contracting out valid as an exercise of management prerogative for as long as it complies with the limits

and standards provided by the Labor Code

Reduction of EEs in a company made necessary by introduction of services of an independent contractor is justified when the latter is undertaken in order to effectuate more economic and efficient methods of production.

BOP on the EE to show that the management acted in a malicious or arbitrary manner in engaging the services of an independent contractor to do a specific activity.

Absent such proof, SC has no basis to interfere with the bona fide decision of management to effect a more economic and efficient method of production. (Asian Alcohol v. NLRC)


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There must be proof of capitalization and of control over his EEs on the part of the independent contractor. (Coca-Cola Bottlers v. Dela Cruz)1. Job contracting and labor only contracting are

technical Labor Code concepts that are easily misunderstood. The law allows contracting and

subcontracting involving services, but closely regulates these activities for the protection of workers.

(D.O. 18-02) The legitimate job contractor must have the capitalization and equipment to undertake the sale and distribution of the manufacturer’s products, and must do it on its own using its own means and selling methods.

2. Labor Code provisions on contracting are blatantly and pervasively violated, defeating workers’ right to security of tenure.

Job contracting/outsourcing is a legitimate activity in the exercise of management’s prerogatives, for a long as it is done in GF, pursuant to the ER’s valid interests and not for the circumvention of the EE’s rights. (Temic Auto v. Temic Auto EEs Union -FFW) A company can determine in its best judgment

whether it should contract out a part of its work for as long as the ER is motivated by GF, the contracting is not for the purpose of circumventing the law, and does not involve or be the result of malicious or arbitrary action.o Here, no evidence questions the company’s

basic objective of achieving greater economy and efficiency of operations.

o No showing that the outsourcing has resulted in reduction of work hours or splitting of the BU - effects that can make a contracting arrangement illegal.

Law and implementing rules recognize that management may rightfully exercise its prerogatives in determining what activities may be contracted out, regardless of whether such activity is peripheral or core in nature. ( Alviado v. P&G ) For such outsourcing to be valid, it must be

made to an independent contractor because the current labor rules prohibit labor-only contracting.

Here, the independent contractor already considered the complainants working under it as its regular, not merely contractual or project, EEs. This circumstance likewise negates the existence of element (ii) in Sec. 5 of D.O. 18-02,

as well as the BF and intent to circumvent labor laws on the part of the independent contractor.

Where labor-only contracting exists, the Labor Code itself establishes an ER-EE rel. bet. the ER and the EEs of the labor-only contractor to prevent circumvention of labor laws. The contractor is considered merely an agent of the principal ER.

Valid independent contracting or sub-contracting arrangements

Trilateral relationship (D.O. 18-02) Two contracts:

1. Contract for a specific job, work or service between the principal and the contractor/subcontractor.

2. Contract of employment between the contractor/subcontractor and its workers.

Three parties: 1. Principal - decides to farm out a job/service.2. Contractor/subcontractor - has the capacity

to independently undertake the performance of the job/work/service.

3. Contractual workers - engaged by contractor/subcontractor to accomplish the job/work/service.

Valid job contracting1. The contractor carries on an independent

business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his ER or principal in all matters connected with the performance of the work except as to the results thereof.

2. The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business.

Permissible job contracting/subcontracting. Where a principal agrees to put out or farm out with a subcontractor the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job/work/service is to be performed or completed within or outside the premises of the principal.

Elements of valid job-contracting (A.106, LC; D.O. 18-02): I ARM Free Capital or Investment (Temwork)


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Contractor/subcontractor carries on a distinct and independent business, and undertakes the job/work/service on his own account, under his own responsibility, using his own manner and methods, free from the control and direction of the principal in all matters connected with the performance of work except as to the results thereof.

He has his own substantial capital or investment in the form of tools, equipment, machinery, work premises; and

The agreement between the principal and contractor/subcontractor assures the contractual EEs entitlement to all rights and benefits (labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social and welfare benefits).

Capitalization requirement, clarified. The following factors need to be considered:1. Whether the contractor is carrying on an

independent business.2. Nature and extent of work.3. Skill required.4. Term and duration of the relationship.5. Right to assign the performance of specified

pieces of work.6. Control and supervision of workers.7. Power of ER wrt hiring, firing, payment of

workers of contractor.8. Control of premises.9. Duty to supply premises, tools, appliances,

materials and labor.10. Mode, manner and terms of payment.

Labor-only contracting arrangements prohibited by law

Labor-only contracting1. Person supplying workers to an ER does not

have substantial capital or investment in the form of tools, equipment, machineries, work premises.

2. Workers recruited and placed by such person are performing activities which are directly related to the principal business of such ER; or that the principal has control over the conduct of the work or services performed by the EEs of the job contractor.

Elements (PAL v. Ligan). Where the contractor/sub-contractor merely recruits, supplies or places

workers to perform a job, work or service for a principal. D.O. 18-02 requires either to exist:1. Contractor/sub-contractor does not have

substantial capital or investment to actually perform the job/work/service under its own account and responsibility; and the EEs recruited, supplied or placed by such contractors are performing activities which are directly related to the main business of the principal.

2. The contractor has no control over the conduct of the work to be done by his EEs.

A finding that a contractor is a labor-only contractor is equivalent to declaring that there is an ER-EE rel. bet. the principal company and the EEs of the labor-only contractor (mere agent of the ER).

Earmarks (Babas v. Lorenzo Shipping)1. Workers worked at the company’s premises,

and nowhere else; no showing that the contractor (1) established the working procedure and methods, (2) supervised the workers in their work, or (3) evaluated the same.

2. No proof that the contractor had substantial capital.

3. Workers performed activities directly related to the principal business of the company.

4. Contractor had no other client except for the company.

Effects of labor-only contracting and valid job contracting agreements (SMC v. MAERC Integrated Systems) If labor-only contracting: Illegal.

o ER deemed the direct ER and is made liable to the EEs of the contractor for a more comprehensive purpose (not only for unpaid wages, but for all monetary claims and benefits under the LC and ancillary laws such as SSS/Medicare/Pag-Ibig). To prevent circumvention of labor laws.

o Labor-only contractor is deemed merely an agent of the ER, who shall be responsible to the workers in the manner and extent as if the latter were directly employed by him. ER-EE rel. bet. principal and the EEs of

the labor-only contractor. Principal ER becomes solidarily liable

with the labor-only contractor for all the rightful claims of the EEs.

If job-contracting: legal.


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o ER is considered indirect ER, and is made solidarily liable with the contractor to the EEs of the latter for a more limited purpose (unpaid wages, monetary claims - including 13th month pay and service incentive leave pay). As such, owner of the project is jointly

and severally liable with the contractor wrt the money claims of the contractor’s EEs (A.109, LC). He is likewise jointly and severally liable with the contractor for violation of labor standard laws and ULP.

o No ER-EE rel. bet. owner and EEs of his contractor. Law creates an ER-EE rel. for a limited

purpose (ensure that EEs are paid their wages).

Principal ER becomes jointly and severally liable with the job contractor only for the payment of the EE’s wages whenever the contractor fails to pay the same. Other than that, the principal ER is not responsible for any claim made by the EEs.

Salient features of D.O. 18-021. Mandatory registration of independent

contractors (S.11) Necessary for establishing an effective labor

market information and monitoring. Failure to register gives rise to a

presumption that the contractor is engaged in labor-only contracting.

2. Requirements for registration (DOLE Application Form) Name and business address of contractor. Names and addresses of officers of the

contractor. Nature of the contractor’s business, and the

industry where the contractor seeks to operate.

Number of regular workers; list of clients, if any; number of personnel assigned to each client, and the services provided to the client.

Description of the phases of the contract, and number of EEs covered in each phase, when appropriate.

Copy of audited financial statements (companies, partnership, cooperative, or union) or ITR (sole proprietorship).

Certified copy of the certificate of registration of firm or business name from the SEC, DTI, CDA or from DOLE.

Certified copy of the license or business permit issued by the LGU where the contractor/subcontractor operates.

Application shall be verified, and shall contain an undertaking that the contractor/subcontractor shall abide by all applicable labor laws and regulations.

3. Other obligations of independent contractor: Duty to produce copy of (1) the contract

between the principal and contractor, if required during regular inspection, and (2) contract of employment of the contractual EE.

Annual report of the registered contractors not later than Jan. 15 of every year.o List of contracts entered with principal

during the subject reporting period.o Number of workers covered by each

contract with principal.o Sworn undertaking that the mandatory

government-imposed benefits (SSS, HDMF, Philhealth, ECC and withholding taxes) due the contractual EEs have been made during the subject reporting period.

4. Effect of non-compliance: Delisting.5. Job-contracting negative list: S.6 provides

prohibited job-contracting arrangements for being contrary to law or public policy. Contracting out of job/work/service when

not done in GF and not justified by the exigencies of the business and the same results in the termination of regular EEs and reduction of work or splitting of the BU.

Contracting out of work with a cabo (person, group of persons, or labor group which, in the guise of a labor organization, supplies workers to an ER, with or w/o any monetary or other consideration, whether in the capacity of an agent of the ER or as an ostensible independent contractor).

Taking undue advantage of the economic situation or lack of bargaining strength of the contractual EE, or undermining his security of tenure or basic rights, or circumventing the provisions of regular employment:o In addition to his assigned functions,

requiring the contractual EE to perform functions which are currently being


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performed by the regular EEs of the principal/contractor/subcontractor.

o Requiring him to sign as a precondition to employment or continued employment: Antedated resignation letter. Blank payroll. Waiver of labor standards

(minimum wages, social or welfare benefits)

Quitclaim releasing the principal, contractor, or subcontractor from any liability as to payment of future claims.

o Requiring him to sign a contract fixing the period of employment to a term shorter than the term of the contract bet. the principal and the contractor/subcontractor, unless the latter contract is divisible into phases for which substantially different skills are required and this is made known to the EE at the time of engagement.

Contracting out of a job, work or service through an in-house agency which refers to a contractor/subcontractor engaged in the supply of labor which is owned, managed or controlled by the principal and which operates solely for the principal.

Contracting out of a job, work or service directly related to the business or operation of the principal by reason of a strike or lockout whether actual or imminent.

Contracting out of a job, work or service being performed by union members when such will interfere with, restrain or coerce EEs in the exercise of their rights to self-organization (A.248(3), LC)

Whether the DOLE certification that one is a legitimate job-contractor constitutes sufficient

proof of compliance with requirements

GR: Such gives rise to a presumption that the contractor is a legitimate one. In the absence of evidence to the contrary

presented by complainants, the DOLE certificate having been issued by a public officer, it carries with it the presumption that it was issued in the regular performance of official duty.o Since the DOLE is the agency primarily

responsible for regulating the business of independent job contractors, the Court can presume, in the absence of evidence to the

contrary, that it had thoroughly evaluated the requirements submitted by the contractor before issuing the Certificate.

EXC: Especially in instances where there are contradictory findings between the CA and the NLRC/LA, the Court may consider other factors in determining w/n contractor complies with the requisites. No substantial capitalization and investment,

workers supplied by the contractor were performing activities which were necessary and desirable in the usual trade or business of the ER. (Coca Cola Bottlers v. Dela Cruz)

The certificate is not conclusive evidence that it is an independent contractor. The fact of registration simply prevents the legal presumption of being a mere labor-only contractor from arising. (Babas v. Lorenzo Shipping)

Effect for failure of owner of project to require the contractor to post bond

The owner must answer for whatever liabilities the contractor may have incurred to his EEs; w/o prejudice on the part of the owner to seek reimbursement from the contractor.

When are the workers deemed to be performing activities which are directly related to the main

business of the principal?

Where the duties performed are dependent and integral steps in or aspects of the essential operations of the principal. If such duties are not, the arrangement should

be allowed as job-contracting. Inasmuch as the duties performed by workers

performing janitorial and yard maintenance service were not integral steps in or aspects of the operations of the principal engaged in the manufacture of consumer products, such workers remain to be EEs of the independent contractor. (Kimberly Independent Labor Union v. Drilon)

Where principal exercises control, then labor-only contracting arrangement

(Author) The decisive determinant in job contracting is that the principal has no right to control the conduct of the EEs as to the means employed to achieve an end, not the character of the


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activities as being usually necessary or desirable in the usual business of the ER. The activities of the contracted workers are

always necessary or desirable. Hence, if the arrangement passes the control

test, it is job-contracting. If not, it is labor-only contracting.

MANAGEMENT PREROGATIVES

Free will of management to conduct its own affairs to achieve its purpose cannot be denied

While the law is solicitous of the welfare of EEs, it must also protect the right of an ER to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. (Bisig Manggagawa sa Tryco v. NLRC)

Except as limited by special laws, an ER is free to regulate, according to his own discretion and judgment, all aspects of employment, including: (Hiring W4rams T3PLS DR.) Hiring Working regulations Work assignments Working methods Work supervision Time, place and manner of work Tools to be used Transfer of employees Processes to be followed Lay-off of workers Supervision of workers Discipline and dismissal Recall of work

ER is given elbow room for profit. Owner of business enterprise is given considerable leeway in managing his business because it is deemed important to society as a whole that he should succeed. Our law recognizes certain rights as inherent in

the management of business enterprises. Management prerogatives - acts by which one

directing a business is able to control the variables thereof so as to enhance the chances of making a profit.

Freedom to administer the affairs of a business enterprise such that the costs of running it would be below the expected earnings or receipts.

ERs are accorded rights and privileges to assure their self-determination and independence, and reasonable return of capital. o Although they may be broad and unlimited

in scope, the State has a right to determine whether an ER’s privilege is exercised in a manner that complies with the legal requirements and does not offend the protected rights of labor.

Elements Exercised in GF For the advancement of the ER’s interest Not for the purpose of defeating or

circumventing the rights of EEs under special laws or valid agreements.

Limitations in exercise Sources:

o Lawo CBAo General principles of fair play and justice

Must be duly established that the prerogative is clearly a managerial one.o Draw line bet. management prerogative re:

business operations per se and those which affect the rights of the EEs. (PAL v. NLRC).

o Wrt to the latter, management should see to it that the EEs are at least properly informed of its decisions or modes of action.

If valid exercise of management prerogatives, SC will not substitute its judgment over that of the ER Labor laws do not authorize the substitution of

judgment of the ER in the conduct of his business.

It is valid as long as it is not performed in a malicious, harsh, oppressive, vindictive or wanton manner, or out of malice or spite.

Examples of exercise of management prerogative

1. Hiring of personnel and size of workforce. ER has no legal obligation to keep in its

payroll more EEs than are necessary for the operation of its business.

While EE has security of tenure, management has the right to terminate an EE for just or authorized cause.

A contract of perpetual employment is contrary to public policy and good customs, insofar as it unjustly forbids an ER from terminating the services of an EE despite the existence of just or authorized cause.


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2. Terms and conditions upon hiring; stipulations against marriage and/or other qualifications. Ban on spouses in same company (Star

Paper v. Simbol)o To impose a stipulation re: condition of

work, the reasonableness must be clearly established to uphold the questioned employment policy. There must be a compelling business necessity for which no alternative exists under than the discriminatory practice.

o Unless the ER can prove that the reasonable demands of business require a distinction based on marital status, and there is no better available or acceptable policy which would better accomplish the business purpose, he may not discriminate against an EE based on the identity of the latter’s spouse. This is known as the bona fide occupational qualification exception.

o Two factors:1. That the employment qualification

is reasonably related to the essential operation of the job involved.

2. That there is factual basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job.

o Theories:1. Disparate treatment: Plaintiff

must prove that an employment policy is discriminatory on its fact.

2. Disparate impact: The complainants must prove that a facially neutral policy has a disproportionate effect on a particular class.

o Here, the policy is invalid as the company failed to show how the marriage of the 2 co-EEs will be detrimental or prejudicial to its business operations. If the rule was upheld w/o valid justification, the ER can create policies based on an unproven presumption of a perceived danger at the expense of an EE’s right to security of tenure. Under the disparate impact theory,

the only way it could pass judicial scrutiny is a showing that it is reasonable despite the

discriminatory, albeit disproportionate, effect.

Stipulations against marriage to EE of competitor company (Duncan Association of Detailman - PGTWO v. Glaxo Wellcome)o Measure was upheld, because Glaxo

has a right to guard its trade secrets, manufacturing programs, marketing strategies and other confidential information from competitors.

o Prohibition against marital rel. w/ EEs of competitors upon Glaxo’s EEs was considered reasonable under the circumstances because relationships of that nature might compromise the interests of Glaxo.

Bona fide occupational qualification regarding obesity and ER’s weight requirement. (Yrasuegui v. PAL)o Weight standards constitute a

continuing qualification of an EE. The obesity of petitioner, when placed in the context of his work as a flight attendant, becomes an analogous cause under A.282, LC that justifies his dismissal.

o The LA, NLRC, and CA are one in holding that the weight standards are reasonable. Such standards show PAL’s effort to comply with the exacting obligations imposed upon it by law by virtue of being a common carrier (i.e. safely transport its passengers).

3. Terms and conditions upon hiring’ non-compete and exclusivity clauses. Validity of restraints upon trade or

employment is to be determined by the intrinsic reasonableness of the restriction in each case, and that such restrictions may be upheld when not contrary to the public welfare, and not greater than is necessary to afford a fair and reasonable protection to the parties in whose favor it is imposed.o Test: Whether, considering the

particular circumstances of the case and the nature of the contract involved, the restraint is not only reasonably necessary for the protection of the contracting parties but will not affect the public interest or service.

The exclusivity clause is neither directed to eliminate the competition nor foreclose new entrants to the market, but to safeguard the


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network that it has cultivated through the years.

4. Terms and conditions upon hiring; qualification and change in law. Enactment of RA 7431 and 4226 is

recognized as an exercise of the police power. Such power embraces the power to prescribe regulations to promote the health, morals, education, good order, safety or general welfare of the people.

Respondent being engaged in the hospital and health care business, is a proper subject of the cited law. Thus, having in mind the legal requirements of these laws, the respondent cannot close its eyes and let complainant’s private interest override public interest.

5. Discipline of EEs (Farrol v. CA) Prerogative to discipline or dismiss EE

cannot be exercised wantonly, but must be controlled by substantive DP and tempered by the fundamental policy of protection to labor.

Infractions should merit only the corresponding sanction demanded by the circumstances; penalty must be commensurate with the act, conduct or omission imputed to the EE and imposed in connection with the ER’s disciplinary authority.

6. Transfer of EEs GR: ER has inherent right to transfer or

assign an EE in the pursuance of its legitimate business interest, subject only to the condition that it be not motivated by discrimination or BF. (PT&T v. Laplana)

EE’s right to security of tenure does not give him such vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him.

It is management’s prerogative to transfer an EE from one office to another within the business establishment based on its assessment and perception of the EE’s qualifications, aptitudes and competence, to ascertain where he can function with maximum benefit to the company.o This prerogative is inherent to ER’s

right to control and manage his enterprise effectively.

o An EE who refuses to be transferred when such is valid is guilty of insubordination.

This prerogative must be exercised w/o GAD, bearing in mind the basic elements of justice and fair play. It cannot be used as a subterfuge by the ER to rid himself of an undesirable worker.

Constructive dismissal does not always involve forthright dismissal or diminution in rank, compensation, benefits and privileges. For an act of clear discrimination, insensibility or disdain by an ER may become so unbearable on the part of the EE that it could foreclose any choice by him except to forego his continued employment. (Zafra v. CA)o Transfer amounts to constructive

dismissal when the transfer is unreasonable, inconvenient or prejudicial to the EE, and involves a demotion in rank or diminution of salaries, benefits, and other privileges.

An EE cannot be promoted, even if merely as a result of a transfer, w/o his consent. A transfer that results of promotion or demotion, advancement or reduction or a transfer that aims to lure the EE away from his permanent position cannot be done w/o the EE’s consent.o No law compels an EE to accept a

promotion for the reason that a promotion is in the nature of a gift or reward, which a person has a right to refuse.

ER must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the EE; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. o Should the ER fail to overcome this

BOP, the EE’s transfer shall be tantamount to constructive dismissal.

Mere fact that it would be inconvenient does not by itself make the transfer illegal.

ER has right to transfer an EE to another office in the exercise of sound business judgment and in accordance with predetermined and established office policy and practice. Particularly so when no illicit, improper or underhanded purpose can be ascribed to the ER and the objection to the transfer was grounded solely on the personal inconvenience or hardship that


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will be caused to the EE by virtue of the transfer.

Reassignment serves no different purpose 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 EE.

7. Management prerogative to abolish positions and/or downsize personnel complement. (Aurelio v. NLRC) Management is at liberty, absent any malice

on its part, to abolish positions which it deems no longer necessary.

Adequate proof must be shown that the abolished positions were unnecessary/

Management prerogative to merge job functions in line with streamlining of the company to cut costs eve if an EE would thereby lose his employment due to abolition of his position.

When there is nothing that would indicate that an EE’s position was abolished to ease him out of employment, the deletion of that position should be accepted as a valid exercise of management prerogative.

8. Abolition of position due to company reorganization or merger In such cases, the company has the

prerogative to abolish managerial and confidential positions or create new ones as the necessity for them requires.

9. Adoption of redundancy/retrenchment program to streamline operations resulting in the reduction of manpower complement in order to minimize or avert losses. Not absolute. The basis for such an action

must be far from being whimsical, and the same must be proved by substantial evidence.

The implementation of such a decision or policy must be in accordance with existing laws, rules and procedure, and provisions of the CBA between the parties, if there be any.

10. Promotion of EEs. Determination of who, between 2 EEs,

possess the better credentials for purposes of promotion is a management prerogative, and the court cannot substitute its

judgment for that of management. (Almodiel vs. NLRC)

Determination of the qualifications and fitness of workers for hiring and firing, promotion or reassignment, are exclusive prerogatives of management.

ER is free to determine, using his own discretion and business judgment, all elements of employment from hiring to firing, except in cases of unlawful discrimination or those which may be provided for by law.

11. ER entitled to impose productivity standards as management prerogative (Leonardo v. NLRC) Non-compliance may be visited with a

penalty even more severe than demotion. Failure to observe prescribed standards of

work or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal.

This management prerogative may be availed of so long as they are exercised in GF for the advancement of the ER’s interest.

12. Grant of bonus is management prerogative. It is an amount granted and paid to an EE

for his industry and loyalty which contributed to the success of the ER’s business and made possible the realization of profits.o Act of generosity granted by an

enlightened ER to spur the EE to greater efforts for the success of the business and realization of bigger profits.

Granting of bonus is a management prerogative; something given in addition to what is ordinarily received by or strictly due the recipient.

It is not a demandable and enforceable obligation, except when it is made part of the wage, salary or compensation of the EE.

ER cannot be forced to distribute bonuses when it can no longer afford to pay. To hold otherwise would be to penalize the ER for his past generosity.

BUT, if the bonus is integrated in the CBA, the same partakes the nature of a demandable right. It becomes a contractual obligations.

13. Change of working hours


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It may be changed at the discretion of the company, should such be necessary for its operations, and that the EEs shall observe such rules as have been laid down by the company. (Interphil Lab EEs Union -FFW v. Interphil Lab)

14. Union leave under the CBA vis-à-vis prior approval policy of the company. The grant of union leave privileges cannot

be considered separately from the other provisions of the CBA, particularly the provision on management prerogatives where the CBA reserved for the company the full and complete authority in managing and running its business.

Precisely, prior notice is expressly required under the CBA so that the company can appropriately respond to the request for leave. Thus, rule requiring prior approval only made express what is implied in the terms of the CBA (nothing that removes from the company the right to prescribe reasonable rules and regulations to govern the manner of availing union leaves)

CLASSIFICATION OF EMPLOYMENT

Classification of EEs for compensation purposes is essentially an exercise of management prerogative

W/N a new or additional scheme of classification of EEs for compensation purposes should be established by the company is properly a matter of management judgment and discretion, and perhaps a subject matter for bargaining negotiations between ER and EEs. NLRC is not authorized unilaterally to impose,

directly or indirectly, under the guise of rectifying a wage distortion, upon an ER a new scheme of classification of EEs where none has been established either by management decision or by collective bargaining.

As to nature of employment (job/work rendered by the EE in rel. to the usual trade/business of the ER) Regular Probationary Project Term Seasonal Casual

As to rank (hierarchy in the positions)

Managerial Supervisory Rank and file

A.280, LC, deconstructed

The provisions of written agreement to the contrary notwithstanding, and regardless of the oral agreement of the parties, an employment shall be deemed to be REGULAR where the EE has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the ER, EXC: Where the employment has been fixed for a

specific project or undertaking, the completion of which has been determined at the time of the engagement of the EE, or

Where the (job) work or service to be performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be CASUAL if it is not covered by the preceding paragraph: Provided, that any EE who has rendered at least

one year of service, whether such service is continuous or broken, shall be considered as regular EE wrt the activity in which he is employed, and his employment shall continue while such activity exists.

Framework of A.280 and 281 GR: Employment is deemed REGULAR, absent

any evidence to the contrary. EXC:

o Probationaryo Termo Projecto Seasonalo Casual

EXC to EXC: o Probationary EEs allowed to work after

probationary period.o Casual workers rendering service for more

than 1y.

Regular employment

Definition. Those who are hired for activities which are necessary or desirable in the usual trade or business of the ER.

Test; reasonable connection rule (De Leon v. NLRC) Primary standard in determining regular

employment is the reasonable connection


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between the particular activity performed by the EE in relation to the usual business or trade of the ER.

Test: Whether the former is usually necessary or desirable in the usual trade or business of the ER.o Determine connection by considering the

nature of the work performed and its relation to the scheme of the particular business or trade in its entirety.

o Regular because of the nature of work and length of service, not because of the mode or even the reason for hiring them.

Necessity or desirability is to be assessed in relation to the general scheme of the business undertaking. (Magsalin v. National Organization of Working Men) The standard, supplied by the law itself, is

whether the work undertaken is necessary or desirable in the usual business or trade of the ER, a fact that can be assessed by looking into the nature of the services rendered and its relation to the general scheme under which the business or trade is pursued in the usual course. o Distinguished from a specific undertaking

that is divorced from the normal activities required in carrying on the particular business or trade.

The nature of the work performed must be viewed from a perspective of the business or trade in its entirety and not on a confined scope.

Repeated rehiring and the continuing need for the EE’s services are sufficient evidence of the necessity and indispensability of his services to the ER’s business or trade.

Probationary EEs

Definition. Those hired generally for regular positions but are placed on a probationary status for a period of 6 mos. (as a GR). He may become regular once he has qualified as such in accordance with reasonable standards made known to him at the time of hiring. They are considered regular if they are allowed to work beyond the probationary period.

Elements (A.282, LC, Dept. Order No. 10). Where the EE, upon his engagement, is made to undergo a trial period during w/c the ER determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of his engagement.

Rationale. It is intended to afford the ER an opportunity to observe the fitness of the probationary EE at work, and to ascertain whether he will become an efficient and proper EE.

As to length of time; GR and EXC GR: 6 mos. EXC:

o Learnership/apprenticeship periodo 3 years in case of teachers.o When parties agree to a longer term by

virtue of company policy or when the same is required by the nature of the work.

If learnable or apprenticeable in accordance with DOLE standards, then: Apprenticeable pd. (A.58 and 62, LC)

o More than 3 mos.o Need special skill.o 75% below min. wageo ONLY highly technical industrieso Qualifications:

At least 14 yo Possess vocational aptitude and

capacity for appropriate tests Possess ability to comprehend and

follow oral and written instructions. Learnership pd. (A.73, LC)

o Not more than 3 mos.o No need for special skill.o 75% below min. wageo May only be hired when no experience

workers are available; provided that: Employment of learners necessary to

prevent curtailment of employment opportunities.

Employment does not create unfair competition in terms of labor costs, or impair/lower working standards.

o If already worked 2 mos. and terminated by ER before end of stipulated period thru no fault of learner, deemed regular.

3y probationary pd. for teachers. Manual of Regulations for Private Schools promulgated by DECS (DepEd).

Extension of probationary pd. beyond 6 mos. GR: EE allowed to work after the probationary

pd. shall be considered a regular EE. (A.281, LC) EXC:

o Agreement bet. the ER and the EE to extend the probationary pd. beyond 6 mos. (Mariwasa Manufacturing v. Leogardo)


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It is an act of liberality of the ER that cannot be used unjustly against him.

By voluntarily agreeing to the extension, the EE waived any benefit attaching to the completion of the pd.

No public policy is served by prohibiting such extension bec. the same actually improved the probationary EE’s prospects of demonstrating his fitness for regular employment.

o Longer pd. stipulated in the probationary employment contract, provided that such longer pd. is established to be company policy or is necessary because of the nature of the work. (Buiser v. Leogardo) In the latter case, there is recognition of

the exercise of management prerogatives in requiring a longer pd. of probationary employment, esp. where the EE must learn a particular kind of work, or where the job requires certain qualifications, skills, expertise or training.

Training pd. plus probationary pd. equals double probation. (Holiday Inn v. NLRC) Probation is the pd. during which the ER may

determine if the EE is qualified for possible inclusion in the work force. o Here, when her services were continued

after this training, the ER in effect recognized that she had passed probation and was qualified to be a regular EE.

o Even if it be supposed that the probation did not end with the 3-week pd. of OJT, there is still no reason why that pd. should not be included in the stipulated 6 mo. pd. of probation.

In all cases involving EEs on probationary status, the ER shall make known to the EE at the time he is hired, the standards by w/c he will qualify as a regular EE. In the absence of this requisite, there is

justification in concluding that EE was a regular EE at the time he was dismissed by company; thus he is entitled to security of tenure during his pd. of employment and his services cannot be terminated exc. for just and authorized causes. (AM Oreta & Co. Inc. v. NLRC)

(Author) As a GR, in the event the ER neglects or fails to inform the EE at the time of engagement about the standards for him to qualify as a regular EE, he cannot be terminated for failure

to comply with the criteria; he can only be removed for just or authorized causes.

The rules on probationary employment cannot be used to exculpate a probationary EE who acts in a manner, contrary to basic knowledge and common sense, in regard to which, there is no need to spell out a policy or standard to be met.

Requiring reasonable standards for inclusion in the regular force is a management prerogative; ER has absolute right to determine who are qualified. May be availed of so long as they are exercised

in GF for the advancement of the ER’s interests. ER has absolute discretion in hiring his EEs in

accordance with his standards of competence and probity.

ER has the right or is at liberty to choose who will be hired and who will be denied employment.

Equality of right that exists bet. the ER and EE as to the nature of the probationary employment. Right of laborer to sell his labor to such persons

as he may choose is the same as the right of an ER to purchase labor from any person whom it chooses. o If the ER can compel the EE to work against

the latter’s will, this is servitude. If the EE can compel the ER to give him work against the latter’s will, this is oppression.

During probationary period, the EE enjoys security of tenure. (Cannot be terminated EXC for just cause as provided by law or under the employment contract). A.281 provides that a probationary EE may be

terminated only on 2 grounds:1. For just cause.2. When he fails to qualify as a regular EE in

accordance with reasonable standards made known by the ER to the EE at the time of his engagement.

Probationary EE’s security of tenure is limited to the pd. of probation. (Woodbridge School v. Pe Benito)

Completion of probationary pd. does not automatically qualify a teacher to become a permanent EE of the University. Note: In cases of probationary contract with term, see new ruling on probationary employment on fixed-term contract.

Probationary EE, if found unfit for the job, may be dismissed for cause at any time before the expiration of probationary pd., provided there is DP.


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Nothing under A.281 that would preclude ER from extending a regular or permanent appointment to an EE once the ER finds that the EE is qualified for regular employment even before the expiration of the probationary pd.

Conversely, if the purpose sought by the ER is neither attained nor attainable within the said pd., A.281 foes not likewise preclude the ER from terminating the probationary employment on justifiable causes.o Probationary EE entitled to procedural DP.

(Pines City Educational Center v. NLRC)o (Author) Probationary EE must be given

ample opportunity to dispute the allegations of poor performance against him.

Termination of EEs on probationary status, guiding principles BOP upon ER to show that the EE failed to

qualify as a regular EE in accordance with reasonable standards made known to him at the time of engagement.

BOP upon ER to show just or authorized causes of dismissal by sunstantial evidence.

Limitations on power of ER to terminate probationary employment contract Must be exercised in accordance with the

specific requirements of the contract. The dissatisfaction of the ER must be real and in

GF. There must be no unlawful discrimination in the

dismissal.

There is no need to inform the probationary EE that he has to follow company rules and regulations - such requirement strains credulity The second ground for termination does not

require notice and hearing. DP consists in making the reasonable standards expected of the EE during his probationary period known to him at the time of his probationary employment.

It is in apprising him of the standards against which his performance shall be continuously assessed where DP regarding the second ground lies, and not in notice and hearing as in the case of the first ground. (PDI v. Magtibay)

New ruling on probationary employment on fixed term contract. Nothing is illegitimate in defining the school-

teacher rel. on fixed term basis. BUT, the school cannot forget that its system of fixed-term

contract is a system that operates during the probationary pd. and for this reason is subject to the terms of A.281, LC.

In a situation where the probationary status overlaps with a fixed-term contract not specifically used for the fixed term it offers, A.281 should assume primacy and the fixed-period character of the contract must give way. o ‘Specifically used for the fixed term it offers’ -

replacement teacher may be contracted for 1y to temporarily take the place of a permanent teacher on a 1y study leave.

New ruling: The lapse of an EE’s probationary employment for a fixed term, w/o the latter’s subsequent appointment as regular EE, will effectively sever the ER-EE rel.

Term employment

Nature of term employment. Contract of employment for a definite pd. terminates by its own terms at the end of such pd. (Brent School v. Zamora) The fact that the service rendered is usually

necessary or desirable in the business operations of the ER will not impair the validity of the term employment contract.

Decisive determinant: The day certain agreed upon by the parties for the commencement and the termination of their employment relation.

Criteria for fixed-term employment contracts so it will not circumvent security of tenure.1. Fixed pd. of employment was knowingly and

voluntarily agreed upon by the parties, w/o any force, duress or improper pressure being brought to bear upon the EE and absent any other circumstances vitiating his consent, AND

2. It satisfactorily appears that the ER and EE dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former on the latter. The opening phrase of A.280, LC should not

apply to situations where parties on equal footing agreed freely and voluntarily to stipulate on the terms or duration of employment pursuant to the principle of freedom of contract.

Brent School doctrine should not be used to preclude tenurial security (Magsalin v. NOWM) Where from the circumstances it is apparent

that the pd. has been imposed to preclude the acquisition of tenurial security by the EE, then it should be struck down as being contrary to law,


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morals, good customs, public order, and public policy.

Provisions of applicable statutes are deemed written into the contract, and the parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other.

Cases of unlawful term employment:1. When tenure is made at the pleasure of ER

Intended to prevent security of tenure from accruing in favor of EEs even during the specified pd. (Pakistan International Airlines v. Ople)

2. When the parties were not on equal footing, the presumption is that the term contract was entered into to circumvent the right to security of tenure. Casual workers cannot be said to have

knowingly and voluntarily agreed to a 5 mo. employment contract. These casuals are never on equal terms with their ER. This is a clear circumvention of the EE’s right to security of tenure; thus, it should be struck down as contrary to public policy or morals. (Pure Foods v. NLRC)

3. Where the term contract was executed years after EEs were hired.

Termination of term EE, nuances Lack of notice is of no consequence, because the

contract expires by its own terms at the end of such pd. expressly stated in the contract itself.

Non-renewal of an appt. for a definite and renewable pd. does not involve dismissal but an expiration of term.

If the contract is for a fixed term and the EE is dismissed w/o just cause prior to the expiration of the said contract, the EE is entitled to the payment of his salaries corresponding to the unexpired portion of the employment contract.

Project employment

Principal test. W/N the project EEs were assigned to carry out a specific project or undertaking, the duration (and scope) of w/c were specified at the time the EEs were engaged for that project. (ALU-TUCP v. NLRC) There must be proof that EEs were duly

informed of their status as such project EE. Absent such proof, it will be presumed that they are regular EEs.

An undertaking by the ER to pay completion bonus shall be an indicator that an EE is a project EE. (Hanjin Heavy Industries v. Ibanez)

Project RegularServices are coterminous with the project and may be terminated upon the end or completion of the project for which they were hired.

Legally entitled to remain in the service of their ER until that service is terminated by one of the recognized modes of termination of service under the LC.

Meaning and scope of ‘project’1. Particular job or undertaking within the regular

or usual business of the ER company, but which is distinct and separate, and identifiable as such, from the other undertakings of the company. Such job or undertaking begins and ends at

determined or determinable times. 2. Particular job or undertaking that is not within

the regular business of the corporation. Such job or undertaking must also be identifiably separate and distinct from the regular or ordinary business operations of the ER. Such job or undertaking also begins and

ends at determined or determinable times.

Indicators of project employment (D.O. 19-93). Either one or more of the following may be considered:1. Duration of the specific/identified undertaking

for w/c the worker is engaged is reasonably determinable.

2. Such duration, as well as the specific work/service to be performed, is defined in an employment agreement and is made clear to the EE at the time of hiring. Absent proof that the project EEs were

informed of their status as such, it will be presumed that they are regular EEs (‘Project EEs whose aggregate pd. of continuous employment in a construction company is at least 1y shall be considered regular EEs, in the absence of a day certain agreed upon by the parties for the termination of their rel.’)

3. The work/service performed by the EE is in connection with the particular project/undertaking for which he is engaged.

4. The EE, while not employed and awaiting engagement, is free to offer his services to any other ER.

5. The termination of his employment in the particular project/undertaking is reported to the DOLE Regional Office having JD over the


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workplace within 30d following the date of his separation from work, using the prescribed form on EEs’ terminations, dismissals, suspensions.

6. An undertaking in the employment contract by the ER to pay completion bonus to the project EE as practiced by most construction companies.

Policy Instruction No. 20. Recognizes 2 kinds of EEs:1. Purely project EEs of the construction corp. who

are hired on a project-to-project basis. Those employed in connection with a

particular construction project. Effect:

o Not entitled to separation pay if terminated as a result of the completion of the project or any phase thereof in which they are hired.

o No prior clearance for termination is necessary, but termination must be reported to DOLE.

2. Those who are part of the construction corporation’s labor pool. Those employed without reference to any

particular project; may be further classified into regular and/or probationary.

Effect:o Right to organize and to collectively

bargain, or join rank-and-file union of the construction company may not be curtailed.

o Completion of project or phase will not sever ER-EE rel., as they are to be considered EEs for an indefinite term.

Requirement to qualify as member of work pool under Policy Instruction No. 20

‘Members of a work pool from which a construction company draws its project EEs, if considered EEs of the construction company while in the work pool, are non-project EEs or EEs for an indefinite pd. If they are employed in a particular project, the completion of the project or of any phase thereof will not mean severance of ER-EE rel.’

To qualify, the worker must still be considered an EE of the construction company while in the work pool. There must be proof to the effect that petitioner was under an obligation to be always available on call of respondent, and that he was not free to offer his services to other ERs. (Fernandez v. NLRC)

Length of service is not controlling in project employment. Their re-hiring is only a natural consequence of the fact that experienced construction workers are preferred. What is controlling is w/n the employment has

been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the EE.

The proviso in the second par. of A.280 relates only to casual EEs and is not applicable to those who fall within the definition of said Article’s first par., i.e. project EEs. (ALU-TUCP v. NLRC)o Contra: Although the work to be performed

is only for a specific project or seasonal, where a person thus engaged has been performing the job for at least 1y, even if the performance is not continuous or is merely intermittent, the law deems the repeated and continuing need for its performance as being sufficient to indicate the necessity or desirability of that activity to the business or trade of the ER. Employment of such person is also

deemed to be regular wrt such activity and while such activity exists.

o NB: The ALU-TUCP ruling is the better one. o BUT! It is subsequently held that the

proviso in A.280, stating that an EE who has rendered service for at least 1y shall be considered a regular EE, pertains to casual EEs, and not to project EE. (Caseres v. Universal Robina)

Evidence of gaps in employment histories (on and off basis) as indicia of employment solely for specific projects. (Fernandez v. NLRC) Conclusion is that the petitioner here has not

continuously worked with private respondent but only intermittently as he was hired solely for specific projects.

Project EEs - employed in connection with a particular construction project; non-project EEs - employed w/o reference to a particular project.

Failure of ER to report to the nearest employment office the termination of workers every time a project is completed proves that the EEs are not project EEs.

Report of termination of project ERs compulsory. Failure to file such reports was an indication that the petitioner was not a project EE but a regular EE.


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The faithful and regular effort of the Company in reporting every completion of its project and submitting the lay-off list of its EEs proves the nature of employment of the workers involved therein as project EEs. (Aurora Land v. NLRC)

Where the EEs were hired w/o any mention of a specific project to w/c they will be assigned, and that there were no termination reports at the end of each alleged project, then they are regular.o Moreover, the EEs ceased to be co-

terminous with a specific project when the EE was continuously rehired due to the demands of the ER’s business and re-engaged for many more projects w/o interruption. (Cocomangas Hotel Beach Resort v. Visca)

Project employment terminates upon completion of the project. For the reason that the services of project EEs are co-terminous with the project.

Upon termination of employment, project EEs are not entitled to separation pay. Pursuant to Policy Instructions No. 20, project EEs are not entitled if they are terminated as a result of the completion of the project or any phase thereof in which they are employed, regardless sof the number of projects in which they are employed. They would be entitled to separation pay if the

projects they are working on have not yet been completed when their services were terminated.

Where the employment of project EEs is extended after the supposed project had been finished, the EEs are removed from the scope of project EEs and they shall be considered regular EEs. A project EE or member of a worker pool may

acquire the status of a regular EE when the following concur:1. Continuous rehiring of project EEs even

after the cessation of a project, AND2. The tasks performed by the project EE are

vital, necessary and indispensable to the usual business or trade of the ER.

Grant of completion bonus as an indicator that the EE is a project EE. In the absence of an undertaking that the completion bonus will be paid to the EE, the latter may be considered a non-project EE. (D.O. 19-93)

Seasonal employment

Nature. Those called to work from time to time according to the occurrence of varying need during a season, and are laid off after completion of the required phase of work for the season. (Author)

Seasonal workers who work for more than one season are deemed to have acquired regular employment. It is not enough that they perform work or services that are seasonal in nature; they must have also been employed only for the duration of one season. (Hacienda Fatima v. National Federation of Sugarcane Workers) Here, the workers, having performed the same

tasks for the Hacienda every season for several years, are considered the latter’s regular EEs for their respective tasks.

In Mercado, the workers were not hired regularly and repeatedly for the same phase/s of agricultural work, but on and off for any single phase thereof.

Seasonal workers during off-season are merely considered on leave. Such workers who are called to work from time

to time and are temporarily laid off during off-season are not separated from service in said pd. but merely considered on leave until re-employed.

Effect of repeated rehiring and length of service upon status of seasonal EE. Repeated rehiring evidences the necessity and

indispensability of her services to the former’s business or trade. Owing to her length of service, she became a regular EE by operation of law, 1y after she was employed. o Enjoys security of tenure (cannot be

dismissed except for just or authorized cause)

Seasonal EEs are entitled to separation pay. When the establishment is sold w/c effectively terminated the employment of seasonal EEs, the latter would be entitled to separation pay under A.283 and 284.

Casual employment

Definition. Neither regular nor seasonal or fixed for a specific project.

When is there casual employment? When it is irregular, unpredictable, sporadic and

brief in nature, and outside the usual business of the ER.


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Where and when it is not permanent nor periodically regular, but occasional or by chance, and not in the usual course of the ER’s trade or business.

Any EE who has rendered at least 1y of service, whether such is continuous or broken, shall be considered a regular EE wrt the activity in which he is employed, and his employment shall continue while such activity exists.

Casual EEs who are dismissed from their employment before the expiration of the 1y pd. cannot lawfully claim that their dismissal is illegal.

Status of regular employment attaches to the casual EE on the day immediately after the end of his first year of service.

Are seafarers regular or contractual EEs? Employment contracts which may be neither for

seasonal work nor for specific projects, but to which a fixed term is an essential and natural appurtenance: overseas employment contracts, to which, whatever the nature of engagement, the concept of regular employment w/ all that it implies does not appear ever to have been applied, A.280 notwithstanding.

Seafarers are contractual EEs for a fixed term, governed by the contracts they sign every time they are rehired, an EXC to A.280. (Millares v. NLRC)o Their employment is terminated when the

contract expires. o There are certain forms of employment

which also require the performance of usual and desirable functions and w/c exceed 1y but do not necessarily attain regular employment status under A.280. Overseas workers including seafarers fall under this type of employment which are governed by the mutual agreement of the parties.

o The circumstance of continuous re-hiring was dictated by practical considerations that experience crew members are more preferred. This does not detract the fact that the petitioners herein are contractual EEs.

EE classification as to rank

Managerial EEs

Those vested w/ powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall EEs. (A.212(m), LC)

EEs are to be considered of managerial level and not entitled to benefits relating to hours of work and other conditions of employment if they meet ALL of the ff:1. Primary duty: Management of establishment in

w/c they are employed, or of a department or subdivision thereof.

2. They customarily and regularly direct the work of 2 or more EEs therein.

3. They have the authority to hire or fire other EEs of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other EEs are given particular weight.

Officer/members of managerial staff shall likewise be exempt from benefits relating to hours of work and other conditions of employment if they perform the ff:1. Primary duty: Performance of work directly

related to the management policies of their ER.2. Customarily and regularly exercise discretion

and independent judgment.3. Regularly and directly:

Assist a proprietor or managerial EE whose primary duty consists of management of the establishment in w/c he is employed or subdivision thereof.

Execute under general supervision work along specialized or technical lines requiring special training, experience or knowledge.

Execute under general supervision special assignments and tasks.

4. Who do not devote more than 20% of their hours worked in a workweek to activities w/c are not directly and closely related to the performance of the work described in the foregoing paragraphs.

Supervisory EEs

Those who, in the interest of management, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires use of independent judgment. (A.212(m), LC) Supervisor deemed a member of the managerial

staff because he oversees the operation of the business of the company and the performance of the workers. This necessarily requires the use of discretion and independent judgment to ensure the proper management of the establishment.


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‘Foreman’ implies that the EE is the representative of management over the workers and the operation of the department. Thus, he is likewise a member of the managerial staff.

Rank and file EEs

All other EEs not falling within the definition of managerial or supervisory EEs, are considered rank-and file EEs for purposes of Book V of the LC (A.212(m), LC)

RIGHT TO SELF-ORGANIZATION

Existence of ER-EE rel. is essential for the determination of w/n one may exercise the right of

self-organization for purposes of collective bargaining

Where the workers are not EEs of the company, they are not entitled to the constitutional rt. to join/form labor unions for purposes of CB. (La Suerte Cigar v. Director of BLR) Existence of ER-EE rel. is a primordial

consideration before extending labor benefits under labor relations law.

It is a condition sine qua non for a BU that it be composed of EEs, failing w/c affects the legality of the union itself, and means the ineligibility of union members to present a pet. for CE, as well as to vote therein.

Rationale. Interest of individual worker can better be protected on the whole by a strong union aware of its moral and legal obligations to represent the rank-and-file faithfully, and secure for them the best wages and working terms and conditions.

Who may unionize for purposes of CB negotiations?

GR: Any EE may be eligible to join and be a member of a labor union, beginning on his first day of service, whether employed for a definite period or not. (UST Faculty Union v. Bitonio, A.277(3), LC) Self-organization is a fundamental right

guaranteed by the Const. and LC. EEs have the right to form, join or assist labor organizations for the purpose of CB or for their mutual aid and protection.

Corollary: Prerogative not to join, affiliate with, or assist a labor union. Thus, to be a union member, one must not only signify the intent to become one, but also to take some positive steps to realize that intent.

o This right not to join is not absolute. Closed shop security clause can be

made applicable to old EEs who are already regular and permanent but have chosen not to join a union. (BPI v. BPI EEs Union-Davao Chapter)

Procedure for union membership is embodied in the union’s CBL.o An EE who becomes a union member

acquires the rights and concomitant obligations that go with this new status and becomes bound by the union’s rules and regulations.

o The CBL is the fundamental law that governs the rel. between and among the members of the union. It is where the rights, duties and obligations, powers, functions, and authority of the officers as well as the members are defined. A union election is held pursuant to the

union’s CBL and the right to vote in it is enjoyed only by union members.

Union affairs and elections cannot be decided in a non-union activity. Thus, the ratification of the new CBA did not validate the otherwise void election of union officers. Ratified were the terms of the new CBA, not the issue of union leadership.

EXC:1. Managerial EEs (A.245, LC)

NB: Supervisory EEs may unionize and form labor organizations of their own, but may not join rank-and-file unions. BUT, both supervisory union and rank-and-file unions may now affiliate with the same national federation.

2. Confidential EEs Those who:

o Assist or act in a confidential capacityo To persons who formulate, determine,

and effectuate management policies in the field of labor rel.

These criteria are cumulative; the confidential rel. must exist bet. the EE and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor rel. (SMCSEEU v. Laguesma)

A confidential EE is one entrusted w/ confidence on delicate matters, or with the


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custody, handling, or care and protection of the ER’s property.

Doctrine of necessary implication: By the very nature of their functions, the rationale behind the ineligibility of managerial EEs to form, assist or join a labor union is held equally applicable to confidential EEs.

Access to confidential labor relations information as a component element of a confidential EE; explained. (SMCSEEU v. Laguesma)o Rationale behind the confidential EE

rule is that EEs should not be placed in a position involving a potential conflict of interests. Management should not be required to handle labor relations matters through EEs who are represented by the union with w/c the company is required to deal, and who in the normal performance of their duties may obtain advance information of the company’s position wrt contract negotiations, disposition of grievances, or other labor rel. matters. Impt. element is the EE’s need to

use labor rel. information. o Granting that the EE has access to

confidential labor rel. information but such is merely incidental to his duties, and knowledge thereof is not necessary in the performance of such duties, then said access does not render him a confidential EE.

o Access to information regarded by the ER to be confidential from the business standpoint (financial information or technical trade secrets) will not render an EE a confidential EE as to render him ineligible to form, join or assist labor organizations.

Examples:o Division secretarieso Staff of general management, personnel

and industrial relations department o Secretaries of audit, EDP and Financial

Systemso Legal secretarieso Executive secretaries of the GMo Executive secretaries of Quality

Assurance, Product Development, Management System, Human Resources, Engineering, Materials, and Production Managers, and Finance and Marketing Directors.

3. Government EEs, including GOCCs with original charter.

4. Those who are members of a cooperative cannot form/join unions for purposes of CB. Rationale: Its owners and/or members are

the ones who run and operate the business while the others are its EEs. Thus, an EE who is a member and co-owner cannot invoke the right to CB for certainly an owner cannot bargain with himself or his co-owners. o BUT, insofar as it involves cooperatives

with EEs who are not members/co-owners, such EEs are entitled to exercise the rts. of all workers to organization, CB, negotiations and others.

o NB: Members are to be considered as EEs in rel. to the cooperative for purposes of social security coverage, when the cooperative engages in job-contracting arrangements with 3Ps. Cooperative can be likened to a

corporation with a personality separate and distinct from its owners-members.

Consequently, an owner-member can be an EE of the latter and an ER-EE rel. can exist between them.

5. EEs of international organizations or specialized agencies w/c are registered w/ the UN and w/c enjoy diplomatic immunity. Contra: GTZ was found to be akin to a Phil.

counterpart of a GOCC w/o original charter.

6. Aliens w/o valid working permits; or aliens w/ valid working permits but are nationals of a country w/c do not grant Filipinos the exercise of the right of self-organization and to join or assist labor organizations.

Salient features of RA 9481

RA 9481 sought to strengthen the workers’ right to self-organization and enhance the Philippines’ compliance with its international obligations as embodied in the ILO Convention No. 87.

Explicitly allows for commingling of supervisors’ unions and rank and file unions in the same federation.


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‘The rank and file union and the supervisors’ union operating within the same establishment may join the same federation or national union.’

Requirements for registration:1. Independent union or federations/national

unions - acquires legal personality upon issuance of certificate of registration. (A.234, LC) P50 registration fee Names of officers, their addresses, principal

address of labor organization, minutes of the organizational meetings, list of workers who participated in such.

(Independent union) Names of all its members comprising at least 20% of all the EEs in the BU where it seeks to operate.

(Existing for 1 or more years) Copies of its annual financial reports.

4 copies of the CBL of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it.

2. Local chapter of federation/national union (A.234-A, LC) - acquires legal personality only for the purpose of filing a pet. for CE upon issuance of the charter certificate. It shall be entitled to all other rights appurtenant thereto only upon submission of the ff: Names of the chapter’s officers, their

addresses, principal office of the chapter. Chapter’s CBL; provided, that where the

chapter’s CBL are the same as that of the federation or national union, this fact shall be indicated accordingly. o The additional reporting requirements

shall be certified under oath by the secretary or treasurer of the chapter and attested by its president.

Failure to comply with reportorial requirements no longer a ground for cancellation of union registration, but shall subject erring officers/members to suspension, expulsion from membership, or any appropriate penalty. (A.242-A, LC, Heritage Hotel Manila v. NUWHRAIN-HHMSC) Law requires the submission of the annual

financial report and list of members to verify if it is still viable and financially sustainable as an organization so as to protect the ER and EEs from fraudulent or fly-by-night unions. With the submission of the required documents, the

purpose of the law has been achieved, though belatedly.o EEs of the appropriate BU should not be

deprived of a bargaining agent, merely because of the negligence of union officers who were responsible for the submission of the documents to the BLR.

o Labor authorities should bear in mind that registration confers upon a union the status of legitimacy and the concomitant right and privileges granted by law to a legitimate labor organization, particularly the right to participate in or ask for CE in a BU.

Fewer grounds for cancellation of union registration (A.239, LC)1. Misrepresentation, false statement or fraud in

connection with the adoption or ratification of the CBL or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification.

2. Misrepresentation, false statements or fraud in connection with the election of officers, minutes of election of officers, and the list of voters.

3. Voluntary dissolution by the members.

No longer grounds for cancellation:1. Violations under (old) A.239 such as:

Failure to submit CBL and ratification documents within 30d from adoption or ratification.

Failure to submit annual financial report to the Bureau; misrepresentation, false entries or fraud in preparation of financial statements.

Acting as labor-only contractor (cabo) Entering into a CBA with sub-minimum

provisions. Asking/accepting attorney’s fees or

negotiation fees from ERs. Checking-off w/o signed individual written

authorizations. Failure to submit list of members yearly.

2. Violations under A.241 referring to rights and conditions of union membership, even with signature requirements constituting 30% of union membership, may no longer be a ground for cancellation of union registration: Right to financial statements. Right to freely elect their officers, or

determine questions on major union policy, by secret ballot.


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No labor organization shall knowingly admit as member any individual who belongs to a subversive organization.

Right against collection of fees w/o due authority.

Right to transparency in union finances. No special assessments w/o authorization

by written resolution of majority of the members in a general membership meeting called for such purpose.

No check-off of special assessment or negotiation fees or attorney’s fees w/o individual written authorization duly signed by the EE.

Inclusion of union members of EEs outside the BU is no longer a ground for cancellation of union registration. Said EEs are automatically deemed removed from the list of membership of said union. (A.245-A, LC) Unless such inclusion is due to

misrepresentation, false statement, or fraud.

Requirements for voluntary cancellation of union registration. 2/3 vote of general membership (A.239-A)

Explicit provision that ER is simply a bystander and can no longer oppose or participate in the certification proceedings. (A.258-A, LC)

Falsification and/or misrepresentation in the adoption of CBL as a ground for cancellation of

union registration

Prior to issuance of certificate of registration, BLR is under obligation to check validity of submitted documents. Registration is not ministerial on the part of the

BLR. After a labor organization has filed the necessary registration documents, it becomes mandatory for the BLR to check if the requirements under A.234 have been complied with. (SS Ventures v. SSVLU)o If the application is infected by falsification

and like serious irregularities, esp. those appearing on the face of the application and its attachments, a union should be denied recognition as a legitimate labor organization.

For fraud or misrepresentation to be valid grounds for cancellation of union registration, its nature must be grave and compelling enough to vitiate the consent of a majority of the union

members. (Mariwasa Siam Ceramics v. Secretary)o Any seeming infirmity in the application

and admission of union membership, most especially in cases of independent labor unions, must be viewed in favor of valid membership. (Eagle Ridge Golf and Country Club v. EREU

Where certificate of registration was already issued, the BOP is upon petitioner to establish fraud. o The LC and its IRR do not require that the

number of members appearing on the documents in question should completely dovetail. As long as the documents and signatures are shown to be genuine and regular, and the CBL democratically ratified, the union is deemed to have complied with registration requirements.

Alleged retractions of union membership looked upon with disfavor after registration, and will not affect union registration.o Before filing of pet. for CE - presumed

voluntary.o After filing of pet. for CE - considered

involuntary and does not affect the same.

No more prohibition against a national federation representing both the rank-and-file union and the

supervisory union in one employer unit (A.245)

Before, it was prohibited to avoid a situation where supervisors would merge with rank-and-file or where the supervisor’s union would represent conflicting interests especially so where the Federation actively participates in the rank-and-file union activity in the company.

Relationship bet. mother union and local union

The mother union, acting for and in behalf of its affiliate, had the status of an agent while the local union remained the basic unit of the association, free to serve the common interest of all its members, subject only to the restraints imposed by the CBL. (Liberty Cotton Mills Workers Union v. Liberty Cotton Mills) The same is true even if the local union is not a

legitimate labor organization (due to failure to comply with procedural requirements).

Disaffiliation of the local union from the mother union


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GR: A labor union may disaffiliate from the mother union to form a local or independent union only during the 60d freedom pd. immediately preceding the expiration of the CBA.

EXC: Even before the onset of the freedom period (and despite the closed-shop provision in the CBA), disaffiliation may still be carried out, but such disaffiliation must be effected by a majority of the members in the BU. This happens when there is a substantial shift in allegiance on the part of majority of the union members. In such a case, the CBA continues to bind the

members of the new or disaffiliated and independent union up to the CBA’s expiration date. (Associated Labor Union - PTGWO v. NLRC)

What happens to existing CBAs in case of disaffiliation? Substitutionary doctrine will apply.

Substitutionary doctrine states that even during the effectivity of a CBA executed between the ER and EEs thru their agent, the EEs can change said agent but the contract continues to bind them up to its expiration date. They may bargain however for the shortening of

said expiration date. The principle applies to a situation when there

occurs a shift in EEs’ union allegiance after the execution of a CB contract.

APPROPRIATE BARGAINING UNIT AND CERTIFICATION ELECTION

Appropriate bargaining unit

Bargaining unit, composition and definition (A.255, LC) Group of EEs of a given ER, comprised of all or

less than all of the entire body of EEs, w/c the collective interest of all the EEs, consistent w/ equity to the ER, indicate to be the best suited to serve the reciprocal rights and duties of the parties under the CB provisions of the law.

Fundamental factors:1. Will of the EEs2. Affinity and unity of the EEs’ interest, such

substantial similarity of work and duties, or similarity of compensation and working conditions (substantial mutual interests rule)

3. Prior collective bargaining history4. Similarity of employment status.

Test to determine the constituency: Community or mutuality of interests The EEs sought to be represented by the CB

agent must have substantial mutual interests in terms of employment and working conditions as evinced by the type of work they perform. (SMC v. Laguesma)

Appropriateness of bargaining unit. A bargaining unit must effect a grouping of EEs

who have substantial, mutual interests in wages, hours, working conditions, and other subjects of collective bargaining.

Examples:o Separate bargaining units in the 3 different

plants of the division will fragmentize the EEs of the said division, thus greatly diminishing their bargaining leverage.

o Where the ER operates 2 enterprises engaged in 2 different kinds of business, the EEs may be separated into 2 distinct Bus for purposes of the CE. (Cruzvale v. Laguesma)

Certification election

Process of determining the sole and exclusive bargaining agent of the EEs in an appropriate BU for purposes of CB.

Consent election: It is an agreed one, the purpose being merely to determine the issue of majority representation of all the workers in the appropriate CBU. (Algire v. De Mesa)

Voluntary recognition: In unorganized establishments with only one legitimate labor organization, the ER may voluntarily recognize the representation status of such a union. Within 30d from such recognition, the ER and

union shall submit a notice of voluntary recognition with the Regional Office w/c issued the recognized labor union’s certificate of registration or certificate of creation of chartered local.

Requirements:o Notice of voluntary recognition shall be

accompanied by the original copy and 2 duplicate copies of the ff: Joint statement under oath of voluntary

recognition attesting to such fact. Certificate of posting of joint statement

of voluntary recognition for 15 consecutive days in at least 2 conspicuous places in the


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establishment or BU where the union seeks to operate.

Approximate number of EEs in the BU, accompanied by the names of those who support the voluntary recognition, comprising at least a majority of the members of the BU.

Statement that the labor union is the only legitimate labor organization operating within the BU.

o All accompanying documents of the notice for voluntary recognition shall be certified under oath by the ER representative and the president of the president of the recognized labor organization.

Effects of recording of fact of voluntary recognition From that time, it shall enjoy rights, privileges,

obligations of existing bargaining agent of all EEs in the BU.

It shall bar filing of pet. for CE by any labor organization for 1y from the date of entry of voluntary recognition.o Upon expiration, any legitimate labor

organization may file a pet. for CE, unless a CBA was executed and registered w/ the Regional Office.

Nature of certification election Not a litigation; merely investigation of a non-

adversarial fact-finding character in w/c the BLR plays a disinterested investigator seeking merely to ascertain the desires of the EEs.

2-fold objectives of CE1. Determine the appropriate BU.2. Ascertain majority representation of bargaining

representative, if EEs desire to be represented at all by anyone.

Role of ER in CEGR: Not a party in a CE (w/c is the sole concern of workers).

EXC: Where ER has to file pet. for CE pursuant to A.258, LC, because it was requested to bargain collectively. Even then, it becomes a neutral bystander. Improper for ER to be present during the

proceedings, even as an observer, let alone sit and participate therein thru a representative.

In the absence of a CBA, an ER who is requested to bargain collectively may file a petition for CE

any time, EXC. upon a clear showing that one of these 2 instances exists:1. The pet. is filed within 1y from date of

issuance of final CE result, or2. When a bargaining deadlock had been

submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout.

EXC to EXC: (Author) In the event a union files a pet. for CE when it is precluded from doing so due to the contract bar rule, deadlock bar rule, or certification year rule, the ER can nevertheless actively participate in the proceedings and oppose the pet.

Where to file

‘A pet. for CE shall be filed with the Regional Office which has JD over the principal office of the ER. The pet. shall be in writing and under oath.’

JD refers to venue where the pet. must be filed. It merely refers to the place where the action shall be brought; it touches more the convenience of the parties rather than the substance. Where the place of work of EEs and principal

place of business of ER is in the same territorial JD, filing of the pet. is to be made at the Regional Office having JD.o Where it is located in different territorial

JDs, filing of the pet. is to be made at either Regional Offices having JD, at the option/choice of the labor union/EEs.

The above-quoted provision does not apply to the filing of pet. for CE where the place of work of EEs and place of principal office of ER are located within the territorial JDs of different regional offices. o It is the worker, who is the economically-

disadvantaged party whether as complainant, petitioner or respondent, as the case may be, the nearest governmental machinery to settle a labor dispute must be placed at his immediate disposal, and the ER must in no case be allowed a choice in favor of another competent agency sitting in another place to the inconvenience of the worker.

Objection to improper venue in CE cases should be raised at the first hearing of the case; otherwise, the same shall be deemed waived.


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When to file No duly registered CBA - Any time. With duly registered CBA -

o Contract bar rule: During the freedom pd. (w/in 60d prior to the expiry date of the 5th year of the CBA). Pet. filed before or after the freedom pd. shall be dismissed outright. EXC: Where the need for industrial

stability is clearly shown to be imperative.

Any stability that does not establish the type of industrial peace contemplated by the law must be subordinated to the EE’s freedom to choose their real representative.

o Certification year rule: No CE may be held w/in 1y from the date of issuance of a final CE result.

o Deadlock bar rule: A pet. for CE can only be entertained if there is no pending bargaining deadlock submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout. Purpose: To ensure stability in the

relationship of the workers and management.

CE in an organized establishment. Pet. should contain the signatures of at least 25% of all EEs in the appropriate BU. (A.256, LC) This should not be strictly construed so as to

frustrate the determination of legitimate representatives of the workers. o Filing of the pet. w/in the freedom pd. is

sufficient, subject to the submission of the consent signatures w/in a reasonable time.

This applies only to organized establishments; even if not strictly complied with, it is still discretionary on the part of the MA to order a CE. o However, if the 25% subscription

requirement is strictly complied with, the holding of a CE becomes mandatory.

CE in an unorganized establishment. An immediate order for CE shall be issued upon the filing of a pet. by a legitimate labor organization. (A.257, LC)

Requirements for unregistered local affiliated with a national federation to be considered a legitimate labor organization so it can file a pet. for CE GR: Only upon submission of the following to

the BLR:

1. Charter certificate, w/in 30d from its issuance by the labor federation or national union; and

2. The CBL, a statement on the set of officers, and the books of accounts, all of w/c are certified under oath by the secretary or treasurer, as the case may be, of such local or chapter, and attested to by its president.o Absent compliance, the local or chapter

does not become a legitimate labor organization.

EXC: Estoppel. It acknowledged the legal existence of the unregistered local union by entering into such an agreement.

Note: A duly registered local union affiliated with a national union or federation does not lose its legal personality or independence. This is even if the local disaffiliates.

W/N a pet. to cancel/revoke registration is a prejudicial question to the pet. for CE

NO. At the time the union filed its pet., it still had the legal personality to perform such act absent an order directing the cancellation.

Who can vote? (D.O. 40-03)

All EEs who are members of the appropriate BU sought to be represented by the petitioner at the time of the issuance of the order granting the conduct of a CE shall be eligible to vote. o All bona fide EEs in the BU, irrespective of

employment status (permanent or probationary), regardless of w/n they participated in previous CEs, and regardless of w/n they are members of a labor organization. (Reyes v. Trajano)

o Probationary EEs are allowed to vote, even if there is a provision in the CBA disqualifying them from voting. (NUWHRAIN-Manila Pavilion Chapter v. Secretary) Collective bargaining covers all aspects

of the employment relation and the resultant CBA negotiated by the certified union binds all EEs in the BU. The Code makes no distinction as to their employment status as basis for eligibility in supporting the pet. for CE. All they need to be eligible to support the pet. is to belong to the BU.

A law is read into, and forms part of, a contract. Provisions in a contract are


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valid only if they are not contrary to law, morals, good customs, public order or public policy.

An EE who has been dismissed from work but has contested the legality of the dismissal in a forum of appropriate JD at the time of the issuance of the order for the conduct of a CE shall be considered a qualified voter, unless his/her dismissal was declared valid in a final judgment at the time of the conduct of the CE.o (Author) The LC defines an EE as including

one whose employment has ceased as a result of or in connection with any current labor dispute. (A.212(6), LC)

In case of disagreement over the voters’ list or the eligibility of voters, all contested voters shall be allowed to vote, but their votes shall be segregated and sealed in individual envelopes. o Time of reckoning in determining who shall

be included in the list: GR: Date of MA’s order granting the

conduct of the CE. EXC: Date of the finality of the Order of

the SOLE (whether affirming or denying the appeal). - The filing of an appeal to the SOLE from the MA’s order stays its execution. Thus, the MA cannot direct the ER to furnish him with the list of eligible voters pending resolution of the appeal.

o Additional workers hired pending appeal of the MA’s order may be allowed to vote. To exclude them would violate the guarantee that every EE has the right to be part of a labor organization from the first day of their service. Even if the IRR gives the SOLE 20d to

decide the appeal, experience shows that it sometimes takes months to be resolved.

Reckoning the date of issuance of the MA’s order as the cut-off date would render inutile the remedy of an appeal to the SOLE.

On retractions, recantations, withdrawals

Best forum: The CE itself where the workers can freely express their choice in a secret ballot.o Withdrawals before filing - presumed

voluntary unless there is convincing proof to the contrary.

o Withdrawals after filing - deemed involuntary.

Recantations are looked upon with disfavor, esp. in cases of pro-forma affidavits.

Procedure for CE (D.O. No. 40)

1. Pre-election conference to be conducted by election officer. Notice of pre-election conference upon the

contending unions and the ER, scheduled w/in 10d from receipt of the assignment.

Failure of any party to appear despite notice - waiver to be present and to question or object any of the agreements reached in the conference.

BUT, nothing shall deprive the non-appearing party or the ER of its right to be furnished notices of subsequent pre-election conferences and to attend the same.

2. Posting of notice of election Election Officer to cause the posting of

notice of election at least 10d before the actual date of election in 2 most conspicuous places in the company premises.

It shall contain:o Date and time of electiono Names of all contending unionso Description of the BU and the list of

eligible and challenged voters The posting, the information required to be

included, and the duration of posting, cannot be waived by the contending unions or ER.

3. CE proper To ensure secrecy of the ballot, the Election

Officer and the authorized reps of the contending unions and ER shall before the start of the actual voting, inspect the polling place, ballot boxes, and polling booths.

Election officer shall prepare the ballots in Eng/Fil or the local dialect, corresponding to the number of voters, and a reasonable number of extra ballots. o All ballots should be signed at the back

by the Election Officer and authorized reps. Failure/refusal to sign - waiver; election officer shall enter the fact of such refusal/failure as well as the reason in the records.


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or in the square opposite the name of the union of his choice or ‘no union’ if he does not want to be represented.

An authorized rep of any of contending unions and ER may challenge a vote before it is deposited in the ballot box only on any of the ff:o There is no ER-EE rel. bet. the voter and

the companyo The voter is not a member of the

appropriate BU w/c petitioner seeks to represent.

Procedure: Election officer shall place the ballot in an envelope w/c shall be sealed in the presence of the voter and the reps of the contending unions and ER.o Election officer to indicate on the

envelope: Voter’s name Union/ER challenging the voter Ground

o Sealed envelope shall be signed by the Election Officer and the reps of the contending unions and the ER.

o Election Officer shall note all challenges in the minutes of the election and shall be responsible for consolidating all envelopes containing the challenged votes.

o The envelopes shall be opened and the question of eligibility shall be passed upon only if the number of segregated voters will materially alter the results of the election.

Requirement to have a valid election. A majority of all eligible voters in the appropriate unit must have cast their votes. (A.256, LC)

Requirement for certification of the union

The union w/c obtained a majority of the valid votes cast by the eligible voters shall be certified as the sole and exclusive bargaining agent of all workers in the appropriate unit. (A.256, LC) Abstentions are not valid votes. If number of votes cast in a

certification/consent election is less than the majority of number of eligible voters and there are no material challenged votes, the Election Officer shall declare a failure of election in the minutes.o A failure of election shall not bar the filing

of a motion for the immediate holding of

another certification/consent election within 6 mos. from date of declaration of failure of election.

o W/in 24h from receipt of the motion, the Election Officer shall immediately schedule the conduct of another certification/consent election w/in 15d from receipt of the motion and cause the posting of notice of CE at least 10d prior to the scheduled date of election in 2 most conspicuous places in the establishment. The same guidelines and list of voters shall be used.

Run-off election, elements and nuances

1. Between 3 or more choices, and no choice receiving a majority of the valid votes cast.

2. The total number of votes for all contending unions is at least 50% of the number of votes cast.

3. Between the labor unions receiving the 2 highest number of votes.

Note: LC provides for 3 or more choices; no union is a choice.

JD to determine ER-EE rel. in CE cases

MA or SOLE has the authority to determine existence of ER-EE rel. bet. parties in a pet. for CE. His decision in this regard will not constitute res judicata in an illegal dismissal case (bar by prior judgment will not apply).

Protests and other Qs arising from conduct of election

Protests not raised and contained in the minutes of the proceedings are deemed waived.

Protests should be formalized before the MA w/in 5d from the close of the proceedings; otherwise, it is waived or abandoned.

May the legitimacy of a labor union, w/c has been duly issued a certificate of registration but which is alleged to be composed of a mixture of rank-and-file and supervisory EEs, be questioned in the CE

proceedings?

After the certificate of registration is issued to a union, its legal personality cannot be subject to collateral attack; only thru an independent petition for cancellation.


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Inclusion as union members of EEs outside the BU shall not be a ground for the cancellation of the registration of the union. They are automatically deemed removed from the list of membership.

Direct certification is no longer allowed.

One where the SOLE or Director of BLR, or the Regional Director of DOLE, declares a union as the sole and exclusive bargaining agent of an appropriate BU w/o the benefit of an election to determine the will of the majority of EEs. The mere fact that no opposition to a pet. for CE

is made does not warrant a direct certification. EO 111, direct certification originally allowed

under A.257 has been discontinued.o What is important is that everyone be given

a democratic space in the BU concerned.

Documents

Labor Law Review (Midterm)