Reviewer Midterms Labor Relations

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MIDTERM REVIEWER IN LABOR RELATIONS

DRANDREB DY. MARIVEN BORBON. PRINCESS CARLOBOS. MARK CEZAR. NORMAL PELINIO

I. THE APPLICABLE LAWS and BASIC PRINCIPLES

1. PD 442, as amended by RA 6715- Known as the Labor Code of the Philippines.- Former Labor Minister Blas Ople is regarded as the Father of the Labor Code. He began the writing of the Labor Code in 1968.- The objective was not merely to consolidate the then existing pieces of labor legislation but to reorient them to the needs of economic

development and justice.- The code was ratified by a National Tripartite Congress on April 28, 1973 and submitted to the president on May 1, 1973. It was signed

into law as Presidential Decree 442 on May 1, 1974.- Article 2 of the Labor Code states that “The Code shall take effect six months after its promulgation.” Thus, the Labor Code took effect on

November 1, 1974.- The Code was extensively amended by PD 570-A before it took effect and as of 2006, it has been amended by 20 PD, 11 EO 4 BP and 16

RA.

- Labor Legislation consists of statutes, regulations and jurisprudence governing the relations between capital and labor by providing for certain employment standards and a legal framework for negotiating, adjusting and administering those standards and other incidents of employment.

- It is broadly divided into Labor Standards and Labor Relations.- Labor Standards sets out the minimum terms, conditions and benefits of employment that employers must provide or comply with and to

which employees are entitled as a matter of legal right. It is also defined specifically by jurisprudence, as the minimum requirements prescribed by the existing laws, rules and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits including occupational, safety and health standards

- Labor Relations refers to interactions between employers and employees or their representatives and the mechanism by which the employment standards are negotiated, adjusted and enforced

SOURCES OF LABOR LAWSA. Primary Sources

1. Constitution2. Statutes (NCC, RPC, Special Laws)3. PD 442 as amended by RA 67154. Omnibus Rules as amended3. Supreme Court Decisions (Art. 8, NCC)

B. Secondary Sources1. Opinion of Foreign Courts2. Labor Law Reviews3. Opinions of Labor Department/agencies4. Rules and Regulations issued by DOLE, Department Orders, LOI, Policy Instructions, Memo etc.5. Contract of employment6. Company policy7. Company Practices - Unwritten policies giving benefits to workers, deliberately and consistently by an employer to an employee

for a long period of time. Ex. valentine’s gift8. Arbitral Awards in voluntary or compulsory proceedings - Decisions granting benefits to an employer as an arbitral award.

2. OMNIBUS RULES- These are rules and regulations promulgated by DOLE Secretary to implement the provisions of the Labor Code as mandated in Article 5

of the Labor Code which states that “The Department of Labor and Employment and other government agencies charged with the administration and enforcement of this Code or any of its parts shall promulgate the necessary implementing rules and regulations. Such rules and regulations shall become effective fifteen (15) days after announcement of their adoption in newspapers of general circulation.”

- Though they are not really laws, they have the force and effect of laws provided that these rules and regulations are neither shortened nor extended in application.

- An administrative interpretation which takes away a benefit granted in the law is ultra vires, that is, beyond one’s power.- When there is conflict, statute prevails over the Implementing Rules and Regulations.

AMENDMENTS- DO No. 09, series of 1997: Amending the Rules Implementing Book V of the Labor Code, as Amended- DO No. 40-03, series of 2003: Amending the Implementing Rules of Book V of the Labor Code- DO NO. 40-A-03: amending sec. 5, Rule XXII of the IR of Book V of the Labor Code on Ground for strike or lockout. Added a provision that

that “all other rules, regulations, issuances, circulars, and administrative order inconsistent herewith are hereby superseded”.

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- DO NO. 40-B-03: amending the IR of Book V of the Labor Code Sec. 1 (i), Rule I – Chartered Local refers to a labor organization in the private sector operating at the enterprise level that acquired

legal personality through (the issuance of a charter certificate by a duly registered federation or national union, and reported to ) (add: registration with) the Regional Office in accordance with Rule III, Section 2-E of these Rules.

Sec. 2 (E), Rule III – The report creation of a chartered local shall be accompanied by a charter certificate issued by the federation or national union indicating the creation or establishment of the chartered local.

Overhaul to: “A duly registered federation or national union may directly create a chartered local by submitting to the Regional Office two (2) copies of the following:

a) A charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter;b) The names of the local/chapter’s officers, their addresses, and the principal office of the local/chapter; andc) The local/chapter’s constitution and bylaws, provided that where the local/chapter’s constitution and by-laws is the same as

that of the federation or national union, this fact shall be indicated accordingly. All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested by its President.” All chartered locals duly-registered prior to the effectivity of this amendatory issuance shall maintain their legitimate status, with all

rights and obligations appurtenant thereto. - DO NO. 40-C-05: Amending section 2, Rule II, Book V of the Omnibus Rules Implementing the LC as amended by DO 40-03, series of 2003.

Para 2: “Alien employees with valid working permits issued by the Department may exercise the right to self organization and join or assist labor unions for purposes of collective bargaining if they are nationals of a country which grants the same or similar rights to Filipino workers, as certified by the Department of Foreign affairs. (Added: “or which has ratified either ILO Convention NO. 87 and ILO Convention NO. 98.)

3. SUPREME COURT DECISIONS- Article 8 of the Civil Code states that “Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal

system of the Philippines.”- Judicial decisions although in themselves not laws assume the same authority as a statute and has the force of law. Judicial decisions are

deemed part of the law when the application and interpretation is placed by the Supreme Court.

DOCTRINE OF INCORPORATION- Article 2, Section 2 of the 1987 Constitution provides that “the Philippines renounces war as an instrument of national policy, adopts the

generally accepted principles of international law as part of the law of the land, and adheres to the policy of peace, equality, justice, freedom, cooperation, and amity with all nations.”

- Examples are International Conventions such as the Magna Carta of Women which is a Convention on elimination of worst forms of discrimination among women.

- The Philippines is a member the International Labour Organization (ILO) which is a UN Specialized Agency which seeks the promotion of social justice and internationally recognized human and labor rights. Here are some of the ILO Conventions:

o ILO Convention 100 – Convention on Equal Remunerationo ILO Convention 111 – On Discrimination (Employment and Occupation)o ILO Convention 138 – On Minimum Ageo ILO Convention 182 – On Worst Forms of Child Laboro ILO Convention 87 – On Freedom of Association and Protection of Right to Organizeo ILO Convention 98 – On Right to Organize and Collective Baragining

4. BASIS IN THE ENACTMENT OF LABOR LAWSA. Police Power

- Power of the State to enact laws in relation to persons and property as may promote public health, public morals, public safety and general prosperity and welfare of its inhabitants.

- It consists of the imposition of restraint upon property or liberty;- An example is when there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the

national interest, the Secretary of DOLE may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout or if one has already taken place, all striking or lockout employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout.

B. Social Justice

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- refers to the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objective secular conception may at least be approximated.

- the law is geared towards the concern of labor in recognition of the social and economic imbalance between the employer and the employee.

- stems from the concept that “those who have less in life should have more in law.” - An example is Article 4 of the Labor Code which states that “All doubts in the implementation and interpretation of the provisions of

this code, including its implementing rules and regulations shall be resolved in favor of labor.”The law must protect labor, at least, to the extent of raising him to equal footing in bargaining relations with capital and to

shield him from abuses brought about by the necessity for survival. C. Doctrine of Incorporation

- See discussion aboveD. Protection to Labor Clause

- Article XIII, Section 3, paragraph 1 of the 1987 Constitution states that “The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all.”

- An example is the Migrant Workers and Overseas Filipinos Act of 1995

LIMITATIONS IN THE ENACTMENT OF LABOR LAWSA. Non-Impairment of Obligations in contracts clause

- Article III, Section 10 of the 1987 Constitution provides that “No law impairing the obligation of contracts shall be passed”. - The obligation of a contract is impaired when its terms and conditions are changed by law or by a party without the consent of the

other, thereby weakening the position or rights of the other. - It includes contracts entered into by the government. - An example is Article 100 of the Labor Code on Non diminution of Benefits. Another is, Congress has no right to increase the benefits

in a contractB. Prohibition on Involuntary Servitude

- Article III, Section 18 (2) of the 1987 Constitution provides that “No involuntary servitude in any form shall exist except as a punishment for a crime whereof the party shall have been duly convicted.”

C. Equal Protection Clause- Article III, Section 1 of the 1987 Constitution provides that “No person shall be deprived of life, liberty or property without due

process of law, nor shall any person be denied the equal protection of the laws.”- This means that all persons subject to legislation shall be treated alike under like circumstances and conditions both in privileges and

liabilities imposed.- There can be a valid classification when the following are present:

o Classification rests on substantial distinctionso They are germane to the purposes of the lawo They are not confined to existing conditionso They apply equally to all members of the same class

- An example is the “Equal Pay for Equal Work” principleD. Due Process Clause

- Article III, Section 1 of the 1987 Constitution provides that “No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal protection of the laws.”

- This means that a person may be deprived by the State of his life, liberty, or property as long as the requirements of due process are observed.

- It involves: o Substantive Due Process – means under the authority of a law that is valid and must not be contrary to the

Constitution; and o Procedural Due Process – after compliance with fair and reasonable methods of procedure prescribed by law.

5. EFFECTIVITY OF LABOR LAWS, RULES AND REGULATIONS- Article 5 of the Labor Code provides that “The Department of Labor and Employment and other governmental agencies charged with the

administration and enforcement of this Code or any of its parts shall promulgate the necessary implementing rules and regulations. Such rules and regulations shall become effective fifteen (15) days after announcement of their adoption in newspapers of general circulation.”

- DOLE shall make rules and regulations to implement the Code.- Administrative regulations and policies enacted by administrative bodies to interpret the law which they are entrusted to enforce have

the force of law, and are entitled to great respect. - A rule or regulation promulgated by an administrative body like DOLE, to implement a law, in excess of its rule making authority (ex.

Policy Instruction No. 9 limiting holiday pay to daily paid employees to the exclusion of monthly paid employees when the law accords it to “every worker”) is null and void.

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- Article 2 of the Civil Code provides that “Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided. This Code shall take effect one year after such publication.”

- EO 200 of June 18, 1987 provided for the publication of laws either in the Official Gazette or in a newspaper of general circulation in the Philippines as a requirement for their effectivity.

- Article 2 partly provides that laws shall take effect after 15 days following the completion of their publication in the Official Gazette, unless it is otherwise provided”. When the statute does not explicitly provide for its effectivity, it shall have effect only after the expiration of the 15 day period following the completion of its publication in full. If law provides a shorter or longer period such will prevail. If it shall take effect immediately such will take effect immediately after publication. The “unless otherwise provided” clause solely refers to 15 day period and not to the requirement of publication.

- If the Rules and Regulations were not published, they are still valid but are unenforceable.

- Executive Order 292: Instituting the Administrative Code of 1987 - July 25, 1987; changes in administrative structures and procedures designed to serve the people. - Section 3 (1) on Filing provides that “Every agency shall file with the UP Law Center, three certified copies of every rule adopted by it. Rules

in force on the date of the effectivity of this Code which are not filed within three months shall not thereafter be the basis of any sanction against any party or persons.”

- Section 4 on Effectivity provides that “In addition to other rule-making requirements provided by law not inconsistent with this Book, each rule shall become effective 15 days from the date of filing as above provided, unless a different date is fixed by law, or specified in the rule in cases of imminent danger to public health, safety, and welfare, the existence of which must be expressed in a statement accompanying the rule. The agency shall take appropriate measures to make emergency rules known to persons who may be affected by them.”

- Section 18 on When Laws Take Effect provides that “Laws shall take effect after 15 days following the completion of their publication in the official Gazette or in a newspaper of general circulation unless it is otherwise provided.”

6. RULE ON THE IMPLEMENTATION AND INTERPRETATION OF LABOR LAWS- Article 4 of the Labor Code provides that “All doubts in the implementation and interpretation of the provisions of this Code, including its

implementing rules and regulations, shall be resolved in favor of labor. “- Statutory construction: Absoluta sentential expositore non indeget (when the language of the law is clear, no explanation is required).

When the law is clear, it is not susceptible of interpretation and it must be applied regardless of who may be affected, even if it may be harsh or onerous.

- If there is doubt, there must be a liberal construction in favor of laborRationale: Article 2, Section 10 of the 1987 Constitution provides that “The State affirms labor as a primary social economic force and shall protect the rights of workers and promote their welfare.” In a capitalist system like the Philippines, money is held by the industrialist, the businessmen, and the entrepreneurs. This causes a so-called economic dependence as the laborers rely on the salary or wage for work for their living and it comes in a take it or leave basis. Hence, they are subject to abuse and exploitation which also in turn creates a social-economic imbalance between the employer and employee who are not of equal footing. Hence, workers look up to the law for protection.

- However, it is important to note that while the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor. Management has also its own rights which, as such, are entitled to respect and enforcement in the interest of simple fair play. The Secretary of Labor is duly mandated to equally protect and respect not only the laborer or worker’s side but also the management and employer’s side. The law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer. Management prerogatives are however subject to limitations provided by law, contract or CBA and general principles of fair play and justice.

- Article 1700 of the Civil Code provides that “The relationship between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.”

- There are four Parties to a Labor Contract: Labor (employee), Capital (employer), State which regulates employment contract in such a way that police power general welfare clause is imbedded in every contract and that contracts must not be contrary to law and the Public which is affected when there is oppression between labor and capital resulting to strikes etc.

- Article 1701 of the Civil Code provides that “Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public.”

- Article 1702 of the Civil Code provides that “In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.”

- Article 1703 of the Civil Code provides that “No contracts which practically amounts to involuntary servitude, under any guise whatsoever, shall be valid.”

7. TRIPARTISM IN DECISION AND POLICY MAKING BODIES OF GOVERNMENT

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- Article 275 of the Labor Code on tripartism and tripartite conferences – a) Tripartism in labor relations is hereby declared a State policy. Towards this end, workers and employers shall, as far as practicable, be

represented in decision and policy-making bodies of the government. b) The Secretary of Labor and Employment or his duly authorized representatives may, from time to time, call a national, regional, or

industrial tripartite conference of representatives of government, workers and employers for the consideration and adoption of voluntary codes of principles designed to promote industrial peace based on social justice or to align labor movement relations with established priorities in economic and social development. In calling such conference, the Secretary of Labor and Employment may consult with accredited representatives of workers and employers. (As amended by Section 32, Republic Act No. 6715, March 21, 1989).

- Tripartism is a representation of three sectors – the public or the government, the employers, and the workers – in the policy making bodies of the government.

- Such kind of representation in the policy-making bodies of private enterprises is not ordained, not even by the Philippine Constitution. What is provided for private sector, is worker’s participation in policy and decision-making process that directly affects their rights, benefits, and welfare. But such participatory right does not mean representation or membership in the corporate board.

- It is observed in government agencies and instrumentalities such as the NLRC, the NWPC, ECC, POEA governing Board, PHIC, SSC , GSIS Board of Trustees

8. LABOR RELATIONS; CONCEPT- Labor relations defines the status, the rights, and the duties as well as the institutional mechanisms that govern the individual and

collective interactions between employers, employees and their representatives.- Processes by which the minimum terms and conditions over and above the minimum are fixed in collective bargaining negotiation.- Labor relations is different from industrial relations because labor relations involves unionized companies and matters internal to labor

sector while industrial relations refer to non-unionized ones and to management labor interactions

9. CONSTITUTIONAL AND STATUTORY RIGHTS OF WORKERS IN GENERAL - The Labor Code is an instrument to carry out constitutional mandates. - If there should be conflict between constitutional provisions and those of the Labor Code, the Constitution shall prevail as it is the highest

law of the land.

Basic Constitutional Rights Sec. 3, Art XIII of the 1987 Constitution provides:

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

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiation, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy decision-making processes affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.

The state shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits and production and the right of the enterprises to reasonable returns and investment, and to expansion and growth.”

CONSTITUTIONAL AND STATUTORY RIGHTS OF WORKERS IN RELATION TO LABOR RELATIONS A. Right to organize themselves; Either to join or not to join

- Section 8, Article III of the 1987 Constitution provides that “The right of the people, including those employed in the public and private sectors to form unions, associations, or societies for purposes not contrary to law shall not be abridged.”

- Article 9-B CSC (Civil Service Code)o Sec 2[3]: No officer or employee in the civil service shall be removed or suspended except for cause provided by law o Sec 2[5]: The right to self-organization shall not be denied to government employees o Sec 2[6]: Temporary employees of the Government shall be given such protection as may be provided by law,

B. Right to conduct collective bargaining or negotiation with management (the right to demand better terms of employment)- Collective Bargaining: refers to the contract between a legitimate labor union and the employer concerning wages, hours of work,

and all other terms and conditions of employment in a bargaining unit. (Rule I, Sec 1 (j) Book V of Omnibus Rules- Bargaining Unit – refers to any group of employees sharing mutual interest within a given employer unit, comprised of all or less

than all the entire body of employees in the employer unit or any specific occupational or geographical grouping within such employer (Rule I, Sec 1 (d) Book V of the Omnibus Rules

C. Right to engage in peaceful concerted activities, including to strike in accordance with law; (the right to picket)D. Right to enjoy security of tenure

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- the right to continue one’s employment until such is severed for just or authorized causes as provided for by law under art. 279, PD. 442); also section 16, art 18 transitory provisions on protection of career service employees.o Career civil service employees separated from service not for cause but as a result of the reorganization pursuant to

Proclamation NO. 3 dated March 25, 1986 and the reorganization following the ratification of this Constitution shall be entitled to appropriate separation pay and to retirement and other benefits accruing to them under the laws of general application in force at the time of their separation. In lieu thereof, at the option of the employees, they may be considered for employment in the Government or in any of its subdivisions, instrumentalities, agencies, including government owned and control corporations and their subsidiaries. This provision also applied to career officers whose resignation, tendered in line with the existing policy, had been accepted.

E. Right to participate in policy and decision making process affecting their rights and benefits as may be provided by law (also Art. 6 on party list allocation in the legislative department)- Sec.5 (2), At VI –Legislative Department: The party-list representatives shall constitute twenty per centum of the total number of

representatives including those under the party list. For three consecutive terms after ratification of this Constitution, one half of the seats allocated to party-list representatives shall be filled, as provided by law, by selection or election from the LABOR, peasant, urban poor, indigenous cultural communities, women, youth, and such other sectors as may be provided by law except religious sector.

CONSTITUTIONAL AND STATUTORY RIGHTS OF WORKERS IN RELATION TO LABOR STANDARDSA. Right to work under humane conditions

- The state affirms labor as the primary social economic force. It shall protect the rights of workers and promote their welfare.B. Right to receive a living wageC. Right to a just share in fruits of production

2. Employer-Employee Relationship

Article 212(e)

EMPLOYER – includes any person acting in the interest of an employer directly or indirectly . The term shall not include any labor organization or any of its officers or agents except when acting as an employer.

Article 212 (f)

EMPLOYEE – includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless this code so expressly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any other substantially equivalent and regular employment.

Employer may be:1. natural2. juridical

Employee – only natural persons may qualify as an employee. It could be Filipino citizens and foreigners

Foreign Investment Code

Of those corporations owned by foreigners, if they want to employ alien as their employees, the following requirements must be complied with:

1. Such domestic or foreign companies should obtain a permit form the DOLE ( Alien Employment Permit) at the nearest regional office

2. There must be a determination of the non- availability of a person in the Philippines, who is competent, able, willing at the time of application to perform the services for which the alien is desired.

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The purpose of the law is to protect the Filipinos.

FOUR-FOLD TEST1. Selection and engagement of employees2. Payment of wages3. Power of dismissal4. Power of control over employee’s conduct and over the means and methods by which the work is to be accomplished

ECONOMIC REALITY TEST Determine the underlying economic realities of the activity or relationships. The determination of the relationship between employer and employee depends upon the circumstances of

the whole economic activity

1. The (broad) extent to which the services performed are an integral part of the employer’s business.2. The (limited) extent of the worker’s investment in the equipment and facilities3. The nature (close supervision) and (high) degree of control exercised by the employer4. The workers (limited) opportunities for profit and loss5. The (small) amount of initiative, skill, judgment or foresight required for the success of the claimed independent enterprise6. The (high degree of) permanency and duration of the relationship between the worker and the employer7. The degree of dependency of the worker upon the employer for his continued employment in that line of business.

Note: Unlike employee, independent contractor does not solely depend on the company for continued work as they can pursue other jobs.

EMPLOYER-EMPLOYEE VS. PRINCIPAL-AGENT

ER-EE – governed by the Labor Code

Principal-Agent – Civil Code

AGENT (Art. 1868, NCC). By the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another with the consent or authority of the latter.

PRINCIPAL-AGENT RELATIONSHIPIt is the principal who selects the agent. An agent is compensated under the contract of agency of services rendered. He is disciplined by

the principal as in the case of an employee because the agent is under the authority of the principal. The principal controls the means and methods of the work of an agent. In this relationship, there is only one party. The agent is merely an extension of the principal. They are regarded as one. So if there is a contractor relationship, it is not among three parties but is between the principal/agent and the other party.

Thus, to make a distinction between a principal-agent and employer-employee, the four-fold test will not be used because the agent is selected by the principal and is also compensated by the principal and most oftentimes, the principal substitutes his own judgment for that of the agent

EMPLOYER-EMPLOYEE VS. PRINCIPAL-CONTRACTOR (DO NO. 9)

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Carries 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 and 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.

PRINCIPAL-INDEPENDENT CONTRACTOR RELATIONSHIPThe principal selects the contractor. The contractor is compensated for services rendered. The contractor is not under the discipline of

the principal. The distinction says that aside from engaging in the business separately distinct from the principal. The performed job, work, or services is according to his own means and methods free from the control and direction of the principal except as to the results thereof.

Contractor may be Individual, Corporate Juridical Entity

ARTICLE 1713, NCC

By contract for a piece of work, the contractor binds himself to execute a piece of work for the employer, in consideration of a certain price or consideration. The contractor may either employ only his labor, skill, or also furnishes the materials.

CHIEF CHARACTERISTICS OF AN EMPLOYEE

Economic Dependence by the Worker Subordination in Work Relation

Cases:

1.) Insular Life vs. Basiao

Using the control test the SC found that. Basiao was not an employee of the petitioner, but a commission agent, an independent contractor whose claim for unpaid commissions should have been litigated in an ordinary civil action. Basiao organized an agency or office to which he gave the name M. Basiao and Associates.

2.) Singer Sewing Machine vs. NLRC

The power to control the employee’s conduct which is the most important element. The nature of the relationship between a company and its collecting agents depends on the circumstances of each particular relationship. Not all collecting agents are employees and neither are all collecting agents independent contractors. The agreement confirms the status of the collecting agents as independent contractor. The requirement that collection agents utilize only receipt forms and report forms issued by the company and that reports shall be submitted at least once a week is not necessarily an indication of control over the means by which the job collection is to be performed. Even if report requirements are to be called control measures, any control is only with respect to the end result of the collection since the requirements regulate the things to be done after the performance of the collection job or the rendition of service.

The plain language of the agreement reveals that the designation as collection agent does not create an employment relationship and that the applicant is to be considered at all times as an independent contractor. The court finds that since private respondents are not employees of the company, they are not entitled to the constitutional right to form or join a labor.

3.) . Manila Golf Club vs. IAC

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Caddies are not employees. From the very nature of their work Caddies must submit to some supervision of their conduct while enjoying the privilege of pursuing their occupation within the premises and grounds of whatever club they do work in. They work for the club to which they attach themselves on sufferance but, on the other hand, also without having to observe any working hours, free to leave anytime they please, to stay away for as long they like.

4.) . Encyclopedia Britanica vs. NLRC

Limjoco the sales division of encyclopedia Britannica is not an employee.The issuance of guidelines by the petitioner was merely guidelines on company policies which sales managers follow and impose on their respective agents. Limjoco was not an employee of the company since he had the free rein in the means and methods for conducting the marketing operations. He was merely an agent or an independent dealer of the petitioner. He was free to conduct his work and he was free to engage in other means of livelihood.

5.) . Carungcong vs. Sunlife

Susan is not an employee of sunlife. Carungcong is an independent contractor. It was indicated in the very face of the contract. The rules and regulations of the company is not sufficient to establish an employer-employee relationship. It does not necessarily create any employer-employee relationship where the employers’ controls have to interfere in the methods and means by which employee would like employ to arrive at the desired results.

Carungcong admitted that she was free to work as she pleases, at the place and time she felt convenient for her to do so. She was not paid to a fixed salary and was mainly paid by commissions depending on the volume of her performance

6.) . Ramos vs CA,

Using the control test Dr. Hosaka is not an employee.The hospital does not hire consultants but it accredits and grants him the privilege of maintaining a clinic and/or admitting patients. It is the patient who pays the consultants. The hospital cannot dismiss the consultant but he may lose his privileges granted by the hospital. The hospital’s obligation is limited to providing the patient with the preferred room accommodation and other things that will ensure that the doctor’s orders are carried out. The court finds that there is no employer-employee relationship between the doctors and the hospital.

7.) . Sonza vs. ABS-CBN

, SC find that SONZA is not an employee but an independent contractor.The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. All the talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. For violation of any provision of the Agreement, either party may terminate their relationship. Applying the control test to the present case

8.) ABS – CBN- Nazareno

Respondents(production assistants) cannot be considered as project or program employees because no evidence was presented to show that the duration and scope of the project were determined or specified at the time of their engagement. In the case at bar, however, the employer-employee relationship between petitioner and respondents has been proven. In the selection and engagement of respondents, no peculiar or unique skill, talent or celebrity status was required from them because they were merely hired through petitioner’s personnel department just like any ordinary employee. Respondents did not have the power to bargain for huge talent fees, a circumstance negating independent contractual relationship. Respondents are highly dependent on the petitioner for continued work.

9.) Nogales et al vs. Capitol Medical Center

Dr. Estrada is not an employee. Court finds no single evidence pointing to CMC's exercise of control over Dr. Estrada's treatment and management of Corazon's condition. While Dr. Estrada enjoyed staff privileges at CMC, such fact alone did not make him an employee of CMC. CMC merely allowed Dr. Estrada to use its facilities when Corazon was about to give birth, which CMC considered an emergency

10.) . Coca-Cola Bottlers Phils., vs. Dr. Climaco

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Dr. Climaco is not an employee. The…company lacked the power of control over the performance by respondent of his duties. The…Comprehensive Medical Plan, which contains the respondent’s objectives, duties and obligations, does not tell respondent "how to conduct his physical examination, how to immunize, or how to diagnose and treat his patients, employees of [petitioner] company, in each case."

11.) . Dumpit-Morillo vs. CA

Thelma Dumpit-Murillo was a regular employee under contemplation of law. The practice of having fixed-term contracts in the industry does not automatically make all talent contracts valid and compliant with labor law.

ABC had control over the performance of petitioner’s work. Noteworthy too, is the comparatively low P28,000 monthly pay of petitioner vis the P300,000 a month salary of Sonza, that all the more bolsters the conclusion that petitioner was not in the same situation as Sonza. addition, her work was continuous for a period of four years. This repeated engagement under contract of hire

12.) Lopez vs. Bodega City

Petitioner failed to cite a single instance to prove that she was subject to the control of respondents insofar as the manner in which she should perform her job as a "lady keeper" was concerned. . It is true that petitioner was required to follow rules and regulations prescribing appropriate conduct while within the premises of Bodega City. However, this was imposed upon petitioner as part of the terms and conditions in the concessionaire agreement. concessionaire agreement merely stated that petitioner shall maintain the cleanliness of the ladies' comfort room and observe courtesy guidelines that would help her obtain the results they wanted to achieve.

13.) Calamba Medical Center vs. NLRC

These doctors were deemed as employees. That hospital exercised control over respondents gains light from the undisputed fact that in the emergency room, the operating room, or any department or ward for that matter, respondents' work is monitored through its nursing supervisors, charge nurses and orderlies. Without the approval or consent of petitioner or its medical director, no operations can be undertaken in those areas. For control test to apply, it is not essential for the employer to actually supervise the performance of duties of the employee, it being enough that it has the right to wield the power.

14.) Escasinas et al., vs. Shangri-las Mactan Island Resort

The registered nurses were employees of the inhouse doctor of shangrila and not Shangrila. The doctor is an independent contractor. That Shangri-la provides the clinic premises and medical supplies for use of its employees and guests do not necessarily prove that respondent doctor lacks substantial capital and investment. Besides, the maintenance of a clinic and provision of medical services to its employees is required under Art. 157, which are not directly related to Shangri-la’s principal business – operation of hotels and restaurants. As to payment of wages, respondent doctor is the one who underwrites the following: salaries, SSS contributions and other benefits of the staff; group life, group personal accident insurance and life/death insurance for the staff with minimum benefit payable at 12 times the employee’s last drawn salary, as well as value added taxes and withholding taxes, sourced from her P60,000.00 monthly retainer fee and 70% share of the service charges from Shangri-la’s guests who avail of the clinic services. It is unlikely that respondent doctor would report petitioners as workers, pay their SSS premium as well as their wages if they were not indeed her employees.

15.) Sycip Gorres Velayo & Co vs. RaedtThe question of an employer-employee relationship is ultimately a question of fact. To determine the existence of an employer-employee relationship, the four-fold test must be applied

De Raedt was neither engaged by SGV as an ordinary employee, nor was she picked by SGV from a pool of consultants already working for SGV. Hence, SGV engaged De Raedt’s services precisely because SGV had an existing Sub-Consultancy Agreement with TMI to provide such services. SGV had no discretion in the selection of De Raedt for the position of Sociologist in the CECAP. It was TMI who recommended her. The engagement of De Raedt was merely coursed through SGV. The letter-agreement between the parties specifies the consideration for De Raedt’s services as a retainer fee payable for every day of completed service in the project. In addition to this, monthly subsistence and housing allowances and medical insurance were to be given to De Raedt. The retainer fees and privileges given to De Raedt are not commonly given to ordinary employees, who receive basic monthly salaries and other benefits under labor laws.

-o0o-

3. RIGHT TO SECURE OF TENURE

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Art. 278. Coverage. The provisions of this Title shall apply to all establishments or undertakings, whether for profit or not.

Art. 279. Security of tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. (As amended by Section 34, Republic Act No. 6715, March 21, 1989)

A. Concept and Scope:- Means that the employer shall not terminate the services of an employee except for a just cause or when authorized by law; - A fundamental right, it is an act of social justice; workers shall be made regular after six months unless a different period is agreed upon

by the worker and the employer.- Cannot be blotted out by an employment contract.- The Labor Code itself and court rulings do not limit this right to regular employees.

o Temporary (ie: probationary, contractual) employees enjoy security of tenure though only to a limited extent – they remain secure in their employment during the period of time their employment contract remains in effect.

o Managerial Personnel? They are also entitled to security of tenure. Only that, employers are allowed a wider latitude of discretion in terminating such employees but this should be exercised without abuse of discretion. Because while the managerial employee may be dismissed merely on the ground of loss of confidence, the matter of determining whether the cause of dismissing an employee is justified on the ground of loss of confidence, cannot be left entirely to the employer.

Managerial Employee - those who, while not of similar rank perform functions which by their nature require the employer’s full trust and confidence.

Rank and File Employee – those whose termination on the basis of same ground require a higher proof of involvement in the events in question. Mere uncorroborated assertions and accusations by the employer will not suffice (Coca-Cola vs NLRC, 1989)

B. Constitutional and Statutory Basis:

Constitution: Section 3, Article XIII

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

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiation, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy decision-making processes affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.

The state shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits and production and the right of the enterprises to reasonable returns and investment, and to expansion and growth.

Statutory basis: Art 279NOTE: Lines of jurisprudences (Kiamco vs NLRC 1999, cited by Azucena) suggest that although Art 279 opens with “in cases of regular employment”, the same is defective because it recognizes security of tenure only in cases of regular employment. Such specification is not found in the Constitution which entitles “all workers” to the right to security of tenure. Moreover, the Code itself and the court rulings do not limit security of tenure to regular employees. Ex. terminating a probationary employee needs valid reason and proper procedure. SO also a project or seasonal employee enjoys security of tenure even only for the duration of the period of their

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employment. Indeed, security of tenure – the right to be removed from one’s job without valid cause and valid procedure – is so fundamental it extends to regular (permanent) as well as to non regular (temporary) employment. Since there is security of tenure for a limited period and security of tenure for an unlimited period.

C. Classification of Employment and Kinds of employment

Art. 280. Regular and casual employment. 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 employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the 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 employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

- Article 280 applies where the existence of employer-employee relationship is not the issue in dispute.o Article 280 is not the yardstick for determining the existence of employment relationship between to kinds of employees:

regular and casual; for the purpose of determining the right of an employee to certain benefits, to join/form a union, or to security of tenure. (Singer Sewing machine vs. Drilon)

- The article limits itself to differentiating four kinds of employment arrangement: regular, project, seasonal and casual.

1. REGULAR EMPLOYEES

Employee has been engaged to perform activities which are USUALLY NECESSARY OR DESIRABLE in the usual business or trade of the employer. (The law demands that the nature and the entirety of the activities performed be considered.)o An employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a

regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Ex. A is engaged as a carpenter in a bank (casual since not usually necessary). A continued to do carpentry works for 1 year so he becomes a regular employee BUT ONLY with respect to the activity which he is engaged and as such after the completion of the project, his employment also ceased.

2 kinds of regular employees:o By their nature of work – usually necessary or desirable to the trade of the employee

ex. painter in La Tondeña paid in regular basis but served for more than 1 year; airline: pilot, maintenance crew, attendants; meter reader Fast food Chain: service crew, dishwasher employed on day-to-day basis but worked for ten months,

o By the Length of Service – those who rendered at least 1 year of service either continuous or broken

TEST/STANDARD: to determine a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the employer; has to be whether the former is usually necessary or desirable to the usual business of the employer; nature of job and not the contract

BASIC RULE: You can CANNOT convert regular employment to another type BUT you can place a regular employee under probation with the intent to make him permanent

What determines regularity or casualness is nit the employment contract (written or otherwise), but the NATURE OF THE JOB. If the job is usually necessary or desirable to the main business of the employer, then employment is regular.o It is the nature if the activities performed in relation to the particular business or trade considering all circumstances, and in

some cases the length of time of its performance and its continued existence.

a. PERMANENT – a regular worker who is appointed for an indefinite period either after passing or without passing a probationary period.

b. PROBATIONARY

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Art. 281. Probationary employment. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.

Art. 13. Civil Code. Rule on the Computation of days, months, year: When the laws speak of years, months, days or nights, it shall be understood that years are of three hundred sixty-five days each; months, of thirty days; days, of twenty-four hours; and nights from sunset to sunrise.

If months are designated by their name, they shall be computed by the number of days which they respectively have. In computing a period, the first day shall be excluded, and the last day included. (7a)

Where the employee, upon his engagement is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment, based on reasonable standards made known to him at the time of the engagement. (nature of a trial period)

‘Probationary’ implies the purpose of the term or period, not its length.o A probationary employee is one who is on trial by an employer during which the employer determines whether or not he is

qualified for permanent employment. Essence: lies in the purpose to be attained by both employer and employee; to afford the employer an opportunity to ascertain whether

or not the probationary employee is qualified for permanent employment; for the probationer to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment.

Conditions:1. employment shall not exceed six months from the date the employee started working

EXCEPTIONS: o where the work for which the employee has been engaged is learnable or apprenticeable in accordance with the standards

prescribed by the DOLE, the period of which shall be limited to the authorized learnership or apprenticeship period whichever is applicable; - Job may be highly technical which requires longer then 6 months

o When parties to an employment contract agree as when the same is established by a company policy or when the same is required by the nature of the work to be performed by the employee. Management has the prerogative to extend probation period ex. 18 months where the employee must learn particular kind of work such as selling, or when the job requires certain qualifications, skills, training and experience (Buiser vs. Leogardo) – cannot agree according to Atty. Marquez. REMEMBER Parties cannot agree

o When it involves academic personnel or those in the teaching/non teaching service Sec. 92 of the Manual of Regulation of Private Schools provide for the probation period and it governs academic personnel.

- Elementary –Secondary: not more than 3 consecutive years of satisfactory service- Tertiary: not more than 6 consecutive semesters of satisfactory service- Trimester: not more than 9 consecutive semesters of satisfactory service

o When the extension was granted EX GRATIA or on an act of liberality on the part of the employer affording the employee a second chance to make good after having initially failed to prove his worth

REQUISITES for VALID EXTENSION: (Mariwasa vs. Leogardo) 1. That the employee has failed to comply with the standards. 2. That the employee has earnestly pleaded to the employer to prove his fitness and qualification. 3. That the employer took the above into consideration in granting the extension of probationary period.

2. Where work is neither learnable nor apprenticeable, the period of probationary employment shall not exceed six months reckoned from the date the employee actually started working; -FROM THE FIRST DAY OF WORK.

3. The services of an employee who has been engaged on probationary basis may be terminated only for a just or authorized cause, when he fails to qualify as a regular employee in accordance with the reasonable standards prescribed by the employer; means they have limited tenure and he cannot be removed except for cause during the period of his probation and such cause is provided by law.

If unsatisfactory: employer has option NOT to hire or to terminateIf satisfactory: made regular since it is not an option to terminate unless there is a just or authorized cause

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LIMITATIONS TO TERMINATION OF PROBATIONARY EMPLOYEE (Manila Hotel Corp vs. NLRC)1. It must be exercised in accordance with specific requirements of the contract;2. If a particular time is prescribed, the termination must be within such time and if formal notice is required, then that form must be

used;3. the employer’s dissatisfaction must be real and in good faith, not feigned so as to circumvent the contract or the law4. there must be no unlawful discrimination

Reasonable standards: work initiative, quality of work, discipline There is a probationary employee performing regular work if the employee performs works that are usually necessary and desirable to

the business of the employer Probationary employee becomes regular after the lapse of 6 months except the exceptions; contracts cannot override the mandate of

law; by operation of the law; ex. not required that employee be issued a regular appointment or must first be declared as such to attain regular status.

Period of probation not necessarily six months. Can be shortened, can also be extended.o The provision in Article 281 means that the probationary employee may be dismissed for cause at any time before the

expiration of six months.o Shall Not Exceed six months means that law provides it merely as a ceiling and that the probationary period can be shorter.

(Central Negros Electric Corp vs NLRC) NO successive probations allowed otherwise it would circumvent right to security of tenure. Hiring of probationary employee but not informed of the standards? regular since day started working

Last day of probation:o Two different computation methods:

ie1: a probation of six monthsa. Ends on the same date it started six months before.

(Cals Poultry vs. Roco) Computation of siz-month period is reckoned from date of appointment up to the same calendar date of the 6th month following.

b. Ends 180 days from starting date(Mitsubishi Motors vs. Chrysler Phil. Labor Union) The probationary period of siz months means 180 days

(article 13). Thus the formula for 6-months probation is 30 days times 6 months equals 180 days.Ie2: a probation of four months

c. Ends on the same date it started six months before.Start: July 1 – 08 End: Nov 1 – 08 (120 days)

d. Ends 180 days from starting dateStart: Jul 1 – 08, Jul – 31, Aug – 31, Sep – 30 Total: 92 then: 120-92 = 28 and: Oct -1 plus 28 End: Oct 29-08

Failure to qualify as a regular employeeWHEN PROBATION IS PERMISSIBLE

1. when the work requires special qualifications, skills, training or experience2. when the work, job, or position involved is permanent, regular, stable or indefinite, and not merely casual or intermittent3. when the work is not intended to circumvent the employee’s right to security of tenure4. when it is necessary or customary for the position or job involved

Teachers and Academic Personnel:o Section 93 of the 1992 Manual of Regulations for Private Schools, provides that full-time teachers who have satisfactorily

completed their probationary period shall be considered regular or permanent. Furthermore, the probationary period shall not be more than six consecutive regular semesters of satisfactory service for those in the tertiary level. Thus, the following requisites must concur before a private school teacher acquires permanent status: (1) the teacher is a full-time teacher; (2) the teacher must have rendered three consecutive years of service; and (3) such service must have been satisfactory.

o Section 45 of the 1992 Manual of Regulations for Private Schools provides that full-time academic personnel are those meeting all the following requirements (all teaching personnel who do not are considered part-time):

a. Who possess at least the minimum academic qualifications prescribed by the Department under this Manual for all academic personnel;

b. Who are paid monthly or hourly, based on the regular teaching loads as provided for in the policies, rules and standards of the Department and the school;

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c. Whose total working day of not more than eight hours a day is devoted to the school;d. Who have no other remunerative occupation elsewhere requiring regular hours of work that will conflict with the

working hours in the school; ande. Who are not teaching full-time in any other educational institution.

o Yet, this is not to say that part-time teachers may not have security of tenure. The school could not lawfully terminate a part-timer before the end of the agreed period without just cause. But once the period, semester, or term ends, there is no obligation on the part of the school to renew the contract of employment for the next period, semester, or term.

o A part-time teacher cannot acquire permanent status. Only when one has served as a full-time teacher can he acquire permanent or regular status. As a part-time lecturer, her employment as such had ended when her contract expired. An employee on probation can only be dismissed for just cause or when he fails to qualify as a regular employee in accordance with the reasonable standards made known by the employer at the time of his hiring. Upon expiration of their contract of employment, academic personnel on probation cannot automatically claim security of tenure and compel their employers to renew their employment contracts

2. (Exception to regular employment) PROJECT EMPLOYEES

(a) where employment has been fixed for a specific project or undertaking (b) the completion or termination of which has been determined at the time of the engagement of the employee; - one element absent; your employment is not project employment but may be a regular employment

SPECIFIC PROJECT/UNDERDAKING: an activity which was commonly or habitually performed or such type of work which is not done on a daily basis, but only for a specific duration of time until the completion of the project.

2 TYPES OF PROJECT EMPLOYEESa. A particular job WITHIN the regular or usual business of the employer company but which is DISTINCT and SEPARATE, and

IDENTIFIABLE as such from the undertakings of the company. Ie: construction jobs in a hotel and terminal project; installation of computers in a school

b. A particular job NOT WITHIN the regular or usual business of the employer company but which is DISTINCT and SEPARATE, and IDENTIFIABLE from the ordinary or regular business operations of the employer.

ie: cafeteria in a hospital, mall in a school

Does a Project employee have security of tenure? Yes, but only a limited one (during the period their employment is in effect). Services of project employees are coterminous with the project and may be terminated upon the end or completion of that project for which they were hired – termination of his employment must be for a lawful cause and must be done in a manner which affords him the proper notice and hearing; as compared to regular employees who are legally entitled to remain in service of their employer until their services are terminated by one or another of the recognized modes of termination of service.

The simple fact that the employment as project employee has gone beyond one year does not dissolve their status as project employees. Length of service of project employee is NOT the controlling test of tenure since the provision on Art 280 that an employee who has served for at least 1 year shall be considered as a regular employee relates to casual employees and NOT project employees.

TEST : Whether or not the project employees were assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employees were engaged for the project; there has to be a PREDETERMINATION of the DURATION OR PERIOD of project employment; (VIOLETA vs. NLRC)

Project employees may or may not be members of a work pool since a work pool may either be a project or a regular employee Project employees are not entitled to separation pay except if the projects they are working on have not yet been completed when

their services are terminated. Completion of project is not valid reason to separate a project employee who has become regular. Computing the backwages of project employee who has become regular; the NO Work NO Pay Principle applies.

WHAT MAKES A PROJECT EMPLOYEE REGULAR? 1. When there is a repeated and continuous rehiring of project employees even after the cessation of a project;

o The repeated rehiring and continuing need for his services are sufficient evidence of the necessity and indispensability of such services to an employer’s trade/business.o Where the employment of project employees is extended long after the supposed project has been

finished, the employees are removed from the scope of project employees and considered regular ones.o Where from the circumstances it is apparent that period have been imposed to preclude the acquisition of

tenurial security by the employee, they should be struck down as contrary to public policy, morals, good customs or public order.

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2. When the task performed by the alleged project employee are vital, necessary and indispensable to the usual business or trade of the employer

Situational example:1. ER hired EE as a fastfood crew and 3 days later after work, ER gives EE a contract as a fixed term employee. HELD: contract NOT VALID because EE was already a regular employee at onset2. Same situation but ER offered 2 months probation. HELD: Not valid since the employee must be informed of the trial period from the time of his engagement

3. (Exception to regular employment) SEASONAL EMPLOYEES

Where the work or service performed is seasonal in nature and the employment is for the duration of the season. (These two requisites must go together.)

Regular Seasonal Employees: employees who are called to work from time to time What happens to seasonal workers during the off season? (Nature of Relationship): during the off season they are temporarily laid off but

during the summer season they are reemployed, or when their services may be needed. They are not strictly speaking separated from service but they are merely considered on leave of absence without pay until they are re employed. Their employment is never severed but only suspended. (Manila Hotel vs CIR)

o During off season (during the temporary layoff) the laborers are considered free to seek other employment (it is natural since they are not being paid yet and must find means of support and should not mean starvation of the employees and their families since no compensation is demanded during the period of the layoff.)

o Their employment contract is never severed but only suspended.

REQUISITES FOR A SEASONAL UNDERTAKING1. Dependent on climatic or Natural Causes – its operations must be limited to a regular, annual, or recurring part or parts of each

year and regularly closes during the remainder of the year due to climatic or other natural causes;2. Activity is agricultural where the crops are available only in certain times of the year

Seasonal ‘pakiao’ employees: the nature of employment as pakiao basis does not make petitioners independent contractors since they are considered as employees as long as the employer exercises control over means and methods.

Rice Mill Job Not Seasonal where the Years of Service shows it is regular: while palay is seasonal if the rice mill continued to operate throughout the year even if there are only 2 or 3 harvest seasons in the year- the milling operations has not let up

Mercado Ruling: (Article 280, second paragraph) The one-year duration on the job is pertinent to deciding whether a casual employee has become regular or not. But it is not pertinent to a seasonal or project employee. Passage of time does not make a seasonal worker regular or permanent.

Mercado Ruling Reconciled with Manila Hotel and Gaco: the doctrine that seasonal employees are regular and merely considered on leave of absence without pay during the off season still stands. Since they are regular their employment did not end in 1993 season and because they were not rehired in 1994, they are deemed being illegally terminated. (The facts are different; in Mercado they were considered project employees and hence are free to seek other jobs.)

Regular Contractuals entitled to benefits of Regular employees – ex. salesladies, wrappers, stockmen, pressers in a dress store hired during peak season from Sep to January who rendered more than 1 year of service and their work (as clerk, etc.) was necessary or desirable in the usual business or trade of the employer. (Cinderela Marketing Corp. vs. NLRC)

Philips Semi conductor: Not Seasonal Employee: According to the appellate court, the petitioner's contention that the respondent's employment on "as the need arises" (petitioner claims that the hiring of workers for a definite period to supplement the regular work force during the unpredictable peak loads was the most efficient, just and practical solution to the petitioner's operating needs—cyclical in nature) basis was illogical. The fact that the petitioner had rendered more than one year of service at the time of his dismissal only shows that she is performing an activity which is usually necessary and desirable in private respondent's business or trade. The work of petitioner is hardly "specific" or "seasonal." The petitioner is, therefore, a regular employee of private respondent, the provisions of their contract of employment notwithstanding. The private respondent's prepared employment contracts placed petitioner at the mercy of those who crafted the said contract

Hacienda Fatima: Not seasonal employers; although they showed that employees performed work seasonal in nature, they failed to prove that the latter worked only for the duration of one particular season. In fact, petitioners do not deny that these workers have served them for several years already. Hence, they are regular not seasonal- employees. For respondents to be excluded from those classified as regular employees, it is not enough that they perform work or services that are seasonal in nature. They must have been employed only for the duration of the season. The evidence proves existence of the first, but not the second condition. The fact that the respondents repeatedly worked as sugarcane workers for the petitioners for several years, the general rule of regular employment applies.

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4. (Exception to regular employment) TERMED EMPLOYMENT/FIXED – PERIOD EMPLYMENT

Article 280 or any other provisions of the Labor Code makes no mention of this employment for a term Under the Civil Code and as a general proposition, fixed-term employment contracts are not limited, as they are under the Labor Code, to

those by nature seasonal or for specific projects with predetermined dates of completion; they also include those to which parties by free choice have assigned a specific date of termination.

Fixed period employment ex. seafarers since they cannot stay long on sea otherwise it will have adverse impact on the seafarer like national, cultural and lingual diversity among crew. (Rabago Case)

A fixed-period employee is not regular because his job, as anticipated and agreed, will exist only for a specified period of time (not permanent). But he is deemed regular in two senses:

1. the nature of his work is necessary or desirable in the principal business of the employer2. he enjoys security of tenure during the limited time of employment as before the end of the agreed period, he cannot be

removed without a valid cause and valid procedure otherwise employer has to pay for the unexpired portion of the term

BRENT SCHOOL DOCTRINE (Brent School vs. Zamora): Alegre engaged as athletic director of the school with annual salary of 20, 000 (1990) and contract fixed at 5 years from July 18, 9171 to July 17, 1976 and 3 months before expiration, he received a letter advising termination of services for completion of contract or expiration of the definite period of employment. RD refused to give Brent School a clearance and required reinstatement of Alegre as permanent employee. SC: declared Alegre’s contract lawfully terminated and therefore not entitled to reinstatement.

Employment of deans: nothing irregular because they have to be hired for a fixed term to give the other teachers the opportunity to become deans, principals

o Criteria laid by Brent Doctrine under which term employment cannot be said to be in circumvention of security of tenure.1. must not be entered into merely to circumvent the employee’s security of tenure2. the fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress or

improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent;3. It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no

moral dominance exercised by the former or the lattero Art. 280 does not proscribe or prohibit an employment contract with a fixed period, provided the same is entered into by the

parties without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating the consent; contracts of employment governs the relationship of parties.

o It does not necessarily follow that where the duties of the employee consists of activities usually necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on a period of time for the performance of such activities. There is thus nothing essentially contradictory between a definite period of employment and the nature of the employee’s duties.

Art. 1306. The contracting parties may establish such stipulations, clauses, terms, conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order and public safety

Effect of renewal of fixed-term employment in regular jobs: When the direct-hired employee is doing necessary r desirable job, the three-month fixed-term employment, renewed several times exceeding one year, establishes her being a regular employee. (Philips Semiconductors Inc. vs. Fadriquela)

Regular employment after End of term Employment- case involving meter readers for 15 days as agreed in the employment contract between BENECO for more than a year. (Viernes vs NLRC)

How about seaferes or seaman? They are contractual. Article 280 does not apply to overseas employment. Seafarers are not regular employees and therefore not entitled to separation pay. His employment if governed by POEA Standard Employment contract for Filipino Seamen. It is an accepted maritime industry practice that employment of seafarers is for a fixed period only. Constrained by the nature of their employment, it is for the mutual interest of both employer and employee why the employment status be contractual only or for a certain period of time.

5. (Exception to regular employment) CASUAL EMPLOYMENT

Where an employee is engaged to perform a job, work or service which is merely incidental to the business of the employer, and such job, work or service is for a definite period made known to the employee at the time of the engagement; (Sec.5 (b) Rule I Book V)

Casual employment if:o employed to perform work merely incidental to the business of the employer;

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ie: janitor in a bank; cutter of cogon grass in a cultured milk companyo employment is for a definite period (usually short duration or less than a year) o employment status made known to him at the time of the engagement

No security of tenure – cannot be reinstated Termination of Service once service has been performed (ie: painting of a classroom) Pangilinan vs GMC: The petitioners were hired as "emergency workers" and assigned as chicken dressers, packers and helpers at the

Cainta Processing Plant. The respondent GMC is a domestic corporation engaged in the production and sale of livestock and poultry, and is a distributor of dressed chicken. While the petitioners' employment as chicken dressers is necessary and desirable in the usual business of the respondent, they were employed on a mere temporary basis, since their employment was limited to a fixed period. As such, they cannot be said to be regular employees, but are merely "contractual employees." Consequently, there was no illegal dismissal when the petitioners' services were terminated by reason of the expiration of their contracts. Lack of notice of termination is of no consequence, because when the contract specifies the period of its duration, it terminates on the expiration of such period. A contract for employment for a definite period terminates by its own term at the end of such period.

Examples:o Usually necessary: ex. teller of a bank; machine operator of a manufacturing companyo Usually Desirable: Janitor, gardener, fireman of a garment factory (Guarin vs NLRC); dispatcher, driver, mechanic or a taxi

business; traffic operator of a telephone company (PLDT vs Montemayor); Gardener, dishwasher of a recreational center or gold club (Baguio vs NLRC)

6. OTHER CLASSIFICATIONS OF EMPLOYEES

a. CONSTRUCTION INDUSTRY under DO No. 19 series of 1993

1. PROJECT EMPLOYEES – those employed in connection to a particular construction project2. NON PROJECT EMPLOYEES – those employed by Construction Company without reference to any particular project (Sandoval

Shipyard vs. NLRC)o 3 TYPES OF NON PROJECT EMPLOYEES: probationary, regular, casual

Policy Instruction NO. 20 requires the employer to report to the nearest Public Employment Office the fact of termination of a project as a result of the completion of the project or any phase thereof in which he is employed.

DO NO 19, s 1993 does not totally dispense with the notice requirement but, instead, makes provisions therefor and considers it one of the indicators that the worker is a project employee as found in Sec. 2.2 of DO 19:

1. the duration of the specific/identified undertaking for which 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 employee at the time of the hiring;3. the work/service performed by the employee is in connection with the particular project/undertaking for which he is engaged;4. the employee while not employed and waiting engagement, is free to offer his services to any other employer;5. the termination of his employment in the particular project/undertaking is reported to the DOLE Regional Office having

jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed form for employees termination/dismissals/suspension;

6. an undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most construction companies

b. TV AND RADIO BROADCASTING (former DOLE Policy Instruction No. 40) STATION EMPLOYEES/PROGRAM EMPLOYEES -Policy Instruction No. 40 defines program employees as—

those whose skills, talents or services are engaged by the station for a particular or specific program or undertaking and who are not required to observe normal working hours such that on some days they work for less than eight (8) hours and on other days beyond the normal work hours observed by station employees and are allowed to enter into employment contracts with other persons, stations, advertising agencies or sponsoring companies. The engagement of program employees, including those hired by advertising or sponsoring companies, shall be under a written contract specifying, among other things, the nature of the work to be performed, rates of pay and the programs in which they will work. The contract shall be duly registered by the station with the Broadcast Media Council within three (3) days from its consummation.

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c. HOSPITALS Are resident physicians considered employees of hospitals?

o It depends. If the resident physician is undergoing training, he is NOT an employee of the hospital. If he is not undergoing training, he is an employee, but only on a term basis.

Basis: Omnibus Rules, Book II, Rule X-A, Sec 15 – “Residents in Training- There is employer-employee relationship between resident physicians and the training hospitals, UNLESS:

(a) There is a training agreement between them;(b) The training program is duly accredited or approved by the appropriate government agency

d. PRIVATE EDUCATIONAL INSTITUTIONS under Manual of Regulations for Private Schools Academic Personnel

o includes all school personnel who are formally engaged in actual teaching service or in research assignments, either on full time or part time, as well as those who possess certain prescribed technical academic functions, education and skills development functions directly supportive of teaching such as registrars, librarians, guidance counselor, industrial and job placement coordinator, and other similar persons. They include school officials responsible for the technical education and skills development matters.

o Teaching or Non Teaching

Non Academic Personnelo school personnel usually engaged in administrative functions that are not covered under the definition of academic personnel.

They may include shall officials

Legal Requisites for a Teacher to be PERMANENT:

o Teacher is a full time teacher

Sec 70, MRPS. Full time and Part Time Faculty. As a general rule, all private TVET schools or institutions shall employ fulltime academic and technology personnel consistent with the levels of instruction.

A FULL TIME academic personnel or technology teacher is one who meets all the following requirements:1. Possesses at least the minimum academic qualification prescribed by the authority under this Manual for all

academic and technology personnel;2. Paid monthly or hourly, based on the regular teaching loads as provided for in the policies, rules and standards of

the authority of said school;3. Total working day of not more than 8 hours a day is devoted to the school4. no other remunerative occupation elsewhere requiring regular hours of work that will conflict with the working hours

in the school;5. Not teaching full-time in any other educational institution

All teaching personnel who do not meet the foregoing qualifications are considered part time.

o Teacher must have rendered three consecutive years of serviceo Such service must have been satisfactory (UST vs NLRC)

- (Lacuesta vs Ateneo) Court held that based on the above rules, the 3 semesters served as part time lecturer could not be credited to her computing the number of years she has served to qualify her permanent status.

Probationary Period for Academic Personnel:

Sec 92, MRPS. Probationary Period: Subject in all instances to the compliance with the authority and school requirements, the probationary period for academic personnel shall not be more than 3 consecutive school years or six regular semesters of satisfactory service, nine consecutive trimesters of satisfactory service for those in the trimester basis. Performance evaluation by students, peers and superiors shall be periodically undertaken for academic personnel under probationary status to ensure that they satisfactorily fulfilled the requisites for the regular employment

Sec 77. MRPS. Regular or Permanent Status: Those who have served the probationary period shall be made regular or permanent. Full-time teachers who have satisfactorily completed their probationary period shall be considered regular or permanent. Part time teachers shall not acquire regular or permanent status.

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In summary, exceptions to regular employment are: Seasonal Employment, Project Employment, Casual Employment and Fixed term employment

4. MANAGEMENT PREROGATIVE

CONCEPT - The right of an employer to regulate, generally without restraint, according to its own discretion and judgment, every aspect of its business, subject to limitations of the law.

- It should be exercised in good faith.

- This privilege is inherent in the right of employers to control and manage their enterprise effectively.

Case doctrine - The law must protect not only the welfare of employees, but also the right of employers. In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees from one office or area of operation to another -- provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is inherent in the right of employers to control and manage their enterprise effectively.

- the exercise of management prerogative cannot be utilized to circumvent the law and public policy on labor and social justice. That prerogative accorded management should not defeat the very purpose for which our labor laws exist: to balance the conflicting interests of labor and management.

SCOPE

Extent of Management Prerogative to Prescribe Working Methods, Time, Place, Manner and Other Aspects of Work

Employers have the freedom and prerogative, according to their discretion and best judgment, to regulate and control all aspects of employment in their business organizations. Such aspects of employment include hiring, work assignments, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers. (Philippine Airlines, Inc. vs. NLRC, G. R. No. 115785, Aug. 4, 2000).

Thus, as held in one case, management retains the prerogative, whenever exigencies of the service so require, to change the working hours of its employees.

LIMITATIONS ON THE EXERCISE OF MANAGEMENT PREROGATIVES

The exercise of management prerogative is not absolute but subject to the limitations imposed by law or by CBA, employment contract, employer policy or practice and general principles of fair play and justice.

- You cant demand an increase in salary if not company practice / policy

1. Right to Hire

This is inherently a management right because it is not found in the Labor Code. Hence, it is not a statutory right.

It is within the right of an employer to hire his own employees. Labor laws do not, generally, authorize interference with the employer’s judgment in the conduct of business. Thus the determination of the qualifications and fitness of workers for hiring are exclusive prerogatives of management.

The employer is free to determine using his own discretion and best judgment. All elements of employment, “from hiring to firing”, except in cases of unlawful discrimination or those which may be provided for by law.

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2. Right to Promote

Promotion is the "advancement from one position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in salary."Consent here is required.

Limiations: The promotion must be within the consent of the employee, as there is no law that compels an employee to accept a promotion for the reason that a promotion is in the nature of a reward, which a person has a right to refuse.

The indispensable elements of promotion are:1. there must be an advancement form one position to another or

2. an upward vertical movement of the employee’s rank or position

Any increase in salary should only be considered incidental but never determinative of whether or not promotion is bestowed upon an employee. This can be likened to the upgrading of salaries of government employees without necessarily conferring upon them the concomitant elevation to higher positions.

3. Right to Demote

Demotion means the movement from one position to another with a diminution in duties and/or status or rank, not necessarily with a reduction in salary. Demotion necessitates the issuance of a notification for demotion for cause.

Demotion must always be for cause and must pass the test of equity, reasonableness and good faith. In case however, a reduction of salary is necessary, the company must be ready to show:1. that it has complied with due process requirements prior to the employer’s action, and2. that the demotion is for a cause.

It may be exercised by an employer when the interests of the employer reasonably demand subject to the following limitations:

1) It must not be exercised arbitrarily, capriciously or whimsically.2) It must be for a cause3) It must pass the test of reasonableness, equity and good faith.

Failure on these requirements may amount to illegal or constructive dismissal, as the case may be. It is even more so if the demotion is not part of the company policy.

4. Right to Transfer

Transfer is a "movement from one position to another which is of equivalent rank, level or salary, without break in service.

It is the employer’s prerogative, based on its assessment and perception of its employees’ qualifications, aptitudes, and competence, to move them around in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. An employee’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 where he will be most useful. When his transfer is not unreasonable, nor inconvenient nor prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee may not complain that it amount to a constructive dismissal.

This right can be challenged if it is exercised arbitrarily or capriciously or in the absence of good faith.

Consent here on the part of the employee is not required since this can only be exercised by the management in accordance with best interest of the company by trying to see where a particular employee can be best maximized.

Transfer is reasonable if there is a need to augment work force because of a work assignment.

Case doctrine - the employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof, the employee’s transfer shall be tantamount to constructive dismissal.

Case doctrine - An employee’s right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal.

Mere incidental inconvenience is not sufficient to warrant a claim of constructive dismissal. Objection to a transfer that is grounded solely upon the personal inconvenience or hardship that will be caused to the employee by reason of the transfer is not a valid reason to disobey an order of transfer.

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Requisites for a valid transfer:

1) Reasonable or it must have a sound purpose.2) Convenience or welfare of the employee.3) Not prejudicial to the employee4) Not involve a demotion of rank or status or a diminution of the employee’s salary, benefits and other benefits.

Violation of the above requirements amounts to constructive dismissal.

5. Right to Dismiss

It is a right to on the management as a measure of self-protection on the part of the employer against all acts inimical to its interest. It is not simply a prerogative but a right because it is found in the Labor Code.

Others: reorganization & abolition of positions; early retirement program, voluntary resignation program, job evaluation program, etc.,

Reorganization and abolition of positionsIn the exercise of this management prerogative, adequate proof must be shown that the abolished positions were unnecessary.

It is not enough for a company to merely declare that it has become overmanned. It must produce adequate proof that such was the actual situation in order to justify the dismissal of the affected employees for redundancy.

It is management prerogative to merge job functions in line with the streamlining of the company to cut costs even if an employee would thereby lose his employment due to abolition of his position.

Abolition of position due to company reorganization or mergerManagement can undertake reorganization within the company or enter into mergers with other companies to meet the

demands of the enterprise. In such cases, the company has the prerogative to abolish managerial and confidential positions or create new ones as the necessity for them requires.

Early retirement program Voluntary resignation program Job evaluation program

The employer has the prerogative to rationalize the duties and functions of all positions, re-establish levels of responsibility, and reorganize both wage and operational structures. It can rank the jobs according to effort, responsibility, training and working conditions and relative worth of job. As a result, all positions can be reevaluated and all employees can be granted salary adjustments and increase in benefits commensurate to their actual duties and functions.

Limitation: Must be done in Good Faith.

EMPLOYMENT POLICIES and STIPULATIONS

Restrictive Covenant ClauseIn determining whether the contract is reasonable or not, the following factors should be considered:

a. whether the covenant protects a legitimate business interest of the employer

b. whether the covenant creates an undue burden on the employee

c. whether the covenant is injurious to the public welfare

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d. whether the time and territorial limitations contained in the covenant are reasonable

e. whether restraint is reasonable from the standpoint of public policy

case doctrine -Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information for competitors. The right to protect its economic interests is recognized by the constitution which recognizes the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and for expansion and growth.

Non-Competing Clause or Competitive Employment BanThe strong weight of authority holds that forfeitures for engaging in subsequent competitive employment, included in

pension retirement plans, are valid, even though unrestricted in time or geography. The reasoning behind this conclusion is that the forfeiture, unlike the restraint included in the employment contract, is not a prohibition on the employee’s engaging in competitive work but is merely a denial of the right to participate in the retirement plan if he does so engage.

A restriction in the contract which does not preclude the employee from engaging in competitive activity, but simply provides for the loss of rights or privileges if he does so is not in restraint of trade.

A post retirement competitive employment restriction is designed to protect the employer against competition by former employees who may retire and obtain retirement or pension benefits and, at the same time, engage in competitive employment.

Case doctrine - A post-retirement competitive employment restriction is designed to protect the employer against competition by former employees who may retire and obtain retirement or pension benefits and, at the same time, engage in competitive employment.

No Spouse Employment PolicyTwo types of employment policies involving spouses:

1. Policies banning only spouses from working in the same company (No spouse employment policy)

2. Policies banning all immediate family members from working in the same company (Anti-nepotism Employment Policy)

- What is important is the reasonable business necessity which must be proven by the ER

Two Theories of employment discrimination:

1. disparate treatment analysis

2. disparate impact

- Unless the employer can prove that the reasonable demands of the business require a distinction based on marital status and there is no better available or acceptable policy which would better accomplish the business purpose, an employer may not discriminate an employee based on the identity of the employee’s spouse. This is known as the bona fide occupational qualification exception (BFOQE)

- To justify BFOQE, the ER must prove two factors:

1. That the employment qualification is reasonably related to the essential operation of the job involved

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

5. TERMINATION OF EMPLOYMENTTermination of employment a management prerogative. It was written in the Labor Code to prevent abuse but it is subject to certain limitations.

Management rights1. Right to manage people – except as limited by special laws, an employer is free to regulate, according to his own discretion

and judgment, all aspects of employment, including the hiring, work assignment, working method, time, place and manner of work, tools to be used, process to be followed, supervision of workers, working regulation and transfer of employees, work supervision, layoff of workers and the discipline, dismissal and recall of workers (San Miguel Brewery Sales vs. Ople)

Employers Right to Discipline prerogative to instill discipline in its employees and to impose penalties, including dismissal, upon erring employees. the policies, rules and regulations on work-related activities of the employees must always be fair and reasonable and the

corresponding penalties, when prescribed, commensurate to the offense involved and to the degree of the infraction (St. Michael’s Institute vs Santos, 2001; Consolidated Food corp. vs NLRC, 1999)

lawfully impose reasonable penalties such as dismissal upon an employee who transgresses the company rules and regulations (Deles vs. NLRC, 2000)

The employer cannot be compelled to maintain in his employ the undeserving, if not undesirable employees (Shoemart vs. NLRC, 1989)

Note:The power to dismiss is a normal prerogative of the ER, generally can dismiss or lay off for just and authorized cause. (subject to the regulation of the state - not arbitrary and capricious)

The right of the company to dismiss its EE is a measure of self protection.

Actual and Constructive Dismissal1. Actual

2. Constructive –defined as an involuntary resignation resorted as a quitting because continued employment is rendered impossible, unreasonable or unlikely; (Phil Japan Active Carbon and Tukuichi Satofuka vs. NLRC, 1989)

when there is a demotion in rank or a diminution of pay when there is no valid reason to do so ex. hacienda guard campaigning for agrarian reform – management demoted him; SC: demotion is tantamount to constructive dismissal. There is a difference between a security guard and an agricultural laborer in sugar plantation; there is diminution of salary- security guard (monthly basis) while laborer (daily or piece work; do not work year round) – Ledesma vs NLRC, 1995or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee.

Note: Constructive Dismissal

an employer’s act amounting to dismissal but made to appear as if it were not. In fact the employee who is the target of the dismissal may be allowed to keep coming from work. Dismissal in disguise.

can be in a form of :1. forced resignation2. Preventive suspension beyond 30 days3. Status is change from regular to casual4. Invalid transfer

5.3 Grounds for Termination of employment1. Just cause and authorized cause (Art 282 and 283)

Grounds for Termination of employment

Just cause Art 282 Authorized cause Art 283 Manual Regulation for Private School or Academic personnel

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Causes a. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;

b. Gross and habitual neglect by the employee of his duties;

c. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;

d. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and

e. Other causes analogous to the foregoing.

a. installation of labor-saving devices

b. redundancy,c. retrenchment

to prevent losses

d. closing or cessation of operation of the establishment or undertaking

1. Disgraceful or immoral conduct

2. Gross Inefficiency and Incompetence in the Performance of Duties

3. Negligence in Keeping School and Student Records or Tampering with or Falsification of These Records

4. Being Notoriously Undesirable

5. Selling Tickets or Collection of Any Contribution in Any form or for any purpose or projects whatsoever whether voluntary or otherwise EXCEPT Girl Scout or Boy Scout Membership Fess among others

Notice Requirement Two-notice Requirement1. Apprise the employee of

the act which the dismissal is sought

2. Inform the employee of the decision to dismiss

Two-notice Requirement1. To the EE to be separated2. DOLE

Serve 30 days before separation takes effect

Separation Pay GR : No separation payEXC:discerning compassion – financial assistance like a separation pay

- If ground does not reflect EE moral character

- Amount depends on the circumstances and the willingness of the ER

Installation of labor saving device or Redundancy (1) month pay or to at least one (1) month pay for every year of service, whichever is higher.

retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher.

Serious LossesNo separation pay

A fraction of at least six (6) months shall be considered one (1) whole year.

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JUST CAUSES (Art 282)

1. SERIOUS MISCONDUCT Defined: improper conduct, willful in character and of such grave that transgress some established or definite rule of action in connection with EES workAries Phils vs NLRCOrdinary or minor misconduct (RCPI vs NLRC)

Grounds:Must be related to the performance of duties of the employee unfit to continue working with the employer;

ELEMENTS:1. an improper act2. willful in nature3. of a grave and aggravated character not merely trivial or

unimportant4. work related – in connection with the employees work or in

transgression with established company policyExamples:1. pressure and influence by a college teacher to change a failing

grade to a passing one and his misrepresentation that the student is his nephew (Padilla vs NLRC)

2. An employee who utters obscene, insulting or offensive words against a superior

3. Immorality that takes the nature of the employment into account, the immoral acts complained of as to render the servant incapable of performing the service properly or were calculated to injure the employer’s business – ex. railroad company with an employee conductor who owned and leased a boat used with his knowledge for prostitution; a company supervisor who got a younger concubine and drove his family in the conjugal dwelling

4. Sleeping in post, gross insubordination, dereliction of duty and challenging superior officers to a fight – security guard is suppose to protect property from loss or pilferage

5. sexual harassment Villarama case6. Cheating a customer ; LRS assigned to repair the telephone of subscriber, told subscriber that defect involves cable replacement with 160 pesos charge when in fact trouble was only a slash on the portion of the wire which can just be connected to the jumper wire. SC: dismissal was justified as his continued work in inimical to the 7. extra-marital relationship: both are married

INADEQUATE CAUSES:1. fistcuffs of private matter between two employees which has no

apparent deleterious effect on the substantial interest of the company, dismissal not commensurate – ex. boxing incident in a store within auxiliary compound

2. shipmaster’s report that employee is hot tempered and apprehensive that employee might get into trouble

3. borrowing of money – hospital employee borrowed from a hospital patient

4. Teacher falling in love with student – Chua-Qua case2. WILLFUL DISOBEDIENCE - 1. Must be Willful and intentional;

WILLFUL - it is characterized by a wrongful perverse mental attitude rendering the employee’s act inconsistent with the proper subordination

2. the orders, regulations or instructions of the employer against which the employer willfully disobeys must be

(a) reasonable and lawful -refers both to kinds and character of the direction and commands and the manner in which they are made or given *Escobin vs NLRC)

(b) sufficiently known to the employee

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(c) in connection with the duties which the employee has been engaged to discharge]

Examples:1. refusal by a secretary to make a report2. transferring to another work without resignation as required3. gross habitual neglect of duties –cashier with key to the banks

vault who is always absent4. employee dismissed for violation of company policy prohibiting

use of company vehicles for personal use without management authority (Soco vs mercantile Corp)

5. painter dismissed for smoking inside the painting booth contrary to company rules (Northern Motors vs. NLRC)

6. Disobeying a VALID transfer order(Abbot Laboratories vs NLRC)

3. GROSS AND HABITUAL NEGLECT Gross Neglect - means the absence or failure to exercise slight care or diligence, or the entire absence care which an ordinary man would use in his own affairs.

1. habitual2. gross negligence EXC:bank teller who left a deposited amount of 50,000 unattended and was subsequently lost just cause despite it not being habitual

Employer need not show that he incurred actual lossEx.

1. Excessive absenteeism esp if managerial position where punctuality is in demand

2. a bank employee who delivered newly approved credit cards to a person she had not even seen before and she did not ask for a receipt causing loss to the bank of 740,00

3. An appraiser who overstated the value of property to 769,545 when FMV is only 142, 915 and merely asked people residing there for land valuation without aking the City Assessor’s office

4. FRAUD/WILLFUL BREACH OF TRUST

Fraud – any commission or concealment which involves a breach of legal duty, trust and confidence justly reposed, and is injurious to another

Must be committed against the employer or representatives and in connection with his work.It implies willfulness or wrongful intent – done KNOWINGLY, DELIBERATELY AND WITHOUT JUSTIFIABLE EXCUSE; an innocent non-disclosure of facts by the employee done to the employer will not constitute just cause for the dismissal; not mere inadvertence, carelessness or thoughtlessness

ELEMENTS1. the breach must be work related;2. the position must be impressed with trust and confidence

(employee has custody over the funds, money or other property of the company)

EXAMPLES OF DISHONESTY1. falsification of Time Cards 2. Theft of Company Property 3. use by a PAL employee of a weighing scale which he knew to be

defective at the time of shipment in order to benefit the shipper and defraud the airline

4. Unauthorized use of vehicle for personal trip to visit

Loss of Confidence: The grounds MUST NOT be:1) merely simulated2) used as a subterfuge for cause which are improper, illegal or

unjustified3) arbitrarily asserted4) mere afterthought to justify earlier action taken in bad faith but

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must be genuine5) employee holds position of trust and confidence

To whom Applicable: Position of Trust and Confidence1. cases involving employees occupying positions of trust and confidence; or – managerial employee or those vested with powers or prerogatives to lay down management policies/hire, transfer, suspend, layoff, recall, discharge, assign or discipline employees or effectively recommend managerial sanctions2. to those situations where the employee is routinely charged with the care and custody of the employer’s money or property – cashiers, auditors, property custodians who in the normal and routine exercise of their functions regularly handle significant amounts of money or property

PROOF REQUIRED: reasonable ground

COMMISSION OF CRIME Note: it must be directed against the person of the employer/his immediate family/representativeImmediate members limited to spouse, ascendants, descendants, or legitimate, natural, or adopted brother and sisters of employer or his relative by affinity in same degrees and those be consanguinity within the fourth civil degree (Art 11. RPC)Conviction is not necessary to effect termination on this ground; conviction is not also conclusive on the Labor tribunal

- substantial evidence – that relevant evidence as a reasonable man might accept as valid to support a conclusion

Note:Dismissal for False or Non-existent cause - The cause of the dismissal is not existent in the sense that the EE did not really commit such. No ground for termination because EE has

no intention to sever relationEX.

Dismiss from work because of abandonment (10 days absent without notice) when in fact he is imprison

Other analogous causes- These are causes that are in one or more respects similar to the above mentioned causes, and have been deliberated by the SC.

1. Abandonment2. Sexual harassment3. Gross inefficiency or poor performance4. Drug abuse (RA 9165)5. Attitude problem6. Conflict of interest7. Lack of common sense

1. Abandonment - analogous to gross habitual neglect

2 Requisites1. failure to report for work or absences without justifiable reasons2. clear intent to severe employment relationship – determinative

factor (Cosmos Bottling vs Nagrama)Note: examples of overt acts manifesting intent to severe employment relationship

2. Sexual harassment

2.3 REPUBLIC ACT NO. 7877 - Anti-Sexual Harassment Act of 1995

Sec.3 (a) In a work-related or employment environment, sexual harassment is committed when: (1) The sexual favor is made as a condition in the hiring or in the

employment, re-employment or continued employment of said

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Note: Gravamen of the Offense: is not the mere violation of one’s sexuality but the abuse of power by the employer who has a duty to protect his employee against over-sex.

individual, or in granting said individual favorable compensation, terms, conditions, promotions, or privileges; or the refusal to grant the sexual favor results in limiting, segregating or classifying the employee which in a way would discriminate, deprive or diminish employment opportunities or otherwise adversely affect said employee; [Note: restriction on right to hire]

3. Gross inefficiency or poor performance

Gross and habitual neglectFailure to meet the quota

ER must proved that1. set a standard2. standard is reasonable to the work3. standard is not meet

4. Drug abuse (RA 9165)

Note: - the law enable the ER

to compel the EE to drug testing

- Random drug testing is allowed

Does the law allow termination of employee is he is found positive of having used drugs? Rule: termination is not an appropriate solution right away but serves as a last resort

1. Employer must have at hand 2 testing kits: - Screening-test w/n using drugs - Confirmatory-test on what kind of drugs

2. must give the employee an opportunity to explainRules:

1. Policy must be a written one2. There must be appropriate penalty defined following the implementing

guidelines set by the DOLE5. Attitude problem

6. Conflict of interest

7. Lack of common sense

Authorized cause1. Installation of Labor Saving Devices

- reduction of the number of workers in a company’s factory made necessary by the introduction of machinery in the manufacture of its products is justified

2. Redundancy - excess of what is reasonably demanded - position is redundant where it is superfluous and superfluity Causes:1. Over hiring of workers2. Decreased volume of business3. dropping of a particular product line or service activity previously undertaken or 4. streamlining of operations5. lack of demand for products

Note:Replacing a Regular employee with an independent contractor valid if done in good faith – to implement a

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redundancy program.

3. Retrenchment to Prevent Losses- means that retrenchment or termination of the service of some employees is authorized to be undertaken by the employer sometime before the losses anticipated are actually sustained or realized- it is not the intention of the lawmakers to compel the employer to stay his hand and keep all his employees until sometime after losses shall have been materialized; otherwise it would be taking one’s property

Burden of Proof: employer has the burden to prove economic or business reversesREQUISITES FOR VALID RETRENCHMENT1. The retrenchment is necessary to prevent losses and such losses are proven – whether or not the employer

would imminently suffer serious or substantial losses for economic reasons2. written notice to the employees and to the DOLE at least one month prior to the intended date of

retrenchment - mandatory3. Payment of separation pay equivalent to one month pay or at least ½ month pay for every year of service,

whichever is higher

Additional in Asian alcohol vs NLRC4. the employer exercises its prerogative to retrench employees in good faith for the advancement of its

interest and not to defeat or circumvent the employee’s right to security of tenure5. the employer uses fair and reasonable criteria in ascertaining who will be dismissed or retained among the

employees such as (whether they are temporary, casual, or regular), efficiency, seniority, physical fitness, age and financial hardship for certain workers.

CAUSES:1) Lack of work 2) Business Recession3) Fire 4) Conservatorship Criterion who to retrench:1. Less preferred status2. Efficiency Rating (Performance Evaluation)3. Seniority4. proof of financial loses

Evidence to Prove losses: must have modicum of admissibility - statement of profit and losses submitted by employer which does not bear the signature of a certified public accountant or audited by an independent auditor; therefore has no evidentiary rule

4. Closure of Business Art 283 allows an employer to terminate the services of his employees in case of closure of business as a result of grave financial loss. But the employer must comply with the clearance or report required under the LC and its implementing rules for terminating the employment of employees.DOLE clearance to terminate no longer required

4.01 CLOSURE BECAUSE OF LOSSES: a firm which faces serious business decline and loss is entitled to close its business in order to avoid further economic loss, and the court has no power to require such firm to continue to operate at a loss.

4.02 RIGHT TO CLOSE WHETHER LOSING OR NOTAllowed whether or not the business is losing. If the business is not losing but its owner, for reasons of his own, wants to get out of the business, he in good faith can lawfully do so anytime. Just as no law forces anyone to into a business, no law compels anybody to stay in business. But the employees should be paid the severance payPREVAILING RULE: in case of closure due to serious business losses, then the employer is not under any obligation to give its employees separation pay – Labor Code says..in case of closures or cessation of operations Not due to serious business losses

5. SALE The purchaser unless he agrees to do so, has no obligation to continue employing the employees of the seller.The seller, as employer, is obliged to pay his employees separation pay and other benefits founded on law, policy or contract.The transferee may, but is not obliged, to give employment preference to the former employees; if hired, they may be required to pass probation

4. Ailment or Disease REQUISITES

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1. the employer suffers from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees the employer shall not terminate his service unless2. There is a certification by a competent public health authority that the disease is of such nature or such a stage that it cannot be cured within a period of six months even with proper medical treatment (Sec 8, Rule 1 book VI)- City Health certification3. That he is paid separation pay equivalent to at least one month salary or to one half month salary for every year of service whichever is higher, a fraction of at least six months being considered as one year

7. Merger Sale not same as mergerSuccession of employment rights and obligations occurs between the absorbing corporation and the employee of the absorbed; absorbing corporation must retain but must also recognize the length of service in the previous employer – successor employer applies

8. Consolidation - law applicable not only to merger but also consolidation.

OTHER AUTHORIZED CAUSES:1. Total and Permanent Disability of an Employee2. Disease is not curable in six months3. Valid Application of a Union Security Clause4. Expiration of Period in Term Employment5. Completion of Project in Project Employment6. Failure in Probation7. Sale Amounting to Closure of Business8. Relocation of Business to a Distant Place9. Defiance of Return to Work Order10. Commission of Illegal Acts in a Strike11. Non-Feasible Reinstatement12. Floating Status or Off Detail Beyond Six Months13. Resignation14. Violation of a Contractual Commitment e.g being a consultant to a competitor15. Retirement16. Death of the employee

Requisite for Valid termination: Substantive and Procedural Requirements

Section 2, Rule XXIII, Standards of due process: requirements of notice. – In all cases of termination of employment, the following standards of due

process shall be substantially observed:

I. For termination of employment based on just causes as defined in Article 282 of the Code: (a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; (b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and (c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. x x x

Note: Substantive requirement: termination is under just and authorized causeProcedural requirement: Due process

notice and hearing

Can never dispense with the twin notice but the hearing is only mandatory in 3 instance1. If the EE so requires in writing

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2. The company policy requires3. It involves evidentiary facts

Terminated with just and authorized cause due process was observed –no liability Terminated not with just and authorized cause due process was observed – EE is entitled to reinstatement and full backwagesTerminated with not just and authorized cause due process was not observed - EE is entitled to reinstatement and full backwages

Terminated with just and authorized cause due process was not observed – dismissal is upheld ER liable for non-compliance with due process (50k nominal damages)

Preventive suspension1. When valid2. Maximum period (Omnibus Rules as amended by DO 9 series of 1997)

Sec 12. Suspension of relationship – The employer employee relationship shall be deemed suspended in case of suspension of operation of business or undertaking of the employer for a period NOT EXCEEDING six (6) months, UNLESS the suspension is for the purpose of defeating the rights of the employees under the Code, and in case of mandatory fulfillment by the employee of a military or civic duty. The payment of wages of the employee as well as the grant of other benefits and privileges while he is on a military or civic duty shall be subject to laws and decrees and to the applicable individual or collective bargaining agreement and voluntary employer practice or policy. (Rule I, Book V)

Due Process 1. Art 277(b). Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. The Secretary of the Department of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off. (As amended by Section 33, Republic Act No. 6715, March 21, 1989)

Note: Twin Notice Rule

- EE- DOLE

The burden of proving termination rest on the ERSec. of DOLE can suspend effect of terminationChief Executive ca suspend the termination (not the RD, alter ego)

Effect or consequence of Illegal dismissal (Art 279)Art. 279. Security of tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. (As amended by Section 34, Republic Act No. 6715, March 21, 1989)

Reliefs of an illegally dismissed employee1. Reinstatement (without loss of seniority rights and other privileges)2. Backwages (full backwages including allowances)3. Other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of

his actual reinstatement4. Damages (Title 18, Civil Code)

5.13 Corporate Officers1. Definition

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- there are specifically 3 officers which a corporation must have under the statute: president, secretary, and treasurer. However the law does not limit corporate officer to this three. Section 25 od the Corporation Code gives corporation the widest latitude to provide for such other offices, as they may deem necessary. The by-laws may and usually do provide for such other officers, e.g. vice president, cashier, auditor and general manager. Consequently, SC that one who is included in the by-laws of a corporation is in its roster of corporate officers is an officer of the said corporation and not a mere EE

2. Liability- the corporate officer is not liable personally to the illegally terminated employee if he acted within the authority and was not motivated

by personal ill-will against the EE

6. SUSPENSION OF BUSINESS OPERATIONS

Article 286. WHEN EMPLOYMENT NOT DEEMED TERMINATED

The bonafide suspension of the operation of a business or undertaking for a period not exceeding six(6) months,or the fulfillment of the employee by a military or civic duty shall not terminate the employment.In all such cases the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one(1) month from the resumption of the operations of his employer or from his relief from the military or civic duty.

For suspension of business operations the maximum period allowed : not exceeding 6 months The so called “Floating Status” of an employee should last only for a legally prescribed period of time. When that floating status of an

employee lasts for more than six months, he may be considered to have been illegally dismissed from service. He is entitled to benefits for his separation, and this will apply to the two types of work suspension , that either of the entire business or

of a specific component thereof.

It maybe recalled that in the case of Sebuguero vs NLRC, the courts construed art 286 as an instance of temporary RETRENCHMENT or LAY OFF.

May a regular employee be placed on a “Floating Status” for six months although there is no suspension of operations? -No, There must be a bonafide suspension of the business or undertaking

7. Disease as a ground for dismissal.

— Where the employee suffers from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees, the employer shall not terminate his employment unless there is a certification by competent public health authority that the disease is of such nature of at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. If the disease or ailment can be cured within the period, the employee shall not terminate the employee but shall ask the employee to take a leave of absence. The employer shall reinstate such employee to his former position immediately upon the restoration of his normal health.

Requisites:1. The employee is found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his

health as well as the health of his co-employees.

2. There is a certification by a competent public health authority that the disease is of such a nature or at such stage that it cannot be cured within a period of 6 months.

3. EE is paid separation pay equivalent to at least 1 month salary or ½ month salary for every year of service, whichever is higher.

The certification is to be secured by the employer.

Q: Can you terminate the employee base on disability?

A: No.

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Q: Can you terminate and employee with HIV status?

A: No. Can only be transmitted through blood transmission, sexual intercourse, intravenous, etc...Q: When can you place an employee under preventive suspension?

A: NO

8. Other causes of severance of employment resignation & Art. 285 (termination by employee)

Voluntary Resignation- is defined as the act of an employee who “finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has not other choice but to dissociate himself from his employment.

Resignation is withdrawable even if the employee has called it “irrevocable”. But after it is accepted or approved by the employer, its withdrawal needs the employer’s consent.

A demotion or forced resignation may cause a complaint of constructive dismissal.

As to form

Express Resignation- that which is made in writing, with the reasons for resignation stated therein. Even if the employee writes a letter of resignation without indicating the reasons therefore, the same is still valid. It is however advisable that a notice of his intention to resign must be given by the EE to his ER at least one month in advance in order for the ER to find a replacement, and to prevent his resignation from disrupting work.

Implied Resignation- this is also called constructive resignation. This kind of resignation is implied from antecedent, contemporaneous and subsequent acts indicating that the EE no longer desires to continue employment.

As to nature

Voluntary and Involuntary Resignation- Under Involuntary COURTESY RESIGNATION and FORCED RESIGNATION, where the intent of the employee is vitiated. (Invalid)

Q: Can an employee resign without giving the employer the 30 day notice or can he resign immediately? And can the employer prevent the employee from resigning?

A: You cannot prevent the employee from resigning; otherwise it will be involuntary servitude.

Purpose of one month notice is to enable employer to look for replacement.

Note: if employee will not give 30 day notice the employer will be entitled damages.

Note: If the resignation is involuntary that amounts to illegal dismissal and you are entitled to the reliefs of illegally dismissed worker.

Retirement – is a mode of severing employment.

Art. 287 Retirement.

Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract.

In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided, however, That an employee's retirement benefits under any collective bargaining and other agreements shall not be less than those provided herein.

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In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. acd

Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. (22.5 days per year of service)

Retail, service and agricultural establishments or operations employing not more than (10) employees or workers are exempted from the coverage of this provision.

Violation of this provision is hereby declared unlawful and subject to the penal provisions provided under Article 288 of this Code.

Exception: Retirement pay applies to all workers except to government employees, retail, service and agricultural establishments or operations employing not more than (10) employees or workers are exempted from the coverage of this provision.

Note: House helpers are entitled to retirement pay

9. PRESCRIPTION OF CLAIMS

Claim for illegal dismissal (Art. 1146, NCC)

ART. 1146. The following actions must be instituted within four years:

(1) Upon an injury to the rights of the plaintiff;(2) Upon a quasi-delict; However, when the action arises from or out of any act, activity, or conduct of any public officer involving the exercise of powers or authority arising from Martial Law including the arrest, detention and/or trial of the plaintiff, the same must be brought within one (1) year. (As amended by P.D. No. 1755, Dec. 24, 1980.)

Money claims (Art. 291)

ARTICLE 291. Money claims. —

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

Workmen's compensation claims accruing prior to the effectivity of this Code and during the period from November 1, 1974, up to December 31, 1974, shall be filed with the appropriate regional offices of the Department of Labor not later than March 31, 1975; otherwise, they shall be processed and adjudicated in accordance with the law and rules at the time their causes of action accrued.

Claim for illegal dismissal with money claims:

They have different prescriptive periods. The action for money claim, whether principal action or not, shall prescribe in 3 years. The action for illegal dismissal, whether principal action or not, shall prescribe in 4 years.

On the issue of backwages as a relief for illegal dismissal, there is no prescriptive period. On the issue of separation pay, this follows the same prescriptive period as money claims. Thus, 3-year period applies.

CASES

1. Ludo & Luym Corporation vs. Saornido [January 20, 2003]

x x x As elucidated by the Voluntary Arbitrator:

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The respondents had raised prescription as defense. The controlling law, as ruled by the High Court, is:

"The cause of action accrues until the party obligated refuses xxx to comply with his duty . Being warded off by promises, the workers not having decided to assert [their] right[s], [their] causes of action had not accrued…" (Citation omitted.)

Since the parties had continued their negotiations even after the matter was raised before the Grievance Procedure and the voluntary arbitration, the respondents had not refused to comply with their duty. They just wanted the complainants to present some proofs. The complainant’s cause of action had not therefore accrued yet. Besides, in the earlier voluntary arbitration case aforementioned involving exactly the same issue and employees similarly situated as the complainants’, the same defense was raised and dismissed by Honorable Thelma Jordan, Voluntary Arbitrator.

In fact, the respondents’ promised to correct their length of service and grant them the back CBA benefits if the complainants can prove they are entitled rendered the former in estoppel, barring them from raising the defense of laches or prescription. To hold otherwise amounts to rewarding the respondents for their duplicitous representation and abet them in a dishonest scheme against their workers.

Indeed, as the Court of Appeals concluded, under the equitable principle of estoppel, it will be the height of injustice if we will brush aside the employees’ claims on a mere technicality, especially when it is petitioner’s own action that prevented them from interposing the claims within the prescribed period.

2. Degamo vs. Avant Garde Shipping Corporation [November 22, 2005]

Petitioner, citing Article 1155 of the New Civil Code, contends that his cause of action had not prescribed as the running of the prescriptive period was tolled by his extrajudicial demand for unpaid sickness benefits on December 24, 1997.

Respondents counter that the Civil Code provision on extinctive prescription applies only to obligations that are intrinsically civil in nature and is inapplicable to labor cases. Respondents assert that petitioner’s demand was made more than one year from his date of arrival in the Philippines, contrary to what is prescribed in Section 28 of the Philippine Overseas Employment Administration (POEA) Memorandum Circular No. 55, Series of 1996. They add that the institution of the action was beyond the three-year period prescribed in Article 291 of the Labor Code as his employment with the respondents’ ended on March 4, 1995 but the complaint was filed only on March 2, 2001.

Held:

We note that POEA Circular No. 55, Series of 1996 became effective only on January 1, 1997 while the employment contract between the parties was entered earlier on November 8, 1994. The earlier standard employment contract issued by the POEA did not have a provision on prescription of claims. Hence, the applicable provision in this case is Article 291 of the Labor Code which we shall now discuss.

In Cadalin v. POEA’s Administrator, we held that Article 291 covers all money claims from employer-employee relationship and is broader in scope than claims arising from a specific law. It is not limited to money claims recoverable under the Labor Code, but applies also to claims of overseas contract workers.

Article 291 provides that all money claims arising from employer-employee relations shall be filed within three years from the time the cause of action accrued, otherwise, these shall be forever barred. A cause of action accrues upon the categorical denial of claim. Petitioner’s cause of action accrued only on January 6, 1998, when Avantgarde denied his claim and so breached its obligation to petitioner. Petitioner could not have a cause of action prior to this because his earlier requests were warded off by indefinite promises. The complaint filed on March 2, 2001 is beyond the three-year period mandated by the Labor Code.

3. Intercontinental Broadcasting Corp. vs. Panganiban [February 6, 2007]

The applicable law in this case is Article 291 of the Labor Code which provides that "all money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred." The term "money claims" covers all money claims arising from an employer-employee relation.

x x x x x x x x x

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Like other causes of action, the prescriptive period for money claims is subject to interruption, and in the absence of an equivalent Labor Code provision for determining whether the said period may be interrupted, Article 1155 of the Civil Code may be applied, to wit:

ART. 1155. The prescription of actions is interrupted when they are filed before the Court, when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor.

Thus, the prescription of an action is interrupted by (a) the filing of an action, (b) a written extrajudicial demand by the creditor, and (c) a written acknowledgment of the debt by the debtor. On this point, the Court ruled that although the commencement of a civil action stops the running of the statute of prescription or limitations, its dismissal or voluntary abandonment by plaintiff leaves the parties in exactly the same position as though no action had been commenced at all.

4. J.K. Mercado & Sons Agricultural Enterprises, Inc. vs. Sto. Tomas [August 29, 2008]

Art. 291 of the Labor Code applies to money claims in general and provides for a 3-year prescriptive period to file them.

On the other hand, respondent employees’ money claims in this case had been reduced to a judgment, in the form of a Wage Order, which has become final and executory. The prescription applicable, therefore, is not the general one that applies to money claims, but the specific one applying to judgments. Thus, the right to enforce the judgment, having been exercised within five years, has not yet prescribed.

Stated otherwise, a claimant has three years to press a money claim. Once judgment is rendered in her favor, she has five years to ask for execution of the judgment, counted from its finality. This is consistent with the rule on statutory construction that a general provision should yield to a specific one and with the mandate of social justice that doubts should be resolved in favor of labor.

5. Reyes vs. National Labor Relations Commission [February 10, 2009]

The law fixes the period of time within which petitioner could seek remedy for his illegal dismissal and for as long as he filed his Complaint within the prescriptive period, he shall be entitled to the full protection of his right to backwages. In illegal dismissal cases, the employee concerned is given a period of four years from the time of his illegal dismissal within which to institute the complaint . This is based on Article 1146 of the New Civil Code which states that actions based upon an injury to the rights of the plaintiff must be brought within four years. The four-year prescriptive period shall commence to run only upon the accrual of a cause of action of the worker. Here, petitioner was dismissed from service on 15 September 2001. He filed his complaint for illegal dismissal on 14 June 2004. Clearly, then, the instant case was filed within the prescriptive period.

6. LWV Construction Corporation vs. Dupo [July 13, 2009]

On the matter of prescription, however, we cannot agree with petitioner that respondent’s action has prescribed under Article 13 of the Saudi Labor Law. What applies is Article 291 of our Labor Code which reads:

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

In Cadalin v. POEA’s Administrator, we held that Article 291 covers all money claims from employer-employee relationship and is broader in scope than claims arising from a specific law. It is not limited to money claims recoverable under the Labor Code, but applies also to claims of overseas contract workers. The following ruling in Cadalin v. POEA’s Administrator is instructive:

As a general rule, a foreign procedural law will not be applied in the forum. Procedural matters, such as service of process, joinder of actions, period and requisites for appeal, and so forth, are governed by the laws of the forum. This is true even if the action is based upon a foreign substantive law (Restatement of the Conflict of Laws, Sec. 685; Salonga, Private International Law, 131 [1979]).

A law on prescription of actions is sui generis in Conflict of Laws in the sense that it may be viewed either as procedural or substantive, depending on the characterization given such a law.

x x x x x x x x

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However, the characterization of a statute into a procedural or substantive law becomes irrelevant when the country of the forum has a "borrowing statute." Said statute has the practical effect of treating the foreign statute of limitation as one of substance (Goodrich, Conflict of Laws, 152-153 [1938]). A "borrowing statute" directs the state of the forum to apply the foreign statute of limitations to the pending claims based on a foreign law (Siegel, Conflicts, 183 [1975]). While there are several kinds of "borrowing statutes," one form provides that an action barred by the laws of the place where it accrued, will not be enforced in the forum even though the local statute has not run against it (Goodrich and Scoles, Conflict of Laws, 152-153 [1938]). Section 48 of our Code of Civil Procedure is of this kind. Said Section provides:

"If by the laws of the state or country where the cause of action arose, the action is barred, it is also barred in the Philippine Islands."

Section 48 has not been repealed or amended by the Civil Code of the Philippines. Article 2270 of said Code repealed only those provisions of the Code of Civil Procedure as to which were inconsistent with it. There is no provision in the Civil Code of the Philippines, which is inconsistent with or contradictory to Section 48 of the Code of Civil Procedure (Paras, Philippine Conflict of Laws, 104 [7th ed.]).

In the light of the 1987 Constitution, however, Section 48 [of the Code of Civil Procedure] cannot be enforced ex proprio vigore insofar as it ordains the application in this jurisdiction of [Article] 156 of the Amiri Decree No. 23 of 1976.

The courts of the forum will not enforce any foreign claim obnoxious to the forum’s public policy x x x. To enforce the one-year prescriptive period of the Amiri Decree No. 23 of 1976 as regards the claims in question would contravene the public policy on the protection to labor.

x x x x

Thus, in our considered view, respondent’s complaint was filed well within the three-year prescriptive period under Article 291 of our Labor Code. This point, however, has already been mooted by our finding that respondent’s service award had been paid, albeit the payroll termed such payment as severance pay.

7. Anabe vs. Asian Construction (ASIAKONSTRUKT) [December 23, 2009]

On the reduction of petitioner’s money claims on account of prescription, under Article 1139 of the Civil Code, actions prescribe by the mere lapse of the time prescribed by law. That law may either be the Civil Code or special laws as specifically mandated by Article 1148. In labor cases, the special law on prescription is Article 291 of the Labor Code which provides:

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

The Labor Code has no specific provision on when a monetary claim accrues. Thus, again the general law on prescription applies. Article 1150 of the Civil Code provides that –

Article 1150. The time for prescription for all kinds of actions, when there is no special provision which ordains otherwise, shall be counted from the day they may be brought. (emphasis supplied)

The day the action may be brought is the day a claim started as a legal possibility. In the present case, the day came when petitioner learned of Asiakonstrukt’s deduction from his salary of the amount of advances he had received but had, by his claim, been settled, the same having been reflected in his payslips, hence, it is assumed that he learned of it at the time he received his monthly paychecks.

As thus correctly ruled by both the NLRC and the appellate court, only those illegal deductions made from 1997 to 1999 when he was dismissed can be claimed, he having filed his complaint only in February 2000. Per his own computation and as properly adopted by the NLRC in its assailed Resolution dated March 10, 2004, petitioner is thus entitled to reimbursement of P88,000.00.

10. JURISDICTION OF LABOR ARBITER

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Original & Exclusive Jurisdiction; Scope (Art. 217, LC)

ARTICLE 217. Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:

(1) Unfair labor practice cases; (2) Termination disputes; (3) If accompanied with a claim for reinstatement, those cases that workers may file involving wage, rates of pay, hours of work and other

terms and conditions of employment; (4) Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; (5) Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and (6) Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-

employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00), regardless of whether or not accompanied with a claim for reinstatement.

(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.

(c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements.

Concurrent Jurisdiction of other agencies (Art. 128, 261, 262, 263{g} [LC], RA 7691)

ARTICLE 128. Visitorial and enforcement power. — (a) The Secretary of Labor or his duly authorized representatives, including labor regulation officers, shall have access to employer's records and premises at any time of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of this Code and of any labor law, wage order or rules and regulations issued pursuant thereto.

(b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection.

An order issued by the duly authorized representative of the Secretary of Labor and Employment under this article may be appealed to the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed from.

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

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

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

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(f) The Secretary of Labor may, by appropriate regulations, require employers to keep and maintain such employment records as may be necessary in aid of his visitorial and enforcement powers under this Code.

ARTICLE 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. — The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the immediately preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes of this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement.

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

ARTICLE 262. Jurisdiction over other labor disputes. — The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks.

ARTICLE 262-A. Procedures. — The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have the power to hold hearings, receive evidences and take whatever action is necessary to resolve the issue or issues subject of the dispute, including efforts to effect a voluntary settlement between parties.

All parties to the dispute shall be entitled to attend the arbitration proceedings. The attendance of any third party or the exclusion of any witness from the proceedings shall be determined by the Voluntary Arbitrator or panel of Voluntary Arbitrators. Hearings may be adjourned for a cause or upon agreement by the parties.

Unless the parties agree otherwise, it shall be mandatory for the Voluntary Arbitrator or panel of Voluntary Arbitrators to render an award or decision within twenty (20) calendar days from the date of the submission of the dispute to voluntary arbitration.

The award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators shall contain the facts and the law on which it is based. It shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision by the parties.

Upon motion of any interested party, the Voluntary Arbitrator or panel of Voluntary Arbitrators or the Labor Arbiter in the region where the movant reside, in case of the absence or incapacity of the Voluntary Arbitrator or panel of Voluntary Arbitrators for any reason, may issue a writ of execution requiring either the sheriff of the Commission or regular courts or any public official whom the parties may designate in the submission agreement to execute the final decision, order or award.

ARTICLE 262-B. Cost of Voluntary Arbitration and Voluntary Arbitrators fee. — The parties to a Collective Bargaining Agreement shall provide therein a proportionate sharing scheme on the cost of voluntary arbitration including the Voluntary Arbitrators fee. The fixing of the fee of the Voluntary Arbitrators or panel of Voluntary Arbitrators, whether shouldered wholly by the parties or subsidized by the Special Voluntary

Arbitration Fund, shall take into account the following factors:

(a) Nature of the case; (b) Time consumed in hearing the case; (c) Professional standing of the Voluntary Arbitrator; (d) Capacity to pay of the parties; and (e) Fees provided for in the Revised Rules of Court.

ARTICLE 263. Strikes, picketing and lockouts. x x x

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for

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compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout . The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure the compliance with this provision as well as with such orders as he may issue to enforce the same.

Article 263(g) was devised to maintain the status quo between the workers and management in a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, pending adjudication of the controversy.

R.A. 7691. SECTION 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of 1980", is hereby amended to read as follows:

"Sec. 19. Jurisdiction in civil cases. — Regional Trial Courts shall exercise exclusive original jurisdiction.

x x x x x x x x x

"(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising judicial or quasi-judicial functions;

Labor Dispute vs. Civil Dispute; Labor dispute vs. Intra-corporate disputes

ARTICLE 212. Definitions. x x x

(l) "Labor dispute" includes any controversy or matter concerning terms or conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee.

Civil dispute – a breach of contractual obligations; not on grounds anchored on employee-employer relations; the plaintiff seeks remedy or protection under civil laws and claims no benefits under the labor code.

See: Yusen Air and Sea Service Philippines, Inc. vs. Villamor

Intra-corporate dispute: corporate controversy which arises between a stockholder (or officers of a corporation) and the corporation

Okol v. Slimmer’s World International [December. 11, 2009]

In a number of cases, we have held that a corporate officer’s dismissal is always a corporate act, or an intra-corporate controversy which arises between a stockholder and a corporation. The question of remuneration involving a stockholder and officer, not a mere employee, is not a simple labor problem but a matter that comes within the area of corporate affairs and management and is a corporate controversy in contemplation of the Corporation Code.

x x x x x x x x x

It is a settled rule that jurisdiction over the subject matter is conferred by law. The determination of the rights of a director and corporate officer dismissed from his employment as well as the corresponding liability of a corporation, if any, is an intra-corporate dispute subject to the jurisdiction of the regular courts. Thus, the appellate court correctly ruled that it is not the NLRC but the regular courts which have jurisdiction over the present case.

SECTION 5. Powers and Functions of the Commission. — x x x

5.2. The Commission's jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court: Provided, That the Supreme Court in the exercise of its authority may

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designate the Regional Trial Court branches that shall exercise jurisdiction over these cases. The Commission shall retain jurisdiction over pending cases involving intra-corporate disputes submitted for final resolution which should be resolved within one (1) year from the enactment of this Code. The Commission shall retain jurisdiction over pending suspension of payments/rehabilitation cases filed as of 30 June 2000 until finally disposed.

CASES

1. Tolosa vs. National Labor Relations Commission [April 10, 2003]

Petitioner was the widow of Capt. Virgilio Tolosa who was hired by Qwana-Kaiun, through its manning agent, Asia Bulk, to be the master of the Vessel named M/V Lady Dona. While in command of the vessel, Capt. Tolosa contracted a fever and in the succeeding 12 days, his health rapidly deteriorated resulting in his death. When petitioner filed a complaint with the POEA, transferred to the DOLE, NLRC, the Labor Arbiter ruled in her favor. The NLRC, affirmed by the Court of Appeals, however, ruled that the labor commission had no jurisdiction over the subject matter filed by petitioner. Hence, this appeal.

Held:

Time and time again, we have held that the allegations in the complaint determine the nature of the action and, consequently, the jurisdiction of the courts. After carefully examining the complaint/position paper of petitioner, we are convinced that the allegations therein are in the nature of an action based on a quasi delict or tort. It is evident that she sued shipmate Pedro Garate and Mario Asis for gross negligence, and that they had no employer-employee relation with Captain Tolosa. The jurisdiction of labor tribunals is limited to disputes arising from employer-employee relations. Further the loss petitioner claims does not refer to the actual earnings of the deceased, but to his earning capacity based on a life expectancy of 65 years. This amount is recoverable if the action is based on a quasi delict as provided for in Article 2206 of the Civil Code, but not in the Labor Code.

x x x x x x x x x

It is not the NLRC but the regular courts that have jurisdiction over actions for damages, in which the employer-employee relation is merely incidental, and in which the cause of action proceeds from a different source of obligation such as a tort . Since petitioner's claim for damages is predicated on a quasi delict or tort that has no reasonable causal connection with any of the claims provided for in Article 217, other labor statutes, or collective bargaining agreements, jurisdiction over the action lies with the regular courts — not with the NLRC or the labor arbiters.

2. Austria vs. NLRC

Having allegedly disclosed confidential information to prospective competitors, Petitioner Nazario Austria was unceremoniously terminated from work. Consequently, he filed a case for illegal dismissal against his employer, PHILSTEEL. The Labor Arbiter dismissed the case. The National Labor Relations Commission upheld the decision of the Labor Arbiter. Hence, this petition.

Held:

Unlike in other cases where the complainant has the burden of proof to discharge, in labor cases concerning illegal dismissals, the burden of proving that the employee was dismissed with just cause rests upon the employer.

Nowhere in all the allegations of PHILSTEEL was there proof of any concrete action by Austria of divulging confidential information and of setting up a rival business.

Accusation cannot take the place of proof. A suspicion or belief no matter how sincerely felt cannot be a substitute for factual findings carefully established through an orderly procedure.

3. Eviota vs. CA

Upholding the jurisdiction of the trial court, the Supreme Court denied the petition. According to the Court, a money claim by a worker against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter only if there is a "reasonable causal connection" between the claim asserted and employer-employee relation. On the other hand, actions between employees and employer where the employer-employee

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relationship is merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular court.

4. Dynamic Signmaker Outdoor Advertising Services, Inc. vs. Potongan [June 27, 2005]

Clutching at straws, petitioners fault the appellate court for failure to recognize the final and executory nature of the June 24, 1996 NLRC Decision rendered in the consolidated cases and for affirming the nullification of said decision, with respect to respondent, which could be attacked only by direct action.

Contrary to petitioners' position, the validity of a judgment or order of a court or quasi-judicial tribunal which has become final and executory may be attacked when the records show that it lacked jurisdiction to render the judgment. For a judgment rendered against one in a case where jurisdiction over his person was not acquired is void, and a void judgment may be assailed or impugned at any time either directly or collaterally by means of a petition filed in the same or separate case, or by resisting such judgment in any action or proceeding wherein it is invoked.

Supplementary or applied by analogy to these provisions are the provisions and prevailing jurisprudence in Civil Procedure. Where there is then no service of summons on or a voluntary general appearance by the defendant, the court acquires no jurisdiction to pronounce a judgment in the cause.

At all events, even if administrative tribunals exercising quasi-judicial powers are not strictly bound by procedural requirements, they are still bound by law and equity to observe the fundamental requirements of due process.

Res inter alios acta nocere non debet. Things done between strangers ought not to injure those who are not parties to them.

5. Metromedia Times Corp. vs. Pastorin [July 29, 2005]

The jurisdiction of the Labor Arbiter was assailed in the cases of De Rossi v. NLRC and Union Motors Corporation v. NLRC during appeal to the NLRC. Since the same circumstance obtains in this case, the rulings therein, favorable as they are to the petitioner, are germane.

In De Rossi, this Court elucidated:

Petitioner maintains that MICC cannot question now the issue of jurisdiction of the NLRC, considering that MICC did not raise this matter until after the case had been brought on appeal to the NLRC. However, it has long been established as a rule, that jurisdiction of a tribunal, agency, or office, is conferred by law, and its lack of jurisdiction may be questioned at any time even on appeal . In La Naval Drug Corporation vs. Court of Appeals, 236 SCRA 78, 90, this Court said:

"Lack of jurisdiction over the subject matter of the suit is yet another matter. Whenever it appears that the court has no jurisdiction over the subject matter, the action shall be dismissed. This defense may be interposed at any time, during appeal or even after final judgment. Such is understandable, as this kind of jurisdiction is conferred by law and not within the courts, let alone the parties, to themselves determine or conveniently set aside."

We held in the Union Motors Case:

The long-established rule is that jurisdiction over a subject matter is conferred by law. [Ilaw at Buklod ng Manggagawa v. NLRC, 219 SCRA 536 (1993); Atlas Developer & Steel Industries, Inc. v. Sarmiento Enterprises, Inc., 184 SCRA 153 (1990); Tijam v. Sibonghanoy, 23 SCRA 29, 30 (1968)]. Estoppel does not apply to confer jurisdiction to a tribunal that has none over a cause of action. Where it appears that the court or tribunal has no jurisdiction, then the defense may be interposed at any time, even on appeal or even after final judgment. Moreover, the principle of estoppel cannot be invoked to prevent this court from taking up the question of jurisdiction.

"The operation of the principle of estoppel on the question of jurisdiction seemingly depends upon whether the lower court actually had jurisdiction or not. If it had no jurisdiction, but the case was tried and decided upon the theory that it had jurisdiction, the parties are not barred, on appeal, from assailing such jurisdiction, for the same 'must exist as a matter of law, and may not be conferred by consent of the parties or by estoppel' (5 C.J.S., 861-863). However, if the lower court had jurisdiction, and the case was heard and decided upon a given theory, such, for instance, as that the court had no jurisdiction, the party who induced it to adopt such theory will not be permitted, on

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appeal, to assume an inconsistent position — that the lower court had jurisdiction . Here, the principle of estoppel applies. The rule that jurisdiction is conferred by law, and does not depend upon the will of the parties, has no bearing thereon. (Emphasis supplied)

In line with the cases cited above and applying the general rule that estoppel does not confer jurisdiction, petitioner is not estopped from assailing the jurisdiction of the labor arbiter before the NLRC on appeal.

Respondent relied solely on estoppel to oppose petitioner's claim of lack of jurisdiction on the part of the labor arbiter. He adduced no other legal ground in support of his contention that the Labor Arbiter had jurisdiction over the case. Thus, his claim falls flat in light of our pronouncement, and more so considering the NLRC's correct observation that jurisdiction over grievance issues, such as the propriety of the reassignment of a union member falls under the jurisdiction of the voluntary arbitrator.

6. Yusen Air & Sea Service Phils vs. Villamor [August 16, 2005]

The petitioner’s cause of action does not arises from employer-employee relations, because, petitioner does not ask for any relief under the Labor Code of the Philippines. It seeks to recover damages agreed upon in the contract as redress for private respondent’s breach of his contractual obligation to its “damage and prejudice”. Such cause of action is within the realm of Civil Law, and jurisdiction over the controversy belongs to the regular courts. More so when we consider that the stipulation refers to the post-employment relations of the parties. While seemingly the cause of action arose from employer-employee relations, the employer’s claim for damages is grounded on wanton failure and refusal without just cause to report to duty coupled with the averment that the employee maliciously and with bad faith violated the terms and conditions of the contract to the damage of the employer. Such averments removed the controversy from the coverage of the Labor Code of the Philippines and brought it within the purview of Civil Law.

Indeed, jurisprudence has evolved the rule that claims for damages under paragraph 4 of Article 217, to be cognizable by the Labor Arbiter, must have a reasonable causal connection with any of the claims provided for in that article. Only if there is such a connection with the other claims can a claim for damages be considered as arising from employer-employee relations.

7. Duty Free Phils. vs. Mojica [September 30, 2005]

Mojica is a civil service employee; therefore, jurisdiction is lodged not with the NLRC, but with the Civil Service Commission.

Accordingly, since DFP is under the exclusive authority of the PTA, it follows that its officials and employees are likewise subject to the Civil Service rules and regulations. Clearly then, Mojica’s recourse to the Labor Arbiter was not proper. He should have followed the procedure laid down in DFP’s merit system and the Civil Service rules and regulations.

8. Easycall Communication Phils. vs. King [December 15, 2005]

While loss of confidence is a valid ground for dismissing an employee, it should not be simulated . It must not be indiscriminately used as a shield by the employer against a claim that the dismissal of an employee was arbitrary.

To be a valid ground for an employee’s dismissal, loss of trust and confidence must be based on a willful breach and founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Thus, a willful breach cannot be a breach resulting from mere carelessness.

In this case, the labor arbiter’s finding, affirmed by the NLRC, was that the sales record of respondent and the time he spent in the field were “clear indications of complainant’s inefficiency and/or negligence.” Inefficiency implies negligence, incompetence, ignorance and carelessness. Negligence is the want or lack of care required by the circumstances.

The grounds cited by petitioner, i.e., respondent’s alleged poor sales performance and the allegedly excessive time he spent in the field, were not sufficient to support a claim of loss of confidence as a ground for dismissal.

Moreover, the promotion of an employee negates the employer’s claim that it has lost its trust and confidence in the employee. Hence, petitioner’s claim of loss of confidence crumbles in the light of respondent’s promotion not only to assistant vice-president but to the even higher position of vice- president.

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The lack of just cause in respondent’s dismissal was aggravated by the absence of due process.

The twin requirements of notice and hearing constitute the essential elements of due process. The law requires the employer to furnish the employee sought to be dismissed with two written notices before termination of employment can be legally effected: (1) a written notice apprising the employee of the particular acts or omissions for which his dismissal is sought in order to afford him an opportunity to be heard and to defend himself with the assistance of counsel, if he desires, and (2) a subsequent notice informing the employee of the employer’s decision to dismiss him. This procedure is mandatory and its absence taints the dismissal with illegality.

In this case, respondent was served with one notice only ― the notice of his termination. The series of dialogues between petitioner’s management and respondent was not enough as it failed to show that the latter was apprised of the cause of his dismissal. These dialogues or consultations could not validly substitute for the actual observance of notice and hearing.

9. Kawachi vs. Delquoro [March 27, 2007]

The SC held that the Labor Code clearly bestows upon the Labor Arbiter original and exclusive jurisdiction over claims for damages arising from employer-employee relations. Not only to reliefs provided by labor laws, but also damages governed by the Civil Code . In the instant case, the allegations in the complaint for damages show that the injury was the offshoot of the immediate harsh reaction of the employers. For a single cause of action, the employee may not be allowed to sue in two forums. Thus, in this case, the NLRC has jurisdiction over the complaint for both the illegal dismissal and the damages arising therefrom. The action for damages filed before the MeTC must be dismissed. The Resolutions by the RTC are reversed and set aside.

10. San Miguel Foods Inc. vs. San Miguel Corp Employees Union – PTGWO [October 5, 2007

The jurisdiction of Labor Arbiters, enumerated in Article 217 of the Labor Code, includes complaints for Unfair Labor Practice.

x x x x x x x x x

As for the alleged ULP committed under Article 248(i), for violation of a CBA, this Article is qualified by Article 261 of the Labor Code, the pertinent portion of which latter Article reads:

x x x violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes of this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement. (Emphasis and underscoring supplied)

Silva v. NLRC instructs that for a

ULP case to be cognizable by the Labor Arbiter, and the NLRC to exercise its appellate jurisdiction, the allegations in the complaint should show prima facie the concurrence of two things, namely: (1) gross violation of the CBA; AND (2) the violation pertains to the economic provisions of the CBA. (Emphasis and underscoring supplied)

As reflected in the above-quoted allegations of the Union in its Position Paper, the Union charges SMFI to have violated the grievance machinery provision in the CBA. The grievance machinery provision in the CBA is not an economic provision, however, hence, the second requirement for a Labor Arbiter to exercise jurisdiction of a ULP is not present.

11. Leyte IV Electric Cooperative Inc. vs. LEYECO IV Employees Union-ALU [October. 19, 2007]

.It has long been settled in the landmark case Luzon Development Bank that a voluntary arbitrator, whether acting solely or in a panel, enjoys in law the status of a quasi-judicial agency; hence, his decisions and awards are appealable to the CA . This is so because the awards of voluntary arbitrators become final and executory upon the lapse of the period to appeal; and since their awards determine the rights of parties, their decisions have the same effect as judgments of a court. Therefore, the proper remedy from an award of a voluntary arbitrator is a petition for

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review to the CA, following Revised Administrative Circular No. 1-95, which provided for a uniform procedure for appellate review of all adjudications of quasi-judicial entities, which is now embodied in Section 1, Rule 43 of the 1997 Rules of Civil Procedure, which reads:

12. Raytheon International Inc. vs. Rouzie, Jr. [February 26, 2008]

Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions on its jurisdiction where it is not the most “convenient” or available forum and the parties are not precluded from seeking remedies elsewhere. Petitioner’s averments of the foreign elements in the instant case are not sufficient to oust the trial court of its jurisdiction over Civil Case No. No. 1192-BG and the parties involved.

Moreover, the propriety of dismissing a case based on the principle of forum non conveniens requires a factual determination ; hence, it is more properly considered as a matter of defense. While it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established, to determine whether special circumstances require the court’s desistance.

13. Deutsche Gesellschaft Fur Technische Zusammenarbeit (German Agency fir Technical Cooperation (GTZ) vs. Court of Appeals [April 16, 2009]

The Court of Appeals is correct in pronouncing the general rule that the proper recourse from the decision of the Labor Arbiter is to first appeal the same to the NLRC.

The Court therein noted that on account of the failure to correctly appeal the decision of the Labor Arbiter to the NLRC, such judgment consequently became final and executory.

As pointed out by the OSG, the direct recourse to the Court of Appeals while bypassing the NLRC could have been sanctioned had the Labor Arbiter’s decision been a “patent nullity.” Since the Labor Arbiter acted properly in deciding the complaint, notwithstanding GTZ’s claim of immunity, we cannot see how the decision could have translated into a “patent nullity.

14. Garcia vs. Eastern Telecommunications Phils. [April 16, 2009]

We have ruled that an intra-corporate controversy is one which pertains to any of the following relationships: (1) between the corporation, partnership or association and the public; (2) between the corporation, partnership or association and the State insofar as the formers franchise, permit or license to operate is concerned; (3) between the corporation, partnership or association and its stockholders, partners, members or officers; and (4) among the stockholders, partners or associates themselves.

We agree with both the NLRC and the Court of Appeals that Atty. Garcias ouster as Vice-President, who is a corporate officer of ETPI, partakes of the nature of an intra-corporate controversy, jurisdiction over which is vested in the SEC (now the RTC). The Labor Arbiter thus erred in assuming jurisdiction over the case filed by Atty. Garcia, because he had no jurisdiction over the subject matter of the controversy.

15. Halaguena vs. Philippine Airlines [October. 2, 2009]

The petition is meritorious. Jurisdiction of the court is determined on the basis of the material allegations of the complaint and the character of the relief prayed for irrespective of whether plaintiff is entitled to such relief.

From the petitioners' allegations and relief prayed for in its petition, it is clear that the issue raised is whether Section 144, Part A of the PAL-FASAP CBA is unlawful and unconstitutional. Here, the petitioners' primary relief in Civil Case No. 04-886 is the annulment of Section 144, Part A of the PAL-FASAP CBA, which allegedly discriminates against them for being female flight attendants. The subject of litigation is incapable of pecuniary estimation, exclusively cognizable by the RTC, pursuant to Section 19 (1) of Batas Pambansa Blg. 129, as amended. Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals.

The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires the application of the Constitution, labor statutes, law on contracts and the Convention on the Elimination of All Forms of Discrimination Against Women, and the power to apply and interpret the constitution and CEDAW is within the jurisdiction of trial courts, a court of general jurisdiction.

In Georg Grotjahn GMBH & Co. v. Isnani , this Court held that not every dispute between an employer and employee involves matters that only labor arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters and the

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NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the Labor Code, other labor statutes, or their collective bargaining agreement.

In Eviota v. Court of Appeals , Not every controversy or money claim by an employee against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter. Actions between employees and employer where the employer-employee relationship is merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular court. Here, the employer-employee relationship between the parties is merely incidental and the cause of action ultimately arose from different sources of obligation, i.e., the Constitution and CEDAW.

This Court holds that the grievance machinery and voluntary arbitrators do not have the power to determine and settle the issues at hand. They have no jurisdiction and competence to decide constitutional issues relative to the questioned compulsory retirement age. Their exercise of jurisdiction is futile, as it is like vesting power to someone who cannot wield it.

OTHER PRINCIPLES:

When can a voluntary arbitrator interpret or implement a CBA?

Although the CBA provides for a procedure for the adjustment of grievances, such referral to the grievance machinery and thereafter to voluntary arbitration would be inappropriate to the petitioners, because the union and the management have unanimously agreed to the terms of the CBA and their interest is unified.

In Pantranco North Express, Inc., v. NLRC, this Court held that:

x x x Hence, only disputes involving the union and the company shall be referred to the grievance machinery or voluntary arbitrators. In the instant case, both the union and the company are united or have come to an agreement regarding the dismissal of private respondents. No grievance between them exists which could be brought to a grievance machinery. The problem or dispute in the present case is between the union and the company on the one hand and some union and non-union members who were dismissed, on the other hand. The dispute has to be settled before an impartial body. The grievance machinery with members designated by the union and the company cannot be expected to be impartial against the dismissed employees. Due process demands that the dismissed workers’ grievances be ventilated before an impartial body. x x x

Applying the same rationale to the case at bar, it cannot be said that the "dispute" is between the union and petitioner company because both have previously agreed upon the provision on "compulsory retirement" as embodied in the CBA. Also, it was only private respondent on his own who questioned the compulsory retirement. x x x.

In the same vein, the dispute in the case at bar is not between FASAP and respondent PAL, who have both previously agreed upon the provision on the compulsory retirement of female flight attendants as embodied in the CBA. The dispute is between respondent PAL and several female flight attendants who questioned the provision on compulsory retirement of female flight attendants. Thus, applying the principle in the aforementioned case cited, referral to the grievance machinery and voluntary arbitration would not serve the interest of the petitioners. Besides, a referral of the case to the grievance machinery and to the voluntary arbitrator under the CBA would be futile because respondent already implemented Section 114, Part A of PAL-FASAP CBA when several of its female flight attendants reached the compulsory retirement age of 55.

What is the relation between Labor and Capital?

Although it is a rule that a contract freely entered between the parties should be respected, since a contract is the law between the parties, said rule is not absolute. Moreover, the relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good.x x x. The supremacy of the law over contracts is explained by the fact that labor contracts are not ordinary contracts; these are imbued with public interest and therefore are subject to the police power of the state. It should not be taken to mean that retirement provisions agreed upon in the CBA are absolutely beyond the ambit of judicial review and nullification. A CBA, as a labor contract, is not merely contractual in nature but impressed with public interest. If the retirement provisions in the CBA run contrary to law, public morals, or public policy, such provisions may very well be voided.

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16. Okol vs. Slimmer’s World International [December 11, 2009]

Petitioner was a director and officer of Slimmers World. The charges of illegal suspension, illegal dismissal, unpaid commissions, reinstatement and back wages imputed by petitioner against respondents fall squarely within the ambit of intra-corporate disputes . A corporate officer’s dismissal is always a corporate act, or an intra-corporate controversy which arises between a stockholder and a corporation. The question of remuneration involving a stockholder and officer, not a mere employee, is not a simple labor problem but a matter that comes within the area of corporate affairs and management and is a corporate controversy in contemplation of the Corporation Code.

17. Hugo vs. Light Rail Transit Authority [March 18, 2010]

The Labor Arbiter and the NLRC do not have jurisdiction over LRTA. Petitioners themselves admitted in their complaint that LRTA "is a government agency organized and existing pursuant to an original charter (Executive Order No. 603)," and that they are employees of METRO.

Light Rail Transit Authority v. Venus, Jr., which has a similar factual backdrop, holds that LRTA, being a government-owned or controlled corporation created by an original charter, is beyond the reach of the Department of Labor and Employment which has jurisdiction over workers in the private sector, viz:

NATIONAL LABOR RELATIONS COMMISSION [CULLED FROM THE BOOK OF AZUCENAS]

CFR. ART.213

A. CREATION AND COMPOSITION

NLRC is an office attached to DOLE Composed of 23 members and a Chairman = 24 ALL IN ALL Sit en banc – when? For purposes of promulgating rules and regulations governing the hearing and disposition of cases before any of its

divisions and regional branches AND formulating policies affecting its administration and operations Sit in 8 divisions [with 3 members per division] – when? When it exercises its adjudicatory and all other powers and functions and duties. Cases from NCR and other parts of Luzon- handled by 1st-6th divisions –office is at Metro Manila Cases from Visayas and Mindanao- handled by 7th and 8th divisions –office is at Cebu and Cagayan de Oro respectively NOTE: THE DIVISIONS OF THE COMMISSION SHALL HAVE EXCLUSIVE APPELATE JURISDICTION OVER CASES WITHIN THEIR RESPECTIVE

TERRITORIAL JURISDICTION.

APPOINTMENT AND QUALIFICATIONS

Chairman and Commissioners – members of the Philippine Bar- Engage in the practice of law in the Philippines for at least 15 years.- With at least 5 year experience or exposure in the field of labor mgt. relations- Preferably be resident of the region where they shall hold office- Hold office during good behavior until they reach the age of 65 unless sooner removed for

cause as provided by law or incapacitated to discharge the duties of their office.- Note: Pres. Of the Phils.may extend the services of the Commissioners and Labor Arbiters

up to maximum age of 70 upon the recommendation of the Commission en banc.- Chairman and members of Commission will have same rank, salary and entitled to same

allowances as Presiding Justice of CA and Associate Justice thereat.

Question : How judgment or resolution is arrived at? Concurrence of 2 Commissioners of a division.

Question: What if desired membership [3] in a division is not obtained hence concurrence of 2 members cannot be validly obtained to pass judgment/resolution? Chairman shall designate such number of additional Commissioners from the other divisions as may be necessary.

B. POWERS AND DUTIES

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APPEAL ONLY

Art. 223 [insert]

Labor Arbiter’s decision maybe appealed to NLRC by the losing party/adversely affected therefrom When: 10 CALENDAR days from receipt of decision [meaning Sat., Sun and Holidays are included in the counting] Prohibition: No motion for recon and relief from judgment is allowed. Effect if appeal not filed on time: DECISION OF LABOR ARBITER BECOMES FINAL No motion for extension of the period within which to perfect the appeal shall be allowed. Where to appeal? – Regional Arbitration Branch or Regional Office where the case was heard and decided

GROUNDS FOR APPEAL:

1) If there is primafacie evidence of abuse of discretion on the part of LA/ RD2) If the decision, resolution or order was secured through fraud or coercion, including graft and corruption3) If made purely on questions of law4) If serious errors in the finding of facts are raised which if not corrected would cause grave or irreparable damage or injury to

the appellant.

REQUISITES FOR PERFECTION OF APPEAL

1. Filed within the reglementary period2. Verified by appellant himself3. Made in a form of a “Memorandum of Appeal” – state the grounds relied upon, supporting arguments, relief prayed for with a

statement of the date the appellant received the appealed decision, resolution or order.4. 3 legibly typewritten or printed copies5. Accompanied by

a. Proof of payment of the required appeal feeb. Posting of cash or surety bondc. Certificate of non-forum shoppingd. Proof of service upon the parties

ON FRIVOLOUS APPEALS- Labor arbiters as well as the Commission may impose reasonable penalties including fines and censures upon a party for filing a frivolous appeal.

Note : A letter expressing dismay in the judgment or order is not an appeal. Perfection of an appeal in the manner and within the period prescribed by law is not only mandatory but also jurisdictional. Failure to conform with the rules regarding appeal will certainly render the judgment final, executor hence unappealable.

APPEAL BOND shall be in the form of:

1. Cash deposit2. Surety Bond Equivalent in amount to the monetary award , exclusive of damages and attorneys fees [ a cash or surety bond shall be valid and effective

from the date of deposit or posting until the case is finally decided, resolved or terminated or award satisfied] No motion to reduce bond shall be entertained except on meritorious ground No bond, no appeal perfected EXCEPTION: PRO HAC VICE IN THE CASE OF UERM MEMORIAL MEDICAL CENTER VS.NLRC: REAL PROPERTY BOND: The requirement

should be given liberal interpretation; hence the importance of deciding cases on their substantive merit and not on strict technical rules.

EFFECT OF APPEAL OF LABOR ARBITER’S DECISION

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LA loses jurisdiction over the case. All pleadings and motions pertaining to the appealed case shall be addressed to and filed with the Commission. Files shall be transmitted within 48 hrs by the Regional Arbitration Branch.

EVIDENCE SUBMITTED ON APPEAL BY NLRC

NLRC is not precluded from receiving evidence on appeal as technical rules of evidence are not binding in labor cases. Labor Code mandated to use every and all reasonable means to ascertain the facts in each case speedily and objectively w/out regard to

technicalities of law or procedure, all in the interest of due process.

CONCILIATION AND MEDIATION

Even when the case is already elevated on appeal to NLRC, the Commission shall exert all effort towards the amicable settlement of a labor dispute.

DECISION, RESOLUTION AND ORDER

The Commission shall decide all cases within 20 calendar days from receipt of the answer of the appellee. [art 223 lc] Decision shall become final and executor after 10 calendar days from receipt of the decision by the parties. Motion for Reconsideration of the decision/resolution/order of the Commission shall not be entertained except when based on

“PALPABLE OR PATENT ERRORS” provided that: it is under oath and filed within 10 calendar days from receipt of the decision. No SECOND motion for reconsideration is allowed.

MODE OF EXECUTION:

Any enforcement agency maybe deputized by SOL or the Commission in the enforcement of its decision, awards or orders.

AFTER NLRC MAY THE DECISION OF IT BE APPEALED? – The Court noted that the present laws provide no appeals from NLRC decision.

BUT: [ST. MARTIN CASE] Rule 65: When there is no appeal, nor plain, speedy and adequate remedy in the ordinary course of law.

1. The way to review NLRC decision is through the special civil action of certiorari under Rule 652. The jurisdiction belongs to both SC and CA3. Hierarchy of courts says CA first, then SC

WHEN AND WHERE PETITION IS FILED? WHAT IS REQUIRED

Filed not later than 60 days from notice of judgment, order or resolution Filed and cognizable by CA Required to be certified is the copy of the questioned judgment, final order or resolution of the NLRC.

EFFECT OF APPEAL TO JUDGMENT

Petition for certiorari shall not stay the execution of the assailed decision of the NLRC unless TRO is issued by CA or SC.

GROUNDS FOR SPECIAL CIVIL ACTION FOR CERTIORARI AS REMEDY

1. Issues of jurisdiction2. Grave abuse of discretion

POSSIBLE DISPOSITIONS OF CA

1. Remand2. Dismissal of Appeal

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AFTER CA THEN SC VIA RULE 45 [APPEAL BY CERTIORARI]

Ground: ONLY QUESTION OF LAW

When: Filed within 15 days from notice of judgment or final order or resolution appealed from or the denial of the petitioner’s motion for new trial or reconsideration.

Important notes Does the NLRC have the power to issue an injunction? – yes under article 218 labor code, in its original jurisdiction.

NLRC – no appeal allowed , your remedy is MR filed within 10 days after decision- Decision becomes final and executor after 10 days from receipt of denial of the MR.- Remedy is now certiorari under rule 65 to CA

TRO- is good for 20days not extendable, and requires cash bond of 50k

Requisites to perfect an appeal:-abuse of discretion , decision was secured though fraud, pure question of law, serious error in finding of facts.

Motion for recon – requisite is palpable patent of error.

LA – finding illegality in dismissal, order of reinstatement is immediately executor, but not final, The employer is obliged to reinstate the employee despite pending appeal, the ER is required to give a compliance report within 10days from LA’s order.GR – Physical reinstatement, unless the position is no longer available then its an option to reinstate in the payroll.The ER must give the EE sufficient and reasonable time to report back to work.

Award of reinstatement – restore to former position or if no longer available to a substantially equivalent position.

Doctrine of Refund is abandoned, by applying the rule in Garcia vs. PAL , wherein the employee is not required to give back all the earnings he had received when on appeal the order of reinstatement has been reversed, there is no unjust enrichment as social justice doctrine is higher than the civil code’s prohibition on unjust enrichment.

Execution by the LA – you file motion for execution,- Under NLRC rules requires “pre- execution conference”

Failure of ER to comply with the order of reinstatement –pays separation pay computed from date of employment, non payment of which subject to 12% legal interest, and ER can be held in contempt.

Documents

Reviewer Midterms Labor Relations