AQUILA LEGIS FRATERNITY

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Fidelitas ex lege

Labor Law
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1st Januario Soller, Jr. 1972
1st Vicente Solis 1973
1st Virgilio Gesmundo 1977
1st Gregorio Batiller, Jr. 1979
1st Cesareo Antonio S. Singzon, Jr. 2010
2nd Gabriel Singson 1952
2nd Antonio Navarette 1957
2nd Prospero Nograles 1971
3rd Teodoro Villarmia, Jr. 1966
3rd Basilio Alo 1967
3rd Liberador Villegas 1971
3rd Francis Ampil 1999
4th William Veto 1951
4th Jose Reyes 1953
4th Redentor Salonga 1960
4th Arthur Soler 1969
4th Solon Garcia 1972
4th Vicente Ruaro 1974
4th Augusto Panlilio 1975
4th Marius Corpuz 1979
4th Nelson Victorino 1992
5th Luisito Baluyot 1967
5th Reynaldo Salutan 1980
5th Thaddeus Venturanza 1989
5th Eric David Tan 2009
6th Jose Brillantes 1960
6th Roldan Dalman 1975
6th Jose Jesus Laurel 1981
6th Yves-Randolph Gonzalez 2009
7th Antonio Quintos 1954
7th Rufino Luna 1955
7th Sergio Apostol 1958
7th Adolfo Angala 1964
7th Arthur Cabilete 1966
7th Raul Cabrera 1968
7th Noel Sanchez 1980
7th Efren de Leon 1982
8th Ruben Cleofe 1977
9th Meynardo Tiro 1952
9th Amado Santiago 1958
9th Ramon Aviado, Jr. 1966
9th Ding Concepcion 1990
10th Ernesto Maceda, Jr. 1956
10th Franklin Ebdalin 1967
10th Nicolas Gomez, Jr. 1977
10th Giorgidi Aggabao 1980
10th Grain Baysa-Pee 1999
10th Darren L. Salipsip 2010
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Labor I

Q1: Under the amended definition of illegal recruitment, what are the two kinds of illegal recruiters?
A: Under the amended definition in the Migrant Workers Act, illegal recruitment may be committed by
either (1) a non-licensee or nonholder of authority, or by (2) a licensed recruiter.

The first kind of illegal recruiter, not having been issued a license or authority to recruit, commits illegal
recruitment when he performs any of the acts defined in the law as recruitment and placement such as
canvassing, enlisting, contracting workers, or any of the fourteen (14) acts enumerated in Section 6 of R.A.
No. 8042.

The second kind of illegal recruiter possesses a license or authority to recruit. It may only be charged with
illegal recruitment when it commits any of the fourteen (14) wrongful acts enumerate in Sec. 6 of R.A. No.
8042. [CESARIO AZUCENA, THE LABOR CODE WITH COMMENTS AND CASES VOLUME I, 97
(2013) (hereinafter AZUCENA, VOLUME I)]

Q2: When is illegal recruitment considered to be a crime of economic sabotage?

A: Illegal recruitment is considered a crime involving economic sabotage when the commission thereof is
attended by the following qualifying circumstances:
1. When committed by a syndicate; or
2. When committed in large scale. [People v. Gallo, G.R. No. 187730, (2010)]

Q3: What are the elements of syndicated illegal recruitment?

A:
1. The offender undertakes either any activity within the meaning of recruitment and placement
defined under Article 13(b), or any of the prohibited practices enumerated under Article 34 of the
Labor Code;
2. He has no valid license or authority required by law to enable one to lawfully engage in recruitment
and placement of workers; and
3. The illegal recruitment is committed by a group of three (3) or more persons conspiring or
confederating with one another. [People v. Gallo, G.R. No. 187730, (2010)]

It must be noted that the law does not require that the syndicate should recruit more than one (1) person in
order to constitute the crime of illegal recruitment by a syndicate. Recruitment of one (1) person would
suffice.

Q4: What are the elements of illegal recruitment in large scale?

A:
1. The offender has no valid license or authority required by law to enable him to lawfully engage in
recruitment and placement of workers;
2. The offender undertakes any of the activities within the meaning of "recruitment and placement"
under Article 13(b), of the Labor Code, or any of the prohibited practices enumerated under Article
34 of the same Code (now Sec. 6, RA 8042); and,
3. The offender committed the same against three (3) or more persons, individually or as a group.
[People v. Calimon G.R. No. 175229, (2009)]

As distinguished from illegal recruitment committed by a syndicate, illegal recruitment in large scale may
be committed by only one (1) person or entity. What is important is the qualifying element that there should
be at least three (3) victims of such illegal recruitment, individually or as a group.

Q5: What are the penalties related to illegal recruitment?

A: Section 6 of RA 10022 enumerates the penalties related to illegal recruitment, to wit:
1. Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less
than twelve (12) years and one (1) day but not more than twenty (20) years and a fine of not less
than One million pesos (P1,000,000.00) nor more than Two million pesos (P2,000,000.00).
2. The penalty of life imprisonment and a fine of not less than Two million pesos (P2,000,000.00) nor
more than Five million pesos (P5,000,000.00) shall be imposed if illegal recruitment constitutes
economic sabotage as defined

NOTES:

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 Illegal recruitment is malum prohibitum, not malum in se, and the fact alone that a person
violated the law warrants conviction. [People v. Domingo, G.R. 181475, (2009)]
 Illegal recruitment committed in large scale establishes a conspiracy and each of the illegal
recruiters are equally criminally and civilly liable. It follows, therefore, that as far as civil
liability is concerned each is solidarily liable to the victims of the illegal recruitment for the
reimbursement of the sums collected from them, regardless of the extent of the participation of
the accused in the illegal recruitment. [People v. Velasco G.R. No. 195668, (2014)]
 Money is not material to a prosecution for illegal recruitment considering that the definition of
"illegal recruitment" under the law includes the phrase "whether for profit or not." Further, a
person convicted for illegal recruitment under the [law] may, for the same acts, be separately
convicted for estafa under Article 315, par. 2(a) of the [Revised Penal Code]. The elements of
estafa are: (1) the accused defrauded another by abuse of confidence or by means of deceit; and
(2) the offended party or a third party suffered damage or prejudice capable of pecuniary
estimation." [People v. Matero, G.R. No. 198012, (2015)]

Q6: What are the requirements for a facility to be deducted from an employee’s wage?
A:
1. Proof must be shown that such facilities are customarily furnished by the trade;
2. The provision of deductible facilities must be voluntarily accepted in writing by the employee; and
3. Facilities must be charged at fair and reasonable value. [Mabeza v. NLRC, G.R. No. 118506,
(1997)]

Q7: Does sales commission received by an agent for sales made by sub-agents in his or her territory
(override commission) fall within the scope of Article 97 (f) of the Labor Code defining wages?
A: No. While sales commissions earned by actual transactions attributable to an employee is includible as
wages, override commission, are not properly includible in such base figure since such override
commissions are not earned by actual market transactions attributable to the employee. Thus, such does not
form part of the wage. [Songco v. NLRC, G.R. Nos. 50999-51000, (1990)]

Q8: What is the "purpose test" in relation to the determination facilities and supplements?
A: Facilities include articles or services for the benefit of the employee or his family but exclude tools of
the trade or articles or services primarily for the benefit of the employer or necessary to the conduct of the
employer’s business. The law also prescribes that the computation of wages shall exclude whatever
benefits, supplements or allowances given to employees. Supplements are paid to employees on top of their
basic pay and are free of charge. Since it does not form part of the wage, a supplement’s value may not be
included in the determination of whether an employer complied with the prescribed minimum wage rates.

Ultimately, the real difference lies not on the kind of the benefit but on the purpose why it was given by the
employer. If it is primarily for the employee’s gain, then the benefit is a facility; if its provision is mainly
for the employer’s advantage, then it is a supplement. Under the purpose test, substantial consideration
must be given to the nature of the employer’s business in relation to the character or type of work performed
by the employees involved. [Our Haus Realty Development v. Parian, G.R. No. 204651, (2014)]

Q9: When is diminution of supplements or benefits prohibited?

A: The rule against diminution of supplements or benefits may apply when it is shown that:
(a) The grant of the benefit is founded on a policy or has ripened into a practice over a long period;
(b) The practice is consistent and deliberate;
(c) The practice is not due to error in the construction or application of a doubtful or difficult question
of law; and
(d) The diminution or discontinuance is done unilaterally by the employer.

Q10: What are the exceptions against the non-diminution rule?

A: Jurisprudence provides that the following cases are exceptions to the application of Article 100:
1. Correction of error
2. Negotiated benefits
3. Wage order compliance
4. Benefits on reimbursement basis
5. Reclassification of position
6. Contingent benefits or conditional bonus
7. Productivity incentives

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Q11: Who are considered as handicapped workers under the law?
A: Handicapped workers are those whose earning capacity is impaired by age or physical or mental
deficiency or incapacity. [A Decree Instituting a Labor Code Thereby Revising and Consolidating Labor
and Social Laws to Afford Protection to Labor, Promote Employment and Human Resources Development
and Insure Industrial Peace Based on Social Justice (Labor Code), P.D. No. 442, art.78 (1974)]

Q12: Can a qualified disabled person become a regular employee?

A: Yes. After showing their fitness for the work assigned to them, they should be treated and granted the
same rights like any other regular employees. [Bernardo v. NLRC, G.R. No. 122917, (1999)]

Q13: What is Labor-only Contracting?

A: Labor-only contracting refers to an arrangement where:
a) i. The contractor or subcontractor does not have substantial capital, or
ii. The contractor or subcontractor does not have investments in the form of tools, equipment,
machineries, supervision, work premises, among others, and
iii. The contractor’s or subcontractor’s employees recruited and placed are performing activities
which are directly related to the main business operation of the principal; or

b) The contractor or subcontractor does not exercise the right to control over the performance of the
work of the employee. [Department of Labor and Employment, Department Order No. 174-17
(D.O. No. 174-14)]

NOTE: “Substantial capital” refers to paid-up capital stock/shares at least Five Million Pesos
(P5,000,000.00) in case of corporations, partnerships and cooperatives; in the case of a single
proprietorship, a net worth of at least Five Million Pesos (P5,000,000.00). [D.O. No. 174-14]

Q14: Is the principal in a labor-only contracting also liable for back wages and separation pay which the
contractor did not pay?
A: No. The principal in a labor-only contracting is solidarily liable with the contractor in the event of any
violation of any provisions of the Labor Code including the failure to pay wages. However, if the liability
is punitive in nature, like back wages and separation pay, and there was no conspiracy for the violation of
the Labor Code between the principal and the contractor, then the principal is not solidary liable with the
contractor. Only the contractor is liable in such case.

Solidary liability is LIMITED to:

Article 106: Extent of work performed under the contract
Article 107: Performance of any work, task job or project
Article 109: To the extent of civil liabilities under this Chapter (which is payment of wages)
As an indirect employer, although the effect of labor-only contracting is to make the agency-employed
employees as an employee of the Principal employer, Article 109 “solidary liability” cannot be interpreted
as an all-encompassing blanket clause. [Rosewood Processing v. NLRC G.R. Nos. 116476-84, (1998)]

NOTES:
• Generally, a contractor is presumed to be a labor-only contractor, unless it proves that it has
the substantial capital, investment, tools and the like. However, where the principal is the one
claiming that the contractor is a legitimate contractor, the burden of proving the supposed status
of the contractor rests on the principal. [Alilin v. Petron Corporation, G.R. No. 177592, (2014)]
 The law creates an employer-employee relationship between the principal and the labor-only
contractor’s employee as if such employees are directly employed by the principal employer,
and considers the contractor as merely the agent of the principal. [Fonterra Brands Phils., Inc.
v. Leonardo Largado and Teotimo Estrellano, G.R. No. 205300, (2015)]

Q15: May the preference of credit in favor of employees be enforced without declaration of bankruptcy or
judicial liquidation of the employer?
A: No. The preference of credit in favor of employees cannot be invoked without a formal declaration of
bankruptcy or a liquidation order. What Article 110 of the Labor Code establishes is not a lien, but a
preference of credit in favor of employees. This simply means that during bankruptcy, insolvency or
liquidation proceedings involving the existing properties of the employer, the employees have the
advantage of having their unpaid wages satisfied ahead of certain claims which may be proved therein.
[Development Bank of the Philippines v. Secretary of Labor, G.R. No. 79351, (1989)]

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Q16: Other than unpaid wages, are there other money claims under the preference of credits in Article
110?
A: Yes. Termination pay is reasonable regarded as forming part of the remuneration or other money benefits
accruing to the employees or workers by reason of their having previously rendered services. The preference
under Article 110 covers not only unpaid wages by also all other monetary claims. [Philippine National
Bank v. Cruz, G.R. No. 80593, (1989)]

Q17: What is “wage distortion”?

A: A wage distortion shall mean a situation where an increase in prescribed wage rates results in the
elimination or severe contraction of intentional quantitative differences in wage or salary rates between and
among employee groups in an establishment as to effectively obliterate the distinctions embodied in such
wage structure based on skills, length of service, or other logical bases of differentiation. [An Act to
Rationalize Wage Policy Determination by Establishing the Mechanism and Proper Standards Therefor,
amending for the Purpose Article 99 of, and Incorporating Articles 120, 121, 122, 123, 124, 126 and 127
into, Presidential Decree No. 442, as Amended, Otherwise Known as The Labor Code of The Philippines,
Fixing New Wage Rates, Providing Wage Incentives for Industrial Dispersal to the Countryside, and for
Other Purposes (Wage Rationalization Act), R.A. No. 6727, §3 (1989)]

Q18: Cite general principles regarding wage distortion.

A:
1. The concept of wage distortion assumes an existing grouping or classification of employees which
establishes distinctions among such employees on some relevant or legitimate basis. This
classification is reflected in a differing wage rate for each of the existing classes of employees.
2. Wage distortions have often been the result of government- decreed increases in minimum wages.
There are, however, other causes of wage distortions, like the merger of two (2) companies (with
differing classification of employees and different wage rates) where the surviving company
absorbs all the employees of the dissolved corporation.
3. Should a wage distortion exist, there is no legal requirement that, in the rectification of that
distortion by re-adjustment of the wage rates of the differing classes of employees, the gap which
had previously or historically existed be restored in precisely the same amount. In other words,
correction of a wage distortion may be done by re-establishing a substantial or significant gap (as
distinguished from the historical gap) between the wage rates of the differing classes of employees.
4. The re-establishment of a significant difference in wage rates may be the result of resort to
grievance procedures or collective bargaining negotiations.

Q19: What are the instances when differences in salaries do not result to wage distortion under Article
124?
A:
1. Salary restructuring or revision of salary scale initiated by the employer;
2. Even if employed in the same company but in different regions. The wage-fixing has been
regionalized by R.A. No. 6727;
3. Employees had been hired on different dates and receiving different salaries;
4. Employee was hired initially at a position level carrying a hiring rate higher than the rates of the
others;
5. Employee failed to meet the cut-off date in the grant of yearly CBA increase; or
6. Employee has been promoted. [AZUCENA, VOLUME I, at 367]

Q20: Can claims of independent contractors to adjust the contractual fee be enforced under Article 129?
A: No. A regular court has jurisdiction of a claim of any independent contractor. Article 129 of the Labor
Code is operative only in the context of an employment relationship.

Q21: Can employees over sixty (60) years of age be compulsorily covered under State Insurance Fund?
A: Yes. General rule is that the State Insurance Fund is compulsory to employees aged 60 and below.
However, an employee who is over sixty (60) years of age and paying contributions to qualify for the
retirement or life insurance benefit administered by the System shall be subject to compulsory coverage.
[Labor Code, art.174]

Q22: Are managerial employees entitled to security of tenure?

A: Yes. The fact that one is a managerial employee does not by itself exclude him from the protection of
the constitutional guarantee of security of tenure. [Maglutac v. NLRC, G.R. No. 78345, (1990)]

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Q23: Are non-regular employees entitled to security of tenure?
A: Yes. Security of tenure is so fundamental it extends to regular as well as non-regular employment.
[Kiamco v. NLRC, G.R. No. 129449, (1999)]

Q24: In general, what is the primary standard to determine regular employment?

A: The primary standard is the reasonable connection between the particular activity performed by the
employee in relation to the usual business or trade of the employer. The test is whether the employee is
usually necessary or desirable in the usual business or trade of the employer. Thus, when the employee
performs activities considered necessary and desirable to the overall business scheme of the employer, the
law regards the employee as regular. [De Leon v. NLRC, G.R. 70705, (1989)]

Q25: What is the principal test to determine whether a particular employee is a project employee?
A: The principal test is whether or not the project employees were: (1) assigned to carry out a specific
project or undertaking, and (2) the duration and scope of which were specified at the time the employees
were engaged for that project. [ALU-TUCP v. NLRC, G.R. No. 109902, (1994)]

Q26: What are the criteria in determining a valid fixed-term employment?

A:
1. The fixed period of employment was knowingly and voluntarily agreed upon by the parties without
any force, duress, or improper pressure being brought to be upon the employee and absent any other
circumstances vitiating his consent; or
2. 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 to the latter. [Brent School, Inc. v.
Zamora, G.R. No. 48494, (1990)]

Q27: What is the additional ground to terminate a probationary employment aside from just and authorized
causes?
A: The probationary employment may also be terminated for failure to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the employee at the time of the
engagement. [Robinsons Galleria v. I.R. Ranchez, G.R. No. 177937, (2011)]

Q28: What are the limitations to the employer’s power to terminate a probationary employment?
A:
1. It must be exercised in accordance with the specific requirements of the contract;
2. If a particular time is prescribed, the termination must be within such time and if a formal notice is
required, then that form must be used; and
3. The employer’s dissatisfaction must be real and in good faith, not feigned so as to circumvent the
contract or the law. [Manila Hotel Corp. v. NLRC, G.R. No. 53453, (1986)]

Q29: What is the basis for computation of retirement pay of workers paid by results without a fixed monthly
salary rate?
A: The basis for the determination of the salary for fifteen days shall be their average daily salary. (Total
salary for the last 12 months divided by the number of actual working days in the particular period) [Rules
Implementing the New Retirement Law, R.A. No. 7641, §5.3 (1993)]

Q30: What are the just causes for terminating an employment?

A:
1. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer
or representative in connection with his work;
2. Gross and habitual neglect by the employee of his duties;
3. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
4. 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 representative; and
5. Other causes analogous to the foregoing. [Labor Code, art. 296(282)]

Q31: What are the authorized causes to terminate employment?

A:
1. Installation of labor saving devices;
2. Redundancy;
3. Retrenchment to prevent losses;

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4. The closing or cessation of operation of the establishment or undertaking, unless the closing is for
the purpose of circumventing the provisions of law; and
5. Ailment or disease. [Labor Code, arts. 297-298(283-284)]

Q32: What is the test to consider that a transfer by an employer of the employee is valid, and disobedience
thereof can be considered as willful disobedience?
A: The employer must be able to show that the (1) transfer is not unreasonable, inconvenient or prejudicial
to the employee, (2) nor does it involve a demotion in rank or diminution of his salaries, privileges and
other benefits. [Blue Dairy Corp. v. NLRC, G.R. No. 129843, (1999)]

Q33: What are the elements to constitute abandonment as neglect of duty and thus a just cause for
termination?
A:
1. Failure to report for work or absence without valid or justifiable reason; and
2. A clear intention to sever the employer-employee relationship (more determinative factor;
manifested by some overt act). [Labor v. NLRC, G.R. No. 110388, (1995)]

Q34: What are the four standards of retrenchment?

A:
1. The losses expected should be substantial and not merely de minimis in extent;
2. The substantial loss apprehended must be reasonably imminent;
3. It must be reasonably necessary and likely to prevent the expected losses; and
4. Alleged losses if already realized, and the expected imminent losses sought to be forestalled must
be proven by sufficient and convincing evidence. [Lopez Sugar Corp. v. Federation of Free
Workers. G.R. No. 75700-01, (1990)]

Q35: Is the employer required to give separation pay to terminated employees in case of closure or
cessation of operation due to serious business losses or financial reverses?
A: No. Where the closure was due to serious business loses, the Labor Code does not impose any obligation
upon the employer to pay separation benefits. [North Davao Mining Corp. v. NLRC, G.R. No. 112546,
(1996)]

Q36: Is an employee who resigns from his position because he was suffering from a disease entitled to
separation pay?
A: No. The termination of employment must be initiated by the employer and not from the voluntary act of
the employee. [Padillo v. Rural Bank of Nabunturan, G.R. No. 199338, (2013)]

Q37: When is sexual harassment committed? Is it necessary that it be committed by a person of “higher-
rank”?
A:
1. In a work-related or employment environment, sexual harassment is committed when:
a. The sexual favor is made as a condition in the hiring or in the employment, reemployment or
continued employment of said individual, or in granting said individual favorable
compensation, terms, conditions, promotions, or privileges; or
b. The refusal to grant the sexual favor results in limiting, segregating or classifying the employee
which in any way would discriminate, deprive or diminish employment opportunities or
otherwise adversely affect said employee;
c. The above acts would impair the employee’s rights or privileges under existing labor laws; or
d. The above acts would result in an intimidating, hostile, or offensive environment for the
employee.

2. In an education or training environment, sexual harassment is committed:

a. Against one who is under the care, custody or supervision of the offender;
b. Against one whose education, training, apprenticeship or tutorship is entrusted to the offender;
c. When the sexual favor is made a condition to the giving of a passing grade, or the granting of
honors and scholarships, or the payment of a stipend, allowance or other benefits, privileges,
or considerations; or
d. When the sexual advances result in an intimidating, hostile or offensive environment for the
student, trainee or apprentice. [An Act Declaring Sexual Harassment Unlawful in the
Employment, Education or Training Environment, and for Other Purposes (Anti-Sexual
Harassment Act of 1995), R.A. No. 7877, §3 (1995)]

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3. No, it is not necessary that it be committed by a person of higher rank. According to Azucena, the
deliberations of the framers of the law suggested that such law should apply squarely to every
employee, regardless of rank, age or sex. Thus, even a co-equal ranked employee can commit
sexual harassment against another co-equal employee.

Q38: What are the duties imposed by the Anti-Sexual Harassment Law on the employer or head of office in
a work-related, education or training environment?
A:
1. Prevent or deter the commission of acts of sexual harassment and provide the procedures for the
resolution, settlement or prosecution of acts of sexual harassment;
2. Promulgate appropriate rules and regulations prescribing the procedure for the investigation of
sexual harassment cases and the administrative sanctions therefore; and
3. Create a committee on decorum and investigation of cases on sexual harassment. [Anti-Sexual
Harassment Act of 1995, §4]

Q39: What are the complainant’s options in pursuing a case against the harasser in a sexual harassment
suit?
A: The complainant in a sexual harassment case can:
1. File a complaint or administrative charge under the company’s policy on Sexual harassment [Anti-
Sexual Harassment Act of 1995, §4]
2. File a Complaint against discrimination of women solely on account of sex. [Article 135
(Renumbered as 133) of the Labor Code]
3. If the person is a government employee, she can file a complaint based on the Civil Service Law
and Memorandum Circular 19, Series of 1994.
4. File a complaint against the employer or head of office, educational or training institution who shall
be solidarily liable for damages arising from the acts of sexual harassment committed in the
employment, education or training environment if the employer or head of office, educational or
training institution is informed of such acts by the offended party and no immediate action is taken.
[Anti-Sexual Harassment Act of 1995, §5]
5. Under Criminal Law, to file a case for: Article 287: Unjust vexation: Article 336: Acts of
Lasciviousness Article 359: Slander by Deed
6. File a complaint of quasi-delict by Article 2176 of the NCC and liability of the employer under
Article 2180 of the NCC.

Q40: Is membership to SSS Mandatory? What are the consequences, if any, should the Employee himself
ask his employer NOT to report to the SSS his contributions? (So that the employee will have a bigger take
home pay)
A: SSS membership is mandatory. The law requires compulsory coverage of the employees and the
employers. Compliance with this duty does not depend upon the employee's willingness to give his share
of the contribution. Section 24 is mandatory, to such an extent that if the employee should die or become
sick or disabled without the report having been made by the employer, the latter is liable for an amount
equivalent to the benefits to which the employee would have been entitled had such report been made. The
collection of the employee's share is a duty imposed by law, and his unwillingness to have it deducted from
his salary does not excuse the employer's failure to make the report aforesaid.

Q41: Who are the beneficiaries of the SSS Member? To whom should the proceeds be given?
A: The PRIMARY legal beneficiaries of a member are:
1. The legally married dependent spouse until he/she remarries.
2. The dependent legitimate, legitimated, legally adopted and illegitimate children
If the member is single, the SECONDARY legal beneficiaries will be his parents If in the absence of either,
any other person designated by the member.

The benefits must be give in such order and such will be non-transferable and no power of attorney or other
document executed by those entitled thereto in favor of any individual for the collection thereof in their
behalf shall be recognized except when they are physically and legally unable to collect personally such
benefits: Provided, however, That in the case of death benefits, if no beneficiary has been designated or the
designation thereof is void, said benefits shall be paid to the legal heirs in accordance with the laws of
succession. [An Act To Amend Certain Sections Of Republic Act Numbered Eleven Hundred And Sixty-
One As Amended By Republic Act Numbered Seventeen Hundred And Ninety-Two, Otherwise Known As
"The Social Security Act Of 1954", R.A. No. 2658, §15 (1960)]

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Labor II

Q1: Distinguish labor standards from labor relations.

A: Labor standards are the minimum requirements prescribed by 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. On the other hand, labor relations defines the status,
rights and duties, and the institutional mechanisms that govern the individual and collective interactions, of
employers, employees or their representatives. [AZUCENA, VOLUME I, at 8]

Q2: What is a strike?

A: A strike has been defined as a cessation of work by employees in an effort to get more favorable terms
for themselves, or as a concerted refusal by employees to do any work for their employer, or to work at
their customary rate of speed, until the object of the strike is attained by the employer’s granting the
demanded concession. [CESARIO AZUCENA, THE LABOR CODE WITH COMMENTS AND CASES
VOLUME II, 551 (2013) (hereinafter AZUCENA, VOLUME II)]

A strike has the following characteristics:

1. There must be an established relationship between the strikers and the person or persons against
whom the strike is called;
2. The relationship must be one of employer and employee;
3. The existence of a dispute between the parties and the utilization by labor of the weapon of
concerted refusal to work as a means of persuading, or coercing compliance with the working men’s
demands;
4. The contention advanced by the workers that although work ceases, the employment relation is
deemed to continue albeit in a state of belligerent suspension;
5. There is work stoppage, which stoppage is temporary;
6. The work stoppage is done through concerted action of the employees; and
7. The striking group is a legitimate labor organization and, in case of bargaining deadlock, is the
employees’ sole bargaining representative. [AZUCENA, VOLUME II, at 552]

Q3: Can a law be passed to prohibit a strike?

A: Yes. Law may prohibit a strike but not the right to self-organization. [JOSELITO CHAN, BAR
REVIEWER ON LABOR LAW, 563 (2014)]

Q4: What is a “lockout”?

A: Lockout means the temporary refusal of any employer to furnish work as a result of a labor dispute. It
is an employer’s act of excluding employees who are union members from the plant. [Azucena, Volume 2,
2013 at p.554] A lockout is valid where, in the course of a labor dispute, it is undertaken as a defensive
weapon, or in pursuance of the employer’s interest. A lockout has been held valid in the following
situations:
1. In anticipation of a threatened strike, where motivated by economic considerations;
2. In response to unprotected strike or walkout; or
3. In response to a whipsaw strike.

A lockout has been held unlawful where undertaken for the following purposes:
1. To discourage and dissipate membership in a labor organization, or otherwise kill the union;
2. To aid a particular union by preventing further organizational work of its rival, or to coerce the
employees to join the favored union; or 3. To avoid bargaining. [AZUCENA, VOLUME II, at 556]

Q5: Discuss the jurisdiction of the labor arbiter with regard to strikes and lockouts.
A: Questions relating to strikes or lockouts or any form of work stoppage including incidents thereof under
Article 278 fall within the labor arbiter’s jurisdiction. Whether the alleged reason for the strike is
“strikeable,” whether the required strike procedure is followed, or whether the strikers committed prohibited
acts during a strike, are some of the issues a labor arbiter may be called upon to decide. [AZUCENA,
VOLUME II, at 57]

Q6: When is a strike illegal?

A: There are six (6) categories of an illegal strike, to wit:
1. When it is contrary to a specific prohibition of law, such as strike by employees performing
governmental functions; or

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2. When it violates a specific requirement of law, such as Article 263 of the Labor Code on the
requisites of a valid strike; or
3. When it is declared for an unlawful purpose, such as inducing the employer to commit an unfair
labor practice against non-union employees; or
4. When it employs unlawful means in the pursuit of its objective, such as a widespread terrorism of
non-strikers/ For example, prohibited acts under Article 264(e) of the Labor Code; or
5. When it is declared in violation of an existing injunction, such as injunction, prohibition, or order
issued by the DOLE Secretary and the NLRC under Article 263 of the Labor Code; or
6. When it is contrary to an existing agreement, such as a no-strike clause or conclusive arbitration
clause. [Toyota Motor Phil. Corp. Workers Association v. Toyota Motor Philippines Corp., G.R.
Nos. 158798-99, (2007)]

Q7: Is the right to strike or lockout absolute?

A: No. Where the parties have an existing no strike-no lockout agreement requiring that their disputes be
brought to voluntary arbitration. [USAEU-FFW v. CA, G.R. No. 169632, (2006)]

Q8: What are the grounds to support a strike or lockout?

A: A strike or lockout may legally held because of either or both:
(1) A collective bargaining deadlock (Economic strike); and/or
(2) An unfair labor practice act of the employer (ULP Strike).
If the ground for the strike is not one of the abovementioned grounds, it is deemed an illegal strike.

Q9: Is the failure to exhaust grievance machinery and voluntary arbitration fatal to the validity of a strike?
A: Yes. It is axiomatically provided and held that a strike is illegal because of the failure to exhaust all the
steps in the grievance machinery and voluntary arbitration provided in the CBA. [USAEU-FFW v. CA,
G.R. No. 169632, (2006)]

Q10: May a minority union strike?

A: No. A minority union cannot demand collective bargaining with the employer because such right
properly belongs to the union that commands the majority. Moreover, the defeated union cannot lawfully
undertake a strike against its employee. [United Restauror’s Employees and Labor Union-PAFLU v. Hon.
Torres and Delta Development Corp., G.R. No. L-24993, (1968)]

Q11: What are the various remedies with respect to labor disputes?
A:
1. Grievance Procedure — in-house adjustment of complaint, problem, or dispute following the
steps prescribed in CBA or company policy.
2. Enforcement or compliance order — an act of the Secretary of Labor (through Regional Director
or other representatives) in the exercise of his visitorial or administrative authority under Article
128 to enforce labor laws, policies, plans, or programs, or rules and regulations.
3. Certification of bargaining representatives — determination of which contending unions shall
represent employees in collective bargaining. This is handled by “Med-Arbiters” of DOLE
Regional Offices after certification or consent elections.
4. Assumption of jurisdiction — an authority vested by law to the Secretary of Labor or the President
to decide a dispute causing or likely to cause a strike or lockout in an industry indispensable to
national interest.
5. Certification to NLRC — an action of the Secretary of Labor empowering NLRC to compulsorily
arbitrate a dispute causing or likely to cause a strike or lockout in an industry indispensable to the
national interest. Either “assumption” or “certification” automatically enjoins an ongoing or
impending strike/lockout. A return-to-work order is issued to strikers; at the same time the
employer is ordered to immediately resume operations and readmit all workers under the same
terms and conditions prevailing before the strike or lockout.
6. Injunction — is an extraordinary remedy which is not favored in labor law. A writ of injunction
is issued to stop or restrain an actual or threatened commission of prohibited or unlawful acts or to
require the performance of an act, which if not restrained or performed forthwith, may cause grave
or irreparable damage to any party or render ineffectual any decision in favor of such party. In
short, an injunction makes a negative or a positive command. As a rule, an injunction or an order
to prevent or stop an act is avoided in resolving a labor dispute. The state policy, rather, is to
encourage the parties to use the non-judicial processes of negotiation and compromise, mediation
conciliation and arbitration. The requirements or conditions to secure injunction are provided for
in Article 218(e) of the Labor Code.

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7. Judicial Action — complaint filed with regular court in cases falling under its jurisdiction.
Examples: Offense against persons or property; criminal case of U.L.P.; illegal recruitment
8. Appeal — the process by which an order, decision, or award is elevated to a higher authority, on
specified grounds, so that the order, decision or award may be modified or set aside and a new one
issued. In instances where appeal is allowed, the administrative remedies should be availed of, as
a rule, before the aggrieved party may go to court. This is the legal rule known as exhaustion of
administrative remedies. Examples of appeal: an enforcement order of a Regional Director in labor
standard cases is appealable to the Secretary of Labor; a denial of union registration in the Regional
Office is appealable to the Bureau of Labor Relations;1 a decision of a Labor Arbiter is appealable
to the appropriate NLRC division (but not to the Secretary of Labor)
9. Review by court — No law allows appeal from a decision of the Secretary of Labor, or of the
NLRC, or of a Voluntary Arbitrator. In these cases, the petition for certiorari, prohibition, or
mandamus (Rule 65, Rules of Court) may be lodged with the Supreme Court or the Court of
Appeals. The grounds for petition for certiorari and/or prohibition are abuse of discretion, or lack
or excess of jurisdiction. [AZUCENA, VOLUME II, at 25-26]

Q12: When is there an employer-employee relationship?

A: An employer-employee relationship exists when the circumstances satisfy the four-fold test, to wit:
1. Selection and engagement of the employee
2. Payment of wages
3. Power to dismiss
4. Power to control the employee’s conduct

NOTES:
 The power of the employer to control the work of the employee is considered the most
significant determinant of the existence of an employer-employee relationship. This is the so-
called control test and is premised on whether the person for whom the services are performed
reserves the right to control both the end achieved and the manner and means used to achieve
that end." It should be remembered that the control test merely calls for the existence of the
right to control, and not necessarily the exercise thereof. It is not essential that the employer
actually supervises the performance of duties by the employee. It is enough that the former has
a right to wield the power. [Gapayao v. Fulo, G.R. No. 193493, (2013)]
 The issue of whether or not an employer-employee relationship existed between petitioner and
respondent is essentially a question of fact. Although no particular form of evidence is required
to prove the existence of the relationship, and any competent and relevant evidence to prove
the relationship may be admitted, a finding that the relationship exists must nonetheless rest on
substantial evidence. [South East International Rattan v. Coming, G.R. No. 186621, (2014)]
 Any competent and relevant evidence to prove the relationship may be admitted. Identification
cards, cash vouchers, social security registration, appointment letters or employment contracts,
payrolls, organization charts, and personnel lists, serve as evidence of employee status.
[Tenazas v. Villegas Taxi Transport, G.R. No. 192998, (2014)]

Q13: What are the Alternative Dispute Resolution modes of settling a labor dispute?
A: Conciliation consists in the efforts of a third party — someone other than the immediate disputants —
to assist the parties to end their dispute perhaps by condoning each other’s fault or finding a give-and-take
compromise. Mediation, there is also conciliation but a mediator, within his authority, takes a more active
role than a conciliator in searching for and formulating a solution. Arbitration is a dispute resolution mode
more determinative than conciliation or mediation but less formalistic or technical than litigation.
[AZUCENA, VOLUME II, at 27-28]

Q14: Differentiate a closed shop agreement from an agency shop agreement.

A: A closed-shop agreement is one whereby an employer binds himself to hire only members of the
contracting union who must continue to remain members in good standing to keep their jobs. A “closed
shop” is a valid form of union security, and such provision in a collective bargaining agreement is not a
restriction of the right of freedom of association guaranteed by the Constitution.

An agency shop is an agreement whereby employees must either join the union or pay to the union as
exclusive bargaining agent a sum equal to that paid by the members. It prevents a situation where nonunion
members enrich themselves at the expense of union members. In other words, the employees who are
benefitting from the CBA (because they are part of the bargaining unit) without being members of the
bargaining union, may be required to pay an agency fee.

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NOTES:
 The collection of agency fees is an amount equivalent to union dues and fees. • A written
authorization from the non-union employee is not required. The employee’s acceptance of benefits
from a collective bargaining agreement justifies the deduction of agency fees from his pay and the
union’s entitlement thereto.
 Another term for agency shop agreement is “maintenance of treasury shop." [AZUCENA,
VOLUME II, at 330]

Q15: What are the requisites for the conduct of a certification election in organized establishments?
A:
1. That a petition questioning the majority status of the incumbent bargaining agent is filed before the
DOLE within the 60-day period;
2. That such petition is verified; and
3. That the petition is supported by the written consent of at least 25% of all the employees in the
bargaining unit. [TUPAS-WFTU v. Laguesma, G.R. No. 102350, (1994)]

Q16: What are the eight reasons to deny the petition to hold a certification election?
A:
1. First Ground: Non-appearance - non-appearance of the petitioner for two consecutive scheduled
conferences before the Mediator-Arbiter despite notice;
2. Second Ground: Illegitimacy - Unregistered Union - the petitioning union or national
union/federation is not listed in the Department’s registry of legitimate labor unions or that its
registration certificate has been cancelled with finality in accordance with Rule XIV of D.O. No.
40-03 as amended.
3. Third Ground: Illegitimacy - No Charter - failure of a local/chapter or national union/federation
to submit a duly issued charter certificate upon filing of the petition for certification election.
4. Fourth Ground: Absence of Employment Relationship - absence of employer-employee
relationship between all the members of the petitioning union and the establishment where the
proposed bargaining unit is sought to be represented.
5. Fifth Ground: Election Bar - The 12-month Bar - filing of a petition within one (1) year from the
date of recording of the voluntary recognition, or within the same period from a valid certification,
consent or run-off election where no appeal on the results of the certification, consent or run-off
election is pending.
6. Sixth Ground: Election Bar - Negotiation or Deadlock - where a duly certified union has
commenced and sustained negotiations with the employer in accordance with Article 260 of the
Labor Code within the one-year period referred to in Section 14.d of the Implementing Rules or
where there exists a bargaining deadlock which has been submitted to conciliation or arbitration or
has become the subject of a valid notice of strike or lockout where an incumbent or certified
bargaining agent is a party.
7. Seventh Ground: Election Bar - Existing CBA - filing the petition before or after the freedom
period of a duly registered collective bargaining agreement, provided that the sixty-day period
based on the original collective bargaining agreement shall not be affected by any amendment,
extension or renewal of the collective bargaining agreement.
8. Eighth Ground: Election Bar - Lack of Support - in an organized establishment, the failure to
submit the twenty-five percent (25%) signature requirement to support the filing of the petition for
certification election. The eight grounds are explained below in the given sequence. [AZUCENA,
VOLUME II, at 458]

Q17: What is the period of appeals for decisions of the Labor Arbiter?
A: Decisions, awards, or orders of the Labor Arbiter shall be final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar days from receipt thereof; and in case of
decisions or resolutions of the Regional Director of the Department of Labor and Employment pursuant to
Article 129 of the Labor Code, within five (5) calendar days from receipt thereof. [2011 NLRC RULES OF
PROCEDURE, rule VI, §1]

Q18: What are the grounds for such appeal?

A: The appeal may be entertained only on any of the following grounds:
1. If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter or Regional
Director;

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2. If the decision, resolution or order was secured through fraud or coercion, including graft and
corruption;
3. If made purely on questions of law; and/or
4. If serious errors in the findings of facts are raised, which, if not corrected, would cause grave or
irreparable damage or injury to the appellant. [Id. §2]

Q19: What are the Unfair Labor Practices found in the Labor Code? (ULP)
A: In summarized form, the nine U.L.P. acts of an employer under Article 258 are:
1. Interference,
2. “Yellow Dog” Condition,
3. Contracting Out,
4. Company Unionism,
5. Discrimination For Or Against Union Membership,
6. Discrimination Because Of Testimony,
7. Violation of Duty to Bargain,
8. Paid Negotiation, and
9. Violation of CBA. [AZUCENA, VOLUME II, at 302-03]

Q20: What is the totality of conduct doctrine?

A: It means that expressions of opinion by an employer, though innocent in themselves, may be held to
constitute an ULP because of the circumstances under which they were uttered, the history of the particular
employer’s labor relations or anti-union bias or because of their connection with an established collateral
plan of coercion or interference. An expression which may be permissible uttered by one employer, might,
in the mouth of one hostile employer, be deemed improper and consequently actionable as an ULP. [Insular
Life v. Obles, G.R. No. L25291, (1971)]

Q21: What is a yellow dog contract?

A: A typical yellow dog contract embodies the following stipulations:
1. A representation by the employee that he is not a member of a labor organization;
2. A promise by the employee that he will not join a union;
3. A promise by the employee that upon joining a labor organization, he will quit his employment.
[AZUCENA, VOLUME II, at 315]

Q22: When is an employer not guilty of ULP for contracting out work?
A: An employer is not guilty of an unfair labor practice in contracting work out for business reasons such
as decline in business, the inadequacy of his equipment, or the need to reduce cost, even if the employer’s
estimate of his cost is based on a projected increase attributable to unionization. In such a case the real issue
is not whether the employer’s business reasons are good or bad, but whether they actually motivated the
contracting out. [AZUCENA, VOLUME II, at 316]

Q23: With regard to ULPs, when is there a valid discrimination?

A: For the purpose of determining whether or not a discharge is discriminatory, it is necessary that the
underlying reason for the discharge be established. The fact that a lawful cause for discharge is available is
not a defense where the employee is actually discharged because of his union activities. If the discharge is
actually motivated by a lawful reason, the fact that the employee is engaged in union activities at the time
will not lie against the employer and prevent him from the exercise of his business judgment to discharge
an employee for cause. [AZUCENA, VOLUME II, at 327]

Q24: What are the requisites for a valid termination based on a union security clause?
A: The employer needs to determine and prove that:
1. The union security clause is applicable;
2. The union is requesting for the enforcement of the union security provision in the CBA; and
3. There is sufficient evidence to support the unions decision to expel the employee from the union
[Alabang Country Club v. NIRC, G.R. No. 170287, (2008)]

Q25: What are the rights of union members?

A: The rights and conditions of membership laid down in Article 249 may be summarized as follows:
1. Political right — the member’s right to vote and be voted for, subject to lawful provisions on
qualifications and disqualifications
2. Deliberative and decision-making right — the member’s right to participate in deliberations on
major policy questions and decide them by secret ballot.

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3. Rights over money matters — the member’s right against excessive fees; the right against
unauthorized collection of contributions or unauthorized disbursements; the right to require
adequate records of income and expenses and the right of access to financial records; the right to
vote on officers’ compensation; the right to vote on proposed special assessments and be deducted
a special assessment only with the member’s written authorization.
4. Right to information — the member’s right to be informed about the organization’s constitution
and by-laws and the collective bargaining agreement and about labor laws.

Q26: Are supervisors prohibited from joining a union?

A: No. it is well settled that supervisory employees are allowed to form their own labor organization but
they cannot join the labor organization of rank-and-file employees. [DLSU Med. v. Laguesma, G.R. No.
102084, (1998)]

Q27: What is the effect of an illegal strike on the employment status of the strikers?
A:
1. Union Member
 Mere participation in a strike, without committing illegal acts, does not cause the dismissal of
a union member. This is true even if the strike itself is illegal. (i.e. a strike held without proper
prior notice)
 To terminate him, there must be proof that he committed illegal acts during a strike.

2. Union Officer
 Participation in an illegal strike by a union officer is cause for his dismissal because as an
officer, he has to answer for leading a strike that violates the law. In other words, an officer
may be terminated from work when he knowingly participates in an illegal strike, or when he
commits an illegal act during a strike. [AZUCENA, VOLUME II, at 670]

Q28: Who may file a petition for certification elections?

A:
1. An independent union;
2. A national union or federation which has already issued a charter certificate to its local chapter
participating in the certification election; or
3. A local chapter which has been issued a charter certificate by the national union or federation.
[AZUCENA, VOLUME II, at 453]

Q29: Explain duty to bargain collectively.

A: The duty to bargain collectively means the performance of a mutual obligation to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages,
hours of work and all other terms and conditions of employment including proposals for adjusting any
grievances or questions arising under such agreement and executing a contract incorporating such
agreements if requested by either party but such duty does not compel any party to agree to a proposal or
to make any concession.

Q30: What are the jurisdictional preconditions of collective bargaining?

A: The mechanics of collective bargaining are set in motion only when the following conditions are present,
namely:
(1) Possession of the status of majority representation of the employees’ representative in accordance
with any of the means of selection or designation provided for by the Labor Code;
(2) Proof of majority representation; and
(3) A demand to bargain.

If the jurisdictional preconditions are present, the collective bargaining should begin within the
“certification year” which means the twelve months following the determination and certification of the
employees’ exclusive bargaining representative.

Q31: When is the freedom period?

A: The last 60 days of the 5-year lifetime of a CBA immediately prior to its expiration. During the freedom
period, the parties may not only renew the existing collective bargaining agreement but may also propose
and discuss modifications or amendments thereto. [AZUCENA, VOLUME 2, at 284]

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